Steli Efti moved to Silicon Valley to establish a startup, he joined Y Combinator, worked on something that didn’t work, built a successful sales agency and only then…
… built Close, a sales productivity CRM that is now en route to $10m ARR without external funding.
How did he get there?
This posts explains…
We’ve started to spot patterns.
After assessing hundreds of SaaS businesses, we start to see patterns between those that do and don’t grow.
Here is one pattern that is starting to emerge:
1. The team starts providing a service that solves a real problem
2. They then start automating parts of that service internally
3. They start selling that software
Prior to Close, Steli founded and grew Elastic Sales:
(Which is now replaced by a lovely long-form story/sales letter linking to Close)
Elastic Sales provided a scalable sales team for startups.
Selling too, meeting and servicing a specific type of business will give you an unrivaled understanding of their challenges.
As Elastic Sales grew, the tech team started to sit with salespeople to understand how to make them more effective through automation.
This resulted in a kind of internal CRM…
Shortly after, clients started asking about how they could purchase salespeople AND software from Elastic Sales.
By the time Close had launched, there was probably no one on this planet that knew the pains of a scaling startup more than Steli and his team.
Furthermore, the Elastic Sales team had experienced the problem of their customer first hand as they started to scale their sales team and couldn’t find a CRM to do so.
In summary, Steli and the Close team had a deep understanding of their customer (from working with them on Elastic Sales) and a deep understanding of their problem (scaling sales teams internally).
Elastic Sales was essentially a paid R&D project that produced a high growth sales SaaS product (Close) without the need for external funding.
What did we learn?
In the early days, focus on developing:
1. a deep understanding of your target market
2. a deep understanding of their problem
Close has and will thrive as their business was spun out from Elastic Sales and continues to grow in alignment with these two principles.