The Top Startup Principles Every SaaS Founder Should Know | SaaS District

As a startup founder and entrepreneur, you're always looking for ways on how to avoid failing when building your startup. Even myself, as I've built several businesses in my career, I've actually failed at a couple of them, but then I also succeeded in many others. And I've also seen many different similarities between working with different entrepreneurs, founders every single day, and tendencies and overlaps. And I've seen the difference between successful entrepreneurs, great founders, and the ones that thrive when they get to the growth stage. of their startup journey. And based off of all that experience and learning, that's exactly where I come up with principles. And that's why principles are super important, because that gives you the foundation of how you should operate your business to be able to increase your chances of succeeding and standing out from your competition. In today's video, I'll be sharing the top 6 principles every single founder needs to know. Hey guys, welcome back to another video here at SaaS District. Glad you could be back. If you guys love these videos, obviously please like, subscribe, hit the bell, and I'll create more content just for you guys. So I'm the investment director and GP at Horizon Capital, where we work directly with B2B SaaS founders who are looking to take their business to growth to the next level. And today's video, what I really want to focus on Is startup principles, because having these principles gives you a guideline on how you should operate your startup every single day. Let's get into the first one. Number one is a question I get often is, Akeel, how much money should I raise? How much capital do I need for my business when I'm launching my startup? And this is the topic that many people, you know, are always thinking about and considering at every stage of their business. Here's my answer for this, very straightforward and clear. Only raise the amount of money you actually need. And the reason why I say that is because if you raise too much money, what happens if you think about it, right? If you have too much money in your bank account, you just got, you know, a huge payday, you got a nice bonus, what happens? You start becoming inefficient. You start looking for places to spend your money that you didn't actually have to need. You start finding things that you want to spend on, and that becomes a disrespect and doesn't lead to good results for your investors, nor for yourself, nor for your team. So you want to avoid those inefficient But then going from there, so you ask, okay, how much do I need? How do I work out exactly the plan of building that plan of how much I really need for my startup? So what I suggest is you propose a budget, actually create a budget for the next 12 to 24 months. Many will suggest 18 months, okay? Decide exactly, create a roadmap. Look, this is exactly what I'm going to spend the money for the next 18 months, okay? I'm going to need to hire this many engineers. I'm going to spend this much on marketing. I'm going to spend this much time Towards salary, travel, entertainment. Have an idea, it doesn't matter, but have it as clear as possible because you know what does an engineer cost, right? You have a range of what they cost. You know what a designer costs. You know what a marketer costs. So you have all those budgets and costs put together in a spreadsheet. Put it out over the next 18 months and then add a 10 to 20% buffer. Okay, add that little buffer on top of it, you know, just to be safe. Always have that safe margin of safety. Right. And obviously use optimistic numbers. But be realistic. That's the whole goal of this exercise, is to be realistic in your numbers so that when you go to investors, you're not saying, I'm going to be able to hire a senior engineer who's going to cost me $30,000 a year, when we know that, you know, a senior engineer coming from Google is going to be looking for almost 5 times the amount of that. And it's funny because, you know, I hear this a lot, right? People come up to me and say, we're going to go to the market and see what we're going to be able to raise. We'll say maybe we'll go somewhere between $2 and $10 million. I think that's the amount we're going to raise. That's the wrong way to look at it. You actually have to say you need to have to look at it more of a data and analytical approach of how you build that and decide how much you want to raise. So that's principle number 1, figuring out exactly how much you need to raise. Startup principle number 2, staying laser focused. So I'm a really, really big believer in being laser focused in what your core proposition of your startup is. Don't go and try to do 50 different things and see what works. Think about the one core thing, the problem that you're solving, what is that solution, and focus on doing that as perfectly as possible. Once you've nailed that solution, that one core problem, then you go out and you expand into other areas based off the results of that one. It's funny how often I talk to founders, they'll come to me and be like, hey, I'm going to be doing these, you know, next The next 12 months, I'm going to be focusing on these 10 different features. I'm going to go out to market. I'm going to do this different marketing channels. I'm going to say, hold on, hold on. Just just slow down for a second here. Let's