S4E11 – Bootstrapping your fully remote B2B SaaS beyond 20M+ ARR With Liam Martin

Bootstrapping your fully remote B2B SaaS beyond 20M+ ARR.

In today’s episode of the Grow Your B2B SaaS podcast, host Joran welcomes Liam Martin, the co-founder of Time Doctor, a SaaS company specializing in time tracking and productivity monitoring. Liam’s background is quite diverse, having worked as a journal editor, a research and teaching assistant, and the co-founder of staff.com. His entrepreneurial journey took a significant turn when he founded Time Doctor in April 2012, driven by a need to solve a problem he faced with an online tutoring business.

The Genesis of Time Doctor

Liam explains how Time Doctor was born out of frustration with his previous online tutoring business. He struggled to account for the exact hours worked by tutors, leading to financial losses. This led him and his co-founder Rob, the CEO of Time Doctor, to develop a solution that could accurately track hours worked remotely, thus giving birth to Time Doctor.

Growth Metrics and Business Model

Joran dives into the numbers, asking Liam about Time Doctor’s current ARR, which is between $20 million to $50 million. Liam clarifies that Time Doctor is primarily a product-focused company with a small part of its revenue coming from Running Remote, their conference business. The company employs nearly 200 people across 48 countries, all working remotely.

What does Time Doctor do?

When asked to describe Time Doctor in a couple of sentences, Liam states that it is a time analytics tool for remote workers. The software helps analyze workdays and offers insights into productivity, tailored to individual definitions of productivity. The name “Time Doctor” is quite fitting, especially since Liam’s business partner was once a medical doctor.

Entrepreneurial Journey and Challenges

Liam shares his journey from academia to entrepreneurship, revealing that he was once in a PhD program for sociology. His foray into teaching was disastrous, leading him to drop out and embrace entrepreneurship fully. This decision was a turning point, leading him to eventually co-found Time Doctor.

The Impact of COVID-19

Liam notes that COVID-19 was a significant catalyst for the growth of remote work. Pre-COVID, only 4.5% of the U.S. workforce was remote, but this number surged to 46% during the pandemic. Despite this, Liam and his team debated whether to continue or shut down, given that their mission seemed accomplished. However, they chose to persist, recognizing that the remote work trend was here to stay.

Bootstrapping and Financial Challenges

Time Doctor is a bootstrapped company, with Liam and his co-founder initially investing $150,000 of their own money. While this helped get the business off the ground, they faced numerous challenges, including a critical decision to refactor their software to avoid catastrophic failure. The software stopped working for three days, costing the company millions in ARR and taking two years to recover their Net Promoter Score (NPS).

Burnout from Success

Interestingly, Liam shares that burnout can also result from too much success. During the peak of COVID-19, he was doing up to 10 press engagements per day, working 80-90 hours a week. This led to severe burnout, requiring him to take a month off and focus on physical exercise and therapy to recover.

Strategic Growth and Product Differentiation

Liam attributes much of Time Doctor’s success to its initial product differentiation, which included measuring websites and applications used during work hours. This data-driven approach set them apart from competitors. Their go-to-market strategy focused heavily on search engine optimization (SEO), building a robust content engine to drive organic traffic and conversions.

Assisted vs. Unassisted Models

Liam introduces the concept of “unassisted vs. assisted” customer acquisition. Initially, Time Doctor was almost entirely unassisted, relying on a self-serve trial model. They later added a sales team to handle larger accounts, which proved invaluable during the COVID surge. This hybrid approach of unassisted for smaller customers and assisted for larger ones has been a key growth driver.

Customer Health Score and Expansion Strategy

Liam emphasizes the importance of a customer health score to identify engaged users. By analyzing how customers use the software, they can proactively offer additional features or services. This strategy has helped them identify and expand within large organizations, turning small initial engagements into significant ARR contributors.

The Role of AI and Future Innovations

Looking ahead, Liam sees AI and machine learning playing a crucial role in Time Doctor’s future. They aim to move beyond simple time tracking to focus on outcomes, helping organizations understand not just how much time is spent, but how effectively it is used. This shift could make the “time” aspect of Time Doctor the least important feature in the near future.

Lessons Learned and Regrets

Reflecting on their journey, Liam shares that one of his biggest regrets was not fully capitalizing on the initial surge in demand during COVID. While they did well, he believes they could have doubled their revenue by being more aggressive in customer acquisition and marketing. He also regrets not listening to his engineering team sooner about the need for software refactoring.

Advice for Early-Stage Founders

For those starting out, Liam advises grinding through the first $10,000 in MRR by any means necessary, even if it means making cold calls. He also stresses the importance of not getting too attached to initial product features, as what works to get the first $10,000 may not scale to $100,000 or beyond.

Scaling Beyond 10 Million ARR

For SaaS founders aiming to scale from $1 million to $10 million ARR, Liam advises gradually delegating responsibilities. By the time a company hits $10 million ARR, the founders should focus solely on strategy and leave day-to-day operations to capable team members. This approach ensures that the company can scale efficiently without being bottlenecked by its founders.

Conclusion and Final Thoughts

The episode wraps up with Joran summarizing the key takeaways, including the importance of product differentiation, the value of SEO, and the need for a balanced approach to customer acquisition. Liam’s journey offers valuable insights for SaaS founders at all stages, emphasizing the importance of adaptability, strategic planning, and self-care.

