Raising Series A almost killed my startup :(

[Seed]

After graduating from 500 Startups & and raising a seed round, our mobile app startup pivoted into b2b saas.
We quickly found PMF, lined up a bunch of clients, and our team worked 100 hours a week to deliver.

[2019] Series A

Our TAM was too small for a unicorn, so investors wanted us to expand it.
I had mixed feelings about it, but all I saw were the startups in growth/unicorn mode.
So we expanded.
We added more verticals, products, people, and sales force and hired super-expensive sales experts and marketers.
We put loads of money into paid marketing, sponsored conferences, and media.
It was all done just like in the Silicon Valley playbook.

[2020] All IN

Covid lockdown. All our customers are closed and don’t know when to reopen.
We’re burning cache like WeWork in their worst days.
The whole strategy fails.
We added a bunch of new verticals, and suddenly, our product is not great for any of them, just average, like the competitors'.

[2021] Failed

We keep losing all the money we raised. We know the whole model failed. We know we can’t make it to work. But we can’t turn the ship.

[2022] Out of cash

We run out of investor money.
But we still can’t turn the ship around. At that time, I was a CTO.
The CEO gets a burnout out and leaves.
The whole thing was heading toward oblivion.
We spent our last money.

I sold my apartment and used my own money to keep things afloat and pay the developers' salaries.

[2023] Pivot

I don’t know what to do. I can’t watch the company die.
I tell the board: we need to change the course. We need to give up on a unicorn dream. We need to turn into an organically growing mid-size profitable business.
It took me one year to convince the chairman.

[The Change]

We cut all sales and marketing people.
Cut costs on everything. I stopped paying my wife and me a salary(she also worked with me).
Stop all sponsorships and pretty much everything that’s not development or support.
We transform into a product-led company.
I jump on a call with each client and tell the whole story as it is. This turns them into loyal friends, and they turn into our ambassadors and start bringing new leads.

[NOW]

In 3 months, we go breakeven and I don't have to fund the salaries from my pocket.
We have great ,.
We cancel all non-core products,
We do only one product for one niche, but we’ve got the best product in the world for that niche.

I setup 100% inbound marketing that relies only on two channels

• SEO (fully run by SeoBOT)
• affiliate partners(I give them 33% of the income for the first 3 years)

A year after this, I'm signing a POS with one of the largest biz on the continent (controls 60% of the market) that will double the revenue.

My dream is coming true: we have zero marketing and sales people. The whole thing runs on autopilot, and I only make demo calls. My next step is to even get rid of demo calls by replacing them with self-served demos.

[TakeAway]
Not all ideas can be unicorns and need investor money.
My company was nearly killed by Series A.
I pivoted it at the end and managed to bring it back to life.

[FUTURE]
I’m not building unicorns anymore.
I’m not aiming for series A or IPO.
My mission is to build profitable businesses that do one thing really well for one niche so that we’re the best in the niche.
It means most of my products won’t make more than 1M ARR. And this is fine. This is the new world.

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I'm on twitter: x.com/johnrushx