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B2B SaaS SEO Tool: Helping brands increase brand awareness, foot traffic, and sales

Daniel Melkersson is the founder and CEO of Pinmeto – B2B SaaS local SEO software for multi-location businesses. The B2B SaaS software helps brands expand their SEO footprint across physical store locations to increase brand awareness, foot traffic, and sales. Using only €3M in funding, Pinmeto has reached €6M ARR in sales, a very capital efficient growth.

Discovering the problem that Pinmeto solves

We started this company a few years ago, targeting the tourist industry. We built a widget for tour operators, tourists, authorities, and alike. Tour & travel websites could put a little widget on their webpage where someone visiting the page could log into the widget and see what their friends have been up to.

They could check in somewhere on Facebook or Instagram, could see reviews from Google and so on. So, when looking for information about locations on different social media channels, search engines, and maps networks, what we found was that the location data was very poor. So, we decided to build something to address this.

But the tourist industry was quite slow to sell to. So, we wanted to go into another industry. Our whole idea was to build a B2B SaaS business to help companies keep their location information updated on maps, search engines, and social media networks. That was the whole idea.

How did you discover pain points?

I started talking to future customers very early on. In a startup, it’s easy because you can say we’re starting off a company and we’ve nothing to sell to you. We just want to learn about their pain points. Then, we could say, “We’ve got this product to fix your pain.” Then, a few of those people we had originally interviewed later became our clients.

I always aimed to go very local in the beginning. So, I started approaching local companies. While the road was never linear, in some way, we found our way into the first product that we actually could sell. It took us about 6-8 months.

The first success: The first customer

I always try to go as big as possible, but also to start locally. Within Sweden, the biggest chain businesses are Volvo, H&M, and Ikea. So, we talked to all of them and actually got some traction early on. We got in contact with a good person at Ikea. So, we recruited Swedish Ikea stores as our first success story. The Swedish Ikea client and brand name helped a lot to get credibility early on.

But in the beginning, we were not allowed to say that we worked with Ikea. Ikea wasn’t our first paying customer. Our first customers were actually a fitness chain and then a gas station chain.

In the beginning, no one knows about your brand. So, I prefer piggybacking on big brands, and can say, “Okay, we work with this big brand.”

Strong problem statement to convince first customers for B2B SaaS companies

Some people say that you shouldn’t sell the problem. I say you should always sell the problem. You need to make sure that the other side feels the pain. And it’s quite easy for us because when we talk to prospects, we’re saying, “Okay, we can find three Ikea stores on Google Maps. The rest of the stores are not there. Or it’s completely wrong opening hours or wrong address.” That’s a very effective way to show the pain.

Sales Efficiency

What didn’t and did work, achieving sales efficiency for your B2B SaaS (€6M ARR with only €3M funding)?

Approaches that didn’t work well for us were that we had high hopes about emerging markets.

We tried to enter the India market. India is a very fast-growing market. We had a few great and very happy Indian customers. But they never paid.

Now, we know the India market and it’s risks. We’re from the Nordic. So, we moved to Sweden and tried to recruit clients from a variety of industries and build cases around those in the country.

Then, we expanded into our closest markets – Norway, Finland, Denmark, and so on. Now, we’re in 12 markets. In retrospect, I’d advise that when it comes to sales efficiency, try to do as much as possible to similar companies in the beginning.

So, if you’re moving to one industry, make sure that you figure out the problem with that industry. Make sure that you’re only selling to that industry until you know that you’ve created a brand name in that industry. After that, you can move into other industries.

We did it wrong and tried too many industries too early on.

If you had to decide on the go to market approach again, would you only sell to car dealerships all the way to €6M ARR?

Yes, I probably would. And I would do it in my home market first, which is the closest market. Then, I will expand globally.

So, I think you should hit your whole market and a few markets that you’re fully familiar with. Car dealerships are the industry where we are number one now, and we can onboard and deliver on those customers fast.

If you’re doing one thing well, then you’ve earned all the reason in the world to go globally after that because you can probably be better than your competitors in that industry.

Can you share your breakdown of customers across big companies and small customers?

Our main targets are SMEs (small and medium enterprises). Of course, we’re not saying no to big companies. But we also know that it’s up to a five-year sales process from time to time with these big companies. So, if you want to grow fast, I would suggest SMEs.

