GUEST: SaaS Startup Advice You Wish You Had 💡 w/Steffen Schebesta, Brevo | Ep. 341

Summary

Episode Summary: SaaS Startup Advice You Wish You Had with Steffen Schebesta

Podcast: Do This, NOT That: Marketing Tips with Jay Schwedelson
Guest: Steffen Schebesta, Chairman of the Advisory Board at Brevo
Release Date: May 25, 2025

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1. Origin Story and Journey to Brevo

Steffen Schebesta shares an inspiring narrative of his entrepreneurial journey, highlighting his early passion for software development. Influenced by his father, a computer science professor, Steffen began programming in his high school years during the 1990s. This early start paved the way for his first venture—a software agency co-founded with a high school friend. However, recognizing the limitations of a service-based model, Steffen transitioned into creating a product-centric business.

In 2011, he launched Newsletter To Go, an email marketing software in Germany. Demonstrating remarkable growth, the company nearly bootstrapped to 80 employees before being acquired by a French competitor in 2019. Reflecting on his journey, Steffen emphasizes perseverance and adaptability as key drivers of his success.

Steffen Schebesta [01:12]: "Starting a company is probably one of the, maybe the most difficult thing I've done in my life. There are so many pitfalls, there's so many issues, basically problem solving all the time."

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2. Key Lessons for SaaS Entrepreneurs

Steffen delves into essential advice for aspiring SaaS founders, focusing on mindset and practical approaches to building a viable business. He underscores the importance of taking the initial leap despite uncertainties, likening it to significant life decisions such as having a child or changing careers.

A central theme is the necessity of resilience and a continuous learning mindset. Steffen advises that founders should embrace challenges and persist through obstacles, leveraging every setback as a learning opportunity. Additionally, he highlights the value of mentorship and collaboration, suggesting that having a co-founder or mentor can significantly aid in navigating the entrepreneurial landscape.

Steffen Schebesta [03:53]: "After you took that step, you'll figure it out along the way. So it won't be easy... But that's part of the journey and you will be able to figure it out if you're persistent and if you really want to do it."

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3. The Importance of Business Models in SaaS

A pivotal discussion centers around the significance of the business model in SaaS ventures. Steffen emphasizes that a recurring revenue model is fundamental to the sustainability and growth of a SaaS business. Unlike service-based or offline businesses, SaaS models inherently support customer retention and reduce churn, facilitating more predictable and scalable growth.

He introduces the metric of Net Revenue Retention (NRR) as a critical indicator of a SaaS company's health. NRR not only reflects the company's ability to retain and grow revenue from existing customers but also serves as a testament to the product's value and market fit.

Steffen Schebesta [07:36]: "One very important metric, maybe my favorite metric apart from revenue growth or the bottom line, EBITDA, is the net revenue retention. That says so much about a company."

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4. The Impact of AI on SaaS and Entrepreneurship

The conversation shifts to the burgeoning role of Artificial Intelligence (AI) in the SaaS industry. Steffen acknowledges AI as a transformative force, presenting both opportunities and challenges for businesses. He notes the rapid and exponential evolution of AI technologies, which can be difficult for humans to fully comprehend and keep pace with.

Steffen observes a surge in AI-driven startups, particularly highlighting the prevalence of AI in pitch decks at recent conferences. He suggests that while the initial wave of generative AI may be stabilizing, niches within AI, such as agentic web in marketing and sales CRMs, continue to offer lucrative opportunities. He encourages entrepreneurs to identify specific applications of AI where they can create unique value and achieve product-market fit.

Steffen Schebesta [09:56]: "AI is evolving at that pace that we don't really understand. So how can we even take advantage of that? ... there's a lot of money to be made in that next wave of AI."

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5. Final Advice and Encouragement

As the discussion wraps up, Steffen offers heartfelt encouragement to aspiring entrepreneurs. He advocates for taking the first step towards founding a business, despite the inherent challenges. Steffen describes entrepreneurship as a fulfilling journey that allows individuals to pursue their passions and work alongside likeminded people.

