Scaling Execution of A SaaS Business: How to Scale Your ARR 5X

my name is yaros Lazer I'm CEO of railsware builds three products um with this this is about a collective experience so um it's about how we scaled 5x and what were the operations behind it and how we we stand it so over next 20 minutes we'll we'll go through how do we go there uh before scaling and

being able to scale um how it got stuck what kind of uncertainty were there and uh idealism uh pre-scaling um how to get out and uh what what to do in order to be able to scale a company understand your operations and how you can how you can do it and then what are some practical advices for you guys to to to scale up and uh to be effective with that so how did we get here so at at

first we got stuck if if you look at this uh graph we had a a a things were coming out things were going away uh everything was linear for for quite a while uh up until the time when we started growing aggressively we had the model we just couldn't handle the growth we couldn't handle um executing in all the directions that would enable us to get the growth so we got stuck and uh that

was the the room that that I was sitting at it's a little war room room uh some people call it the little crazy room uh where um I was I was stuck with this huge uncertainty uh what are we as a company and what elements of the company have to move and have to scale uh in order to get uh to to the state where where it's just you know nice and easy um so I I've been trying to map out the uh the operations of companies we were at like 50 people at the

time um so the most of the the the the process that uh we had to do that that um let me see something wrong with oh okay here it is all right so uh basically the idealism um so we were we wanted the company to be still great at every step of the way and this idealism uh what what got us stock so we were good at product management at

engineering designing uh um and sales we were not great at doing all the rest of the things that the company has has to deal with which is like marketing uh the crafts uh didn't um expand and and didn't uh uh grow uh we had to pay salaries and bonuses to people so people were leaving or uh uh because they were not treated uh properly uh hiring was not great uh it was spotty uh events and fun as an

important part of the culture it was not execute executed properly offices procurement travel legal Finance all those functions where uh pretty much troubled stalled and um um you know it's the the the industry say or like the best practices of these she says hire perfect people um or grow people in house but those two things have a lot of um black knowledge in it so it's there's

there's a lot of there's a there's no uh understanding of how do you do it meticulously and step by step in order so to to actually figure out how do you grow those people in- house or how do you hire right and there was this management Hall so we didn't have effective people who were able to take on an area and just do it and when you hire the wrong person you figure it out six months later and you you figure it out six months later you're you're stall there's it's it's such a huge pain right and then typically so there was two of

us me and my partner he he would focus on marketing I I would focus on the rest um and that was a very transformative and interesting path um so eventually we did it so let's start backward um uh we succeeded uh in growing and um uh we looking back we know what the process was and and how we can what is there to share so how did we get out of it so first of all we built a map of the company so we're starting from the map of the company then the right people and

the right seats and then uh what do you do with your projects and processes because this is the only thing that happens in the company you you progress this projects and you stabilize this processes right so how do you build a map there's a video which someone doesn't have access to uh for playing the file it was a it was a great video Let's see there's two videos okay none of them have access that that that was a beautiful video I spend time on

that I mean I can share it right now I guess but that would be too late anyway idea was that um we were progressing throughout as I was learning what the company is and how does it function the map of the company was shaping we have the final map of the company which is a Pity because the the path was very uh very hard and brutal so that's eventual this is the

map of the company that we operate on right now every line in this map has a particularly important function and every line needs to have a a person who who leads this function a person who understand it the stars on the screenshot represent the level of understanding of the management uh of of those particular functions you know and then you have things like people or events or charity or office and operations all of them uh are an important part of your uh company and if

you're not uh cutting Corners if you're not pushing all your people through um you know bad operations so they eventually leave and uh um the company again cannot scale uh there has to be every one of those lines have to be um empowered there has be an empowered individual who can own kind of those um um elements of the company the lines of the company and uh can lead it through um

the we have a very rigorous way of hiring the people but hiring doesn't solve all the problems so this is our actual uh screenshot from uh the hiring metrix we look uh through 11.3 thou uh 11,000 300 people in the last 18 months which is a brutal amount for a company of 200 people size but we're a bit crazy about it um and there's a reason for that um out of those 11,000 we hired just 107