Key Timecodes

• (00:00) Introduction to Scaling Customers and Remote Work Impact
• (01:00) Spotlight on Liam Martin, Co-founder of Time Doctor
• (01:35) Genesis of Time Doctor: Solving a Crucial Problem
• (02:26) Tracing Time Doctor’s Origin Story
• (02:29) Early Challenges in Time Doctor’s Development
• (02:50) Current ARR and Business Model Insights
• (03:09) Exploring Employee Count and Remote Work Dynamics
• (03:42) Overview of Time Doctor’s Services
• (04:18) Journey into Entrepreneurship
• (04:49) Academic to Entrepreneurial Transition
• (05:58) Driving Forces Behind Time Doctor
• (06:10) Mission and Impact of COVID-19 on Remote Work
• (07:29) Customer Testimonials and Their Impact
• (08:10) Growth Strategies Amidst COVID-19
• (09:52) Personal Challenges and Navigating Burnout
• (11:11) Managing Workload and Achieving Balance
• (12:03) Steps to Recover from Burnout
• (15:04) Strategic Decisions During Growth
• (15:16) Differentiating Through Growth Strategies
• (18:23) Go-to-Market Strategy and Sales Approach
• (21:08) Transition to a Combined Sales Approach
• (22:54) Customer Qualification and Sales Funnel Management
• (24:34) Scaling Opportunities with Large Customers
• (28:32) Addressing Major Technical Challenges
• (29:08) Managing Significant Technical Failures
• (31:08) Reflecting on Past Decisions and Potential Regrets
• (31:29) Strategic Learnings from COVID-19 Challenges
• (36:19) Role of AI and Machine Learning in Time Doctor
• (37:35) Vision for Future Product Development
• (38:11) Advice for Early-Stage SaaS Founders
• (38:22) Insights for Scaling from 10K MRR to 10M ARR
• (41:20) Summary and Advice for SaaS Founders

Transcription

[00:00:00.000] – Liam

First 10,000 MRR, your customers are not always right. Your customers are an experiment. Treat them like an experiment. Do not treat them like the precious, unique snowflakes that they are. Your job is to identify how can you scale those customers? You could quite possibly treat them badly, rip a feature out of their hands one day, randomly, to be able to measure the reaction. Remote work has the biggest impact in the developing world because that’s where the vast majority of very difficult jobs exist. If you’re generating $20,000 MRR on a self-serve model, just by adding salespeople, you could probably add 10,000, $20,000 MRR just from that customer base, finding the ones that really need your help, and then selling them on add-ons, upgrading them to premium packages. It’s relatively easy to do. It just requires a large sales org to be able to ramp in order to do it.

[00:01:00.830] – Joran

In today’s episode, my guest is Liam Martin. Liam is the co founder of Timedoctor. Timedoctor is a SaaS which helps in time tracking and productivity monitoring. Before starting Timedoctor, Liam worked as a journal editor, research and teaching assistant at the university. He also co-founded staff. Com, which provided companies with long term outsourced labor. And next to this, he’s running a conference called Running Remote. He wrote a book which is also called Running Remote and he’s been speaking at major SaaS events like SaaSter, SaaSopen, and SaaS. Welcome to the show, Liam.

[00:01:35.670] – Liam

Thanks for having me. Excited to be here.

[00:01:37.650] – Joran

Nice. Let’s get to know you and the company. When did you start at Time Doctor?

[00:01:41.590] – Liam

The company started approximately in 2012. I think our first customer was April of 2012, and spent about six months before that working on it. Me and my co founder, who was the CEO of the company, Rob. We had a real problem that we were trying to solve, which was I had I actually had a previous business, which was an online tutoring company, and I couldn’t actually equate for the hours worked for those online tutors. A student would come up and say, I didn’t work with my tutor for four hours. I worked with them for two hours. Then I ended up having to pay the tutor the full four hours and refund the student two hours, which ended up producing zero money for me. So this time doctor was a perfect solution to be able to equate for hours that people were working remotely.

[00:02:26.830] – Joran

Love it. So just started out of pure frustration.

[00:02:29.370] – Liam

I always tell people scratch your own edge.

[00:02:31.790] – Joran

Let’s talk about numbers. What is your current ARR at the moment?

[00:02:35.780] – Liam

I’m at more than 20 right now, and between 20 to 50, realistically, that’s a good swath for everybody to Google it and see what the real truth is.

[00:02:44.430] – Joran

I think it gives a good ballpark on where you’re at. Is there any separation between service and product revenue?

[00:02:50.990] – Liam

No. At this point, we’re almost purely a product to play. However, Running Remote, which is our conference, which has a separate thesis from Time Doctor, Mission, Vision, and Values, is still under that umbrella. It’s a small part of that, what you would essentially call a service-based business.

[00:03:09.920] – Joran

Yeah, great job. How many employees do you currently have?

[00:03:13.880] – Liam

On last check, We have probably a little bit below 200. I do know that we’re located in 48 different countries at this point because I was just at our executive retreat, and that was the longest number that I got.

[00:03:25.890] – Joran

Nice. I have to ask, are they all remote?

[00:03:28.300] – Liam

Absolutely. We used to have offices, and then we realized that it was a stupid expenditure money. This was back in 2017, 2018. We just shut them all down and we’ve been entirely remote from day one.

[00:03:42.000] – Joran

Nice. If you have to explain time doctor in one or two send this is? What would you say?

