Lessons from the founders of hypergrowth startup Sastrify
Once upon a time…
Maximilian Messing and Sven Lackinger met during their first week at college and immediately hooked up. Since then, they have spent most of their time in college as roommates. They were studying business at WHU in Germany and launched their first startup called Evopark with two other classmates right after graduation. It was based on a course on entrepreneurship that they took during their master’s degree. Evopark was a payment operator for car parks. They ended up in the German version of Shark Tank, raised money from Porsche, and built lots of car integrations to make it easier for people to park. The company was acquired in 2018 by the Scheidt & Bachmann Group. After that, they both stayed on board for about two years, focusing on integrating it into the group and working on projects around the world on flawless parking technology.
However, Max and Sven were still keen to build and decided to embark on a new startup venture in 2020. They were looking to combine their skills, namely Max’s skills as a CTO and Sven’s business skills. They realized they were running into the same problem they are now solving for companies around the world: “Max always liked to mention that he was spending a ton of money on software tools, and I was chasing after him trying to figure this out. that we were spending money at.” They thought it was worth researching to what extent other companies had this problem as well. They spent the summer of 2020 researching how companies purchase software and identifying pain points along the way.
“For us, the most important thing was that there is a huge trend towards SaaS and decentralized purchasing, there are so many new tools and the combination of the best defines the success of a company. It was so really a good mix for us in terms of the right time to find a solution to the problems that just arose.Also the market is exploding in size.There is basically a new need coming which is only going to increase in the future. They decided to build Sastrify as a platform capable of managing the entire life cycle of SaaS within a company, from the moment a need arises to acquire a software solution, to supply them, to manage contracts, to take supports renewals, upsells, downsells, etc. for us was discovering that people are more interested in saving time than saving money. And that’s why we built the platform – to really support them in their daily work. We wanted a combination of SaaS, ‘easy’ and ‘simplification’; that’s what brought us to Sastrify.
Something they learned in their previous company, and successfully implemented in this one, was to get as much customer feedback as possible – even before creating an MVP. They did it this way: they went to many companies and looked at their SaaS stack. They learned a lot about what worked and what didn’t, thus focusing on the main customer-side bottlenecks and frictions that they could solve.
It was only after this whole process that Max built the MVP. It was a platform that offered the minimum features, which compiled a list of subscriptions and set renewal dates. This has allowed companies to have their accounting data in one place and work with that data to determine how much they are spending on which tools. Sven and Max tried to sell this product early on which gave them more feedback, this time on price. Another important aspect they received feedback on was why people weren’t buying. This allowed them to continue to refine the product. As a result, the product quickly responded even better to the wishes of users. “As a founder, you always question yourself and your decisions. The cool part about Sastrify was that the idea makes so much sense to everyone. With each client, we get more confirmation on this.
During the fourth quarter of the same year, they raised 1.3 million in their pre-selection round and hired the first people. It took them another six months of bi-weekly experiments, with results defined by design, to figure out which direction they wanted to go and when would be the right time. This was followed by their seed round in which they raised an additional 7 million. The first quarter of 2021 was when they realized people were much more focused on solving the whole vendor management part, than just saving an extra dollar. They decided to focus on that; saving them a ton of time and making the product as easy to use as possible. This greatly accelerated their customer base, they acquired various big logos and experienced strong growth over the next year.
Attract and retain customers
All in all, attracting customers has never been a big challenge for them, largely thanks to a guaranteed and tangible return on investment. From a financial perspective, it just makes sense for businesses to work with Sastrify. It was particularly interesting for them to have the first big names on board. While their first customers were mostly startups or friends, soon a number of well-known companies like Gorillas, Hubbub and Runtastic came on board and allowed them to use their logos, photos and quotes. It made a big difference. For a sustainable growth of the company, it was very important to build a long-term customer base. At the same time, however, Sven and Max experimented a lot with shorter contracts of less than a year. This involved figuring out which customers didn’t fit Sastrify and how the product could be further adapted to appeal to a wider audience.
Start earning as soon as possible
According to them, one of the best decisions they made was to make money with him as soon as possible. With this, the most important thing is to create value for your (potential) customers. Only then will they pay you. Another good decision was to hire a senior team as senior and as soon as possible in your current state, who has done it before and has the experience. Assemble a team that is truly mission-focused. One thing they say they could have done differently is start with major marketing efforts earlier. Until today, they feel like they are lagging and underselling. They could be more aggressive showing what they do and showing it to the world.
Hire for talent, not location
As the company grew, something else that contributed to its success was going completely out of the way right from the start, allowing talent to be hired rather than hiring for location. Sven and Max started completely remote as it was in the middle of Covid. This is reflected in the company’s DNA to this day. “It’s a fascinating experience that broadens our horizons every day. Looking back, it was definitely the right decision, because it allows us to build an international team and really the best talent around the world. It allows us to hire talent, not necessarily for location. It also gives a great mix of freedom, flexibility and ownership to everyone in the business. Although the model is turning out extremely well for Sastrify, personal encounters are certainly not a thing of the past. Every few weeks the team gets together physically, once a year the whole company goes to a special (read: sunny) location and thanks to the unwittingly formed “hubs” in Barcelona, London, Berlin and Munich, several “Sastronauts” still see each other weekly in coworking places or for a drink on Friday afternoons.
In just two years, Sastrify has grown fivefold and acquired hundreds of clients worldwide in six regions in Europe, as well as some customers in Latin America, Asia and the Middle East. “We’ve really seen, especially in the last two months, that people are getting more used to putting processes in place to make sure they’re not overspending, which is exactly what we’re doing. I think overall we were also able to build a team of over 140 astronauts in 23 countries. There have been many milestones, the last raise our Series A with FirstMark Capital in January 2022, one of the world’s top venture capital funds investing in Airbnb, Shopify, and more. Additionally, we launched in the US in the summer of 2022 and working with the team and our customers there is great fun. The most memorable moment however was our off-site team with the whole company in Lisbon earlier this year. We are lucky to experience the mad dash of a fast growing startup with many stressful but rewarding days around the world. Whenever someone thinks of software tools in an organization, they should think of Sastrify. This is how we will enable the future of work and how organizations will buy their SaaS in the future. »