people so uh a little less over 1% conversion 0.95% the r of the people were rejected throughout the process and and uh um every time when we would just losen up this metric of how many people do you hire and and who comes in um all sorts of bad things would start uh hopping in the company there there are cultural problems there's knowledge problems um the people who were supposed to be focused on growth and uh execution of of

the um the best uh possibilities that that you can capture from the market are starting to shift into the problem space and starting to solve the problems instead of like capturing you know growth of the company or or expending it um and then we found that this is the necessary evil we have a uh for the company of 200 people we have nine recruiters who who have to par through those hordes of people the 11.3 th000 right and uh you have to create a proper

brand uh which is separate subject in order for you to even capture uh this this many uh applicants we spend quite a lot of time on every applicant as well 30 minutes uh on a screening call where um you actually get the taste of the individual but at that time as you see uh only tenth of people arried to the screen to the screen call Profile review and test tasks are are killing a lot of the candidates uh cultural fit uh then RPI uh which is an incredibly important

element and uh I'm I'm putting so many efforts into this because it's this is one of the most important things that help us grew eventually over time that you have to strategically put time into um we spend 90 minutes doing a pair candidate work so we we work together on a problem and uh you actually get to see what the other individual has in their head are they rushing are they listening to you do

they even understand the task uh it's uh it's pretty hard to kind of you know like um skip this one or or or or do it incorrectly um and then for every role in the company we would spend time on on Des sparing on spending 19 minutes with every candidate and then we do a lot of them um then there's a cultural fit where an a top manager would like a a lead within the company would join the call and would actually understand

what's up with the what is what is happening in the head of the candidate why are you even applying for this company and uh what what the potential outcome could be and then we spend full days so we spent eight hours with every candidate uh typically two people four and four hours and by the end of those eight hours we actually understand how the person works and uh what's in their head um can they do the job do they have the right energy uh it is very hard to fake an 8 hour working day no it's still possible um

and that that's the Cornerstone for the right people right seat um so the kind of the uh it is a very know very wellknown fact that the the most important thing for coo to do is is to execute the proper hiring strategy and uh the best way to do it is to actually learn a lot of the functions yourself and understand them who who is it that you're hiring in the process and we worked with a lot of like billion plus evaluated level uh companies when they skip this

step it it's um while they have the revenue they don't have the executional power and they are not able to ship and deliver anything within their company and and this is it's like going to the gym you need to put the hours and you need to do it well multiple times a day at least three times a day this is the same thing um otherwise what happens is that you hire people a you spend a lot of time on them then people a get tired of hiring and they hire people B people B uh are quickly hiring people C because

they need some naysayers and they need someone to to just say yes to them yes there is uh and people uh see hire eventually people Z and people Z do absolutely nothing within your company except for burdening your uh life and your money and your potential uh for the future uh so if you look around then you see people Z everywhere but it all started with the people a and eventually from the CEO of them not spending time just saying get the job done right and then networking with others to understand who are the right people

within your industry and within a particular uh part of your company is very important um the second thing uh that can help you a lot is uh Frankensteins so very often you don't have the right person for the job nobody can do the job or someone who who is who is supposed to do something bigger in the company can do the job what what you have though is you can take multiple people break them apart and take the

functions uh like in a movie money bow take the best functions from every particular person in the team and join them back in a Frankenstein that can execute uh division uh execute the certain process uh as a top manager you have people that you can delegate through and you can push through them uh to get a certain thing done for example this is this example is oo which is an Erp system nobody did Erp in our company ever before so we we took an ARP

developer we took uh an ax hat of recruiting uh and data analyst who knew how data is flown in the company and from out of them we created a new creature that that was able to to execute the leadership function uh to to push the Erp I was leading uh the team for a couple of months and um uh on part part-time involvement but then the team was able to the team was baked and they were able to execute that particular uh part of the company that particular

