Summary of Podcast Episode 433: "Summize: SaaS Lessons on Narrowing Your Target Market" with Tom Dunlop

The SaaS Podcast - SaaS, Startups, Growth Hacking & Entrepreneurship
Host: Omar Khan
Guest: Tom Dunlop, Co-Founder and CEO of Surmise
Release Date: March 6, 2025

Introduction

In episode 433 of The SaaS Podcast, host Omar Khan engages in an insightful conversation with Tom Dunlop, the co-founder and CEO of Surmise—a contract lifecycle management (CLM) platform designed to streamline the creation, review, and management of contracts for businesses. Surmise has rapidly grown to achieve a late seven-figure Annual Recurring Revenue (ARR), expanding its footprint with over $10 million in funding and a presence in both the UK and Boston.

Origin Story: From Legal Frustration to SaaS Solution

Tom Dunlop's journey into entrepreneurship was born out of a significant pain point experienced during a corporate acquisition. While working as an in-house lawyer, Tom was tasked with manually reviewing 500 contracts—a laborious and time-consuming process. The situation worsened when he needed to revise the contracts to include an additional clause, effectively doubling his workload. This frustrating experience ignited the idea for an automated solution.

Quote:
"Every point was the most important thing in the world at the moment in time. Whether it was the ultimate backhand smash that won the Wimbledon championships or whether he lost the point, he treated them the same way and moved on to the next."
— Tom Dunlop [03:54]

Inspired by Roger Federer's mindset of handling every point with equal importance, Tom adopted a resilient approach to business scaling, expecting and swiftly moving past mistakes and challenges.

Validating the Product Concept and Securing Funding

Recognizing the inefficiency in contract management, Tom partnered with a senior software engineer, David, to develop a prototype capable of automatically generating contract summaries. Positive feedback from potential customers led them to raise approximately £250,000 (around $10 million) to develop Surmise further. However, their launch coincided with the onset of the COVID-19 pandemic, which initially seemed like poor timing but ultimately provided an unexpected market opportunity as companies sought to understand contract obligations amidst the crisis.

Early Sales Strategies and Initial Challenges

In Surmise’s first 18 months, the team employed a broad sales approach, targeting a wide range of customers—from law firms and in-house legal teams to businesses of varying sizes. They experimented with free trials and event marketing but struggled to gain significant traction. The lack of a clearly defined Ideal Customer Profile (ICP) led to scattered efforts and limited success.

Quote:
"We cast a wide net, thinking every lawyer in the world could use this product, so we just went and tried to sell it to all of them. It was like spearfishing versus casting a net."
— Tom Dunlop [20:25]

This broad strategy resulted in some initial deals but lacked sustainable growth, highlighting the dangers of insufficient focus in the early stages of a SaaS startup.

Pivoting to a Focused Target Market

The breakthrough for Surmise came when Tom and his team honed in on a specific segment: in-house legal teams at mid-sized companies. By aligning their product to integrate seamlessly with tools these teams already used daily—such as Slack, Outlook, Gmail, and Salesforce—Surmise provided a more accessible and user-friendly solution.

Quote:
"We created our product to be embedded in the tools that people use every day. So no one really has to go to surmise.com, and that's definitely the big ethos that we've had as a product development."
— Tom Dunlop [07:08]

Focusing on this targeted market allowed Surmise to better address the specific pain points of their users, leading to increased adoption and growth.

Growth Strategies: Outbound vs. Inbound

Initially, Surmise relied heavily on outbound sales efforts, which involved casting a wide net without a clear target. This approach led to mixed results and inefficiencies. Recognizing the need for a more strategic approach, Surmise shifted towards a more targeted outbound strategy, focusing on specific verticals and customer personas.

Quote:
"The outbound model is very good for a very targeted individual within an organization with a very prescribed message that you can craft to that person."
— Tom Dunlop [20:25]

Additionally, Surmise explored Product-Led Growth (PLG) strategies, offering free trials and streamlined onboarding to attract users organically. However, they found that PLG was not entirely suitable for their complex CLM solution, leading them to revert to more traditional sales methods while integrating successful elements of PLG.

