Episode 843 | Success Patterns of $1M+ SaaS Founders

Rob Walling: Welcome back to another episode of Startups for the Rest of Us. I’m your host, Rob Walling. And in this episode, I talk with Julien Marzouk. He’s a former SaaS founder and now a SaaS coach. He’s been coaching for 10 years and has coached hundreds of founders. And in this episode, we dive into the success patterns that he’s seen across the seven and eight figure entrepreneurs he’s worked with. Before we dive into that conversation, if you are a seven or eight figure ARR SaaS founder, you might be interested in an event we are hosting this December. It’s called Tiny Summit. It’s a two and a half day high level knowledge sharing event exclusively for seven and eight figure ARR SaaS founders. And while this event will primarily be for SaaS Institute founders, we are opening a limited number of tickets to qualified founders who are outside of Institute. 

If you’re doing millions in ARR, it is hard for you to find a group at your level, and this event will be just that. It’s a very small group retreat focused on founders sharing real behind the scenes knowledge on what’s working, building relationships with other successful entrepreneurs, and taking a step away from the day-to-day to figure out the next big picture moves. It’s going to be at one of the top resorts in Cancun, December 5th through the 7th. If you’re already part of SaaS Institute, hit us up in Slack. But if you’re listening to this and you think, if I want to get together in a room, I’m going to be there. There’ll be a few folks you have heard on this podcast, and we’re going to have a great time masterminding, talking, troubleshooting. If you are not in SaaS Institute, you can email tracy@tinyseed.com to get on the wait list. 

And with that, let’s dive into my conversation with Julien about success patterns of one million ARR founders. Julien, welcome to Startups for the Rest of Us. 

Julien Marzouk: Thanks, Rob. It’s a pleasure to be here. 

Rob Walling: I want to talk to you today about coaching SaaS founders. We’re going to cover a few topics: why a SaaS founder, especially someone doing seven or eight figures, might need a coach. We’re going to talk about how to be coached well, what to look for in a coach. But I think the meat of this episode, and the part that I’m most interested in hearing and that I think the listeners will be as well, is to dig into your experience having coached dozens and dozens of seven and eight figure founders across that decade, the patterns that you see. And I’m assuming there’s some success patterns, maybe some anti-patterns here, but I really want to hear that out of your knowledge today. Sound good? 

Julien Marzouk: Absolutely. Sounds great. Yeah, I’d be happy to. I think that’s a good opportunity for me to order what I’ve seen. It’s actually hundreds of founders over the years. I’m ashamed to say that. And yeah, happy to get started. 

Rob Walling: Awesome. So I want to dive in starting with founders doing more than a million, and this is specifically SaaS folks. We’re not talking about folks with e-comm, and it is the focus of this podcast and my whole ecosystem. Why do founders above a million seek coaching? Why should they consider finding someone to help them? 

Julien Marzouk: Absolutely fair question. Usually they’re done going about it alone. At this stage, they usually feel pretty lonely. If they’re around one to three million, isolated, and they want a thinking partner. They need help because usually their life has become miserable. And overall, they need to change something. They realize that the way they’ve been doing it is not working anymore. In one sentence, even though they don’t say it like that, what they feel is: what got me here won’t get me there, to 10 plus million. 

Rob Walling: And another thing that I’ve seen, I’m curious what you think about this, is there’s so much content for people starting up, for people doing five or 10K a month, for people doing a little less content if you’re doing 50K a month, 600K a year. When you get into seven figures, and I’m guilty of this too, the audience is just so small for that content. So the stuff that I’ve created, or we at TinySeed and MicroConf have created, for later stage folks, whether it’s on YouTube or whether we create actual products we sell, they just don’t get nearly the uptake, because there’s so few people that want that content. So as a result, there’s not a lot of content for folks at that stage. And it seems like customization. It feels to me like everyone in the early stage has very similar problems. How do I find an idea, validate it? 

Do you see this, that the problems themselves get further and further apart, such that a generalized course is potentially a lot less valuable to someone doing a million, five million ARR? 