If you target SMBs, then you’re targeting two completely different kinds of companies. So, we try to stay away from SMBs because they don’t feel the pain enough. Also, they take up a lot of our time because once they’re onboard, they need a lot of educational help. It’s because they don’t have people who know digital marketing or this space at all.

With SMEs, we can close the business within a few weeks.

What is your average churn rate?

Our gross churn rate per year is 3%.

It’s a really good number. I think our product is quite sticky because once you have it, it’s like, “Okay, this is what we need to assure local SEO quality. If we don’t do this, we’re going to lose customers.”

We tend to lose customers either because they actually weren’t a fit from the beginning, ofen too small, or they change management, and the head of marketing comes in and says, “I’m going to redo everything.” But then, we tend to get them back a few months later.

With ACV of $20,000, 3% yearly churn, LTV/CAC ratio of 3, you can easily pay more than $50K CAC. Would that be fair?

Yes. That’s how we see it as well. That’s also because we’re a very sales-oriented company, but we always put product first. In other words, we’re not product-led company. Instead, we’re a sales-led company. We talk about the pain points. So, 90% of sales are outbound and 10% inbound. That’s how we decided to build this company.

There’re different ways to build it, and maybe, we’ll change it in the future. But with the numbers you said, we can afford to spend, and we know it works. It’s the way we’ve chosen to scale our company.

How do you balance – business expansion and burning more cash versus staying profitable?

At the moment, we’ve decided to burn faster in order to grow market share. Because we raised money two years ago, and the funds haven’t been used, and our investors want us to use them.

Now, we’re going from 50 to 100 employees in the next six months, and that will cost us more money.

But what we also started last year is to push up-selling and cross-selling. So, we’ve got three different products to offer within our platform.

Our most important KPI right now is net retention. I think we’ve increased it from a ballpark of 103%, to 110%, and our target is 115%, which drives profitability.

Do you give a sales individual a $1 million quota per year?

The more senior ones – yes. But our focus is more on smaller teams having quota, and then they share the quota within the team. The team sizes are between 2-8 people, and every team handles their industry.

What’re the keys to hiring, training and growing great sales individuals to meet their quotas?

It’s something we struggle with and try to be better at all the time. But very early on, you need some experienced A players. But they may not be super-efficient when it comes to handling teams because they’re self-driven and they work for themselves. They’ll work to drive their own individual bonuses. So, you need a few of those.

We’ve built a very structured sales development department. They hand the client to customer success (CS) as soon as the deal is closed. So, they can go back and focus on sales. Every team has sales development representatives (SDRs).

Then, we’ve got another part of sales organizations that we call sales enablement. We’ve got managers to ensure that we’re using our sales tools and educating, onboarding and handling our SDRs and sales managers in the best possible manner.

How your B2B SaaS company almost went bankrupt?

When we started this company, I wanted to learn how raising money, and VC funding works. The whole idea from the beginning was to have raised capital because I built companies before on my own. So, we raised money very early on.

We were at this incubator, and one day they had this event. You can walk in and pitch an idea, and I did. It was the idea we had before we pivoted into the idea we have today. So, the pitch worked and they ended up investing €200K.

So, we had an investor very early on, and after that, we pivoted. We used the money to build the proof-of-concept for our current B2B SaaS product. After that, I went after a brand piggybacking startegy. So, I looked for a company in Sweden that owns most retail store chains. They just started a VC company inside that organization that was supposed to invest in fast-growing SaaS tech companies or tech companies in general.

They gave us the impression that they are going to back us with bigger fund. They hired a few people and invested in general more money than the annual investment from the entity that had given us the early stage funding. They acted like lead investors. They told us, “Go ahead and build out the product. Hire developers, and we got your back”, And we did.

Then, they decided not to keep investing in early startup companies. So, they just took it away. The people that were hired to handle us were fired. So, we went from five founders and four people to 20 people, and it left us with a hefty burn per month.

We believed a new round is already fixed, and I talked to another big chain business in Sweden. They were supposed to co-invest in that round, and then, they also went away. So, of course, everything fell out. I was seven months without salary for founders, although we managed to carry salaries for our employees.

