SOFTWARE AS A SCIENCE

A SaaS Academy Press Book

www.SaaSAcademy.com

Software As A Science © Copyright 2024 SaaS Growth Coach Inc

By Dan Martell, Matt Verlaque, Johnny Page, Marcel Petitpas

First Edition

Published in the United States by SaaS Academy Press

in collaboration with Stone Crest Books

Stone Crest | www.StoneCrestBooks.com

For more information, visit www.saasacademy.com

ISBN Identifiers:

To all the visionary SaaS founders who came before, thank you for blazing the trail. We’re all standing on the shoulders of giants.

To all the mentors who taught us, coached us, challenged us, and molded us: thank you for being so generous with your time and experience. We wouldn’t be here without you.

To our families: thank you for supporting all of our crazy dreams and inspiring us to think bigger than we ever thought possible.

To the team at SaaS Academy, past and present: thank you for working tirelessly to build the best coaching program in the world and to support our clients in every way possible.

To the small group of advance readers who gave us early feedback: thank you for being so generous with your time and opinions. It’s easy to say great job and move on, but instead, you truly helped make this book better.

But most importantly…

To the founders who have come through our doors over the years—this book was built by you just as much as it was by us. Without you—tirelessly building, testing, challenging yourselves, and growing incredible businesses—it would be a volume of empty pages.

We’re incredibly grateful for the opportunity to serve such a brilliant and hardworking group of clients. It’s a privilege that most people could only dream of.

Above all else…this book is for you.

– Dan, Matt, Johnny, and Marcel

Contents

Foreword

Introduction

Chapter 1 – Your SaaS Company Tastes Like Chicken. . . and It’s Supposed To

Chapter 2 – The Only Three Levers You Can Pull

ACQUISITION—Get More Customers

Chapter 3 – The $2 Million Facebook Ad

Chapter 4 – How To Convert Attention into Customers

Chapter 5 – Shatter the Sales Chokepoint: The Rocket Demo Builder™

RETENTION—Keep Customers Longer

Chapter 6 – Activation Is a Hurdle Race to First Value

Chapter 7 – Finding Your C.H.I.

Chapter 8 – The Circle of Trust: Turning Happy Customers into Your Best Marketers

EXPANSION—Make Customers More Valuable

Chapter 9 – How to Build the Pricing Plan You Actually Deserve

Chapter 10 – The Ultimate Price-Increase Method™

Chapter 11 – You’re Already a Services Company (Here’s How to Charge for It)

One Last Story

When You’re Not Sure What to Do Next…Run the System

About The Authors

Sources

Foreword

Founding and running a successful SaaS company is hard. Really hard. There are cash flow hurdles, marketing hurdles, and (my favorite topic) pricing hurdles. Opinions on how to solve these hurdles are pretty easy to find (just Google them). But proven answers you can trust are a lot harder to come by. Welcome to a book that cuts through the noise with data, stories, and proven answers you can trust.

For most of my professional life, I’ve been on a mission to help software founders unlock the strategies that work. That work led me to founding ProfitWell, before it was acquired by Paddle, where I served as the CSO.

Software as a Science delivers on a number of the most difficult problems facing our industry: sales, marketing, retention, and pricing. Dan, Matt, Johnny, and Marcel don’t just write down the answers; they show you how to apply them to your own software company.

Here’s what you need to know about this book:

1: Every SaaS Founder Can Use These Strategies

We can debate all day long about the best strategies for growing a SaaS company. But facts are hard to argue. Right from chapter one, you’ll find convincing evidence from tons of analyses on how certain elements underpin every SaaS company on Earth — acquisition, retention, and expansion. Increase one, increase your chances of success. Fail at one, and your company will likely fail with it.

