S6E18 - The 3-Step GTM Playbook to Grow Your SaaS from €0 to €1M ARR with Alexander Estner

The only way to grow to the 1 million in a repeatable way is doing less and saying no to a lot of things. It's definitely not about scalability, it's really about finding clients who value what you're building. So you have confidence that you build something that's more for them to pay money. So you have you found problems with it. You don't need to serve more clients or more use cases. Maybe it's just doubling down. That's option one. After the solo podcast from last week where I shared our story of our field acquisition, we're back with a guest date. A topic which is related to many listeners. My guest today is Alexander Esner. Alexander is a hands-on GTM advisor that focused on helping SaaS founders build an executor go-to-market foundation, coming from 0 to 1 million dollar AAR. And that is exactly what we're going to talk about today. We'll dive into his three-step GTM Playbook to grow your SaaS from 0 to 1 million AAR. Alex has been entrepreneur himself. Right after leaving university, he joined the company as the first hire and finally the company himself. Before making the jump and becoming a resultant and mentor in 2021. If you do want to get his knowledge without paying him, of course, listen to this show but he shares a lot of knowledge daily on LinkedIn and he runs a bi-weekly email newsletter which has over 4500 SaaS leaders subscribed. Let's just dive right in. Welcome to the show, Alexander. Great to be here. Thanks for having me. We're going to dive right in. To start with a super basic question, why is getting your go-to-market strategy right from day one so important for SaaS founders? I'm not sure if it's a basic question, but I think it's important to understand when I talk about go-to-market strategy, what is strategy and the execution part because I think a lot of people have not a clear distinction between what strategy and what's the execution and the technical piece of go-to-market. When I talk about go-to-market strategies to the foundations, getting clarity on who's my ideal customer, what's the right positioning, how do we communicate our value proposition to the client that it's really resonating, what's your messaging, I believe that strategy is then important because execution will not work without strategy and vice versa, of course, but what I see is that a lot of founders jump directly into tactics, so they think about, okay, what's the perfect LinkedIn dose or what's the best way to run Google ads, so how do I do outreach on email or co-calling, and this is all important, right? This is the execution part, but this won't work if your strategy, if the foundation is strong, so if you don't know how to position your product, like who's your ICP, what they care about, how do I communicate all the cool features and capabilities that our product can do in a way that our target audience understand that, then all the execution most like you will fail, so that's why I believe it's important from day one to also think about the strategy part, but not solely the strategy that always goes hand in hand, and you need to test different things, so you need to be on the execution side being in the trenches, run different things in order to validate the strategy and also vice versa. If you skipped that early on, you will race your run away, you burn money, you chase the wrong customers, you probably think that they're unscalable and such as burn money, so I think getting clarity on your go-to-market playbook on your strategy part is quite important from day one. Yeah, so it's not that you create your entire go-to-market strategy from day one and then that's your strategy going forward, you need to keep iterating and making sure you do the right things. One other question, what is the biggest misconception sound founders have about going from zero to one million AR? I believe there are two main misconceptions I see when I work with founders. Number one being that they believe the zero to one stage is just one stage, so it's like I'm on zero and one, that's the next milestone I need to achieve, and I do believe it's multiple stages, so it's not zero to one, it's at least three stages, I think we will cover that later on, what are the three stages, but the resulting misconception of that is that they believe they need to have the perfect go-to-market playbook from day one, they see something linear, hey, it's zero, it's one, and I'd rather believe it's multiple milestones, and the benefits of that is that you don't have the conception that you need to have the perfect playbook from day one, so I see go-to-market very iterative, so I prefer to have to, let's say, the perfect ICP from zero to 10 clients from 10 to 100 clients, make from 100 to 1000 clients, same for pricing or for positioning and messaging, it's fine to think about, okay, what's the perfect pricing, what's the perfect messaging, what's the perfect ICP from zero to 10 clients, what do we need to hit then to get the next 90 clients to hit 100 customers, and I think it's fine to have iterative pricing won, pricing two, pricing version three, and so on and same for all the other parts of go-to-market. Yeah, that's interesting because we went through many of these things, you just mentioned, like pricing, we started with a freemium model, then we dropped the freemium model, then we brought back the freemium model, we I think increased our pricing three times in the last two and a half years, so it's keep iterating as I guess what works. It's also quite stressful for a lot of founders, we all follow the big players, right, like the notion, mirrors, and