Dec. 29, 2022

Monetizing a SaaS Business Model: Lessons Learned with Spencer Barclay of Savology

Monetizing a SaaS Business Model: Lessons Learned with Spencer Barclay of Savology

Episode Summary:

In this episode of SaaS Origin Stories, Spencer Barclay, Founder and CEO of Savology,  joins host Phil Alves to share a founder’s insight on the roadmap for building a successful SaaS business. 

Spencer’s insights are best practices across different business phases, from ideation and funding to market validation of the MVP and how to scale. He also offers insights on hiring the right people and some pitfalls to avoid while recruiting talent.

Guest at a Glance:

Name: Spencer Barclay

What He Does: Spencer is the founder of Savology, a SaaS startup providing financial planning and financial wellness solutions to consumers through a B2B gateway of employers and financial consultants.

Connect with Spencer on LinkedIn

Topics we cover:

  • Limiting your scope with a stair-step approach
  • Invest in discovery and proof of concept
  • Focus on monetizing with a minimum viable product
  • Talent acquisition is key
  • Three tips to keep front and center on your SaaS journey

Key Takeaways:

Limit the Initial Project Scope to Delivering a Minimum Viable Product

Your initial focus should hinge on delivering an MVP and getting market validation. Don’t set out with the objective of building the final product; instead, build the project scope step-by-step, just like you’d climb a stairway. This ensures that you’ll minimize the initial investment and monetize your product faster. Funding becomes simpler for a market-validated product. 

If your product is gaining traction, but the growth could be faster with a different product, give due thought to an exit. Put some money in your pocket to start again and become what investors love, a successful serial entrepreneur. 

“There are some people that are successful going straight for the big scope, but I think it decreases the probability of success while adding a lot of risk along the way”.

Invest in Discovery and Proof of Concept

Spend time in discovery to identify the problem you’re looking to resolve and the solution the customers are looking for. Invest time and resources in conducting market research, interviews, and focus group studies. Be ready to pivot if the core issue and solution desired by the customer varies from your initial scope. 

The next step is to validate your discovery with a proof of concept, which should precede your MVP launch. This is critical for tech and SaaS startups. Through all this, stay flexible and ready for change. Fall in love with the problem and not the solution. The solution is what the customers want. 

“I wouldn’t have succeeded with the MVP if I hadn’t done the proof of concept. We would have wound up building the wrong product”. 

The Real Learning Starts Once you Launch Your MVP

Getting the product in the hands of your customers is when real learning starts. The feedback you get helps you to tweak and modify your product for higher adoption. Feedback is also an opportunity to evaluate your business model and see if any changes are required. This is also the time to look at a pre-seed round of funding. Keep your pitch deck updated with every new learning, so you’re ready to engage with your investors. 

“The big pivot was to move from a D2C to B2B space. We needed to change our GTM strategy on the fly and pivot to a B2B strategy”. 

Hire Talent that Can Grow with Your Business

Don’t hire talent based on personality; instead, hire based on skills that will help fill your company's need gap. Instead of hiring a VP of marketing outright, hire a senior marketing manager with the skills to fill your gap today and the talent to grow into the VP role in a couple of years. Don’t be tempted into hiring overqualified talent. Chances are you’ll lose them in a couple of months once they find another role at double or more of what you can pay. 

“We know that we need to get the right people on the ship. Know that it’s very difficult to find the right people, but every time you get it right, it accelerates the growth of the company”. 

One Person’s Hindsight is Another's Foresight

Spencer shares his top three hindsight learnings while setting up and scaling his SaaS business. First, be ready to pivot. Statistics prove that agile startups that pivot once or twice in the early stages are more likely to succeed. Pivot based on your learnings. Lesson two is to monetize as soon as possible. Validate your proof of concept and start monetizing your MVP while you continue to build your product. Find the distribution channels that get your product to your audience most efficiently.

Number three is don’t get caught up in the SaaS hype. Stop blindly following successful entrepreneurs. Know that for every successful startup, there are 1,000 that didn’t make it. Instead, keep your head down, focus on your business needs, and work accordingly. Don’t quit or give up.

“It's the founders who don’t quit who make successful products”.


And so on launch day, right, we find this out at nine in the morning that like our site is loading incredibly slowly after it was previously testing in the two to three second range.

And that alone is a reason why people won't use your product, right?

Like they're not going to wait 19 seconds for your marketing site to load. That's an embarrassment. Welcome to SAS origin stories. Tune in to hear authentic conversations with founders as they share stories from the earlier days of their SAS startups. We'll cover painful challenges, early wins and actionable takeaways.

You'll hear firsthand the do's and don'ts of building and growing a SAS as well as inspirational stories to fuel you on your own SAS journey. Here is your host, Phil Alves. Today I have Spencer Barkley, the CEO of Safeology. Welcome to the show, Spencer.

Thanks, Phil. Glad I could be here with you.

So, Spencer, the first question I would like to ask you, tell us a little bit about your background. So I come from a background of in financial services and entrepreneurship.

You know, I grew up in Utah. I was excited my whole life about being a lawyer one day. I learned when I was doing my MBA that I didn't really want to be a lawyer. But instead, I found my passion in building and running businesses. And I was engaged in some financial services helping to build a credit repair company and a state planning company.

And I just found that that's what really got me out of bed in the morning was not just the problems of building and solving small businesses, but also helping people with their money. So my background comes from that. And that's where Safeology got started, was applying those lessons that I learned between those two things.

So you have that passion for to help people with finance and you want to help people in a certain way.

So how is Safeology helping people with their finances?

