Learning lessons on building a SAAS startup and crossing the penny gap

What I have learned from building and launching a fully bootstrapped SAAS startup as a woman and crossing the penny gap...

What I have learned from building and launching a fully bootstrapped SAAS startup as a woman and crossing the penny gap…

 

Everyone has got a plan until they get punched in the face – Mike Tyson

 

2.5 years ago, I had a plan to launch a tech startup with my husband. And because my husband is awesome and also a bit crazy to listen to my ideas sometimes, he said “hell yes, let’s do this!”

 

It was a great idea. We had the skills, the knowledge, the experience, the vision, the passion, and the motivation to make it happen.

 

The timing was right and everything was aligned.

 

Since then, I got punched in the face almost constantly!
Drinking daily from that ocean of rejection, judgment, criticism, and naysayers. Without even crossing the penny gap was excruciatingly hard. (Read more about the penny gap in this article from David Sacks, from Yammer).

 

Along the way, we made the conscious decision to refuse investors’ money to stay 100% bootstrapped. So throw that financial uncertainty into the mix, you might start to get an idea of the whole picture.
Being a woman in a male-dominated industry, and in a pretty conservative, old-school country, clearly didn’t help.

The fact that it was hard is an understanding.

In fact, crossing the penny gap for a tech-based startup is known to be one of the hardest things. This explains why 9 startups out of 10 actually die before that milestone.

 

It was hard on ourselves, on our family, on our friendships, on our marriage, and even on our child.

 

In fact, I can now tell you it was the hardest thing I have ever done in my entire life (much harder than ED Recovery).

 

But I am not going to go into too many details about that here so that those of you wanting to launch a startup won’t dive into full-blown depression straight away!  Just kidding… or maybe not 😀

 

One thing though: did you ever realize that the hardest things you’ve ever done in your life were also the most rewarding?

 

After crossing the penny gap (learn more about the penny gap) in Q4 2019 and recently launching with a few major international brands, I can finally see some light at the end of the tunnel.

 

Along the way, I have also learned one or two things on that matter – thank god 😀

 

And since – more than ever – tech and entrepreneurship are taking a major part of my life, I figured I should write about that too on my website.

 

If I can empower women not only with their health and nutrition but also to step into their full power in tech and business, then I am in!

Here are my most important lessons learned:

1. Never listen to someone who hasn’t achieved what you’re trying to do.

I know it might sound harsh. But the truth is, everyone will always have an opinion about what you’re doing and how you should do it.

I still remember when I just had my baby. Everyone – like even the strangers in the supermarkets – knew why my baby was crying (he is hot, cold, hungry, tired, yadde yadde yadda).

Always – ALWAYS – keep in mind that nobody knows best than yourself.

When it comes to startups, it might get tricky because they might take the appearance of a coach, a teacher, a professional, a governmental institution trying to help ‘young entrepreneurs’.

Or even a close friend seeing you going through the entrepreneurial ups and downs. They might have read all the books about startups in the world and they probably have your best interests at heart.

BUT – If they haven’t done it, listen and… run away.

They will – not voluntarily – misguide you. Some of this kind of ‘advice’ made us waste a lot of time and energy, which is your most precious resource when you’re a startup. And if you’re not careful, this can be fatal.

When it comes to taking external advice, always question the source. Is this person/institution where I want to go? Did she manage to create/do the exact thing I am trying to achieve? If the answer is no, just politely listen and forget about it straight away.

There is one saying my all times mentor, Marie Forleo, says in her book ‘Everything is Figuroutable’ that reflects this pretty well: “Opinions are like assholes. Everyone has one and most of them stinks“.

This, my friend, is applicable not only in your business but in every area of your life. The day I realized I had to be more selective about the opinions I was listening to, and the people I was letting into my life, my all game changed. And my self-confidence as well.

2. Think twice before getting VC money

I know it might seem tempting to go through the funding process. Some might not even know this is totally possible to build a successful tech business without funding. For some, the simple fact of raising money means success, while, believe me, this couldn’t be further from the truth.

Unfortunately for us, we got through that decision process in Belgium, which in my opinion, is definitely not the best place to be for a tech startup (except for an exit plan). Not much money first of all, but also a very outdated mentality in the way people work, in the way they think the whole startup scene is working and in the market readiness – they are a bit late in adopting new solutions.