so on as of the world, and then we look at the pricing page, for instance, if you continue the pricing discussion, and we do believe, oh shit, we need to have this perfect pricing plan from day one on because that's what the market requires, that's stressful, and I think if you flip it and say, okay, what's, maybe it's just a simple pricing, as you said, like that pricing 50 years per month for the first 10 clients, it's not about optimizing margins early on, or it's more like validating problem solution fits, and yeah, for people listening, we have been going into depth regarding every topic we mentioned, pricing positioning, we had April, Dunford, Walter from Unium, today we're going to talk about your three step process, how to get from zero to one, and we'll definitely cover a couple of things if you want to dive deeper, check out the other episodes, before we dive into your framework, what is the common mistake founders make with their go-to market strategy? Yeah, again, I see two mistakes that happen a lot, number one is in two parts early, what I mean by that is serving too many clients at the same time, different ICPs, different channels and tactics they try to do, even on the products covering too many use cases, too early on, meaning without having the relevant resources that you need to execute all those things in parallel, I believe one of the main reasons, especially if it's we see funded companies that they talk a lot about the big time, right, so the total addressable market and they need to be the big player in order to get funded, which is true, but when you go on the execution side, really like from zero to one, being too proud to early, it's almost never possible to execute, so that's definitely something I see happening quite a lot, and the problem of that is, or the resulting problem is that when I ask them what is the product doing and for whom it's really hard for them to explain it in one sentence, it takes me not hours, but at least a couple of minutes to really understand, and a couple of questions to really understand what the product does and for who the product is, and why it's better than maybe the alternatives in the market, the problem of that is they are too proud too early, yeah, and another common mistake more on the technical side, like if I talk to technical founders is the outsourcing go to market mindset, so they don't want their own go to market, they don't want to do sales, they want to be on the products like on the tech side, and they have the mindset that ideally we want to hire you Alex or another, I don't know sales agency, very early on, please fix the go to markets for us, be focused on the product, and I think that's not possible, I think at least one of the founders need to own go to markets, and I say own go to market, it's fine to bring someone like me in and they help them to do it, but I'm not doing it for them, so they need to validate all the things that are important under all this stage, build it and they will come, it's definitely not going to be true in this case, true, we're going to dive into the three step process, can you just walk us through the three step, go to market journey, what are the steps, and then we'll dive into every specific stage of her, so when I talk about zero to one, I see three stages, stage one is hustle mode, stage two is focus mode, and then the expansion mode is stage three, when we dive into the hustle mode, the goal is to validate that your product is solving a problem, so I call it problem solution fit, and how you do it is that you will test different things, you will validate your hypothesis, so you go out, talk to clients, in order to get and retain the first 10 to 100 customers, I think this depends on your ACV, but roughly I would say the goal is to hit the 100K AR, and how you do it, non-scalable things, hustle mode, reach out to your network, you go on conferences, you ask your first clients for referrals, so all the scrappy things that you can do in order to get first clients, it's definitely not about scalability, it's really about finding clients who value what you're building. So you have confidence that you build something that's worth for them to pay money. So you have, you found problem solution fit. And success of that phase is, as I said, you have the first Rican clients, they stay, they use the product, you hit the first 100 KAR. If your sales lead and your own sales calls yet prospects, not their head and say, yes, I understand what you're doing. So you get first signals of message market fit, right? That's nice as a founder to you pitch a product and, oh, yeah, this is really solving a problem for them. That's step one. But the problem of that is you will most likely end up with different customer types. Maybe they used a product in different use cases. You acquired clients through different sources, different channels, maybe even with different sales motions like product lead versus sales lead. That's definitely not ideal to scale because each of them require a lot of resources. So then it's really important to sit down to acknowledge that this is hard to scale. This is great. You've found product solution fit. But now you need to narrow down. That's the only way to grow to one million. And actually, the problem that I've seen the market that found us ignored it and tried to continue doing that and running multiple ICPs, multiple use cases, multiple go-to-market motions at the same time, it's hard to scale. Stage two is then I call it the focus mode. Your goal is to hit go-to-market fit. So you want to go beyond your initial customers and the way how you do it is you sit down, try to analyze