Want to know how to become a startup founder? The internet has painted a very unrealistic picture of knowing how to start a business online, or how to build a SaaS startup.
I’m a founder myself. I’ve built Sparrow from scratch. Our startup advisors help SaaS startup founders scale their revenue and bring in more customers - in 90 days. You get to learn directly from founders who’ve built, scaled and sold their own companies for millions.
When we started, the platform had nothing. It was hard. But I came through. I’m telling you this so you know that my guidelines below come from experience and also from talking with over 50 startup advisors, business mentors, venture capitalists (also known as VCs) and the “aspiring” entrepreneurs. We’ve got fantastic testimonials on our homepage and wall of love.
I’m a big fan of creating concise and high-quality articles on entrepreneurial topics. And my signature is bullet points. So let’s dig in.
1. Understand your intention and incentives
It’s very easy to think you want to just “start a company” and make millions like every headline you read online. But the reality is tough and only a tiny, tiny, tiny percentage of startups even become profitable enough to sustain themselves. I follow the indie startup scene very closely on Twitter and the SaaS products which usually hit $5000MRR (i.e., $5000 of monthly recurring revenue) solve a very specific problem for a niche audience.
Not always of course, but if I listed some of these products, you’d notice that they solve a very specific problem for an audience who wants to fix something that bothers them.
So what I mean by this point is that you need to understand what you want to build and why you want to build it. This takes a long time to understand, iterate, and decide upon and you’ll find yourself revisiting this question every few weeks on your startup journey.
But it’s important to look inward and be honest with your “why” as this may be the only thing keeping you sane when you’re spending 60 hour weeks building, marketing, and shipping your product - There will be bad days. You will have annoying customers. But the will to move forward will always need to be within you. Being motivated by external factors (like money or fame) in the early days of your venture is a disaster.
2. Founder market fit
We’ve all heard of “product-market fit” (i.e., PMF) everywhere on the internet. But to even get close to PMF, you first need to understand if you’re the best fit for the market you’re targeting i.e., founder market fit. There are two things you need to ask yourself for this:
1. Do you really care about the audience you’re building for?
2. Do you truly understand the extreme pain you are trying to solve for your audience?
You’ll notice I didn’t touch upon the how of building the product. That’s because if you are not building for people you truly care for and if you’re only skimming through the core of their problem, your mind isn’t set on creating anything. Go back to step 1 and re-assess why you even want to “become an entrepreneur”. There’s no shame in being an excellent employee who creates high-quality output. Don’t try to become something your mind isn’t set on. It’s better to laser focus on what you actually and truly care about.
3. First sell the outcome, then build the how
Classic text online give the impression that if you build a good SaaS product as a startup founder, then the “customers will come”. As you probably understand by now, this is 200 miles away from the truth. Here’s what the successful folks in the startup space say the sequence should be:
1. Decide on an audience based on points (1) and (2) above. Ideally, your total addressable market (TAM) must be large so that it’s worthwhile building the product. If you make something that only 20 people in the whole world can bring, you’re going to be making a very small amount of money every month. When I built Sparrow, over time, I adjusted our messaging to help bootstrapped SaaS founders scale - but initially, our messaging was absurd and I wanted to “help everyone scale”.
Not a good idea for many reasons. So I niched down to only serve certain kinds of founders - but, even then, there are over 10,000 founders I can serve with our reasonable mentorship rates. So yes, niche down to serve an audience but make sure there’s enough potential customers in the space you’re in.
2. Understand the dire, burning problems they are desperate to get rid off (you usually make money by helping people simplify complex tasks, reducing the time needed to said tasks or making it cheaper to do things).
3. Sell the outcome you wish to bring them and build a waitlist/newsletter list/niche following. You can do this by using simple website builders like Carrd.co - explain what your product will do and have an email intake form on the page. The founder of Carrd btw, is a Sparrow advisor too! Come say hi!
4. Build out a very basic, barebones version of your product (also called an MVP) to see how your target audience reacts to it
5. You can also have a list of beta users who get access to this version of the product for them to test it out and give you their honest feedback. This also allows you to make slight modifications to your offering, decide on a pricing model that is likely to sit well with your audience, upgrade existing features, add features you think are absolutely mandatory, etc.