Julien Marzouk: Yeah, absolutely. It’s also a much, much smaller group of people who get there, right? As you said. So the content is also according to the audience. And yeah, I think we’ll get into it. I’m happy to talk a little bit about what I’m seeing. You do see different scenarios, different cases that play into the different strengths of the founders. So you do have a range of different scenarios and different challenges that arise. Though I do think that we can extract, as you said at the beginning, key patterns that are very helpful to be aware of when you get to that stage. 

Rob Walling: So answer me this, because I can imagine someone thinking, “Well, I’m in a peer group. I’m in EO, or I’m in a MicroConf mastermind, or a mastermind of my own making.” Why isn’t that enough, and what does a coach offer beyond that structure? 

Julien Marzouk: A coach, ideally a good coach, someone who’s actually going to help you at this stage, has both domain expertise and coaching expertise. Meaning that they are able to both ask you the right questions based on what’s going on in the business, but they’re also able to recognize patterns, patterns that they’ve seen because they’ve talked to dozens, as you said, or hundreds of people in that same situation. That’s number one. Number two is a coach is not an operator, not just an operator. Meaning that usually when you’re mentored by an operator, they’re super strong technically, and they’re going to be able to help you basically do what they did. But if you want to help someone play to their strength, then that’s a little bit of a different game, because the path that worked for you might not work for someone else, because we have different strengths and you come to entrepreneurship from different journeys. 

Some are sales experts, some are great marketers, some are amazing product people and developers. So if you have someone that is exactly like you, then great. But for all the other cases, having this actual skill of coaching is going to unleash much more. 

Rob Walling: Yeah. And we’ve seen that with the SaaS Institute, for folks who don’t know. Obviously I’ve mentioned SaaS Institute on the podcast before. It’s our premium coaching program for seven and eight figure ARR SaaS founders. And we have both masterminds and one-on-one coaching. You are one of our coaches at Institute. And there’s a very specific reason that we structured it that way, because I’ve been building software, well, geez, I’ve been building software since I was eight years old. I’ve been building SaaS for almost 20 years, but I’ve been building audiences for 20 years, and I’ve been building communities for like 16. And I’ve been in masterminds, one is still going, that’s like 15 years old. And the difference between that, I’ve seen both across our accelerator when we launched it seven years ago and my experience of being in masterminds versus having a coach one-on-one who’s really digging in with me, asking the questions, often not even giving me direct guidance, but asking me the questions that make me guide myself. 

Asking, how do you get more data out of that? The coach may not know how I get more data to make this decision, but they know when to switch that topic and go pretty direct. Sometimes you can get in a mastermind with someone who’s a good coach and you’ve lucked out, you’ve lucked out. It is by far the exception, by far the exception. And that’s, I think, the difference. 

Julien Marzouk: I just wanted to take the opportunity to say how I love how the SaaS Institute is structured, because I do believe that you need both. You need the community with peers that you can relate to, that are going through the same things. It’s not the same type of conversations, right? You’re going to get value from their journeys and things that they have worked out, and that’s great, but the community is extremely valuable. I mean, I’m not going to have to convince you here. The combo with the coaching is, I believe, a great combo that the SaaS Institute nailed. 

Rob Walling: Well, that’s good to hear, because we feel like we’ve been doing this for a while and helping a lot of founders, obviously with 350 something founders in our accelerator, and then the tens of thousands of founders that have found community in MicroConf. So before we dive into the patterns that you’ve seen across these hundreds of founders you’ve coached, I just want to briefly talk about, if you were to look for a coach, and obviously you and I believe in the SaaS Institute, but if someone’s listening to this, they know me well enough to know that I don’t just shill my own stuff. I think what we’ve built is great. I always try to build the best thing on the market, but sometimes people might want to go somewhere else to get a coach. So we’re keeping this general. If you’re a SaaS founder and you desire to find a coach, and you want to be coached well, what’s the mindset shift that founders need to embrace, I guess, to get the maximum benefit? 

