Dear SaaStr: Funding Aside, What Are The Top 3 Things That Stop SaaS Companies From Growing From ~$25k MRR to ~$250k MRR?
Let’s take a step back. If you have reached $25k in MRR ($300k in ARR) … you have something tangible. It may not be significant yet, but it is real. So …
You WILL reach $3m in ARR ($250k MRR) from $300k ARR … as long as:
- you truly have happy customers (no churn),
- continue to acquire more customers (you have already found a way to get some), and
- do not give up.
That’s it.
Satisfied customers will lead to more satisfied customers. This may not happen immediately, not even within a month or two. It can take time. It could take months for one paying customer to bring in another customer through word-of-mouth or other positive feedback from happy customers. But it will occur.
It will happen much quicker if you are growing at 15% MoM compared to 7.5% MoM, but it will happen.
My #1 recommendation is to Focus Intensely on the Satisfaction of Your Existing Customers:
- Monitor NPS (Net Promoter Score) and CSAT — more information can be found here,
- Meet as many customers in person as possible, not just through Zoom,
- Engage with as many customers as you can, and
- Ensure their satisfaction. Do whatever it takes.
My #2 recommendation is to Commit to Putting in the Time.
You may find ways to grow faster than you currently are, but at just $25k MRR, you may not be certain how. Even if you raised more funds. Plan out how long it will take to reach Initial Traction ($1.5m ARR or so) and beyond, to your $3m ARR goal. Commit to investing the time. Determine what sacrifices, hiring decisions, and capital requirements are needed … and stick to the plan.
My #3 recommendation is to Avoid Chasing After Every Opportunity.
I typically give this advice at the next stage, at $1m+ ARR. The fastest way from $1m to $10m ARR, 90% of the time, is to double down on what is already working. This may not always apply at the half-stage earlier where you currently are — $250k in ARR. At this point, if you are growing by 10% or more Month-over-Month … focus mainly on what is successful. Even if it doesn’t seem significant enough yet. This approach will propel you to the next level.
