For SaaS leaders, creating a strategy for long-term sustainable growth is a monumental task. And while the process is full of intricacies, there’s a simple equation to guide you through it. At this year’s SaaStr Annual event in San Mateo, FullStory Founder and CEO Scott Voigt shared his three-part formula for building a successful SaaS startup from the ground up. Here’s a summary of his presentation and his lessons learned along the way.
What you need to know to build a SaaS rocketship
The magic formula: (i)*(g)*(c) = 🚀
Building a successful SaaS company may not technically be rocket science, but it is a complex undertaking. To make this complicated task easier to digest, Scott developed a simple framework to go by: (i)*(g)*(c)* = 🚀.
While this might look like a bit of gibberish, it’s actually a simple equation that expresses the three key ingredients of a high-growth SaaS business. Written out, it would be: Idea x Go-to-Market x Culture = SaaS rocketship.
FullStory’s founding team—comprised of eight former googlers—believe that when each of these elements are thoughtfully strategized and multiplied with one another, you’ll have a successful SaaS organization. Here’s how FullStory approaches each piece of the equation.
Ironically, when FullStory was founded, it wasn’t FullStory at all. The team behind the company was pursuing another software idea entirely—a sort of combo marketing and project management solution called Homebase.
When they went to meet with a potential investor, he asked a question that changed the company’s course: “What’s the invention?” Scott and the team realized that they had an idea but not an invention. While Homebase might solve a problem, it didn’t solve it in an innovative way that would be uniquely valuable.
So they reevaluated their premise, asking themselves, “What are we good at?” And a simple answer came back:” We understand the web.” While working on Homebase, they realized that the event instrumentation paradigm that had defined digital experience analytics was no longer enough; they set out to build something that could take in all of a website’s visitor data, index it, and distribute it to cross-departmental teams in meaningful ways.
This kind of digital experience intelligence software would solve a problem that people didn’t know could be solved—a sure sign of an innovative product. And FullStory as we know it was born.
Armed with a good idea, the early FullStory team needed a business plan. FullStory has always thought of our go-to-market (GTM) motion as what we call “the Flywheel,” which is roughly equivalent to the concept of product-led growth.
In the early days of FullStory, our founding team determined that starting at a relatively low price point would force us to be excellent product builders and encourage us to think about the product at scale rather than relying entirely on outbound sales, creating a sustainable growth model.
As shown in this graph, the number of potential customers goes down as a product’s price goes up.
The idea behind the flywheel is that by starting small, we can earn loyal users who will take FullStory with them as they move on to different—often larger—companies. The software also matures and is able to start with a foundation that grows in capability to support larger customers along the way. Then, as our customers grow in their careers and their companies grow too, FullStory grows alongside them.
At FullStory’s outset, culture wasn’t a major concern. The company was founded by a group of people who already knew one another, had a shared mindset, and placed priorities in similar orders. These commonalities meant they didn’t really need to proactively think about culture in those early days—it occurred naturally.
As the company grew, though, they set out to define the cultural values that would be woven into the fabric of FullStory. Two of the key values they came up with were empathy and clarity. Here’s how these values play out day to day:
Everything about FullStory is built on empathy: We aim to lead with empathy within the company and toward our customers, and the product allows our customers to empathize with their customers. Empathy is baked into FullStory on a foundational level.
Clarity describes how we communicate. We approach clarity with the belief that no problem or disagreement should survive a thorough, clear description of it. When we encounter some issue, we talk or write it out until a logical solution appears.
This comes into play when decisions are made that impact the whole company. When FullStory was a tiny organization, everyone in the room could weigh in on a decision and be happy with the outcome. As the company gets bigger, it’s inevitable that someone somewhere will be unhappy about almost any decision that’s made.
When we communicate with clarity, we can transparently explain the factors and reasoning behind decisions that impact our teams. Whether happy or unhappy with the outcome, clarity allows each FullStorian to assume that big decisions were made with good intent.
Each of these concepts alone don’t amount to a whole lot. But when you combine an idea that makes peoples’ lives easier, a go-to-market strategy that’s sustainable, and a culture built on empathy and clarity, you’ve got the best chances of launching a rocketship.