The 5 Growth Indicators Required To Build The Perfect Software Business

The 5 Growth Indicators Required To Build The Perfect Software Business

Every startup wants to grow fast.

And while there’s value in modelling the tactics and strategies that have fueled the rapid success of companies they look up to…

There’s even MORE value in identifying the core, underlying principles that serve as the backbone for that success.

Over the years, I’ve identified 5 core elements behind the perfect software business.

I learned one of them directly from Jason Fried @ when I visited Chicago to take his workshop over 10 years ago.

Another from guys like Mike McDerment @, and Ben Chesnut @, both early mentors of mine who inspired a lot of the work I create at Flowtown.

In today’s world you see companies like, and (disclosure: I’m an investor) shooting for the moon and you wonder:

“How did they do it?”

That’s what I want to break down for you in this week’s video.

Here are the 5 key elements that the world’s best startups all have in common:  

What I’ve learned is it really comes down to how the product is used by the companies, how they extract the value (i.e. get paid) and their position in the market…

… now, there are some nuances, and I go over them in the video, but I want to list them out real quick so that you can understand how impressive it is for a company to hit this level of growth:

  1. Product Is Core to the Operation of the Business
  2. Cost/Value Proposition is Straightforward
  3. Finances Its Own Growth
  4. Efficient Sales Model
  5. Market Leadership

If you’ve got tough decisions to make on your product to better address these elements and need my feedback, be sure to leave a comment with your question and some context, I would love to help.

See you next Monday!


  • Mike Moyer

    Thanks Dan, are you implying that the best companies don’t raise outside funding and rely instead on cash-flow to grow their business?

    Also, any advice or videos about pricing?

    • Dan Martell

      Mike, in a perfect situation it wouldn’t require outside funding – however, in todays competitive landscape, most of the funding is to compete, not because the unit economics wouldn’t support the growth.

      re: Pricing – it’s all based on the market, so nothing specifically… I do have a framework that discusses the different pricing axis ( ) and the best ones to use at each stage of growth.

      Email if I can ever be of help.

      Just used your book (Slicing Pie) in a recent investment amongst founders 🙂


      • Mike Moyer

        Thanks Dan. Good luck with your new Slicing Pie company. I’ve had some interaction with people who found out about Slicing Pie from you, so thank you for sharing. Slicing Pie has a SaaS tool that has been growing on cash flow, but I want to take it up a notch!

  • Joel Snyder

    Hi Dan,
    Client onboarding is always a challenge as a marketing consultant. Setting priorities always seems to leave something out in the process and we end up going back to it, because the client thinks they have it “handled”. When you talk about a clear sales model, do you include onboarding in the discussion?

    • Dan Martell

      Joel, when I talk sales models, it includes anything that could effect the messaging/positioning AND the pre-qualification process before a lead is called upon.

      How a customer thinks about your solution in regards to their problem is sales 🙂 / onboarding effects that.


  • Poul Halgaard

    You mention having training as an up-sell in your pricing page.
    I have this now (combined sign up form/pricing calculator), but it is a complex product and I have a feeling there is too many add-on options on the page, confusing buyers and holding them back from/delaying pressing the Send button. Would it be better to have a 2 step signup process. Step one looking like a full sign up with package selector/extra options and address form and a Send button. Then a extra page could be added like “Setup options” and the option for e.g. “Training/course 7 hours” and more? I guess it is important to list all things part of the product on the first page, but service could maybe be moved to 2. page. What do you think about that?

    • Dan Martell

      Poul, my goal is always to get a sale first, then to upsell to serve the customer as needed… so maybe just keep the pricing clean, then call and see if you can add additional support via training, etc.


      • Poul Halgaard

        Thanks, yes I agree. I figure the options should be just the minimum in relation to being fair at showing the raw cost without soft add-on’s like assistance with installation and training (which is most often required with this product). But having the sale should be the absolute focus as you suggest.

        • Dan Martell

          Poul, was there a question in there?

          • Poul Halgaard


          • Dan Martell

            Got it.

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