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 #50, Anna Nadeina talks with Tim Schumacher, serial entrepreneur, environmentalist, and, of course, co-founder of saas.group.
saas.group is a serial acquirer of SaaS businesses, focusing on small to mid-sized b2b companies. The goal is to help these companies scale and thrive in a competitive market. Tim emphasizes their approach of acquiring businesses that have potential but may need guidance or resources to reach the next level.
The Shift Towards Sustainable Profitability
The SaaS landscape has experienced significant changes in recent years, particularly with the shift from growth-at-all-costs to a focus on sustainable profitability. Tim highlights that many companies, which previously aimed for hyper-growth, are now reassessing their strategies to ensure they can maintain profit margins while still achieving reasonable growth rates.
- Previous mindset: Growth at all costs with heavy investment in recruitment and marketing.
- Current mindset: Emphasizing profitability and sustainable growth, with companies happy to achieve 10-30% growth rather than seeking hyper-growth.
Embracing the Bootstrap Mindset
Tim notes that some VC-funded companies are even reverting to a bootstrap mindset, focusing on what truly matters for their business. This change can be painful yet necessary, as it forces companies to refocus on their core strengths and the value they provide to customers.
Product-Led Growth (PLG) vs. Sales-Led Growth
Product-Led Growth (PLG) has emerged as a fundamental approach to building successful SaaS companies. Tim argues that every product should aim for PLG, as it drives the development of user-friendly and functional products.
PLG emphasizes user experience and product usability, which can lead to better customer satisfaction and retention. Tim cites examples like Gmail, which started as a consumer product and evolved into a robust enterprise solution, demonstrating the power of PLG.
While many companies are attempting to move upmarket by incorporating sales-led strategies, Tim suggests that this may not always be feasible. He believes that companies should focus on building a solid product foundation before adding sales components.
Recent Acquisitions by saas.group
This year, saas.group has made several strategic acquisitions that align with their vision. Tim discusses the rationale behind these acquisitions and how they fit into the broader portfolio.
Deploy HQ was acquired as an add-on to the existing brand DeployBot. This acquisition was aimed at leveraging synergies between the two brands to enhance customer offerings and technology.
INFOnline, an analytics tool for website traffic, presents a different case. Tim describes it as an old company with a strong technology core but lacking international reach. saas.group plans to modernize its infrastructure while preserving its robust analytics capabilities.
The goal for future acquisitions is to identify businesses that can benefit from saas.group’s resources while maintaining their independence.
The Role of AI in SaaS
AI is becoming increasingly important in the SaaS industry, with saas.group exploring ways to integrate AI into their products and services. Tim discusses the potential of AI to enhance customer support, product development, and overall efficiency.
Tim shares his enthusiasm for various AI tools, such as LanguageTool, which aids in writing and communication. He believes that integrating AI into everyday operations can significantly enhance productivity and effectiveness.
Challenges and Opportunities in M&A
As saas.group continues to acquire new companies, Tim stresses the importance of due diligence. This process involves thoroughly understanding the acquired company’s culture, technology, and customer base to ensure a smooth integration.
He explains that due diligence is not just about assessing the company being acquired; it also serves as a reflection of the acquiring company. Transparency and open communication are key to building trust between buyers and sellers.
Maintaining Brand Independence
One of saas.group’s core philosophies is to allow acquired companies to maintain their brand independence. Tim believes that this approach fosters innovation and autonomy, enabling brands to thrive without being bogged down by bureaucratic structures.
While saas.group has centralized certain functions like finance and HR, the core product development remains decentralized. This balance allows for flexibility and adaptability within the brands while ensuring essential support functions are in place.
Looking Ahead: The Future of saas.group
As saas.group continues to grow and acquire new companies, Tim is focused on laying a solid foundation for future growth. This includes establishing a board for strategic oversight and preparing the organization for scaling to 60 brands and beyond.
Key Takeaways for SaaS Founders
For SaaS founders navigating the post-acquisition landscape, Tim offers several key insights:
- Focus on sustainable profitability rather than hyper-growth.
- Embrace product-led growth to create user-friendly products.
- Maintain brand independence to foster innovation.
- Prioritize due diligence to ensure successful integrations.
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