[00:03:46.450] – Liam

It is a time analytics tool for remote workers. Essentially, what we do is we can analyze your workday and specifically tell you what things you need to change in your workday in order to become more productive or focus on any outcome that’s really important to you. Because we’ve identified that most people actually have completely different definitions of what productivity means to them. So we’re very agnostic towards that.

[00:04:14.860] – Joran

Then the name definitely relates to what you guys are doing.

[00:04:18.540] – Liam

Yes. Also, my business partner used to be a medical doctor. That’s how we came up with it.

[00:04:24.290] – Joran

Nice. Is this your first startup?

[00:04:26.430] – Liam

Yes. I would say it was my first SaaS startup. I had other companies that I didn’t even know the terms to rep at that point. I had an agency, I had a physical sporting goods company. I had a couple others that weren’t very small, but those probably were the two that were the biggest that I had before I started this business.

[00:04:46.770] – Joran

Did you always wanted to be an entrepreneur then?

[00:04:49.730] – Liam

Yes. It took me a very long time to come to that conclusion. I was pressured primarily by my parents to be able to pursue graduate school. I ended up taking a PhD program in sociology from McGill University. I remember this so clearly, was able to teach my very first class, not just as a teaching assistant, but as an actual instructor. I Started the semester with 300 students. I ended up with less than 150 by the end of the semester in the worst academic reviews in the history of the department. The department had been running for 186 years, so it was very bad. I remember walking into my supervisor to his office and I said, I don’t think I’m very good at this. And he said, No, you are not. And then I said, So what do you think I should do with the rest of my life? And he said, You got to get pretty good at this teaching thing if you want to pursue academia or you need to figure out something else to do. Six weeks later, I threw a master’s thesis under his door and I was out into the real world.

[00:05:49.590] – Liam

And I realized that entrepreneurship, which is what I had done in undergrad, was actually my true calling and I needed to just come out of the closet as an entrepreneur.

[00:05:58.280] – Joran

Sometimes you just have to feel, I guess, is something to figure out what you really want.

[00:06:02.900] – Liam

Absolutely.

[00:06:03.580] – Joran

How old are you right now?

[00:06:05.280] – Liam

I am 42.

[00:06:08.460] – Joran

Do you have an end goal defined with Time Doctor?

[00:06:10.720] – Liam

The mission of Time Doctor, which feeds into everything that we do, Time Doctor running remote, even staff. Com, which we can get into, is to empower the world’s transition towards remote work. That’s been our thesis since 2012. Obviously, COVID was a huge accelerator of that mission. But we We still think that there’s a lot more work that needs to be done in order to be able to get us to that goal. That’s really the true mission of Time Doctor more than anything else.

[00:06:40.220] – Joran

That maybe goes really well on the next question. What keeps you motivated?

[00:06:43.710] – Liam

I think it’s three customer testimonials that come in. I get an email randomly once a week from a customer that says, I would not be able to do my job if it wasn’t for Time Doctor. I remember just three or four weeks ago, there was a guy that used to drive a Jeep. He was running a Jeep, and he is now a virtual assistant, and he has three to four clients, and he uses Time Doctor to be able to measure the amount of hours that he’s working for all of these different clients that he makes sure he’s getting paid. And he just sent us this really great email saying he’s now like, sticks X to his income. He was able to give his kids a fantastic future, and he’s not stuck in the never traffic all day long.

[00:07:29.900] – Joran

Yeah, and this is go back to your vision, you want to help people, but mostly around the world, because I guess in the Philippines, this is a major change for somebody going from a driver to actually VA work and being able to charge for his time.

[00:07:43.140] – Liam

Yeah, remote work has the biggest impact in the developing world because that’s where the vast majority of very difficult jobs exist. For us, we recognize that we can take people that are very intelligent, gifted individuals, and give them a future that they wouldn’t have even imagined without the internet, without access to remote work. They just need a few pieces of technology in order to be able to make that happen.

[00:08:10.160] – Joran

Cool. This was a little bit of a fire round. Let’s dive deeper now. You already gave where the idea of time doctor came from, right? Start up your frustration. Did you know what the beginning already is? It was going to be such a success?

[00:08:22.620] – Liam

No, you can never tell with those types of things. So a lot of people ask me about remote work because now remote work is such a huge phenomenon. Pre-covid, January of 2020, 4.5 % of the US workforce was working remotely. Three months after COVID, it was at 46 % of the US workforce, with a peak at 67 % one month. So essentially everyone on planet Earth was working remotely. We almost at that point, said, we should just shut down because it’s mission accomplished. We’re done. Now it’s not that. It’s around 20 % are working entirely entirely remotely with another percentage working hybrid. So we’re still at about 46, 45 % of the US workforce working remote to some degree, but we have seen a resettling of that number. For me, what I saw was a trend where you could And you can see remote work doubling essentially almost every year. And it was a very small percentage, but it was doubling every single year. And if you can see that number, that old argument about statistics, exponential curves, no one really understands them. That’s why everyone scared shitless about AGI right now, is you don’t really understand how fast things grow on an exponential curve.

[00:09:37.930] – Liam

And we just had a acceleration of, I would probably say, 10 years with COVID as it applies to remote work. This would have happened regardless. It just happened 10 years faster than what I thought it was going to happen.

[00:09:52.450] – Joran

What for many businesses was something negative, for you guys, it just took the business at the moment. Almost it happened where everybody had to start working remotely.

