EPISODE SUMMARY
In the fast-paced world of software companies, the journey from initial product-market fit to achieving market dominance is both exhilarating and challenging.
This week’s episode of Scale Your SaaS features Roland Sieblink, Founder & CEO at Midstage Institute. As a seasoned entrepreneur, he shared invaluable insights into navigating this critical mid-stage phase with host and B2B SaaS Sales Coach Matt Wolach, shedding light on common misconceptions, essential strategies, and personal growth.
PODCAST-AT-A-GLANCE
Podcast: Scale Your SaaS with Matt Wolach
Episode: Episode No. 305, “How To Become a Unicorn Company – with Roland Siebelink”
Guest: Roland Siebelink, Founder & CEO of Midstage Institute
Host: Matt Wolach, a B2B SaaS Sales Coach, Entrepreneur, and Investor
Sponsored by: Leadfeeder
TOP TIPS FROM THIS EPISODE
Aligning Teams and Functions
The key to success in the mid-stage is breaking down silos and fostering alignment among different teams, particularly engineering, marketing, and sales. By connecting these functions closely and promoting cross-functional collaboration, SaaS companies can ensure everyone is working towards common goals and priorities. This alignment is essential for maintaining strategic focus and driving growth effectively.
Personal Growth of Leaders
As companies grow, so must their leaders. Founders transitioning through the mid-stage must be open to personal growth and self-awareness. This involves seeking feedback, being receptive to criticism, and adapting their leadership styles accordingly. The journey from a hands-on entrepreneur to a strategic leader requires constant learning and evolution.
Strategies for Accelerated Profitability
In an evolving investment landscape where profitability is increasingly prioritized, startups must focus on accelerating profitability without compromising long-term sustainability. This involves understanding the actual costs of running the business, honing in on profitable segments, and strategically investing in growth areas while avoiding unnecessary diversions.
EPISODE HIGHLIGHTS
Understanding the Mid-Stage
The mid-stage for software companies, often characterized by initial signs of product-market fit to striving for market dominance, is a treacherous yet pivotal phase. Many founders mistakenly believe that achieving product-market fit marks the end of their journey, failing to recognize that the real work begins here. It’s not just about exploring anymore but transitioning to exploiting that fit and racing towards market domination.
The Importance of Strategic Focus
One common pitfall highlighted is the undisciplined pursuit of growth. Founders often spread themselves thin, attempting various strategies without allowing sufficient time for them to yield results. This lack of focus can lead to wasted efforts and hinder long-term sustainability. Instead, a sharply focused strategy, grounded in understanding the target market and ideal customer, is crucial for success.
Final Advice
Navigating the mid-stage of a software company’s growth requires strategic focus, alignment among teams, and personal growth from its leaders. By recognizing the challenges and opportunities of this phase and implementing effective strategies, companies can successfully transition from product-market fit to market dominance, setting the stage for long-term success in the dynamic world of software entrepreneurship.
TOP QUOTES
Roland Sieblink
[17:37] “One question we always asked the executive teams when we interviewed them right before a workshop is can you state your strategy in one sentence? That is still the best possible indicator I found of having a sharply focused strategy.”
[21:35] “I would still say start with creating a bit more self-awareness. And that sounds very soft. I know a lot of people resist that. But really, if you can learn to be more open to some feedback about yourself, maybe ask a coach to do a 360 survey of people around you.”
Matt Wolach
[15:39] “Learn your market, know who your ideal customer is, and aim directly at that customer with your product with your marketing messaging with your sales process, aim at that person.”
[09:36] “A lot of people don’t realize the evolution you need to go through as a leader. As your company grows, there are so many different changes.”
LEARN MORE
To learn more about Midstage Institute, visit: https://www.midstage.org/
You can also find Roland Siebelink on LinkedIn: https://www.linkedin.com/in/rolandsiebelink/
For more about how Matt Wolach helps software companies achieve maximum growth, visit https://mattwolach.com.
Head over to leadfeeder.com and sign up for a 14-day (no strings attached) free trial: https://www.leadfeeder.com/
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Check out the whole transcript of the episode here:
Matt Wolach 00:05
Hey, welcome to Scale Your SaaS super excited to have you here My name is Matt and I am here to help you do that exactly scale your SaaS, let’s grow, let’s make sure we understand how to generate a lot of leads. Let’s close a lot of deals. Let’s scale our team so that they can be successful doing all that fun stuff for us. If you want those things, definitely subscribe to the show right now hit that button. That way you’ll get notified of all the new episodes we have where we have incredible creators and innovators who tell you exactly how to scale yourself. And one of those incredible people is here with us today. I’ve got Roland Siebelink with me. Roland, how’re you doing?