And what are some of the lessons that you learned coming up to here that you were able to apply on Safeology?

Yeah, a lot of different things. Let's start with maybe how Safeology helps people with their personal finances. So I learned while I was at a couple of our previous companies, Credit Repair Plus and Benefit Guard, that people were not great with their money. So as an example, Credit Repair Plus, we learned that student loan default rates were about 21 to 22 percent in 2011, 2012. There's just a ton of people not paying their student loans.

And that surprised me because I was going to school at the time and I had never even considered not being able to pay back my student loans. And then I saw even further as we're fixing people's credit that Victoria's Secret credit cards were like one of the most defaulted on item on credit reports.

And so, you know, the people making less than good decisions with their personal finances and I got to help them and get the satisfaction out of helping them. When we moved to Benefit Guard, you know, building small business 401k, as I saw that people weren't good at saving money, even when incentivized with a 401k match. Right.

And so I said, why is that?

You know, what can we do to help that?

Because if we don't do anything about it, it's going to cause a future problem when generations of Americans don't have retirement savings and the economy has to prop them up. And so that's why we built Sabology. The problem that we solve is what we'd call financial wellness. People are highly stressed with their money and they don't have good financial outcomes. Most people don't even know that much about financial, their personal finances.

And so we help people overcome those barriers through financial planning and coaching. You touch a lot on that, but I would like to go a little bit deeper.

Like, why do you think you were the right founder for this product?

I'm a big believer that we talk a lot about product market fit, but I'm a big believer that before product market fit, you have to find founder product fit. Like you have to have the right founder for the right product. So let's go a little bit deeper.

What do you think it makes you the right person to build this company?

Yeah, I love that thought of, you know, founder product fit or even founder market fit. It often does take the right person to build the company. And I would say that for a lot of different ways of solving this problem, I wouldn't be the best fit. But when I looked at this problem and how I decided to solve it, then my background aligned really well with that.

Because solving this problem is holistic, right?

Like there are ways to approach personal finances through something like microsavings. And that requires a very specific knowledge and maybe niche understanding. But when we are looking at solving this problem through holistic financial wellness and digital financial planning, that brings in all of these other elements. It brings in your credit and your estate planning and your retirement savings.

And those are all three areas that I have a background in and not a lot of people do.

You know, I'm the person that friends and family would come to when they had questions about their credit or about building a will or how to save more money or advice for their 401K plan. Like all of those things go into financial wellness. And I was the guy that people were turning to.

And it surprised me when my friends would ask those questions because I thought a lot of this was just general base knowledge that everyone had. And I learned that it's not. So that doesn't make me the expert at everything. But I had a round enough knowledge of all of these things that I could put together the right people to then execute on the plan that we put together.

I think that's again, that's very important. You have to have a deep knowledge of the problem you're trying to solve. And like it looks like you were solving that problem many ways before too. It was just not you woke up some day and I'm going to solve that problem. You have been doing that along the years.

Now you're just trying to put everything in one single place and help more people than just the close, close friends or even more people that even more people that help in the previous companies that you worked before.

Is that correct to assume?

Yeah, you know, those other ventures were a lot smaller in scope. For example, you know, fixing people's credit was focused primarily on helping them get out of a bad situation into a better one. And that's a great problem to solve. But it didn't necessarily get down to the level of habits and behaviors that they would have to adjust in order to change that trajectory for the future.

Likewise with estate planning, right?

We were helping some people, but we didn't even have brought enough education into that market. So we were only helping the people that knew they needed help. And with our 401k business, you know, we were helping small businesses get access to retirement savings, which was an excellent vehicle to help them prepare for retirement. But we weren't getting the adoption that we would need to make an impact across the full generation.

We have to approach this a lot more holistically to do that. So another thing path that I see here, there's a guy called Rob Wallen and he calls this stair step approach. So like first you fix a small problem in that niche in financial. So actually two different problems in financial until you get to the more ambitious goal. Now you're trying to do something very, very big.

But before you did something very, very big, you work in a smaller scope and you were successful in that smaller scope. That's how you believe entrepreneurs should do or you feel like if you could start over, you go straight to the biggest scope.

You know, I think there are some people that are successful going straight to a big scope, but I think it decreases the probability of success and adds a lot of risk along the way. So each of the ventures that I've been a part of have been a little bit bigger and a little bit better.

And I think in a lot of ways they have prepared me to be able to do the things that I can do now.

And look, I'm still not there yet, right?

There's still more learning and development to be done. And hopefully this will be a springboard to an even bigger problem, but I wouldn't be where I am today without each of those steps along the way.

And, you know, I look back with the knowledge that I have now at each of those ventures and just think, man, it would have been so much bigger and so much better if I knew the things that I knew now, right?

If I knew how to do demand generation, like we would have blown up our 401k business. If I knew how to do digital marketing and SEO, our credit repair business would have been 10 times bigger. But that's all part of the learning process. So I think it is a smart path to decrease risk for entrepreneurs. Sure. I agree.

And so how did you fund the build of this product, the version one of the product?

Yeah. So this one, I feel like I was in a very fortunate place because when we built Benefit Guard over a few years, we were able to sell it to a publicly traded company and got a meaningful exit from that, which means that I had some money in my pocket that I could choose to put into a new venture. And I still had to be smart about how I did it.

And, you know, I don't tell everyone the whole story of how exactly it worked.

But as we started to figure out what we wanted to do and how we wanted to do it, part of that equation became how do we fund this new venture and where should our capital come from?

How much do I want to invest versus bring in other people to invest?