[00:10:01.440] – Liam

Yeah. I would say it probably wasn’t a net negative for the vast majority of businesses out there, even though they might have thought about that in the moment. You now have an entire workforce that is comfortable working So that labor is much more transitionary. You can hire not just from your local environment, your local talent pool. You can hire internationally to be able to get better talent for what you’re doing. So to me, a lot of people were scared. I We called it during COVID emergency remote work. So no one really knew what the hell was going on. Actually, that’s one of the major reasons why we wrote this book with Harpers. They approached us and they said, Listen, we have no books on this particular subject. No one knows how to actually build a remote organization from a managerial perspective. And we want to be able to try to help people do that. And that was the piece. If I could go back to 2019 and scream from the rooftop, it would be, here’s how you manage remote workers, and it’s very different from people in an office. We would have probably had a much better transition towards remote than we had during COVID.

[00:11:11.810] – Joran

That’s funny because I actually worked remote already also before COVID, worked at a company called Leadfeater. Full remote. Did it for, I think, two or three years before COVID hit. People were looking always really weird to me, Hey, what? Are you always working from home? Don’t you have an office? And after that, it became normal for everybody, which was quite funny. If we go to time, doctor. Are you guys bootstrapped or funded?

[00:11:34.030] – Liam

We’re bootstrapped. It’s a little bit just ingenuous to be able to say we’re completely bootstrapped from dollar zero. Me and my business partner, we invested $150,000 of our own money inside of that business. But even with that, I don’t know if there’s a seat around now that goes for $250,000. You couldn’t get very far, even back then, on that amount of money. It was just hiring a couple of engineers, building a very early stage beta, and then seeing whether anyone wanted to buy it.

[00:12:03.810] – Joran

This is definitely the terminology of bootstrapping, putting your own money into place and growing it. Now between 20 to 50 million ARR, it sounds like a success story, and it is. But in that moment or in that journey, everybody hits rock bottom one day, either financially, personally. Could you share one of your moments?

[00:12:23.100] – Liam

I can actually share with you a rock bottom of success, which you’re probably not going to hear those many on this podcast. When COVID hit, I went from doing maybe one to two pieces of press per month to doing 10 pieces of press per day. We had the very definition of an exponential curve. In 2020, we grew 202% for an eight-figure sales to grow at 202% as in total. Everyone wanted to talk to us. I remember that was the moment where I said, Okay, this is the train leaving the station This is the opportunity that we have been looking at for the past 10 years. We need to be able to execute on this as quickly as humanly possible. And I did. And I worked for 80, 90 hours per week. Now, it was a little It was a little bit easier because we were all locked inside of our houses. It was easy for me to just do nothing but work. But my wife was pregnant when COVID hit. She was three months pregnant at that point. It was just a lot of stuff that was happening all at the same time. And for me, For me, I definitely had a burnout, which I actually documented on the Running Remote YouTube channel.

[00:13:38.670] – Liam

I very clearly documented, Here’s exactly where I had a burnout. This is what happened to me. This is how long I had to basically just lay on the floor and stare up at the sky for weeks to be able to just get myself back to where I was. I was just mentally and physically exhausted. I think that it’s interesting as well because Burnout is almost always correlated towards lack of success. If you’re very successful with something, if everything’s going really well for you, you’re very rarely burnt out. No one really says, Oh, man, I’m burnt out of all of the money and opportunities that we’re generating inside of the business. And that’s generally true. And that’s actually why it was so problematic for me because I didn’t see it coming. I literally at one moment, I remember my I was twitching uncontrollably. I could not sit through a podcast and not have my eye twitch constantly. I went to my doctor and she said, your cortisol levels are off the chart. You are essentially at this this point, a complete mess, and you need to be able to stop doing whatever you’re doing. When everything’s so successful, you just think, Oh, we just got to keep going.

[00:14:54.880] – Liam

We’re generating all this money. We got to keep going. We got to make sure that everything is moving in the right direction. When in reality, I should have paid attention to my body and stuck to that point, which I didn’t do.

[00:15:04.090] – Joran

Yeah, it’s really interesting. I don’t think you ever hear people getting a burnout from so much success because it gives you dopamine or it gives you the adrenaline which helps you to keep-I did have that With the cortisol, right?

[00:15:16.560] – Liam

So it was one of those things that it was so exciting and yet also still draining at the same time. And it is one of those things that when you look at burnout, it’s almost always correlated towards negative outcomes. It’s almost never correlated towards positive outcomes, which I would say in 95% of cases is true. But if you have so much success that it just burns you out. Looking back at it now, I should have actually hired a full staff just to manage my time and all of the work that I was currently doing. I have that now, and I’m a lot more relaxed. I probably work 35 hours per week as opposed to 80 to 90. That is very easy for me to do. But back then, it was me and one assistant running. It was like, Okay, do I talk to the Wall Street Journal or CNN this afternoon? Because I have to choose one. It was a very exciting but exhausting time. Yeah.

[00:16:12.740] – Joran

How did you manage to get out of that situation?

[00:16:15.480] – Liam

I basically didn’t work for a month. I just stopped doing things. I told my co founder, I need to stop. And he said, Yeah, no problem. We’ve been working together for over 10 years. So we have a shorthand, and He knows when I’ve had enough, and I just had enough, and I had to take that time off. Another big thing for me was physical exercise. So I had not touched… I had not walked into a gym at that point, two years. I started going in exercising every day, and that got a lot of that dopamine running through my system and also reduced my cortisol levels. It’s really just a chemical imbalance issue that you need to be able to solve for. Then also, too, I got weekly therapy. That was another big thing for me as well to be able to make sure that I had that. I had someone else to be able to throw ideas against and push back on those different things. Someone who had experience specifically in SaaS was very good. I had a therapist who basically understood business people and understood SAS specifically. That was very powerful because there would be a lot of bullshit that I would spout and this person would come back saying, That’s not true.

