Operating

Scaleworks acquires B2B SaaS products we feel have the potential to be truly great, but need support in their efforts to scale from around $3-10M in size to $20M and beyond.

OUR PORTFOLIO

Exited Companies

OUR PRINCIPLES

Due to the popularization of SaaS, there’s a wealth of growth tactics floating around the space. These tactics can be great resources for optimization and fueling new experiments, but don’t confuse them with real business building. We tend to overcomplicate things, and can get backlogged with a huge list of tactics to implement, many of which won’t really move the needle or solve for strategic needs.

We’ve distilled the 6 Strategic Pillars we prioritize for any of our businesses.

Many entrepreneurs are afraid to charge the appropriate price for their product. It’s an unfortunate cliche, that when you build something, you tend to undervalue what others will pay for it. Just like the product, market and customer, your price should be constantly evolving, so test various price points and models to find what works. Be careful with grandfathering customers, and even more so with freemium – it is not a revenue model, it’s an expensive marketing tactic. Free trials are fine, but freemium should really only be used if that cohort demonstrably refers a high number of paid users.

Product tends to get too much focus in software companies. The reality is that it’s easier to build something than it is to market it. Founding teams are also passionate about their product, and less likely to be excited by marketing. But the real magic (and what will determine the success of the company) is demand generation and effective on-boarding. Finding channels to test, working to activate a higher percentage of leads, and discovering where scalable levers exists is enormously important. A simple ratio we abide by is for every $1 allocated to product, at least $1 is spent on marketing. Also, the entire team should be metrics driven and searching for insights in the data. There’s gold in there.

Given the sheer amount of capital being invested in SaaS companies, it’s easy to garner, and subsequently rely on VC money to fuel growth. But this builds bad habits, in which you skip the part where you learn how to achieve self-sustaining growth! Venture Capital should really only be used to fund time-consuming R&D and setup capital, neither of which are required for the majority of SaaS startups. So we invest where the dollars will be used to pour fuel on a scalable campaign that we know will deliver revenue.

In a small to medium size business, where everything is up for debate, change is constant. Not being able to quickly huddle in a room to discuss strategy, or even informally chat over coffee, gives up a lot of what makes startups win against large companies – agility. That’s not to say that no one should work remote, and that it’s impossible for remote workers to succeed, but building an entire business remote will undoubtedly decrease opportunities for collaboration, and raises an already high barrier to success.

It’s simple ,  acquiring new customers is more expensive, time consuming, and difficult than keeping the customers you have. The Install Base has two primary factors — keep churn low by listening to customers and iterating to continue delivering value; and grow the product usefulness over time so customers will happily pay more for it as it continues to evolve. The important metric here is that without new customers, the business should still grow.

SaaS business is not winner takes all — there’s plenty of room to be one of the leaders and succeed, and even more so to refine a sub-category and be #1 player in that niche. To do this, it’s imperative to have a clear vision, strategic direction and market position. It takes a lot of effort to figure these out — market knowledge, product and marketing creativity, and constant customer conversations are what will help you find the way.

HOW WE OPERATE

SHARED SERVICES

We also do everything possible to help companies maximize time spent on customers, product, and messaging. By centralizing common operations, we’ve found we dramatically accelerate each team’s ability to focus on what makes the business unique and valuable.

FINANCE

Scaleworks provide capital, advice, and services to ensure the financial health and growth of each company. The fund operates accounting, provides lending. assists with budgeting, and helps navigate major events like acquisitions and expansion.

CORPORATE DEVELOPMENT

Companies get full support in negotiating deals and bolt-on acquisitions, ensuring the process goes smoothly (we’ve done this many times) and keeping it from being a drain on the business. Then, as companies are ready to exit, we help prepare strategy, terms, and diligence.

PROGRAMS

We hire for aptitude over experience, and have invested heavily in innovative programs for learning and advancement. More than a job, Scaleworks strives to offer those with passion and motivation a master class in business and marketing.

CEO-IN-TRAINING

The CEO is the most critical, and most difficult to fill, role in any company. We believe in identifying and developing high potential executives in our portfolio companies. Through a mixture of exposure to CEO challenges, board meetings, CEO roundtables and 1:1 coaching, the CEO-in-training program helps develop functional leaders into company leaders.

MARKETING ACADEMY

The tactics of experimenting and growing SaaS funnels are ever-changing, and marketing in general is an under-trained area. The Marketing Academy brings together marketing peers across all our portfolio companies, and facilitates workshops with domain experts across a wide variety of marketing topics.

PLAYBOOK & PRINCIPLES

We are a Principles driven organization – from evaluating an investment, to deciding on strategy and hiring the team – a ‘playbook’ of approaches that work (and don’t) emerges that we can leverage across the portfolio to facilitate a faster pace of learning. We strive to be doggedly curious and relentless learners.