Steffen Schebesta [13:57]: "I always encourage my friends, my relatives... everyone around me to take that first step to become a founder. It's a beautiful experience. It's tough for sure, but it's really a way to find fulfillment and to work on something that you're passionate about with people that you like."

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Key Takeaways:

• Start Now: Embrace the willingness to begin without overplanning. Action breeds clarity and progress.

• Mindset Matters: Cultivate resilience, a learning-oriented mindset, and seek mentorship to navigate challenges.

• Business Model is Crucial: Prioritize recurring revenue models inherent to SaaS for sustainable growth and scalability.

• Leverage AI Wisely: Identify and capitalize on specific AI applications that align with your product and market needs.

• Niche and Expand: Focus on a niche market to build a loyal customer base before scaling up to broader markets.

This episode serves as a valuable resource for marketers and entrepreneurs aiming to build successful SaaS businesses, offering actionable insights grounded in Steffen Schebesta's real-world experiences.

Transcript

[Jay Schwedelson]

What up? Welcome to do this, not that, the podcast for marketers. I'm Jay Schwedelson. Let's dig into some tips and some randomness. We are back for the do this not that podcast presented by Marigold. And I have an incredible guest today, an inspiring dude. And this is part of our new series called My Path. We bring people on the show that have just had an incredible career journey to. And there's things that you can really learn from their journey. So who do we got? We got Stefan Chibesta. Now, Stefan was the CEO, okay, Of Brevo North America. Now he's the chairman of their advisory board. And if you don't know Brevo, they're a rollup of some of the biggest tools and platforms, especially in the email marketing space. And from a global perspective, they're huge all around the world. And I've always been impressed by Brevo. But Stefan's story about how he started his business, the journey that got him there, failures he had to overcome, it's just awesome. And he's a good dude, so I just want to get into all of it. So, Stefan, welcome to the show.

[Stefan Chibesta]

Thanks, Jay. Thanks for having me.

[Jay Schwedelson]

Absolutely. So what's wild about your journey, and that's what I want to dig into, is that you took this thing from literally nothing, right? And you ended up, you raised over $160 million, the business grew, over 900 employees, all these crazy things happening. But it really, it started when you were a kid, right? And I, I, some people are going to listen to this and be like, oh, God, I am so lazy. I, I can't do what Stefan did. I'm never going to get there. But kind of give everybody kind of the origin story. How did this all come to be? And then is it possible for everyone, everybody to do what you did?

[Stefan Chibesta]

Well, there's always a bit of, of luck involved and being at the, at the right place at the right time. So for me, it started in, in high school when I started with, like, software development. I started programming when I was a teenager, and that was kind of driven by my dad, who became a professor for computer science. So that was like, I was. These are lucky circumstances for me. So he pushed me into programming a bit, and I somehow fell in love with it. That was like, the early days in the 90s, right? I'm 40 years old. So I started programming with, like, Turbo, Pascal, and Delphi, and I started programming games and all kinds of, like, stupid stuff in the beginning, but that eventually transitioned to become My first software agency with a friend from high school. And if you run an agency for a while, you're very dependent on a few customers, very service heavy and sometimes it's very difficult to deal with customers. Eventually we wanted to build something more product heavy and this is how we transitioned into building an email marketing software back in Germany called Newsletter To Go, which I started in 2011. And then we almost bootstrapped it to about 80 employees and sold it to our French competitor in 2019.

[Jay Schwedelson]

So let me ask you a question about a SaaS business for a second. I'm just curious, what are some of the things that you've learned? Somebody's out there, they have a great idea for a new software business somewhere, software as a service business, SaaS business. And what are some simple kind of pitfalls that you're like, listen, if you're going to go down this road, what you really need to focus on are, you know, these three things, you know, these people, how many people coming back and using or whatever. Or this is the, the, the thing you absolutely need to know if you're going to be in this world. What is that thing?

