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The SaaS Playbook with Rob Walling

I’m excited to have Rob Walling who is an entrepreneur, author, podcaster, and angel investor. He is the author of Start Small, Stay Small: A Developer’s Guide to Launching a Startup, and runs a popular podcast – Startups for the Rest of Us. He is the founder of email marketing software Drip which was acquired in a life-changing exit by Leadpages in July 2016. He is coming up with his new book, The Saas Playbook In this episode, Rob talks about his experience in the startup world, including his successes with HitTail and Drip, his thoughts on bootstrapping versus venture capital, the criteria for implementing a freemium model in a SaaS company, the hiring process for startups, and Rob’s decision to launch his new book on Kickstarter, thoughts on angel investing and if founders should angel invest while they are still building their own companies, and much more! Timestamps Robert’s interest in startups [00:00:31] Robert’s motivation for entrepreneurship and how he got interested in startups. Rob’s first successful startup [00:01:29] Rob’s first successful startup, HitTail, and how he bought it instead of building it. Building Drip and the exit [00:04:36] Rob’s experience building Drip, considering raising funding, and ultimately selling it to Leadpages. Tiny Seed Investment Model [00:09:23] Rob Walling explains the investment model of Tiny Seed, a startup accelerator that invests in bootstrap SaaS companies, and how it gives founders optionality. Advantages of SaaS Business Model [00:11:30] Rob Walling shares his thoughts on why SaaS is the best business model, citing reasons such as high margins, subscription-based revenue, and high exit multiples. Impact of AI and No-Code on SaaS [00:13:26] Rob Walling discusses the potential impact of AI and no-code tools on the SaaS industry, and how they may affect custom SaaS apps and pricing models. Pricing Strategies for Early-Stage Startups [00:15:14] Robert asks Rob Walling about pricing strategies for early stage startups, including whether or not offering a free model is a good idea. Freemium Criteria [00:15:31] Rob Walling discusses the criteria for implementing freemium, including quick onboarding, low incremental cost per user, low support load, and virality. B2B SaaS Marketing Approaches [00:19:01] Rob Walling outlines the 20 B2B SaaS marketing approaches, with the top five being content marketing, SEO, cold outreach, integrations/partnerships, and advertising. Ideal Cadence for Cold Outreach [00:21:31] Rob Walling advises that a high volume of cold outreach is necessary, with multiple channels used, and suggests outsourcing to a company like Post if possible. Hiring and De-risking [00:23:30] Advice on how to attract great people and compensate them for revenue ties and non-founder product guys engineering talent. Building a Product, Business, and Company [00:23:53] The stages of building a startup and when to start hiring managers and building a company. Interviewing Sales and Product Candidates [00:27:04] The importance of hiring a recruiter and the interview process for sales and product candidates. Testing for Grit and Curiosity in Interviews [00:29:29] The challenges of testing for grit and curiosity in interviews and the importance of asking hard questions tactfully. Asking Hard Questions [00:30:13] Rob talks about the importance of asking hard questions during interviews to reveal more about a candidate’s experience and grit. Key Metrics for SaaS [00:30:52] Rob discusses the six key metrics for SaaS businesses, including ARR, month-over-month growth, cost to acquire a customer, sales effort, churn, annual contract value, expansion revenue, and referrals. The Importance of Churn [00:34:23] Rob emphasizes the importance of churn in SaaS businesses and how it impacts lifetime value, annual contract value, and spending on hiring and customer acquisition. Angel Investing [00:36:57] Rob shares his thoughts on angel investing and advises against founders doing it unless it’s a shoe-in investment opportunity. Rob’s new book and Kickstarter campaign [00:37:45] Rob explains why he chose to launch his new book on Kickstarter and the benefits of doing so. Writing the book and hiring a writing coach [00:39:49] Rob talks about the process of writing his new book and how he hired a writing coach to help him overcome writer’s block. Growing a podcast audience [00:41:29] Rob shares his experience on growing a podcast audience and the challenges he faced. Favorite business book and online tool [00:42:46] Rob recommends a business book called “Founding Sales” and talks about his favorite online tool, Airtable. Contacting Rob [00:43:59] Rob shares how people can reach out to him and learn more about his new book, “The SaaS Playbook.”