function and and that's basically that's something in between uh hiring and growing the people you kind of do both and then you use the both uh the best from both worlds and uh this is how you you know push it through and then the third step is projects and processes so um typically meetings don't lead to understanding of what the company should do uh you need to spend efforts into

understanding your projects what what is happening within what is happening within new projects the lead structures within the projects people that run the projects um uh there's a particular approach to that and I'll share it in in the next section as we do it but uh projects have to be well understood and well owned uh the one of them is also understanding your processes so uh you actually need to own your processes you

need to uh write them down describe them and uh um uh have team members who who uh have the Practical knowledge how to do them um like 10 10 99's taxes or payroll or um the um the barding stuff right the uh onboarding activities that happen how the project starts uh how the new client is being added uh um how things how how clients are of boarded um

and so on and uh then you need to develop your people step by step uh you cannot just drop so if if you were if you're like a high growth individual and you're being through functions throughout the years becoming better at every step um um it's a it's a really hard experience uh to replicate it into the new people they typically are confused they don't understand uh what they're getting in into so there's you need to have a way of developing people

step by step and for them to actually understand how how are they going to be successful they need to feel empowered uh successful not not silly while executing those functions so just dropping and delegating people is not going to work and uh there's a there's a framework for Clear communication and we'll we'll talk about that so I I'll tell you how you can do it based on how we did it um so mapping your company basically back to uh back to this example um this is an internal tool that

we did uh we're probably going to release it to the market but uh we create an internal tool for ourselves um you know because I guess we just like to create intern tools um it's it it created the map of everything that has to be done within a particular function so for example take coupler coupler has sales uh uh product strategy development management uh um uh marketing legal and all of them have certain projects and processes that are connected uh within

it somebody some some particular people have to be responsible for them and they have to lead through them the moment you create the map you start using the same uh names for everything you're using uh instead of saying accounting or Finance or like the money people you're using the we we have this particular accounting legal and finance name uh your policies are named the same way your uh recruit and hire processes are named the same way that way when

you're you're using the uh dictionary and you actually uh everyone understands what it's you know what it's coming where is it coming from and what it is is because they have a uh a map um of of the company and and everyone looks at the map and then you basically we were building it throughout 10 years that that's where I have that beautiful video where it was U migrating throughout 10 years um after you build a map you need to we

we have an approach called Bridges the bridges approach gives ability for people to close down in room and extract knowledge that is worth probably 3 to six months of a step-by-step uh collaboration I did personally aund of them with clients and my own teams in all sorts of uh uh parts of the company including finance and marketing and product obviously and and so

on Bridges is incredibly powerful tool to create a like a spirit of the team so when one particular team Clos in room um you get this like well in the days of remote they're closed hell knows where but um uh it still creates this Spirit of the team uh and a focus for the team and you build up uh um Bridges has a way of explaining it and we have it on our website there's going to be a QR code in the end that

you could capture um it helps you capture the uh understanding of who you're working with who are the people uh and the roles connected to the problems that we're talking about what are the issues benefits and risks of those people what are the goals of the company what is the domain knowledge of the company and that um uh it shares a tremendous amount of information uh within pretty much one day of work you can learn whole context whole domains

how things work how like us education is very different than education in Europe us medical is very different than Medical in Europe or you can learn trading which is an incredibly like whatever you know about it is not true and then once you dive into the domain this is like the most effective way uh how to dive in and then definitely do uh take read about it there's a lot of videos uh that we produce as well um everyone is on one page as a result because there's one page in front of you

everyone looks at the same things uh you can point fingers you remember stories uh uh it's years of information it it lowers the fear of people uh not understanding um like do I understand what we're talking about or do I not understand am I going to look silly when I ask the question question about a particular subject was it Shar it or not um so uh it lowers the fears of the team which is very important uh element now there's um after that we do

a thing called codify processes um so you extract the steps of the so companies have lots of processes someone has to put the toilet paper into the toilet someone has to clean the coffee machine in the particularly this is the uh process our process where we clean the coffee machine and then we have a fourth office manager being switched over a role in in CCO but the coffee machine stays clean over the years