focus on what's really important here. What is the one thing we're really doing? Let's let's hold put all this stuff on hold. Why don't you show me what you're going to do for this problem here? Let's really dig into the core of what your business is, and let's decide on what the one core metric that matters and dig into. Further, how we can nail that down before we go on to the next one. So there you have it. There's principle number 2, being laser-focused in your vision and your execution. Startup principle number 3, follow your customer. I think this is really core to any business we're talking about here and any walk of life. Your customer are the people who are using your product, right? These are people that you're working with. You also have to remember that it's easy to hide behind technology and say we're creating all these features and functionalities. At the end of the day, people are going to be using it, and that's what you have to really focus on. And you should let them decide where you should be going, what you should build, and where the business is going to be going. And they should give you an indication of what's working and what isn't. All right. So that's why it's super important to follow your customer. So it sounds pretty logical that you should always follow them, but always have that in the back of your mind when you're making any strategic decision about your business. So ask yourself these questions. For example, if you're building a feature, Are my customers actually going to use this? Are they actually asking for this, or is it just something that I think that's going to be cool and I should add in? Is there actually going to be demand for this? How should we price it, right? So if you're thinking about how to price it, think about your customer and see what they're willing to pay before you decide how you want to price it. So you can think about, right, are you trying to target, you know, lower-priced people and you'll be as cheap as possible? That's fine. You know, you exclude all these features, you make it very simple for them where you focus on price and being the cheapest possible solution? Or do you focus on quality service? Are you, are you focusing on value, on overall experience? And if you're including all these factors, then obviously you're going to increase your price because they're getting a lot more value out of your solution. So just, you know, those are kind of decisions, but that's going to depend on your customer who you're following, right? So there you have it. That's number 3, follow your customer. Startup principle number 4, not all investors are created equally. Okay, this is probably self-serving because I'm talking about myself as well. I'm an investor in many startup companies I work with, but you know, I'm not trying to say we're all the same or all the different, but what I'm trying to say is there is a huge number of investors out there right now. There's a lot of cash and there's a lot of good businesses to invest in. There's no shortage of businesses, no shortage of new startups. If you have a strong vision, if you have a strong team, if you If you know what you're doing, you're probably highly likely going to get the capital and investment you need. At this stage, you have to think, who is the best investor for me? Okay, not all money is treated equally, and there's different kind of elements that you want to look at when deciding who you want to partner with and invest with. The first thing I look at is, is it a cultural fit? Okay, you have to think of this person. You're going to be spending the next maybe 5 years 10 years working with this person, that's almost getting into a marriage, right? So this is a huge commitment. You're gonna be taking their money, and do you want to be dealing with this person every single day? I've made that mistake before where I've taken money from, you know, LPs and investors and part of our, our own acquisitions. And what we found is, you know, some of them are just not the right people we want to work with. And that was a huge mistake I've made in the past because then I'm dealing with them for the next couple of years or months where they're just constantly, you know, being difficult, a lot more difficult than they are helpful as an investor that you want on your team. So when I talk about cultural fit, you know, things to think about are, is this somebody I can be a friend with? Is this somebody I can go to have dinner with? Is this somebody I would introduce my family with? Is this somebody I want to go have a drink with at the bar? So you want to think about them as somebody, as like a friend that you can go have a drink with, and they're going to tell you the truth. They're going to tell you the harsh realities, and they're going to be your advisor and mentor to make sure they're actually giving and caring about you and the results you're giving versus their own interests. So I'll say that's number one, is the cultural fit when you're picking an investor that you want to work with. The second element I would say obviously is domain knowledge. Like, do they have expertise in the same industry that you're in? Let's say you're working in, you know, marketing technology. Have they worked in marketing tech before? Have they had success in that type of industry? Do they know the market as well as you do or better? And are they going to be able to add value? Can they help you