2: The Authors Prove Their Frameworks

I’ve sat in the room with all of these guys. I’ve spoken on their stages at SaaS Academy events with hundreds of SaaS founders from across the globe. We’ve discussed how to handle product-market fit, uncovered marketing tactics, and digested complex problems to find the simple answers. In this book, the authors draw on these experiences and provide examples from real SaaS companies just like yours that have used tactics such as their Ultimate Price-Increase Method, the Rocket Demo Builder, and other frameworks. Not opinions, just results. And the stories to prove it.

3: They Deliver Detailed Frameworks with Simple Next Steps

At the end of the day, without some straightforward takeaways, elegant solutions are nothing more than pipe dreams. I love how Dan, Matt, Johnny, and Marcel put this book together — they offer detailed analyses of their frameworks, and then, at the end of every chapter, they offer you the next steps you can take immediately.

Let’s take one of my favorite sections, chapter 6. In this part of the book, they address the churn problem that happens if you don’t have a strong activation process. First, the chapter unpacks a specific, detailed plan that they’ve used with hundreds of other companies to cut churn in half. Then, at the end of the chapter, they give you the three simple next steps you can do (literally in the book, as you’re reading) to get a jumpstart on fixing your product activation now.

Here’s what you need to understand: this book has the stories to pull you in, the data to convince you, and the results to prove that the models work. If you’re in SaaS or, honestly, any recurring revenue business, this is a must-have resource. Get it. Read it. Pass it on to your team.

—Patrick Campbell, founder of ProfitWell

Introduction

Hop in.

Dan called Marcel on the phone, asking if he wanted to go for a run. About thirty seconds after Marcel said sure, he heard the rumbling engine of Dan’s supercar. In typical Dan Martell style, he was already waiting outside Marcel’s house. Hop in.

They drove to the trailhead, parked the car, and jogged. Just as Marcel was getting out of breath, Dan shared why he was really so eager to go on this run. He wanted Marcel to be the first-ever expert coach at SaaS Academy. SaaS Academy was growing quickly under Dan’s leadership, and there were more and more founders showing up in the community ready to scale their companies—which meant there were more people to help than Dan could handle by himself. And Marcel kept following Dan’s lead.

It was 2016, and at the time, the software world was falling over itself looking for venture capital funds. You were more likely to hear people bragging about raising money than you were to hear people talking about making money. Investors had deep pockets, and they were all looking for the next unicorn. Software founders, intoxicated by the thought of huge investment rounds, gravitated toward raising cash as the default model for company building. It was almost like the investors became their customers, and their funding requests became their sales pitches. The game was no longer about creating the best product for the right customers and then iterating toward perfection—it was about growth at all costs and making sure that you could raise your next round at a higher valuation than the last one.

We’re not bashing venture capital funding—it has its place. Dan raised venture capital for his last two companies before SaaS Academy. And he, in turn, has invested in dozens of other businesses as an angel investor. Raising venture capital is a great tool for the right type of business. In fact, for those businesses, it’s likely the only tool that’ll work. But in our opinion, it’s a tool that gets misapplied to lots of companies that don’t really need it.

When Dan said, Hop in, he wasn’t just inviting Marcel into a car. He was inviting Marcel to join what would become the most successful coaching program in the world for B2B SaaS founders, and to work with some of the most incredible software CEOs of the last two decades. And those two little words embodied the same type of invitation that Dan used to hook Johnny and Matt—the other two authors of this book—to join the company a few years later. So, we find it only fitting that we offer the same invitation to you:

Hop in.

The Back Story

SaaS Academy was created with the goal of helping SaaS founders who had reached their first $10,000 in monthly recurring revenue (MRR) learn how to scale their company, deliver results for their customers, and build a business that they wouldn’t grow to hate.

But that vision—with its tight target market and highly specific mission—didn’t arise out of nowhere. That vision was born the way most entrepreneurs birth a new company: first by seeing a problem without a solution, and then by building the solution.

