S3E11 – How to Achieve Explosive Growth and Increase Profitability with Stefan Avivson

What is explosive growth and increased profitability, and How can you achieve explosive growth and Increase profitability? To help us understand this topic in the context of B2B SaaS companies, show host Joran Hofman invites subject matter expert Stefan Avivson. As a seasoned entrepreneur, Stefan commonly known as Mister Raw, recounts his journey of starting and selling multiple companies, along with the valuable lessons learned from both failures and successes. His focus on helping startups unlock their full potential and drive revenue growth is highlighted. Stefan shares his extensive entrepreneurial experience and insights gained from mentoring startups.

What does a mentor do?

A mentor helps with personal and business growth. Asking open-ended questions in customer interactions gives real insights. Using good strategies in sales calls helps understand customer needs and preferences.

Stefan emphasizes the value of learning from mistakes and leveraging past experiences to navigate challenges effectively in the business world. He stresses the significance of mentorship and the joy of giving back to the community.

What is explosive growth and increased profitability

Stefan delves into the concept of product-market fit, emphasizing the importance of aligning offerings with customer needs through direct communication and understanding. He highlights the significance of genuine customer interactions in achieving sustainable growth.

Common Mistakes in Achieving Explosive Growth and Profitability

Stefan discusses common pitfalls, such as relying on surveys over direct customer conversations, which can lead to skewed feedback. He advocates for engaging with customers through open-ended questions to gain authentic insights.

He emphasizes the need for founders to talk to at least 100 clients to pivot effectively. The significance of adjusting pricing based on market feedback and customer responses.

How to achieve Traction and Profitability

Initial focus on client interactions and feedback to establish a strong foundation. He recommends adjusting your pricing and conducting outbound calls to gauge market interest and to iterate based on insights to establish a solid foundation for growth. Stefan further recommends focusing on continuous market engagement to adapt offerings effectively.

Strategies for Profitability

Stefan shares strategies for growing profitability, including adjusting pricing models based on market feedback, and emphasizes the importance of maintaining transparent communication with customers.

Advice for Startups

 For early-stage startups aiming to reach 10K MRR, Stefan emphasizes the importance of consistent customer engagement and understanding evolving customer needs to drive growth effectively.He encourages founders to avoid rushing into seeking investors and focus on building a stable revenue stream first. Founders should establish transparent communication and alignment within the founding team to navigate challenges effectively.

Scaling to 10 Million ARR

As companies scale towards 10 million ARR, Stefan underscores the continued significance of customer-centric approaches and aligning with market demands to sustain growth momentum.

Key Timecodes

• (0:37) Show and guest intro
• (1:14) Why you should listen to Stefan Avivson
• (3:27) What does a mentor do?
• (5:40) What is explosive growth and increased profitability?
• (13:04) common mistakes companies make while trying to achieve explosive growth and increase profitability. 
•  (15:25) How to test the willingness to pay
• (19:31) The best practices to achieve real traction and product market fit 
• (22:04) The common challenges in startups
• (25:05) Stefan’s advice on reaching and growing your profitability
• (28:26) How to grow towards 10K MRR
• (29:28) How to grow towards 10 million ARR

Transcription

[00:00:00.000] – Intro

Welcome to the Grow Your B2B SaaS podcast. In this podcast, we cover all topics on how to grow your B2B SaaS, no matter in which stage you’re in. I’m Joran Hofman, the host of this show and the founder of Reditus, which is a B2B SaaS that helps other B2B SaaS companies to set up, manage, and grow an affiliate program. Being a founder myself means I’m going to the exact same journey as you are, experiencing the exact same issues, and probably have the exact same questions. And this is why I started the podcast in the first place. Get advice from industry experts on to grow my B2B SaaS. So if you like this content, make sure to subscribe, follow, give it a thumbs up. Let’s just dive in.

[00:00:37.260] – Joran

In today’s episode, we’re going to talk about how to achieve explosive growth and increase profitability. My guest is Stefan Avivson. He has started his first company at the age of 11. He has had over 10 companies where he sold five of them and two of them went bankrupt. In the last 10 years, he’s been a startup mentor, focusing on helping others. He wants to help startups to unlock a business’s full potential, generate 2-10 times more revenue growth and leave a lasting impact.

