We're opening up Maki through a series of Medium posts. We'll describe what Maki is building and how. We'll explain how we built a SaaS in 100 days. This isn't a step-by-step guide to starting a business, but a product philosophy to help you build quickly.

Focus on end-users.

This may seem obvious, but it's important to talk to users first. When we started thinking about Maki, we interviewed 100 HR directors from SMBs, Next40 scale-ups, and major Enterprises to understand their concerns. We initially thought about the future of employment, but most of their worries centered on Recruitment. We don't have a clear recruiting process, it's time-consuming, we recruit clones, we don't support diversity, etc. And as hiring managers, we couldn't help but agree.

Co-create your product with your end-users.

We went to the drawing board, read as many books as possible (here, here, and here), and when we started getting a sense for a solution, we questioned 100 more operational HR specialists to corroborate the idea and get a feel for our potential answer. This confirmed our direction to help hire more objectively and efficiently.

Back to the drawing board, we designed our first flows and screens. We organized sessions with certain survey respondents to show them our early work and get comments. We got great input that helped us build Maki, and we met some consumers. Obsess about users and execute alongside them.

Don’t shoot for the moon, yet. Make pragmatic choices first.

Once we were convinced, we began building. To launch a SaaS in 100 days, we needed an operating principle that allowed us to accelerate while still providing a reliable, secure, scalable experience. We focused on adding value and outsourced everything else. Example:

Concentrate on adding value. Reuse existing bricks.

When determining which technology to use, we looked at our strengths and the future to see what would last. Node.js for backend, React for frontend, both with typescript. We thought this technique would scale well since it would attract more talent and the surrounding mature ecosystem would help us go quicker.

We explored for ways to bootstrap services while setting down strong foundations that might support millions of users. We built our backend services on NestJS so we could extend into microservices later. Hasura, a GraphQL APIs engine, automates Postgres data exposing through a graphQL layer. MUI's ready-to-use components powered our design-system. We used well-maintained open-source projects to speed up certain tasks.

We outsourced important components of our platform (Auth0 for authentication, Stripe for billing, SendGrid for notifications) because, let's face it, we couldn't do better. We choose to host our complete infrastructure (SQL, Cloud run, Logs, Monitoring) on GCP to simplify our work between numerous providers.

Focus on your business, use existing bricks for the rest. For the curious, we'll shortly publish articles detailing each stage.

Most importantly, empower people and step back.

We couldn't have done this without the incredible people who have supported us from the start. Since Powership is one of our key values, we provided our staff the power to make autonomous decisions from day one. Because we believe our firm is its people, we hired smart builders and let them build.

Nicolas left Spendesk to create scalable interfaces using react-router, react-queries, and MUI. JD joined Swile and chose Hasura as our GraphQL engine. Jérôme chose NestJS to build our backend services. Since then, Justin, Ben, Anas, Yann, Benoit, and others have followed suit.

If you consider your team a collective brain, you should let them make decisions instead of directing them what to do. You'll make mistakes, but you'll go faster and learn faster overall.

Invest in great talent and develop a strong culture from the start. Here's how to establish a SaaS in 100 days.

Christopher Janz of Point Nine Capital created the SaaS napkin in 2016. This post shows how founders have raised cash in the last 6 years. View raw data.

Round size

Unsurprisingly, round sizes have expanded and will taper down in 2022. In 2016, pre-seed rounds were $200k to $500k; currently, they're $1-$2m. Despite the macroeconomic scenario, Series A have expanded from $3m to $12m in 2016 to $6m and $18m in 2022.

Valuation

There are hints that valuations are rebounding this year. Pre-seed valuations in 2022 are $12m from $3m in 2016, and Series B prices are $270m from $100m in 2016.

Compared to public SaaS multiples, Series B valuations more closely reflect the market, but Seed and Series A prices seem to be inflated regardless of the market.

I'd like to know how each annual cohort performed for investors, based on the year they invested and the valuations. I can't access this information.

ARR

Seed firms' ARR forecasts have risen from $0 to $0.6m to $0 to $1m. 2016 expected $1.2m to $3m, 2021 $0.5m to $4m, and this year $0.5m to $2.5m, suggesting that Series A firms may raise with less ARR today. Series B minutes fell from $4.2m to $3m.

Capitalization Rate

2022 is the year that VCs start discussing capital efficiency in portfolio meetings. Given the economic shift in the markets and the stealthy VC meltdown, it's not surprising. Christopher Janz added capital efficiency to the SaaS Napkin as a new statistic for Series A (3.5x) and Series B. (2.5x). Your investors must live under a rock if they haven't asked about capital efficiency. If you're unsure:

The Capital Efficiency Ratio is the ratio of how much a company has spent growing revenue and how much they’re receiving in return. It is the broadest measure of company effectiveness in generating ARR

What next?