Notice how you should first try and understand what your product needs to accomplish. And only after you’ve determined that niche need that your audience is dying to pay for, should you build out an MVP to address that specific issue or problem or pain. Most people do it the other way around. Hence they spend months and hundreds of dollars chasing the wrong tail.
Throughout all these steps, you should be testing to see which marketing channels work best for your target audience and product.
Focusing on channels while building out a product is crucial because it helps you test to see how you can reach your best customers in the most optimized way possible. As you grow your business and get more customers excited, these channels will change. Today it might make sense to send 20 personalized DMs to your ideal customers to have them test your product, but when you’re at 1000 customers, DM-ing people might make money sense anymore. Which is cool haha.
The point here is to always be marketing - never stop experimenting to see which ways you can best reach your customers in the most effective way. As mentioned in the book “Traction” there are 19 marketing channels exactly, which have helped companies reach insanely high numbers of customers.
Not all of these 19 will help you - some of these will be more suited to your personal founder skillset and audience, more than others. And as you mature through your product cycle, older channels that once worked wonders might need tweaking or you might have to move on to other channels entirely. It’s hard. But fun.
4. Build, learn, scale
Once you’ve satisfied your initial pool of customers and you have the capacity to serve more customers, it’s time to scale. But a lot of things can go wrong when you’re scaling your business. The founders I’ve spoken to have told me the following:
1. “There’s too much to do. Growth is just another big thing I don’t have time for.”
2. “It’s getting more and more expensive to get customers now.”
3. “I’m not sure where to start. SEO? Twitter? Or just 100 cold DMs a day?”
Your journey to growing your revenue will be unique. And it does get very hard to know where to start. Here are some recommendations:
1. Find notable founders in your space and follow their tips! E.g., If you’re in DTC (Direct To Consumer), go on Twitter and look for successful folks who’ve built and scaled DTC businesses multiple times.
2. Reach out to help within your network. If you already have a founder network, ask your founder friends to connect you with individuals who may be good mentors to startups. Some people are also Entrepreneurs in Residence (EIR) to different organizations and could potentially give you great advice on how to attract more customers.
3. Tap into a mentorship system that has worked for others as well. This is precisely why I built Sparrow. I spent 6-8 months sending 150 cold emails to find the kindest and most effective startup advisors. They’ve built, scaled and gotten acquired - so they know what it’s like to be a founder and scale a business of your kind. If you’re reading this article and need help scaling, I’ll personally sit down with you to make sure you have what you need.
Since we’re talking about scaling, I do want to mention the 19 marketing channels that startups have used so far. You may read more about it in the actual book “Traction”. They are as follows:
1. Viral Marketing - my fave
2. Public Relations (PR)
3. Unconventional PR
4. Search Engine Marketing (SEM)
5. Social and Display Ads
6. Offline Ads
7. Search Engine Optimization (SEO) - long term
8. Content Marketing - long term
9. Email Marketing - fun
10. Engineering as Marketing
11. Target Market Blogs
12. Business Development (BD) - hard, but rewarding
13. Sales - you get to meet cool people
14. Affiliate Programs
15. Existing Platforms
16. Trade Shows
17. Offline Events - my jam
18. Speaking Engagements - hell yes
19. Community Building - always day 1
I genuinely hope this article helped you understand the different phases that a person must go through to become a reliable startup founder. It starts with knowing what you truly understand and love → building for people you care about → actively engaging with them to understand their deepest and hardest problems → selling an outcome to them and generating hype for your product or service → starting with a barebones version of your offering → validating the demand for your product → serving your small customer base and making them dangerously happy → scaling and then finally, maybe - if you’re that type - getting acquired!
Final inspiration
MailChimp, a bootstrapped product that’s close to many of our hearts, actually never took a single dime in fundraising and was recently acquired by Intuit. It’s just one of many stories that bootstrappers love because it reminds us that it’s always day 1 and it’s never too late to start a business you love building and enjoying a great quality of life while you do.
I love HackerNoon - reach me anytime!
Thanks for reading this! Let me know how I can help. Always an honor to chat with founders.
(Btw, I’m very active on Twitter and would love to talk about startups, founders, product, growth - anytime. Just DM me anytime. Bonus points if you’re a founder as well, haha.)