What is velocity for business?
In physics, velocity refers to the rate and direction of motion. In a business context, the term refers to how long it takes a venture to reach certain milestones. Organisational speed is crucial in the cut-throat tech industry. Moving fast should be a priority, but you also have to move in the right direction – towards specific goals and milestones – or else you might as well stand still.
The benefits of increased velocity
As a metric, velocity helps you:
- Measure the progress of your business.
- Gauge the success of new endeavours. Ask yourself: is organisational speed slowing down, remaining the same, or speeding up when you implement changes?
- Plan better for the future.
The aim should, of course, be to increase your velocity, as this is linked to your companies momentum, thus in turn resulting in increased Annual Recurring Revenue (ARR) – a sure way to beat your competitors.
How to boost velocity for your SaaS company-
1. Find the correct commercial and marketing models
Spend time focusing on your sales strategy
According to several founders and CEOs we’ve interviewed, creating a strong sales strategy is a critical step that should be a top priority for your business and one every CEO needs to be involved in.
“Founders need to be very involved in sales,” shares LinkSquares’ CEO Vishal Sunak, noting that their team hired someone to help build the sales pipeline early. This person had to help with cold calls, emails and setting up meetings, all while learning from the founders. “We made that kind of first hire when we had, I think, five or six customers.”
Hotjar founder David Darmanin took another approach, which meant they never needed to hire a sales team.
“We said: what if instead of selling to the executives, we sold to their teams? What if we just created a low-friction solution that any team can get their hands on and then let them sell it to the organisation? This worked really well for us. And so we still don’t have a sales team.”
Leadfeeder, in turn, focused on their inbound marketing strategy to boost sales:
“We started with a few of these inbound sales reps that worked only with those who signed up for a trial. We found that if we had a 30-minute training call during the trial, we had a 50% trial-to-paid conversion rate,” says CRO Jaakko Paalanen.
A mixture of inbound and outbound marketing was the solution for Dixa: “Within nine months after the global launch, we hit the $1 million mark. We didn’t just sit there waiting only for the product lead growth or the inbound to kick in,” says CEO and co-founder Mads Fosselius. The team used both approaches at the same time, with great success.
Christian Owens, CEO and founder of Paddle, learnt that sales rely on authenticity.
“The big mistake we made […] was trying to hire salespeople and then train them […] to emulate us.” An approach of telling stories and anecdotes, and sharing their own challenges and pain points, worked for the founders. But trying to get their team to do the same and imitate them didn’t bear fruit. Their colleagues, they learnt, had to be authentic, too.
Content is king
Most successful businesses rely on consistent, relevant, top-quality content to engage existing customers and attract new ones.
Email outreach platform Lemlist focused heavily on creating valuable, industry-related content for its community to help build velocity. The team also created videos and articles about their forward-thinking company and its own growth journey – an approach that created a community of engaged, loyal customers.
Hotjar’s Darmanin, in turn, focused on his team’s strengths to drive the content marketing process.
“We knew how to do Facebook advertising quite well. We leveraged our knowledge of messaging and how to make ads much more news-oriented than content-oriented and less spammy. We leveraged our positioning and the novelty of Hotjar heavily by talking about new and awesome tools, highlighting the change happening.” This strategy proved to be highly successful.
Paalanen and the Leadfeeder team used PR to help build their business and gain velocity.
“We published content, but we also worked with PR agencies. We got articles to TechCrunch and Forbes (in this way) and got nice backlinks from there.”
2. Focus on the product
Create a differentiated product that can stand alone
What sets your product apart from similar products? Is it different enough to lead you towards success and help you pick up speed?
LinkSquares’ Sunak reflects on their efforts to differentiate their AI-driven contract-management platform from competitors.
“Contract management is an old category. Most people historically focused on pre-signature technology, like contract drafting assembly. About 500 companies were doing that type of pre-signature thing. We were different. We started a post-signature, purpose-built repository.”
Another question to ask is whether your product can operate independently.
After being in a tricky situation with Google Analytics, Paalanen and his team learnt a valuable lesson:
“Don’t build your product fully on top of somebody else’s product so that you’re fully dependent on somebody else’s business. Instead, create a product that can stand alone without relying on other software.”
Create demand quickly and early
Hotjar created demand for their product right from the start – another factor that contributed to their success. Their goal was to get people using and speaking about their solution as quickly as possible and build velocity in this way.
“We had this very simple notion: put in your email address and you’re going to be one of the first people to use Hotjar,” Darmanin explains. “Once people were interested, the team created a waiting list. “This was huge for us. We ended up getting around 60,000 emails.” People began to write about the product, its value, and the waiting list – and the rest is history.