because the process is documented and it's handed over uh to the team and you can say that you know if we are already um if you're uh we have a process of cleaning the coffee machine we have about 1.7 th000 processes across the company how to do lots of much more important things um you there's a way of uh templatized uh templatized then scheduling it uh and repeating it and we build a product around it and uh it's going to be accessible through the CER

code if if that's something your company is struggling with specifically operational excellence you can read about it uh but you extract the steps after you look at the steps of the process you can optimize it only then you can optimize it you cannot optimize it from words of a person who's who's telling you something you can look through it and you can change it and if you can change it you can deploy it back to your team like AWS services so basically whatever happens in your company if you don't like it you can write it down as extract steps you can look at it optimize it and change it and

you can deploy it back to your team and the team will execute it in a different manner now because it's well documented right and uh it's great for new members it's great for existing members in when things like Co hit you need to like change the way your company Works Co did hit us hard right and then we what we were able to do is to go in and then change a couple of hundred processes and we change the way our company executed so I also strongly encourage you to do that and then you develop people

um so you know after the rigorous recruiting uh and then you found the right people they are a muscle and you have to retrain them and you have to reposition them because they don't they're they're a part of a bigger mechanism and you need to put them into the proper place and you need to be them help them be successful because sometimes they are successful but they don't know you need to give them feedback you need to provide them understand understanding and framework right and this is one of the Frameworks is individual development plans in

particularly this is an example of individual development plans of the person on the left it's the skills that the person wants to execute on the right is the projects that uh they're executing Pro projects and processes they're executing within the company uh and then what's their success and what's happening within them uh and so on this is spreadsheet but we'll also build a tool soon about that and deliver it to the market and make people happy um so when you have standard onboarding

which is also set of processes it's very important so so everyone understands the same type of information and everyone feels much more connected because they read through like your playbook uh which which takes me to the third step Playbook is as an important tool of the company to express itself to say this is what we do this is how we do it and then when people actually with when you give them time at the first days of onboarding to be onboarded then you can go through the play they should go through the play B and they should understand uh how things work and then

they feel much better together working as a team so it's a kind of a team building experience right and then um okr and all hands so basically the company has to have big goals ideally over the company map and then on all hands you just share them to people with same consistent framework that way uh people feel that the the company is moving somewhere in which particular where which particular way um because you have a map and you are consistent

with the map and then you have those goals and you're consistent with the goals and this is this gives you this sometimes gives you like a productivity out of the people like 3x out of what you wouldn't have before right if you implement all of those processes you get a lot of x uh if you don't have the Z players all around right if uh you hire the right people if you have the standard on boarding and everyone understands what's happening if you have the the uh proper Playbook and people understand what's happening uh and very

important individual development plans we we had one-on ones before it was more like a free psychologist session by a manager it's great but it's uh but idps are particular elements where people feel the connectivity they feel a responsibility for executing them because you agreed and then they then they feel that they're a part of this big massive map that is propelling them and moving them forward um and on all hands you know you you you feel that so for last 20 minutes

we we discussed I don't know how many minutes there was um we discussed how how we got there so um you know this particular speech is not about like how do you grow your SEO or how do you grow so how do you withstand the grow pain of the company uh and you can grow 5x with those meticulous steps right and then how we got stuck how we managed to to go through uncertainty uh idealism doesn't work uh but if you do the mapping of the company cre the map of the company it

can be on a paper that what what was on my videos do the right people approaches and uh you work on your projects and processes you you write them down properly and then basically you saw how we did it with what kind of tools and um you know if that uh sounds interesting uh or exciting to you there's some existing resources and products that uh that we have that we share with the community there's a um and then you can record interest of upcoming releases some of the stuff that we're going to

release we're going to release templates and texts and products and so on and then you can connect me with LinkedIn and tell me some good stuff hopefully um and and that's it that concludes my speech thank you guys