Software had been second nature to Dan for years before he founded SaaS Academy. After a troubled childhood and a number of run-ins with the law, he found himself in a rehab facility staring at an old computer and a dusty yellow book about Java programming. He cracked the book, fired up the machine, punched a few keys, and as soon as he saw Hello World! appear on the screen…he was hooked. After a couple of early failures, he found success with his company Spheric Technologies, which went on to sell for millions. A few years later, he started Flowtown, which was acquired by Demandforce in 2011. The term serial entrepreneur was starting to fit.

In 2012, Dan started Clarity.fm—a software platform that helped entrepreneurs get advice over the phone from people who had the answers. This was a platform for any entrepreneur in any business anywhere in the world. Not sure how to fix your empty sales funnel? Clarity has someone who’s done it. No idea which side of your marketplace to solve for first? There’s an expert on Clarity. Don’t know how to set up your pitch deck to go raise that money you need? You get the idea.

The network of experts that jumped on to serve others with their expertise was incredible—from serial entrepreneurs, to nine-figure-CEOs, to some of the most talented sales and marketing voices in the world…most of them were on Clarity.fm sharing their genius with the people who needed it most. And Dan had a front-row seat, which helped his mission become clearer: he was here on Earth to connect entrepreneurs with the knowledge they need. Although Clarity was a great start, it still felt like he was hitting just outside the bullseye. After Clarity was acquired in 2015, Dan’s mission became even more focused:

It was time to build a community that has all the answers…only for B2B SaaS founders.

Dan knew that most of the communities and accelerators for SaaS founders were born out of the echo chamber of raising venture capital in order to grow—and that many of these communities weren’t as interested in helping founders build durable revenue as they were interested in helping them raise capital. Where was the authoritative resource for those who wanted to start their own business, and run it themselves? Where was the group that showed bootstrappers that they can create a big company—or even become a unicorn—without relying on venture capitalist dollars?

That group didn’t exist. So, Dan did what any self-respecting serial entrepreneur would do—he built the solution: a program just for B2B SaaS founders, where coaching, content, and community could all come together to help as many founders as humanly possible.

And just like that, it was off to the races. Built on Dan’s incredible network of the smartest minds in SaaS, the business took off. Anyone who wanted to learn how to increase their revenue, reduce their churn, or fix their product positioning was joining. And that growth was what led up to Dan and Marcel going for that run—and to Marcel joining SaaS Academy.

Dan was an early investor in Marcel’s company Parakeeto, which helps digital agencies run more profitably. Marcel wouldn’t tell you this himself, so the rest of us will let you know: Parakeeto is a world-class example of how a tech-enabled services business should work—it’s thriving under Marcel’s leadership. So, it makes sense why Dan brought Marcel into SaaS Academy: His ability to quickly understand complex problems, ask challenging questions, and reframe the solution in its simplest form…it’s uncanny to the rest of us. By now, he’s done thousands of coaching calls with B2B SaaS founders, helping them market their companies, understand their numbers, and serve their customers at a world-class level.

In fact, that was the exact type of coaching that attracted Matt and Johnny to join as clients. Sitting at a SaaS Academy event in 2018—in the front row taking lots of notes—is where they met for the first time.

They didn’t know each other—Johnny was from the west coast, Matt from the east, running two different companies. But they had many of the same problems. They were both SaaS CEOs, trying to figure out how to scale, and weren’t always sure what to do next.

For his part, Johnny had taken over his company from within—he first joined Silvertrac Software as a commission-only sales rep in 2013. By 2015, Silvertrac had increased their revenue to almost $100,000 per month, primarily from the sales that Johnny and his team were bringing in. He then stepped into a leadership role as the head of Customer Success, where he was instrumental in nearly tripling their MRR again. The next stop was the CEO role, when he joined SaaS Academy as a client and guided Silvertrac through its successful acquisition (at an 8x revenue multiple) in November of 2019.

Matt left a successful career as a firefighter to create his company, UpLaunch, in 2017, and joined SaaS Academy as a client the following year. He found himself firmly plateaued—something we know that almost every SaaS founder faces—at $18,000 in MRR, and he wasn’t sure how to get past it—but he was incredibly committed to figuring it out.

