Monetizing a SaaS Business Model: Lessons Learned with Spencer Barclay of Savology

Episode Summary:

In this episode of SaaS Origin Stories, Spencer Barclay, Founder and CEO of Savology,  joins host Phil Alves to share a founder’s insight on the roadmap for building a successful SaaS business. 

Spencer’s insights are best practices across different business phases, from ideation and funding to market validation of the MVP and how to scale. He also offers insights on hiring the right people and some pitfalls to avoid while recruiting talent.

Guest at a Glance:

Name: Spencer Barclay

What He Does: Spencer is the founder of Savology, a SaaS startup providing financial planning and financial wellness solutions to consumers through a B2B gateway of employers and financial consultants.

Connect with Spencer on LinkedIn

Topics we cover:

• Limiting your scope with a stair-step approach
• Invest in discovery and proof of concept
• Focus on monetizing with a minimum viable product
• Talent acquisition is key
• Three tips to keep front and center on your SaaS journey

Key Takeaways:

Limit the Initial Project Scope to Delivering a Minimum Viable Product

Your initial focus should hinge on delivering an MVP and getting market validation. Don’t set out with the objective of building the final product; instead, build the project scope step-by-step, just like you’d climb a stairway. This ensures that you’ll minimize the initial investment and monetize your product faster. Funding becomes simpler for a market-validated product. 

If your product is gaining traction, but the growth could be faster with a different product, give due thought to an exit. Put some money in your pocket to start again and become what investors love, a successful serial entrepreneur. 

“There are some people that are successful going straight for the big scope, but I think it decreases the probability of success while adding a lot of risk along the way”.

Invest in Discovery and Proof of Concept

Spend time in discovery to identify the problem you’re looking to resolve and the solution the customers are looking for. Invest time and resources in conducting market research, interviews, and focus group studies. Be ready to pivot if the core issue and solution desired by the customer varies from your initial scope. 

The next step is to validate your discovery with a proof of concept, which should precede your MVP launch. This is critical for tech and SaaS startups. Through all this, stay flexible and ready for change. Fall in love with the problem and not the solution. The solution is what the customers want. 

“I wouldn’t have succeeded with the MVP if I hadn’t done the proof of concept. We would have wound up building the wrong product”. 

The Real Learning Starts Once you Launch Your MVP

Getting the product in the hands of your customers is when real learning starts. The feedback you get helps you to tweak and modify your product for higher adoption. Feedback is also an opportunity to evaluate your business model and see if any changes are required. This is also the time to look at a pre-seed round of funding. Keep your pitch deck updated with every new learning, so you’re ready to engage with your investors. 

“The big pivot was to move from a D2C to B2B space. We needed to change our GTM strategy on the fly and pivot to a B2B strategy”. 

Hire Talent that Can Grow with Your Business

Don’t hire talent based on personality; instead, hire based on skills that will help fill your company's need gap. Instead of hiring a VP of marketing outright, hire a senior marketing manager with the skills to fill your gap today and the talent to grow into the VP role in a couple of years. Don’t be tempted into hiring overqualified talent. Chances are you’ll lose them in a couple of months once they find another role at double or more of what you can pay. 

“We know that we need to get the right people on the ship. Know that it’s very difficult to find the right people, but every time you get it right, it accelerates the growth of the company”. 

One Person’s Hindsight is Another's Foresight

Spencer shares his top three hindsight learnings while setting up and scaling his SaaS business. First, be ready to pivot. Statistics prove that agile startups that pivot once or twice in the early stages are more likely to succeed. Pivot based on your learnings. Lesson two is to monetize as soon as possible. Validate your proof of concept and start monetizing your MVP while you continue to build your product. Find the distribution channels that get your product to your audience most efficiently.

Number three is don’t get caught up in the SaaS hype. Stop blindly following successful entrepreneurs. Know that for every successful startup, there are 1,000 that didn’t make it. Instead, keep your head down, focus on your business needs, and work accordingly. Don’t quit or give up.

“It's the founders who don’t quit who make successful products”.