[00:01:04.090] – Joran

I had a chat with him a couple of weeks back about something for Reditus, and I loved the straightforward advice, so I thought, let’s just get him on the podcast. And here we are. Welcome, Stefan.

[00:01:13.420] – Stafan

Thank you, sir.

[00:01:14.600] – Joran

I already know you. For the people who are not convinced after this introduction, why should people listen to you today?

[00:01:20.930] – Stafan

Hello, first of all. And why you should listen to me is literally because I experience so much in my life. And when I’m saying experience, I’ve fucked up many times in my life that I know now how to navigate and maneuver myself in all the faults and mistakes and the fuck-ups that we all are doing as founders in companies. I started 10 years ago with mentoring, but that was actually due to a mere fact of me not surviving one of my startups that actually became a unicorn. We changed the shipping industry and it was amazing. But I failed with it because we had the wrong investors on board who were committed suicide during the process. I learned that you cannot raise money with a dead Russian on board your startups. That’s lesson number one. But I started mentoring because I learned one beautiful thing, and that’s also what you’re doing, Jorn, that is helping other people is literally what makes you most happy. Usually, people are helping to get something in return. But this way, you don’t get the joy out of actually giving, because this is what the fewest people actually dare to do.

[00:02:27.780] – Stafan

That’s why I became a mentor here 10 years ago. Right now, this past year, I’ve been doing a lot of consultancy, but I am an entrepreneur, and I have found my project. I’ll have a few customers who I love to work with, because they really listen to what I’m saying.

[00:02:48.210] – Joran

It’s good. You had your own fuck off, you learn from it, and that helps you to become really valuable for others as well.

[00:02:54.470] – Stafan

Absolutely. At some point, and you’re pointing it out as well, I’m pretty made for one. I think two years ago, one of my customers said, God damn, you’re raw. I said, What? You’re so raw, Stefan. Then I just, Okay, fuck it. Let me be Mr. Raw.

[00:03:12.160] – Joran

I actually forgot to mention it in the intro. Every where you find Stefan, you’re going to see Mr. Raw, or you’re going to see Mr. Ra and might not even see Stefan anywhere. We might refer to Mr. Raw in this recording. When we look at you’re a mentor, you’ve been here for 10 years, I always start with a real basic question. What does a mentor do?

[00:03:31.610] – Stafan

That’s a good question. The point is, we are all stupid. Even I am stupid. What I tend to say, usually, is you can’t see the forest for trees because you have your perspective, you have your perception of what the world is. If you don’t get someone else to show you a broader perspective, you won’t evolve. What a mentor does is making sure that you evolve, whether it’s if it’s as a person or if it’s as a company or whatever it is. Be your love life as well. But no, a mentor helps other people. Usually, mentorship is actually done for free. You don’t get paid doing it. I have come up to a point in my life, which is quite funny to think about because we have me too and stuff like that. I only mentor women now for free because I learned that the real difference between men and women, you really see in the founder’s act of people. Let’s say I was coaching you, Jan. We would have a coaching session, for instance, a couple of days ago, that could be. If we then meet up next week and talk about what we talked about or what the goals were, then you will most likely, because you’re a man, spend half of the time excusing why you didn’t do all the things you promised yourself to do and then secure During the last half of it, Okay, so how are we actually going to do it?

[00:04:48.380] – Stafan

If you do that process with a woman, you spend the next week, you spend the first half of the session of being simply empowered by all the things she has already done, plus the additional things that she has added towards those processes that she wants to achieve. It’s just much easier to coach a mentor women because they actually do what you tell them to do. That’s very rewarding. The fun part is when men start paying, I’m pretty expensive, but when men start paying, they switch over becoming like the women.

[00:05:20.030] – Joran

If it’s free, then they don’t value it enough to really spend the time upfront for it.

[00:05:25.860] – Stafan

If you are paying something in between €1,000 and €5,000 per month for somebody who’s making sure that you’re doing the right things, then you’ll be doing the right things.