your customers that you have in order to find your, I call it the best fit customers. So customers that show better product usage, that maybe have a better cultural fit. So you want to work with them. They maybe have better win rates, better higher ACVs, better retention rates. So there are different ways to identify your best fit customers. But your goal is to find them. As I said, you need to narrow down to one use case, one ICP. And once you have that, you should adapt your go-to-market motion or strategy to that, meaning re-wamping your positioning for this specific best fit customer, re-wamping your messaging that really speaks to those clients, maybe narrowing down that your product is only for this use case. And also like in the beginning, you test the different channels. Now it's about focusing on one or two channels that are the best channels to acquire those clients. The goal is to get repeatability for this specific segment of the market in order to reach the one million. One question here. We had the hustle mode where you just did whatever you could and we're going to go focus. Is there anything you would recommend people, document in the hustle phase to make focus easier? So if you're going to do everything right, especially in hustle mode at one point, you don't know where the clients are coming from or you're like, oh, I can't remember where I actually spoke to this person first or how did I get in? Anything you can do to make, I guess, that transition easier. I'm a big fan of documentation, but of course it needs to be in a good balance. You can't document everything and you shouldn't spend more time on documentation than running tests. But having a basic documentation definitely makes sense. So when you test different things that you take conclusions, that you have a summary of what the work or what didn't work and also why didn't it work. And also let's say the KPI metric side that you set up some basic things from the beginning on some of a big fan, for instance, for self-reported attribution that you ask people on the sign-up process of during the discovery call, how did you find us? So that's a good way to analyze what channels are working, same that you start from the beginning, having a good system for tracking shared reasons or lost reasons while you're not running deals. I think all those things help you to be more efficient in the focus mode. Right. So then we found our best fit and we're going to narrow things down. So now we're going to go to the Xpaint in, right? Exactly. I roughly see the end of the focus mode hitting product market fit into 1 million ARR because you found product solution fit fit in stage 1, you found go to market fit in stage 2 and now it's about you want to grow beyond 1 million. And I do believe you have three options to do that. Either you just continue what you're doing, right? If the time is big enough, just double down, maybe that's enough. That's option one. Another one is expanding vertically. So you still serve the same ICP, but you're adding new use cases for those as well as companies or vice versa. You stick to the same use case that your product is very good at and now you're adding other target audiences. And but I think that's very important. When I work for founders, they also tell you now it's working. Can we now build new use case or can we now add an under target audience? You shouldn't do that too early. So it's really important that you have this repeatability and predictability in stage 2. When you look into your monthly reporting, one good signal for that is if you do sales let and you measure mqls that or signups, if you're more product let, that there's repeatability. So maybe in January 50 and February 55 and 60, that's repeatability like small growth. Next month you probably will hit the same amount because it's repeatability versus when I work with founders and they want to scale to early. Maybe they have in January 50 mqls but then five in February and then maybe 10 in March and then 100 in April and then again 20, which maybe at the end is still good right because you grow but it's not repeatable and that's not ideal to jump into expansion mode, which is also the phase when you hire your first go to market team bring in market here, set teams and so on. Yeah, do you have peaks because you're running all these experiments and sometimes you figure out something which works and then maybe the next month it doesn't work anymore or but indeed as you mentioned like you need repeatability to be able to actually continue from there. Nice. Let's dive deeper. This is already a framework or a process but other, any other tools templates, processes you would recommend for founders to execute this approach. My goal of the newsletter time running is basically exactly that sharing a lot of free templates and frameworks for zero to one stage. My personal favorites are ICP and messaging framework because that's what everyone needs. But one document that clearly says, who is my ideal customer, how do we communicate with them, why is our product better than direct and indirect competition, that's something I do with all founders I work with and then we try to turn that into sales tech and home pages. To answer your question, probably there are four templates I do really love is ICP, messaging framework, sales tech template and home page template. Yeah. I know you run them on mirror right we're going to add the links in the show notes so people can find it to inspiration from your home page template to create a SaaS affiliate program landing page where I kind of took inspiration from it and I turned it into our own template. So thanks for that. Great