[00:17:32.670] – Liam

That person would keep me accountable for a lot of things. You don’t just want a therapist that’s just saying, Oh, what was you? I hope that you do better. Just understanding your position is bullshit. You need to be able to take action and get yourself out of these problems as quickly as possible. If you just have a therapist that coddles you, it’s not a good therapist. You need someone that’s actually good at moving you forward.

[00:17:56.350] – Joran

Let’s talk about something positive. Now, again, between 2015 and ARR, has there been a certain thing, or I guess, COVID, but I guess the things you controlled, what you’ve done to get Time Doctor to where it is today? It could be anything like strategy, growth, go-to-market. If you now look back, What are some key moments where you said, We did this and now- Number one, we had a big product differentiator in comparison to everyone else in the space.

[00:18:23.480] – Liam

We were the first company that came out with measuring websites and applications throughout your workday so that you could actually see, I’m working on a Microsoft Excel document from 2:00 PM to 3:30. Then you could do a whole lot of really interesting data mining of that data as opposed to just measuring your workday. I worked for six hours. What do you do? Did you do anything productive? What did you do with your time? We were the first ones that really focused on essentially doing workplace analytics as opposed to just simply time tracking. That was a big differentiator for us. We were able to go into the market and say, In comparison to all these other products, it just track time, we actually tell you what you did with that time. Then the way that we solved the go-to-market strategy on that was really search So if I had to nail down one singular funnel that generated the vast majority of our revenue in the early days, it was search. We would just basically write content, get it ranked, and it would be a rinse and repeat type of system that we would do. We had a staff at one point, I think the peak was 40 people that were just writing content and ranking that content, which was a pretty big operation at that particular point.

[00:19:40.680] – Liam

And the other piece that was easy for us in the earlier days is we were, and we don’t like to call it PLG, like product-led versus sales-led, we like to call it unassisted versus assisted. We were almost entirely unassisted at the beginning. It was a self-serve trial. You either buy it or you don’t buy We ended up then adding a sales team in 2018. Six or seven years into the business, we actually added sales people. Thankfully, we did because we had gotten that team ramped just in time for 2020, which was great to be able to take advantage of all of those types of opportunities. But I would tell anyone now, go product-led at the beginning. Get a couple million ARR in your books, be able to have a scalable way of acquiring customers without actually assisting them, and then go out inside of your inbound list and grab the top 1%, top 5%, top 10%, that could actually be a 10X customer for you and spend your time there on developing those particular leads. And that’s what we do today. And that is incredibly valuable for us because if we were entirely sales-led, we wouldn’t be able We don’t generate the current amount of revenue that we generate at all because we would just have a sales team of 80 people as opposed to 20 people.

[00:21:08.660] – Liam

The vast majority of our customers are relatively small. They’re 10 employees, they’re 20 employees. That are managing some of their remote team. And you can’t really build a sales-led model on top of that. But you can on a sales team that can go after 500, 1,000, 2,000, 10,000 seat orgs. Yeah.

[00:21:31.370] – Joran

I like how you call it, assisted versus unassisted, because you look at, okay, what are the qualified leads or qualified signups? And you pick them out based on a qualification you’re probably asking during the onboarding, or maybe you enrich it with data you get in, and then you feed them to sales purely on the ones which are going to be relevant to them.

[00:21:49.820] – Liam

We have a metric which is MQLs and PQLs, market qualified leads, sales qualified leads. When we look at sales qualified leads, they are at minimum 25 seats before we would even look at them. It’s 5% of our customer base that’s above that. But that 5% generate, in some cases, more than the other 95 5% of conversions that can burn on their own. It’s a really interesting and cool dynamic where you’ve got your beachhead, which is, let’s say you’re generating $20,000 MRR per month from a self-serve model. If If you’re generating $20,000 MRR on a self-serve model, just by adding salespeople, you could probably add 10, $20,000 MRR just from that customer base, finding the ones that really need your help, and then selling them on add-ons, upgrading them to premium packages. It’s relatively easy to do. It just requires a large sales org to be able to ramp in order to do it.

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[00:23:15.580] – Joran

When you say 25 seats, it implicates that they’re already paying client of those 25 seats, or can they also sign up and they have the potential to go to 25 seats plus?

[00:23:26.020] – Liam

If we look at a company and say, Oh, that’s NVIDIA. Maybe they just bought a seat, or they could have even bought a seat without just even touching them. One of the things that I find hilarious is we still allow people to sign up for Gmail addresses, and there will be so many Gmail addresses that end up being multibillion dollar companies that are just testing it out for their own team, or they’re just playing around with it, and they just want to put their credit card in and play with it for a month or two. And then we start to see that they’re actually much, much bigger. So then that’s our hook in to that org. It’s an inbound CS play on that side. But even during the trial, our general playbook right now is we go in on the trial, we figure out those 5% of customers that are the big ones, and then we pursue them very clearly. We say, Hey, do you need me? Help. And if they say, No, we’re just fine, we’ll say, No problem. We’ll be here if you need any help. They’re just managered through the store. But in the vast majority of cases, when you’re looking at software sales, particularly when you’re looking at, let’s say, a six-figure ARR software sale, none of those deals get done without a salesperson.