Julien Marzouk: That’s a great question. I don’t think you go into coaching to be validated, or even to be just told what to do. That’s not really the way to start. I think getting into coaching, you need to be willing to be uncomfortable. You need to be willing to be challenged. And yeah, you need to be able to act in between sessions, because eventually the coach is not going to do the work for you. The founder still has to do the work. So if you want to really leverage the relationship with your coach, you need to be ready to execute in between sessions, because those are the ones that make the most out of it. After six months engagement between a founder that has been executing consistently and someone who is just getting started, you see the difference. It’s important that the founder understands that they still own the agenda, even though the coach will help them prioritize and identify the biggest bottlenecks and then zero in on the priorities. 

What happens in between sessions matters so much that they need to come back and say, “This is what happened. This is what’s on my to-do list,” and take it from there. And maybe last but not least is being okay with being wrong. It’s important, both for the coach and for the founder. 

Rob Walling: I think those are good things for founders to do whether they have a coach or not. Willingness to be wrong, you know what I mean? It’s just good advice. 

Julien Marzouk: Absolutely. 

Rob Walling: All right. Let’s dive in. You said you gathered a few patterns for me. I think maybe we’ll get through six or seven depending on time, but let’s just dive into the first pattern that you’ve seen across folks that you’ve coached. 

Julien Marzouk: The first one, which is really at this stage the defining moment, is the operator who hasn’t become a leader yet. Basically at one to three million, the founder is the growth engine. They’re the ones who’ve built the growth, who’ve been doing it all. The problem is that in order to get to 10 million, it needs to change. They need to be able to remove themselves from the equation, to build the system, to empower their team, in order for the business to run without them, ideally. That’s the goal. And so what’s tricky is you have very often an identity shift that needs to happen, because what got them here, being a great salesperson, being a great developer, being a great marketer, there is self-worth tied to it. And so you’re basically asking them, what’s been your greatest strength? What got you all this success? Now actually get rid of it. 

We don’t want it anymore. You need to be able to put your focus on a different system and on your people, and to build a machine that can run without you. And that’s a big deal. That’s a big deal for them, because it’s basically who they are at this point. And it takes a second. This is something that you can surface very often. In the first session, I do a time audit, very big picture, but I take the six functions and I’m like, okay, how much of your time do you spend in each function? Just a rough percentage. Every time there’s a function that’s beyond 40% in time spent, in sales, product, marketing, you know it’s going to be a topic and it’s going to take some work for them to actually let go. 

Rob Walling: Love it. I’ve seen it myself. I echo it. Let’s talk about number two. 

Julien Marzouk: I think a lot of people will recognize the pattern, and not just founders, but founders at this stage specifically. It’s doing too many things at once. So you get on a session, one of the first sessions, and you realize that founders run five growth initiatives in parallel. And when you start questioning, like, but are you sure that you will be able to bring them all to fruition, and how come it’s taken so long? It’s very difficult for them to let go, because they think that it’s saying no. No, I’m not going to do this. And actually the reframe is, we’re not saying no, we’re just saying not now. It’s about sequencing. And very often you see many different ICPs, different types of clients that founders are pursuing, even sometimes different sales motions, different acquisition channels. And there’s one tool that I want to share with your audience that I found very helpful to help them focus. 

And the way it’s useful is because there’s no subjectivity about it. It’s basically math. It’s the sales velocity equation. I don’t know if you’ve used that before, but basically you take every segment. So let’s say I have this client, for example, compliance SaaS that sells into banks. It was going after national banks, regional banks, and community banks, and mostly regional and community. And the thing is, when we compare the sales velocity, the pipeline, the conversion rate, the sales cycle, and the deal size, he spent a lot of time on the regional banks because they were 70K per deal versus the community banks that had, I think, something like 30K per deal. The thing is, the sales cycle for the regional banks was seven months versus one month for the community banks. So basically spending more time on the community banks after six months means basically 10 times the revenue. 

It’s just math. And so we’re not saying we’re never going to do the regional banks. We’re just saying right now, the best use of your time is on this channel, these ICPs, this motion, and these are the numbers to back it up. 

