68. Do startups have more trouble scaling SaaS from a technical or business perspective? The problem is they tend to bite you at alternating times. Getting the first 50-100 or so customers rarely breaks a hack. But even just after that, downtime, data issues, etc. start to become material. In other words, just as you are getting sales finally figured out! Then usually, things break again around a few million in ARR. Just when you have the salesteam first built :) The bandaids on the hacks don’t scale another order of magnitude. Should we refactor? Rebuild? Or put bandaids on the bandaids? Finally, everything tends to break again around $8m-$10m in ARR, unless you’ve put in place a great VP of Engineering by then. The CTO/co-founder’s limitations in hiring, scaling infrastructure, etc. begin to reveal themselves in all new ways. Right when you are ready to Go Big! As annoying as the answer is, it’s Both. And usually, right when the other one is finally working well. You need to get all the VPs in place by $4m-$5m in ARR if you can. If you do, you’ll push past it. 69. How can a SaaS startup survive in a crowded market? “Crowded” is either really important, or unimportant. What I mean is, you do need to be 10x better than the competition at something — or else competition will eat you alive, or at least, trap you in a lower growth/high-cost paradigm. It could be brand alone that you are 10x “better at” if you are far and away #1. It could be one critical feature the other guys don’t do well. It could be a vertical specialization. It could be a different buyer. Or unique integrations. Lots of things. Markets can seem crowded from the outside, but it may be that many of the participants don’t have a 100% direct competitor for their core use case and buyer. By contrast, sometimes there may only be 2 players, but the products are fungible and competition is 100% and fierce. My rough learning is if you hit $1m ARR growing >=10% a month, competition isn’t really hurting you, no matter how it may feel. SAASTR.COM 65