Growth, Funding & Navigating Challenges as a SaaS Founder
In this interview, Peter chats about SaaS growth, funding and navigating challenges as a founder with Dominic Sutton, Co-Founder of StockTrim, an inventory planning software for SMBs.
Dominic shares interesting insights on:
- Teaming up with a technical co-founder and raising $575K in seed funding
- How he started with a prototype and a few early customers.
- What’s been working in terms of customer acquisition
- Their go-to-market strategy involving strategic partnerships
- Resilience and an entrepreneurial mindset to navigate the ups and downs
These are valuable pieces of advice for SaaS Founders and their teams.
Check out all our SaaS Founder Interviews here on our YouTube channel.
Introduction to Dominic Sutton and StockTrim
Peter Loving: Okay, so I’m here live from StockTrim. Dominic, would you like to take a moment to introduce Tell us who you are. And what do you do?
Dominic Sutton: Yeah, my name is Dominic Sutton. one of the founders. I’ve got a founder as well of StockTrim stock trims and inventory forecasting SaaS business. I’ll tell you a little bit about what that does later but we’re based and the head office is in New Zealand. So, yeah. we’re a B2B focused SaaS, targeting the SMB market and our audience is global but mostly in English-speaking countries.
Peter Loving: Okay, And yes should we touch on what exactly that is that your product does who it serves some and what it does for them?
Dominic Sutton: So we work with mostly manufacturers, wholesalers and retailers to a certain extent, mostly in the e-commerce area. Our software reads all the inventory behaviour. That’s and usually in a recording system of some sort, Inventory Management System, e-commerce platform, Point of Sale platform. It reads those behaviours and analyses it using some AI algorithms and plots those for customers and basically tells them, how to… what the best performing products are. But also not only that, but also how to order. So to read all individual component,
Dominic Sutton: Items and a manufactured product. They’re different velocities, how they’re being used and items and will tell you how…Will actually produce recommended purchase plans, in order for you to send off to your suppliers.
So the key outcomes of that, without getting too, technical is a fully optimised inventory. What an optimised inventory means for a small medium sized business, who didn’t have access to this kind of technology before is up to 40% savings and working capital around about 50% reduction and stockouts. So you can’t sell something you don’t have. So it’s a profit related issue and a customer service issue, of course.
Then the third, key outcome, is obviously the software’s automation. So it saves a lot of manpower time. We’re small medium business owners, often pouring over spreadsheets, applying formulas and producing PO orders. So the software does all this for the users.
Peter Loving: Sounds like a really awesome platform and Dominic. Are you a solo founder? Do you have a co-founder?
Dominic Sutton: I have a co-founder, Paul, so he’s my technical co-founder. I’m a marketing sales and marketing guy and have been for most of my life. I couldn’t write any code at all, so the good thing about I mean co-founders, some guys like to go it alone and I normally have in the past but having Paul is a technical founder. He’s really good at what he does, he’s written the core software. it’s our code and Paul really knows what he’s talking about. So we’ve got cleared of domain expertise and we pretty much respect each other’s area of expertise so it works well.
Building the Product
Peter Loving: And how did you guys build the product? You’ve fundraised to build the platform so far?
Dominic Sutton: A Paul built the initial prototype just working as a side gig to as paid employment and got a couple of initial test customers that you could call and beta customers. Paying customers, just a handful and then he met me, I was searching for something that could solve a problem. The history is, I had a problem with one of my previous businesses. I bought a toy importing and wholesaling business.
Dominic Sutton: It was kids toys. Don’t do it guys. If you ever think about it, it’s a horrible business and I promptly started losing money because I just didn’t understand my inventory properly. So once I got out of that business, when I saw what Paul was doing, I said, look this is just great, small businesses need this. If I had had a tool when I had a toy, but if I had a head StockTrim when I had that toy business, I would have saved myself hundreds of thousands of dollars within a short period of time, just in purchasing and having the right optimised stock. So to come back to your question.
Dominic Sutton: I got involved and I was the initial funder, technically, apart from Paul’s time building the initial product and then we adjusted up rebrand…Built a more SaaS user-friendly, UX website, got a CMS platform under it, with hubspot CRM, and started scaling from there. So it was my initial funds and then we went about a year later. We went to do a capital race.
Peter Loving: What have you raised so far? What kind of stages of funding? Have you gone through?
Dominic Sutton: We call it a seed, we raised just over half a million dollars about 575K. We didn’t want to raise too much more as some of your viewers will know the early stage seed funding can be probably some of the most expensive funding you’ll ever receive. Because you have to give away a great percentage of shareholding for not a huge amount of dollars, considering your great plans for your SaaS. So we didn’t want to raise more than we needed to. So we raised about 575,000, I think on evaluation of around about 2 million dollars which is pretty good. Considering we’d only been going for about a year.
Peter Loving: Yeah, that sounds great and okay. How have you used that seed funding so far? What has been your focus with that?
Dominic Sutton: The two very clear areas, I mean we are a very light footprint from a fixed cost-based point of view. We’ve got a hybrid and we’ve got a remote team, remote-first, very low overheads, other than… so so from efficiency of funds raised, we’re very efficient, we put that money straight into acquiring new customers, customer acquisition, marketing and a few extra sales reps. Also into the product, into the development team so it’s pretty much gone straight into things that generate more. No fancy offices for us. Unfortunately.
Peter Loving: What have been your tactics? Your go-to-market, kind of strategy? What’s been working for you in terms of customer acquisition?