Rob Walling: So as a coach, let’s say that you see this and you can see that there’s an issue. How do you help, or do you help, guide the founder? Do you do it through questions? Is it the Socratic method? Or are you kind of like, “Hey, there’s a blind spot over here,” and you just direct, like, “Have you considered this?” What would it be like to be in a session with you and have you realize that? 

Julien Marzouk: I think there’s the myth of the coach is not supposed to give guidance. They’re supposed to only ask questions. I believe that for founders at this stage, it’s actually very important to be able to wear both hats: to be able to be really asking questions, getting them to clarity and to their own understanding of the problem, but also in some situations, give your own opinion and experience on something and share what you think. But labeling it as such, being very clear, “Here, I’m going to tell you what I think. You should do this, because these are all the reasons, and I’ve seen it before, and you’re going to get faster.” This is, I would say, you have to balance both hats. But overall, I wouldn’t say it’s a problem in session. I would say founders welcome the guidance very often. I would say the trap is indeed to not allow for the space for the founder to actually be creative and find their own solutions based on all the amount of information that they have, because the founder has much more information than the coach. 

They’re in the business. They have more data points. So I think you have to kind of hold both those truths at the same time. 

Rob Walling: All right. Let’s dive into our next one. Am I counting right? Is this the third? 

Julien Marzouk: It is the third. 

Rob Walling: Number three. Yeah. Talk me through it. 

Julien Marzouk: The rescuing founder. The rescuing founder is basically, team members come to him with problems, him or her. And they think it’s faster, and very often it is short term, to just take the problem and solve it themselves. They’re not going to take time to actually work the problem with the team member in order for them to still own the problem. And the thing is, when you do that, what you’re actually doing is you’re teaching your team members to bring you problems instead of solutions. And so you cannot grow like that. Basically, you are just in this loop where you are still the bottleneck. And so a few things that are extremely helpful here. The first one that I love, that I use very often, is the 10/80/10 rule. Basically just get involved in the first 10% of the task and the last 10% of the task. 

The 80% in the middle are your team member’s responsibility. So be there to help frame it, scope it out, share, be clear on the standards of expectation, and then be there at the end to actually get the project, the deliverable, where you want it to be. This one has been helpful with clients. The second one is basically creating a system that fosters accountability, that requires an operating rhythm. So a weekly cadence. I like the model of one priority per week, three commitments on this priority, and then a scorecard to measure it. Very simple, very clear. And you do need tools in order to create delegation. Otherwise, it’s very hard for a founder from nothing to create a new system. So those tools I actually very much rely on in my work with clients, because it gives them something that they can do to start the transition. 

Rob Walling: I was so guilty of this one. So guilty of all the ones you’ve mentioned, and my guess is, of all the ones that you mentioned, this is probably the one that I did the hardest as I was coming up. Because here’s the thing, I like helping people. I like solving problems. I enjoy it. Even in my personal life, one of my kids, the battery on their car ran out the other day, and I just loved being like, “Oh, here’s the AAA number. You call this and they’ll come charge it, and then come to the house and I’ll look at it.” And then their phone broke and I would just come to the house and I’ll figure it out. You know what I mean? That actually gives me juice, to help my friends and my family. But my stuff and business is not good. 

It’s not good. I was Mr. Swoop-In, and I was like, “Well, obviously I’m a founder, so I can solve all these problems.” And it really burned me out. And as you said, it taught my team to just come to me with everything. And it was not good for growing the org. By the time we were 10 people, this is with Drip, I was basically still making all the decisions, and everyone, “Well, let’s see what Rob thinks about it.” Everything. And that was my fault. So it really resonates for me to hear you talking about this. 

Julien Marzouk: I hear you. I think we all can, to different levels. It’s just, you get finally in a place where you can do things. And, as you, I do love to be helpful and to be of service. But yeah, that’s the path. Pattern three. 

Rob Walling: Let’s do number four. 