[00:05:35.410] – Joran

Because then the investment is high enough to actually do it, probably as well for yourself, for your mind. Exactly. In today’s episode, we’re going to dive more in explosive growth and increasing profitability. You help startups do that. What does it mean to you? It’s pretty straightforward, but how do you look at it? What does explosive growth and increasing profitability mean to you?

[00:05:55.790] – Stafan

Growth in VC terms, you usually see the 40% rule where you want to achieve at least 40% of growth because then the lifetime value will most likely go above your CAC, if we’re using such terms. Acquisition cost, the customer acquisition cost, the customer acquisition cost. Increasing profitability is about actually leaning into the business and taking it serious. It’s just an after effect of actually looking at your business as you should be looking at a business. But growth in reality is all about one thing, and that’s product product-market fit. The question is, of course, how do you achieve product-market fit? That’s one of the big issues that everybody’s talking about, especially VCs. Have you achieved product-market fit? Have you blah, blah, blah? The fun point, if you talk to a VC, tell me, I did this several times. I do it of pure joy. Tell me, how do you achieve product market fit? Then you’ll be seeing them in their little boat out on the sea, trying to do something and trying to explain something that they don’t know shit about because reality is also that product market fit is just a term. Marco Andreessen and Jason Horowitz, the original VC, is something he tweeted.

[00:07:09.180] – Stafan

He didn’t even think much about it. He just said product market fit, and then all the smart influences started catching up on it. But there’s no actual theory behind it. Of course, there’s been a lot talking about it and doing their own theories. I did my own theory as well. Because in reality, it’s actually pretty easy to achieve product market fit. It goes like this. As soon as your customers buy in on the same premises as you are offering your product or service, you have product-model fit. You start selling what your customers wants to buy. As soon as you start selling what your customers wants to buy, you have product-market fit. Now, the question is, of course, whether that product-market fit constitutes a big enough market in order to make it profitable, which is the second part of the product-market fit. The market you want to address should have a certain size before trying to scale out such success. I actually did that with one of my companies 12 years ago or something. I thought that my addressable market was 300,000 companies, and one article made me realize that actually we are not talking about 300,000, we’re talking about 30,000.

[00:08:23.750] – Stafan

That’s when I learned how you decimate your market. How do you get to understand what your customers in reality want. There are many marketers who have their opinions on that. I can’t stop, to be honest, laughing about it because I know there’s only one way understanding what your customers want. That one way is by talking to them. When I say by talking to them, I’m talking about talking to them on the phone, talking to them live in front of each other, talking to them on the online web meetings, talking to them. Because that’s when you realize who they are, what their pains are. It’s not something you can do down in your basement or in front of your computer. It’s not something that you can ask out all your preliminary users. If you’re having a SaaS platform, you can’t. Of course, you can. But in my reality, you can’t just send out a survey and ask them because the ones who answer are not your key clients. The ones who answer such a survey are either the ones that love you, can I say too much? Much, and the ones who hate you. In reality, those are the exact outliers that you want to avoid because the guy who loves you too much, God damn it, he calls you all the time, He tells, Oh, this feature is missing.

[00:09:47.690] – Stafan

Oh, you should do it like that. Please get out of my head. Get out of my life. You’re spending too much time on the ones who love you too much. The ones who don’t love you, you fucked it up. In reality, most B2B SaaS companies, because they’re actually doing these surveys out to their customers, they’re building their company on the outliers of what doesn’t work for them, which is quite crazy to grasp around when you realize it. There’s only one way to get the truth from anyone for that matter. The truth comes by creating a sales situation. Because when I’m telling you, Jérôme, if I’m telling you, I want to sell you something, either you get into the defenses or at least now you understand, Okay, this guy wants to sell me something. But the point is, what I’m actually saying is, do you want this? What most founders also do in this exploratory phase is that they call potential customers saying, Hello, we are making a preliminary survey in hope that we can perfect our product, and I’m hoping that you would like to spend three minutes with me so I can learn more about you.

