The recent presentation by Lew Cirne at the SaaStr Annual Conference ("New Relic: Scaling Even Faster the Second Time") provided some highly valuable nuggets of information for startups looking for insights into achieving exponential scale.

1. Narrow your target market, focus on thought leaders

Even if the potential target market of your product is largely horizontal, narrowing your initial target market gives you a tighter focus and a stronger platform to start from. Distraction can quickly kill a startup, and limiting your initial marketing activities to a specific target market allows you to focus more strongly on that market, reducing distractions and establishing a better value proposition.

A great way to establish a strong value proposition in a narrow target market is establish thought leadership in that specific market. Becoming the tool or platform that drives thought leadership can have an exponential effect on your viral adoption curve. 

2. Stay lean and develop smart thinking

It can be too easy for startups to try solving their problems with cash, by either hiring more staff or increasing costs. However it's important to understand that the business methods you put in place early on will determine the type of business you become as you scale.

I'm not talking about bootstrapping, that's another business choice entirely, instead I am talking here about taking smaller investment rounds early on and keeping your cost structure as lean as possible for as long as possible. Focus on fixing your problems with smart thinking as a culture of staff who think outside-the-box will help you to scale faster in the long term.

3. Cash is king

The key metric that Lew focused on in the early days was cashflow -  growth is an important metric, but closely tracking your cash position and ensuring you always have 90 days of cash is what will keep you operational.

Growth should never be 'at all costs'. Establishing strong cash monitoring processes from the beginning will help the business to stay focused, keep lean, and develop a stronger position for future growth.

4. The first 60 seconds is critical

We are all aware that a great on-boarding experience is critical for driving user conversion, but according to Lew it is the first 60 seconds that are the most important. In the same manner that unpacking your first iPhone sets the scene for your entire iPhone experience going forward, the initial 60 seconds that your customer spends using your product will determine their emotional response going forward.

Therefore when you are planning your on-boarding experience to drive traction, front-load all of your efforts into those first 60 seconds. If you are early-stage and resource poor, ensuring this specific time period is the best user experience possible will yield you the best conversion results.

5.   Provide the 'whole solution'

Expansion and up-sell revenue has be proven to be a key driver in SaaS revenue growth (negative churn anyone?), and New Relic is driving that in their business model with 50% of their current customers base being multi-product users.

Customers are wanting to buy the 'whole solution', and to develop expansion and up-sell revenue streams you will need to provide this to your customers. Thinking about this early on can help you to structure your product, pricing methods and data tracking systems to support future growth.

You don't need to have a suite of products to start with, but you do need to be thinking ahead and ensuring you are monitoring your user engagement in a manner that allows you to identify future customer need as early as possible.  


Amy Walker - Specialist in SaaS Strategy & Business Execution

I work with SaaS companies to develop their key strategies, and assist them to get the right tools in place to be able to execute seamlessly in market. I believe that the only thing preventing a great idea from scaling globally is a clear strategy supported by strong execution.

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