Dominic Sutton: One key thing to understand about us is that we are an add-on tool. Like I mentioned. Remember those inventory management systems we have to attach and read data that’s there. And the data is not initially ours, we don’t create it in our software, we take it from another system. So we’re an add-on tool. There’s some strengths, and weaknesses of that, we’re very fast to be adapted. it’s very easy to use, and you can pretty much go on a trial, and be pretty much using the product within an hour. So, to its full extent. The downside is that we’re not the core system.
So, what I’m saying from a go to market strategy, is that partnerships are probably, especially with our integration partners, is probably a really key area because those guys are already dealing with our future customers, right? So SMB… finding SMBs at the cost of acquisition SMB customers at a cost of acquisition that works. Especially when, we are introducing something that SMB business owners aren’t used to using, we’re not taking customers off another inventory planning and forecasting system, usually we’re taking them out of using spreadsheets.
Peter Loving: Okay, okay.
Dominic Sutton: So there’s a little bit of education, so that other key area is just creating articles and information that small meeting businesses are hungry for, they’re having problems with their inventory. They want to find how to fix this problem, which is, usually I mean Betty in accounts has ordered way too much of the skill and it’s going to cost us or we’ve got all this wastage happening over here. So they know there’s a problem. They go to the Internet. How do I fix my overstocking problem or something like that? And we want to be there.
It’s tricky. we don’t have the funds that some of these enterprise system guys have and they’re after our keywords. So we have to be very I don’t know, almost and street fighting style of trying to acquire customers. Google AdWords,
Peter Loving: Yeah.
Dominic Sutton: Picking up customers directly is great. Problem, as if we pick up a customer direct and they don’t have an integration, it’s harder for us to onboard them. So we keep coming back to partnerships as best to just communicate and work through our existing partners.
Target audience and value proposition
Peter Loving: So would your ideal customers already have a platform? I’m aware of Unleashed within the, kind of, inventory space. I have a platform like that and then you’ll integrate with Unleashed?
Dominic Sutton: Exactly. That Unleashed, Katana, Cin7 are really good partners of ours, another Kiwi
Dominic Sutton: Great, Kiwi, software company, Unleashed is too actually. We will integrate with accounting platforms like Xero or QuickBooks, but most customers that are sitting in our target, which is sort of the 1 to 20 million turnover size. They’re not using their accounting system to record their inventory, so, yeah, you’re absolutely right, spot on. Usually an inventory management system or even ERP systems where the user doesn’t want to use the existing Demand Planning module, because it is not user friendly.
Peter Loving: Interesting. That’s good. Okay, I guess that can always be a bit of a risk, but also a route to market because you’ll sometimes have users of these bigger platforms that are looking for the kind of functionality that your platform provides. So they might integrate through the marketplace of one of the bigger tools, right?
Dominic Sutton: Yeah, really yeah, it comes down to the psychology of the user. It depends on where they are on the size of their business, the one to twenty million turnover user, they want something that’s accurate, you need it accurate, that’s a core requirement. But it needs to be affordable for those guys. And they always assess value, the approach to things, completely different from an enterprise level customer, and they need it to be easy to use because a lot of these guys aren’t Demand Planners or Inventory Forecasters or Inventory Managers, it’s just a guy or lady. That’s found a product, we’re creating a product, it’s selling online or they’re making it and they’re getting more orders and next many of their businesses in the five million turnover and the spreadsheet is just not going to work anymore for us. So, that’s the stage where we’re going for.
Resilience and the entrepreneurial mindset
Peter Loving: Cool and Dominic sounds like this isn’t your first business and in your entrepreneurial kind of experience you’ve learned a little bit about the resilience of a founder. The mindset. Can you talk to us a little bit? Because we just got a couple minutes more, but I’d love to hear a bit of your take on the kind of, like, mindset that you need for being a SaaS founder.
Dominic Sutton: Yeah.
Dominic Sutton: Yeah. I mean I’m a little bit older. I’m in my late 40s and I know, some of the listeners will be, that they’re in there, maybe even their 20s. Got a great idea. Just going for it with the software product good on them. But being a little bit older, I’ve got a little bit more hindsight. I’ve made lots of failures and I’ve had some great successes.
The key, I’m sure they’ve heard this, the key is, you’ll have events in your business that you think is just the end of the world, you’ll go home and you’ll go, I think it’s over. It’s only over, if you say it’s over. I mean, there’s just some ideas that just won’t work, no matter how much money you throw at it. But if you’ve got a good idea and you really believe in it just keep going. Because some of these events you look back and you go, that wasn’t so bad really and it taught me a good lesson. And so, life’s just a series of getting kicked in the guts, learning and you become more robust.
Dominic Sutton: So, treat every kick in the guts, almost learning lesson and almost learn to welcome….I know that sounds hard to fathom right now, but every value you have it’s almost like something to be celebrated even though you don’t want to have too many of them in a row because it can really knock you. So that’s what I learned. And I follow up with some stoic philosophy which helps to cope with seemingly doomsday scenarios really
Peter Loving: That’s great. I love the outlook there, Dominic, that there’s lots to learn from those kinds of experiences and I like that phrase that you said about, it’s not able to say It’s over. So you can always keep going, but hey, and thanks for your time. It’s been great to talk with Great to learn a bit about structure.
Dominic Sutton: Yeah, that’s right. Yeah.
Peter Loving: And yeah, how can people follow what you’re doing? And check out your product.
Dominic Sutton: We’re stocktrim.com as our website. Pretty easy. All one word, StockTrim. I know. I’ve got a hard to understand accent and you can follow me on LinkedIn if you want. I engage quite a lot on LinkedIn. And so just follow me Dominic Sutton StockTrim, and you’ll find me there, welcome to have you, to connect with you. And that’s probably the two key areas that somebody could connect with me or the business.
Peter Loving: Thanks great to chat with you Dominic
Dominic Sutton: Thanks Peter.
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