[00:10:50.750] – Stafan

When you do it this way, it can be done in many ways, but that’s the usual form. When you do them this way, people are not telling what they think. They’re telling you what they think They could think about what you do. But when I actually am telling you, Would you like to buy my service or product? I give you a choice. Of course, if you say no, then the choice is no. Then you don’t like what I have presented to you. But that’s where I need to ask why because I need to find out why is John telling me no? What is it? Is it my pitch that fucks up? Is it my value proposition? Is it the way we are doing business? What is it that actually makes you say no? Because now I start to understand in reality why people don’t want my product. On the other hand, if people actually in these 2 or 5% instances, say, Yes, I would actually like to buy from you. This is where most SDRs and founders and anyone who are talking to customers make their biggest fail, because when you have said yes to me, the most important thing now is to understand why are you saying yes to me?

[00:12:00.140] – Stafan

Because that why, not the one I think about the why, but the why you want to buy from me is in reality my value proposition to you. The point is just when you realize why your customers in reality buy from you, you can only create real growth because you have product-market fit, because you are selling what your customers are buying. That’s the real way of actually achieving product-market fit to achieve the growth rates that you would most people dream of. But in reality, it’s very easy to do. However, this is where most people fail because they don’t do it. They always say, Yeah, it’s second on my list. For some reason, it keeps on being the second on the list. It Now it goes up to number one because there’s always something more interesting to do.

[00:12:50.690] – Joran

Of course, there’s always one more feature to build or one more other thing to do. If you look at, I guess, common mistakes, then definitely, you mentioned already doing surveys instead of the calls, focusing on the outliers instead of the people you need to focus on. Are there any other common mistakes companies make while really getting the foundation in this sense in order?

[00:13:11.630] – Stafan

I have in some interviews stated that what every founder needs to do is to talk to 100 clients. Why I say this? Because when you look at the whole startup scene, most companies pivot before they become a growth company. It’s the fewest companies who actually don’t pivot and doing the same shit that they started doing from the beginning. Why they pivot? It’s because they have achieved enough amount of customers who have given them their input so they can actually adjust not only their product, but also their value proposition towards the market. This is something that happens anyway, but they do it on the back of the whole story instead of, Why not do it immediately? Sure, when you talk to 100 different potential customers, many of them will say no, and that’s why you don’t dare to do it. But it’s the reason why they say no that you will build your company on, whether you like it or not.

[00:14:10.840] – Joran

Yeah, maybe to give an example of what we did, and then you can tell me if we did the good thing or not. We basically had a product. We’re building this big new feature where we knew that there wasn’t a problem, but we still wanted to validate it. We’re building now this affiliate marketplace where SaaS companies can search, filter, and contact affiliates which are in our database. Days. What we did is we booked 30 client calls, but not… I say clients, but I actually mean companies who fit our ICP, so also outside of our own rates, which never actually signed up to ready to. Then we had 10 questions prepared for them. We were asking, are they actually getting the problems or having the problems we think they have? We already had it.

[00:14:50.700] – Stafan

How many have you conducted? Thirty. You’ve already done it.

[00:14:54.820] – Joran

Yeah, in a week. We did it all in a week. I had the devs also. We were together in Budapest. We did 30 in a week, back to back and got a lot of feedback. But we did those 10 questions. We showed them the solution we had in mind. We first asked them, Is this a problem? Then we showed them, Is this fixing your problem? Both of them said yes. Then they were really liking it, which was a bit the issue we’re having. They really liked it a bit too much, we didn’t get the feedback we wanted. But then we said, We’re launching it as a beta, we’re going to charge for it, we’re going to charge this for it. We didn’t actually say how much we charge for it, but would you be willing to pay for it and how much would you be willing to pay for it? So testing willingness to as well. Is that something you would recommend others doing or would you change something about that?

[00:15:35.060] – Stafan

First of all, I think it’s beautiful you talk to 30 customers. I love you for that because you can already see the difference between knowing all this and not knowing it. I assume, but you can improve. The thing is now what you’ve been doing is you’ve been asking them questions, close-ended questions, meaning, So I did this. Is this something you want to do? I’m asking you about what I would like to know from you instead of actually allowing you to tell me what you would like to tell me about what I am offering you. What I’m trying to say here is that you need to create open-ended questions in doing so. A quick trick to do it is saying, Hi, my name is Stefan Averson. I’m calling from relatives, and we build an affiliate marketplace that can blah, blah, blah, so you can blah, do, ding, ding, then do that, and pay it on a monthly schedule, whatever. A pitch that actually describes what it is I have created. Because now with this storytelling, now you know what I’m selling. Then I ask, What do you think of this? I don’t know what you’re going to say.

