Startups For the Rest of Us
Episode 760 | White-Labeling, Founder Mindset, and More Listener Questions (A Rob Solo Adventure)
Tue, 25 Feb 2025
In episode 760, join Rob Walling as he takes on some listener questions in another solo adventure. He offers insights on balancing custom-built solutions versus white-labeled components, and the impact white labeling has on company valuation and growth. He also discusses strategic hiring, founder mindsets, and tools for tracking your SaaS success. Topics we cover: (2:30) – Considerations when white-labeling within your SaaS (9:03) – Does relying on other SaaS affect our valuation? (10:10) – Tools for tracking SaaS metrics to enable scaling (17:03) – Do founder mindsets change at MRR milestones? (21:34) – Mistakes founders make in their mindset (25:27) – Forcing an onboarding step (27:29) – Determining team composition Links from the Show: The SaaS Launchpad The SaaS Playbook Episode 735 | The 8 Levels of SaaS Platform Risk (A Rob Solo Adventure) Invest in TinySeed Episode 685 | 7 Things You Should Never Do (A Rob Solo Adventure) Episode 722 | Bootstrapping a Vertical SaaS to 7-Figures in 18 Months If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you! Subscribe & Review: iTunes | Spotify
Chapter 1: What mistakes do founders commonly make?
But it was just that long list of the same mistakes that I see founders and aspiring founders making, thinking they can sell everything on Twitter and they don't have to do any hard work. It just, it's common and it's unfortunate that so many people kind of fall into that trap, as well as the build it and they will come thing or just the, okay, so I built this product, now how do I market it?
I see this question on Reddit. And it's just, it's like, geez, dude, are you kidding me? It's Startups for the Rest of Us. I'm your host, Rob Walling. Each week on this show, I cover topics related to building ambitious yet sustainable B2B SaaS companies. So you could be bootstrapped, mostly bootstrapped. Maybe you've raised buckets of funding, as some of the listeners do.
Historically, the show has focused on bootstrapping. But really, it's about building independent, self-sustaining startups that aren't tied to this need for fast, fast, fast growth, billion dollar outcomes, and the constant influx of additional capital. In today's episode, I answer listener questions.
It's a good mix of some voice questions, some intermediate questions, and I think I even have an earlier stage question to answer as well. Before I dive in to the questions, if you have not checked out SaaS Launchpad, that is the best course that I know for early, early stage SaaS founders.
So it's all about finding ideas, vetting ideas, trying to do some validation, building your product, getting to launch, doing marketing before you start coding, doing marketing before you launch the product, and finding those early adopters and early users. That's at saslaunchpad.co. If you want to check it out, it is by far the best course I have ever built.
It has almost 10 hours of in-depth video content that is just packed with tactics and strategies and all the stuff that I espouse. This is stuff that I don't have in any other books. It's things that I touch on here and there on the podcast, but I have definitely not gone into this depth yet. ever in anything that I've released. So sasslaunchpad.co if you're just getting started.
And with that, let's dive in to our first listener question.
Hey, Rob. Long-time listener, first-time caller. Thanks so much for the podcast and for the SaaS Playbook. I listen to the podcast every week, and I've read the SaaS Playbook five or six different times. And each time I extract new information and insight from it, it's just such an incredible resource for Bootstrap founders. So first of all, thanks so much for all you do.
provides an analytics platform to HR teams to help them make data-informed decisions about their talent. So think about things like collaboration insights, employee engagement drivers, predictive attrition. And for this, we use a variety of different data sources, such as HR systems, business systems, and employee surveys.
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Chapter 2: How should a founder approach white-labeling in SaaS?
For MVP, we built many components, such as our data marts and pipelines, but for others, we decided to white-label other SaaS solutions. For example, for the surveys, there's so many great survey platforms out there, we just couldn't justify custom building something given the relatively low expense we would incur by white labeling an existing solution.
Ideally, though, we would prefer not to have these dependencies on other SaaS companies because we would like the flexibility and control over the cost and features within our platform. Since we are a bootstrap startup, however, we found white label components to be a quick and low-cost method of achieving product market fit and launching our MVP. I've got a few questions around this.
