How the Founder of SmarterQueue Took His SaaS Company From $0 to $40K MRR
“From the first paying customers bringing us $250 MRR, it took 6 months to hit $2,000 – only because we were still limiting how many people we invited to onboard. We then hit $20k MRR in the next 6 months after that, then $40k 6 months later.”
Building A SaaS Company Using Low Fi Tests And Solving a Problem People Actually Need Solved.
Today, Kibi.One was fortunate enough to chat with Claude Schneider, the founder of SmarterQueue about his social media management SaaS company. If you’re a SaaS entrepreneur and you’re looking to learn from others in the space, then don’t miss out on the exciting interview we have planned for you today, as we talk about Claude’s journey from $0 MRR to $40,000 MRR. So without further ado, let’s jump in!
💬 First, thank you for joining us today Claude. Can you kick off the interview by telling us a little bit more about SmarterQueue and what it does?
SmarterQueue is a social media management power tool – our users call it Buffer on steroids, or a Hootsuite that’s quicker and easier to use (see SmarterQueue here). The idea came about while I was doing the social media for my previous startup in 2015, and I needed a category-based scheduler. I built something myself, and started asking other founders at London startup events about their social media pain points; about 80% of people said the same three words: “I hate Hootsuite”, and shared the same pains about social scheduling being time-consuming, and getting low ROI from each post they create. After a simple landing page garnered 1700 emails in 2 days (thanks to BetaList and our referral offer), I built out my social scheduler into something standalone that beta users could try out. The two core features that people still love ❤️ today are category-based scheduling, and evergreen recycling – combined, it means you get up to 10x more reach and engagement from each post, and you save over 5 hours every week. I made a great infographic and blog post sharing SmarterQueue’s journey.
💬 I watched your product walk-through video (great video by the way), which shows the different features and benefits for your product. How long did it take you to create an MVP of your product and how have you expanded past your MVP version to make SmarterQueue what it is today?
It took about a year between building the social tools for my own internal use, then realising that this was a product that other people wanted, and making a beta available to other users.
“Of course I was validating with a landing page and talking with people during that time, rather than just building something in isolation – getting product-market fit is vital, and the best way to do that is to be sure that people have a problem that’s worth solving.”
Since the early days when it was just me, I’ve built out a team of 15 people, we’ve become official Pinterest and LinkedIn marketing partners, and added lots more power features to make it even easier to find, share, and analyse content. We’re now filling in the missing pieces that social media managers need, by adding engagement tools and a unified social inbox, so you may never have to step outside of SmarterQueue to get all your social media sorted!
💬 That’s very valuable advise Claude. SaaS founders are often so focused on their idea of a solution, without spending enough time engaged in a deep exploration of the bigger problem. And you’re 100% right. You can’t explore the deeper problem(s) in isolation.
Moving on now, when you first launched SmarterQueue, how did you go about on-boarding your first paying customers? What was the most valuable on-boarding strategy in your earliest days?
I had a very hands-on approach with the very first beta users, and would regularly have Skype calls with them to get their feedback. I’d built a 4 step onboarding flow within the product, and iterated on that many times, to help people understand the product, and get fully setup without needing onboarding calls. The two best things I did were set up Amplitude event tracking to look at our drop-off points in the onboarding funnel, and to watch users go through the onboarding and see what issues they were encountering.
After 4 months I’d invited several hundred people from our pre-launch email list, and had done lots of pricing surveys (a black art!), and was ready to start asking for money. It was great to see how many beta users valued the product so much that they were happy with a higher price point than Buffer.
💬 Do you feel the pressure from increasing competition in the social media SaaS space? How are you dealing with that pressure?
Social media SaaS isn’t a mature market yet, and there are over 40 similar tools on my radar, even though fewer than 10 are actual competitors that people consider. In 2018 things took a change when Facebook changed a lot of their access policies after Cambridge Analytica, and Twitter decided to stop duplicate tweets in an attempt to prevent bots from affecting elections and political trends. We spent much of our time adjusting to these changes, rather than focusing on competitors.
“As long as we keep understanding people’s needs and pains, and offering a solution that they can’t get elsewhere, we’ll continue to grow.”
💬 How has the marketing strategy for SmarterQueue changed over time? What marketing advice would you give to early stage SaaS founders who are struggling to gain traction early on?
