Typical Timeline to $1M ARR
First, let’s look at the question that france telegram phone number list many people are wondering about: “How long will it take to reach $1M ARR?”
Average B2B company : About 2 years old
After first customer acquisition : Approximately 1.5 years
Goal setting : Aim to achieve $1M ARR within 1.5 years of acquiring first customer
Interestingly, there isn't much difference on this timeline between companies with large annual contract value (ACV) (e.g. Looker, Gong, Sprig, Vanta) and companies with smaller ACV (e.g. Loom, Figma).
However, it is important to note that in some cases, intentionally delaying monetization can be a valid strategy. For example, Loom co-founder Shahed Khan said, "We intentionally did not monetize Loom for a few years because we were focused on becoming a pervasive tool within organizations."
A key growth channel for B2B companies
Let's take a closer look at the key growth channels that top B2B companies are leveraging.
1. Organic Inbound (Self-Service)
This is the channel where users hear about your product from others (or are invited to do so) and then sign up themselves. Companies like Loom, Figma, Segment, Gusto, Hex, and Linear have grown primarily this way.
Features :
Users run their own trials and pay with a credit card
People often subscribe after seeing other users' content (e.g. Loom videos in Slack or Salesforce)
Many of the participants are from open source activities.
2. Organic Inbound (Sales Assist)
Similar to above, but in this case the sales team is helping with the leads. Companies like Looker, Ramp, Vanta, Hex, Census, Persona, and parts of Amplitude and Segment are growing in this channel.
Features :
Most of the inquiries come from the "Request a Demo" button on the website.
Customer referrals are a powerful channel
All growth is inbound, but it takes a sales touch
3. Outbound Sales
This is classic sales-threat growth: the sales team reaches out to prospects, makes a pitch, and closes the deal. Gong, Zip, and parts of Ramp and Segment have seen strong growth in this channel.
4. Content/SEO
Surprisingly, content has become a key growth channel for many top B2B companies, with companies like Vanta, Amplitude, Figma, Persona, and most notably HubSpot finding success this way.
5. Paid Advertising
It may seem low-key, but paid advertising works. For B2B, this means advertising on Google, Facebook, LinkedIn, and sometimes even podcasts, newsletters, and other less scalable channels.
6. Partnership
It can be a huge payoff if it works, but a huge waste of time if it doesn't, and it's been a key growth channel for companies like Census, Hex, and Zip.
point
Focus on one of the top three channels: inbound self-service, inbound sales-assisted, or outbound sales
No matter how you start, you'll eventually need a sales team
A content strategy works for many businesses, but it's important to build a scalable system rather than a one-off effort.
PLG (Product Led Growth) needs to be considered carefully. It is not suitable for all companies.
Timing and pricing of charges
Finally, let's take a closer look at a topic that many founders struggle with: timing and pricing.
When should you start charging?
One thing that many successful founders emphasize is that you should start charging sooner than you think you should.
"We wasted a year and should have wanted monetary value sooner," says Amplitude co-founder and CEO Spencer Skates.
Zip co-founders Rujul Zaparde and Lu Cheng advise that you should be careful with feedback from people who aren't willing to pay.
"Most companies start charging too late. We started charging from day one," says Front CEO Mathilde Collin.
Early revenue is liberating. As Notion co-founder Akshay Kothari explains, "Charging early gave us massive leverage for years to come."
Pricing Strategy
Setting the price higher than you think Tomer London, co-founder and CPO of Gusto, reflects, "We set the price incredibly low in the early stages, which was driven by a lack of confidence on the part of the founders."
"My sales advisors told me, 'Double your price. If they say yes, double it again,'" says Calvin French-Owen, co-founder of Segment, which doubles its prices until they stop working . "I did that many times."
Keep it simple at first: Eilon Reshef, co-founder and CPO at Gong, advises building friendly relationships with your early customers, who are willing to take the time to use your unfinished software.
Regularly reviewing your pricing strategy Stytch co-founders Reed McGinley-Stempel and Julianna Lamb say they should have reviewed their pricing every six months.
Pricing approach
Look at benchmarks : Look at industry standards and competitor prices.
Use pricing surveys and regression analysis : It's also effective to ask your users directly. Loom conducted pricing surveys with tens of thousands of users.
If it's usage-based, look at "utility metrics" : "For a long time, we didn't know what the right metrics were," says Boris Jabes, co-founder and CEO of Census.
Success stories
Figma : We based our pricing on existing similar products and carefully introduced new pricing tiers for large enterprises.
Databricks : After much trial and error based on customer feedback, we ultimately adopted a pay-as-you-go model like Amazon.
Snyk : We built a unique pricing model using the number of contributing developers as our metric of value.
Coda : Adopted a "pay-per-view" model to accelerate its growth cycle by making document sharing free.
