Why There Has Never Been A Better Time To Start A B2B Software Company Without Big Funding

There has never been a better time to start a B2B software company without big funding.

Here are 10 reasons why:

  1. You can build the first sellable version of a B2B software app for $100K-$400K. Less if you are coding it (or no-coding it) yourself. This is much cheaper and easier than it was 5 or 10 years ago, and 10X cheaper than 15 years ago.
  2. You don’t need massive marketing and sales budgets to reach and sell your first 20-100 customers to get revenues moving and start the improvement cycle. Savvy founders are finding and selling customers themselves to $500K+ ARR.
  3. More tech talent is available now who are interested in opportunities that aren’t crazy moon shots where big VC funding probably won’t work. Finding great people is still hard, but there are more great people out there who want meaningful work and less BS.
  4. There are wide-open slices of very big global markets where big problems still exist that can be solved with software. We don’t have fewer problems to be solved than 3 or 5 years ago.
  5. The SaaS business model with recurring revenues and dialed-in metrics is almost recession-proof if you keep customers happy and find new customers efficiently. Unlike pre-SaaS when 70%+ of revenues and cash had to be generated EVERY quarter.
  6. There are many proven and practical ways to generate cash in a growing SaaS business that don’t involve big VC funding. Annual contracts with upfront cash, selling a little or a lot of services until MRR catches up, venture debt, and more.
  7. A $1M-$3M ARR software business with happy customers, steady growth, breakeven or profitable run rates, and a laser focus is already WORTH A LOT to a hungry acquirer at that size. Exit valuations aren’t as high as 2021, but an up-and-running SaaS business is still worth 4X-10X revenues to a reasonable acquirer.
  8. Software is still eating the world. New technologies are still showing up to make amazing new solutions. And many industries are finally ready to use new software to solve old problems.
  9. There is a TON of inexpensive help out there to learn the game of SaaS – podcasts, videos, conferences, books, blogs, mentors, founder peer groups, and more. No excuses for not knowing advanced SaaS and growth practices quickly. Local ecosystems, incubators, and accelerators can be useful, but they usually require you to get on their funding drugs.
  10. The world has been disrupted in the last 3 years with a lot of change and serious new challenges. There is big opportunity in there. And this year’s stock market contraction and economic challenges are hobbling big companies and overfunded unicorns. They are hunkering down and not focused on the smaller and new problems that startup founders can solve.

That’s 10 and I’ll stop here.

What else can you add to this list?

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