Chapter 18Embrace Frustration

Any expectations you have about how long it will take, or how hard it will be, are pretty much guaranteed to be wildly off. But it's worth it.

Are You Sure You're Ready for This?

One night I had dinner with the founder of a pretty successful web company and he asked me how long I'd worked on EchoSign. I told him and he nodded his head, “Yeah, same for me. It takes about seven years to get to exit.” That's true in the software/SaaS business and it's true for many businesses and even career paths. You have to be ready for it to take years longer than you hope or want before you hit your big goals.

You may have heard that SaaS companies usually take longer than consumer Internet companies to get to $75–$100 million in revenue. But it's not always clear how much longer.

Let's look at some basic math: Assume it takes you a couple of years to get going and Nail A Niche, and then you grow 100 percent a year through $50 million or so in revenue (which isn't easy, mind you):

  • Y1 revenue: $0
  • Y2 revenue: $1 million
  • Y2 revenue: $3 million
  • Y3 revenue: $6 million
  • Y4 revenue: $12 million
  • Y5 revenue: $24 million
  • Y6 revenue: $48 million
  • Y7 revenue: $80 million

Having done extremely well, hitting $80 million ARR in Year 7—it took you seven years—you're ready for your IPO in Year 8. If you do well, but not quite as well as this, it can take a decade. A friggin' decade.

What about mergers and acquisitions? The challenge here is that in most SaaS M&A, unless it's ...

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