Quote:
"PLG is great, but not right for everyone."
— Tom Dunlop [34:50]

Event Marketing: Learning from Experience

Surmise's initial foray into event marketing was met with both enthusiasm and challenges. Early efforts focused on maximizing exposure at events without a strategic approach, resulting in significant engagement but low ROI due to ineffective follow-up processes.

Through iterative learning, Surmise developed a more refined event marketing strategy. By pre-event planning, targeted outreach, and structured follow-ups, they transformed events into high-ROI activities.

Quote:
"What was probably our worst ROI is now probably one of our best ROI activities that we do."
— Tom Dunlop [38:08]

Expansion into the US Market: Adapting to New Dynamics

Expanding into the US market presented new challenges and insights for Surmise. Tom emphasized that the US market differs significantly from the UK and EMEA regions, particularly in terms of market education and competitive landscape.

Quote:
"The US is much more educated, much more advanced. We can also get a yes a lot quicker and we don't have to do a more consultative sell. It's a lot more on the differential."
— Tom Dunlop [39:36]

Surmise leveraged their unique selling proposition (USP) of seamless integration with existing tools, which resonated well with US customers who were already familiar with CLM solutions. This strategic differentiation facilitated smoother market penetration and adoption.

Differentiators and Integration: The Surmise Advantage

One of Surmise’s key differentiators is its ability to seamlessly integrate with platforms that legal and business teams use daily. Unlike traditional CLM tools that require users to navigate to separate web applications, Surmise operates within existing workflows, enhancing usability and adoption rates.

Quote:
"We want them to get the benefits of Surmise almost like the copilots that are coming out there. They can create a contract, submit for review, understand what's going on—all within exactly the tool that they currently use."
— Tom Dunlop [42:38]

This integration approach not only streamlines the contract management process but also reduces the friction typically associated with adopting new software solutions.

Lessons Learned and Key Insights

Throughout the conversation, Tom shares several critical lessons learned from Surmise’s journey:

1. Importance of a Defined ICP:
   Focusing on a specific customer segment allows for more effective marketing and product development, avoiding the pitfalls of a scattered sales approach.

2. Adaptability in Growth Strategies:
   Being flexible and willing to pivot strategies—such as balancing outbound and inbound efforts—can lead to more sustainable growth.

3. Strategic Event Marketing:
   Effective event marketing requires thorough planning, targeted outreach, and diligent follow-up to convert engagements into tangible ROI.

4. Market-Specific Approaches:
   Recognizing and adapting to the unique dynamics of different markets, especially when expanding internationally, is crucial for success.

5. Product Integration as a USP:
   Ensuring that your product integrates seamlessly with existing tools enhances user experience and drives adoption.

Lightning Round: Quick Insights from Tom Dunlop

1. Best Piece of Business Advice Received:
"Do things that don't scale," a principle inspired by Reid Hoffman, emphasizing the importance of tailoring actions to the business’s stage.

2. Recommended Book:
"Impossible to Inevitable" by Jason Lemkin—a step-by-step guide to establishing an effective go-to-market strategy.

3. Attribute of a Successful Founder:
A relentless drive to win, where the motivation to succeed outweighs other emotions and challenges encountered along the way.

4. Favorite Personal Productivity Habit:
Scheduling regular time for fitness and personal well-being, which fosters clarity of thought and mental resilience.

5. Crazy Business Idea:
Creating a social knowledge platform that curates selected content from trusted experts, enabling users to interact with a personalized knowledge model or chat system.

6. Fun Fact:
Tom was a competitive badminton player and trained with the Great Britain program before transitioning into law and entrepreneurship.

7. Most Important Passion Outside Work:
Spending quality time with his three children, particularly engaging in their sports activities, which provides a mental respite and personal fulfillment.

Conclusion

Tom Dunlop’s journey with Surmise underscores the significance of narrowing down target markets, strategic adaptability, and leveraging unique differentiators to achieve SaaS success. From overcoming early challenges to refining growth strategies and expanding into new markets, Surmise exemplifies how focused efforts and insightful pivots can drive substantial business growth.

For more information about Surmise, visit surmise.com. To connect with Tom Dunlop, you can reach out via his LinkedIn profile.

This summary captures the essence of the conversation between Omar Khan and Tom Dunlop, highlighting the key discussions, insights, and actionable lessons for SaaS entrepreneurs and startup founders.