for you. If somebody's listening to this podcast and zero to one million AR we now made it sound super simple, three steps just do it. But if you zoom out where do most SaaS founders struggle when trying to implement or even going for your framework in real life when they're trying to do this. Yeah. It's staying too broad for too long meaning being too long in the hustle mode phase, especially if it's working right, adding new clients on a monthly base feels good but what I see is that people stay there too long because it's counter intuitive to say now it's time to narrow down and saying no to a lot of things because it's working. So I'm adding new clients channels are working but as I said before I think the only way to grow to the one million in a repeatable way is doing less and saying no to a lot of things. This sounds inferior and I stand like super logical. Of course we need to focus that's your way to do it. But when you end the trenches and you build it product and customers love it it's hard to say no. I remember one of the first conversations with a founder he said this was one of his toughest conversations because they executed well they had clients from different use cases, different target audiences. One of the first things I told them is if you want to grow we need to stop serving them. We need to stop being everything, everything for everyone. It took them one or two months until we finally took the decision to do that because it has a big implication. Maybe change the pricing. Do discovery demos differently because you fully focus all your attention to one specific use case and ICP. Yeah I just to be clear it's only for new clients to the clients they already had will remain them is not going to drop the AI. R is just acquiring new clients, putting into repeatability process. I have to focus purely on those. Exactly. And I don't know if this one is going to be easy to answer, but let's see. So if a SaaS founder is now listening and they think, yeah, I definitely want to do things right, I guess, to move forward in my go-to-market journey. Is there a thing they could do? Probably figure out first where they are in a tree step process. What else would you recommend? You often see typical questions probably a lot. Being conscious and analyzing where we are in the journey is my next milestone problem solution fit. So do I want to validate my idea? Is it about go-to-market fit? The next milestone. So do I want to find repeatability in what I'm doing? Or is it more like scaling already? Because I found problem solution fit. I found go-to-market fit. Now we need to double down. Just for one of the things they can do immediately after listening to the episode, sitting down, looking into your metrics and then being conscious about what's your next milestone. Are you struggling to find a cost effective and scalable marketing channel? Check out where it is. We help you to have other people recommend your SaaS and you would only pay them when they deliver you paid clients, making it very cost effective and scalable marketing channel. What I'm going to do more, go to getredities.com. Let's go into a fun question. You just gave an example where you help somebody to focus right, so they switched their focus from going from everything to everyone to fully focusing. What happened after? Were they able to put things in a repeatable process? Can you give some best practices? Yeah. Let's continue with what I said with the company. To give some context, they build a research management solution. In the beginning, they were very proud. They had companies using the product, but also the public sector using the product, even like spotclubs using the product because they had multiple use cases for that. At the end, their resources could be multiple things, could be a whole, could be co-working spaces, could be public resources. Once we identified that the public sector is the best fit customers and we fully focused on that. We saw way better win rates. Sales cycle decreased, win rates increased. We even doubled the ACVs. We saw way better in that revenue expansion, so we saw that customer success can really upsell, expand clients over time. Everything just made a click, right? In the beginning, all of them worked okay-ish, but average win rates, rather low ACV, super long sales cycles. Once we narrowed down on the public sector in that case, we revamped everything. We went to the website, made the messaging clear, adapted our sales process, so how the sales team built this car, we re-bammed their CRM, adapted to pricing. Basically everything for this specific segment, but it results back quite with all metrics and then their riot direction. Plus, I think that's quite important. More on the qualitative side. Clarity, I think clarity is something that we are not talking a lot about because metrics is one thing, but how clear is it for me as a founder or also the team to execute things. When you do so many different things at the same time, it's hard. You're missing to clear path and now everything becomes super clear for them, even like they re-vent their vision because from being a broad tool, now they fully focused on digitalizing the public sector and the European market, so different vision, different mission coming out of that. When you do these transitions, or you did this transition in this case, who do you work with? Is it purely the founder or the people from different departments? Yes and no, or both. My main contact person is definitely one of the founders. Why? Because I believe the founder needs to own that, own the go-to market side. I can help them and able them, but they need to be behind the decisions. Let's