What are the mysterious ingredients for the success of a SaaS start-up? The Cloud & SaaS Awards Team spoke to Ryan Dempsey, CEO of TCW, for his take.
“Have you ever wondered about the attitudes and ingredients needed to create the perfect SaaS start-up?! Would you read on if I told you I was going to detail how to find the perfect idea? And then how to detail it, create it, turn it into a viable company in a demanding market, sell it and then fundamentally make money from it? Wouldn’t that make me the flavour of the month… or even the year?
The problem is, the process of idea, product, company and then profit is not something that can be written down. It could never be a process to be followed because of many variables that appear along the journey. In truth, as I sit here writing I would comfortably say that to go from nothing to something special requires multiple ingredients — one of which is luck.
Let’s look at some of the ingredients you’ll need:
- Stone heart
- ‘Get-it-done’ attitude
Sorry, got slightly carried away.
Seriously though, more things could trip you up than help you along your way.
Let’s try and create a scene or scenario that describes the journey, metaphorically speaking.
Imagine if you were stood at the end zone on a football field looking down towards the other end zone. Between you and there, twenty individual sections, all five yards apart. Where you are stood you have nothing. But! If you can only get to the end zone you have a profitable, expanding software company which is growing in value — and you’re now a successful entrepreneur.
Each five-yard section has a wall stretching the width of the pitch and the wall has ten doors. Nine of those ten doors won’t open and you only get one shot to choose the right door.
The first wall is for the idea. 90% of software companies never make it and continuously drain equity and venture capital funds until someone decides to pull the plug — or sell to save something. If you manage to pick the right door, you move onto the market, and then on to demand, etc., etc.
There are things you can do to better position yourself to make the right calls, but there is never a complete solution.
For example, my original idea for The Compliance Workbook (TCW) was pitched in secret to a couple of guys who subsequently became my fellow directors. One, a very clued-up, ‘outside of the box thinker’ and software developer, and the other, an experienced ex-Plc director who founded a company that floated in the .COM era.
From inception, the business was complemented by quality experience and further graced with more ex-Plc directors who came onboard as strategic advisors. I probably could have done more now that I look back, but all-in-all, the team we developed put us in a position where decisions were less knee-jerk and more calculated.
We naturally move to the items I mentioned flippantly. Although an off-the-cuff joke, it is true that determination, grit and a stone heart are all required. On the journey up the mountain, you’ll be asked to do things that previously you would consider crazy.
An example: I was asked to fly to Vienna to meet a potential investor. I left the house and passed through Manchester airport. Landed in Austria, had the meal and headed back to the airport. While passing through passport control I was asked to step aside — and then asked how my day had been. The woman who checked my bag through security a few hours earlier was the same woman checking my passport as I entered the UK again.
“I just flew out to have a bite to eat with a friend” is not something everyone naturally computes!
So, you are making progress and find yourself at wall seventeen. You have the business, the market, the demand — and you are so close to ‘everlasting success’ …but you’re completely out of cash. You’re invited to an awards evening and it’s your turn to get the next round of drinks in. Remember, you’re a successful software CEO at this point, folks….
Could you imagine calling your wife at 22:00 to ask her to put £260 on her credit card for you? Fight or flight, can-do attitude… what do you do. Have you just made it through door seventeen?
If you’re still reading and you’re excited because you’ve only got a couple of doors left until lifelong success and happiness… this is such a beautiful place to be, right? I remember Ian (my Co-Director and Chief Operating Officer at TCW) saying to me when I was at this exact spot:
“Can you feel the engine roaring Ryan? We’re in the shuttle and the fuel tanks are starting to burn. This is going to be one hell of a ride!”
Well, how would you feel about a technical fault, a blip, a bump in the road or a few steps back? Do you still have the drive, determination, motivation and ability to keep going if your whole life is lifted and reversed to section ten of our metaphorical football field?
The truth is to grow an idea and keep the momentum you have to accept that this will happen more than once. The number of knock backs you’ll get either make you stronger — or break you down until it’s just not working in your head anymore. The only way to keep going is to believe in the obsession. Somewhere in your head there is an image of you being recognized for changing the world with your idea. Because the image exists, you know it’s real.
The final, extremely important, piece of this puzzle is the character and how they interact with people at the start and throughout the journey.
They say if you say something enough times it will become true… that’s complete tosh.
What is true is that as an entrepreneur growing your idea, being told constantly “it won’t work” does starts to grind away at your character. You should never doubt your idea, as I never have, but you should also prepare yourself for the most negative traffic heading straight through your door — daily — and you should learn how to harness this to fuel motivation. In the early days of TCW I must have said I wanted out a thousand times. I never once doubted the technology — but was so scared of my mental well-being that it pushed me to say things I didn’t mean. Thank god for those around me.
I hope something in this post gives you something to think about and I apologise if you’re the person looking for the golden nugget guidance on how to be successful. My advice, if at all worthy of your attention, is to grab an idea and then run with it with 100% of everything you’ve got. Make a lot of wrong decisions — and then correct your direction each time. Force yourself to accept that 9-to-5 living is not you and that you are happy to work until you don’t have to. I would also say find some good right-hand men/women who refuse to accept this, just as much as you.
– Ryan Dempsey, CEO of TCW