$1M ARR the Hard Way: 5 Early-stage blunders to dodge
Want to sprint from zero to your first million in ARR? This is often the first mountain to climb in a startup, the first of many, but one of the most important ones. This initial revenue growth in SaaS often helps validate Product Market Fit; helps you take your product from MVP to something that users can integrate into their daily workflows; makes your business more appealing to investors; and the list goes on.
I have seen and/or worked with businesses that have been impacted by these initial struggles, so steering clear of these mistakes along the way is key. Here are some of the most important ones to avoid as you go from £0 to £1mill.
Delegating Too Fast
Resist handing off sales, marketing and support too early. Build your minimal viable founder skillset first.
If you as a founder/ founding team, don’t understand the go-to-market processes and don’t have access to that initial feedback loop with your early adopters, you’ll miss out on critical feedback that will more often than not become a black hole in your growth strategy.
I’m not saying you shouldn’t delegate, certain things have to, but be there for customer-facing touchpoints, understand the world from a customer perspective, and add more strings to your bow, this is the time!
Solving the Wrong Problems
If you’re not truly passionate about the problem, your drive will fizzle. Ensure founder-problem fit.
Let’s face it, you’re not going to be making money for a while, external pressures appear, and doubts will arise, and some days will be really tough. Being passionate about the problem you are solving, will make you resilient, focused and often, inspiring to others. Believe and be passionate about the problems that make you tick!
Forgetting You’re the Chief Sales Officer
Believing “sales isn’t your job” is nonsense. You are the sales team in the early days.
Founder-led sales are key. After all, you have a new product, probably know the problem inside out, have a network of like-minded people you can test the product on, etc… You must get your sales hat on (i know,i know, this is really tough, especially for highly technical products with technical founders), there’s no getting away from this.
You’re the domain expert, entice conversations using your unique skills and knowledge, share your vision, inspire those prospects, and close the sale!
Over-Engineering Data
Optimising every metric sounds smart but delivers analysis paralysis. Just focus on revenue.
It’s good to be confident with numbers and be able to look at metrics comfortably, but… dissecting conversion rates between sales and marketing funnels, going deep into unit economics, and obsessing about web traffic metrics, rarely will help you move the needle. From zero to 1, focus on revenue.
tip: do make sure you are collecting data, the time to analyse it will come, for now, collect it, and focus on the revenue.
Fundraising Too Soon
Fundraising is a full-time job, the market is very hard right now (and will likely stay like this for the foreseeable future. Beyond becoming a distraction, it pushes you away from the frontline, reducing those oh-so-very important touchpoints with your customers.
Your startup needs cash now, the best way to get it is from your initial customers, focus on point 3!
A marathon, not a sprint
In your journey from £0 to £1 million in ARR, it’s crucial to navigate these early-stage pitfalls. The road may seem challenging, but by steering clear of these common mistakes, you can set yourself up for success. Remember, building a successful startup is a marathon, not a sprint.
Whether you have questions, need guidance, or just want to share your own startup story, I’m here to support you on your path to success, and together help you reach that coveted £1 million ARR milestone. Connect with us today.
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