This post originally appeared on Entrepreneur.com - #StartingABusiness
Follow our journey so that we can provide tips, techniques and tactics for upping your annual recurring revenue.
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You read this article title and thought either: “This dude’s high AF” or, “That’s child’s play bruh.” If hitting $1 million annual recurring revenue (ARR) sounds too easy to you, stop reading, put down the coffee and go back to selling life-coaching packages to hedge-fund managers. But if you’re an early stage entrepreneur building a real company and seeking some tactical tips, keep reading, because I’m going to break down how we’re going to accomplish this goal in 12 months or less. (Note: we’re going to be documenting everything at SaaS Army, so make sure you go subscribe there).
Before I get into strategy, let me give you the context of everything so you have an idea of where I’m coming from, metaphorically and physically. When I was 24, I co-founded a company that raised $2.3 million and scaled to $60 million in under five years. During that time, I learned more than any school could teach me about building companies and fell in love with the growth and scaling process, and I’ve been building companies ever since — all different types across all different industries.
I recently sold one of my software companies (Hooty) to a team in the same space (Press Hunt), and we merged teams. My new co-founders are Matt Henderson and Aaron Tsai, both technical (i.e. can code) and product-focused. Over the past 24 months, my partners launched 18 new products and have been focused on creating cash-flow-positive SaaS apps. Coming together as a team, we decided that we would focus on growing and building Press Hunt (obviously, as that is the reason we decided to partner and it will continue to be our core company), but also decided to continue building other SaaS apps (so we could provide even more value and get even more bread). We came up with the company name SaaS Army, which will provide products that help SaaS entrepreneurs and agencies start and scale their companies.
Related: How to Forecast Revenue and Growth
We plan to hit $1 million ARR ($83,00 in monthly recurring revenue, or MRR) in 12 months from the $5,000 MRR we currently are operating from. Just for some mental context on the $1 million ARR, if we sell one $1,000 of monthly product to 83 people, we hit our target. To hit our first $30,000-month target, we only need 30 customers on a $1,000 product. Investor Scout, Press Hunt and Daily Bread all have $1,000-a-month products. Plus, we’re also providing a bundle on SaaS Army that allows access to a bunch of our tools for a low cost of — you guessed it — $1,000 a month.
In our shared portfolio, we currently have four products that generate revenue, and when we decided to start this journey, our MRR was at $5,000. Since then, over the past six weeks, we’ve already almost tripled that through new product launches and some marketing.
Most of our product ideas come from a specific problem we’re solving in our own SaaS companies and/or a problem or gap we see in the marketplace.
Over the past year, my partners have done a ton of product launches on Product Hunt. However, we’ve all noticed that PH doesn’t provide that big marketing push it once did, because it’s saturated and bigger companies are edging out indie hackers. Due to that fact, we’ve learned how to diversify launches with other product lists and sites like Betalist, private Slack and Facebook groups specifically for our customer demographics, and have created products that help with distribution.
For example, Product Club is one of our latest products. We have a newsletter that shares the top product launches of the day. We created an algorithm that aggregates and ranks products from all of the top product sites like Product Hunt, Betalist, Indie Hackers, Hacker News, etc., and we share that daily newsletter to our subscriber list. In each newsletter, we share some of our own products with a discount code (for example we give 20 percent off Press Hunt with our code: EARLY). This strategy alone has generated thousands of unique vistoros to our own products and afforded us a 60 percent open rate, which is unheard of these days with email marketing.
Some variables that we’re using to our advantage include:
- Strong Team. We’re a great team that works well together. Aaron Tsai is a total badass full-stack developer and ex-cancer-research grad. Matt Henderson, also technical, is a product genius and marketing maniac. I’m technical enough to be as dangerous as needed, and marketing is my forte.
- Product-Focused. We build products from a place of need. For example, my business just launched, but I needed exposure. Boom — Press Hunt. Well, what if we want to raise a round and need investors? Bam — Investor Scout and Weekly VC. My startup survives on new leads and generating new business and we need leads? OK, Daily Bread: Go get you some.
- No Code. We’re taking full advantage of the #nocode movement, which is basically a way for us to create web apps without coding using third-party apps like Parabola, Zapier, Makerpad, Phantom Buster, Glide and Airtable. Through the use of this no-code movement, we’re able to deploy apps almost immediately (from months to weeks and even days), test fully functional ideas quicker and generate user feedback and revenue faster than ever before. Below is an example of a flow for one of our no-code apps:
- Awesome Tools. We’re product nerds at heart, so obviously we look for the best and most useful products to help us manage and build as well. For example, we love Crisp for managing customers, questions and support. We love Landen for building quick and modern landing pages. We heart Chart Mogul for displaying our numbers from Stripe.
- Content and Community. We also plan to document the entire journey to share tips and experiences and provide as much value to our audience and community. I’ll be posting one or two blog articles per month via my column at Entrepreneur, and we’ll use this to build our community as well. Plus, through this documentation, we plan to build a larger community of entrepreneurs and founders, all of whom can use our products, which in turn helps create our self-fulfilling ARR prophecy.
We didn’t know exactly what our “consequence” should be if we don’t hit the target, but felt the need to do something semi-extreme if we didn’t hit our goal. Below is a snippet of our conversation:
“If we lose, we have to pay a bunch of money and do a triathlon somewhere freezing.”
“Fine. But, if we win and hit the $1 million ARR, we can donate a bunch of money to planting a ton of trees to improve this climate crisis.”
Related: $1 to $1 Billion: A 4-Stage Plan for Company Growth
This is our current plan and mission. I hope you all enjoy the content and follow our journey so that we can show each of you how to build successful SaaS apps and companies that focus on growth and products with high demand.