We didn’t do any marketing at all for the first 2-3 years – all of our growth came from word of mouth, and our referral program (visitors get a double-length free trial from a referral link, and if they sign up from your referral, you get the value of their first month applied to your subscription). Once we’d got some beta users via BetaList, and my networking in the London startup scene, they fell in love with the product, told their network, and it grew from there. A few of them were bloggers with a decent audience, and their review posts help bring in constant traffic too. I teach a lot of early-stage entrepreneurs that referrals are the best and cheapest way of acquiring users, as unlike paid marketing it doesn’t require any up-front funds – you only pay a small fraction back after you’ve earned revenue – and it’s much more scalable, and helps you reach networks that would be impossible for you to reach directly. And referred visitors convert better too, as they’ve been pre-sold by someone they trust telling them how much they love the product.
💬 How much A/B testing (if any) have you been doing in order to try to optimize the effectiveness of your homepage? In your experience what have been the most important design elements that have helped increase CR on your site?
I’ve always had A/B tests running on our home page from the beginning, as it’s impossible to know whether your product marketing is optimized for conversion. I started off running several experiments side by side, which made it hard to get enough data to get statistically significant results, so we now try to only run one experiment on the home page at a time. Also, there’s so much variability in data even when not running experiments, that it can be hard to get any significant outcome from an A/B test. We’re on version 5 of our home page now, where we’ve added a lot more social proof and testimonial quotes/videos, which appears to be having a positive impact.
“Another surprising finding is that we got more paid customers by hiding the Pricing link from the top of the home page – the hypothesis is that people would go straight to the pricing page and decide that they don’t like the price point, without even seeing any of the benefits, or understanding that the product will actually save them more money than a cheaper product.”
Because SmarterQueue offers more powerful features than competitors, we save users more time and get them better results, so you need to take into account your own time, and the increased ROI, and not just the product price.
💬 That’s a really interesting observation. I’m sure there will be people reading this right now that will be inspired to run a pricing menu link A/B test! I see you offer a 14 day free trial of SmarterQueue. How much experimentation have you done with this on-boarding process? Have you tried shorter trial time frames? Have you experimented with credit card vs. no credit card required for the free trial? What big takeaways have you found A/B testing your signup process?
I’d read lots of research about signup and onboarding best-practices, so decided from the beginning not to require a credit card for signup, and only require it when they decide to upgrade. I’d also read that trial length doesn’t affect conversion rate. However, we have had a few visitors comment that the 14 day trial isn’t long enough, so we may experiment with a longer trial combined with an incentive to upgrade early.
Being a social tool, we offer social signup as well as email signup, with users choosing evenly between the two. However, the social connection step relies on them being logged into the right social account, or knowing the password, so there’s some drop-off there, so it’s better to get their email up front, ensuring that you can reach out to them later.
The most important steps to test are the product onboarding flow, where you have several conflicting tasks to accomplish: get the user’s account set up so they can use your product; explaining how your product works, especially hard if its value lies in the complicated/detailed power features 💪; and getting the user to the “aha” moment, so they decide to carry on using your product.
💬 I see you have a blog as well. How much has content marketing and SEO played in your company’s success so far? What percentage of your leads can be attributed to your SaaS SEO efforts?
We’ve only focused on content marketing (blog posts) for the last year or two – it’s a slow burn, and takes a while to generate traffic to the blog, and then to convert that traffic to trial signups. Using our own product to manage our social media content is a great way of practicing what we preach, and we can definitely see the benefits of social media posts for getting traffic to our blog and product.
The best blog posts we’ve had are long-life posts that keep bringing us traffic from SEO (such as our posts about Instagram feed planning), and with SmarterQueue’s evergreen post recycling we can re-share that post to our social every few weeks to reach new audiences.
The majority of SEO traffic to our website is simply searches for our brand name, but we’re working on creating lots more SEO-focused landing pages, which we hope will start bringing more traffic from searches for social media tools.
💬 You offer three different monthly pricing plans. How much experimentation have you done around pricing and SaaS monetization?
Pricing for SaaS is a really difficult subject – fortunately there’s lots of great research out there, so you can stand on the shoulders of giants without making their mistakes.
