Hey - Marc here.

Happy Saturday morning, motivated B2B SaaS Founders!

Here's at least one tip to keep in mind as you grow your B2B SaaS company:

Today's issue takes about 5 minutes to read.

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In today's issue, I share some key takeaways from a recent interview between Nathan Latka, the host of Daily Interviews with SaaS Founders, and Steven Nelemans, the founder of Luna. They discussed why you don't need a new idea, just better execution, as their firm hits 160 customers with $25k MRR.

Steven Nelemans has raised $20 million for startups and built a $70 million startup at the age of 19. He's now working on Luna, aiming to build the best AI-driven salesperson. Luna is not just AI; it's an AI sales tool that aims to break through skepticism about AI sales tools being spammy.

About Luna

Before Luna, you had the choice between (1) doing hours of research and writing emails, or (2) landing straight into any spam box by using tools to blast hundreds of emails at once. Now, you can write personalized cold emails as if you've hired a professional to write them for you.

Their customers come from digital agencies and B2B SaaS companies. Digital agencies prefer Luna to hire a sales team, while B2B SaaS companies with growth ambitions want to scale up their sales efforts. The average customer pays about $139 per month for Luna's services, with tiered subscription pricing based on the number of emails and additional features.

They currently have 163 paying customers and about a thousand free plan users. They have a freemium model with tiered pricing and have seen about 37% of their signups come from referrals. They are working to improve their churn rate, which is currently around 15%.

The Luna team currently consists of three co-founders. Steven acknowledges that their main competitor is Apollo.io. While Apollo is larger, Luna believes it has a superior product and is focusing on growing its market share by emphasizing their competitive edge.

PS Luna raised a small angel round before launch to focus on product-market fit and user interviews. They are now considering another funding round to accelerate growth.

Challenges

They also receive a lot of emails in the current crowded email landscape.

AI, according to Steven, is the solution to the spam problem. Unlike other companies, Luna focuses not only on generating emails but also on finding the right leads and personalizing emails to improve quality. The goal is to reduce the number of emails needed to get a reply.

Advice to Other Founders

Premium features and autonomous mode are essential in driving expansion revenue.

The key feature that prompts free users to become paying customers depends on their sector. Highly detailed geographical targeting and timing-based targeting settings are popular among users and must be considered.

Embrace unconventional partnerships.

In a crowded market, identifying a competitor as a potential partner might seem counterintuitive. However, Steven's strategic approach of partnering with a competitor to target different segments showcases the power of finding complementary strengths.

Use early setbacks as learning opportunities.

Steven's experience of building a car-sharing startup that didn't yield massive financial gains highlights the importance of viewing setbacks as learning experiences. While financial success is a goal, the knowledge gained from failures can shape your strategies and decision-making for future ventures.

Dive deep into market research and user interviews.

Before even starting to code, invest your time in thorough market research and user interviews. Building a product without understanding your target audience's pain points and needs is like trying to hit a bullseye blindfolded.

Bonus

1. Steven’s current favorite book is "The Future is Faster Than You Think," which he finds incredibly intriguing.

2. When asked about his preferred online tool apart from Luna, he mentioned Excel. He clarified that although it's not precisely an online tool, it's his absolute favorite.

3. At 27, He manages to get a solid eight hours of sleep each night.

4. He shared that he wishes he had known everything he knows now about building a company back when he was 20. This knowledge would have empowered him to accelerate his progress even further.

TL;DR

GetLuna.dev is helping sales teams and digital agencies send emails. They are currently sending 24,500 emails a month, up from a thousand a month a year ago. Revenue has grown nicely, with a pre-seed round of $350,000 at a $6 million valuation back in 2022. They are now targeting a $2 million round with a potential $12 million valuation. They currently have 163 customers paying about $140 per month, with a team of three. They are scaling nicely and taking advantage of the AI trend. The challenge is to improve email reply rates, aiming for an industry average above the market response rate of 4.57 percent.

PS Here is a link to the full interview if you are interested in listening to the full episode: Proof you don't need a new idea, just better execution. Firm hits 160 customers, $25k MRR.

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See you again next week.

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