[00:16:48.410] – Stafan

I literally don’t know what you’re going to say. You can say, I think that sounds like a fucking stupid idea, you moron. Pardon my French. Or, I think that’s a great idea. Either way, you get to understand how their reaction is. By then asking afterwards, after you ask, What do you think of this? Why do you think this? Because now you are going to tell me what I’m missing or what is good about what I do, not what I believe you should be telling me. Because the point is, if you don’t know the answer to a question I’m giving you, most people want to at least act clever. People will most likely not say, I don’t know. They will come up with an answer. But if they don’t know the answer, then they’re making up an answer. What they literally are doing is that they’re lying. They have to lie. Otherwise, they look stupid. When you ask people about specific stuff that they don’t know about, you will most likely get a lie. That means on the other end, now you’re starting to build your product and your company based on lies. Stop building companies based on outliers and lies.

[00:17:53.020] – Stafan

The only way to get that from your customers is to ask open-ended questions, meaning questions you can’t say yes or no What do you think of that?

[00:18:01.200] – Joran

It’s a good open question. That’s exactly what we did. So I’m happy to hear. Good. I know I’ve been in too many calls where if you ask close questions, the conversation is really short and you don’t get the information you want. We did spend quite a bit of time in actually prepping those. Maybe even to summarize, talk to your clients, then talk to the right clients. But as you mentioned as well, if they are ready to purchase, know why they purchase so you can use it in your value prop. Then at one point, you might want to pivot based on the customer understanding value they’re getting. That’s why it is going to be really important to talk to your clients.

[00:18:34.580] – Stafan

I think there’s 0.1% chance that you would not pivot after you realize what hundred of your paying clients feel about what you offer. You will be guaranteed, maybe it’s just a little pivot, but it’s still a pivot towards something better. What we want as founders is to create as good a situation that we can for all our stakeholders, of course, also including the customers who are literally driving the company in reality unless you’re fully funded and only focus on getting more users instead of actually making money.

[00:19:07.920] – Joran

This podcast episode is sponsored by Reditus. Reditus helps B2B SaaS companies to set up, manage, and grow an affiliate program. In short, it means you’re asking other people, affiliates, to promote your SaaS. You would only pay the affiliates a kickback fee when they deliver you paid clients, making it a very cost-effective and scalable way to grow your MRR. See more at getreaditus. Com. Are there any other best practices to achieve real traction, product-market fit you can share?

[00:19:39.550] – Stafan

I think when I look at many of the, not only the ones that I’ve helped, but also the ones that we stand on the scene and you have several hundred founders, blah, blah, blah. They’re mostly geeks. I’m a geek as well. I’m a commercial geek, though, but they’re mostly geeks. People don’t take it so serious that the commercial side of a business, at least in my perspective, is 50% of the business. When you are a founder and you don’t have a friend or a co founder who’s in the sales position, not a marketing, please, not a marketing, a sales, or as I call them, business developers. You need to have somebody who is talking to and addressing the market that you are trying to engage yourself with. Because that’s how you get the product market fit right. If you only focus on creating the product, it will most likely not stick to whatever market you think it should have been stopped to. Having people actually doing conversations with the market. When saying that, also addressing just before, that the most important thing is to understand why people would like to buy or why they don’t like to buy.

[00:20:44.940] – Stafan

Then the best way to perform business development is actually trying to sell because that’s where reality kicks in. If you can’t do it yourself, then find the person who’s willing to talk to 100 customers. Because if they can talk to 100, they can most likely also talk to 100 at all. If that actually works, and it most likely will, by the way, because if it doesn’t work, you will understand why it doesn’t work.

[00:21:07.340] – Joran

For tech founders, I think one important thing is if you find that person who’s going to do it for you, make sure that they record the call, so at least you can also listen to them or even listen to them live, but always get the feedback yourself as well. I’m not saying you can’t trust your salesperson, but get it directly from the client itself. Always make sure that they record it so you can watch it later.