Julien Marzouk: This one is actually maybe the, actually, I think it might be the most common one I see. Let’s see what you think about it. Have you seen it before? It’s the visibility problem disguised as a lead problem. Let me tell you more. How many clients come to a session and say, “We need more leads”? 

Rob Walling: Most. Yeah. 

Julien Marzouk: Most, right? And then you ask a few questions and you realize they don’t know which channel produces the best customers. They don’t know the percentage that converts. They don’t know where prospects drop in the funnel, who expands, who churns. So they actually don’t know where’s the bottleneck, what’s to fix. And it’s understandable. When growth slows, the instinct is just to add more marketing, more sales, more tools. Actually, in most cases, it’s getting the information: where things break, where do we need to focus? Just today I talked to a client and we’ve been working together for many months, but he came, same thing. I need more leads. Growth has slowed. We start working together and realize that he has a churn issue, turnover issue within his sales teams, sales conversion rate. And we start popping up the hood, and he actually needs more technicians to deliver on his product to avoid churn. 

The scripts of his sales teams are not good. They need to be improved. The compensation of his sales team is not ad hoc. So in just six months, because I’ve actually asked him to find out those data recently, the LTV to CAC ratio went from high twos to four in six months, just by doing the work on those. And so those were actually the highest priorities for him, not more leads. 

Rob Walling: Yeah. And that is something that often, as a founder, when you’re so close to the metal, you may not be able to see that yourself. And that’s where having a co-founder, having a mastermind, having a coach, having a therapist, depending on the type of therapist they are, usually not a therapist because they’re not going to know business well enough, but that is where you can’t see the forest for the trees when you’re so close to it. I still do this today. I do this today. I have my network of really close founder friends who really understand me, who I can go to and say, I know that I need help with this thing. And here’s the thing, here’s the reason it works for me. I don’t have a coach right now, but it works for me because I feel like I’m pretty good at identifying. 

I’ve been a founder forever. And I’m pretty good at identifying when I do actually need the outside help. For a lot of people, they aren’t good at identifying when they need the outside help. So unless you have that monthly or twice monthly meeting with a coach, you’re not really asking yourself the whole time, do I need advice on this? Do I need a different point of view? And you can be stuck without knowing you’re stuck. 

Julien Marzouk: 100%. And I’m obviously sharing this from a place of love, and it’s not about pointing fingers here. I’ve done all those things. Had my business in New York for six years. I’ve been the bottleneck, been focused on the leads, been rescuing teammates. I’ve done them all. So it’s exactly how you said it. When you’re close to the action, when you just have your nose in it day in, day out, the pressure, the expectations, it’s difficult to have that visibility. Almost impossible if you don’t have the right forum for it. 

Rob Walling: Let’s dive into number five. 

Julien Marzouk: Number five is the emotional reality of it all. Something that comes up very often. I don’t know if you’ve heard it before, but founders tell me, most days I feel both encouraged and discouraged. This is something that comes back very often. And I think that’s a very important reframe: you don’t solve uncertainty with more thinking. You solve uncertainty through action. The founders who keep moving, they try to stick with momentum, keep executing. And that’s how the emotional regulation happens in the best way and the fastest way. The ones that stop executing because of uncertainty and just get caught up in the thinking loop, it’s usually getting worse. And I thought, yeah, that was worth actually one spot in this list. 

Rob Walling: Yeah. I mean, the number one thing Einar and I talk about when we’re asked about TinySeed founders, who succeeds, who doesn’t? Generally, the people who succeed, they do a lot of things and they’re right more often than not. Not all the time, but they’re right. They can be right 60% of the time, but they just do a lot of stuff. And they’re not flailing. I mean, there’s people that do a lot of stuff on their ADHD, launching 12 products in 12 minutes. And that’s not what I mean. I mean, focusing, having some type of game plan, but it’s like everything they do with a sense of urgency. And they don’t sit around analyzing everything to death. They take action to gather more data, to then take action, to gather more data, to then take action. And oh, I just discovered the data now is that the YouTube channel is working, that LinkedIn is working, that that cold outreach via whatever avenue, via Twitter DMs, is working, because I didn’t sit there and talk to ChatGPT about it for three hours and then think about it and ask everyone for advice for three days. 

