Here are the biggest milestones for practical SaaS startups on the way to $5 million in ARR when they get started and grow without big VC funding:

1.  Finding an idea that inspires you to start a company.
2. Validating that customers have a problem they will pay you to solve with software.
3. Building your first crappy product and crappy website.
4. Getting paid by a customer for your first crappy product with founder-led sales.
5. Getting 5-10 early customers who show you where your product needs to be less crappy.
6. Fixing your product, website, sales process, and marketing enough so it looks like you know what you are doing.
7. Getting to $100K ARR and hiring some help to get things done.
8. Getting interest from investors and learning they would never invest.
9. Getting to $300K ARR with a couple of employees who you pay more than you pay yourself.
10. Realizing the limit to growth is the founder’s time, not cash.
11. Realizing that half of the product features, sales messages, employees, and customers you sold to…didn’t work.
12. Starting to say no to things that don’t work and speeding up smaller experiments of things you think should work.
13. Getting to $1M ARR with some happy customers, founder-led sales, a few loyal employees, a sharper message, and execution tactics that work.
14. Founders taking a livable salary and making a tiny cash profit in the business.
15. Having productive internal conversations about narrowing in on your ICP, company culture, scalable customer acquisition, and pricing. Focus!
16. Founder realizing being a CEO of a team of 20 employees is a completely different role and mindset than that of the do-it-all founder.
17. Starting to get customers that were referred by other happy customers.
18. Starting to get interest from investors now that it looks like you have a proven product and an actual company. Telling them no or ignoring them.
19. Founders realizing how much they don’t know about everything. And that they need to spend time on their health to do this for another 5 years.
20. Getting one or two salespeople who can sell without the founder’s help.
21. Getting most customers up and running to high value in a predictable way.
22. Finding your primary customer acquisition muscle that can be flexed to create efficient growth next year.
23. People in your industry or market treating you like you know what you are doing.
24. Realizing not every employee can report to the founders and you need a few leaders who can manage too.
25. Fixing the deeper things you ignored at first but now clearly block your path to $5M ARR.
26. Founder getting help (books, mentors, coaches) to learn how to be a CEO.
27. Realizing that a few of those loyal, scrappy employees who joined your crazy startup aren’t doing so well when you have 30 employees.
28. Realizing the work on product, company, culture, company reputation, systems, and processes will never be done.

That’s a start. What did I miss?

Where are you now?

#practicalfounders