Roland Siebelink 00:38
Hello Matt, it is such an honor to be on this podcast. I’ve been looking forward to this interview for a long time. Likewise,
Matt Wolach 00:44
I was so excited to be able to talk with you. I know you’ve done a lot of great stuff. And I I’m really looking forward to sharing your knowledge with the world. But first, let me make sure everybody knows who you are Roland. So a little bit about Roland. He’s the founder and CEO at Midstage Institute. The Mistage Institute, It helps founding teams of mid stage startups maintain maximum momentum so that they can keep growing while keeping their culture. Roland himself, he’s a three time tech founder with a profound understanding of the challenges inherent in scaling a business. He’s a momentum facilitator and coach for fast growing startups. He brings 30 years of experience in software and SaaS startups. And is a former landslide winner of the Silicon Valley founders showcase. He is the man he knows his stuff. And I’m so glad to have him here. Roland, thanks for being here.
Roland Siebelink 01:33
Oh, you’re too kind Matt.
Matt Wolach 01:36
Well, I wanted to hear about what you’re doing lately. And what’s coming up for you? Can you tell us?
Roland Siebelink 01:40
Yeah, absolutely. So, as you said, our focus is really to help mid stage companies, typically software companies as well, go through that treacherous mid stage, right. So typically, we find that as from the moment you have some first signs of true Product Market Fit until you reach product market dominance, right. And a lot of founders know this first, but many of them kind of assume that that’s the end of the journey, or like once you reach product market fit. And that’s basically all the success you need. I might even say, the ones with the more technical backgrounds, they get an itch to start developing the second products. But what we found is that really the journeys only beginning once you get some inkling of product market fit because now it’s time to start, instead of exploring at the start exploiting that product market fit and start racing towards actually occupying that market sooner than all the competitors out there could possibly catch up with you.
Matt Wolach 02:39
I think that’s just it right there. So many times I’m talking with people who are like, well, we’re doing well, we were ahead of the market, we’re doing great, I think we’re fine. And I say hold up in software, things happen so fast, and somebody behind you could come up and catch you and pass you if you’re not paying attention if you’re not continuing to grow. So that happens all the time, doesn’t it?
Roland Siebelink 02:59
It does. And I think few founders are actually aware of the basic economics of software and tech companies in general, which is that ultimately, the technology investment that you can make, drive so much value that the bigger you are, the more you become dominant in your space. So you know, the writer of Crossing the Chasm calls, there’s ultimately every sector ends up with one gorilla, two monkeys and a bunch of chimps, right? You know, and so essentially, you have to put everything in your power to work to become that one gorilla in your space. And if you don’t believe me just ask around like, what do you think you know what company comes to mind? When you say search? What company comes to mind when you say CRM? What company comes to mind when you say operating systems? And it’s very clear, there’s always one gigantic winner.
Matt Wolach 03:53
Yeah that’s so true. Great point on that. I think it’s super important to get there. I want to go back though. What led you to start Midstage Institute’s?
Roland Siebelink 04:01
Yeah, good question. So I’ve been very lucky, as you said to have been a founder several times, but also to have been early employees in companies that three times turned out to become a unicorn. So three successive unicorn journeys every time I’m lucky enough to be among the 10 or so first employees to see it grow to over 1000 in just about three years time. And, I think I’m pretty unique in that I’ve been very lucky. And also I found myself even in the earliest ones when I was quite a bit younger, to always get into some kind of a position of coaching the founders/ CEO starting to realize how lonely that position is, and also starting to feel like how difficult it is to actually get through that treacherous mid stage. So after having done that three times, and having founded a few companies of my own, I felt like my true strength in actually in sharing those stories and experiences and basically help people see ahead of the curve that typically they cannot yet because it’s invariably the first time that they are on that unicorn journey. And I’ve done it a few times before.
Matt Wolach 05:10
Yeah, definitely. I think you’re being a bit modest when you say you were lucky. And I do agree, there’s a little bit of luck. But there is a common element here that you were there each time helping to make it happen. So I’m gonna say you’re amazing. So I want to understand the what does it take? I mean, you’ve had this perspective multiple times, you’re probably seeing some some common elements here. What does it take to start and grow a company that becomes a unicorn?