Number 1, how would you advise thinking about the mix of custom-built versus white-label components? Does the optimal mix vary based on growth stage? Number 2, is there an inflection point at which we should consider prioritizing a migration away from these white-label components?
And then lastly, if we were to sell the company one day, does a reliance on other SaaS for specific capabilities impact our valuation versus a fully custom solution? Thanks for your time.
Chapter 3: When should a SaaS company move away from white-label components?
Craig, thanks for calling in and for the kind words at the top of your voicemail. If you've read the SAS playbook five or six times, I take that as a real compliment. And I take it as a sign that it's probably providing some value to you. So thank you for that. I really do like this question because it's not super common that people will completely white label big areas of their app.
I guess I've seen folks like they'll do an integration with an electronic signature app if they don't want to build that functionality. So I've seen it done here and there, but it sounds like you've done this with multiple white labeled vendors. which is obviously a good way to, as you said, get to market faster, not to have to build all this functionality.
I will admit, I do see white-labeled integrations like this as a form of technical debt. And it's one of those that it may never come back to bite you. And that's great. And I think that'd be a big part of my thought process here, is if it's not broken, I would probably not prioritize fixing it very highly, unless I felt like the white-label vendor or that part of the app was existential security
to my existence as a company. And so if I was doing half a million dollars a year, unless one of the vendors is jacking up their prices or they're not reliable or there are bugs or there's downtime, like obviously then it's broken and I would consider prioritizing fixing it. But with none of those things in place, like if there's not anything going wrong with any of them,
I could see getting to a million ARR before really considering swapping them out. And the way I would think about it is, which of these is the biggest platform risk? Because that's really what this is. It's a form of platform risk. Now, it's lower risk than something like building on ex-Twitter or making a Facebook app, right, or making a Shopify app. Certainly lower risk.
And if you go back to the episode where I talked about platform risk, I talked about how there were eight levels and three different factors that contribute to those. And I believe what you have only has one of the factors, which is a technical reliance on a third party. You are relying on their white-labeled solution and the API for your product to properly function.
So one of Craig's questions is, how would you advise thinking about the mix of custom-built versus white-label components? And for me, white-label is a risk, there's platform risk, and it's a form of, I guess, technical debt, because it's something that long-term, I mean, if I'm going to become a 10 million ARR, 20 million ARR SaaS company, I have to undo this at some point.
Much like if I'm going to become a 10 or 20 million ARR SaaS company, at a certain point I have to go back and fix some of the crappy code that I wrote in the early days when I was trying to get to an MVP. These are different, but they're similarities. And so I would, the mix and the way I would think about it is I want as much of my custom code that I own that is my custom IP as possible.
as possible, as makes sense. But of course, there's a balance here. If I can get to $250,000 or $500,000 annual recurring revenue much faster by using white label, I want to probably consider that. And then Craig asks, does the optimal mix vary based on growth stage? And I think it does.
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Chapter 4: What tools can help scale a SaaS business?
The answer there is kind of maybe it really depends on the extent of it, how hard it would be to recreate that functionality and whether there have been any issues at all with the white-labeled components to date. So thanks for that question, Craig. I really do appreciate you writing in with it because it's one that we haven't heard on the show before.
My next question is from Ian, and Ian was kind enough to send in a question, and then they kind of answered their own question a couple weeks later. So let's listen to his first voicemail, which was a question about a VoIP system, as well as a way to get to his SaaS metrics.
Hi, Rob. Long-time listener, first-time caller. First off, I wanted to thank you for all the great work you've done to help bootstrapped founders and co-founders like myself. Startups for the Rest of Us has been helping us and encouraging us since we started our business back in 2016. My name is Ian Galahan, and I'm the co-founder of Wash, Dry, Fold POS.
We're a bootstrapped B2B SaaS company that offers point-of-sale and management software exclusively to laundromats that offer Wash, Dry, Fold. We built this very niche software because we needed it in our own laundromats located in Tulsa, Oklahoma. We've recently sold our thousandth point of sale system and hit the 1 million ARR milestone.