Focus on early feedback
Getting feedback about your product should be a key focus early in your business journey. Your customers will get your business off the ground, so their input is vital, advises Paalanen.
“When we started testing out the initial product, we had a free Leadfeeder product. We did customer interviews and got feedback to try to improve the product bit by bit. The idea at that time was just to give it out for free and gather as much information as possible.”
Experiment with free trials
Leadfeeder also focused on maximising and monetising free trials in the early stages – another strategy that proved to be successful.
“We introduced a 30-day free trial and took some of our features and put them behind a premium wall. After the 30-day free trial, we dropped you to a free version. Or if you put in your credit card details, you got to the paid version and started paying a monthly subscription,” says Paalanen. “What we found out is that the 30-day free trial was a bit too long. It didn’t drive enough urgency. We saw that people did all the key activities […] in the first two weeks.”
The team decided to cut the trial in half and found that the conversion rates stayed on the same level or even increased. “We got the money in faster, and the whole process went faster.”
Think narrow and specific
Know what you want your product to look like and look for customers who will benefit from that product as is. In other words, pick your customers wisely.
Here’s what Paddle’s Owens has to say:
“A couple of times we took on customers that we probably shouldn’t have for the revenue. In a number of instances, we were able to make them work out, and everybody was happy. In other instances, we learned the hard way that those are the customers that you sink a ton of time into at the expense of potentially 10 other customers that would have been in aggregate worth more than that one.”
Keep things simple
Part of Hotjar’s explosive growth engine is also attributed to a low-friction, simple approach to sign-up. They made it easy for customers to use their product and spend more with the company. In fact, Darmanin still aspires to a product that’s as simple to use as Netflix. “What if I could just go in there and hit play? It’s that simplicity we strive for.”
Userflow founder and CGO Esben Friis-Jensen shares the same sentiment:
“Don’t try to build super-complex products. Don’t over-engineer things.”
Demonstrate value through pricing
Friis-Jensen furthermore believes that customers perceive product value based on pricing. Going in too low can slow you down.
“I think we started way too low on pricing,” he shares. “I think many SaaS founders are in that situation, especially at an early stage. But you can probably put your pricing higher than you think.”
3. Get enterprise sufficient
Sometimes it isn’t good enough to just differentiate your SaaS product from your competitors. You also have to make it attractive to big companies, where you can expect a high barrier to entry.
David Benigson, CEO of Signal AI, explains:
“You have to pass (your product) through compliance and procurement. And you have to be buyable and viable for large companies, particularly if you’re selling in B2B enterprise SaaS.”
4. Find investors who share your culture
Finding the right investors, who align with your company culture, is another crucial part of boosting velocity.
“A good culture fit – people we trust, people we feel aligned with […] – trumps almost all the other capabilities or value an investor can bring,” Signal AI’s Benigson says, adding that it’s essential to ask yourself whether all parties are trying to achieve the same things in the same way. Misalignment can, unfortunately, slow you down significantly.
5. Hire well and build efficient teams
Your business won’t be able to move fast if you hire the wrong people or if team members aren’t working together successfully.
“I think (your) team is critical,” Benigson notes. “I’ve […] been very conscious about trying to find people who are more experienced, more knowledgeable, and more tenured than I am, and surrounding myself with great, experienced senior folks or junior folks who are great and of a high quality. I think sometimes ego gets in the way of hiring the best people. I’m totally egoless. I think the greater the people I have around me, the better it reflects on me.”
6. Streamline your operating model and processes
Owens reflects on the challenges of setting up Paddle in a way that would help them reach the $10 million mark.
“[We had to] figure out how to build the machine that builds the machine. How do we build the company? How do we forecast and plan? How do we hire great people?”
Benigson focused on using an operating system to streamline their processes:
“We use an operating model called four disciplines of execution – 4DX. I think it creates significant alignment and focus in the business. It enables you to really zone in on one wildly important goal, and then set up the organisation to be focused and aligned around achieving that goal.”
7. Hone your leadership skills
The CEO of a growing SaaS business carries a large leadership responsibility, which is why it’s critical to sharpen your leadership skills.
“As a business grows and scales, IQ becomes less and less important, and EQ becomes more and more important,” Benigson says. “EQ is about managing people effectively. It’s about communication skills. It’s about managing conflict. It’s about galvanising teams. It’s about setting a vision that people feel inspired to follow. It’s about building the right set of values and culture.”