Roland Siebelink 05:35
Yeah, so I think most founders are aware, there’s two big sides to the business. One is the product engineering side where of course, you need to have an attractive product and keep up with the market changes, you know, be able to resolve bugs in time, all that stuff. But what I think they often miss in that, is that real dominance of that field, how can you maybe hone in on an even smaller target group that get that target group loving your product and sticky with your product, so they don’t move to a different product, right, I think of the go to market side, I really use that Crossing the Chasm framework a lot it throughout the journey that we do with founders, because many intuitively like to sell doctors, startup founders like themselves. You know, the dirty little secret of all the Y Combinator startups is that almost all of their first clients are other Y Combinator companies, because it’s just a brotherly thing to do. And what does that mean, not just for my sales motion, but also for my product and the kind of features they offer? And, you know, can I psychologically deal with maybe not being the coolest company anymore, but you know, actually becoming more solid, more robust, all the while trying to avoid, of course, becoming like a big bureaucracy where nothing happens anymore. And then then I think the three dimensions that are usually a little bit under exposed, that we often focus on in the background, I’ll go through them fast one, is the business model, like how do you actually think you’re gonna be returning cash to investors? Of course, in the beginning, you can kind of ignore that question. But you better have a pretty good idea about how in the long term, you’re going to be creating superior cash flows and profits. And many founders have no idea actually buy into the VC narrative of like, well just get more and more funding, not realizing that what that really means is because we want to get your company from under you, right? That’s a very good thing to keep in mind. The two others are, what mode do you set in the company? Think of this as like a proxy for culture. Like, what is the actual challenge that you pose to the workforce at large? Is it just sales? Or is it like win any deal at any price or at some point in time, they start shifting into like, we have to follow some guidelines because otherwise everything falls through the cracks, right? And how do you get to that perfect, Yin and Yang of like enough energy, and enough gung ho, sales motion, but that the other side, also enough process on robustness to actually deliver on all that the company requires him to keep scaling it. And the last one, the hardest one is, how do you as a founder actually need to change? Because your company requires different things from you as you grow. I think if you start with that, then many founders are naturally resistant to it. Because, you know, their their starting point is like, how do I manage my employees better? How do I get people to finally do what I want them to do? Kind of a bit of an autocratic mode, maybe in the beginning, which is appropriate when you’re in a garage stage, let’s say right, but it’s not appropriate anymore, when you suddenly have 50, 100, 200 people reporting to you, and you need to learn totally different styles. Rachel Turner, Founder Survival Guide is a great resource in this and she talks about moving from a brave warrior to a considered architect and ultimately even to become the wise monarch. And how can you learn those new styles? How can you add them to your quiver, let’s say as a founder that that psychological dimension is probably the hardest nut to crack.
Matt Wolach 09:36
Yeah, I totally agree that I love hearing that because a lot of people don’t realize the evolution you need to go through as a leader. As your company grows, there are so many different changes. I talked with a lot of my clients, I help them grow, I help them scale and then they say, wow, my day to day has changed so much in just the last few months. It’s crazy. high growth mode, it can really shift right?
Roland Siebelink 09:58
Yeah, absolutely. I think psychologically, it’s really, really hard to ask people to change the very thing that made them successful in their minds, right? which is typically in early stage hustle, very quick decisions, constantly changing perspective until something sticks, right? Very appropriate. If you didn’t do that, in the early stage, you would never even get anywhere, right. But at some point in time, you need to start becoming aware that that’s not your recipe for success anymore. So how do you give that up and learn new skills? Or if you prefer, would you rather have somebody else come in, but frankly, I’m not a believer in replacing a founder CEO. I like to keep them in charge for as long as possible. But of course, the condition is that they need to be open to learning and developing their skill sets and maybe changing their profile altogether over time, as you say.
Matt Wolach 10:49
Yeah, I totally agree. So can you give us some things you were able to help with? How can founders identify these habits and, and let go of old habits that maybe got them there without losing that innovative edge?
Roland Siebelink 11:01
Yes. And that’s a really important point that I will also want to back up that, you know, the big picture here is all about how do we get to company to be more robust? How do we get the leader to be more robust, but without losing that innovative edge? So how do we avoid them becoming too big for incorporation that they all fled in the first place? Right. So it’s, that’s why I think I really think of it as this like mid stage where it’s kind of like an adolescence for companies, you know, if you still behave like a little kid, and throw tantrums all the time, you’re not going to be very successful anymore. But if you start behaving like a middle aged adult, right away, when you’re still figuring out who you are, and what you’re good at, you’re also not going to be very successful. So it’s really like a different set of prescriptions that works the best in this stage. And that’s what we try to teach people.
Matt Wolach 11:52
I love it. So can you help us and share some specific strategies that startups can implement to accelerate profitability without compromising long term sustainability?
