Note: This AMA is closed for new questions, but you can check out the existing conversations below.
In this AMA, we had Bob Moore — the co-founder and CEO of Crossbeam and a serial entrepreneur — share his thoughtful insights on discovering your PMF (with an incredible water-hose analogy), building in the partner ecosystem, pricing intelligently, and more. Dive in!
AMA Index (Bob’s brain-pickings)
(founding insights, opinions, and observations; deftly examined and articulated)
Further reading/listening/pondering from the interwebz /
(Other insightful excerpts drawn from blog posts, interviews, and conversations)
On PMF and great teams:
“And to me it really–after all this time running all these companies, it still comes back to nothing is more important fundamentally than a strong vision that leads you to product-market fit and those two things working together. And it’s just the old adage that money solves all problems. Really it’s more like product-market fit solves all problems.”
“All those things the first time you do them they are painful and difficult to formulate. The next time it gets a little easier. The next time you feel like you actually have a time tested, a battle-worn process that makes it faster and makes the outcome better. And I feel like there’s a whole library of those things that just get developed as by virtue of time.”
“The idea is that you shouldn’t make the decision either to do it yourself or offload it. It’s that you should constructively build a team that’s going to be like assembling the Avengers where any one of them by themselves has amazing superpowers, but it’s the entire squad together that is going to save the world.”
“I learned a hard lesson: your place in an ecosystem of tech partners is just as important, if not more so than the quality of your product itself. Marc Andreesen was right when he quipped that “software is eating the world.” But in today’s marketplace, ecosystems are eating software. I’ll never make that mistake again.”
Source: My $2.6 Billion Ecosystem Fail: an RJMetrics Post Mortem
Stay in touch:
You can follow Bob to stay updated with his discoveries and insights:
Having built two companies with the partner ecosystem at the core, what advice do you have for other founders who’re trying to think about this? What questions should we ask ourselves to know when to start focussing on shaping this ecosystem?
I am super excited about this because we are in the PMF stage. One of the advise we have seen on this is to think about the different axes relevant to your product and in some sense use that to understand your competition and create your niche.
My question to you:
Is it important to think of a niche to get to PMF?
Apart from Size (SMB vs Enterprise), Geography, Industry - what other type of axes will you think of?
Or perhaps if there is something completely different to think about.
Hey Bob, thank you so much for doing this AMA and sharing your lessons with us.
In your SaaStr podcast something you mentioned stuck with me - “it took 8 years to build an amazing 3 year old company”. I have always wondered about the number of years we could have shaved off of those initial years of mistakes and iterations. I imagine that decisions play a huge role in this process.
How has your decision making framework changed over the years? What advice would you offer to your old self (as a first time founder) about decision making?
What kinds of decisions do you deliberate a lot over these days vs. the faster ones?
Thanks for doing this AMA with us. I have a couple of questions.
How difficult was it to let go of your previous ventures especially after all the work you put in to get things right? As a first-time founder, I often wonder what I will do when I reach that bridge. How does one know if they are a serial entrepreneur or someone who is built for the long haul?
As one who has followed (and handily exceeded) your path of taking many more years than intended to build our company, I would be curious to hear what specific triggers helped you set the course right. Have you built an operating system that you now follow that lets you skip the hurdles you used to face?
As I am doing back-to-back inbound sales calls four days out of the week, at $66/mo/deal, it feels like I’m singing for my supper (there is growth, but slow and controlled).
Because our SaaS business has a lot of competitors in the space (prospects find us via Googling and typically schedule demo calls with them), it “feels” like it is hard to implement pricing increases. A lot of our direct competitors are Enterprise software that charge 10x-20x our prices, but there are also competitors who price less than us.
Is there any advice you have on how we can grow revenue with competition looking over our heads? Can simply having a better product warrant increasing prices?
I’ve read that entering a competitive market has negative 2nd order effects - eroding pricing power and lengthened sales cycles. Looking back now as a FTF, would you enter a crowded market or would you create a new category?
p.s: was an avid user of RJ Metrics at Le Tote, loved the product but didn’t quite enjoy the load on our database when the queries ran
Hi Bob, thanks for doing this AMA session.
In today’s world, do you think its possible to build a SaaS business to scale by being bootstrapped? Is the journey always the longer when compared to funded startups?
Thanks for taking time out to do this AMA. Our question:
How do you think about high touch vs low touch sales? We’re currently very early stage and having great success with high touch / concierge sales. We’re eager to switch to a lower touch model in the Atlassian / Slack image. How do think about the optimal amount of “touch” in a sales process relative to deal size, product maturity, team maturity etc?
You recently mentioned (SaaStr podcast) that every company desires to be a platform and how all these companies are interconnected in one big eco system — interesting point.
So, given the proliferation of SaaS applications and the potential of seamless interconnections, do you feel there’s been a revision in what gets defined as a SaaS platform? What does it really mean to be one today? And should companies be thinking about becoming one?
You need to make an early, vision-level decision about how partnerships and partner ecosystems will play into your business model. Ask yourself which of these applies to you:
A partnerships-first company where the value proposition of what you’re building is dependent upon connectivity with a large number of tech partners (Stitch was one of these, and Zapier is another good example).
A company where partnerships are a force multiplier, but your core product offering has its own standalone value proposition. Most B2B SaaS companies fall into this category, with rare exceptions like the ones mentioned above.