No one knows what's next, including me. All startup and growing enterprises around me are tightening their belts and extending their runways in anticipation of a difficult fundraising ride. If you're wanting to raise money but can wait, wait till the market is more stable and access to money is easier.

Or the “lie to me” method.

I can predict a startup's success in minutes.

Just interview its founder.

Ask "why?"

I question "why" till I sense him.

I need to feel the person I have in front of me. I need to know if he or she can deliver. Startups aren't easy. Without abilities, a brilliant idea will fail.

Good entrepreneurs have these qualities: He's a leader, determined, and resilient.

For me, they can be split in two categories.

The first entrepreneur aspires to live meaningfully. The second wants to get rich. The second is communicative. He wants to wow the crowd. He's motivated by the thought of one day sailing a boat past palm trees and sunny beaches.

What drives the first entrepreneur is evident in his speech, face, and voice. He will not speak about his product. He's (nearly) uninterested. He's not selling anything. He's not a salesman. He wants to succeed. The product is his fuel.

He'll explain his decision. He'll share his motivations. His desire. And he'll use meaningful words.

Paul Ekman has shown that face expressions aren't cultural. His study influenced the American TV series "lie to me" about body language and speech.

Passionate entrepreneurs are obvious. It's palpable. Faking passion is tough. Someone who wants your favor and money will expose his actual motives through his expressions and language.

The good liar will be able to fool you for a while, but not for long if you pay attention to his body language and how he expresses himself.

And also, if you look at his business plan.

His business plan reveals his goals. Read between the lines.

Entrepreneur 1 will focus on his "why", whereas Entrepreneur 2 will focus on the "how".

Entrepreneur 1 will develop a vision-driven culture.

The second, on the other hand, will focus on his EBITDA.

Why is the culture so critical? Because it will allow entrepreneur 1 to develop a solid team that can tackle his problems and trials. His team's "why" will keep them together in tough times.

"Give me a terrific start-up team with a mediocre idea over a weak one any day." Because a great team knows when to pivot and trusts each other. Weak teams fail.” — Bernhard Schroeder

Closings thoughts

Every VC must ask Why. Entrepreneur's motivations. This "why" will create the team's culture. This culture will help the team adjust to any setback.

The easiest online explanation.

Web3 is growing. Crypto companies are growing.

Instagram, Adidas, and Stripe adopted cryptocurrency.

Bitcoin and other cryptocurrencies made web3 famous.

Most don't know where to start. Cryptocurrency, DeFi, etc. are investments.

Since we don't understand web3, I'll help you today.

Let’s go.

1. Web3

It is the third generation of the web, and it is built on the decentralization idea which means no one can control it.

There are static webpages that we can only read on the first generation of the web (i.e. Web 1.0).

Web 2.0 websites are interactive. Twitter, Medium, and YouTube.

Each generation controlled the website owner. Simply put, the owner can block us. However, data breaches and selling user data to other companies are issues.

They can influence the audience's mind since they have control.

Assume Twitter's CEO endorses Donald Trump. Result? Twitter would have promoted Donald Trump with tweets and graphics, enhancing his chances of winning.

We need a decentralized, uncontrollable system.

And then there’s Web3.0 to consider. As Bitcoin and Ethereum values climb, so has its popularity. Web3.0 is uncontrolled web evolution. It's good and bad.

Dapps, DeFi, and DAOs are here. It'll all be explained afterwards.

2. Cryptocurrencies:

No need to elaborate.

Bitcoin, Ethereum, Cardano, and Dogecoin are cryptocurrencies. It's digital money used for payments and other uses.

Programs must interact with cryptocurrencies.

3. Blockchain:

Blockchain facilitates bitcoin transactions, investments, and earnings.

This technology governs Web3. It underpins the web3 environment.

Let us delve much deeper.

Blockchain is simple. However, the name expresses the meaning.

Blockchain is a chain of blocks.

Let's use an image if you don't understand.

The graphic above explains blockchain. Think Blockchain. The block stores related data.

Here's more.

4. Smart contracts

Programmers and developers must write programs. Smart contracts are these blockchain apps.

That’s reasonable.

Decentralized web3.0 requires immutable smart contracts or programs.

5. NFTs

Blockchain art is NFT. Non-Fungible Tokens.

Explaining Non-Fungible Token may help.

Two sorts of tokens:

1. These tokens are fungible, meaning they can be changed. Think of Bitcoin or cash. The token won't change if you sell one Bitcoin and acquire another.

2. Non-Fungible Token: Since these tokens cannot be exchanged, they are exclusive. For instance, music, painting, and so forth.

Right now, Companies and even individuals are currently developing worthless NFTs.

The concept of NFTs is much improved when properly handled.

6. Dapp

Decentralized apps are Dapps. Instagram, Twitter, and Medium apps in the same way that there is a lot of decentralized blockchain app.