[00:24:34.090] – Liam

I wouldn’t say none. We have had a couple that have just shown up and have bought $300,000 worth of software per year. For every one of those, there are 50 that need the help to be able to get you to that point.

[00:24:48.420] – Joran

Interesting. One interesting thing you said as well, we actually started blocking Gmail signups. In your case, you said, Okay, people actually try it out first. Maybe that’s the nature of the product as well.

[00:24:59.170] – Liam

Yes. Where people It’s one of those things that they’re trying it out for their own. They try it out for themselves and they figure out, Does this work for my own productivity? Do we really want to be able to develop it, to deploy this company-wide? We see three stages. They try it for themselves, they try it with two or three people, and then at that point, they deploy it to 500 people. So it’s really just seeing where they’re at in that particular funnel. And we have been thinking about this quite a bit. We haven’t done it yet, but we would love to be able to even build different customer journeys for each separate stage in that process. We know they’re a Gmail, but we put that Gmail into some enrichment software and we’re like, I’m like, for the VP of HR at NVIDIA. Okay, this is a really important customer. Let’s talk to them and let’s just figure out what’s up. That’s the stuff that at this point we’re doing well, but it would be great. It’s on our roadmap of something that we wanted to just say, Hey, The people that say that they don’t need any help, you respect what they’re saying, but then you also just make sure that you’re hanging around.

[00:26:06.410] – Liam

Maybe I’m telling you more about the enterprise features of our product, even though you’re one particular seat, but we know that we’ve qualified you inside of the enterprise bucket.

[00:26:13.900] – Joran

I think that’s an interesting development. Are people really waiting for? Are they expecting that? Are they not just trying it out for themselves? I think they’re going to be fun things to find out in that process.

[00:26:25.330] – Liam

Yeah. The other thing that’s really cool is because we see website and application usage, and we do it en masse, we can very clearly identify the health of a customer because we could say, Hey, how often are you using our product? What are you using our product for? That’s a really important indicator for us that maybe a customer wants to expand as an example. We know that if someone is using the product at 80% capacity, so let’s say they have 100 people, and the amount of hours, there’s eight hours a workday per 100 people in that org. If they’re using those hours at 80% capacity, they’re probably at full engagement. They love the product. That’s at the point where we would be able to swoop in and say, Who else do you know that loves this product? That’s what I’m even looking at MPS. I can tell you, if they’re using the software this much, they’re probably going to have an 8, 9, 10 on MPS. We can go in and say, Who else are you interested in telling about our product? Are there any other seats that you want to be able to fire up?

[00:27:38.790] – Liam

Is there another department inside of your organization that you want to be able to go after? There’s a very large It’s a top three customer for us, and they actually are divided amongst a lot of different countries and states. They all act as separate cells inside of those organizations. We have maybe 5% of that org at this point. We know that if we fire up the other 95%, it’s like 100 million ARR in our pockets. But you have to resell yourself every single time. We literally are actually building a small sales team and CS team just for that one single client because it’s so important for us that it could be a huge growth partner that could take us to No, 100 million ARR, no problem.

[00:28:32.210] – Joran

Interesting. Really interesting. And I think on topic, you also covered customer health score. I definitely, if you’re listening and not doing it, make sure you have one. So really to identify who’s using your product. I did a podcast with Mike Wright from Leadfeater, where I used to work as well. Head of customer success. Nice one to listen to. It gives you so much insight. As you mentioned already, you can quickly identify who loves the product so you don’t need the MBS core anymore. We talked about a personal challenge, right? Has there been a big company challenge, many, most likely. Yes. Can you give an example of a big company challenge you faced and how you got out of that one?

[00:29:08.730] – Liam

Software stopped working for three days. Everything shut down. For a time tracking company to not be tracking time for three days is a big problem. When I work out all of the numbers and look at the long term impact on churn and the customers that we would have gotten from that customer segment, we had permanent damage to our MPS. Not permanent. It took about two and a half years for MPS to recover from that impact. It probably cost us, at this point, 10 million ARR. It was bad. I remember actually sitting at our company retreat three months before this crash happened. We were sitting with all the other engineers, and one of the engineers said, We’re not stable enough to be able to keep running. We need to do a refactoring project this quarter, and I think it was eight engineers. One engineer said, We need to refactor. The other seven said, No, we’re rock solid for the next year. Three months later, the entire software basically collapsed in on itself. That was just a horrible experience because a lot of these customers are my friends, and it’s horrible to get an email from one of your customers, it’s a friend of yours, saying, Hey, Liam, do you got to fix this in the next 12 hours where I got to find another solution.

[00:30:33.130] – Liam

That’s just heartbreaking because the SaaS product, it gives people so much freedom to say, You’re going to pay a slight increase on the monthly cost of this software, and in exchange, I’m going to make sure that your software works 24/7, and I’m going to update it every single quarter, month, whatever. It’s not a problem that you need to deal with. That’s the magic of SaaS. You can leave whenever you want. They did. We lost, as I said, millions and millions of dollars worth of revenue. I would not wish that on my worst enemy.

[00:31:06.480] – Joran

I can imagine three days sounds like a short period, but if people rely on you tracking time, then three days is going to be a really long time. If we talk about maybe some, not mistakes, but maybe regrets, if this could be one, listening to the engineer, what do you regret as well? You didn’t do maybe sooner or you didn’t do at all?