imagine if I would work with the marketing leader on the other sales lead and you want to change big things, as I mentioned before, this is not possible without the buy-in from one of the founders because it has drastic implications on the whole business. They were very early stage here. It won't be a lot of big teams, right? So it's one of the founders, it's my main contact person. Sometimes sales on marketing is joining those sessions. Gotcha. When we look at go-to market, there's a lot of beliefs out there. What is a popular belief you've seen, maybe on LinkedIn or anywhere else, where you completely disagree with? I remember two or three weeks ago, I had a good discussion on LinkedIn and a theory on the go-to market advisor on exactly on my free stage approach. One of the things that in this free stage approach is that product market fit is the combination of problem solution fit and go-to market fit. So basically, you need to have problem solution fit first and go-to market fit. If you have both, you have product market fit. I liked the definition. I saw this from Anthony Peary from Fletch, PMM. Björn said, I disagree with that. I believe product market fit comes before go-to market fit. So I think there was a discussion of what is product market fit basically. I understand advantage of both definitions, but for me, it makes more sense to say product market fit is the combination of, I found the product that solves a problem for a specific target audience and I know how to acquire and retain them. So go-to market fit and there was a link, maybe we can link it to the LinkedIn discussion, but there was a lot of discussions around what's the right definition on product market. I imagine that LinkedIn both kicked off as well. I think it was not my fault. I commented on someone else, but yeah, I think it was quite some good impressions. When we look at go-to market as a whole and trends, there's a lot happening right now with AI agents, is there something SaaS founders aren't paying enough attention to right now or they should be paying enough attention to certain things right now? I think there's a lot. Maybe I could take an example of the last two weeks, two times that came up. So maybe that's a good indicator that this is something they ignore and I believe they should pay more attention to it. In both our sales, let companies and maybe that's important, my sweet spot is ACV from 2020 K products are not no pure PLG products. And a discussion I have quite a lot is how transparent should we be in our go-to markets, meaning should we publish our pricing for instance on the website, how much content should we share about how the product works. And I do believe there's still a lot of founders out there who believe it's better to hide pricing behind Okatemo or we don't want that our competition knows exactly how our product works. And I'm a big believer that the P2B buyer behavior is changing so people are more self-educating, they expect more B2C-ish buying experience so that they get a lot of content that they already know their pricing before they jump on a call and get a demo for the product. If it's the right approach, I don't know, I think the future will show. I believe that strong signals, this is the future of B2B, SaaS that you need to be more transparent about what you're doing. Because if you're not, your competitors are and buyers will acknowledge that. I personally always hate it if I go to a site in a environment pricing or have to talk to somebody to see the product. I often go away and look for something else. I also do believe that pricing for instance, especially, is a good way to positioning yourself. Because I think if you go on the pricing page and probably you and me, we have immediately an understanding is the product for me or not. Just because of the price point, it could be the same features, like two products, two companies, same features, same use cases, completely different pricing. The result of that is positioning gets clear. I think one product is maybe then more for upmarket enterprise. The other one is more for the SMB market or prosumers. What I want to say is basically being transparent can be an advantage for your whole good to market strategy. Yeah, and depending on what you're pricing is, determining how transparent do you want to be and what is going to be the best for your conversion rate. But you do think the more transparent, the better sometimes. And also don't get me wrong. I mean, I'm really talking about it too. It's 20, 30k ACV range. If you really like enterprise, six figure ACVs, I have no clue about that to be aware. So I think there are advantages to high-deprived pricing because it's very complex such product. Maybe even the most trickiest question of the day. If you had to summarize your go-to-market device or founders in one or two sentences, what would you say? Being okay to narrow down. Maybe in combination with staying close to the customers and don't outsource go-to-market. This mindset, as I mentioned before, also single-to-market. It's probably the combination. It's okay to be narrow in the beginning to niche down. Plus, please own go-to-market yourself and tone the outsource. Yeah, nice. If we're going to take things wider, the final two closing questions. If we talk about growing a BTP SaaS in general, what kind of advice would you give a SaaS partner who's really just starting out and trying to grow to 10k MR? Do non-scaleable things? I'm always surprised to fabric with early stage companies, even if they pre-revenue are very early on, so if they must on the 10k, that they tend to focus on scalable channels to early, ignoring the non-scalable