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Welcome to the sixth episode of Founder's session, where I have a chat with the founders of SaaS companies on their journey building the company.
This session's guest is someone whose writing I am a big fan of and it was through one of his blog posts that I came to know of his product.
Let's meet Geoff Roberts, Co-Founder of Outseta, which is a tool designed to be a complete solution for early-stage SaaS companies to minimize the tech stack and the number of tools needed.
Hi Geoff, Thanks so much for joining us for a chat. I have been following Outseta since the very beginning of your launch. Delighted to have you to share your thoughts and experiences on building Outseta.
For some of the readers who might not know, what is Outseta and what is the problem it solves as a SaaS product for a business?
Hi Yusuff, happy to participate in a chat.
Outseta is an all-in-one tech stack to launch and scale a SaaS or subscription business. The problem we’re solving is the status quo in SaaS—every company goes out and buys the same series of software products—a CRM to store prospect and customer data, a billing system to charge customers, email marketing tools to help desk tools to communicate with users, etc.
This results in a lot of unnecessary technical and financial overhead for any early-stage business. Outseta brings all the key tools you’ll need together behind the same login so you can launch faster and scale more efficiently.
Tell us a bit about yourself and your background when it comes to tech and SaaS?
I grew up in the Boston area but now live by the beach in San Diego. I found my way into tech largely by accident—I went to college for writing. In 2008 when I graduated the economy had crashed and I needed a job—I was offered a role as Buildium’s first full-time marketing hire when it was just a small start-up of about 10 employees.
I walked into a great situation there unknowingly and led marketing for the next 5 years as we scaled to $15M+ in revenue and acquired 10,000+ customers. I fell in love with start-ups in the process.
After I left Buildium I led marketing teams at a few venture-backed companies, then started my own consulting practice. After that, I teamed up with Dimitris Georgakopoulos, who Co-founded Buildium, and we’ve been working together on Outseta for the past 3.5 years.
Have always loved your writing since the day I first read one of your posts a year back.
What was the primary motivation behind building Outseta? When was the first line of code written?
We have a few notable motivations…
- To give back to the SaaS start-up community. With Outseta we’re providing founders with a set of tools that increases their odds of success and is very accessible to bootstrapping companies.
- We scratched our own itch by building the tech stack that we wish existed in the early days at Buildium. The status quo was just so inefficient for an early-stage company.
- We’re building a self-managed, employee-owned company and are hugely motivated to show that you can build hugely successful SaaS businesses with a long-term mindset and a focus on profitability rather than taking the traditional “Silicon Valley” approach to building a business.
The first line of code was written in October 2016.
How yourself and your co-founders decided on the initial idea to build something like Outseta. It is a completely different type of product and the market you are targeting to what you did with Buildium?
Through our own experiences, we just saw that the status quo of buying 5-10 software solutions and integrating was so inefficient for an early-stage company.
The founders we talked through inevitably felt that their tech stacks were duct-taped together and they had to spend a lot of time buying, integrating, and maintaining their software tools rather than building their core product.
When we looked at other industries—Buildium included—we noticed that most outside of tech are dominated by “platform” solutions.
People in tech love technology and have the skills to integrate best in class tools, to they’re one of the few industries that choose to cobble together a tech stack of point solutions. But there’s still very much an opportunity cost in doing so and context and some context on the customer in almost always lost along the way.
We’re pushing back on the “I’m using Hubspot CRM, and Mailchimp, and Zendesk, and Drift, and Auth0 status quo by asking “Why? What’s “lean” about that?”
Yeah, sure it becomes overwhelming and extremely ineffective beyond a point.
What are the primary channels you have used to market and promote Outseta until now? Are there any plans to expand to new channels?
As we’re bootstrapping ourselves we’ve focused all of our time and energy in “free” channels and have stayed away from paid marketing. We started investing in content marketing the same day we started writing code, which drives the majority of our sign-ups today.
We’ve done a good amount of email prospecting and partnerships with Stripe and Webflow have also been particularly productive for us.
What is your vision for Outseta and what are the expansion plans in the next 2 to 3 years?
We want to become the de facto tech stack for early-stage SaaS or subscription businesses.
We’ve built our core features already and are now focusing on taking each a bit deeper so we creep closer to feature parity with the point solutions that we compete against.
At this point, who would you define as an ideal target customer? I believe it started with bootstrapped SaaS companies, is it still the only customer type you are targeting?
The reason I am asking is many of the bootstrapped companies have a high failure rate and there is a real possibility of a very high churn. How do you plan to overcome this issue without targeting more mid-market or higher level SaaS companies?
We sell primarily to three types of users:
- Developers launching new SaaS products
- Membership sites often launched by “no-code” founders
- Consultants that sell their services on a retainer
All of these groups have a high likelihood of churn. What that means is we’ve had to deliberately design all aspects of our business to consider this challenge.
We’ve focused much more on profitability centric metrics like revenue per employee than the overall growth rate.
We’re deliberately choosing to serve this end of the market better than anyone else because frankly, our VC backed competitors can’t afford to focus on this end of the market—it just doesn’t make financial sense for them to do so.
For a product like yours, it is easy to get compared with something like HubSpot which an early-stage SaaS founder can use for free. How do you define the need to use Outseta instead?