[00:31:29.280] – Liam

I think I could probably focus on COVID for that because March of 2020, it was just insane growth. At that point, I could buy a customer, and the buyback period was two and a half months, whereas previously, our ROAS was maybe 12 to 14 months. Probably I should have put every single dollar that we had into buying customers for those first three months. If you go into any type of SEO tool and When you just type in remote work, you’re going to see a massive spike in March, where just all of these keywords, didn’t 10X, they 20X. There was just so much more people that were looking and trying to learn about this particular subject, and we did relatively well. So we did a lot better than any of our competitors, actually, because we were really focused on remote work, and a lot of our competitors were maybe half pregnant on remote work. So they were trying to talk to offices, and they were trying to do other types of businesses. But we were really big on remote work. But if I had taken advantage of that and really gone all in at that point, we probably would have been double the revenue that we’re currently at right now.

[00:32:44.650] – Liam

A company that did it very well is Loom. So Loom, about two weeks into COVID, made a decision, got them to a $900 million exit. We’re going to make our product free. So they were paying. It was a paid-for product. Then they just said, Open, freemium model. Let’s just acquire a shitload of customers as quickly as humanly possible. Make those customers love the freemium product, and then add in a premium tier. And another company that did this very well but didn’t do as much of a pivot was Zoom. So Zoom had a very good freemium product where you could do a 45-minute call. You can still, I think, do a 45-minute call. And then after 45 minutes, basically, the call resets, which is annoying enough to be able to convert 5, 10% of our customers over to a paid product. But during COVID, the business community grabbed all of those and said, Yeah, this is something that we absolutely need that’s critical to our business. And it’s very scary to have eight figures worth of ARR in your books and then just say, We’ll give you all your money back, free product. We couldn’t have done it.

[00:33:54.820] – Liam

It would just be stupid on so many levels. But I bet if we had rolled dice on that one, we probably would be at 100 million plus ARR had we just said, Premium, everyone gets to use it. We would have actually had to raise money at that point to be able to just supply that type of growth.

[00:34:14.560] – Joran

Yeah, and I guess there’s going to be so many variables to make that work, even looking in hindsight.

[00:34:19.680] – Liam

One of our ideas was we have another domain which was a two-sided marketplace called staff. Com, which we still own. We thought, could we very quickly build a version of Time Doctor on staff. Com? Call it staff. Com. Free product, everyone just gets it. But then we thought, that’s not fair to our existing customers on Time Doctor that are actually paying for the product. So we decided not to do it. But it was one of those ideas that we had come. There was crazy ideas swarming around during COVID because no one knew what was going on. We didn’t even know where the bottom was for remote work. It was one of those situations where we were like, All right, so 67 % of the United States is currently working remotely. Full All time. That was, by the way, full solinity for remote work. Essentially, about 70 % of the US workforce could work remotely. So when you look at it statistically, there was a really good Stanford study that was done on this. So we were at 67 %. So there were only 3 % of people that could work remotely that weren’t during the peak of COVID.

[00:35:21.100] – Liam

And so we thought to ourselves, is this going to go back to 4.5 %? Is it going to go to 30 %? Is it going to go to 40 %? Now we know it’s essentially about 20 % is fully remote right now, another 20 % are hybrid. So we’re looking at about 40 % of the US workforce that still has some of that remote work. And those numbers are not going down. They are pretty darn flat. And the remote side actually has gone slightly up in the last six months. So that’s our new ground floor. But no one knew where that was, which was very exciting for everyone, because if the ground floor was 50 then we’re a multi-billion dollar company. If the ground floor is 10%, then we’re not. Now we know, which is good.

[00:36:09.480] – Joran

It’s always easy to look back. One question regarding new technologies. You guys started way before at AI, machine learning were a hype. How do you currently leverage them? Do you leverage them?

[00:36:19.990] – Liam

We do. We have a couple of products that we’re coming out with relatively soon that I think will be more important than Time Doctor When we look at time tracking, what do people really want to figure out when they’re tracking employees time? They want to figure out an outcome. Are you doing what you’re supposed to be doing? To what degree are you doing it? That is the fundamental reason. There’s some tax implications with regards to time tracking. If you’re a freelancer or if you’re a contractor, you legally are required to be able to keep track hours in order to be able to do a W-line tax return. But fundamentally, it is I’m trying to actually identify an outcome. And I think probably in the next five years, the least important part of time doctor will be the time part. And we will focus entirely on the outcome of what you’re doing. We’ll be able to tell you, yeah, someone only works four hours per week, but they’re outperforming the person that works eight. And here’s specifically why. And here’s how you can take what that four hour per day person is doing and apply it to the eight hour person to be able to make them more productive.

[00:37:35.640] – Liam

That’s essentially the vision that we’re trying to lay out at Time Doctor. We’ve already got a couple of those ideas in our beta community. If you’re not part of Time Doctor at this point, you can sign up. The beta program is completely free and we give you access to all those tools.

[00:37:50.560] – Joran

Nice. I’ll make sure we add a link to it. I love the focus on the outcome. This is what I focus on. I don’t care how things are getting done, as long as the outcome is good. Exactly. Let’s dive into the final two questions. When we look at a certain revenue stage, what advice would you give somebody who’s just starting out and growing to 10K money per current revenue?

