Continuing from my last year’s update.
Product
- We had a 2.5X YoY growth in monthly revenue. 8% monthly compounding. Lots of processes changes. This year I am expecting a 4X year.
- The product is expanding to become the financial department for business of all sizes – from new age startups to scaled up public companies.
- We are an accounting app now. This year we will add the accountant and CFO layer, thanks to AI.
- There are marketing and sales modules that are branching out due to customer demand. Each
distractionnew direction in SaaS is just one more feature to add. - Banking relations is still a challenge. Of all the contacts I have in fintech, its still unsolved for us. Banks had opened up their APIs for a short period during 2018 to 2022. Lately, banks in India have become less open and that restricts what our product can do. Hopefully this year we should be able to resolve that.
- Service as a Software or remain a product company? We have thought of this pre-AI boom also but now this is on everyone’s mind. We will resolve the dilemma this year. For now it seems we will enable accounting teams and services companies to serve their businesses better, that will keep us light. But then the value attribution won’t come to us. Dilemma!?
- We have paying customers in 124 countries all grown orgnically. This year we will focus on just 4 countries and try to scale them with more predictability.
- In some of the cohorts that we want to win in India, we are now number 2 in terms of new user acquisition and product maturity.
- Adding the cherry on the cake is worth more than the cake but you still have to make the whole cake first. Now that the base product is mature, we added to 2 new modules on top. Each of these module sells for 3X to 10X the price of the base product.
- SaaS becomes a commodity very fast. That makes it a popularity contest. Some really bad accounting software from the non-internet era still gets mentioned by users. That still keeps us our marketing team on toes.
- The moat is the scale. Scale of the product that only requires adding different cherries/toppings. And scale of recurring revenue that makes adding the topping possible even in a bad quarter.
Finance/Revenue
- We started the last year with 11 months of runway in the bank. After 12 months we have 7 months runway. This month we might actually become cashflow positive.
- Revenue does solve a lot of problems.
- We expanded some teams faster in anticipation of revenue. We could have waited one more quarter. There is no right timing here I guess.
- Accrued revenue vs cashflow is a weird thing we had to adopt this year. Still makes little sense to me. Lots of financial engineering in startups happen around this and leads to poor outcomes. We are sticking to cashflow for internal MIS.
- When you are growing well, profitability becomes a choice.
- VCs still don’t love SMB focussed startups. My thesis is that growth curves are not very exciting, there are can rarely be a 10X year. And the user persona does not resonate with them.
Team/Org building
- Team size has grown 40% in last 12 months.
- We have added new roles in every team. Trying to create a multi-level hierarchy. This has slowed us down but gives us more visibility. I am hoping to see some gains because of this in the current quarter.
- Each major feature now has an owner. They are measured on revenue but they do not do sales directly. This is the layer between product manager, tech, sales and support. At smaller scale this would not have been possible.
- For a brief period I had a young college grad help me with new initiatives. In about 4 months he helped me start 3 new things that would have otherwise been stuck in my head forever. I will open this as a permanent position.
- We are taking “what cannot be measured, cannot be improved” very seriously. While sales people get measured easily, others are difficult to do. New age teams do not like to be measured on number of hours in office, neither is it the right proxy for work. So we came up with some crude numbers. Implemented it in 2 teams and the output has improved significantly. The variance between the highest performer and lowest performer has reduced drastically. We will refine this number further.
- Some teams are now being given cash incentives, over and above their promised CTC. By the start of next quarter I am targeting to have variable incentives for every team member. It helps the managers give better direction to each member. Else there is too much chaos and too many people running in multiple directions.
- One person, one task, one metric. We have to adhere more to this.
- I tend to hire people for intent over skill. This has led to multiple finger burns. We changed the hiring process and it has helped keep my biases in check.
Ecosystem
- Apart from Saasboomi, in Chennai and Surat, I attended a lot of new events. It feels good to meet users in person.
- Lots of learnings from those events. AI will kill SaaS, to AI will grow SaaS bigger.
- We have a growing set of well wishers, who I have never met in person, who send us new users and potential hires. Really thankful for this.
- The number of startups building in our space is increasing. Narrative is changing from Accounting is a solved problem, to Accounting is a boring SaaS, to All B2B fintech will offer an accounting product.
Random
- People still read Refrens as “Refrain” and type it as “Refern”. The trailing “s” is ignored. Not sure why. It is a play on Reference, so it should be pronounced as “ref-uh-rens” or “ref-rens”.
- I need to write more often, beyond twitter.