And we had to balance all of those out. So I actually pursued several different options. I pursued one option that I would look at self-funding the business where I would keep a larger control of the company. And in return, I would be putting in more of my own capital. I considered an option where we would go raise money from the get-go from outside investors.

And having a previous exit under my belt made that a little bit easier to do. I considered a venture service option and I considered like a bootstrapped option.

And I, after pursuing each of those, what I decided to do was kind of bring in a blend of all of them. I decided not to pay myself for the first couple of years and to front a lot of the early expenses without putting a ton of capital into the money. So I bought the domain. I hired some of the first consultants that we brought in.

I paid for some of the digital marketing that we did. I fronted the cost of the branding. But I wasn't going to pay payroll by myself. So we looked at outsourcing development as an example. And we ended up finding a great team where we could trade equity for development services. So instead of me paying the first $250,000 to build our MVP, we had this venture service group do it in exchange for equity.

And that really de-risked me and made it feel like other people had skin in the game. And so we were more likely to be successful than if I was the one doing it all on my own.

So how was the process of finding the venture service for founders that have never done that before?

And how hard was to get a SEPT and to have them come on board?

Of course, you had your exit and you had your experience. But talk with founders a little bit more about how that works.

Yeah, I don't think it's easy. I don't think very many things in entrepreneurship are easy. But if you take some time to prepare and to learn what you're doing, it dramatically simplifies the process and makes it easier. So at that time, this is early 2019. As I'm actively pursuing these multiple options, I'm talking to developers and development companies that we could pay to do this.

I'm interviewing potential CTOs that we would hire on if we were going to bootstrap it. I'm also pitching traditional venture capitalists to see which takers that we could get. And out of the woodworks comes this company. It was actually from an entrepreneurship event that I was at. And their model really resonated with me.

This company just said, hey, what we do is we change the venture capital model so that we provide the services that young entrepreneurs need in exchange for that equity. And it resonated because it felt to me like it was going to go farther than I would if I just got the capital upfront. They do a two-year commitment. You come into their umbrella and they help accelerate and incubate the company.

And so it was not an easy process, but I already had the decks all built from working with traditional venture capitalists. So I'd already had pitch decks to go in and meet with them. They were very receptive because I had a previous exit and some experience in entrepreneurship.

This is my first solo founded business, but I had been part of three other companies in the past that we founded from an early stage together or I ran as one of the startup executives that lowered the barriers to entry for me a lot.

And then I like to think that I had a level of passion and subject matter expertise that not a lot of other people do when they're starting a business. Some people trip into their business. I didn't. It took me 10 years to get to where I was. And that really helped me sell the business.

I'd like to talk a little bit more about the solo because you really mean solo when you decide to go solo. You didn't bring a co-founder. And I imagine that also made raising money a little bit harder as you were going through the process.

Why you made that decision of being just yourself?

And how did they impact the raise of the money and everything else?

Yeah, it was a big decision. One of the reasons why I decided to go this path was because the previous company that we had built and sold had several founders along the way and we had raised a bunch of outside money.

And so by the time exit came, the equity was split among so many different people that I thought it was a lot less meaningful and I thought it'd be fun to try one by myself. And I'm also one of the people that I would consider to be less agreeable, which means sometimes I make hard decisions on my own and I push people's boundaries.

And it's easier to do that as a solo founder. So I don't want you to think I didn't consider other co-founders, but I decided for this venture I wanted to try it on my own.

And look, I say on my own as meaning the first one in the business, not the only one contributing to it, right?

Like it took a lot of help from a lot of people.

And I mean, even the VP of Engineering that we brought on just a few months afterwards, like he went through as much of the entrepreneurship ride as I did, just fronted less capital, you know?

And so I'm super grateful for all the people that believed in us early on, which includes the venture service firm and, you know, Tim is our VP of Engineering, Jordan is our head of partnerships.

But I had to question myself many times along the way because other VCs would say you'd be more successful if you brought in someone else, you know?

And I had to push back to say that this is the way that I wanted to do it and I'm glad that I did. Nice.

And it looks like you made it a little bit more organic, right?

Instead of like trying to bring the person from day one, and now you have a VP of Engineering that you come along the way. And like you said, you participate a lot in the entrepreneurial journey, but you were like from day one trying to find someone. Walk me through like the process of designing, prototyping, coding, and taking the version one to market.

Like how did the process went?

How long did it take?

And yeah, walk me through that.

Yeah, there's a lot that went into it for me.

So keeping in mind that I had previously done an MBA and had taken plenty of courses on this, like I didn't go the fastest route to market, right?

Like I spent a lot of time doing market research on it and I was in a good position to do that because of the previous exit, you know, I didn't have to rely on a paycheck. So I could take my time getting to it.

But I actually ended up in a very different place than where I was originally targeting, right?

So my very first step was identifying what problem I wanted to solve.

I told you about that, right?

People weren't financially well, not financially literate, not good financial outcomes. So I wanted to help them save more money. Step number two was figuring out what the solution might look like to do that. And in order to do that, I went and got a lot of potential customer feedback.

I did about a thousand surveys, a hundred one-on-one interviews, and a couple of focus groups to learn if we're going to address this problem, how should we even go about that?

Because what I had in my mind ended up being very different from what came out of those interviews and surveys. So I took the data from those surveys and found some interesting points that I hadn't considered before. One of which is that financial planning is a more effective way of changing behavior and outcomes than almost anything else in personal finance. It's a bigger indicator of success.

And that shifted even the core of our business model, right?

Like when you look at Savology now, what are we?