The main inputs that lead to our current pricing is lots of conversations with early customers, some pricing surveys to find out their price sensitivity (using Van Westendorp questions), and to work out which features they value. Once we got lots of users, we then had data to help see what features people use at each price point, and what the value metrics are. We’ve tested different designs of pricing pages, to try to make it easier for users to compare and choose plans, but the biggest data point comes from looking at conversion rates vs our number one value metric: number of profiles. Like most SaaS products, our three plans are divided into fixed tiers (in our case, 4 social profiles, 10 profiles, and 25 profiles, with the option to get 50+ profiles via add-ons). By looking at the conversion rate from signup to paid, grouped by how many profiles users have connected, we can see very obvious dips just above each tier – this indicates that we should switch to a granular add-on model, where you can pay a bit more to add one or two profiles, rather than have to jump to the next plan up. We’ll be A/B testing this carefully, as we expect it will improve conversions, but there’s the risk of getting less revenue overall.
💬 Can you tell us a little bit more about SmarterQueue’s funding path? Are you self-financed or do you have investors on board? Can you tell us a little bit more about the pros and cons of your decision?
I’m in a fortunate position to be technical, so I built everything myself. This meant I was able to get a functional product into people’s hands that they were willing to pay for. I also had some savings to help hire the first contractors, so I’d say SmarterQueue was 20% seeded from my own investment, but then 80% bootstrapped from customer revenue. While I know that not everyone can start making revenue without taking investment, I feel that early stage entrepreneurs should definitely put more effort into getting paying customers, rather than trying to convince investors for funds. Pitching for investment is a full-time job (i.e. a distraction from what your business is trying to do), and in no way helps you reach product-market fit. If anything, it delays your learnings, as you’re not finding out whether customers will pay for your idea.
“The best money to try to win is always going to be revenue, not investment.” 💸
💬 Tell us a little bit more about some of the early failures you experienced and how you overcame those failures.
I would say that SmarterQueue fully came about from my early failures – this is my 4th startup idea! The first two failed because I didn’t validate my ideas with the market, and was too focused on building a product. The previous one had 2 years of effort, and got good early traction, but had I validated the user’s pain points properly, I would have created a job board for creatives, instead of the portfolio and networking site that I wanted.
Fortunately, by experiencing the most common reason for startup failure first-hand (working on a product that people don’t really need), I focused solely on validation, and lean startup methodology, and that’s a large reason SmarterQueue has succeeded and grown, while most startup ideas fail after a year or two.
“Ash Maurya’s book “Running Lean” is something I recommend to all founders, and when I mentor entrepreneurs, It’s amazing how few people spend time ⏱️ validating by talking to people, running simple lo-fi experiments, and using data to make decisions.”
💬 That’s great advice. I see you have an affiliate program. How well has your affiliate program worked for you so far? What is the percentage of traffic your referral program helps you bring in? What are your most successful affiliate on-boarding techniques? How do you go about finding the best affiliates for your program?
Our referral program is the reason we grew 50% each month in the first year, and still generates over 20% of our traffic, with a lot more of our traffic coming from people searching for our brand after hearing about us from our users. We’re now in the process of launching an official partner program and affiliate program, on top of our referral program, so that anyone can earn money as an affiliate. So far, our best partners have been bloggers who review and write about social media products and strategy.
💬 Wow. That’s incredible. Great work. Now if you’re comfortable talking about financial milestones, can you tell us a little bit more about your SaaS size and growth rate? How long did it take SmarterQueue to hit $2000 MRR?
“From the first paying customers bringing us $250 MRR, it took 6 months to hit $2,000 – only because we were still limiting how many people we invited to onboard. We then hit $20k MRR in the next 6 months after that, then $40k 6 months later.” 📅
Our team grew from just me in 2016, to 15 people in 2018. We’re a fully-remote company, with our team spread across Canada, USA, UK, Spain, and Italy, and we’re still hiring across all roles!
💬 Lastly, if you had to start over again and do three things differently, what would those three things be?
👉 1) Start building out a team earlier
👉 2) Put more focus on hiring SaaS experts with product, UX, and growth experience.
👉 3) Make my role redundant, so I can spend more time being a outward-facing CEO, rather than an inward-facing product owner
Thanks for taking the time to chat with us today and thank you for being so transparent. You’re a very smart guy Claude. I know everyone reading this will have at least one big takeaway that they can apply to their own SaaS company. To our audience, if you’ve enjoyed this interview I encourage you to head over to the SmarterQueue website and consider signing up for their free trial.
If you have enjoyed this interview and would like to read more just like it, then head over to our SaaS marketing blog.
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