GUEST: SaaS Startup Advice You Wish You Had 💡 w/Steffen Schebesta, Brevo | Ep. 341

Jay Schwedelson: Welcome to Do This, Not That, the podcast for marketers. Marketers. You'll walk away from each episode with actionable tips you can test immediately. You'll hear from the best minds in marketing, who will share tactics, quick wins, and pitfalls to avoid. We'll also dig into life, pop culture, and the chaos that is our everyday. I'm Jay Schwedelson. Let's do this, not that. We are back for the do this, not that podcast presented by and I have an incredible guest today, an inspiring dude. And this is part of our new series called my path. We bring people on the show that have just had an incredible career journey, and there's things that you can really learn from their journey. So who do we got? We got Steffen Schebesta. Now Stefan, was the CEO, okay, of Brevo North America. Now he's the chairman of their advisory board. And if you don't know Brevo, they're a roll up of some of the biggest, tools and platforms, especially in the email marketing space and from a global perspective. They're huge all around the world. And I've always been impressed by Brevo. But Steffen story about how he started his business, the journey that got him there, failures he had to overcome, it's just awesome, and he's a good dude. So, I just wanna get into all of it. So, Stefan, welcome to the show.

Steffen Schebesta: Thanks, Jay. Thanks for having me.

Jay Schwedelson: Absolutely. Alright. So before we get into kind of this journey, because your career really has been a journey, what what is it that you're doing now? What do you do for a living today?

Jay Schwedelson: So what's wild about your journey, and that's what I wanna dig into, is that you took this thing from literally nothing. Right? And you you ended up you raised over a $160,000,000. The business grew over 900 employees. All these crazy things happening. But it really it started, when you were a kid. Right? And I I some people are gonna listen to this and be like, oh, god. I am so lazy. I I can't do what Steffen did. I'm never gonna get there. But kinda give everybody kinda the origin story. How did this all come to be? And then is it possible for everybody to do what you did?

Jay Schwedelson: So okay. WEEK you're doing all of THIS, though, right, did you just was it always success after success after success when you decided to get out of the agency space and into the software space? I mean, that's gotta be difficult to break into, especially when it's not like you ran 5 software companies before that.

Steffen Schebesta: No. It's it's never success after success after success. Looking back, it always looks like it has been a straight line. But in reality, you know, it's a river that takes turns, and you're in intersections. And and sometimes you get lucky and take the right way, and sometimes you you have to go back and and and change your decision. So definitely not only success. And we were really close to being bankrupt at one point. My my cofounder, he started working for another company part time, so he could basically keep our company afloat. So he he would program some some code for them, get a lot of money, much more than we would be earning, and then we Us that money to actually pay our employees. I was you know, we're very close to being bankrupt at at one point. The first, like, 2, 3 years were really, really tough, and we almost didn't make it. But, again, we yeah. Maybe timing, a bit of luck, and also our persistence, helped to to overcome that, and then we saw the silver lining, basically. We we understood that our business had first traction, that we were growing, that our customers were happy THIS they would come back, and that we THIS we would be able to grow the company much bigger than we even had anticipated at that point. Because we honestly, we started when we were teenagers, early twenties, and we didn't know what we're really doing. Like I said, it was first company we ever started. So, yeah, it's a lot of learnings, a lot of trial and error, but, you know, it has to be strong, will, and motivation to to keep going. And, then, like, small pieces of success kept us kept us going, and eventually, yeah, we're we're lucky enough to to reach some milestones, breakeven, and grow the company further from there.

Jay Schwedelson: So so let me ask you a question about because a a SaaS business for a second. I'm just curious. What were what are some of the things that you've learned? Like, somebody's out there. They have a great idea for a new software business, somewhere software as a service business, SaaS business. And there what are some simple kind of pitfalls? You're like, listen. If you're gonna go down this road, what you really need to focus on are, you know, these three things. You know, these people how many people are coming back and using or What’s, or this is the the the thing you absolutely need to know if you're gonna be in this world. What is that thing?

