

Milestones for SaaS Companies - ivolo
http://rein.pk/milestones-for-saas-companies/

======
lunaru
This article must have been written with an implicit ARPU in mind. For lots of
low ARPU companies, milestone 1 and milestone 2 are going to be inverted. That
is, you'll likely get 10 paying customers before finding true product market
fit.

Also, likewise, hundreds of customers will not equal $1M ARR for lots of SaaS
companies. Even at 1000 customers, you'd need ~$100/mo or greater subscription
price.

For SaaS companies with < $100/mo pricing, the equations and milestones are
very different. For example, a $30/mo ARPU means having to get 3x more
customers. So suddenly, hundreds of customers are not enough, you need
thousands. That can mean the difference between a direct sales or white glove
treatment to something slightly higher scale.

------
xivzgrev
I enjoy reading how he quantifies pm fit - different people have different
approaches. Another guy, can't think of his name, said 40%+ would be "very
disappointed" if business shut down. Think they're all useful signals.

------
molf
I find it hilarious that "profitable" is the last milestone.

~~~
beat
Once you're on the investment treadmill, growth is everything. Every dime of
profit is a dime not reinvested in growing the company. Early investors are
making a tremendous commitment - they're not just investing, they're giving up
liquidity on their investment. They can't just turn around and resell it to
invest in something else, the way they could with publicly-traded stocks.
Illiquidity is a largely alien concept to most people.

A little background. There are really three factors to any investment - risk,
return, and liquidity. The more you sacrifice with one, the more you expect
from the others. Startup investments are high risk and low liquidity, so they
should generate incredible returns when they do succeed.

So no, your angels and VC don't _want_ profitability. They want growth. When
you finally achieve a "liquidity event" (selling the company, or IPO), it's
getting sold to the people who want profitability, and are willing to
sacrifice returns for it. Different investors, different needs.

As a business, if you want control, you eschew investment and instead target
profitability and stability. But you're greatly limiting your growth. That's
fine, too.

Do you want to be rich, or do you want to be king? If you want to be king,
avoid investors and build for stability. If you want to be rich, take the
investment and grow as fast as you can.

If you want to stand on the sidelines, that's fine too. But don't laugh and
mock business decisions by smart and determined people. Maybe they're trying
to solve a problem you don't understand.