Curve, Yearn Finance, OpenSea, Axie Infinity, etc. are dapps.

7. DAOs

DAOs are member-owned and governed.

Consider it a company with a core group of contributors.

8. DeFi

We all utilize centrally regulated financial services. We fund these banks.

If you have $10,000 in your bank account, the bank can invest it and retain the majority of the profits.

We only get a penny back. Some banks offer poor returns. To secure a loan, we must trust the bank, divulge our information, and fill out lots of paperwork.

DeFi was built for such issues.

Decentralized banks are uncontrolled. Staking, liquidity, yield farming, and more can earn you money.

Web3 beginners should start with these resources.

He kept it under wraps for years until he legally couldn’t.

His shirt is incomplete. I can’t stop thinking about this…

Actually, ignore the article. Look at it. JUST LOOK at it… It’s quite disturbing, isn’t it?

Ughh…

Me: “Hey, what up?” Friend: “All good, watching lord of the rings on amazon prime video.” Me: “Oh, do you know how Amazon grew and became famous?” Friend: “Geek alert…Can I just watch in peace?” Me: “But… Bezos?” Friend: “Let it go, just let it go…”

I can question you, the reader, and start answering instantly without his consent. This far.

Reader, how did Amazon succeed? You'll say, Of course, it was an internet bookstore, then it sold everything.

Mistaken. They moved from zero to one because of this. How did they get from one to thousand? AWS-some. Understand? It's geeky and lame. If not, I'll explain my geekiness.

Over an extended period of time, Amazon was not profitable.

Business basics. You want customers if you own a bakery, right?

Well, 100 clients per day order $5 cheesecakes (because cheesecakes are awesome.)

$5 x 100 consumers x 30 days Equals $15,000 monthly revenue. You proudly work here.

Now you have to pay the barista (unless ChatGPT is doing it haha? Nope..)

• The barista is requesting $5000 a month.

• Each cheesecake costs the cheesecake maker $2.5 ($2.5 × 100 x 30 = $7500).

• The monthly cost of running your bakery, including power, is about $5000.

Assume no extra charges. Your operating costs are $17,500.

Just $15,000? You have income but no profit. You might make money selling coffee with your cheesecake next month.

Is losing money bad? You're broke. Losing money. It's bad for financial statements.

It's almost a business ultimatum. Most startups fail. Amazon took nine years.

I'm reading Amazon Unbound: Jeff Bezos and the Creation of a Global Empire to comprehend how a company has a $1 trillion market cap.

Many things made Amazon big. The book claims that Bezos and Amazon kept a specific product secret for a long period.

Clouds above the bald head.

In 2006, Bezos started a cloud computing initiative. They believed many firms like Snapchat would pay for reliable servers.

In 2006, cloud computing was not what it is today. I'll simplify. 2006 had no iPhone.

Bezos invested in Amazon Web Services (AWS) without disclosing its revenue. That's permitted till a certain degree.

Google and Microsoft would realize Amazon is heavily investing in this market and worry.

Bezos anticipated high demand for this product. Microsoft built its cloud in 2010, and Google in 2008.

If you managed Google or Microsoft, you wouldn't know how much Amazon makes from their cloud computing service. It's enough. Yet, Amazon is an internet store, so they'll focus on that.

All but Bezos were wrong.

Time to come clean now.

They revealed AWS revenue in 2015. Two things were apparent:

1. Bezos made the proper decision to bet on the cloud and keep it a secret.

2. In this race, Amazon is in the lead.

They continued. Let me list some AWS users today.

• Netflix

• Airbnb

• Twitch

More. Amazon was unprofitable for nine years, remember? This article's main graph.

AWS accounted for 74% of Amazon's profit in 2021. This 74% might not exist if they hadn't invested in AWS.

Bring this with you home.

Amazon predated AWS. Yet, it helped the giant reach $1 trillion. Bezos' secrecy? Perhaps, until a time machine is invented (they might host the time machine software on AWS, though.)

Without AWS, Amazon would have been profitable but unimpressive. They may have invested in anything else that would have returned more (like crypto? No? Ok.)

Bezos has business flaws. His success. His failures include:

• introducing the Fire Phone and suffering a $170 million loss.

• Amazon's failure in China In 2011, Amazon had a about 15% market share in China. 2019 saw a decrease of about 1%.

• not offering a higher price to persuade the creator of Netflix to sell the company to him. He offered a rather reasonable $15 million in his proposal. But what if he had offered $30 million instead (Amazon had over $100 million in revenue at the time)? He might have owned Netflix, which has a $156 billion market valuation (and saved billions rather than invest in Amazon Prime Video).

Some he could control. Some were uncontrollable. Nonetheless, every action he made in the foregoing circumstances led him to invest in AWS.