SAAS Startup, $100K+/mo, $1M+/valuation (ASK AWAY!)

[MJ DeMarco]

I am happy to welcome Dan C (@DanC ) to Fastlane who is the founder of the SAAS startup, FollowUpBoss, a CRM tool for real estate agents.



Here is a little bio:

In 2008 Dan realised he'd been scammed by society after having completed 4 years at university (college) in Australia studying business and getting a job in finance. When the financial crisis hit his department went from 11 people down to 1 (Dan). After about 2 years at that job he realised he had to get out of the mind numbing boredom and started building websites for small businesses.

In 2011 he teamed up with a developer to start a SAAS business (the original idea was a simple but powerful CRM for small businesses), but 6 months in there were no customers and just a very basic product that no-one would ever pay for. He realised he needed to learn a lot more about marketing, sales and product creation and found Dane Maxwells Foundation course through Mixergy.com.

After going through the foundation course and finding out specific problems from real estate teams, he created www.followupboss.com a real estate lead management system. The business was created completely remotely from the USA with no outside funding while baselining in Europe, Turkey and Germany. The business now employs 8 people, is doing 6 figures a month revenue and is growing quickly.

He’s now living in Sydney, Australia.

Here's a photo of his "baselining" (everything he owned!) inventory.



Feel free to ask away. And if you're out there Dan, please say hello.

You can also find a detailed interview here on how Dan got started from scratch.

https://thefoundation.com/podcast/episode81

And yes, Dan is/was as student of the Foundation. http://www.thefoundation.io

 

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[MoneyDoc]

Nice to have you here Dan.

 

[RHL]

Hey Dan, thanks for taking the time to talk to us!

As a guy who makes money without regular employees (ex: Contracting out jobs rather than having people on the payroll), but who recognizes that almost all big businesses have employees, can you talk a bit about how you identified that you were in a situation where you needed to hire vs. using contractors, how you went about finding your people, and what methods you use to ensure you get hungry, relentless staff rather than clock punchers who will be browsing Reddit or playing Plants vs. Zombies on their phones whenever they're not being watched?

Having worked in a white collar office, when looking at my co-workers, I was constantly bothered by the thought, "Man, I'm glad its not my money paying for this 'work' day."

How do you get past that problem?

 

[Silverhawk851]

Welcome Dan, and thanks for doing this!

What steps did you take to validate that there was a need in the real estate marketplace for this type of service?
What strategy did you use to acquire new clients in the Real Estate space?
How did you figure out the exact things people were looking for in the niche, when you're coming from the outside and unaware of their painpoints?

 

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[tafy]

I would be interested in knowing how you got your first clients, and did your first clients test the product for you?

 

[DanC]

Hey guys great to be here (Fastlane fan here!)

Great question Enaeka.

Because we work remotely, thats a huge benefit for people looking for more flexibility and work/life balance.

We had some good success with the website https://weworkremotely.com (found 2 great developers and 2 CS people there), its was run by the guys from 37 signals so it attracts a lot of people already familiar with SAAS and working remotely.

We've got fulltime people because we want to train them up and grow the business with them, as opposed to just getting todays work done or a one off project. If you know you will need people ongoing and cashflow supports it might be time to bring some people on full-time.

I think we need to put in place better systems for hiring and filtering people out (so we probably aren't the best company to model there), right now it's basically filtering people based on their initial email (looking for clear communicator, understands what we need done etc) and an interview then trial.

Upto this point we've being hiring most people based on job ads, but the best way to hire people is through strong referrals. This is a good post with more specific tactics. https://zapier.com/blog/how-to-hire-remote-team/

As for people wasting time, you need to make sure you have accountability in place for what you need them to do. Have weekly 1 on 1 calls and daily updates (this goes for contractors as well). We use a tool called idonethis.com

I plan to spend a lot more of my time on hiring this year.

btw we're currently looking for strong designers, developers and customer service people with SAAS experience.

 

[DanC]

Welcome Dan, and thanks for doing this!

What steps did you take to validate that there was a need in the real estate marketplace for this type of service?
What strategy did you use to acquire new clients in the Real Estate space?

The process in the foundation is called Idea Extraction, in the startup world its called customer development.