with hiring, with operational decisions? Building your network, maybe making different introductions. So that network component is super important as well. Like I said, it's not just about money these days. It's, you know, having the right money from the right strategic investor. And the last piece of this, you know, in terms of picking your investor is share of mind. How much time can they actually commit to you, right? They're making a commitment to you that they're going to give you money, but they're also willing to sit there. Are they sitting on 10 different boards, 20 different boards? and they're advisors across 100 different companies, how much time can they actually allocate to you? Can you call them at midnight, you know, in the middle of a stressful situation, and are they going to be able to answer and give you the time you need to be able to get through that difficulty or challenge? So, you know, think about that. Are they going to be able to allocate the right enough time for you and your startup and give you that respect that you need? So there's all these different elements that I talk about here, and that's what makes a super important decision when deciding that you pick the right investor. investor that I think a lot of people don't really think about. So that's, that's the key principle here is choosing between smart money versus just any investor money, making sure you're aligned, make sure you're 100% on the same path of that vision, and you'll be a lot more successful in moving forward on your startup. Startup principle number 5, look in the mirror before looking out the window. So what do I mean by that? Look inside before looking at your competition. Look at what you're doing. You know, I hear this a lot. from different founders is where they focus so much time and energy. What is their competition doing? What is their new feature? What is their pricing they've adjusted? How much money did they raise? They're spending all this energy and time focusing on what their competition is doing, and they stop focusing internally on their own business. And this is super important, especially if you're at the early stages of your business. You really, really need to focus on yourself. That's the most important thing before thinking about your competition. And instead, what's going to happen is you're going to be trying to catch up to them every single time. What your competition is doing instead of trying to focus, innovate, and build something actually better without even looking at what they're doing. So the only question you should be asking yourself is, how do I make this business the best version possible? That's the only question you should be asking yourself. That's your dream, that's your vision, and that's not what everybody else is doing. That doesn't matter. What matters is your vision and your dream that you want to achieve for your business. And so you have to think here, if you build an amazing business, everything else will fall in place. Fall into place, right? Your competition, it doesn't matter at that point because your business is so good that people can't stop and not pay attention to you. So as a startup founder, I do think you should keep tabs on your competition, see what they're doing, you know, here and there, but don't spend all your time on that. Look inside, look at what you're doing, and focus on building an amazing business. So that's startup principle number 5. Startup principle number 6, being relentless in your vision and your business. It's interesting to see this, right? You see this in the best founders and the best businesses, you know, the ones who I always speak to are doing amazing. They have this relentless fire and drive inside them that they know what they're doing is absolutely right. Nobody can tell them otherwise because they're so excited, passionate about what they're doing, and they're so focused that they know what they're doing is gonna— is the right solution out there, and there's nothing better. I mean, you can see that with, you know, some of the best entrepreneurs out there. Elon Musk, right? You guys know him. He says, I'm going to— I'm going to Mars. He doesn't care what anybody thinks. He has so much drive and passion and vision of getting that, that he'll do whatever it takes to make leaps forward to achieving that goal. And they believe they're going to get there no matter what, and nobody can stop them and get in their way. And as an investor, that's super important for us and something you really want to see in another founder because you see a founder, you know, that they understand what they're doing and they know they're going to get there no matter what. And that's super important to think about. When building your own company is do you have that fire inside you that this is a problem I love and I'm going to do whatever it takes to get there. So there you have it, guys. There— these are the 6 startup principles I recommend to every startup founder consider when building their startup. Hope you guys enjoyed this video. If you liked it, make sure once again to comment, to subscribe and hit the bell and let me know below. I'd love to hear from you. What is a core principle that you guys have in the back of your mind and you follow to build your own companies? Let me know in the comments. I'd love to hear from you. And thanks again for watching and joining SaaS District. See you guys in the next video.