After 6 years of success, he’s got some great tips on scaling a SaaS business

Michael Litt. Photo credit: Michael Holmes Photo / Tech in Asia.

“The way I generally describe the seed round is that raising the money at that stage is pretty much 100 percent smoke and mirrors,” says Michael Litt. “Selling the vision, selling the dream.”

An entrepreneur at that stage has to communicate very clearly what he or she wants to do.

“You have very little traction – it’s just about the vision that you have. And it’s not necessarily the size of the vision, it’s your capability to communicate the reality of that vision which ultimately relates to your success in raising the seed round,” adds Litt.

The 30-year-old Canadian did all that six years ago when his startup, Vidyard, a sort of Youtube for businesses, got some seed money.

“The series A is, like, 20 percent how your business is performing and 80 percent smoke and mirrors. ‘Cause you might have that initial traction, some unit economics that make sense. It would indicate the size of your opportunity and your ability to scale.”

That all changes with the next injection of cash.

“Series B, I think, is when that flips. It becomes 80 percent how your business is performing and 20 percent smoke and mirrors. And then finally the series C, for us, was like 100 percent what are the economics of the business,” Litt explained onstage last week at Tech in Asia Tokyo 2017.

Now his company employs 230 people across two offices in Canada and one in the US. It’s grown from 100 staffers in just the last 18 months.

Reinventing me

In the past six years, the Vidyard founder has gone through many versions of himself.

“Reinvention of yourself happens frequently – for me it’s been kinda on a four or six-month cadence,” he explains.

Litt transformed into a sales rep for some time as his business, like all software-as-a-service (SaaS) companies, chased after crucial enterprise customers.

“I was the one who was cold-calling initially,” the CEO chuckles. “I was doing about 100 calls a day.”

Hiring and re-wiring

Legwork

‘Leaking at the seams’