Today we reached $2M in monthly recurring revenue or to put it in a fancier perspective, $24M in annual recurring revenue. This is a big milestone that for many years I considered infeasible. But here we are today, with it being a reality.
I always thought that this would be a moment of triumph. That we would celebrate it with a big party, huge smiles and a lot of hugs. But it did not feel this way. It mostly felt like a shallow excitement combined with melancholy.
It doesn’t feel like an achievement as our ambition while approaching this milestone grew bigger and bigger. Now $24M in annual recurring revenue is not enough; we need to grow more and we need to do it fast. And as we grow, we need to compete with our past-self. A good year becomes a liability on January 1st of the next one.
How did we end-up with this? Just a few years ago, we were a very small company trying to survive. At one time we were considering selling most of the company for peanuts. Then, we launched our SAAS product which was evidently a success from day one. But SAAS grows slowly and accumulates power through time. In between, the actual revenue was small. It was growing steadily but slowly. There were no big, immediate wins to celebrate.
We were frugal with money. We were living through our income stream and reinvest what little left every month. We did not have any VC to supercharge us with money; we were having a shared space and a meeting room with a ceiling leacking water any given rainy day.
It was fun though as we could do what we love. We did not have any big vision, our vision got shaped together with success. We were lean and agile. We were making a ton of progress each month and we were eager to re-start whenever it felt like we had taken a wrong turn. We made dozens of wrong decisions but none were lethal. Politics were contained and there was little to fight about. Somehow, we managed to hire people although we paid less than the competition. And most of them stayed with us for a long time.
We were talking with various advisors and most of them had an opinion on why or when we will fail; you are based in a small country with little access to capital, you do not have prior expertise on scaling internationally, you have limited access to talent, you need a big sales team to close customers, competition is fierce on your industry, your growth will flatten after level X, you are a startup for over ten years — if you were to make it, it should have happened by now. They were right on many, but not on everything.
As we were waiting for the unavoidable stagnation and doom, we continued to grow, month-by-month, quarter-by-quarter, year-by-year. We were still a company of introverts, located in a small isolated country. But somehow, we had found something that despite its flaws and shortcomings had a very good market fit. If there is something I have learned through the journey it is that market fit is all there is to discover. It is harder than you think but finding it once is more than enough. Everything else will magically improve around market fit — morale will improve, the right talent will become approachable, you will have the means to improve infrastructure, any doubter will rethink his/her reasoning.
Soon the accumulated growth got us to important milestones — $50K MRR, $100K MRR, $200K MRR. Institutional investors started knocking on our door. A few were more knowledgable than others. We closed a financial round although we did not need the money. And then additional interest from a very big private equity at an escalated valuation, led-us to close one more.
Having support from institutional investors gave us perspective. It helped us understand the full potential of what we were building, and also provided market/competition analysis, connections and actionable advice. But this is a two-sided sword. Having institutional investors also means that your business is no longer a lifestyle one. You have to grow in order to maximize its value and exit. The emotional bonding is no longer wise, as your company has taken a critical turn. Growth becomes of paramount importance as it dictates the final outcome.
This is an endless road, with short-living excitement and gigantic obstacles. As you grow, your growth seems to slow-down. This is inevitable even for stellar businesses. Adding millions upon millions of new recurring revenue every year is not an easy task. At the same time, your company is becoming bigger and bigger, you are less fragile but somehow you produce less. From the excitement around the products, you move to endless meetings and pointless days. Your life is less fulfilling somehow.
So here we are, a truly successful business reaching a historic milestone.
It should feel better.
