Our competitors raised $100M: How we’re competing with just $1M raised and still growing 2x

This is part of our AMA series with top SaaS founders and operators. If you’d like to join live, apply to FounderLed here.

Ari Salafia is the founder and CEO of TaxTaker. At $3m in revenue with just $1m raised, she’s built a capital efficient company to take on her competitors who have raised over $100m.

She recently joined the FounderLed community for an “Ask Me Anything” session to share her lessons learned – including how being bootstrapped and scrappy doesn’t mean you can’t grow and take customers from your well-funded competitors.

Below is a lightly edited transcript of her answers.

How do you compete against companies that have raised 100x more than you?

For us, we can really look at the competition in a positive way.

We’ve kind of had to because it’s pretty scary when you’re going out into a market against someone who has $100 million in sales and marketing and budget, and you don’t have that.

One thing you definitely want to think about is that they’re actually helping to educate the market.

So one thing that we do at TaxTaker or besides being kind of a customer first organization and really trying to get in the minds and in the seats of our customer and what they care about is also keeping an eye out on the competition on what are they getting right and also what’s kind of the baseline expectation for your company at a minimum.

Where can you essentially reinforce your value prop? For us, we started to see the competition in LinkedIn ads, Facebook ads, social ads, whoa, okay, they’re spending a lot of money here, but what are they saying?

What seems to be resonating with their messaging? But also, what are they getting wrong? That also allows you to highlight their weaknesses with customers and their pain points.

For us, it was around customer success and pricing where we were able to really scoop up a lot of business from our competitors.

Where did you look for those weaknesses in their messaging?

It was a holistic approach.

We were looking at forums, were looking at comments on their ads and socials. We were asking our customers. It was also coming up on early sales calls.

When our customers are with other providers, it’s a really great opportunity to ask one: what are you looking for, and two: who else are you talking to?

Or if you’ve done this before, and why are you here? And that became a big, big trend of, oh, I used so-and-so, but I didn’t really like it, insert, why?

We were hearing this messaging over and over again in our operations as well. Someone would be assigned to be on this project. For context, we save companies money primarily through R&D tax credits.

A founder or their accountant or CFO might sign a contract with us. Sometimes they’re doing the process from A to Z, but more often than not they’re tapping their head of finance or controller to champion the rest of the project.

Oftentimes these organizations had some familiarity with the topic, and they would often say, “Wow, in five minutes, you’ve been able to explain so much more to me about how this works than the other guys did, and we were working with them for years at my last company. ”

So really listening to what they were saying and where there would be room for improvement made a big big difference.

How do you choose which competitors to follow?

We actually keep a very detailed spreadsheet of every competitor that we come across.

We’ll use it to track things on social media, we’ll see who has the best reviews, who has the most followers.

LinkedIn has those dashboards you can use for insights on your page. That’s a really good way to get free insights of growth and follows is on LinkedIn with your competitors.

We also keep an internal spreadsheet so that if we ever come across a site or someone, even customers are like, hey, this person’s emailing me and we’re like, “Oh, never heard of them! Add it to the competitor list!”

We’re always keeping a running tab of that. Even if someone even mentions that they might offer this, and maybe it’s just kind of a partnership deal, we keep a pretty robust spreadsheet and we keep that pretty active.

We keep pricing information in there. We keep location. We keep everything that we can possibly have as intel. Why that matters later is really if you end up, if you have an exit opportunity, if this is not a lifestyle business, you’re also going to get asked about this competition.

It’s been really helpful for us to keep an active list, just to show how we stack up.

But I would say, if you’re really trying to just track, I would say, track three to five actively and then everyone else just list under those folks, because you’ll see the ones that stand out the most.

You’re in the business, run your business, not just looking at the competition. You want to keep their blinders on to some extent, right, but also just be mindful that those folks are out there.

What does “running lean” mean to you?

We’re a bit of a David and Goliath story.

Running lean does not mean you can’t grow profitably and make some waves. Emulating what’s working and crushing what’s not working with the competition is something I’m always focusing on.

Efficiency is something we’re thinking about as a weapon. I do not see being lean as being a weakness.

I can see it as a strength. It creates a lot of optionality. The markets are really volatile, obviously. Startups that are heavily VC backed still have to meet certain milestones. It’s more challenging to do so. People are looking for discounts. People are looking to swoop up companies right now.

So having been bootstrapped or having a healthy EBITDA is highly favored. You’re going to get better multiples on that than you ever would have before.

You’re also just in great shape because you might just be able to outlast your competition. That’s another way to win.

How has this influenced your approach to sales?

When we’re thinking about levers that we can pull in running a lean organization, we found three areas with room for opportunity across sales, operations, customer success, and then pricing and payments.

I know there’s a lot of SaaS founders here, but we’re a bit more of a tech-enabled service than a true SaaS. So we’ve ended up having to flip the traditional SaaS team.

We found after 2020, that outbound was really, really hard for us. I think that’s a big problem across SaaS right now as well, is that SDRs are just not standing out in the same way that they were a few years ago.

So we actually don’t have SDRs and AEs anymore. I would reframe an SDR to be more of a BDR, a business development rep.

For us, it’s been a really great way to win and it’s also much less expensive than to have three SDRs that then feed into the one AE that then comes in the one salesperson. We’ve been able to run a leaner team in that way.

How has 10 years of experience in the industry given you an advantage?

We leverage subject matter expertise, AKA thought leadership, as an advantage.

Founderpath does a really great job with this, right? They use data. They serve it up. They know the ins and outs and the metrics that SaaS founders care about.

Can you also demonstrate that one, you’re a thought leader in your company. Can you stand out across your competition and start to create or curate content around that?

