January 25, 2017

Tweetstorm: Preparing budgets in SaaS startups

Nakul Mandan

A common mistake I see in SaaS during the budget prep cycle is founders making a 12 month operating and hiring plan instead of 24 months
The tendency is to put together a detailed plan for the next 12 months and high level projections for the following 2 years.
This most often first happens at ~$1m ARR, when founders are beginning to make detailed plans for the first time.
One reason this is tough at ~$1m ARR is bec this is the 1st time you're going from finding-product-market-fit-while conserving-cash to...
...growing-as-fast-as-you-can mode.
You got to $1m by iterating, while conserving cash. You'll go from $1m to $5m by doubling down and investing ahead!
What you will achieve in 2018 is directly contingent on the hiring you do in H2-2017, especially for enterprise sales driven models.
As you put together your budget for 2017, think about your 2018 plan too. Plan ahead for success!