Steffen Schebesta: Yeah. Let me let me mention a few things. I think the the fundamental the starting point that I always point out to any any founder, an early founder, is if you have an idea, if you have the will and the capacity to start a project, you should get into it. Just do it, because there's always a reason not to do it. It's similar to, like, having a child or switching jobs or doing anything relevant in your life. There's always a good reason not to do it. And sometimes it just you know, you Us have to take that step and have that leap of faith to get there. And the second one would be after you took that step, you'll figure it out along the way. So it won't be easy. Starting a company is probably one of the maybe the most difficult thing I've done in my life. There are so many pitfalls. There's so many issues. Basically, problem solving all the time. You're trying to figure out what's going on, trying to to learn from what failed and and and make the company successful. But that's part of the journey, and you will be able to figure it out if you're persistent and if you really wanna do it. And it's a con so there has to be some kind of mindset of of learning, always improving, and hopefully having somebody you can you can talk to maybe a a cofounder or a mentor, that can be very, very helpful. But I think that's that's the basics are to have the right mindset to get started, maybe without overthinking it. Because even even I, if I had known THIS journey ahead of me, all the competitors, all the issues that we came across, I probably wouldn't have started the company. Right? So it was sometimes it's good to have to be almost a bit naive when starting a project, and then you can figure it out. And one thing that is very important that we didn't really realize until we are a few years in is how important a biz the business model is. And you talked about starting a software as a service company. The beauty of software as a service company is that there's a recurring mechanism within the business model. And the business model itself, I see I I talked about an agency or a service based business. It's not as recurring. Or if you have an offline business, it's hard to get user retention. Imagine you sell, you know, bridal fashion. Likelihood you will retain customers is pretty low, and you might grow through referrals, recommendations. But it's it's very, very difficult to grow Us if you don't have recurring revenue from existing customers. And in the beginning, we only had prepaid plans. So we would basically sell to our customers prepaid packages of emails. So they could buy 10,000 emails. They would send it. They would pay right away, and they would have months or years to use them. So we didn't have that recurring, packaging pricing in here, but we figured out people would still come back. And then we eventually changed our pricing to make it into a subscription based business, and that's when we were like, okay. Well, this totally makes sense. And we saw that existing customers, the year they signed up, the amount of revenue they made, they would make at least the next year. So that's what we call the net retention rate. Right? So the revenue that they generate in the 1st year, 100% of that revenue the same amount of revenue they would make in THIS the next year, which is that's a great business model. Because already acquired customers, they will keep on generating revenue for you, and you can grow just by growing the new customer base. So I really start thinking about a business model first. What's a business model where I know THIS customers will come back to me? They can be retained. They will not churn. And then what's the growth mechanism inside that that company? But so to answer your one of your questions, one very important metric, maybe my favorite metric Up from, like, revenue growth or the bottom line EBITDA Us the net revenue retention What’s says so much about a company. It says so much about growth potential. It says so much about how good the product is as well, and, it it tells you a lot about the the business model behind it. So yeah. THIS those are

Jay Schwedelson: a few

Steffen Schebesta: things that

Jay Schwedelson: I that

Steffen Schebesta: I talked

Jay Schwedelson: I love that. I love that because it really does keep people a north star of what they should be thinking about if they're gonna go down this road. It's something you said at the beginning I'm curious Us, where you said basically Us get going, get started. You know, everyone tries to make all these, you know, plans, business plans, and this is gonna happen. THIS write a 50 page document. Are you saying THIS somebody's sitting out there right now, listen, like, they got this idea, they wanna do this thing, but they haven't laid out, you know, the next 3 years of exactly what's gonna happen, that you don't need this fancy business plan, so to speak. You don't need an MBA to kinda just get things out there. You're better off just going for it and figuring it out. Is is that kinda the vibe?

Steffen Schebesta: Yeah. Totally. 100%. I think it's much more important to understand the customer, to build a product that adds value and that customers love. And the typical way my recommendation would be is to start in a small market in a niche market. Build a product that customers love over starting in a huge market and build a product that customers like. It's much easier to expand from the small niche into a bigger market when you have very loyal customers. And, again, that kind of is, this whole retention product market fit narrative. If you can do that, your customers will refer you, will recommend you, and you will grow kinda almost naturally product led growth. Right? And another advantage is you will have less competition in that niche over a broad market. Let's say I would so we're in the marketing space. Right? Marketing software, email marketing software, CRM. If you wanna start a CRM now, you would be competing with Salesforce, HubSpot, Breville, I don't know, countless other players. So you have to find THIS niche where you can be the best in. So maybe you wanna build a CRM for hospitality, right, in Greece, whatever. Right? And you find that one little niche where you know you can be the best in the world. And and that's kind of the I my favorite business author is Jim Collins. And, if you know the hedgehog concept, that's part of that. It's identifying where your skills are and what what can you be the best in the world in. And that's very important. That's part of that. And and then one other part is, like, are you passionate about THIS about it? Are you gonna be able to spend, like, 5 to 10 years at least, on that journey? And it also has to drive your economic engine. So there has to be some kind of, you know, business model behind it, some kind of monetarization that that you can do.