We're digital financial planning and wellness. And before we had considered options of being microsavings platform or a call-in service to answer questions for people's personal finances. So that step was really important for us. Around that step is when I think I met you, Phil. We had just finished some of this customer feedback, and I was figuring out what this solution would look like. And I went to a proof of concept stage.

I recommend a proof of concept before an MVP, especially when it comes to a technical startup or a software startup. I'm not sure if you remember. You don't happen to remember what our proof of concept looked like.

Do you, Phil?

I remember, actually. You'd sent some documents. It was kind of like a Google Forms where you answer a bunch of answers, a bunch of questions. And then you would, on the background, make the analysis yourself and put together a financial plan for the person. I remember. I love it. And then we'd go into the process. It was very good.

And I think that's also so many times we think we have to code a bunch of stuff to test the process. You don't.

Yeah, I love that you remember. It makes me really happy, actually, because that's what we did. It was so ghetto. But I built a whole what I called a robo plan in Excel. And we built a Google Form that would pull in all the data that we needed. I had to figure out what data we even needed. It would pull it in, send it to a Google spreadsheet.

I would manually move that from the Google spreadsheet to this really extensive Excel spreadsheet that would calculate all of the things that we needed.

Things like how much is someone saving?

What's their debt to income?

What's their income?

Compare that to general populations. Then run through a couple algorithms to determine what their next steps of action should be and give them a report card. All of that was done manually so that we could test it up front to see if people liked what we were doing.

Would they be willing to give a bunch of information about their personal finances to build a financial plan?

And then what would they do with that financial plan?

That was our proof of concept. And I got really good feedback from that, that we were creating a $750 to $2,200 financial plan in 10 to 15 minutes that financial advisors would take 10 hours for and charge a lot of money for. So that was my proof of concept.

Knowing that I had a good proof of concept that was working a little bit and I felt like we were headed in the right direction, that's where we went to the MVP. And MVP is where we talked to you. Before I go to the MVP, let me stop you here because I think there's a lot of insights here for founders.

The first one is you fell in love with the problem, not with the solution. You talk about, hey, I could do a microsaving, I could do a phone call. You had a problem. You wanted people to be financially more successful. And that's the problem that you want to solve. How you would solve it really didn't matter. And then when you come to a proposed solution, you did this POC.

And again, so many founders can do that. You can do a proof of concept with Excel. You can do what you are doing to so many people call the Wizard of Oz.

Because you send the data and then someone actually, it looks like the computer is doing it, but you were calculating and doing everything in Excel yourself and giving the output back for the early users and testers and seeing what value they found from the financial plan.

And again, I think that's a great insight. And so many times I see founders trying to build a product and they go straight into coding. Or they don't even get too familiar with the problem. And then it's hard to tell your developers what you need to do if you don't actually go very deep to have understanding of the problem you're trying to solve.

And I think you did that very well in the early stage. Yep.

Thank you, Phil. I learned a lot through that process. Not just what the solution was. And I learned a lot more about the problem. But I learned about user behavior and potential customers there. A lesson I had learned from my MBA was that you don't want to just take your idea and your proposed solutions to friends and family members because they tell you what you want to hear.

So I posted on Craigslist and KSL, which is a local classified site, to find potential users, right?

People that would be willing to build a financial plan for free. And that gave me a little bit more validation. And then with each person that I talked to, I improved the outcomes. I improved the design of the deliverable that I gave to them. I improved the recommendations.

And by the time we were ready to build the MVP, I had a very full and functioning algorithm that did all the things we wanted it to do and was quite robust. I wouldn't have been able to get there if we hadn't gone through the proof of concept first, and we would have ended up building the wrong thing.

So how long did the proof of concept take?

I would say about 45 days of testing it.

I mean, the very first version probably only took me 10 hours to build. I had to figure out how to do some of the financial planning calculations to kind of integrate Social Security and a couple of those things. But the 45-day process was building a first version, getting a few people to submit a Google Form, improving the survey through Google Form, then improving the spreadsheet, then improving or creating a deliverable.

I considered that whole 45-day process the proof of concept, not just like the V1 that I released. I did have to go back to the drawing board a few times along the way, but after the 45 days, I was much more confident with where we came. That's nice. So now let's talk about the MVP. So you have your POC, your happy customers.

How was the process of building the MVP?

What were the learnings there, and how long did it take to take that to market?

So you asked me how hard it is to get a venture service company or venture capitalists at this stage. And at the time, I was pitching these venture capitalists and venture service companies with no product, which is not advisable in most cases.

The fact that I had a previous exit certainly helped me, but I was probably one of the earliest-stage companies to get through this venture service company, who primarily worked with early-stage company, but I was pre-product. And so we went with the intention of saying, your services are meant to help me get to the MVP.

And so we signed on with this venture service company in July of 2019, and our target was an October launch of the MVP, taking the proof of concept, which was very manual, paper-oriented email, and turning it into a fully functioning application. And so in that time, I found the VP of Engineering that would help lead the effort, the architect behind the system, and paired that with the venture service company's developers internally.

And it took us three months to build and design, a ton of user experience and user interface work went into that, but to build something that we were proud enough to release to a mass market, and a little testing along the way, build a little bit, test with a couple people.

But after three months, the goal was public release, get a couple thousand people to do it the first month, and that's what we built to.

So you were able to hit your goal, three months, and you guys had a product ready to go?

Ready to go is a rough term here because it was ready to release. I would not say it is anything, it's not much like it is now today. It was very underdeveloped, maybe even a little underwhelming, because it only did a few of the core things that we really wanted it to. But for an MVP, it did the trick, and that's what we needed, and we did hit the goal.