We just hired a fourth full-time employee and I need help finding the right tools to help us scale. For several years now, I've been searching for a software that would centralize virtual phone lines for all employees while also providing a way to centralize our inbox for tech support, customer service, sales, et cetera.
Beyond this kind of VoIP slash CRM functionality, I also really need in-depth SaaS metrics like LTV based on custom cohorts.
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Chapter 5: How to centralize communication and metrics in a growing SaaS?
We already use ActiveCampaign, Slack, Calendly, WooCommerce, and all the Google tools, but I'm really struggling to find a solution that pulls everything together and adds all the functionality without adding multiple new subscriptions that then everyone on the team has to learn. It's something I've researched, but I'd love to hear from a B2B SaaS veteran or from somebody who has deep experience
in the space. Thanks so much again for all you do.
So when I heard this question, I thought to myself, hey, that's a pretty cool niche and congrats on getting to a million ARR in such a small, what I would consider a small market. It's not huge, but that's great. The things that came to mind when Ian asked this question, and then I'll let Ian answer his own question with the solutions he went with.
When I think of like a VoIP solution to centralize all the phone numbers, I think of OpenPhone or Grasshopper. Now Grasshopper's older school, it's been around for what, 10, 15 years. But OpenPhone, I know a lot of startups that use it. And then for in-depth SaaS metrics, if you're using Stripe, I would be using one of three. ProfitWell, ChartMogul, or BearMetrics. Those are the most popular.
We see it across TinySeed and MicroConf companies, but those were the things that came to mind. And then for CRM, so I don't know, you know, I think of like Close.com that integrates outbound VoIP with CRM functionality, but I don't know. I don't know if they do inbound. I would guess not. And so I was thinking that these are three different tools, right?
These are not, there's no one tool that does all of what Ian has asked for, but to have inbound VoIP, to have CRM separately. Well, I'm like, okay, well, Pipedrive and Close and ActiveCampaign, since you're already using ActiveCampaign, I've heard their CRM functionality is not the worst. And so maybe that's a piece I would use. And then, of course, SaaS metrics I already weighed in on.
So with that, let's cut to the chase and hear what Ian decided to go with.
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Chapter 6: What are the best VoIP and CRM solutions for SaaS?
Hey, Rob, it's Ian. I sent in a question a few weeks ago and I just wanted to give you an update because I think I have a few answers. For one, for VoIP, I ended up going with Zoom and it turns out you can bundle a lot of their stuff to get really good values.
And they're still even with like a Zoom Pro license, it was still half the cost of RingCentral and some of the other more VoIP central services. So I think that's a really nice resource for someone looking for something similar. For the CRM piece of it, I think we're just going to go with active campaign CRM functionality because it's got the basic stuff that we need.
And then the third thing I was really looking for was SaaS metrics. And I've kind of dove in deeper on that. And there's certain things like net revenue retention where I haven't really been tracking
all the metrics that I should have been tracking or the way that I should have been tracking them specifically because with certain customers, I guess if they add a seat, quote unquote, which for us would be adding a store, that's an increase in that customer's spend. but we just track it by store and not by actual customer.
And so there's a lot of kind of funny things that I probably need to go back and like recategorize and go find when they first started with us and calculate their LTV and all that kind of stuff. And so it would be nice to still know a really good SaaS metrics software that somebody's used and liked, but at the same time, I'm realizing that I don't really even have all the right data
to get the right metrics out of the SaaS software, at least in the past. So anyway, I just wanted to give you an update on everything. Appreciate what you're doing. Always listen to new episodes. So keep doing what you're doing. And thanks. Bye.
So obviously, thanks for weighing in on that, Ian. I didn't know that Zoom had any type of VoIP functionality. So that's really interesting. And it's less than RingCentral, which is yet another one of these phone centralization platforms. And then Ian did wind up going with ActiveCampaign, which is cool. And I'm not sure if they're using Stripe.
And so the solutions that I suggested may be a little trickier to get to. But with that, you've heard both my and Ian's take on this question. So thanks for writing in, Ian. If you want to invest in founders, you can do so through my world-class accelerator and venture fund, TinySeed.
We are currently raising our third fund after having raised and mostly deployed almost $42 million across our prior funds.
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