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How a startup can build a great SaaS app on a limited budget

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As a start-up founder you have only one goal: to convert your idea into a product as quickly as possible and storm the market with it. Sprout expert Marc van Neerven explains how you can build a great SaaS service with a limited budget.

A focus on speed-to-market, given the constraints of a small budget (unless you have just won the lottery), produces a very pragmatic, sometimes even opportunistic attitude.

However, this same opportunism also presents some challenges when it comes to establishing a good foundation for your SaaS app.

Provided you are aware of this dynamic and its implications, you can be very lean and pragmatic and still make a great first impression with your SaaS MVP.

As Chief Technology Officer (CTO) I have worked with countless early startups, many of them grappling with tech issues.

I will group my findings into Process, Product and People:


1. Process

If you are lean, you don’t need a lot of tooling to manage your company. Expensive project management, CRM or financial software are really a bridge too far, but you do need some structure, especially on task, workflow and knowledge management.

Note: Saving documents in folders is not knowledge management

To get the noses in one direction as a team, it is good to use a knowledge management tool, preferably one that makes it ultra-simple and productive to write and share content. Previously I would have said ‘use a Wiki’, but compared to what’s on the market now, a Wiki feels gooey and clunky.

Personally, I am very fond of Nuclino. Nuclino provides direct, focused content management, where productivity comes first. Everything you write or add is immediately live (for your team), internal links are too simple for words and pictures, videos and diagrams, you drag or paste without any effort.

There are now plenty of tools like this that allow a team to have (and keep) its noses in one direction when it comes to everything important in running a startup and developing a strategy.

What you should not forget, however, is that the use of knowledge management tools entails a mindset change: your team members will have to break free from entrenched habits such as sending email attachments to each other, or saving documents in SharePoint / OneDrive / Google Drive / Dropbox folders and send each other left.

I have worked with so many startups, scaleups and ISVs who admitted that their internal knowledge sharing was a nightmare, that I can safely say that using a good knowledge management tool can make a huge difference.

So we sometimes want to make an exception in this way. Run rate x 12 should be around € 2 mln. In short, turnover can be viewed in different ways.

What does the investment process look like and what are situations in which you want to abandon the normal course of business in order to make an offer faster?

Daniël: We first look at the commercial aspect of the company. Based on the commercial aspect and the associated traction, we will decide to conduct deeper analyzes. If all traffic lights turn green, a non-binding initial offer (NBO) will follow. As soon as there is agreement between the scale-up and the investor with regard to the NBO, the due diligence investigation will start. We then really dive into your books, your forecast, your accounting system, your Google Analytics, etc. In short, we try to map the most important KPIs (e.g. LTV / CAC) and underlying factors. We would also like to talk to your customers and market experts. We also do a technical due diligence: are you GDPR compliant, is the IT platform scalable, is there technical debt, are there key-personnel risks, etc. Based on this in-depth investigation, we make a binding offer. This entire process normally takes between 3 and 4 months.

October 21, 2020 |
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