I think the last month was a bit hard, but then we found an angel investor. I’m not allowed to say, but they are associated with the biggest brand in Sweden. Because we were out of money, the angel investor has borrowed the money without any security. They borrowed us €200K, and I’m very thankful today for that fund injection. Without him, we weren’t here anymore. He saved us.

But we lost at least a year, one and a half, and two years in traction because of this because we had to focus on saving the company instead of building the company.

What mindset did you practice during those difficult times?

First of all, if I can make sure I don’t lose, then I don’t lose. That kind of stamina and grit help a lot.

I think, in the end, it’s much better to be the good guy rather than the bad guy in situations like this. So, we asked, forced it through, and luckily, we made it. I wouldn’t say it was pure luck. It was hard work because it was hard for someone to invest in a company where the lead investor walked away, even if we had good explanations for why.

What was the one thing that made the angel investor do it?

I think it had a lot to do with our perseverance. It’s more about believing in us as persons, and then the product itself.

Of course, we could back it up because we had a few paying customers and so on back then as well. But in the end, I think they asked, “If they made it so far, they would make it really far.” Someone actually said something like that when they invested in that round. So, it was very personal.

At the same time, it was really hard for the company. One of my co-founders went away for eight months because he couldn’t sleep. So, it was affecting them pretty harshly. But I think it’s part of the price founders pay when setting out to build a company.

Today, Pinmeto is growing by thousands of percent year over year. Today, many investors approach us for different reasons and with proposals for different kinds of investments. But we want to stick with the ones we’ve got so far and see where we go from here.

No stress whatsoever. We’ve money in the bank. We’re in a situation where if we want more money, we can actually work with debt, which we couldn’t afford in the beginning.

What are the challenges today?

I think the biggest challenge today is growing the company. We’re now moving into a hundred employees. So how we organize ourselves in a good way. How do we keep the culture? So, how can we sustain that culture we already have built. We help each other a lot here. We learn from each other, and we grow together. How do we keep that moving forward?

Another challenge is the effects of COVID when a lot of companies, like us, didn’t start as remote first companies. We started as an office-based company, and I think companies that are not fully distributed from the beginning are facing challenges adapting to the remote work environment.

Partially at home and partially at the office for two days or so. It’s harder to keep the culture when some people are in the office and some at home.

Which books, tools, podcasts, and blogs would you recommend in order to succeed in building a B2B SaaS business?

I listen to Nathan Latka because he’s got so many numbers in his daily news. So, you can actually make really good decisions out of it.

I’m reading an old book Synchronicity: The Inner Path of Leadership which is about how leadership should work.

Leadership is not about leading. It’s about helping people to lead themselves. Everyone in a scale-up phase in a company should think about this at least.

Coming to tools, we use many different SaaS tools. In sales, we use Pipedrive and GetAccept. Then, we use Rocket Reach to find information about companies. LinkedIn Sales Navigator is another one I like. In CS, we use Planet Swedish company for the whole customer journey in there. We use Vidyard for videos.

What are the opportunities your B2B SaaS is seeking?

Companies that develop complementary solutions to ours. We are looking to expand through M&A, or work together with other companies that operate not exactly in our industry but complimentary in some ways.

We prefer working with SEO technology companies and other kinds of marketing technology companies, especially if they’re focused on the local market. It means technology for large companies with a lot of physical locations around the world. Because that’s our customer base, and we’ve reached quite a big customer base today.

Other startups can piggyback on us.

Do you have any affiliate programs?

As of now, our B2B SaaS don’t work with affiliates officially. But if someone is listening this and they enable an affiliate platform, they can approach us. So far, we kept everything internally. Product development, sales, CS, everything is 100% employed internally.

Are you looking at raising maybe a bigger funding round?

Perhaps a bigger funding round, later on which will probably include some buyouts of early investors to clean the cap table. But that will be the only reason to raise more money.

So, Pinmeto is an amazingly capital efficient B2B SaaS company that successfully overcame investors’ rollercoaster, almost going bankrupt, bearing with seven months of no salary for founders when lead investor walked away. Now, generating €6 M ARR and growing from 50 to 100 employees, the B2B SaaS company is looking for complimentary products for acquisitions or partnership.