[00:21:27.670] – Stafan

As a founder team, You spend half of your time on your market, then you will succeed, or at least you will fail so fast that you realize that this is not the thing you should be doing. Which is also nice. Last year, I helped a guy. He saved $350,000 because he realized that his startup was a fucker. He ended it six months before he ran out of his own money. Instead of wasting all his money on something that didn’t work, he suddenly had 350,000 to invest in something else.

[00:21:54.690] – Joran

That was because he talked to clients or at least-He didn’t talk to clients.

[00:21:58.700] – Stafan

But then he started talking to clients. Then he realized that nobody was interested in what they were building.

[00:22:04.740] – Joran

I think this is one of the common challenges, as you mentioned. Most tech founders have is not talking to clients. Are there any other common challenges in startups?

[00:22:13.690] – Stafan

Yes, and that is the founder team. It is the development over time that happens. One thing I believe most or any founder team should talk about is what do we do when we become successful? Because when you become successful, you’re shifting your attitude, your Your life changes because now you’re a success. Now, for many people, when it comes to success, not many people have had much success. When people crave for success, so when I finally get success, the reason is me, not you, only me. I am the reason why we are achieving so much. When you have three different people feeling that, instead of saying, Hey, we are a success because we are three together, the ego comes in. If you’re not dealing with that, it will most likely fail because then one of the families will see, I’ll just jump over to the investors and be with them, and then we’ll push the other ones out. The point is, in most cases, when this happens, it becomes, what do you call it, a company that sleeps. It never becomes a real success because the reason why it became success was because of the three people working together.

[00:23:17.890] – Stafan

When you dissolve that, and I’ve seen that many times, and I’ve seen it in my own companies as well. It’s not because I’m a genius. I always create success in my companies. The reason why I achieve success My success with my company is always because I talk to clients. The point is just when you get to the greedy point of success, this is the second time of failure in your company. This is actually where if you achieve some traction, this is where you start failing. You have to address this. You have to speak openly about it because if you don’t, it will break your friendship with your co-founders. You just have to remember that the real reason why we have this company is because we started out together. The reason why we have success is because we are together. Together.

[00:24:00.290] – Joran

The advice here would be basically emphasizing that you are doing it together, making sure that you keep talking to each other, making sure you keep that team morale up and high, founder morale up and high, that we have done this together and it’s not just one individual who took you there.

[00:24:15.400] – Stafan

A good example. I can’t talk about what company I’m jumping into, but up until now, I’ve had two customer meetings, and all of them bought. I doubled the ARR for the whole company with the last sales call because they bought for a hundred But that’s not because of me. It’s because of all of us. I can close a $100,000 deal like this because I believe in my team, because I believe in my product. I believe in the work that we do together. What you usually see is the sales guy who closes a $100,000 deal. Damn, his balls are big. They’re goddamn big. They don’t get bigger. He needs to buy new pants. The ego flushes over. But the real reason for closing a $100,000 deal is not because of the sales guy. It’s because of the team.

[00:24:57.860] – Joran

Yeah, exactly. This is why I do the product-led growth approach. You don’t have to have a big sales team, big commissions, things like that. One question before we dive into the final four questions. What would be your advice on reaching and growing your profitability?

[00:25:13.090] – Stafan

This is how I see budgets. You have a lump sum of administrative costs that you can’t literally do anything about. You have some rent, you have some service you need to pay, you have a lady who cleans the office and stuff like that. If you’re that fortunate to come that far with your company, then you actually, not living in your basement, but actually have an office. But yeah, you have a base cost. Everything else is derived also development cost, is that then you have sales acquisition costs. The first thing you do is you try to sell 10 times. This is also another thing that many, at least, B2B sales companies do wrong. They think that the pricing schedule that they put out, when they set out their pricing schedule, they feel and think, This is going to be it. But anyway, within 6-24 months, it changes. I wonder why. The reality is you always have to find your actual pricing point in the market. Making that into an actual tactical roadmap, you get to find your pricing point much faster. The price is not fixed. The first 10 sales is to find out, is there anyone who actually wants to pay for this?