Be bold in your decision-making
An inefficient decision-making process could ultimately hold you back. “Be brave,” says Billbee founder David Pohlmann.
“We’ve always tried to make radical decisions. So at some point, we really stopped and cancelled one key feature of Billbee, which was heavy in development, heavy in support, and low in revenue. We just cut it. Only big things, big decisions, big impact lead to big changes.”
Signal AI also benefited from Benigson’s decisiveness.
“As a founder and a CEO, who cares about my culture and cares about the people in the organisation, I used to think making changes at a leadership level was somehow in conflict with me building a great corporate environment. One of the big lessons I’ve learned is for the company to function, and even for the individual where you might need to make a change, the sooner you do it, and the more forthright you are about it, the more effective it is for all parties involved.”
Celebrate the big and small wins
When you’re caught up in the nitty-gritty of running an expanding business, it’s easy to neglect your achievements and not appreciate them.
At LinkSquares, Sunak focuses on celebrating his team. “Be generous with your time and our team, and tell them they’re doing a great job every day,” he advises. “I try to tell someone in the company every day that they’re doing a great job. It’s so important that they hear it from you as CEO.”
8. Keep a narrow focus
Focus on your objectives
Billbee learnt to narrow their focus to gain velocity:
“We found it’s hard if you don’t focus and have too many things in parallel to work on,” says Pohlmann. “We now try to really be as simple as possible, have as few goals and objectives as possible, and focus on a few things instead of working on too many.”
Define your values
Signal AI doubled down on values as the business grew. For Benigson, it became important to build the right processes and to start defining values and embedding them into the organisation. His team then also started hiring people who exemplified those values.
Focus on what’s working well
For Sunak, velocity also translated into doing what was working well.
“If things are working, quadruple down on it. Take the biggest stack of chips you can, especially in the sales process. Which sub-segments are working? Put all your chips on that. Just do it. Stay focused. Don’t get distracted. And don’t give up.”
9. Keep your eye on the numbers
In the early days of trying to boost your business’s velocity, numbers and metrics are everything.
Leadfeeder kept a strong focus on data, to great effect.
“We were a data-driven company from the get-go. And that’s super important in product-led growth models,” says CEO and founder Guillaume Moubeche. “We tracked basically everything. Being super data-driven, numbers-focused from the beginning has helped me scale up from the early years to over 10 million.”
10. Building community is key
Moubeche and his team also focused on building a community around sales automation and prospecting. Today, Lemlist prides itself on its community engagement, word-of-mouth marketing, and family-like culture.
By also continuously focusing on the pain points and needs of the community, they’ve been able to improve their product. The more you care for your customers, the Lemlist CEO believes, the more they talk about your business.
Tips for the growth process
The founders and CEOs we interviewed also share great life advice for surviving the challenging growth process.
Don’t rush the early growth process
Paddle’s Owens says that, while speed is critical, it’s best not to sprint to a million.
“Rather walk to a million, then sprint from one to 10. Slow down, and enjoy the process.”
To add to the above, Owens believes it’s important to invest time upfront to plan for different scenarios. Spend time forecasting and working on operational and structural pain points.
Learn when to say no
While building a loyal community is important, maintain boundaries regarding customer requests is also critical.
“One of our biggest learnings was that we can’t please everyone from a product-build perspective,” Owens says. “When you’re in the zero-to-one-million-dollar range, the number of customers you have is small enough. They all look pretty similar, and when one of them asks for something, it usually makes logical sense to apply to all. For slightly too long, we tried to please everybody rather than getting really narrow and really specific with what we’re good at.”
One of Lemlist’s core values is transparency, especially regarding what’s working or not working with your product. As a result, Lemlist has documented its growth and progress from day one and shared this with their community.
For Hotjar, open and transparent communication is also vital for lowering friction and boosting velocity. Darmanin explains:
“We publish our product roadmap. Customers don’t need to stay guessing, or they don’t need to ask us, and we reply. We just put it out there. Many people think we’re insane because we’re telling our competitors what we’re going to do. But I think that’s great. Maybe they’ll end up following us, and that’s a great position to be in.”
Stay flexible and agile
Not every strategy will work when you’re trying to boost your business’s velocity. Sunak says that you’re not necessarily going to meet every goal.
“Be flexible to rework things and challenge your assumptions.”
Boosting your SaaS business’s velocity doesn’t have to be an arduous process. You’re halfway there with a clear set of objectives, efficient processes and systems, and a rockstar team.
Boost your scaling speed and velocity by networking, collaborating and learning from like-minded founders who are also on similar paths with their SaaS businesses with SaaStock’s founders membership.