Roland Siebelink 12:01
Yeah, I’m guessing this question comes from the change in the investment landscape, more than anything else, of course, most of their startups until two years ago would have been able to attract quite good funding so that they didn’t have to worry about profitability yet. Now, that’s not so easy anymore. But I also think that that’s actually in a way a good thing, because it pushes forward that question about the business model to earlier, and you actually have a chance to keep more of your company than if you would have followed the old VC model where you get addicted to the cash flow. And you know, ultimately, you end up at IPO with less than 1% of the stock, which is some of the cautious stories out there. Right. So to answer your question, how to do this, I think you need to understand very well, what is actually the cost of running the business, and what is all the what I call almost like speculative investment in future growth. And most startups, I’m convinced once they have a degree of product market fit, they are fundamentally profitable. They could be very profitable, if only they just kept selling their current product. And, you know, basically kept that on automatic mode, right? The problem is that the model has been so much about, well, you need to show ever more growth, you need to show more products, you need to build a whole stack that the company does tons of investments in money, but also executive energy in all those growth directions, typically running 10-20 At the same time trying all those experiments still trying to see what sticks, right? And there’s a huge cost associated with that, that typically does not pay off at all. So in these lower growth times when it’s harder to attract investment, I would be far more curious about you know, what is actually our bread and butter? Where can we actually already have a profitable business underneath at the foundation, let’s say? And then yeah, of course, you should still invest in some growth, but then pick two or three dimensions, not 30.
Matt Wolach 14:12
Yeah, I think that’s totally a great way to think about it. So if software leaders out there, they’re trying to grow, what mistakes are you seeing what are the biggest mistakes these leaders are making around growth?
Roland Siebelink 14:24
I think it’s really the undisciplined nature of pursuing growth. So trying everything under the sun to see what sticks and then never sticking with it long enough to actually make it work. So I see that a lot with marketing channels. I see that a lot with the different segments that you target, sometimes even with different product features, right? And I think on the product side, many people do not realize that what makes your product the most successful over time is if you keep control over it, and if you have a relatively limited feature set that you can actually keep saying to customers, Well, we decided not to do that. Too many companies become very dependent on 1 to 3 core customers that were basically when the customer says I’d like you to add that button, then it’s yes and amen. Right? Those are the kinds of products that really missed the mark over time, because they cannot satisfy lots of people anymore. There’s maybe 10-20 people that use it intensively. And all the rest, say, Well, this is bloated software, I don’t need that anymore. And so keeping control over your products, honing in on the actual value that you’re providing for the most important target group that you have, not just the whole world out there. That I think is the right approach.
Matt Wolach 15:39
So I think it just kind of goes back, this is something I work with my clients on right at the beginning, as you’re getting started, before you get to that mid stage level, it’s Hey, learn your market, know who your ideal customer is, and aim directly at that customer with your product with your marketing messaging with your sales process, aim at that person. And so we shouldn’t change that. You’re saying that even mid stage Don’t forget about that perfect fit ideal customer don’t try and be all things to all people nail that, right?
Roland Siebelink 16:06
Yeah, absolutely. And you know, once the sales really start taking off, which is typically when you have breached some degree of the mainstream market, then of course, the model in your mind is that it should be like bowling pins where you hit one and then later on you hit the second, then you hit the third, right. It’s kind of like a chessboard that way or maybe like the wrist game where you gradually conquer more and more of your time. Right. But I think the whole focus on on time, and some, in early stage startup is really misguiding founders have an incentive to start thinking of like, oh, let’s boil the ocean, let’s let’s conquer this $10 billion market, which really leads to lots of wasted efforts and never getting to any penetration where customers actually start using Word of Mouth start, recommending you to others, which is really what makes you the most successful. I think the positioning book by April Dunford is really good in that she always says like, you know, your target group should for this year should not be bigger than what you need in order to make your sales targets. So that’s actually way smaller in most cases than what many founders think of right?
Matt Wolach 17:20
Yeah, absolutely. And April’s brilliant. So I’m glad you brought her up, because that’s really important. But I want to ask you, so as you’re working with your your clients, and even thinking back to growing your companies, what are some of the key indicators that signal a startup strategy is sharply focused and aligned with its goals?
Roland Siebelink 17:37
One question we always asked the executive teams when we interviewed them right before a workshop is can you state your strategy in one sentence. That is still the best possible indicator I found of having a sharply focused strategy. There’s also the old Dilbert comic, that people for a certain age where, you know, Dilbert picks up the phone. People say, Oh, can you do this? And he’s like, “Uhh” and that’s a company without a strategy. A company with strategy would say, No, we don’t do that.