[00:38:11.610] – Liam

If you can’t generate 10,000 MRR getting on the phone and talking to people and closing deals that way, it’s probably not going to work out. You need to grind to that first 10K. You need to know that there’s something possible there. I would say that’s the first We generated, and I remember specifically on staff. Com, we generated the first half a million dollars just off of my phone rollbacks. Hey, I always heard that you needed a bookkeeper, but we have one. Do you want to go and check them out, that a thing. 10,000 MR. Then I would probably say outside of that, too, is how you got to that first 10,000 MRR is probably not the product that’s going to get you to 100,000 MRR. So don’t be married to it completely. We, originally in Time Doctor, a core component of the application was a project management system. It was like time tracking and project management combined. We tried to pitch this to so many people that were active customers of ours. Why aren’t we using the project management component? And they said, Oh, well, we’re using Face Camp, or we’re using Asana, or we’re using Notion, or we’re using monday.

[00:39:26.840] – Liam

Com. And we’re like, Yeah, but this is free. This is with what you’re… With Time Doctor. And they just said, Screw off. We don’t like it. We’re not willing to try that. And we realized, and I got a really good piece of advice from somebody, which was, One One day on the dashboard, we had the project on Time Doctor, and we ran an experiment where we just removed it from the dashboard. And the outcome was, how many angry letters do you get from the link disappearing? It still exists inside of the app. Let’s just remove that link from the dashboard and see how many angry letters, emails that we got. We got three. We probably had a thousand customers at that point. We were like, Let’s not do that. That was probably a third of our engineering budget was building this project management system, and we just realized that it was really stupid for us to be able to do it because no one was using it. I would also say, too, first 10,000 MRR, your customers are not always right. Your customers are an experiment. Treat them like an experiment. Do not treat them like the precious, unique snowflakes that they are.

[00:40:39.450] – Liam

Your job is to identify how can you scale those customers. You could quite possibly treat them badly, rip a feature out of their hands one day, randomly, to be able to measure the reaction of that activity. Because if you’re at 100 customers, 200 customers, when you’re at 10,000, no one will remember. But when you’re at 10,000, everyone will remember. You need to be able to make sure that you’ve figured all that out before you’re at that stage.

[00:41:08.670] – Joran

Nice. Yeah, because I think we’re going to, I guess, the next stage you were talking about, we passed 10K MRR and we’re going to make a huge jump. I know we’re going to grow towards 10 million ARR. What advice would you give SaaS founders here?

[00:41:20.870] – Liam

Actually, I would probably define that in a couple of different tranches. The first would be a million ARR. At that point, you probably still need to do everything on your own. Million to five million, you’re starting to delegate some responsibilities, but you are still essentially executing on the vast majority of things that need to be done in the business because you can’t afford really good people, particularly if you’re bootstrapped. Five to 10 is you, at 10 million, you should have no job in the business other than strategists. Because if you are still in the business in any context, every single thing that you’re doing in the business should definitely be done by someone who’s better than you. At $10 million, you can afford to be able to hire at all of these different positions to have someone that’s better than you. That’s why I’m talking to you as an example. It’s one of those skills that essentially someone that you’re going to interview, you don’t want the VP of XYZ, VP of marketing. To be able to come on for time. Doctor, you generally want one of the cofounders of the business in order to be able to do it.

[00:42:35.560] – Liam

It’s just something that I can do during this point. But outside of setting mission, vision, and values with Rob, the CEO of the company, and working on PR, and then doing some of the research and development, like visionary direction. Those are my three separate things that I do inside of the business. I couldn’t replace anyone to be able to do those particular jobs, so that’s why I’m doing them. And you should extricate yourself from everything else that is mission critical towards the operation of the business.

[00:43:06.510] – Joran

Love it. Let me see if I can summarize a little bit the episode of today. Having a big differentiator is a great go-to-market strategy, especially at the beginning. Go product-led first, build a scalable way to acquire customers, as you call it, unassisted versus assisted. Make sure you start assisting them later on. Search has been a great revenue channel for you guys. Build a customer health score to identify people who love the product, so you don’t even need MPS at that point. Grind through the first 10K MR. Your phone is going to be your best friend. Want to know if people love a feature or product? Just delete the link and see how many angry responses you get. Start delegating after a million ARR, after 10 million ARR You should not have a job anymore. And you can actually burn out by having too much success. So make sure you keep exercising through the entire journey. Get therapy if needed, and listen to your engineer when they say your software can collapse.

[00:43:58.470] – Liam

That’s a great breakdown. Nice.

[00:44:00.090] – Joran

I really enjoyed this podcast. If people want to learn more, get to follow you, get a contact with you, what is the best way to do this?

[00:44:08.030] – Liam

Linkedin and Instagram, all that stuff. I’m @liamremote on most of those things. If you really want to go deep, go to my YouTube channel, youtube. Com/runningremote. Other than that, set up for a trial of time doctor. It’s a lot of fun. If you’re really interested about remote work, go to the Running Remote Conference. We do it every single year.

[00:44:32.780] – Joran

We’re going to make sure we’re going to add links to everything. So the Running Remote Conference, Time Doctor, your YouTube channel, LinkedIn, Instagram, so people can find everything, and the book, of course. For the people listening, we’re going to add a poll again to this one, so make sure you answer it. It helps me to identify if you like this episode and what you would like to hear more. And if you haven’t done so, please leave us a review on the podcast platform you’re listening to right now. Thanks again for coming on, Liam.

[00:44:58.990] – Liam

Thanks for having me.

[00:45:00.580] – Joran

Thank you for watching this show of the Grow Your B2B 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 Reddit, feel free to reach out as well. But for now, have a great day and good luck growing your B2B SaaS.