Essentially you begin by talking to a niche, by cold emailing them, setting up phone calls.

Then you dig deep on the phone calls, by asking them things like "what is the biggest problem in your business?", you ideally want to find something they are losing sleep over. Then ask them why it's such a problem, how much money its costing them, why haven't they solved it already etc. You want to understand everything deeply, better than they even understand it.

Then you find more people and if you start hearing the same problem over and over you probably have an opportunity.

Here is a live example
Listen to Dane Maxwell call a prospect, and hear ... - Mixergy

We did a lot of social media work on Facebook early on and get a lot of word of mouth referrals (by having a good product and providing good customer service).

Welcome Dan, and thanks for doing this!
How did you figure out the exact things people were looking for in the niche, when you're coming from the outside and unaware of their painpoints?

Lots of people ask me if I used to work in real estate, or my family does. I'm not even from the USA, but the reason I understood better than everyone else what they needed is using the idea extraction process above. If you spend time understanding a problem and building a solution for it, your going to understand it better than 99% of people that have never spent any focussed time on the problem.

Listening to people is the key, try to go into every conversation without any bias.

 

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[DanC]

I would be interested in knowing how you got your first clients, and did your first clients test the product for you?

Cold emailing, Facebook (interacting in groups), forums, webinar with someone already in space, referrals.

Yes clients must be the ones testing the product, feedback from anyone else is irrelevant. When we initially launched we just did a whole bunch of things manually for them as we hadn't built out those features, this is easy when you have just a few clients and lets you understand the problem even better before coding up a solution.

 

[Ses]

When did you realise your plan was going to work out? Right after cold emailing and facebook? Is your plan even working out and/or do you have other plans?

 

[DanC]

When did you realise your plan was going to work out? Right after cold emailing and facebook? Is your plan even working out and/or do you have other plans?

After selling the first few people the solution. I had a strong notion it would work before that because of the idea extraction and all the research I had done on the market, but after the first few sales I knew we could get more.

Once you sell a few people your solution you will also know how hard it is to sell, find leads etc.

Ideally you should presell the solution (ask people to pay before you create the product, like kickstarter), this removes all of the risk that you won't be able to sell the product. We didn't do this, but if I did it again I would.

 

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[randomnumber314]

a lot of people get stuck on trying to perfect their product before release, how refined was your product before you started selling?

 

[DanC]

a lot of people get stuck on trying to perfect their product before release, how refined was your product before you started selling?

Yes that is a trap, because there is no way your product will be perfect before you get customers (our product is still not perfect). What you think people want and what they actually need and want will be different.

Thats why you should presell the solution, I think in the new foundation classes you are actually banned from coding until you have presold some people. This eliminates all the risk and chance you will spend 6 months building something no-one wants to pay for. Focussing on coding or design when you have no customers is a form of procrastination (I've being there).

Our product wasn't very refined, as I mentioned we'd just did a lot of things manually. In startup terms they call it a Minimum viable product, think along the lines of minimum sellable product.

 

[Kingmaker]

Any techniques that worked for you for cold calling business owners without feeling like you're wasting their time?

 

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[limitup]

Right on DanC, welcome. I love the SaaS model myself and after a few years "vacation" I'm working on one as well. Great model if you can just get traction.

 

[DanC]

Any techniques that worked for you for cold calling business owners without feeling like you're wasting their time?

Email them first.

Here's some templates
Email Copy for Idea Extraction - Geordie Wardman
http://www.carlmattiola.com/connect-with-your-market/

 

[Payden]

I have a 4 person team that's working on a product that will make life better for people with reading disabilities. Right now we're working on developing a prototype, working on customer development, and building a website to sell pre-orders. What would be your advice on pricing? Should we sell pre-orders at full retail price or should we give people a discount, perhaps sell the pre-orders at cost? I would appreciate any advice you (or anyone else on here) could offer.

Edit: In case it's relevant, our product is going to retail at around $250.

 

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[K.Y.]

• did your presells cover the entire first run of the development?
• how did you find reliable developers? (I think dane provides a list of good ones?)
• how did you end up picking real estate as your niche?

 

[csalvato]

did your presells cover the entire first run of the development?

