From raising funds to bootstrapping SaaS business with Osman Koc @UserGuiding

saas.unbound is a podcast for and about founders who are working on scaling inspiring products that people love, brought to you by https://saas.group/, a serial acquirer of B2B SaaS companies.

In episode #25, Anna Nadeina talks with Osman, Co-Founder & CEO at UserGuiding, a no-code product adoption tool.

With a background that spans investment networks and venture studios, Osman has cultivated a wealth of knowledge in entrepreneurship. UserGuiding, the no-code product adoption tool he co-founded, addresses critical challenges in user onboarding.

The birth of UserGuiding

Osman’s journey to founding UserGuiding began during his time at a venture studio, where he helped entrepreneurs build their first web applications. Through this experience, he identified a common problem: onboarding. Many existing tools were either ineffective or too expensive, and the need for a robust, easy-to-use solution became evident.

After moving to San Francisco, the heart of the startup ecosystem, Osman and his team realized that onboarding was a widespread issue among product teams. This led them to develop UserGuiding, a tool designed to improve product adoption and enhance user experience.

Common traps for first-time founders

Osman highlighted several traps that first-time founders often fall into, based on his experiences:

• Ideas Are Worthless, Execution Is Everything: While execution is crucial, it’s essential to recognize that a solid idea can still be the foundation for success.
• Listening to Everyone: Early-stage founders often seek advice from various sources. However, not all advice is valuable, and the wrong guidance can lead to missteps.
• More Features, Better Product: Many founders believe that adding features equates to better products. Instead, focusing on solving real problems for customers should be the priority.

The fundraising journey

When it comes to fundraising, Osman shared his experience of raising a modest amount of capital, which allowed UserGuiding to achieve profitability. The initial $200K pre-seed investment and subsequent $1 million round enabled the team to focus on sustainable growth.

Osman emphasized the importance of understanding that raising money isn’t always the answer to growth challenges. Instead, a more cautious approach to spending and hiring can yield better results in the long run.

Transitioning to a bootstrap mindset

After experiencing the challenges of scaling too quickly, Osman and his team adopted a bootstrap mentality. This approach, which he refers to as “latestrapping,” focuses on sustainable growth without relying heavily on external funding.

Osman explained how maintaining a solid cash flow and being mindful of expenses allowed them to grow at a steady pace. This strategy has proven successful and aligns with their long-term vision for UserGuiding.

The importance of community in entrepreneurship

Building a supportive community is vital for entrepreneurs. Osman has actively participated in various startup communities, including the SaaS Founder community and the Turkish Founders Club. He believes that these networks provide invaluable support and mentorship, helping founders navigate the ups and downs of their journeys.

Osman noted that sharing experiences and learning from peers can significantly impact a founder’s growth. The connections made in these communities often lead to collaborative opportunities and mutual support.

Improving user onboarding

For founders looking to enhance their user onboarding processes, Osman offered several key insights:

• Analyze User Behavior: Watching session replays can provide valuable insights into user interactions and highlight areas of confusion.
• Continuous Improvement: Onboarding should not be seen as a one-time task. Regularly revisiting and refining onboarding flows is essential for ongoing success.
• Holistic Approach: Effective onboarding begins long before users engage with the product. The messaging and positioning on landing pages must align with the actual user experience.

Final thoughts and hacks for founders

As a seasoned entrepreneur, Osman shared his biggest win: working with people he cares about. In contrast, he reflected on losing talented team members due to inexperience, which he considers one of his key mistakes.

Osman’s advice to aspiring founders is to remain calm and focused during challenging times. He emphasizes the importance of enjoying the entrepreneurial journey and staying resilient amidst obstacles.