Couple of weeks ago I had a meeting with the SaaS Company Apicbase from Belgium. They are on a mission to become the number 1 restaurant management software company.
Apicbase was founded in 2013 and raised Serie A funding in june 2019. At this point they have a team of around 35 people all over Europe and work remotely. Impressive story and great team. I met with the marketing director Joris Brabants over Zoom to talk about the growth of this amazing SaaS Company. Like every Startup of the month series we ask 5 questions. Here we go:
1. Bootstrapped or Funded:
Funded. Apicbase started with around 10k as a result of winning a Kitchen Tech competition back in the days that our main focus was still the Apic Studio. This really was the start of Apicbase. In the meantime we raised over 2 million euros in a seed and a Series A round. When the focus was still on the hardware (Apic Studio), the money was really needed in order to be able to deliver our product.
Since then, the focus did change from hard- to software. Studio users asked if they could tag ingredients in the pictures they took with the Studio, if they could add the entire recipe, preparation instructions, … Step-by-step an entire F&B management solution was developed. Any company serving a food product can use Apicbase to keep track of food cost, F&B inventory, automated ordering at suppliers, sales analytics, … The product is built in a modular way so that companies can start with the basics, but upgrade as they grow.
The capital raised in the Series A is mainly used to
#1 Build a scalable infrastructure
#2 Build a scalable sales proces
So we needed the money to hire talented developers and build out a sales team in Belgium and abroad.
2- Tips for starting SaaS entrepreneurs. What are your learnings you want to share?
I’m speaking as a marketer here, not as a founder, but for all SaaS marketers working at startups I want to share one important advice: don’t fall into the trap of starting to focus on paid acquisition early on. The reason is that it’s way too easy to acquire traffic, but it comes at a very high cost. Not only the actual cost of acquisition but also the time you lose that you cannot spend on longer term return. Here’s an example: we invested some time and efforts into our content which led to an increase of organic traffic. That same traffic would cost me $2 to $3 per click if I start advertising on Google for those search queries. Let’s say I’m hitting 5k of organic visitors after a couple of months into our content strategy. That would mean $15k to get the same visitors via Paid Search.
First of all, not a single non-funded SaaS startup would be able to invest that kind of money because:
A) they have no idea of how long a customer stays and what the Lifetime Value is, so they’re investing money without knowing it would ever give a positive return.
B) if they run out of money, they run out of visitors.
C) they usually haven’t mastered their sales & onboarding yet, so conversion rate to paid will be low.
Another benefit of this constant influx of organic traffic is that I get an audience to play around with. Every single day I know that at least X amount of people will land on a certain page. I can run any experiment I want on that page, without spending a dime.
Two other tips that I’d like to share (but won’t go into too much detail here):
#1 Get the right metrics & cohorts in place. What is a new customer costing you? How long does it take to earn that amount back? Are they actually using your product or service on a regular basis? Cohort analysis will help you understand how leads turn into customers over time, or how customers keep using your product over time.
#2 Focus on revenue early on.
3- Main growth channels? Marketing tips?
As a marketing director I’m happy to say that the majority of our leads come from non-paid channels like referrals and organic. This is the result of having happy customers, and of the efforts we’ve put into our content. We started focussing on content late last year, but we’re reaping the benefits of it every single day, and we know that there’s still a lot of room for additional growth there.
When we look at the bigger “growth” picture, there’s a lot more to be considered. We’re lucky to have built a product that allows internal growth within existing accounts. This internal growth comes from 2 things:
– Food companies start using more modules (eg they start with the basics, but add Inventory & Sales Analytics later)
– They open more outlets, and these outlets start using Apicbase as well
This is a really interesting model, because it allows us to “land & expand”, a tried and tested SaaS growth methodology of which Lincoln Murhpy is a big advocate
4- Biggest mistakes made as a startup? Epic failures to learn from? 😉
Focussing too much on acquisition, while neglecting sales, onboarding and retention. In order to build a good SaaS machine, you have to think backwards, and once you know that Sales can close deals easily, and Customer Success can get them hooked on the product early on, you’ll find it much easier to generate the right amount and right type of leads.
5- How long did it take you to reach a certain revenue goal? For example: it tooks us 2 years to reach 10k mrr.
I cannot disclose a lot about this, just because I joined so recently here at Apicbase, but I will try to get back to it asap. I do know that the subscription people paid along with purchasing the Apic Studio was only $15, so I’m quite sure it took us a looooong time to get to a 10K mrr, while now we have single deals that bring in 1,5k of MRR. It shows that our product matured, and bigger food service companies are willing to pay for it.