Ideally you should presell the solution (ask people to pay before you create the product, like kickstarter), this removes all of the risk that you won't be able to sell the product. We didn't do this, but if I did it again I would.

how did you find reliable developers? (I think dane provides a list of good ones?)

We had some good success with the website https://weworkremotely.com (found 2 great developers and 2 CS people there), its was run by the guys from 37 signals so it attracts a lot of people already familiar with SAAS and working remotely.

There's some good info here...you should read the whole thread if you are skimming...

 

[10lapsdown]

Hey Dan,

I was just looking at the Foundation and listening to a few of the podcasts. Obviously you found the course beneficial. Was there a broad spectrum of ideas for different niches/markets or did you find that real estate featured prominently?
Did you have any issues picking up a phone and making those initial calls? Like, nerves, confidence, etc?

Cheers

 

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[Andy Black]

you are actually banned from coding until you have presold some people

^^^ Haha. Awesome. Love this.

Thanks for doing the AMA Dan.

 

[tafy]

I think in the new foundation classes you are actually banned from coding until you have presold some people

I would be screwed then lol

 

[Ses]

This is 12 hours late, but how did you deal with spam filters when cold emailing people?

 

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[DanC]

I have a 4 person team that's working on a product that will make life better for people with reading disabilities. Right now we're working on developing a prototype, working on customer development, and building a website to sell pre-orders. What would be your advice on pricing? Should we sell pre-orders at full retail price or should we give people a discount, perhaps sell the pre-orders at cost? I would appreciate any advice you (or anyone else on here) could offer.

Edit: In case it's relevant, our product is going to retail at around $250.

Hey Payden, I'm not to sure about selling to consumers we only do B2B. But usually for early signups you would offer some kind of incentive like a discount or bonus (like kickstarter). I'd research everyone else in the market re what they are charging. Also ask your potential customers what they would pay.

 

[DanC]

I was just looking at the Foundation and listening to a few of the podcasts. Obviously you found the course beneficial. Was there a broad spectrum of ideas for different niches/markets or did you find that real estate featured prominently?
Did you have any issues picking up a phone and making those initial calls? Like, nerves, confidence, etc?

The techniques apply to any niche, there are some guidelines to help you choose a niche e.g. it should be easy to reach the decision maker by phone and email, >1000 customers in the niche, they use software already in their business, >100k revenue per year. Theres a few more which I can't recall right now, but essentially your looking for an attractive niche where you can reach people.

Yes re confidence and nerves, you get over this with practice.

 

[DanC]

This is 12 hours late, but how did you deal with spam filters when cold emailing people?

You just email them from your Google account one at a time.

You can use a freemium tool like yesware.com to track who opens and clicks.

There are also some other tools for cold emailing like https://toutapp.com but I prefer just sending from Google as learning a new tool and setting it up is a barrier to actually taking action and sending the emails.

 

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[Tregan]

Hi Dan,

Thanks for doing this AMA!

Regarding The Foundation, is it likely you would have started a SAAS without going through the program? I've been interested in their program for a while and think the community is the strongest piece of their model. Thoughts?

 

[MJ DeMarco]

Guys don't forget to REP @DanC for taking time to answer.

 

[DanC]

Hi Dan,

Thanks for doing this AMA!

Regarding The Foundation, is it likely you would have started a SAAS without going through the program? I've been interested in their program for a while and think the community is the strongest piece of their model. Thoughts?

Your welcome!

We tried to start one before going through the program, we got 0 customers as we had no idea what we were doing. Of course it's possible to start a SAAS without doing their program but your going to need to pick up the marketing, sales, product creation skills from somewhere. Learning from someone else who's done it before is a shortcut to that.

The community is a very strong part of the course. Learning and doing something with other people increases your chance of success and keeps you motivated. Before this business I used to sit at home coming up with "great" ideas and schemes, trying to do everything alone and figure everything out by yourself can make things harder than they need to be.

 

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[Tregan]

Where do you see your business at in the next year, 3 years, 5 years?

 

[MJ DeMarco]

I updated the thread to include an interview that details some of his starting processes via the Foundation.

https://thefoundation.com/podcast/episode81