Thank you, GianFabien,
I have not said anything, managing expectations is definitely a hard lesson learned early. This is the second reference for a negotiator at the 30% range, thank you for that data point. I had no reference to this before yesterday. Thank you for the recommendation. Any suggestions on how to find this kind of negotiator?
This is a good point. Perhaps there is some logic to finding a price that lets us hit the next milestones and get customers two and three onboard. Even if it is less than what the material value might be for customer one.
That is a good link, I appreciate the reference. My primary takeaway is that according to the survey on SaaS ACV we would be on the very high end even at $120k/year. I think this is part of the challenge I face - the customer is not used to seeing SaaS billed this way.
looking at competitors is a good idea. Perhaps I can capitalize on the benefit we could have for their reputation as leaders in this space.
Any suggestions on how I find this type of negotiator?
I am confident in solving technical problems, semi confident in writing code, and I have generated about $3m in sales over the past 2 years in this space, but now that I have the product dialed enough it is laterally scaleableI really don't want to mess up something that could set the standard for the next 5 years or more.
Thank you again for the thoughts. I appreciate it.
As one commenter mentioned above, make sure you enter all these communication processes with correct NDA's and Legal prevention to stop them just making your product.
Go find yourself a small company decent legal team, they will be integral in setting terms of contracts anyways so might as well start the relationship early. TBH you don't actually need a negotiator. You need a legal team to define your terms of business your willing to operate/sell under (multi year contract, fixed or variable price and so on). How do you want your business to work? do you want long haul big contracts to a singular or few clients? or do you want short term in bulk to many? (these are the polar ends maybe you want in the middle?). Do you want to be repeating this process soon or not for a few years? You also would do well to hire an analyst to value your business/services product to the market your selling to. AKA get someone to data crunch what your price ranges are for sale and how well it allows for growth and all that. Basically an accountant.
Then you take the numbers from that. Slap 10-20% on it and thats what you take to your market as offer. If they dont just pay it and want to haggle, you got 10-20% to play with. Thats when you negotiate. But not by much and mostly via your legal team. What are they compensating you with for the reduction in your price? Why do they deserve it? Will their competitor kick up the same fuss?
If you make bank you can buy a pc off me someday I turnover like 30k a year atm as a one man band MSP. Maybe I should switch to consulting?
All great points too, and a very good strategy. Thank you, gtvwill. Congrats on your side gig success. Thats the hustle! I am new to HN, how do I get in touch?
lol my 30k a yr isn't my side gig, its my only gig just in its 2nd year :) Its the side effect of being a one man band IT company in a town of only like 5000 people, income is low af. Hit me up gtvwill(at)gmail.com and I'll get in touch via official comms :)
Thank you, verdverm. That was sort of my calculus on $45k/month. It is an interesting point though - these companies will hem and haw over $20k but will not blink an eye at $2m. Thanks again.
