welcome to the Literary Digest please subscribe to the channel or give a like and comment on this video if you find it helpful to help us reach more people more than 99% of startups seeking funding are rejected most that do secure it still fail thankfully there's an answer bootstrapping so what exactly is that the practice of building and growing a business using personal savings or revenue generated by your company rather than relying on external funding this approach is more sustainable because you don't need permission from investors your business only ends if you quit and the main challenge is managing your motivation not your money in this summary you'll learn how to bootstrap a tech business using software as a service or SAS as the model business SAS benefits from predictable recurring Revenue economic resilience and lower Reliance on compared to speculative Ventures like crypto or social media startups you'll discover the six areas to consider when planning for your SAS success market pricing marketing team 8020 metrics and mindset whether you're a developer entrepreneur or non-technical business owner you'll gain actionable insights to build grow and eventually sell your SAS company sustainable success doesn't require Venture Capital just a clear strategy and a focus on creating value through thoughtful intentional growth the first step is understanding your Market chapter one your product's place in the market the foundation of any successful SAS business begins with a deep understanding of the market a reliable way to gather insights is by having direct conversations with prospects current customers and even those who chose not to buy or have canceled their subscriptions many entrepreneur ERS avoid these discussions out of fear of hearing negative feedback but these conversations are essential for refining your product road map and ensuring it solves real customer problems when speaking with these groups ask meaningful questions pay attention to any frustrations expressed about existing tools or processes when the time comes to implement suggestions though you don't actually need to integrate all of them into your product customers often struggle to Envision Solutions beyond what they already know Henry Ford is famously and falsely credited with saying if I had asked people what they wanted they would have said Faster Horses so when evaluating feedback consider whether the idea fits your long-term Vision how many users will benefit from it and if it solves a meaningful problem stay focused on your vision while assessing feedback and you'll be on your way to building a sustainable product as your building it you'll need to find its place in the market in competitive markets which most of them are standing out can be tough some companies compete by offering lower prices While others differentiate through creative sales models such as premium plans or personalized demos another way to compete is by developing a product that offers a superior experience and features how you compete depends on your product you may need to get creative about it once you've fought your way into the market and established a strong position it's time to build a mode around your product modes are things that make it difficult for competitors to unseat your product from its high ground in the market these modes include Integrations with other software a strong brand owned marketing channels and high switching costs unique features alone won't protect your business for long long-term success comes from making your product indispensable with a solid understanding of the market in place your next step is to create a pricing strategy that aligns with your goals we'll cover that next chapter 2 finding the sweet spot for pricing if at least some of your customers aren't complaining you're probably not charging enough a little friction around pricing is healthy it shows that customers recognize the value they're receiving and ensur your business isn't underpricing its product which could erode profitability and sustainability pricing too low can hurt your SAS business by signaling lower value to customers and making it harder to cover acquisition costs confusing pricing tiers can also overwhelm prospects reducing conversions a thoughtfully chosen price not only communicates value but also impacts customer retention research shows that $50 per month is often a Sweet Spot low enough to reduce churn and substantial enough to ensure customers are invested in your product for more specialized sass tools pricing is usually higher products in Niche markets with longer sales Cycles or those requiring demos are often priced at $250 per month or more SAS solutions that involve a hi touch sales process with multiple calls or personalized on boarding might charge closer to $1,000 monthly at the Enterprise level where custom implementations and deep Integrations are standard prices can climb to $30,000 per month understanding where your product fits will help you produce an informed pricing strategy to determine where your tool belongs compare your product not just to competitor's features but to how they position and sell segmenting your customer base can also reveal usage patterns and help develop expansion Revenue where customers pay more as they derive greater value make sure you're charging enough for your most valuable users the Enterprise customers since they tend to generate the highest margins revisiting pricing every 6 to 12 months is good practice especially as your product evolves price increases should aim to grow monthly recurring Revenue Mr by at least 10% otherwise it's rarely worth the risk of alienating existing users a smart approach is to keep current customers at their old rates while adjusting prices only for new users with pricing in place the next step is to focus on marketing strategies to attract and retain the right customers chapter three turning strategy into sales building a great product is only part of the equation it won't automatically sell itself many Founders are naturally drawn to product development and shy away from marketing but understanding marketing is essential even if you plan to hire someone for the role having a solid grasp of the fundamentals ensures you can assess whether your marketing efforts are on track and delivering results the best course of action is to create your own marketing strategy before Outsourcing its implementation this helps you develop clarity about your products value ideal customers and the best way to connect with them when strategizing you need a solid understanding of the marketing funnel which Maps out the customer Journey from initial awareness to the final purchase the funnel typically moves through stages such as awareness consideration decision and retention High touch funnels for premium or Enterprise level SAS involve more personal interaction like demos or consultations while low touch funnels for low price point SAS rely on automated processes such as content or free trials if you want the ultimate and funnel strategy consider something called the Dual funnel in this strategy you use both low and high touch funnel strategies where the low touch gives you the benefit of keeping customers flowing in and getting the word out about your product while the hi touch connects you with the big fish you really want to go after Sewell is a great example of this it had a broad customer base ranging from people who just needed a few documents signed here or there to Enterprise level businesses needing thousands of e signs per month generally with this strategy you'll start by seeing the majority of your Revenue coming in through the low touch funnel but gradually shifting as you build those High touch connections when it's time to execute your strategy there are several marketing approaches you can choose from options include SEO PPC that's pay-per-click advertising cold Outreach content marketing integration marketing and dozens more to select the right approach you need to evaluate three factors speed cost and scalability for instance SEO is cost effect itive but takes time to show results while PPC offers faster outcomes at a higher cost cold Outreach works well for specific