If you’re reading this, chances are you know Dimitris Georgakopoulos, Dave Wong, or myself (Geoff Roberts) in some capacity. Happy 2017, we’re happy you’re here!
While we may have let the cat out of the bag a bit already, we want to use this post to announce a new start-up project we’re working on together. We’re calling our new start-up Outseta. Here’s the scoop!
What are we building?
Outseta is a software-as-a-service (SaaS) start-up focused on making it easier for other SaaS start-ups to get off the ground successfully. We’re building a platform that meets all the basic operational needs of an early stage, SaaS business - including subscription billing, email marketing, support, CRM, and reporting tools. Outseta gives SaaS start-ups the basic tools they need to…
- Capture leads online
- Send email communications to prospects and customers
- Receive and answer customer support tickets
- Bill and accept payments from customers
- Report on key SaaS metrics
- Track every customer interaction, from lead capture to lifetime value
In a sentence, we’re calling it “The software starter kit for your SaaS business.”
At this point we don’t expect you to be jumping out of your seat with excitement - frankly, I wasn’t at first. Billing, email marketing, CRM - these are hardly new categories, and frankly there are plenty of good options out there for each of these needs. But is integrating 4,5,6, or even 7 point solutions the most efficient way to grow your business? We lived through this pain first hand at Buildium, and had a pretty strong hunch that the answer was no. So over the course of the last few months we conducted a slew of idea validation interviews with early stage, SaaS founders. Consider the following…
- The average SaaS start-up we talked to was using 6-7 different point solutions.
- There was pain in the initial integration of these point solutions.
- There was pain in the ongoing maintenance of these integrations, and the complexity and amount of maintenance required only grew over time.
- There was pain in the costs associated with buying 6-7 different point solutions.
- There was pain and anxiety associated with evaluating and selecting the “right” mix of point solutions, with so many possible permutations.
- Founders overwhelmingly felt that their tech stacks were “duct taped together.”
- Despite the use of many point solutions, most founders still struggled to get a clear view of their business’ performance. Manual reporting was the norm.
- They did not have a “single, 360 degree view” of the customer.
For me personally, the ongoing maintenance required to support multiple point solutions really struck a cord. As a relatively non-technical marketer, I’ve always been an end user of lead capture, CRM, email marketing, reporting, and billing tools. Anytime there was a technical integration issue that I couldn’t tackle on my own, I’d need to ask someone in engineering for help. At Buildium that was Dimitris, at other companies it was our VP of Engineering or CTO. Early stage start-ups are most often small teams without resources dedicated specifically to these types of integrations, so every time I needed help it came with an opportunity cost - engineering time spent supporting our software stack, rather than building our product.
With all of these inputs and thoughts swimming around our heads, we decided this was a problem worth attacking. And knowing that we’d be entering a very crowded ecosystem of point solutions, some of the initial work that we tackled focused on our value proposition design. Without further adieu, here’s V1 of our value prop.
“Outseta is FOR early stage, SaaS start-ups WHO are frustrated by the time, complexity, and costs involved in integrating multiple software solutions required to effectively run their businesses. Outseta IS the only all-in-one platform integrating subscription billing, email marketing, support, CRM, and reporting tools THAT reduces costs, maintenance, and helps SaaS start-ups get off the ground faster BECAUSE a single, clear view of their business’ operational performance allows them to better focus their efforts and spend more time building their business.”
Why tackle this problem?
Ultimately we’re choosing to tackle this problem for a couple of reasons. We’ve been fortunate to be involved in some successful SaaS start-ups, experiences which have enriched our lives in many ways. We understand the space, the business model, and would like to see SaaS start-ups continue to thrive. We think we have an opportunity to help more SaaS companies launch successfully.
Additionally, it’s our belief that one fully integrated software platform is a better solution than integrating a handful of point solutions. While there’s no doubt that Outseta won’t offer the breadth of features that many point solutions do out of the gates, for an early stage SaaS business we believe that we can cover all of their basic operational needs. We may only offer 80% of the functionality that some of the leading point solutions do, but in our minds the 20% we’re missing are most often “fluff” features anyways.
How will we build this business?
Now that you know what we’re building and why we’re building it, it’s important to mention the “how.” For Dimitris, Dave, and myself the “how” is really why we’ve chosen to work together.
In short, we’re striving to build this business by embracing the principles shared in Frederic Laloux’s Reinventing Organizations. The book is available for free online - although you are encouraged to pay “what feels right” - or you can watch a 100 minute overview of its core concepts here. While we won’t get into all of the details in this post (we plan to do that in subsequent blog posts), the basic premise is that most companies today are not operated in a way that is both personally and professionally fulfilling for their employees. When a company and its employees are each looking out for their own respective interests (which most often aren’t aligned), it’s rare to find employees that are loyal, care about the good of the company first, and optimize for the long term. And it’s all too common for the company to focus on how their employees are supporting their interests, without considering how well they (as an employer) are supporting the interests of their employees.
The book introduces some pretty unconventional concepts on how to organize, operate, and succeed in an extremely flat, self-directing organization. I’ll give you one example related to compensation as a teaser. A comp policy suggested in the book reads like this - every employee names their own compensation. Once per year every employee writes a letter to all of the other employees stating their role, responsibilities, what value they think they’ve added to the company, and what they’d like to be paid. But get this - for the most part, everyone gets what they ask for. The policy is self-policing in the sense that the letters are kept, and there’s nowhere to hide for employees who consistently ask for pay higher than their peers yet aren’t delivering higher value relative to their peers. Nobody wants to be that person, and if it becomes a problem it’s addressed. People are encouraged to pay themselves a fair rate that’s commensurate with their contributions to the company.
Is this very aspirational? Absolutely, and we like it that way. This is just one example of many, but it’s important to note that there are already dozens of businesses who have embraced these principles with great success. Running Outseta in this manner is the challenge we’re most excited about.
Last but not least...
We want to thank all of the very generous SaaS founders and execs who graciously gave us an hour or more of their time as we were conducting our idea validation interviews. These businesses are tackling a wild array of problems. It was awesome to have the opportunity to speak with each of them.
Alex Jiao, Co-founder, miPS Labs - A subscription service that stores your stem cells for future regenerative therapies.
Adam Loving, Senior Software Engineer, Pioneer Square Labs - A Seattle based start-up studio that launches 3-5 SaaS companies per year.
Randy Parker, Founder Brevi & Constant Contact - Brevi is a Facebook advertising platform for small businesses. If you’re reading this, I’m guessing you’re familiar with Constant Contact.
Jacob Colker, CMO, Lighter Capital - Non-dilutive financing for tech start-ups.
Tom Huntington, Former CEO, Windshield.io - A collaborative planning solution used to drive continuous alignment as SaaS businesses grow from 100 to 10,000 employees.
Christos Perakis, Co-founder & CEO, Zoottle - Uses social media authentication to WiFi networks to solve some of hotels' biggest challenges.
Chris Micali, Co-founder, Sense - A home energy monitoring system that lets you know what every light, appliance, and device in your house has to say.
Stuart Levinson, Co-founder & CEO, OpenCompany - Company updates that build trust with employees, investors, and customers.
Ryan Coyle, Co-founder, Private Press - Small batch record of the month club for vinyl enthusiasts.
Want to stay up to date on our progress? We’d love it if you’d subscribe to our monthly update - you’ll receive one email per month highlighting our progress, and one email per month with tips on building SaaS businesses. We look forward to sharing more with you over the course of 2017. Cheers!
Dimitris, Dave, and Geoff