[Stefan Chibesta]

Yeah, let me, let me mention a few things. I think the, the fundamental, the starting point that I always point out to any, any founder, an early founder, is if you have an idea, if you have the will and the capacity to start a project, you should get into it, just do it because there's always a reason not to do it. It's similar to like having a child or switching jobs or doing anything relevant in your life. There's always a good reason not to do it. And sometimes it just, you know, you just have to take that step and have that leap of faith to get there. And the second one would be after you took that step, you'll figure it out along the way. So it won't be easy. Starting a company is probably one of the, maybe the most difficult thing I've done in my life. There are so many pitfalls, there's so many issues, basically problem solving all the time. You're trying to figure out what's going on, trying to learn from what failed and make the company successful. But that's part of the journey and you will be able to figure it out if you're persistent and if you really want to do it. And it's a con. So there has to be some kind of mindset of learning, always improving and hopefully having somebody you can talk to, maybe a co founder or a mentor, that can be very, very helpful. But I think that's the basics are to have the right mindset to get started maybe without overthinking it. Because even, even I, if I had known the journey ahead of me, all the competitors, all the issues that we came across, I probably wouldn't have started the company right. So it was. Sometimes it's good to have to be almost a bit naive when starting a project and then you can figure it out. And one thing that is very important that we didn't really realize until we were a few years in is how important the business model. And you talked about starting a software as a service company. The beauty of software as a service company is there's a recurring mechanism within the business model and the business model itself. I see, I talked about an agency or service based business. It's not as recurring or if you have an offline business, it's hard to get user retention. Imagine you sell, you know, bridal fashion. Likelihood you will retain customers is pretty low and you might grow through referrals, recommendations. But it's very, very difficult to grow business if you don't have recurring revenue from existing customers. So I would really start thinking about a business model first. What's a business model where I know the customers will come back to me, they can be retained, they will not churn, and then what's the growth mechanism inside that company? So to answer one of your questions, one very important metric, maybe my favorite metric apart from revenue growth or the bottom line, ebitda, is, is the net revenue retention. That's says so much about a company. It says so much about growth potential, it says so much about how good the product is as well. And it tells you a lot about the business model behind it. So yeah, those are a few things that I love that.

[Jay Schwedelson]

I love that because it really does keep people in North Star, what they should be thinking about if they're going to go down this road. And something you said at the beginning, I'm curious about where you said, basically just get going, get started. You know, everyone tries to make all these, you know, plans, business plans, and this is going to happen. They write a 50 page document. Are you saying this? Somebody's sitting out there right now, listen, like they got this idea, they want to do this thing, but they haven't laid out, you know, the next three years of exactly what's going to happen, that you don't need this fancy business plan, so to speak. You don't need an MBA to kind of just get things out there. You're better off just going for it. And Figuring it out. Is that kind of the vibe?

[Stefan Chibesta]

Yeah, totally, 100%. I think it's much more important to understand the customer, to build a product that adds value and that customers love. And the typical way my recommendation would be is to start in a small market, in a niche market, build a product that customers love over starting in a huge market and build a product that customers like. It's much easier to expand from the small niche into a bigger market when you have very loyal customers. And again, that kind of is this whole retention product market fit narrative. If you can do that, your customers will refer you, will recommend you, and you will grow kind of almost naturally, product led growth. Right.

[Jay Schwedelson]

I'm so into that, you know, find something that you could be the best in the world at, niche down, and then you can grow back up. And I think that's so cool. So let me pivot, a total pivot here. I have a question for you that I'm curious about. So you really grew up learning how to code, right? You started a big SaaS company, crushing it, all that stuff. AI is everywhere, obviously now. If Stefan was now, today, in this moment, 15 year old kid, okay, would Stefan's dad still say, hey, get into this coding stuff, that's the future, or whatever. Or what is your take on AI's impact on SaaS companies, on coding, on engineering, on all of that?

