A lot of SaaS companies are focused on scaling their business. There is a time and place to scale; and most of the time, founder CEOs get the timing wrong.
The tech community ethos is the idea of getting big fast.
If your market doesn’t exist at all, getting big fast = going out of business faster.
If your product-market fit isn’t there, getting big fast = telling your market you can’t meet their needs = going out of business faster.
If your market-to-sales-message match isn’t there, getting big fast = selling your market on things they don’t care about = going out of business faster.
If you have a poor marketing-to-sales-conversion process, getting big fast = funding all the leaks in your funnel = going out of business faster.
If you have the wrong sales rep hiring profile, getting big fast = hiring a bunch of the wrong people who won’t be effective = going out of business faster.
If the financial model of your business is fundamentally flawed (e.g., selling $100 bills for $10), getting big fast = going out of business faster.
Now, there is absolutely a time to scale… and go big or go home.
The time to scale is after you first get the key parts of your business working on a small scale.
If you have a customer acquisition model that’s killer – $100 customer acquisition cost translates into $1,000 customer lifetime value – scaling is definitely worth considering!
If your customer acquisition model bleeds cash – $100 customer acquisition costs translates into $1 customer lifetime value – scaling is incredibly stupid.
Don’t be stupid.
In other words:
Nail it… Then scale it.
Get it right on a small scale, then increase the scale to see if the performance metrics hold. If they do, scale even more.
If you enjoyed this article, I recommend joining my email newsletter. You’ll be notified when I publish other articles and helpful guides for improving your SaaS business. Submit the form below to sign up. Also, use the email icon below to share this article with someone else who might find it useful.
If you’re the founder and CEO of a SaaS company looking for help in developing a distribution channel strategy, please Click Here for more info.
How to Scale and Grow a SaaS Business