Launch day was rough for many other reasons that we can talk about a little bit later, but the product was ready, some of the marketing stuff wasn't.

So yes, we did hit our goal.

So the product go to market, what are your learnings?

Because we learn a lot actually when you get the actual product in the hands of customers, and how was that first, like the next six months after you took the product to market, what are the biggest lessons there?

The next few months were really fun for me because I was learning from our users, we were improving the product, we were enhancing engagement, and we were building the business model.

So being the old school MBA trained student that I was, I had built a traditional business plan, right?

Some people laugh at traditional business plans, but I actually think it's valuable to help understand and document every aspect of the business that you haven't thought of, like it's not just the problem or the solution, it's the business model and the suppliers and the vendors and the distribution partners and the marketing to make it successful.

And so I bring that up because our business model was originally around a direct to consumer product. And I learned through those first few months that we can get a lot of direct to consumer people coming and building financial plans, but that it wasn't the right business model for us.

It took months to really find what direction to take the product, but in the meantime, as we're learning that the business model wasn't quite right, we were at least learning that the product was, like in a lot of ways the product was what we wanted it to be. We just needed to find the right distribution of it, and we needed to help it solve the problem.

And so that was that few months of learning, right?

As we're doing that, we're out raising capital because we got to that product, we were finally ready to go do a pre-seed round. And so we were juggling both of those back and forth, like my pitch deck changed every week as we learned new things. I think we tested it with about 5,000 users in that first three months, and that was enough to push us in the direction that we're going today.

And so, tell me, you say direct to consumer didn't work, so what worked for you guys?

What is the correct business model that worked for you guys that has been working now?

Yeah, so when we, I would say, pivoted, it was more of a function of finding the right people to pay for it, right?

For the delivery. In our original business plan, we had two elements listed that were for us to pursue after a couple of years. The direct to consumer model was meant to be a free financial planning application that we could monetize with some affiliate partnerships where we would get paid as they do life insurance and other recommendations that we would provide.

And the unit economics weren't good enough in that, and so we looked at that business plan, which I was glad I put together, and it said that we were going to consider distributing through employers.

And we had already had conversations with a few employers that said, can I give this to my employees, right, when it was just a D2C product?

And so we added to our menu a paid option, and we had to add new features and stuff to make that worthwhile, but for example, that financial coaching.

But then we found a distribution channel where we could sell our digital financial planning application, added with financial coaching to an employer as a financial wellness benefit where they would be paying for their employees to get ongoing digital financial planning and reduce their financial stress. And it really aligned incentives. Employers were willing to pay for it because it improved their retention and their productivity. It improved their recruiting efforts.

And in turn, these employees were decreasing their financial stress and improving financial outcomes. So that was the first big pivot was to change monetization strategy from direct to consumer to B2B. And then we added one more B2B strategy in there, which is distributing it to financial advisors so that they can still work with their end customers. It's all the same product.

The direct to consumer experience, the user experience is fundamentally the same, but who we sell it and how we sell it changed. I see that all the time.

Like, there's a product and you can do the D2C or the B2B. The B2B is usually a lot easier to scale because the company is easy for CROI. If I have an employee and he's stressed financially and he can do his job well and I can come and I can help him be better, he's going to produce better.

And so it makes sense for me as a business to pay for that product. And that's kind of like every time I meet with founders, and I don't remember if when we met, I told you that. That's one thing that I always try to convince founders.

Like, let's start in the B2B space. And then you're going to have the opportunity to go into B2C eventually. But that's kind of like it's a lesson that I hear over and over again. And thanks for sharing. Because again, I believe in the B2B space, it's easier for a lot of companies to be successful there because there's a ROI.

Yeah, I do remember you telling me that you guys didn't like to take on direct to consumer companies, but you liked that I had the B2B in our roadmap. And you thought that because I had some of this extra background in entrepreneurship that I might be able to make it successful.

I could have listened to you earlier and just moved directly to the B2B, but I think I had to experience that for myself. And we did learn a lot through that process. Our user experience dramatically improved because the volume that we could get on free D2C was exponentially higher. We were able to test that out with 30,000 users before we were selling to these employers.

And so we could say we have a proven experience. It's working. People are engaging with it. It's much more streamlined. And the credibility on B2B sales is a little bit harder. The level of due diligence that they go through isn't always easy, so that helped us get past that barrier. That's great. So basically you had a much more polished product.

And it's kind of like a feature of the route that you went helped you build a much more polished and more product. They had a lot of people that give you feedback and a better product overall because the way you did. Yep. It just took more time and more money than I probably would have wanted it to. But we got there eventually and each of those led to the next iteration.

We get these employers that ask us about it. We test it with a few. After we launch our employer product, we start getting financial advisors to reach out to us and say, hey, I want to use this with some of the employers I work with.

Can I use it?

And it led us to the iterations of the business that we needed to eventually monetize and at least create unit economics that can work for us in the long run. We're not a proven successful SaaS company yet. We're still a startup and we are seeing more success than we've seen in the past, but we have a lot of work left to do. I'm just glad we're on the right path.

You touch on the challenges of actually getting those customers.

Could you share with us what has worked to attract and retain customers for you guys?

We're still learning a lot of that, but we have started to see some success with it. One of the things that I would say is that distribution and partnerships are critical to success. We saw early on that we could go out and offer a beta to some employers and do some direct sales. That could get us small quantities of organizations.