things, when I talk about non-scalable things, have you ever talked to all your investors and ask for warm interest to their portfolio companies? Have you ever talked to all your ex-employees and ask for warm interest to potential buyers? Have you ever talked to all your freelancers or advises you have for interest and warm recommendations? Network sales on the second one have you ever really established a referral engine? When I talk about referral engine, it could be just purely sales left, meaning do you at the end of every sales conversation ask prospects for interest to other potential buyers? Or if it's more product that can build an engine for that, asking for referrals? And I'm always surprised that they don't do it, not all of them, but a big chunk of them never thought about that. If you're goal is really to hit 10k MR, I would just do that. At least I would try it first. Maybe you don't have a big network, maybe you don't have partners, maybe you don't have investors, or your ICPs are very special, so it's not easy to find them. One thing, the fast maturity can really grow to 10k without any scalable fancy channels or executions. The referral engine doesn't have to be expensive, doesn't have to be complicated. This is why we even built an in-app referral program at Reddit as a free-mear model. You can implement it and just ask people to start recommending you and only give them money or even in-app benefits if they do the thing you want them to do. So it doesn't have to be super sophisticated. It can be done set up within two hours. Absolutely. Cool. Then we reached 10k MR and we are going to take it one step further than 1 million AR. We're going to grow to 10 million AR. So it's going to be a huge step or multiple steps, far away. What would you recommend, Sas, if I was going from 10k to 10 million? I do believe that customer success can be a big revenue driver. So implementing the mindset of customer success is more than support. So it can be one of your main revenue drivers. And I saw this happening for instance for the same company I mentioned before that now customer success is the main source of the new pipeline. They really build in a referral engine. Every time they talk to existing clients, they get one or two referrals for potential buyers and this is handed over to the sales team. So they are number one pipeline source and same for like implementing expansion goals. Don't see customer success purely to retain clients but also to drive a new business or not new business but expansion revenue. Nice. Let me see if I can summarize. So if we talk about why this setup will go to market strategy, execution will not work without a proper strategy. If you are going to implement it, keep iterating. You do not have to have a perfect playbook from day one. Common mistakes going too broad, too early, having different ICPs, too many channels, too many features and definitely do not outsource you go to market. You can hire somebody like Alex but you have to be in the driver seat yourself. When we're going to go from zero to one million, there are going to be three stages, hustle, focus, expansion. If we look at hustle, fix problem, solution fit, validate your problem, threshold could be 100K AER and get your message market fit. Do things that don't scale network sales, setup referral engine but don't stay too long here even though it is working. When you're going to move to focus, go to market fit, analyze customers to find your best fit customers, check self-attribution, revamp positioning, messaging and narrow down use cases to improve your acquisition channels. You will need to build repeatability here and once you actually focus all your metrics will increase once it really clicks with everybody. After that go into expansion phase which is often 1 million plus AOR just double down on what works or end experiment vertically. One other thing customer success can be one of your reviewed drivers, offer referrals, experiment, expansion goals so you can really make that an acquisition channel for yourself as well or revenue channel as well. The other thing you mentioned is we are going to link towards the ICP and messaging template which I think is going to be helpful for every staff founder. Any other things we need to link towards Alex. This was an awesome summary. Perfect pitch in one minute. Feel free to follow me on LinkedIn sharing every day content about that. Follow me on the newsletter and I'm unlocked. And if you need help reach out. Yeah, perfect. We're going to add a link towards your LinkedIn profile. Alexander Esner. I definitely follow you on LinkedIn. I appreciate the content which is coming by which is sometimes a reminder. Keep focusing and keep focusing on the things which matter. I'm going to make sure we're linked towards the templates. For people listening on Spotify we always put a poll to this podcast so please answer it so I know if you actually enjoyed this podcast or not if you did enjoy it leave us a review so we can boost the algorithms to help more other founders basically. Thanks again for coming on Alex. Thank you for watching this show of the Growery of Bdb SaaS Podcast. You made it till the end so I think we can assume you liked this content. If you did give us a thumbs up subscribe to the channel. If you liked this content feel free to reach out if you want a sponsor to show. If you have a specific guest in mind if you have a specific topic you want us to cover reach out to me on LinkedIn more than happy to take a look at it. If you want to know more about where it is I feel free to reach out as well but for now have a great day and good luck growing your Bdb SaaS.