{"id":5592,"date":"2016-10-14T15:50:40","date_gmt":"2016-10-14T13:50:40","guid":{"rendered":"https:\/\/chartmogul.com\/blog\/?p=5592"},"modified":"2023-08-10T12:25:02","modified_gmt":"2023-08-10T10:25:02","slug":"8-startup-dos-and-donts","status":"publish","type":"post","link":"https:\/\/chartmogul.com\/blog\/8-startup-dos-and-donts\/","title":{"rendered":"Christoph Janz and Nick Franklin’s 8 Startup Dos and Don’ts"},"content":{"rendered":"

In September, Christoph Janz<\/a> and Nick Franklin shared nuggets of their collective wisdom on the SaaStock stage. We’ve gathered it here to share with those of you couldn’t make it to Dublin.<\/p>\n

1. Don\u2019t give away your product too cheaply.<\/h1>\n

Align your price with value. Increase your prices. You don\u2019t have much to lose.<\/p>\n

Worried about your pricing and how to proceed with changing it? Take a look at “What to do when your SaaS pricing is wrong<\/a>.”<\/em><\/p>\n

2. Don\u2019t assume your growth rate will stay steady.<\/h1>\n

Just\u00a0because you\u2019re growing at >20% MoM in your first year, don’t assume\u00a0you can do the same in your second year. The climb gets steeper.<\/p>\n

Think about it in terms of raw MRR growth you need to attain that 20% growth rate over time. The amount of new revenue needed to sustain it\u00a0increases incrementally\u00a0as your business grows, to the point that it might become extremely hard to add that much<\/em>\u00a0new\u00a0MRR\u00a0each month.<\/p>\n

Instead, when evaluating your growth, base it\u00a0on Net MRR %<\/strong>. This takes into account churn and contraction business, which gives you a more accurate picture.<\/p>\n

3. Don\u2019t reinvent the wheel!<\/h1>\n
\"Janz
Christoph Janz dropping knowledge at SaaStock 2016 in Dublin.<\/figcaption><\/figure>\n

Leverage the knowledge that is already out there. There\u2019s a wealth of best-practice information available online. Case in point: Jason Lemkin on Quora<\/a>.<\/p>\n

Study the needs of the market\u00a0as well as\u00a0the products\u00a0that already exist.<\/p>\n

4. Don\u2019t mistake latent demand for Product-Market Fit.<\/h1>\n

Or as Peter Reinhardt, CEO of Segment, put it in his SaaStock speech:<\/p>\n

\u201cGlimmers of false hope are not the same as customers wanting to rip it out of your hands.\u201d<\/p><\/blockquote>\n

Understand the market dynamics. Example of a failed product: Segway.<\/p>\n

Read up on common (tangible) indicators toward\u00a0Product-Market Fit<\/a>.<\/em><\/p>\n

5. Don\u2019t screw up your fundraising.<\/h1>\n

Aspire to create an awesome<\/strong> slide deck, not just okay. Talk to the right number of investors so that you create a competitive process. This increases your leverage.<\/p>\n

6. Do everything you can to win the US market.<\/h1>\n

\"US
\nEven if it means neglecting your home market.<\/p>\n

You want to be a category leader<\/strong>. It comes with innumerable subsequent benefits to the business. For example, as a category leader your company already has some brand recognition, so your sales and marketing efficiency is much higher.<\/p>\n

And to be a category-leading SaaS business, you need to be competitive in the US. If you win North America, you win globally.<\/p>\n

<\/h1>\n

<\/h1>\n

7. Don\u2019t end up in the SaaS graveyard of low LTV and high CAC.<\/h1>\n

\"SaaS<\/p>\n

Stay vigilant about reducing CAC and increasing LTV. In the image above, you want to be moving up or left, ideally both.<\/p>\n

How important is it? Well, if you cannot monetize your customers, then none of your other hard work matters. David Skok <\/a>remarks looking at a group of failed startups:<\/p>\n

\u201c…A very large number of these had solved the product\/market fit problem, but still failed because they had not found a way to acquire customers at a low enough cost.\u201d<\/p><\/blockquote>\n

Many sources cite an ideal CAC:LTV ratio of 1:3. For further reading, Ed Shelley evaluates the most effective method for measuring the CAC:LTV ratio<\/a>. (Hint: segmentation is key!) And for more information on LTV as a metric, check out this Customer LTV Cheat Sheet<\/a>.<\/p>\n

8. Don\u2019t blow your seed round on paid advertising. Do invest in engineering and a world-class product.<\/h1>\n

This is how you get to Product-Market Fit<\/a>. This is how you become a category leader.<\/p>\n","protected":false},"excerpt":{"rendered":"

We don’t usually do listicles, but here is some essential, quick-and-dirty advice from Nick Franklin and Christoph Janz about what will make or break your early-stage startup.<\/p>\n","protected":false},"author":15,"featured_media":5616,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[93,12],"tags":[41,21,108],"class_list":["post-5592","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-funding","category-gtm","tag-metrics","tag-saas","tag-startups"],"yoast_head":"\nChristoph Janz and Nick Franklin's 8 Startup Dos and Don'ts | ChartMogul<\/title>\n<meta name=\"description\" content=\"Essential, quick-and-dirty advice from Nick Franklin and Christoph Janz about what will make or break your early-stage startup.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chartmogul.com\/blog\/8-startup-dos-and-donts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Christoph Janz and Nick Franklin's 8 Startup Dos and Don'ts | ChartMogul\" \/>\n<meta property=\"og:description\" content=\"Essential, quick-and-dirty advice from Nick Franklin and Christoph Janz about what will make or break your early-stage startup.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/chartmogul.com\/blog\/8-startup-dos-and-donts\/\" \/>\n<meta property=\"og:site_name\" content=\"ChartMogul\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/chartmogul\" \/>\n<meta property=\"article:published_time\" content=\"2016-10-14T13:50:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-10T10:25:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/chartmogul.com\/blog\/wp-content\/uploads\/2016\/10\/christoph-nick.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"3000\" \/>\n\t<meta property=\"og:image:height\" content=\"1250\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Annie Musgrove\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@chartmogul\" \/>\n<meta name=\"twitter:site\" content=\"@chartmogul\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Annie Musgrove\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/chartmogul.com\/blog\/8-startup-dos-and-donts\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/chartmogul.com\/blog\/8-startup-dos-and-donts\/\"},\"author\":{\"name\":\"Annie 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