We were getting yeses through that path, but it's a little more difficult to scale when we do that. Finding the right distribution is what helps change your company to a system that is scalable rather than a small business.

For us, those look like who can we partner with that will sell it to employers for us?

Financial advisors came into that picture for us a lot because they have relationships with business owners and they're already networking with the groups that we need to.

Now, we sell once to a financial advisor. They go out and sell that product to more people. That helps us create the momentum that we need. That's an example of one of the distribution paths that we've gone to. We still do a lot of direct outbound marketing. It's just not probably the future of the business. It's the early stages of the business.

How do you build a relationship with those financial advisors?

We do a couple different things for them. The first one is starting with people who know their business. The two people internally that market to these financial advisors have been in that space for quite a while. They speak the same language and they have credibility in there. We do some outbound prospecting on email and LinkedIn to get connections with them.

We attend some conferences where we get a network with them and build up general interest in them. Once we've done that and get them on a call, those relationship managers take it to the next level and help them see a market opportunity for approaching the 95% of people that don't use financial planners right now. It becomes a pretty natural sell after that. You have to build that relationship of trust.

I don't think we could do it through a strict sales process because we're creating that new market for those advisors. We have to treat it a little bit differently than we would if we were a couple years further down the road. Makes sense.

Are you guys doing some kind of inbound marketing too or is it just more outbound?

We are doing a little bit of inbound marketing. On the direct to consumer front, that was a lot more important for us. Our inbound marketing right now, our efforts are slow. We don't have a lot of people so we don't have anyone dedicated strictly to inbound marketing.

Instead, we're all helping in some different fashions for us. For example, we host webinars and invite people to those webinars. But our SEO efforts are limited. We're not doing a ton on SEO right now. We are doing some review-based marketing where we get reviews from our employers.

That way, people can find us on sites like G2 and the Crosource and a couple of these ones. But overall, right now, it's a lot of outbound effort because it's a new space. Financial wellness isn't super proven. A ton of employers aren't looking for it.

Instead, they're finding it or being told about it and then they go or talk to us because we're the ones that brought it to them. It's a different stage of the market than we'd like it to be. In a couple of years, we'll be at the stage of the market where we need more inbound marketing and we hope to be ready for it.

I think I see that a lot too in SaaS products. Outbound works very, very well in the early years. Then you might expand to other strategies because, again, especially in the B2B space, you know who has the pain, you know where the person is, and you're educating those people.

A lot of your efforts in outbound will translate in efforts to inbound later because you're figuring out what's the message in that work, you're figuring out what's the problem they have or the questions that they have. I think that's just a normal path that I see overall on B2B and SaaS products going their route.

What is the first oh-shit moment that comes to mind from the early days of your SaaS?

Yeah, I mean, I shared a little bit when we changed the solution that we were going to. I don't think that that was incredibly shocking. I would say the first big one was what we'd call that MVP launch day. I mentioned that we had a couple marketing failures that day. So this is October of 2019. We've been building up for a couple months to get ready for this release.

We have press release going out that morning. We've emailed 100 journalists. We've talked to a ton of people, letting them know that this is coming. And the application worked flawlessly.

Like, our app was great. The problem was the marketing site. For some reason, that day, our hosting provider was having some serious issues, and it took like 19 to 20 seconds to load our marketing page, which was the gateway to our application. And so on launch day, we find this out at 9 in the morning that our site is loading incredibly slowly after it was previously testing in the 2 to 3 second range.

And that alone is a reason why people won't use your product. They're not going to wait 19 seconds for your marketing site to load. That's an embarrassment. So that day, we all hands on, we had to overhaul the marketing site. We had to move it to a new hosting provider. We had to get everything ready, switch over a DNS. And we did it. It took us a few hours.

And everything was smooth sailing after that. But that's a stressful time, you know, when you prepare for so long.

Like, we have this giant launch checklist of everything that we were doing leading up to that. The people we would talk to, the processes that we'd go through. I had checked 100 boxes that said that we were ready for this. And it all hits the fan at once. And you have to jump all hands on deck to fix those problems. And luckily, at an early stage start-ups, you can do that.

Is there anything that you feel like you could have done to avoid that?

Who would you think that the marketing site would go down?

Is there anything you could have done?

Yeah, we could have started with AWS LightSale in the beginning. That wasn't the hosting provider that we chose for our marketing site to begin with. And we chose another name that was reputable. I had used it in my previous company. And I hadn't had problems with before. But that perfect alignment of stars, of their having some hosting issues that day, or some server issues on the same day that we're launching.

Like, we have not had that problem with AWS LightSale since we switched over that same day.

We've had close to 100% uptime, right?

99.9999% uptime on the marketing site since we switched over. And so I don't know.

There's probably more we could have done, right?

We could have started testing a little bit earlier before we sent out the press release. But overall, we had to make it happen. And it worked out in the long run. And nobody outside of the company looks back and views that as a failure. But internally, it eats at me sometimes.

Yeah, we always remember the stressful moment. I can only imagine how stressful it was for you guys. All the investment, all the time, and all the sites down.

How many hours did it take you guys to get it back up?

I want to say three.

It was, I mean, that's not as bad as it could have been.

The longest three hours, right?

It was the longest.

And look, I'm not the technical person, right?

Like, I am a product manager, so I speak that language better than some other people. But I'm not the one doing that on my own, which means I'm having to help pull in our designer and pull in our VP of engineering to do it. And I'm doing a little bit of the customer support, working with that other hosting company to try to solve problems.

