I Discovered the Ultimate Cheat Code for SaaS... 😱

0:00I did it I discovered the ultimate cheat code for SAS four of them to be exact I've listed all four of the SAS sheet codes that I've discovered over the past 15 plus years starting my own companies investing in more than 150 SAS companies these four cheat codes are listed in my new book The SAS Playbook and in this video I'm going to dive deep into one of the SAS cheat codes that I think is an incredible power up for your startup I'm Rob Walling a Serial entrepreneur with multiple exits I've written four books on starting companies and I've invested in more than 150 startups and if you

0:37stick around till the end of this video you can learn how to Manifest this cheat code in your startup so here I am with Maya I love you more than my sibling does Mug of cold brew ready to dive in to SAS cheat codes I've talked on this channel about net negative churn and expansion revenue and I cover all four of my SAS cheat codes in my new book The SAS Playbook talk about that a little later about how I dive into to these cheat codes and talk about how to use them how to take advantage of them today's cheat code is a dual funnel and

1:06I wanted to find that for you if you've never heard this term if you've watched this channel before you've likely heard me talk about a low touch funnel and a high touch funnel low touch is just what it sounds like people mostly self sign up self on board there's a little support here and there but it's not a massive sales process it's really focused on marketing and it's focused on driving leads to a website maybe getting them to opt into your email list looking at website visitor to trial sign up trial to paid retention it's a Basic Marketing funnel a high touch funnel is often where you're doing cold outbound

1:37and it's a sales driven funnel tons of demos often an Enterprise sales process a lot higher annual contract values higher price points and much more sales effort to land each individual deal but the deals are worth a lot more to your bottom line so we have a low touch funnel sometimes I call it a no touch funnel and a high touch funnel a dual funnel is where you have both funnels running simultaneously on the same product so you have this high volume low touch funnel and a low volume High sales effort High annual contract value High touch funnel I'm going to talk about a couple SAS examples of this in a minute

2:13but imagine that you have Folks self-signing up for 10 20 30 a month so what is that 120 240 360 a year even up into the 100 or 200 dollars per month still people can self onboard you think about MailChimp you think about my last SAS app drip we have these low price points we had a high volume of Trials and a high volume of conversion to paid in addition you can have a high touch funnel let's say it's twenty thousand dollars per year fifty thousand a hundred thousand dollars per year end up the high touch takes a lot more effort but each contract brings in a lot more

2:48value and having a dual funnel with both of these happening at once is an incredible superpower there's a reason I call it a SAS cheat code and in a couple minutes I'll talk specifically about why that is I remember years ago it was more than a decade ago I heard about a company called wufu it was a y combinator company and think of it like an online form Builder maybe a precursor to type form and they sold for millions of dollars maybe tens of millions I don't remember what the purchase price was but when they sold one of their Founders said that more than 80 percent

3:17of their revenue came from these big Enterprise deals and you would never have known that from the outside they had their 10 20 30 40 price points and I always thought they were this self-service SAS but it turns out they had a dual funnel perhaps the first one that I've ever heard of I coined the term dual funnel I think maybe three or four years ago as I started investing in more startups through my accelerator Tiny Seed and I realized that having folks coming in self-serve in high volume as well as having the low touch High annual contract value Enterprise deals is this incredible cheat code so

3:51to give you an idea of the more than 150 startups that I've invested in the majority of them grow the fastest from Enterprise deals and that's not an uncommon thing but a dual funnel as I've already described is where you have Enterprise deals plus that low touch low price point funnel one example of this is a tiny suit company called sign well and this is electronic signature so signwell competes with the DocuSign and hello sign and what sign well has if you go to their home page click on that pricing link you'll see that they have low priced individual or per seat plans and then they have their API that would

4:24allow you to embed sinewell functionality in your app and the price to do that to use their API in embed is substantially more 10 times 50 times 100 times more than their self-serve they have a massive funnel of self-serve customers coming in on the low end in terms of price point and then they have these incredible Enterprise deals there's far fewer of them and they take a lot longer to close but those two combined are able to provide sign well with substantial growth I was in the same situation with my last startup drip and I didn't realize that was the case I hadn't coined this term dual funnel yet

4:56but we had folks on our 49 plan 100 plan 100 149 a month and then we had folks coming in with millions of emails saying we want to pay you two thousand three thousand four thousand dollars a month and in essence we had a dual funnel we had an entire sales team but we also had a really strong marketing team that were driving leads to the low touch and those two combined allowed us to grow very quickly I can name five more examples but I'll stop at one another example is WP engine which is one of the if not the largest WordPress hosting company in the

5:26world I was an angel investor in WP engine and they have lower price hosting plans and they have hosting plans that are thousands if not tens of thousands of dollars a month and they are a unicorn they are a company valued at more than a billion dollars so dual funnels can be with bootstrapped with mostly bootstrap and with venture-backed companies so you might be wondering why not just have a high touch funnel the problem with high touch funnels is there can be pretty demoralizing they're low volume your growth is really Jagged because low touch funnels are so much smoother you drive x amount of visitors per month why convert to trial and Z

6:00become paying customers and usually you can have a pretty smooth growth curve if you have repeatable traffic channels but Enterprise deals are slow they take forever to close and oftentimes you're working on five or ten deals that might not close for six months it's incredible to have hundreds of new trials a month or hundreds of new customers because inevitably some of them will be aware of your brand and they will become Enterprise customers or they serve as this great fan base on social media on LinkedIn on captera on Facebook groups wherever people are talking about the problem that you solve when you only have 10 or 20 customers you could have a

6:35great business let's say do half a million a year with 30 customers right but if you can do half a million a year with 3 000 customers although support will be much larger of an issue you have a brand out in the Twitter sphere right or in the Facebook sphere which is totally not a word but follow me on this when you have that mini brand you have Advocates you have people who use your product who are fans of your product and that can often make it easier to close these Enterprise deals because you have so much momentum in the space lastly as I said earlier Enterprise deals are a

7:06grind without a constant flow of new sales and a low touch funnel can keep you motivated it can keep the growth going in the months that you don't close the big deals there's another reason that dual funnels are so incredible in a second I'll tell you how you can create a dual funnel in your own startup but before I do that if you want to read about all the SAS cheat codes they're in this book The SAS Playbook build a multi-million dollar startup without Venture Capital you can head to sasplaybook.com or these days it should be on Amazon and audible Amazon.com or wherever greater books are sold not only

7:38do I cover the four SAS cheat codes but I try to lay out everything that I know about marketing and sales and pricing and building your team and mindset just all the stuff that you would want to know to build launch and grow your own SAS company so how to create a dual funnel if one doesn't already exist there's really three ways that I've seen sometimes it happens naturally if you you have expansion Revenue you can have small and large customers if you naturally have pricing that allows for people to pay you two three four thousand dollars the more seats they have or the more emails they send then a

8:10dual funnel can emerge naturally other times you really have to listen to what customers are asking for because they might be using your 20 a month service but be asking to White Label your software or do an integration with your software and as we saw with the example of sinewell earlier in this video that may be the thing that you can charge two three four thousand dollars a month for the idea is to listen to what your customers are asking for and even if you don't want to build it think about could I charge thousands a month for it and then maybe reconsider potentially building it and developing your own dual

8:41funnel and still other times you might need to keep tabs on your competitors to see if they start offering extremely high priced Enterprise plans because they may get there before you right they may know the strategy or they may have found the in on how to create a dual funnel and you can always look at them and figure out how can I create a similar situation if you want to learn more about how I launched this book on Kickstarter generating over a hundred and eight thousand dollars in 30 days you'll want to check out this video thanks for watching