Hubspot is a great product—I was an early customer and love their product and company. That said whether it’s Hubspot, Intercom, or plenty of other vendors they often have a free entry-level tier that becomes VERY expensive when you upgrade out of it.
This drives our business in droves—it’s sort of a bait and switch model, which isn’t going to happen with us.
That aside, we also offer a lot of other functionality that’s quite differentiated—for example, marrying our billing and CRM tools as part of the same platform is really powerful, and we offer lots of other “scaffolding” and functionality that all early-stage SaaS companies need and typically try to build internally.
Why limit the product to only SaaS companies? It could be used by anyone that uses Stripe for any kind of subscription payment. Was it a strategic decision to concentrate on a specific niche first and expand later or will Outseta always be a product only for SaaS companies?
We started with a focus on SaaS when we were designed the product, but you’re absolutely right, and small business that charges customer on a recurring basis is a great fit for Outseta.
Consultants and membership sites have been markets that have discovered and grown with Outseta quite organically.
Bootstrapped or raised capital? If bootstrapped, are there any plans to raise?
We raise money by increasing our revenue! We’re deliberately staying away from raising venture capital.
Has the current crisis affected your revenue inflow? Many SaaS companies have taken a beating, but for some, it has been a great opportunity. How has it been for Outseta?
It’s been great and has helped us. Quite frankly, we’ve been talking for 3+ years about building profitability focused companies with low overhead and our message had been largely falling of deaf ears. When COVID struck, all of a sudden everyone started slashing their software overhead and reaching out telling us our approach now resonated.
It’s unfortunate that it took these circumstances for this to happen, but we’re excited that so many new companies are being launched out of necessity right now and are growing on Outseta.
One of the main reasons anyone would hesitate to try an all-in-one product is there is the fear of giving up on flexibility and getting locked down to one platform. It becomes almost impossible to change to some other platform easily.
It's great for starting out, but as a company scales up, they might want more flexibility in the tools they use. How do you address this issue and make Founders feel comfortable to start using Outseta?
This is a really misinformed perspective and a question that we get all the time—you can find our answer here:
In short, it’s actually much easier to migrate off of Outseta than it would be if you were using 5-10 different software tools. We have a single, clean data record for all of your CRM data, financial transactions, emails, support tickets, etc that we can easily provide to any customer looking to migrate. If you try to do the same type of migration from a series of different tools, it gets far messier.
We fully expect that our most successful customers will eventually grow out of Outseta and that’s OK by us. People are notorious in planning for issues like this far before they occur—if you get to the point where you’re doing $10M in revenue and have outgrown Outseta, that’s a fantastic problem to have. Use the software that can make you relevant most quickly!
That's a really interesting way to look at it and yeah, it makes completes sense.
I believe Outseta is currently Stripe only. Are there any plans to expand to other subscription billing platforms like Chargebee, Recurly, etc. Especially, if you have plans to expand outside of North America & Europe?
Outseta offers its own subscription management functionality that can be used to set up and manage your subscription options—Stripe is used solely as the payment gateway to process the actual financial transactions. Said another way, Chargebee and Recurly are competitors rather than platforms we’d look to support.
Got it. That makes the product even more versatile.
What is the major shift in the SaaS industry in your perspective in the past 5 years since your days at Buildium and how you see it evolve over the next decade?
I think people have caught on to the idea that software is largely a commodity and brand matters. Most of our users work with us because they like how we do business and run our company just as much as they like our software.
Your favorite SaaS tool apart from yours and why?
Trello—I can’t get away from it. It’s so simple and it just works.
True, Trello has become an indispensable part of many SaaS companies.
Your favorite SaaS company in terms of marketing & growth which you would like to implement at Outseta?
We’ve grown almost exclusively by using our own tools. That said, Wistia is probably the SaaS company that I admire most and I’ve been using their Soapbox product to send highly personalized sales and customer service emails containing video. That’s been hugely effective for us.
What is the team size currently both on-site and remote, and are there any plans to expand the team in the near future?
We are a fully remote team of 4 and then also rely on some contractors. We’re staying intentionally small but will likely bring on a fifth team member pretty soon.
AWS or Azure or GCP? Which you used for Outseta and which would you choose if you are starting a SaaS company today and why?
We use AWS, but I leave those decisions to my Co-founders Dimitris and Dave.
Finally, you would have worked and had conversations with a lot of SaaS founders as the product is designed for them. What are the major challenges they face in your view and your advice to get the company profitable as soon as possible?
I think SaaS founders have a predominant mindset that they need to build perfectly operating, scalable systems from the get-go. While this is well-intentioned, they quickly become overwhelmed with all of the work involved, and when things don’t go perfectly, they look up and their runway is disappearing fast. We try to say, “Hey, this is a faster route to market so you can spend more time building your business.” Beyond that, companies typically invest in growth way too early—long before they are ready to. The single best advice I can give to any SaaS founders comes from former Hubspot CRO Mark Roberge. He says to focus on…
- Customer Success
- Unit Economics
- The Growth
The important part is that you focus on these aspects of your business in that order. More on this framework here. Truly following this methodology will increase your chances of success more than anything else that I’m aware of!
Thanks for joining me for an insightful chat, Geoff. Outseta is seriously impressive and I will be following your growth closely. Much appreciated and I hope to meet you back soon.
Thanks a lot for having me on, Yusuff.