audiences but scaling it may require additional resources to find what works best for you experiment while staying focused adjust one variable at a time whether it's messaging audience targeting or ad placement so you can accurately measure what drives results spreading efforts too thin or making too many changes at once can lead to confusion and wasted resources now that we've covered your product price and go to market plan let's talk about something a little more human building your Team chapter four giving away your hats at the start of a SAS business entrepreneurs often wear too many hats handling everything from product development to Marketing sales and customer support while this Hands-On approach is necessary early on to scale your business you'll need to build a team the key to effective hiring is assigning roles rather than tasks instead of looking for someone who's a jack of all trades focus on specific skill sets common departments in SAS include product management design engineering Marketing sales customer support finance and legal clear roles help ensure each new hire has a defined focus and contributes to your company's growth a common challenge you'll face is deciding which role to delegate first start by grouping your tasks under relevant roles and departments then evaluate which areas your least skilled at or don't enjoy these are often the best places to start hiring for example if marketing feels overwhelming it might be time to bring in a dedicated marketer once you know what role you're hiring for it's time to write the job description a quick tip for standing out in the job market is to treat your job description like a sales letter you'll want to do two things that seem quite contradictory first you need to be different from everyone else out there but at the same time the same as everyone else how's that possible be different by expressing who your company is its unique flare personality and challenges you probably want to retract someone as Scrappy and up for the challenge as you are so Express that in your description but it also doesn't pay to be too cute some things need to follow industry standards because that's how people search for jobs for instance when it comes to job titles it can be tempting to just invent your own title Like Chief people person for a sales representative or director of answering phone calls for an accounts manager while this seems fun it's best to use standard SAS job titles along with standard language about responsibilities expectations and compensation this makes it easier for candidates to find your job postings and allows you to Benchmark your roles against the market once your team is in place treat it like a professional team not a family teams have clear roles accountability and healthy boundaries qualities that promote better collaboration than the informal dynamics of a family besides people know you're not a family and saying otherwise comes off as disingenuous next up how to measure your success chapter five measuring what matters without metrics there's no way to know whether you're headed toward your goal or falling behind metrics not only show you what's happening in a moment in time they also help you put together Trends and a framework for testing and optimizing your product you simply have to follow the right numbers to understand both both your current performance and future growth potential in SAS two of the most telling metrics are Mr that's monthly recurring revenue and month-over-month growth rate Mr shows how much predictable income your business is generating while growth rate reveals how fast your company is scaling both are lagging indicators meaning they reflect the results of past activities rather than predicting future Trends to get a full picture of your company's Health you could adopt the the three High three low framework this provides insight into where your revenue is headed and helps identify signs that growth might Plateau key low metrics to monitor include CAC that's customer acquisition cost sales effort and churn CAC measures the cost of acquiring each of your customers sales effort evaluates the time and resources needed to close a deal and churn or the percentage of customers who cancel is a signal of long-term customer satisfaction equally important are high metrics like ACV that's annual contract value expansion revenue and referrals ACV reflects the revenue generated per customer per year expansion Revenue shows how much existing customers are spending beyond their initial subscription and referrals indicate customer satisfaction and are a powerful driver of organic growth let's go back to churn for a moment moment and talk about the North Star for this metric first of all if your product is priced too low you may see higher turn rates lower priced customers tend to have less commitment and are more likely to leave so this is a quick issue to address when attempting to lower your turn rate ideally you want your turn rate to fall between 0 and 3% to maintain Healthy Growth but the ultimate goal for every SAS business is achieving net negative churn this happens when the revenue you generate from upselling or expanding services to existing customers outweighs the revenue lost from cancellations even without acquiring new customers with net negative churn your business can grow organically building on existing relationships and creating a self-sustaining Revenue Loop achieve this dream metric and your business will be set up for success by tracking these metrics you can gain insight into the health and sustainability of your business each number contributes to a clearer understanding of how efficiently your company is operating and where it's heading in the next and final section you'll learn about the mindset you need for long-term success chapter six cultivating mental resilience building a successful SAS company requires a combination of hard work luck and skill but only two of these are within your control while you can't predict or manufacture luck the right mindset that will ensure you maximize the impact of your effort and abilities one essential mindset shift is learning not to turn speed bumps into roadblocks every entrepreneur faces setbacks whether it's a product glitch a marketing misstep or a customer issue the key is to treat these challenges as part of the process adapting and continuing forward rather than letting them halt your progress another way you can support yourself is by surrounding yourself with the right Community being a Founder can be isolating so finding a network of other entrepreneurs who understand the challenges is invaluable peer communities Provide support accountability and fresh perspectives connecting with fellow Founders whether through online groups or in-person meetups can give you the encouragement needed to get through tough times burnout is a real threat for Founders who are deeply invested in their startups to avoid this integrate mental health strategies into your routine this can mean setting boundaries between your work and personal life taking regular breaks or building habits that promote well-being ultimately success is about consistency and resilience with the right mindset you can work hard leverage your skills and stay open to Opportunities when luck Comes Your Way final summary the main takeaway of this summary to the SAS Playbook by Rob Walling is that building a successful SAS business requires more than just a great product it demands the right strategy mindset and metrics start by understanding your Market setting thoughtful pricing and executing a focused marketing plan as you grow build a team by delegating roles effectively and track key metrics like Mr and churn to gauge your progress success also relies on balancing hard work and skill while managing burnout out through community support and mental health strategies with the right approach you can grow your business by its bootstraps no Venture Capital needed thanks for listening if you enjoyed this please like And subscribe to the Literary Digest for more videos like this one and don't forget to leave a comment below and let us know what you found most helpful until next time keep striving for success