The Tutorial Mission: Your First Business ¨ Ship it. Ship it. Ship it. Ship it. Ship it. Ship it. ¨ Optimize for learning over perfection. ¨ Start accumulating unfair advantages for later businesses. ¨ Cover “minimum viable financial goal.”
How You Know It’s An Advantage? ¨ People tell you you’re anomalously good. ¨ Watch other people around you in the community. Note where you’re doing particularly good on something useful. ¨ Use your growing understanding of your business to project what X would do in another, larger business, or a business with advantages you lack.
The Case Against SaaS For Biz #1 ¨ Huge barriers to shipping and keeping it in the market. ¨ Hard to sell and market without any pre-existing foothold in industry. ¨ Long slow SaaS ramp of death.
The Glide Path To SaaS ¨ Plant a flag on the market with an e-book, WordPress plugin, etc. ¨ Start collecting email addresses. ¨ Launch a productized consulting business. ¨ Gradually titrate up the amount of software offered.
Typical Bootstrapped SaaS Pricing ¨ $29 ~ $49 – Tier 1, some foozles ¨ $99 – Tier 2, even more foozles, maybe a special feature ¨ $249 – Tier 3, lots and lots of foozles
Productized Consulting Base Offering ¨ $99 a month: SaaS application to do pricing pages ¨ $500 a month: Savvy pricing pages as a service ¤ 3 A/B tests to run a month ¤ We’ll implement them ¤ Nice PDF report to make you look good to boss ¨ $2.5k to $10k++ a month: Chief Revenue Officer ¤ I’ll own your pricing strategy and physically manage it. ¤ I’ll implement all your upsell/etc lifecycle emails. ¤ I’ll do all the analysis/reporting for management.
Level Up In… ¨ Scale of problem you’re attacking. ¨ Engineering acumen brought to bear on target. ¨ Sales/marketing techniques. ¨ Sophistication of business operation.
Deciding When It’s Time To Move On ¨ Business not helping you achieve goals. ¤ Live / Love / Learn ¨ You’ve stopped accumulating marginal advantages. ¨ It’s “clearly time to go.”
Anatomy Of A Saleable Business ¨ Goldilocks zone for revenue / price. ¨ Low ongoing time involvement from founder. ¨ Low-risk that present revenue evaporates. ¨ Growth in market. ¨ Technical risk mitigated.
Early Decisions Make Selling Easier ¨ Business opportunity: enduring and stable/increasing ¨ Technology stack: something simple and well understood ¨ Business model: fat margins, ideally recurring revenue ¨ Traffic sources: diversity and defensible ¨ Founder involvement: variable as desired
Starfighter ¨ Online games (CTFs) engineers play, for fun, by programming. ¨ We passively identify skilled engineers. ¨ We contact them and ask about background/goals. ¨ If appropriate, introduce them to hiring managers. ¨ If they take a job, we earn a commission.
Why was this impossible before? ¨ Co-founders: met them as a direct consequence of doing things on my own. ¨ Starfighter is tremendously technically ambitious. ¨ We used reputational capital to bootstrap sales cycle. ¨ Self-investment required; would have been painful before.
Rule #1 at Kalzumeus Software was, literally, “We never, ever, ever crunch.” Guess what happened the last three months. Remember To Be True To Yourself
Thanks for listening ¨ [email protected] or @patio11 ¨ https://training.kalzumeus.com (mailing list) ¨ Software Conversion Optimization course upcoming – send me an email when it launches and it’s yours. ¨ http://starfighters.io ß seeking players and clients, launching early May two weeks!
Pre-requisites For Sale ¨ Understand your numbers cold and be able to document them all. ¨ Isolate assets to be sold from the rest of your business. ¨ Minimize founder ongoing time commitments. ¨ Block off a few months.
Process and Timeline ¨ January / February: Lay technical and organizational groundwork. ¨ March: Start working with broker in earnest. ¨ Late March: Buyer identified. ¨ April 2nd: Contract executed. ¨ April 8th: Wire transfer hits bank account. ¨ May 3rd: I’m freeeeeeeeeeeee.
Process Drill Down ¨ Gather data on everything. Answer ~100 questions. ¨ Broker prepares prospectus. ¨ Broker locates, vets buyer. LOI signed. ¨ Due diligence to verify all material facts. Answer ~10 questions. ¨ Contract signed. Buyer escrows. ¨ Transfer domain names & accounts. ¨ Escrow released after inspection period ends. ¨ Aftercare for negotiated period.
Making Your Buyer Happy ¨ Spend extra time improving backend. ¨ Find ongoing technical help for them (huuuuuge). ¤ Retainer agreement a good option. ¨ Process documents for day-to-day and next ~6 months. In particular, marketing plan of attack. ¨ Go overboard on training.
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