And then two, can you be talking about the things that or the pain points that your customers value most?

That’s one whole.

We saw that the competition wasn’t leaning into their expertise. One, because they actually didn’t really have it, they just kind of smelled a lucrative business space and they’re like, we’re experts now, but they didn’t actually come from that space.

So we really leaned into the fact that we had already spent 10 years in our industry and that by default, we should be a go-to choice because we know the ins and outs of this business and that’s one way that we really stood out.

If you are a subject matter expert, make that shine and that can be a nice lever to pull and that can make you stand out.

How do you get inbound interest from G2 for free?

Being scrappy, we were able to identify some freebies for inbounds. We really leaned on activating both referral partners from our channel partners, as well as from our customer base.

G2 can be really expensive these days. But you can get really, really scrappy around some of these sites like G2 that are actually totally free to start getting your name out there without purchasing anything.

You can set up a free G2 account and there’s a bunch of other ones out there. We’re actually seeing that this is starting to trend as an inbound strategy. Our competitors that have raised over $100 million have like two reviews.

We just went to our top rated customers, we got five to 10 reviews, and now we’re actually seeing inbound from G2 without paying a penny.

So looking into sites like that or other marketplaces where you think that your prospects might also be living in. That could include perks pages, whether they’re on a BREX credit card or they’re in a certain founder channel or accelerator, those doors are really not that hard to open.

Some of them are pay-to-play, and if you don’t have the budget, no sweat, just move onto the next one. It’s just a great place to land and it takes very, very little effort to do so.

So create your perk, your blurb, and have that ready, and you can get pretty much a 20-minute call with a partnership person the same week as you email them.

We primarily sell to founders and another thing we do is put our blurb in Slack channels that founders are living in.

These VC/accelerator, or mastermind groups, where are those where those people and can we have a member from there or you know, head of platform perhaps give us the shout out.

How did you have “$100k” summer this year?

You should be asking for customers – I think it’s obvious, but also something that we can often overlook.

The price of what you would pay for a referral where you’re going to make a margin, give that back to your customer. They’re probably willing to talk about you if they love you. And I mean, most people aren’t strangers to free money either.

So can you give them $500? Can you give them $1,000? What does that look like? Test out that campaign.

We did a $100k summer this past summer. We wanted to give away $100k, so that would require us getting 100 referrals.

We didn’t end up getting to 100. But we definitely made a dent and so that was a worthy campaign.

How do you use content to stay close to your customers?

Content is king, but even with AI and all these great tools, it still takes a commitment to create content. What are easy ways that you can also get more customers or keep your customers, and that’s kind of centered on socials?

One thing that we do is we feature our customers.

We say, hey, we actually love what you do because we do. All of our customers are so awesome. They’re building the coolest products and technologies. We love to feature you on blog, social, newsletters, et cetera.

They love it. They get their most recent call to action out there across the network. In turn, that’s great for us because typically we’ll see conversions start to happen because we’re talking about someone else.

I didn’t expect to give so many Founderpath shout outs today, but Founderpath does that all day long. You highlight your customers. It’s happening right now, right?

Curating content is much, much easier than creating the content.

But if you can create templates and make it be really easy for your customers to participate, i.e. giving them a CTA and a headshot and a link, it’s worth it.

How do you cheaply acquire customers?

There was a quick stat that I heard from someone. KeyBank did a SaaS survey and it was mentioned that ARR generated from a new customer acquisition is nearly 300% more costly than what you’ve been generating from existing customers.

That’s a lot. So that means that it takes $1.78 to acquire $1 in net new revenue.

How can you be thinking of ways to upsell your current customers or retain your customers? Keep instilling that in your operations and customer success teams.

You can acquire customers cheaply, but don’t be cheap. This is an example of a referral agreement we use. This is the document that’s activated over a billion dollars in revenue for our business.

It starts with, hey, you sell to the people we sell to, make an introduction, and we’ll give you a percentage of our fees. We make it really, really easy for them to make a referral to us and we pay them right away when we build our clients.

That also keeps us top of mind with that partner to continue to make referrals. If you effectively create a salesforce of folks that are not on salary and just purely on commission, it’s a really great way to scale presence and sales very, very cheaply.

But I say don’t be cheap because I mean you want to keep these folks incentivized in the long run.

One thing that we did at first was we offered 10-15% on a first year study, because honestly legal told us to be careful about perpetuity. But then we asked ourselves why we were doing that. They’re really going to remember us if we give them recurring fees.

Now we’ll do a percentage of our savings for the lifetime of that customer. So we have partners that can make $10k, $20k, $100k in net new and off of recurring partnership agreements.

So this document is really really solid.

How do you invest in building community through attending live events?

Over the last few years, we’ve been focused on building community.

And that’s virtually and in person. So virtual for us, light ways to show up very intentionally. If you get everything organized, you put a lot of investment up front.

This should really only take a few hours of your time monthly and you can automate most of this. You can nurture your partners and clients to activate through things like socials or webinars or things that you can just kind of create repeatable processes for.

In person, we obviously can’t be everywhere. It’s also very expensive to go to every single conference. But if you are going to go to things, be intentional about it and have a plan.

It’s amazing to me when I meet people at conferences. And I’m like, So what are your plans for this conference?

And they say, I think I’m going to go to this session and this session and I’m what do you mean? Like, you showed up, you traveled across the country. Who are you meeting with? 

You can be a little bit smarter and do your homework on what, who’s going to be in the room, who you should be talking to. It doesn’t have to be expensive. Set meetings or coffee dates beforehand or happy hours.

That time investing up front pays off later.

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