And after a couple hours, we had reduced the problem, but we hadn't switched over to the new solution yet. I don't think we were all the way migrated over to the new solution until probably early afternoon. So that might have been five or six hours until we were actually on light sale.

And that was a stressful time because this whole time I'm just waiting for the scathing reviews of people telling us that our site's down when in reality the application was fine. It's just the marketing side.

Well, I'm glad everything worked out. So let's think about the whole time from the day you start from today.

What do you think it was like a very smart decision that you made?

I shouldn't have to pause as long as I am to think of a very smart decision that I made. I do think that it was a really smart decision to go with the venture service company that we went with. That aligned our interests really well, learned a lot through the process, met some amazing people along the way.

I would say one of the smartest decisions was in who we brought in to lead our engineering. I talked to 40 to 50 different people about to see if they'd be a good fit to join that team. And I just never got the right feeling about them or found the right technical aptitude or future leadership capabilities. And then I got a referral from a guy that I knew who recommended me to people.

And one of those people is the guy who changed the future face and direction of saveology. So I'm super grateful for that. It wasn't a hard decision, but it was a smart decision to bring him in. For sure.

And how about a not so great decision that you made?

We've had a couple bad hires. So one of these still stresses me out today. It's another one of those moments that you kind of look back and regret. We were hiring for a head of marketing position and there are a lot of good candidates for it. But there was one that just stood out, head in heels above the rest.

And I was a little dumbfounded that we as the small company were even competing for this person. They were super well qualified, very well spoken. They just seemed like the perfect fit. And so we chose to hire him and we kept him around for like a month and a half before he got an offer that paid four times more than what we could do. And it was a tough setback for us.

And I put that on me and we should have maybe either vetted that out a little bit better or found a different, better hire for it. One of the things I learned from that is that when I look at our company now and the staff that we have, referred candidates work out way better than cold applications.

And there was at least one referred candidate in that pool that we could have picked instead. And we didn't end up getting them, even though it was a month and a half. Like that person had already moved on and taken another role. So we had to go back to the drawing board. Those small setbacks, like they slow down startups. And startups are about speed and time and intensity.

And every setback like that, it just makes you feel like you're tripping and you're never going to get ahead again. I think that's a big lesson here because your smartest decision was a very, very good hire. Your bad decision was a bad hire.

Another lesson here, too, I think that we have to think about as a small company, hiring that person that it's already ready, that has all the experience, might not be in your best interest.

You know, maybe you get an upcoming person, maybe in that person that was, let's say, for the marketing position, instead of hiring a head of marketing, you hire a senior marketing person that's ready to become the head of marketing. And you mentor that person. And I think that's how we should think about as a startup. We have to get the people and grow those people.

We're usually better off doing that than just getting someone that's super overqualified and it's going to be hard to maintain, that's going to cost a lot of money and that frankly might not be used to work in a scrappy situation. That might require this huge budget to do anything. So I think that those are big lessons here.

Would you agree?

I absolutely agree. But it's easier said than done. Right.

Like, we all know that we need to get the right people on the ship. We know that. It is very difficult to get the right people and to choose the right people. And most of us make one or two mistakes along the way with those. But every time you get it right, it changes the direction of the business.

So I have learned a few things along the way to help make those successful and we hope to continue to apply those.

Some of those are related to the things you say, right?

You need to make sure you're not hiring just for the person, but you're hiring for your needs. And so we started developing scorecards for the exact things we needed to achieve out of a hire rather than the person that we were hiring. And that helps us align our incentives a lot better, making it so that we don't miss hire as often. Makes sense. Yeah. I love scorecards. I use EOS.

I don't know if that's what you're using. And they have their scorecards, write people right seat. And that really helps with the hiring and bringing the right person to the bus. I'll have to look at EOS. I have not looked at that one. We read a book called Who by Jeff Smart. And based on some of the things we learned in there, we created our own scorecards.

But I am always open to other best practices. So I'll look into EOS after this.

So in the early days, what was like your biggest fear?

I do have a fear of failure. I think some other people have that as well.

But I always ask myself the question of what if this doesn't work out?

Instead of asking myself the question, what if this does work out?


Like I could have been a lot more optimistic through that period. But my fear was rejection from the marketplace.


It was building something that wouldn't get used and wouldn't get purchased and falling on our face after spending hundreds of thousands of dollars. And I still worry about that today to some degree.


It's never perfect. Like we still have obstacles to overcome. But we're a lot further along than we were and we've de-risked ourselves in a lot of ways. But a big fear was just failing as a company. Yeah. I think we all have that fear. But I like your thing.

What if everything goes south?

We start asking ourselves, what if everything work out?

What's the impact that I'm going to make in people's life?

I really love how you phrase that.

So if you could go back in time and meet yourself from 2019, what do you tell yourself?

Yeah, I would probably tell myself to be open to new ideas and new ways to do it. So I am thinking of a couple specific things that if I could have heard at that time, it would have changed the outcomes of the business.


Lesson number one, like play with those business models early. Don't take 18 months to learn what you need to do to sell it. So lesson number one, be open to pivots. Find those early.

In fact, there's a statistic that says that the businesses that have pivoted more than once or more than twice is likely to succeed. And I didn't know that going into this. So I was a little bit scared of the pivot. Maybe number two, I would say to really try to monetize early.


Find those distribution channels and prove that you can make money doing what we're doing. And maybe number three would be don't get caught up in the startup hype.


A lot of people in this space, they worship SaaS founders and tech founders and they see the glamour life. And there are so many events for startups. And I probably distracted myself a little bit early on with too many of those things and need to spend more time working on the business and in the business.

