Nov 14, 2022 · 16m · top-founders
How my shift from SaaS to SaaS+ moved retention from 74% to 107%
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
At the Founder 500 conference, OnStrategy founder Erica Olson explains how abandoning a pure self-serve SaaS model in favor of an integrated 'SaaS+' consulting-and-software approach transformed her bootstrapped company's net retention from 70% to 107%.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 10.7% of the talking time here. How this is scored →
Nathan as informed peer 0.0 Guest teaching 0.0 Guest disagreement 0.0 Nathan pushing back 0.0
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:55 Internal debate on service labor margins
Erica recounts pushing back strongly against her CFO's conventional SaaS objections regarding service labor costs in order to fix customer retention.
Hardest push from Nathan ▶ 8:27 Nathan promotes valuation comparablesNathan delivers a commercial read asserting that FounderPath's valuation tool is essential for founders to push back against investor dilution.
Biggest teaching moment ▶ 4:50 Reframing pure-play SaaS failureErica explains why standard DIY SaaS failed for strategic planning and why merging software with services was necessary to fix retention.
Nathan holds their own ▶ 0:15 Nathan highlights metric-driven founder talksNathan emphasizes his platform's standard of requiring speakers to show authentic revenue charts, retention graphs, and real artifacts.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Nathan Latka Introduces Founder 500 and GetLatka Platform | 0 | 0 | 0 | 0 | Nathan delivers an introductory monologue for the Founder 500 conference presentation before handing the stage over to Erica, who begins her solo talk on rebuilding OnStrategy from scratch. | |
| Blending Software and Services to Reach 107 Percent Retention | 0 | 0 | 0 | 0 | Erica delivers a presentation monologue explaining how combining software and services into an embedded model raised retention to 107%. Nathan does not participate. | |
| Managing Labor Economics and Deploying Senior Strategic Consultants | 0 | 0 | 0 | 0 | Erica continues her keynote presentation, discussing the unit economics of senior strategic consultants and maintaining 200k revenue per FTE without host interruption. | |
| FounderPath Valuation Tool Commercial Break | 0 | 0 | 0 | 0 | Nathan presents an ad read for FounderPath's valuation tool, followed by Erica returning to explain her strict inbound sales funnel. | |
| Unconventional Pricing Strategy and the Graduated DIY Model | 0 | 0 | 0 | 0 | Erica delivers a solo presentation segment breaking down their non-seat-based pricing model and quarterly graduated DIY structure without host engagement. | |
| Building Custom Retention Scorecards Focused on Business Outcomes | 0 | 0 | 0 | 0 | Erica concludes her keynote by detailing proprietary outcome-based retention scorecards and internal pushback overcome during the transition. The segment contains no host interaction. |
Statements from this episode (13)
OnStrategy reached $1.5M in ARR but hit a wall at 70% retention
“So we grew a SAS DIY model up to about 1.5000000 and we had churn, or we had a retention of about 70% pretty high churn. We couldn't change it. We couldn't fix it. We couldn't retain any more customers.”
Olson intentionally churned $1.5M in zombie revenue to rebuild OnStrategy
“We started all over again, and we churned out all, a 1000000.2, 1.5, In, in zombie revenue over the past, we have a little bit left, and we rebuilt the whole business.”
OnStrategy achieved 107% net retention via a hybrid software-service model
“Just this year, we changed it even more, and that's how we got the expansion revenue that got us to the 107%.”
Olson says OnStrategy is fully bootstrapped, debt-free, and pays profit sharing
“We are fully bootstrapped. We have no debt. Nathan. We are working too hard. We have no debt. We are profitable. We pay, pay, pay profit sharing and we're still here.”
OnStrategy generates approximately $200,000 in revenue per full-time employee
“But we're clocking in at about 200, K per FTE, and that's pretty good. That's above average.”
OnStrategy pairs every client with senior strategists instead of support reps
“Every single client is assigned to a senior strategist. They know The work. They know how to deliver strategic plans. They know how to write OKRs. They know how to manage a quarterly performance cycle. We do not have low, lower trained customer service reps.”
Olson says selling OKRs via outbound is like selling a root canal
“We don't do any outbound because selling strategy and OKRs is like selling a root canal. So we stopped doing that. It doesn't work for us.”
Olson says OnStrategy's average annual contract value is $30,000
“Our annual contract value is about 30 K.”
Shifting to bottom-of-funnel conversion content was OnStrategy's biggest growth unlock
“Producing content's easy. We are producing content, all of us, all of the time. Producing low in the funnel content that converts is something that we shifted to, and that was a big unlock for us.”
Olson avoids per-seat pricing because it creates barriers to OKR adoption
“We don't sell per seat, and the reason that we did that is because when we deploy OKRs, the more people that have OKRs, the better off we are. Why would we put a pricing barrier up in front of our customers?”
OnStrategy refuses to sell software without mandatory bundled professional services
“There's no question. We don't ask you if you want services. We don't ask you if you want an add-on. If you want to buy from us, it's software and services. That's how we sell it.”
Olson says a 30% price hike pushed OnStrategy's retention past 100%
“We increased our prices about 30%. We shifted to a quarterly pricing model, matched that up with our, like, our job to be done, which is managing a quarterly process and got paid more for that. So that's really working for us, and that's how we got to more tha…”
OnStrategy measures customer success by client KPI attainment, not app utilization
“We built our own metrics based on not utilization because we don't really care about app utilization. We care about the fact that our clients are delivering organizational performance. So if they're not hitting their KPIs and their OKRs, We are failing as an o…”