Lessons - Juvenile Detention to 5 Exits & 600+ SaaS Clients | Dan Martell - SaaS Academy Founder & Buy Back Your Time Author

In this lessons episode, explore why scaling a startup often breaks, not from lack of customers, but from flawed models and weak retention. Discover how pricing strategy, expansion revenue, and customer fit drive, sustainable growth understand the personal traits that separate high performing founders from those who stall and uncover how choosing the right coach accelerates execution and long-term success. And I'm curious, where does the machine break? Where do you find entrepreneurs making the biggest mistakes when they get to that point and can't scale past that? Typically, it's the reverse of what they think. So I call it chocolate broccoli. People come to me because they think they need more customers and what they really need is a better model. So what does a better model look like? There's only three levers in staff. It's top of funnel retention and monetization, right? So most of the time people have a retention problem, but they don't want to admit it or they think it's good enough. So we need to keep more customers than we're losing because that scale, that percent loss per month gets to the point where you'll hit what's called the growth ceiling. So retention's number one, number two is monetization. Though expansion revenue through upsells, cross sells add-ons, especially your pricing. Most staff founders don't understand pricing economics and psychology, and that is probably the lowest-hanging fruit. Normally clients build too much stuff and they don't have a clear understanding of value drivers and how people should transition in between different plans and how structure their plans to create that sales motion to pull people through that expansion, right? So that's the big thing where are they doing it wrong? Yes, do they even know they're not doing it? No. I mean, these are things that if you haven't been doing this for a long time, it's your first time building a software company. You've spent most of your time just trying to figure out how to get this thing built that you didn't spend any time on pricing optimization. And then finally, once we have that, Dennis, all that sales velocity, right? Like, how do you take the right customer, which I call a perfect fit customer, ready to buy customer? So how do you decide who to focus on, who to sell to? How do you get the message in the market appropriately, what channels do you use? And then once you get their interest, what's the conversion process to get them from opportunity to customer and get that done in the shortest amount of time, so you don't have these long-scale cycles. That's at a high level, and this is all covered in my eighths growth engine framework. But most people start at the top, attract, and then they go to convert expand scale. I almost start at the bottom because I need to make sure the model, the unit and economics of your process actually makes sense to scale, because if it doesn't, then we can waste a lot of time and money on marketing that's just not going to produce the long-term revenue retention that you need. And no, I appreciate it. I think that if somebody's listening to this, even that awareness of what could be broken can drive them to look to the right resources, and you know, yourself, or even, you know, a ton of others. But to understand all those points that you just mentioned that could potentially break when trying to scale, I think it's very important. And I think that you sort of, I'm covered that recipe, you know, quote-unquote recipe for success. When it comes to scaling startups, a lot of the things that you're mentioning, I hear emulated from a lot of other very successful sales leaders were talking like Mark Robair from HubSpot. He emulated, especially the turn piece like mitigating the loss, you know, plugging that leaky bucket. That's another one that I hear a lot, the people don't focus on, I've seen it a lot. And I don't want to, you know, reiterate everything you just mentioned, but I think that as people try and scale their company, it's really smart to understand, like you said, these things that are going to be huge growth inhibitors. Now, I'm curious about, these are very tactical growth inhibitors. In terms of perhaps personality traits, or I don't want to say that there's a perfect kind of startup founder, but what are the personal traits or growth traits that somebody should focus on internally that can allow them to be successful, or is there just that kind of person that has the grit, determination, drive, perseverance, you know, self-awareness, empathy, whatever that is the most important trait to be successful as an entrepreneur, because you work with so many. Yeah, no, I think these traits can be developed and taught and learned. I think there's a natural, like, you know, there, you need to be a certain type of person to build a Mark Zuckerberg or equivalent, right? So there are, there are these like outliers in the data set, but there's this like very large medium, the mean of people. And when I look at that, most of my clients are bootstrapped, you know, incredibly successful. They all have a lot of characteristics. One is they're very growth-minded, meaning that they're willing