How to Scale A SaaS Startup to $100M ARR with Alfonso de la Nuez

To learn more about how to scale a SaaS startup, click here to attend Alfonso de la Nuez’s global keynote on Dec. 14.

Last year, venture capital firm Bessemer Ventures coined a new phrase to describe SaaS startups who have achieved $100M ARR: Centaur. According to the report, there are approximately 160 private cloud Centaurs in the world, making these companies about seven times more rare than unicorns.

Among that rare breed of SaaS startups is UserZoom, a user experience (UX) insights management company that helps businesses gather and manage the insights they need to design and deliver exceptional digital experiences. 

Co-founded by Alfonso de la Nuez in 2007, UserZoom has grown from a bootstrapped firm out of Spain into a $100M ARR, global organization with Fortune 100 customers across the retail, e-commerce, healthcare, financial services, technology, and insurance industries.

To date, the startup has raised $150 million in venture capital funding and is backed by Silicon Valley investors Sunstone Capital and Owl Rock. Last year, top software investment firm, Thoma Bravo acquired UserZoom for $810 million.

In a Founders Network global keynote on December 14, Alfonso will share his journey with UserZoom where he served as CEO. He’ll provide tips on how to scale a SaaS startup to $100 million ARR and achieve centaur status.

Here’s a sneak peak of his journey.

The Birth of UX

Alfonso’s startup journey began in the mid-1990s in Silicon Valley, where he honed his skills in digital marketing, website design, usability testing, and UX research, laying the groundwork for his future as an entrepreneur. Prior to co-founding UserZoom, he gained valuable experience at renowned companies like Dell Technologies, Icon Medialab (now DigitasLBi), and Proxicom’s venture in Spain (now Indra). But he soon caught the entrepreneurial bug and wanted to be his own boss.

“I was fortunate to participate in the very early days of the World Wide Web and the birth of e-commerce,” Alfonso says. “I was fortunate to work for consulting agencies where I was designing and building websites for companies. But it was always the same challenge, which was, no one really cared about the end user.”

That gave Alfonso the idea for his first startup, a consulting firm that centered around usability and user experience. Ultimately, that consulting firm, focused on UX research, would be the foundation for UserZoom. 

Startup Bootstrapping

The early days at UserZoom were marked by the resilience and determination of Alfonso and his co-founders. Bootstrapping became their modus operandi, and while it was far from a smooth journey, it laid the foundation for their eventual success. It’s worth noting that even though UserZoom would eventually secure a staggering $150 million in venture capital funding, their very first Minimum Viable Product (MVP) was funded from the revenue generated by Alfonso’s UX consulting firm.

“Bootstrapping is very, very hard. We had a really hard time in the first five years or so,” Alfonso says. “But we persevered and after five to six years, started growing.”

Identifying an ICP

In the early days, Alfonso and the UserZoom team struggled to identify an ideal customer persona. Since resources were scarce, Alfonso says they initially took the safe route of targeting small and medium size enterprises with shorter sales cycles. However, thanks to the advice of a mentor, the team decided to take a riskier approach that ultimately paid off. 

“We took the risk of being very focused on enterprises with longer sales cycles, higher pricing model, higher pricing packages, and white glove service,” Alfonso says. “But we just decided, you know what,  these guys are going to pay us more and they’re going to renew more. And, as a SaaS business, it is absolutely critical to have a good retention rate.”

How to Scale a SaaS Startup

For many SaaS startups, the most challenging part of scaling is going from $1 million to $10 million ARR. Achieving this milestone requires building a solid brand and product, but also a strong team. According to Alfonso, a strong team is especially important in startup scaling beyond $10 million ARR, because it enables founders to delegate, which is essential for growth.

“When we were scaling, the thing that was critical at that point was to learn to delegate,” Alfonso says. “Going from an entrepreneur to a CEO, the transition you have to make is a psychological change from doing everything and calling the shots to delegating. At the beginning, there’s a my way or the highway type of mentality. In the beginning, you need that confidence and security in yourself to get to the first 10 to 20 million. But once you get to a certain size, the best thing you can do is focus on recruiting really good people. Hire a great team and let them operate. Let them do their thing, and get out of the way.”

To learn more about how to scale a SaaS startup, click here to attend Alfonso de la Nuez’s global keynote on Dec. 14.