[Stefan Chibesta]

Yeah, it's quite interesting. I think it's here to stay for sure. It's a fundamental change. It's one of these things where maybe that happens every, what, 10, 20 years, the last time when the Internet became really popular. And there's always opportunity and there's always threats to existing business models. The beauty about technology is that it evolves exponentially. So it's very, very hard to understand for human mind. Like if you, I think if you take like 100 exponential steps, you're at the moon, something like that. Like it's crazy, right? We, we don't understand it as, as a human being. So it's very hard to keep up with that. And so AI is evolving at that pace that we don't really understand. So how can we even take advantage of that? And that's a really good question to ask, Jay. And I don't have the one answer for you, except that every technological disruption will bring opportunity and then it's up to us to find the opportunity and start something with it. And there's a lot of startups. I recently went to a conference and I had access to like 300, started pitch decks and 99% of them said AI in the, in the headline. Right? Everybody does something with AI now. So obviously it's a big opportunity. Now it's up to you to figure out where the opportunity lies. And I can't answer that, but I would probably go into that space because it's clearly the future. Agentic web is a big thing in the marketing and sales CRM space. So that, that might be something that's interesting. I feel like the whole gen AI wave is almost behind us already. But there's so many things that you can automate that you can improve, make more efficient. One company that I coached at Antler, they used AI to automate all the documentation for software as a service company. So again, they broke it down, took one little niche where they knew they could apply AI to, they knew how to monetize it in that space. And it's a pain because I can tell you from our documentation, it's hundreds of pages, it's translated to seven languages. We have one change in the ui, we have to redo all the screenshots in seven languages. Honestly, it's a pain. So I think like these kind of approaches, there's a lot of money to be made in that next wave of AI. And again, if you don't know exactly what it is, maybe you have a first idea, try to validate it, talk to potential customers, get that product market fit figured out, maybe raise some money or try to do it yourself and then figure it out along the way again, that kind of get into it, just do it mindset, I think is important because nobody can predict the future, but we can create the future. And I think that's what entrepreneurs do and how we can get into these topics.

[Jay Schwedelson]

I think that really the theme coming out of this is to A, get started, whatever it is, and B, I love the idea of, you know, niching down and then growing from there and getting, you know, raving fans and loyal customers or whatever you're doing, because then you're on the, on the right track. So speaking of raving fans, people are raving fans of Brevo, which you are the chairman of the advisory board for. We're going to put in the show notes a special discount code if anybody wants to check Brevo out. It's an incredible platform for marketing, for email, for all things. So we're going to put a special discount code in the show notes and we're going to put Stefan's LinkedIn in the, in the show notes as well, because his last name is almost as tough as my last name to spell and say. But Stefan, any other parting words or things as we're wrapping up here?

[Stefan Chibesta]

I always encourage my friends, my relatives, sometimes to a degree that maybe it's too much, but I always encourage everyone around me to take that first step to become a founder. It's a beautiful experience. It's tough for sure, but it's really a way to find fulfillment and to work on something that you're passionate about with people that you like. So I would really like to encourage people to take that first step and become a founder and start a new business.

[Jay Schwedelson]

I love it. Very inspiring stuff. Jay. Really appreciate you being here and we're going to put all in the show notes. So Stefan, we will talk to you soon. My man, you did it. You made it to the end.

[Stefan Chibesta]

Nice.

[Jay Schwedelson]

But the party's not over. Subscribe to make sure you get the latest episode each week for more actionable tips and a little chaos from today's top marketers. And hook us up with a five star review if this wasn't the worst podcast of all time. Lastly, if you want access to the best virtual marketing events that are also 100% free, visit google guruevents.com so you can hear from the world's top marketers like Daymond, John, Martha Stewart and me. Guru events.com check it out.