I just started sending some cold DMs one day, and suddenly I realized that one out of 20 that I sent got a response. You know what I mean? It’s this action bias, towards action over sitting around. Analysis paralysis is something that strikes so much of us, especially builders, especially makers, especially developers, because action is scary, and the safe, secure, comfortable thing is building, writing code, another feature. I want to think about the product. I want to build a product, because it is fun. That’s my favorite part. That’s why I get into this. But the scary part, the hard part, is taking action and getting out there. 

Julien Marzouk: 100%. Short learning loops. Short learning loops, right? Do something, result, let’s iterate. And it’s very useful. I think founders at this stage, they don’t want general advice. They’re drowning in advice. They want to be able to have something actionable, and usually to identify what’s the highest leverage path to their next stage. And that’s usually action, short learning loops. 

Rob Walling: All right. Last one. Let’s look at number six. 

Julien Marzouk: Number six, I wanted to pick something that was related to this new AI era. And it’s tricky because obviously there’s so much going on, and it’s in every conversation that I have. One thing that I wanted to highlight is the shiny object syndrome. So very often the response to AI with the founders I work with is, I’m going to build a ton of agents. I’m going to build agents to do this, to do that. Agents, agents. Make no mistake, agents are great. I love them. But there are a number of things that sometimes need to happen before. And the first biggest challenge that I see at this stage is, if you don’t have clarity on your ICP, the use case that works for you, how your GTM is designed, you’re going to be crushed by AI. AI punishes fuzzy positioning and rewards clarity. It rewards words like ROI, clear deliverables. 

And some founders don’t have that yet, and they can’t capture the right data if they don’t have clarity on their ICP, on their use case. So they cannot leverage AI for their own product. So there’s a lot of work already there to be done. GTM first. Number two, a lot depends on SEO still. And you probably saw SEO is declining across the board. So usually before setting up a new agent, what channel do you want to develop to counterbalance the decrease of SEO? This needs to be intentional. And then last but not least is really the information flow. So there’s an opportunity to simplify everything with AI before adding more agents. A lot of how GTM organizations are structured is you will have SDR, AE, manager, you will have some RevOps, some enablement. The thing is, if everybody is connected to the same information in real time and leveraging AI, well, there’s a lot you don’t need anymore, actually, because information is just flowing. 

And so I think it impacts how organizations work, and that’s a big deal. It’s really like you can keep a tight team and get a lot done. And agents, they’re there for everybody. Just make sure that those fundamentals of your business are secure before adding complexity. 

Rob Walling: Awesome. Thanks for sharing those today, man. I think they’re going to be really helpful for the listeners. And listener, if you found value in any one of those or all of them, feel free to reach out to us on X/Twitter. I’m @robwalling. And Julien, what’s your handle? 

Julien Marzouk: I’m at Julien Marzouk on LinkedIn. 

Rob Walling: Perfect. On LinkedIn. Yep. And we will get that in the show notes. One final question before I let you go. What does working with you at SaaS Institute actually look like, if someone was wondering? 

Julien Marzouk: Yeah. It’s one session every two weeks, plus the community. We get started with the first priority that’s going to have an outsized impact on your business. We create one priority, three commitments until the next session. And if we need to add more, if we need to involve more team members, we can do that. But the relationship with the founder, biweekly, that’s the foundation of the coaching, together with, obviously, the community of the SaaS Institute. 

Rob Walling: Very nice. Folks want to keep up with you, Julien Marzouk on LinkedIn. Thanks again for joining me today. 

Julien Marzouk: It’s my pleasure. Thank you for having me. 

Rob Walling: Thanks again to Julien for coming on the show. And if you feel like Julien or another coach could be helpful to you, and you’re doing at least a million in ARR and you’re running a B2B or B2C SaaS company, you should head to saasinstitute.com and check out what we have to offer. Thanks for listening this week and every week. This is Rob Walling signing off from episode 843.