How should an early stage B2B SaaS startup (<$1M ARR) balance inbound marketing with outbound sales?
95% of our revenue comes from outbound sales. We’ve been active with content marketing, but should we put more resources behind inbound marketing?
At this early stage you should go full speed at whatever is actually working for you, which is clearly outbound. Ignore all other things that “may work some day” as distractions. Right now, that’s all they are.
Based on the details of your question (which Quora has stuffed into comments) it seems safe to assume that you’ve not raised any substantial amount of capital.
If you had a pot of money that can’t be spent fast enough to satisfy your VCs I would put some real resources into inbound.
If you’re bootstrapping (as I’ve done with my company, Net-Results, a marketing automation platform that competes with Marketo, Pardot, Hubspot) you need to leverage strategies that return cash quickly.
Inbound is great for many companies but it’s absolutely not the right thing for every company. Some quick real world cases:
- Small, well defined markets.
Let’s say your target market is, for example, companies in the Netherlands with trade show/conference budgets of at least $35,000 Euros.How big is your market? Maybe only 250 companies. Call them. Visit them. Network and build relationships. You’ll win business far faster than you will with an inbound strategy. - Unknown brand, limited resources.
Inbound takes time to generate consistent results. The more recognized your name and brand, the easier it gets.Realize that Hubspot built their own inbound machine by spending more than $2 for every $1 of revenue they generated, and they did this for years.They could afford this because they raised 100’s of millions of investor dollars planning on fast, but unprofitable growth. I suspect you cannot afford to spend $2 to bring in $1 of revenue.Hubspot is an incredible example of fast growth, but the example they set cannot be realistically followed by many companies.With your currently limited resources, diluting your focus to employ a tactic that is slow to generate cash (inbound) may be a rough road.
Trust your gut.
Outbound is working so double down there. As you build revenues and can afford to invest in longer-term efforts like inbound, go for it then.
- Have realistic expectations for return on your investment in inbound. You will have a far happier life if you understand that inbound is a long game. Invest now for a good increase in opportunity generation in 9 months, 12 months, 15 months.
Given that you are a subscription based software business, structure your pricing, proposals and agreements to maximize the number of customers that pre-pay for annual agreements.
Prepaid annual agreements allow a bootstrapped SaaS company enough cash flow to make real investments in the future (like inbound marketing, product features, etc.)
