Episode Summary:
In this episode of SaaS Origin Stories, Ajay Goel, Founder of GMass, joins host Phil Alves. Ajay, a twenty-four-year veteran in the SaaS space and a serial entrepreneur, shares his insights on building and scaling a SaaS business in the outbound email space.
His seven-year-old company was founded on an investment of $10,000 and has been scaled on internal accruals without investor participation. Ajay shares his insights on how low-cost and high-impact business strategies enable GMass to compete with majors like MailChimp in the email outreach space.
Guest at a Glance:
Name: Ajay Goel
What He Does: Ajay is the Founder of GMass, a SaaS stack in the email outreach space.
Connect With Ajay on LinkedIn
Connect With Ajay on Twitter
Topics we cover:
Ignore the media hype; most SaaS startups are bootstrapped- Minimize expenses during the development stage
- Launch on established platforms to minimize marketing expense
- Outbound marketing to scale your startup
- Get the pricing right the first time
Key Takeaways:
Ignore Media Hype on Big-Ticket Funding
Startups with big-ticket funding are outliers and not the norm; ignore the media hype surrounding these startups. Most sustainable SaaS companies have been bootstrapped to different degrees. These companies fly under the radar and don’t get highlighted. Funding is cyclical.
In a growth environment, the focus is on spending for growth. In an economic downturn stage, like our current environment, the emphasis is on profitability, with money selectively chasing profitable companies.
“Basically, bootstrapped and organically grown companies are not sexy enough to make the headlines”
Keep Your Startup Costs Low
The bulk of pre-launch spending is on product development. Hence, it is essential for the founders to be able to code, develop, and test the proof of concept (POC) product with minimal expenses for outsourced coding. Once your POC is validated, don’t get tempted to throw money at marketing; instead, focus on low-cost, high-yield launch strategies.
“ It wasn’t a big concern to generate enough money to cover expenses because my expenses were super low”
Leverage Established Platforms Like Google and Apple Store
Another way to keep initial marketing costs low is to offer your product as a plug-in that works with established platforms like Chrome. Leverage the platform traffic to build your sales. A word of caution here – platforms have strict approval processes to weed out spammers and malware, but for the benefits you get, it’s worth the effort.
Once you establish a revenue stream, you can then migrate to your website. The downside of staying exclusive to platforms is that the platform can shut you down at any time, which is an unacceptable risk.
“So now I was getting referrals from just visibility on the Chrome store”
Outbound Marketing is Alive and Kicking
Ajay shares his insights on the value of outbound marketing for scaling a startup. He used virtual assistants to scrape reviews of his competitors on the Chrome store to make a mailing list for his outreach. He then pitched his product and USP to this audience and acquired conversions.
Email is still a viable sales channel in the SaaS space. While many old-school marketers have moved away from email, lots of success stories are built around outbound cold emails. The key to cold email campaigns is to avoid using your business domain to prevent it from getting blacklisted.
“Six months into my launch, I started to dig into the cat-and-mouse game of avoiding spam filters and preventing the domain from getting blacklisted”
Get Your Pricing Right The First Time
Most founders are conservative when it comes to pricing their products. They will price their products at a third or one-fourth of what the market leaders are charging to try and go after volumes. This approach needs to be corrected. Not only are you leaving money on the table, but you’re also sowing seeds of doubt in the customer's mind; the customer thinks they’ll get what they pay for.
Make sure you read up on different pricing strategies and identify the one that works best for your business.
“I read everything online on pricing and spoke to a couple of pricing consultants. There are companies that specialize in pricing consulting for SaaS companies. Speak to them”
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