The biggest advantage Matt had was that he is a ruthless implementor—he and his team installed playbook after playbook from SaaS Academy (one per week for the first twelve weeks), fought hard for their customers, and ended up rebuilding most of the business. After those first twelve weeks, UpLaunch enjoyed double digit growth every single month until he and his co-founders sold the company for over a 10x revenue multiple in January of 2020.

You might have noticed that Johnny and Matt exited their companies at almost the same time…which meant that those two CEOs who were once sitting in the front row taking notes would soon be looking for their next adventure. And that adventure would be with Dan and Marcel at SaaS Academy.

By then, the word was out—just like at Clarity, experts from around the world were joining as speakers at our in-person events and coaching founders in our weekly sessions. These experts—people like Patrick Campbell (founder of ProfitWell) and Simon Bowen (creator of The Models Method)—combined with Dan and the SaaS Academy coaching team, had built an incredible library of cutting-edge growth playbooks, and an incredible community to help with implementation. And people kept asking the question:

When are you guys finally going to write a book??

Here’s the thing: we weren’t really writers. Sure, most of us had a blog, and SaaS Academy had thousands and thousands of hours of content (enough to write an actual encyclopedia). But no one had ever accused us of being authors. We were founders, coaches, creators, and mentors…but none of us had the first clue how to write a book.

And besides—there was a lot to do. Johnny and Matt both held C-level positions in SaaS Academy and were laser-focused on delivering results for our clients. Marcel was still coaching, while also scaling his company Parakeeto (not to mention running his podcast and speaking at events as well).

But everything changed when Dan released his own book, Buy Back Your Time, in 2022. It became a Wall Street Journal bestseller, old-school style: organically. While that book was for all entrepreneurs—showing them how they can get their time back—it sparked the same community to ask us again, Where’s the SaaS book?

That’s one of our mantras at SaaS Academy. And although we’ve done that to a certain extent with our marketing and YouTube content. . . we finally agreed that after seven years of running SaaS Academy and helping thousands of founders, it was time to write the book.

Most people don’t realize the depth of what actually goes on inside of SaaS Academy. There’s a full-time team of Executive Coaches that can use a mathematical formula to predict exactly when your company will stop growing. We’ve refined our content library into about 300 best-in-class playbooks to help founders cure whatever is holding them back. And our sales demo process has been used by our clients to sell over one billion dollars in software since we first started teaching it (more on that in chapter 5).

Inside this book, you’ll find everything you need to know to run one of the worlds’ greatest SaaS companies. While anyone could find this book useful—as many of the tactics are time-tested and based on sound business principles—we wrote this book specifically for the founders who already have a SaaS company, who are wanting to know how to scale it, the right way, with less frustration and more financial reward. If you’ve got a B2B SaaS company—whether you’re at $1 million MRR, or you haven’t even launched yet—this book is for you. It’s the last book you’ll ever need to read when it comes to understanding how your business works, breaking through your revenue plateaus, and making the right moves at the right time in order to unlock growth.

The foundational playbooks of the SaaS Academy curriculum don’t talk about shiny objects and cutting-edge technology. We don’t care if what we say is sexy or not. We’re too pragmatic for that. In fact, most of these playbooks are timeless, built around the patterns of business that never change: creating a point of view in the market, generating sales conversations and converting them into customers, onboarding and retaining those customers, creating raving fans, and nailing your pricing and packaging.

The strategies in each chapter of this book have helped to create hundreds of success stories, dozens of incredible exits, and a tribe of founders who have finally realized that they don’t need to choose between scaling their company and living the lifestyle they’ve always dreamed of.

Most of these strategies have been kept private for our clients…until now. But all four of us agree—it’s finally time to give our best playbooks to the world.

Why? Because the software landscape has drastically changed.

The capital investment required to start a SaaS company is a fraction of what it once was. More people are starting software companies every single day. The competition for venture capital is tougher than ever—the days of raising a seed round from a slide deck at