Don’t get me wrong there are many interesting, smart, and knowledgeable people in the startup scene in Belgium. It’s just they are not the norm. And once again, many – the ones you’ll be in touch with first – will misguide you if you’re not careful.

So, if you have to take that decision, I urge you to think it through properly for yourself. 

Why are you building a startup? Why do you want to run your own business?

And if you decide to get VC money, what kind of investors do you want? Think of them as your best mentors.

For us, our main goal was freedom. Being able to run our business as we wanted to. That meant being totally lean and remote. No offices in Brussels center and definitely not a huge team of employees coming to work 9 to 5 for example.

We also wanted to be able to experiment and pivot quickly without having to discuss all our decisions with investors.

Also, even though you’ve got to be able to ‘afford’ not taking any external investments, you also have to ask yourself what you’re going to do with that external money if you decide to take it. Is it a way to just burn cash you can’t afford yet?

Or do you have a very thorough plan that will leverage what you do and make your company profitable quicker?

Some startups in the tech world – because tech startup can leverage and scale more quickly than other types of business – just keep raising more and more money instead of being profitable. Think Uber and Airbnb for example. And in that case, it’s great.

But is YOUR startup going to become the next Airbnb?

Is it what you really want?

It makes me laugh so much that so many little startups take this approach while I personally think they should first focus on being profitable and being able to scale properly instead of spending their time on raising money just for the sake of burning cash. Once again it’s just my point of view but I think it’s always great to question the underlying motivations.

And yes, to me, the best examples are those ones – fully bootstrapped – at least for me to base my own startup on. Think Mailchimp or Basecamp for example. Very profitable with no unnecessary paperwork.

Many times, people tried to send us to accelerator programs or investors. Each time we thought about it, it didn’t feel right. Even though there were times extra money would have been welcomed. But at the end of the day, we always asked “why should we burn money we don’t have/earn?”

It turns out it was a great idea. If we had taken VC money or hired a fixed team, we’d probably have died during the Covid crisis, just like so many other startups.

Instead, being lean allowed us to pivot and experiment easily at very low costs.  I reckon this was one of our strengths.

2. Go above and beyond – deliver an outstanding product and UX

When you first start onboarding people in your SAAS – or get your first clients if you own another type of business – make sure their experience is outstanding.

If your first users/clients are disappointed, you can be sure not only they will not come back but they’ll also let other people know you’re not worth checking.

Because my strengths lie more in customer success and inbound marketing than pure, traditional outbound sales, it made a lot of sense not to hire a sales team. I understand if it sounds counterproductive but to me, inbound marketing is the new sales team, and I couldn’t burn myself out trying to master something I was not good at. I tried anyway and it was a failure. That is why I decided we should only focus on what we are good at.

So far, our results prove this. Our clients are coming to us by word of mouth of our great client support system and outstanding product. So far, no sales teams and no more corporate meetings for me – as I said, I tried and those were killing me, my soul, and my productivity.

So focus on your genius zone and master it. Excel in it as much as you can instead of trying to cover the whole spectrum of “what you should be doing” and spreading yourself too thin.

At the end of the day, building a tech startup is something!

You’ll have to make a lot of compromises. It’s going to be freaking hard. But it’s also the universe asking you – do you really want this that bad?

There were tears (lots), arguments, fights, sweat, and blood. But today, I can finally tell you I wouldn’t change a thing. I’ve learned so much from it and this made me grow so much, it was priceless.

Don’t forget that you can create your own rules – and if you’re in business it’s also probably why. So start straight away. Don’t let people impose their way of working and their opinions on you. Be strong and decisive. It will be easier to get over your own mistakes than those coming from decisions imposed by others.

I still remember early on taking the Y Combinator startup school program. I was seeing all these founders talking about their experience and business.  There were all so smart and successful, yet so humble. Not one once of ego in the way they talked. I admired that so much and I was thinking to myself… This is how I want to grow. Now I understand why they are so humble. They have drunk so much from that ocean of rejection and criticism, they have peeled all the layers.

I am not saying I am there yet but I also know there is no turning back, I will always be an entrepreneur and nobody, nothing will take that freedom away from me. Ever.

Now I’d love to hear from you!

Have you ever build a business from scratch? I’d love to hear about your experience.

Can you relate? What were your biggest learning lessons? 

Please let me know in the comments below!

Love,

Pauline

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