So not getting caught up in that early startup hype and just buckling down, heads down, work on it, make it successful, have it prove itself out. And then participate in some of those rewards later. I think those are things that could have changed our trajectory a little bit. Yeah. Those are great insights.

And you cannot tell that to yourself, but you're telling to everyone that's listened to and they can learn from you.

So how is the company doing today and what does the future look like?

And if you could share anything that we could kind of like know the size of the company today. Yeah. So we have a lot of work left to do. We're past those early stage startups where it was me and a couple of guys working on the project. We now have 10 employees. So things are getting better, but we have a lot left to do.

So our target for next year is to try to raise a series A, bring in a couple more million dollars of funding to help us get to a few million in ARR. We're not there yet. We're still early stage, but things are starting to click. We now have tens of thousands of users and about a hundred companies on board. And those are things that make you feel good along the way.

You need those wins to support you, but we're still far from breakeven. We're not profitable yet. We're not cashflow positive. And those are some of the next milestones that we need to cross soon. I'm sure you guys will. And I guess the lesson here for founders too, it's going to take time. It's a long journey to build anything very meaningful and you're going to have to keep working on it.

Yeah, I think the overnight success is a myth in the entrepreneurship world. We look at companies that have grown really fast and have been really successful without seeing the work that was done behind the scenes. And sometimes the time that it took and some of my favorite products and companies out there, they took years and years and years to get off the ground.

And they are wildly successful companies now, but they weren't built overnight. In most cases, it wasn't even one or two years. Like Notion.

Phil, have you ever used the product Notion?

Yeah, every day. I'm an everyday user now as well, but like it took Notion a long time to figure it out. Tesla is another good example. Tesla spent years developing an early car and their first cars weren't that successful. And now I drive a Tesla that I love to death, but it took a long time to make that right.

And so I look at my three-year venture to bring us to where we're at now today. And sometimes I feel like we haven't gotten as far as I would want to be. And you have to look back and remember that it's the founders that don't quit that eventually make successful products.

The ones who quit along the way in years one and years two, they won't ever have the company to show for it. But the ones who stick with it and can ride out the hard times, they're going to be the ones left standing in the long run. For sure. Like we like to believe that's going to be this magical pill, but there's not. We have to work harder.

And even if there is those outliers, I always like to think myself, I'm not the outlier.

Why would you believe you are the outlier?

But you think like, like you say, people like Elon Musk, they built multiple companies and took like so long to get things. And like he didn't even build Tesla from the get-go. But it's just it takes time and you have to be patient. You have to keep working hard. If you keep doing long enough, you're going to be successful.

Being smart about it, right?

Changing, pivoting, making, you can't just keep doing the same thing and expect different results. For sure. It's not an excuse. You can't tell yourself it's okay that it takes this long.

In fact, one of my favorite books is called Amp It Up. And it says in that book, raise your standards, pick up the pace, sharpen your focus, align your people.

You know, what you need from day one is to ratchet up the expectations and the urgency and the intensity. And we still need to do that. So even though it will take time, we still need to act like we have to get it done today. We have to move faster. We have to try harder.

We have to raise our standards and make it even more remarkable or else we still won't get there in the long run.

Yeah, you guessed my final question. The final question that I like to ask founders, it's a book. They made a huge difference in your company. And I would like you to ask to add a second book. You had one, but let's do two because you guessed my final question.

Yeah, you know, I highly recommend that Amp It Up book. The second book that I would recommend was probably The Hard Thing About Hard Things.

It's a really good book that explains firsthand some of the journeys the entrepreneurs go through, right?

It's a roller coaster. But I think I just mentioned a minute ago that the best founders never quit. And it shares that lesson 10 different times in that book. It says that the best founders don't quit. They should embrace the struggle. And it makes them a better person when they go through that struggle.

It also says in there that you should not spend any time looking at what you could have or should have done differently in the past and instead devote all of your time to what you might do in the future. And that's a good lesson for entrepreneurs. We have to forget quickly some of our mistakes and move on just retaining the lessons learned.

Oh, that makes sense. That's probably why I'm an entrepreneur. I can't remember anything. My wife always got mad at me. I'm going to tell her tonight, no, no, no, no, no. That was making me a good entrepreneur. I think good entrepreneurs and good athletes have that in common.

Like a good athlete, you can't miss a shot and beat yourself up over time, right?

You have to forget, be that goldfish. And then you can go back out there and give it your best and remember that you're good at what you're doing. But the entrepreneurs that dwell on small failures, like if I dwelled on the marketing site launch, then we would have had to give up the next day.

Instead, we move on. We move past that. We learn from it. We make things better for the future.

Yeah, for sure.

Spencer, thank you very much for taking the time today. That was a great show. I like to keep it short and sweet.

Before you go, how can people find you and follow what you guys are doing?

Yeah, two good ways to find me would be on LinkedIn. I think I'm not the most active person in the world on there, but I do engage a lot with direct messaging. I'm not a thought leader by any means, putting out all my own content, but I like to find people and network and connect with people there. And then the second way is

That's where you find saveology and our digital financial planning products and financial wellness benefits for employers. Awesome. Thank you very much for your time today again.

Thanks, Phil. SaaS Origin Stories is brought to you by DevSquad. To find out more about how we help entrepreneurs launch new products and help larger businesses plug in a ready to go development team, visit Add us to your rotation by searching for SaaS Origin Stories in Apple Podcasts, Google Podcasts, Spotify, or anywhere else podcasts are found. Make sure to click follow so you don't miss any future episodes.

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