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Ask HN: I need advice on my first B2B SaaS startup

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Ask HN: I need advice on my first B2B SaaS startup

#1

Post by oliverx0 »

Hello, I am a technical founder of a bootstrapped B2B SaaS company. Our solution is a very horizontal process automation platform that has the potential to adapt to a lot of different industries and company sizes with the goal to automate pretty much any business process. I do 100% of coding and my co-founder does sales. Our pricing model is $10/user/month.

We started working on the product 4 months ago, and are still in the validation phase of the idea, which is showing a lot of potential, yet this hasn't materialized into revenue / paying customers just yet. Trying to look objectively at our progress, it seems we have accomplished a lot in 4 months: we have a working product, 5 signed pilot agreements (to start once we finish a couple of features), and we definitely get a 'wow' impression when we showcase our product. Business process consultants seem to particularly see the potential of our platform.

We have only 8 months of runway left, and will need to raise capital to stay afloat. My questions are:

- Most blogs seem to suggest that in order to raise a seed round you need around $100k in ARR. How are we supposed to get anywhere near that, considering we started working on the product only 4 months ago? Even if we go through the rest of our savings, I don't think it is likely we can hit such a number in the next 8 months.

- Is the advice from these blogs for startups in a later stage? How likely are we to raise money without the kind of traction these blogs talk about?

- What strategy would you recommend for companies in our stage? Is friends & family / business angels our only option at this point? How much would be a good amount to raise from them? We think that if we could hire 4 - 6 people we would be able to move significantly faster. Even if we have a good product, it still needs a lot of work.

EDIT:

Product link: www.seliom.com

Re: Ask HN: I need advice on my first B2B SaaS startup

#2

Post by omarhaneef »

Where are you? If you are in San Fran or Seattle, rumor has it that you can convince an angel investor to give you a convertible note, 20% discount at a $5mm cap without any real sales.

But every where else that I have seen, your intuition is correct: friends/family.

This might be a good thing, because the sales is really what proves the product. Look at the dozens of low code platforms that compete in your space (if I understand your concept).

Good luck.

Re: Ask HN: I need advice on my first B2B SaaS startup

#3

Post by oliverx0 »

omarhaneef wrote: post #2

Where are you? If you are in San Fran or Seattle, rumor has it that you can convince an angel investor to give you a convertible note, 20% discount at a $5mm cap without any real sales. But every where else that I have seen, your intuition is correct: friends/family. This might be a good thing, because the sales is really what proves the product. Look at the dozens of low code platforms that compete in your space (if…

We are located in Europe. Thank you for your advice!

Re: Ask HN: I need advice on my first B2B SaaS startup

#4

Post by aazaa »

You didn't mention anything about your goals for the business. I'd start there.

Taking funding might get you out of a short term hole, but it's a tradeoff with costs down the road that will be paid one way or another.

> We have only 8 months of runway left, and will need to raise capital to stay afloat.

Depending on your goals, there could be a number of paths open to you that don't involve outside funding.

Re: Ask HN: I need advice on my first B2B SaaS startup

#5

Post by sharemywin »

accelerators https://thembaisdead.com/list-of-startup-accelerators-and-in...

pre-seed and/or angel investors

freelance to stay a float.

funding portals:

https://www.crowdfundinsider.com/2018/03/131246-finra-approv...

https://www.crowdfundinsider.com/2018/06/134408-there-are-no...

Re: Ask HN: I need advice on my first B2B SaaS startup

#6

Post by oliverx0 »

aazaa wrote: post #4

You didn't mention anything about your goals for the business. I'd start there. Taking funding might get you out of a short term hole, but it's a tradeoff with costs down the road that will be paid one way or another. > We have only 8 months of runway left, and will need to raise capital to stay afloat. Depending on your goals, there could be a number of paths open to you that don't involve outside funding.

Thanks for taking the time to respond. Our goals are to build a great product and make a living. The more companies we can reach / revenue we can generate, the better. In that sense, we would be open to going down the VC route, we just don't know how to get to the point that a VC would be interested in investing (how to get the traction necessary at our stage).

> Depending on your goals, there could be a number of paths open to you that don't involve outside funding.

Could you elaborate on this? Thank you!

Re: Ask HN: I need advice on my first B2B SaaS startup

#7

Post by oliverx0 »

sharemywin wrote: post #5

accelerators https://thembaisdead.com/list-of-startup-accelerators-and-in... pre-seed and/or angel investors freelance to stay a float. funding portals: https://www.crowdfundinsider.com/2018/03/131246-finra-approv... https://www.crowdfundinsider.com/2018/06/134408-there-are-no...

Thank you, we also thought of accelerators as a plausible option. Part of the reason I asked the question though, is that I am curious how others are able to get from just an idea to VC funding. It sounds simple: build a great product, and get enough traction. But actually doing it, even if we believe in the product, seems to take a lot of time. Are we missing anything that other founders do? Or are the suggestions you posted what everyone else does?

Re: Ask HN: I need advice on my first B2B SaaS startup

#8

Post by jbob2000 »

Stop coding and start selling. If you have something that is up and running, you need to get it in the hands of paying customers. Until you have actual paying customers using your system, you will be guessing about what features to build.

Push the people you have signed agreements with to start using the system. Maybe they don't need the features they asked for. Push them to pay you.

Do not pursue an investor until you have actual clients or money coming in. This is the first thing they will ask about and you will close doors if you approach them too early.

Re: Ask HN: I need advice on my first B2B SaaS startup

#9

Post by sharemywin »

sharemywin wrote: post #5

accelerators https://thembaisdead.com/list-of-startup-accelerators-and-in... pre-seed and/or angel investors freelance to stay a float. funding portals: https://www.crowdfundinsider.com/2018/03/131246-finra-approv... https://www.crowdfundinsider.com/2018/06/134408-there-are-no...

offer a discount on one some of the launch platforms like producthunt.com

Re: Ask HN: I need advice on my first B2B SaaS startup

#10

Post by persona »

> 5 signed pilot agreements (to start once we finish a couple of features)

Just a word of caution here. It would be important for you and the client to already be aligned on financial terms / paid pilot when based on feature development. When dealing with larger organizations, it’s not unusual do see B2B postmortems caused by ‘death by a thousand features’ where the deal never happens. Until the organization has to pay anything you may not have a deal at all (didn’t go through procurement, legal, etc).

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