to invest in themselves, hence why they're coaching with me. They're willing to invest in themselves because they have confidence that with that knowledge, they can do better than without it. Most people don't trust themselves. When you ask somebody like, why do you not hire a coach? They'll make up a bunch of reasons, but the truth is, is they don't trust themselves to get knowledge, to implement, to get a return. That's the only reason why you wouldn't hire somebody's been there before, to help you, because if I was going to climb Everest, you'd be an idiot to not want to go learn from people that have been to the summit of Everest, or Everest, before you had hemped it. Like, that would just be honestly suicidal to anybody trying to do it. Yeah, people do that every day in their business, and I think the reason why is they just don't have a lot of confidence in their abilities to translate that information into execution. So that's one thing. So the people that are going to succeed have a level of confidence about their ability to execute that most people don't. They're very much intuned with feedback. What does this look like? It means that they're willing to pick up the phone and call customers and get feedback. They're willing to call, talk to their team and ask them their team questions like, what do you need more for me as a leader? They're willing to instrument the metrics to know what's really going on in the business. A lot of founders that don't have the product or financial metrics around their business, I believe it's because they just don't want to know. They'd rather not know, right? They put their head in the stand, then actually pull that together because literally there's so many tools out there that'll give it to you for free, that for you not to know what your turn or your expansion revenue or your activations are or your trial conversion or whatever they are, it's really just ignorance around getting that information and being scared to know. I mean, they don't come down to fear. I mean, it's got that's the reality. But the traits is those things. They're curious. Curious is a big one. They're driven. They have a vision. This is a big one. They have a vision for their future that's way bigger than where they're at today. And they're able to expand that as they expand. You know, I think what happened sometimes, people peed her out because they actually hit, you know, I would just love to make 100 grand a year. And then they hit it and then they just stay there forever. Which is fine. Just not what I do. What I do is push people way beyond what they think is possible by showing them examples of that and reinforcing within them that confidence encourage and clarity of execution to make sure that that comes the reality. And when they're looking for someone like you, there's a lot of coaches out there. How do they find somebody who's right for them? How do they audit that coach? Yeah, and I had a lengthy discussion. One of my clients, Liam, he's the founder of Time Doctor. And he actually interviewed me. So if people want to search that interview, like, he's coming on. Yeah. Yeah. But he's the one that asked me that question. I mean, here's how I hired my coach. I want somebody who's been there before. Okay. So Mercy, for example, one of my coaches back in the day, she built a company brought a public 5,000 employees, right? So in there before had had results with other people. I think a lot of people are idiots of bonds in the sense that they know they can do it themselves, but they're not really good at getting other people the same results. I want to I want to know that they've been able to get other people similar results. I would reference check the crap out of who they are. I think you should back channel. So if you see somebody on a Facebook ad, you should see if you have mutual friends reach out to them. Is this person a good person? What have you heard? How long have you known them for? A lot of fly by night coaches in the industry. It's unfortunate part that I, you know, I'm okay with because I understand that, you know, performance over time is the best, the best example of success. It's just keep being consistent. Do do what you do over long periods of time and eventually you'll separate yourself from everybody else. But yeah, there's a lot of coaches out there that, you know, come off and they're very flashy and they're, you know, they're they're selling with material things. But when it comes down to it, their students results should be speaking for themselves. And that's that's a big thing that I pride myself on is is client wins on a monthly basis and progress over everything than really good marketing per se. So I don't know. I think it's a personal decision. If you don't resonate with the person, if you're listening to me and you don't like the way I talk, you really shouldn't work with me because that's not going to get better. That's probably going to get worse. And I think that's important to know is, is you need to find the person that you vibe with and that you feel is going to provide you with honest, direct, clear feedback. And if you don't feel that, don't force it, right? I think it's a very personal decision on who you coach with. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.