Jay Schwedelson: I, I'm so into that. You know, find something that you could be the best in the world at, niche down, and then you can grow back Up, and I think that's so cool. So let me pivot, a total pivot here. I have a question for you that I'm curious about. So you really grew up learning how to code. Right? You started a big SaaS company, crushing it, all that stuff. AI is everywhere, obviously. Now if if Steffen was now, today, in this moment, 15 year old kid, okay, would Stefan's dad still say, hey. Get into this coding stuff. You know, that's the future or What’s. Or what it what is your take on AI's impact on SaaS companies, on coding, on engineering, on all of that?

Steffen Schebesta: Yeah. It's it's it's quite interesting. I think it's it's here to stay for sure. It's a fundamental change. It's one of these things where maybe that happens every, what, 10, 20 years, the last time when the Internet became really popular. And there's always opportunity, and there's always threats to existing business models. The beauty about technology is that it evolves exponentially. So it's very, very hard to understand for you and mine. Like, if you I think if you take, like, 100 exponential steps, you're at at the moon, Something like that. Like, it's crazy. Right? We we don't understand it as as a human being. So it's very hard to keep up with THIS. And so AI is evolving at that pace that we don't really understand. So how can we even take advantage of that? And that's a really good question to ask, Jay, and I don't have the the one answer for you, except that every technological disruption will bring opportunity. And then it's up to us to find the opportunity and and start something with it. And there's a lot of Up. I I recently went to, went to a conference and had access to, like, 300 startup pitch decks, and 99% of them said AI in the in the headline. Right? Everybody does something with AI now. So, obviously, it's a big opportunity. Now it's up to you to figure out where the opportunity lies. And I I can't answer that, but I would probably go into that space because it's clearly the future. Agentic WEEK is a big thing in the marketing and sales CRM space. So that that might be something that's interesting. I feel like the whole Gen AI WEEK is almost behind us already, but there's so many things that you can automate, that you can improve, make more efficient. One company that I coached, at Antler, they used AI to automate, all the documentation for software Us companies. So again, they broke it down, took one little niche where they knew they could apply AI to. They knew how to monetize it in that space, and it's a pain because I can tell you from our documentation, it's hundreds of pages. It's translating 7 languages. We have one change in the UI. We have to do redo all the screenshots in 7 languages. What’s, honestly, it's a pain. So, I I THIS, like, these kind of approaches, there's there's a lot of money to be made in that next wave of of AI. And again, if you don't know exactly what it is, maybe you have a first idea, try to validate it, talk to potential customers, get that product market fit figured out, maybe raise some money or try to to do it yourself and then figure it out along the way. Right? Again, that kind of get into it, just do it mindset, I THIS, is important because nobody can predict the future, but we can create the future. And I think that's what entrepreneurs do and, how we can get into these topics.

Jay Schwedelson: I think that the really the theme coming out of this is to, a, get started, whatever it THIS. And, b, I love the idea of, you know, niching down and then growing from there and getting raving fans and loyal customers or whatever you're doing, because then you're on the on the right track. So speaking of raving fans, people are raving fans of Brevo, which you are the chairman of the advisory board for. We're gonna put in the show notes a special discount code if anybody wants to check Brevo out. It's an incredible platform for marketing, for email, for all things. So we're gonna put a special discount code in the show notes, and we're gonna put Stefan's, LinkedIn in the in in the show notes as well because his last name is almost as tough as my last name to spell and say. But Stefan, any other, you know, parting words or things, as we're wrapping up here?

Steffen Schebesta: I always encourage my friends, my relatives, some sometimes to a degree that maybe it's too much, but I always encourage everyone around me to to take that first step WEEK become a founder. It's it's a beautiful experience. It's tough for sure, but it's it's really a a Jay to find fulfillment and to work on on something that you're passionate about with people that you that you like. So, I I would, yeah, I would really like to encourage people to take that first step and become a founder and and and start a new business.

Jay Schwedelson: I love it. Very inspiring stuff today. Really appreciate you being here, and, we're gonna put all in the show notes. So, Stefan, we will will talk to you soon, my man. You did it. You made it to the end. Nice. But the party's not over. Subscribe to make sure you get the latest episode each week for more actual tips and a little chaos from today's top marketer. And hook us up with a 5 star review if this wasn't the worst podcast of all time. Lastly, if you want access to the best virtual marketing events that are also 100% free, visit gurueventsdot.com, so you can hear from the world's top marketers like Daymond John, Martha Stewart, and me. Guruevents.com. Check it out.