[00:26:17.250] – Stafan

All dependent on how much the price is or on your software service, you start adjusting up and down afterwards and doing it as fast as possible in the shortest time frame possible because then you make sure that your entire market doesn’t hear about it instead of hearing about it. Because if you have a company, they’re changing prices all the time. You can’t count on them. I don’t know what the price is next year. The way to find out is to do the outbound call. People don’t see your prices, but you present the prices to the ones that you believe you should present the prices to. With that in hand, you have to find, first of all, a pricing point that enables whatever marketing or sales or founder lets sales that you make money on it. Because it’s pretty easy. If you make more money than you spend, you are most likely- There we go, completion. It’s an exercise. It’s quite hard to do it because it’s Especially in the beginning, damn, you realize you’re a failure.

[00:27:18.020] – Joran

But that’s, I guess, the problem with B2B SaaS or at least with SaaS. You have low subscriptions, at least when you get started. As you mentioned, start adjusting it up and down. You need to build a product, the pricing will go up over time. But at the beginning, you don’t have the product you maybe want, so you don’t have the pricing as high as you want, but you still have the cost. From there, it will take longer to actually hit that profitability. Yes. Nice. But your advice is start adjusting it up and down, take a short time frame, do outbound calls where you basically propose the pricing so they can’t go to the website. We just did a pricing show with Walter Reberge from Unium. I think he’s the one view, three episodes ago. Check that one out as well where we dive really deep into pricing. It’s not about pricing, it’s more about packaging. How can you package your services in a way that can get value out of it and which is fair and which they’re willing to pay that’s 40 minutes.

[00:28:11.930] – Stafan

That’s the hardest part for most. No, because you have a B2B sales doing anything. The real matter is actually delivering real value to your customers. That’s the whole key.

[00:28:23.520] – Joran

Yeah, exactly. We’re going to zoom out. When we talk about how to achieve explosive growth and increased profitability, what advice would you give somebody who’s just starting out and growing to 10K monthly recurring revenue?

[00:28:36.740] – Stafan

That’s pretty easy. It’s pretty easy. What you need to do is you need to speak to clients. You need to speak to clients all the time because the behavior and the value that you’re giving and the demands and wishes the customers have, they also change over time. All dependent whether we have wars, we do not have wars, we have COVID, we don’t have COVID, we have expensive housing, We have cheap housings, we have a crisis, we don’t have a crisis, we have all the VCs are spitting up money to any crazy founder who created whatever B2B says and stuff like that. Everything just changes over time as well. Nothing is static, Nothing is static. That’s why I have to continue speaking to customers, or at least have someone to do that job for you because that’s the key and that goes to your second question, which is-Yeah, we’re going We’re going to go past the 10K MRR.

[00:29:31.750] – Joran

We are going to make you a big jump. What advice would you give somebody who’s growing past 10K MRR all the way to 10 million ARR?

[00:29:38.660] – Stafan

That answer is pretty easy. You need to continue talking to and understanding your market, your customers because the value of your product changes over time. The perception of your product, the capabilities, the value that you bring into your customers, life changes over time as well. Keep on speaking to customers because that is the real driver for any company. It’s fun because one of my companies, we’re conducting something called a reality check. I’m in the midst of selling it. Now I know all the numbers. We’ve conducted 77 reality checks, and we’ve done reality checks for the small startup without almost any customers up until Cargill, one of the largest companies in the world. What I’ve learned with these 77 reports is that only one in 20 leaders, it doesn’t matter how big your company is, it doesn’t matter how old it is, it doesn’t matter how young you are, only one in 20 founders know why the customers buy from them. I find that really weird because in reality, the only reason you have a company, Jörn, is because you have customers. It’s the only purpose the company has that is to serve their customers. If you don’t understand what your customers want, how the fuck are you going to lead your company towards success?

[00:30:55.770] – Joran

Exactly. This might already be the answer to the next question I’m going to ask. Would you have any general advice towards SaaS founders who are now on their journey? It doesn’t matter in which stage, it doesn’t matter if it’s going to be towards traction or profitability. Any general advice you want to give them?