If you fall into the second bucket, I would be cautious about over-indexing your energy on partnerships before you have truly found product-market fit for your core offering. Partnerships are great, but they are not a replacement for a standalone value proposition. Once the engine is running, however, you can layer them on as a way to amplify your scale and make things more sticky.
(Note: This answer assumes you are talking about tech partnerships, although you could probably use similar logic for channel partners as well.)
This is framed like a question about sales strategy, but to me it’s actually a product question. There are two key inputs when trying to roll out a low-touch model:
Does the buying motion of your user persona allow for it?
Can your product actually support a self-serve or low-touch user experience?
You need both of these to be true in order for a low-touch model to work, and they are both very difficult to change once the snowball has started rolling down the hill.
Many people don’t realize the persona issue until it hits them. Sooner or later, even with companies like Atlassian and Slack that you mentioned, you end up moving upmarket, selling to large enterprises, and hiring high touch sales reps. This is for persona reasons and not product reasons – people need a high touch just to survive their company’s procurement processes.
In your case, with a very early stage business, it is probably still doable to move to a low-touch model, but it has to be part of a comprehensive strategy. Put lines in the sand around who your product is for and what their experience needs to be like in a low-touch UX, and commit to living in that world comprehensively across your business.
This happened to us at RJMetrics. We marketed ourselves as a self-serve product and focused on end users who wanted to self-serve. But the product never caught up to the vision because so much of our functionality was built around the crutch of high-touch services from our early days. That gap was a major source of friction, contributed to churn, ultimately was at the core of a lot of our biggest issues in scaling the company.
The “platform” thing is all semantics really, but I do think it’s an important distinction. Every company can’t be a platform. Having an API doesn’t make you a platform, nor does having tech partners or a bunch of integrations to third-party products. It just means you’re participating in the modern API economy, like basically every other SaaS company out there. And that’s fine and you can still build a massive company if that’s true.
I like the definition Bill Gates uses: " A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it." (more here)
You can put your thumb over the end of a hose and it’ll cause water to come out faster, but it kind of masks how big the original opening actually is. The niche thing is like that – you can iterate more rapidly, get more pointed feedback, and generally create value faster by focusing on a core group. But it masks the data about the size and applicability to your total addressable market. That’s the tradeoff.
That way, later on when you need to zoom out (take your thumb off the hose), you can remove those segment filters but not have to pivot off of your core persona that sat underneath them.
As for other axes of segmentation, it varies a lot by your business model. One that I like a lot (and that people use Crossbeam to discover) is what other tech tools they are already using. It can really tell you a lot about their tech sophistication, ability to pay, and organizational maturity.
I suspect you are selling to a different buyer than your upmarket competitors that charge 10-20x more. They don’t just charge that much because their product is bigger and better – they probably have to charge that much because their cost of acquiring a customer is higher. In order to play ball in their end of the market they have to:
Recruit and compensate enterprise sales reps (which clock in at $250k+ typically)
Build extra functionality to meet enterprise needs (SSO, etc)
Undergo costly audits and security routines to pass infosec and procurement reviews (SOC 2, etc)
This stuff costs money, and so it makes their products cost more. It’s also why you see enterprise-focused SaaS companies raising so much money – they spend more and make more per deal. Everything is bigger.
In your world, I suspect you have a few options:
Figure out how to get yourself off the phone and offer a fully self-serve product. Do you really have to manually sell all your deals? At your price point, this will kill your company if so. Run screaming from this customer profile if they pay that rate and require a founder-level sales rep to close the deal.
Push yourself upmarket and start pitching to more mature companies and/or buyers at those companies who have budget for at least 10-20x your current pricing. You can keep your higher-touch sales model (if a rep can sell ~$1M of ARR/year this can scale with non-founder hires). However, this likely will require some up front product and organizational investment to do right, or you won’t make it past the front door at these buyers.
The path to both of those is painful when you have an entrenched customer base and are dependent on the revenue they generate. My best advice would be to try and structure your offering into a “startup” and “enterprise” tier offering where conversations get elevated to enterprise after a certain level of EITHER usage or procurement baggage exists. Start having those enterprise conversations to understand the requirements.
Also, as a side note, I would not call 10-20x your price point “enterprise” – you are currently an $800/yr product, so 20x that would be $16k a year. That’s not enterprise software – it feels like something you’d see selling into smaller mid-market companies, and even at that price you’ll have a hard time with enterprise reps closing enough deals to make that $1M quota. Given that, and if you think this is a true ceiling on your price point, I am inclined to suggest that you try and remove the sales rep entirely, even on larger sales.
At some point, and this happened around maybe 50 employees for me at my first company, you have to accept the fact that your company is no longer just “yours” – it belongs to your team, your customers, your community, your investors, etc. If you fail to do this, you will struggle to scale. Moreover, if you build a successful company and sell it, you will be intimately involved in the “what happens next” discussion, including who runs it at the acquirer (likely you for a while), how your team is structured, where the product vision is going, etc. It’s just another phase in the life of your company.
My first company RJMetrics was acquired by Magento, which itself was then acquired by Adobe. Our software, and much of our team, is now part of the Adobe Digital Experience Cloud. I’m so proud of that, even though I haven’t been involved there for years. That’s the mentality that makes it easy.
For #2, I think it took me a long time to develop a true sense of intellectual honesty and to be risk-seeking rather than risk-averse while operating an early-stage company. Both are core requirements in a startup entrepreneur, as you have to chase down the high-risk, high-upside chess moves and then be honest with yourself quickly when you screw them up and need to pivot. This was a mental journey more than anything. I’ll talk more about other frameworks in another question.