Matt Wolach 18:09
Wow. Cool.
Roland Siebelink 18:11
So Strategy is about choices, right? It’s really about making a choice and daring to live with that choice. And I think that’s where a lot of people really fail, because they kind of want to be popular for everyone.
Matt Wolach 18:24
Very true. So what were some of the things that you did in your companies that helped you get to where they were?
Roland Siebelink 18:31
um, it really depended on the specific situation. But I think the red thread was almost always to connect the product organization much closer to the marketing and sales organization so that it didn’t feel like different silos, but that we had more of an understanding of what does the customer really want? And what can we deliver and how to reconcile that dilemma, right. And so I think one of the most powerful things you can do is have a bit of a program where even engineers some time listening to calls or sit with a customer, of course, not to resolve all their problems on the spot, but more like, you know, to get exposure and to realize that, they’re all just people like you and me, and not this kind of ideal that you see on a cardboard somewhere, right? Same way the other way around, when sometimes he wants some, some customer focus people, some like sales, customer success, also get to know the technology a little bit better and see what the constraints are. And why resolving this one request for this one customer might actually decrease the value of the overall product for hundreds or maybe even hundreds of 1000s of other customers out there.
Matt Wolach 19:42
Yeah, I agree. And I’m surprised at how many teams don’t connect engineering and marketing and sales well enough and it’s really bad, like you said, when it’s siloed and as you’re talking about that mid stage as you navigate throughout mid stage and continue to grow, the silos become easier to have It’s harder to get those teams to make sure that they’re in alignment. And I found that the most successful companies do keep that alignment. So it’s great.
Roland Siebelink 20:07
Yeah, and one key lever for that, Matt is when we come in and help those executive teams is not just to coach the CEO, but also to have those quarterly sessions with the entire executive team. But to keep those resolutely cross functional. The question is not what is marketing going to do? What is engineering going to do? What is it finance is going to do? The question is, what do we need to do as a company? What are our top five priorities for this quarter or a year, whatever the case may be, and just, I often even ignore, I know very well who’s who has which function, you can usually already tell by the type of person, right, to be honest. But in the end, it doesn’t matter. Like I will sometimes purposely ask a marketing question to a head of engineering or the other way around, you know, because I say, you know, when you come in here, your job is not to represent your departments or to defend your people, your job is to learn to think like a CEO. And it cannot all be on that one guy or girl in the room that is supposed to bang your heads together and try to make you come to compromise. That’s something you can learn for yourselves.
Matt Wolach 21:20
Yeah, absolutely. Very, very true. Okay, so as we wrap up here, relevance is a ton of great stuff. What one piece of advice would you give to software leaders who are entering this stage and saying, Okay, I need to figure out how can we grow as a company, how can I grow as a person.
Roland Siebelink 21:35
I would still say start with creating a bit more self awareness. And that sounds very soft. I know a lot of people resist that. But really, if you can learn to be more open to some feedback about yourself, maybe ask a coach to do a 360 survey of people around you. Also, board members can be helpful in that regard, learning to be open to feedback, and then independently to decide whether you want to act on that or not. That’s perfectly fine, right? But most people are so much in pitching mode all the time that they have not learned to listen, and they do not actually pick up the crucial information that they need to adapt to. And that would be my my core advice.
Matt Wolach 22:20
That’s definitely great advice. I would echo that as well. Hope everybody takes note of it. Roland, this has been awesome. Thank you so much for coming in and sharing your knowledge with us. It’s really, really great stuff. How can our audience learn more about you and Midstage Institute?
Roland Siebelink 22:34
Yeah, so we’ve made a page available with all the resources, some of the which I’ve mentioned in this interview, and it’s at midstage.org/thrive. And so just going to that URL, you’ll see that my contact information, please connect on LinkedIn as well. But also some of the downloads that we have some of the core blog posts that, that explain everything. And hopefully also this, this podcast video at some point in time.
Matt Wolach 23:01
Okay, perfect. I agree. I will make sure we put that stuff into the show notes as well. So if you’re listening, you’ll be able to grab it there. But, Roland, this has been fantastic. Thanks for coming on the show.
Roland Siebelink 23:10
Yeah much, much appreciated. Thank you for the invitation. It’s been my pleasure and a big honor.
Matt Wolach 23:16
The honor is mine. I really appreciate everybody out there. Thank you for being here. Thanks for watching, and listen and make sure that you’re subscribed. As I mentioned earlier, you don’t want to miss other amazing guests like Roland sharing all of their knowledge with you. Take care.