[00:31:12.810] – Stafan

Don’t get any investors. The reason for that is that you will most likely fail at some point. The point is when you have failed, when you get investors on board, the road has already been outlined for you in regards to that. I would always suggest founders to create a stable foundation that at least pays for the running costs of the company. There was this a couple of days ago. I mentored a couple of founders. They were considering raising money, and my advice to them was, get your MRR up to $10,000 a month and then raise your capital. Because the point is, when you’re raising capital, when you’re using other people’s money, the only way you achieve without luck is being in front of your results. You can actually mold your future. If you’re not capable of doing that, you will most likely fail because you don’t have any other choices. Actually achieving just €10,000 a month, if you can make €2,000 a month, €3,000 a month, you can also do €10,000. The only thing that really needs to be done is to get down to work and actually do it. It’s going to hurt. But when you reach €10,000, no, it’s going to hurt.

[00:32:22.000] – Stafan

He said, No. But when you reach €10,000, you can literally do this. We’re going to do what we want to do. Now suddenly, the whole attitude from the investors also changes because now you are in front. You’re not asking for money. You’re giving them an opportunity to get a payback on their investment if they invest in you. That’s what you should use other people’s money for. That is to grow your company, not to find out whether your company is going to live or not.

[00:32:51.420] – Joran

Really good advice. You basically receive a lot more leverage, strong core before you even are going to use the money for growth, which is going to be the purpose, of course, really growing the company. Final question. Ten years ago, you started mentoring, so it’s funny that it is going to be 10 years. What is one thing you wish you knew 10 years ago?

[00:33:10.990] – Stafan

How evil most people in reality are when there’s money on the table.

[00:33:15.580] – Joran

Yeah, money changes a lot.

[00:33:17.450] – Stafan

It’s sad, to be honest. It’s really sad. That’s also why I’ve been running around, traveling and living in different countries the last year. I needed to find good people to work with. The reason is I failed in my life was due to greed. Not my greed, because I come from the get so. The get so, it’s a street code. You take care of each other. A word is a word. For some reason, you don’t have that in other layers of society. Yeah, make sure you work with good people because it really matters.

[00:33:46.390] – Joran

Agreed. We’ve been personally doing not anymore, but a lot of things without building contracts and doing things on good faith. We just put everything in contract, but I really trust each other. But at one point, you do need to get that in place just in It’s a case that have people not turn evil if there’s money on the table and just to protect yourself.

[00:34:05.020] – Stafan

No, always start making some… Use a standard model for a shareholders’ agreement and then go through point by point. What do you feel here? What do you feel here? What do you feel here? Because one thing is for sure, if you’re out raising money, the shareholders’ agreement will change anyway. When you’re actually raising money, you need to be aligned. That’s what actually usually happens. Okay, now we’re going to make a term sheet. Then you see the founders, No, I don’t want that. Why didn’t you talk about it before? Whether we were going to be in this situation. Now we’re fighting each other, not even the fucking investor.

[00:34:39.750] – Joran

Cool. I guess the final question, if people want to get in contact with you, how can they do?

[00:34:44.450] – Stafan

They can visit my LinkedIn profile and they can send me a message. There’s also, of course, my website. I work in full transparency. There’s a lot of videos with hopefully good content on how you grow your business in many different ways. And just reach out.

[00:35:01.610] – Joran

Nice. You can find him by basically searching for Stefan Elvison or Mr. Rob, but we’re going to add the link also in the- Mr. Rob. Everywhere where we can add it. If you like this episode, feel free to subscribe, follow, and engage with us on LinkedIn. On Spotify. We will be adding the polls, the questions. We are going to experiment with that more. Just let us know what you thought of this episode, which is going to help us to give you more valuable content going forward. Thanks for listening and thanks for coming on, Stefan.

[00:35:28.940] – Stafan

Take care and stay roll.

[00:35:31.220] – Joran

Good ending. Thank you for watching this show of the Grow Your BDB SaaS podcast. You made it till the end, so I think we can assume you like this content. If you did, give us a thumbs up, subscribe to the channel. If you like this content, feel free to reach out if you want to sponsor the show. If you have a specific guest in mind, if you have a specific topic you want us to cover, reach out to me on LinkedIn. More than happy to take a look at it. If you want to know more about where it is, feel free to reach out as well. But for now, have a great a great day and good luck growing your B2B SaaS.