How We Beat Our Business Goals in 2022 (While Everything Else Crashed)

2022 was not a great year for business and tech in general…

But it was for our team at AppSumo Originals.

Across the board, we saw record-setting metrics for our team — and we had no layoffs.

Our main KPI for 2022 was 34% higher YoY than 2021.

The way we run Originals is different than how many other tech organizations run.

Instead of chaotic growth, we focus on sound business decisions that can survive nearly any economic climate. It might be a bit slower, but while other companies are struggling right now… we’re thriving.

As I teach my coaching clients, focusing on long-term sustainable growth is overlooked in tech.

Too many tech CEOs are pressured into ”growth at all costs” and keeping up with the Joneses. And we see the harsh reality today with dozens of previously-darling tech companies struggling (layoffs, stock plummeting, unhappy team members, etc.)

As I’ve been reflecting how Originals did so well on 2022 compared to other technology companies, here’s what we did differently.

1) Keep the team small and connected. While many tech companies were growing headcount dramatically in the 2020 and 2021 “boom” years, our team stayed roughly the same size.

At the start of 2020, our team looked like this:

  • General Manager (me)
  • Lead Software Engineer
  • Software Engineer
  • Senior Designer
  • Support Lead
  • Support Teammate
  • Support Teammate
  • Support Teammate

And in 2021:

  • General Manager (me)
  • Lead Software Engineer
  • Software Engineer
  • Senior Designer
  • Marketer
  • Support Lead
  • Support Teammate
  • Support Teammate
  • Support Teammate

And, finally, 2022:

  • General Manager (me)
  • Lead Software Engineer
  • Software Engineer
  • Senior Designer
  • Support Lead
  • Support Teammate
  • Support Teammate
  • Support Teammate

I love this quote from the my mentor and friend — and the CEO of AppSumo — Noah Kagan:

The teams I admire the most keep their team size as small as possible. They aren’t obsessed with the vanity metric of how many employees they have “under” them.

Our team at Originals focuses more on UP-LEVELING existing team members than we do HIRING by default.

We look at how we can give talented, smart team members the opportunity to continue to become more effective and efficient at their roles (and grow into new roles).

And it’s worked. Our average teammate tenure is ~5 years, and our revenue per team member is mid six-figures.

The easy answer when things get hard is ”let’s hire someone to help”… but easy isn’t always best.

A practical example of a challenging decision that wasn’t easy was marketing going into 2022.

Common knowledge says every tech SaaS startup “needs” a marketer. But we ran the numbers after 2021 ended… and the ROI for our marketer wasn’t there.

We questioned conventional wisdom, and shifted to product-led growth instead of outbound marketing. It worked. We were able to grow dramatically in 2022 without a dedicated marketer.

And, whenever we do think about hiring, we have a few principles:

  1. Mostly hire senior level team members who want to work hard, move fast, and take ownership.
  2. Don’t underestimate cultural fit. Former AppSumo CEO Ayman Al-Abdullah had a great culture fit test they used to run at AppSumo called the “Helsinki Test”: If you were trapped with this person in the Helsinki, Finland airport… would you want to hang out with them?
  3. Do whatever you can to make your team members’ lives easier, happier, and more fun. This includes compensating as fairly as possible while keeping the business sustainable so they can stay for years to come.

A great quote is that you can never overpay for great talent. You get in trouble overpaying for good and mediocre talent.

2) Keep your goal consistent and clear. You could ask any Originals team member the yearly goal, and they could tell you within 30 seconds.

We repeat our goal constantly: During our weekly team meeting. During our monthly leadership meeting. When thinking about new features or ideas.

A screenshot from our monthly Leadership meeting in November.

Everything, everything comes back to our goal.

Too many tech CEOs and entrepreneurs change their goal constantly. This week they care about page views. Next week they care about revenue. And in a month they care about something else.

Aligning a team is like moving a ship. Do your research, pick a direction, and go that direction.

If you keep spinning the wheel in different directions you’ll get nowhere (and your crew gets annoyed).

From January 1st to December 31st, our goal never changed.

This allowed us to build momentum and get compounding results over the year. Your team needs time to reflect, ideate, and launch ideas aligned with your goal. So give them consistency.

3) Ignore the noise

Very few people look back and learn from their mistakes.

When I think about all the pundits and people on LinkedIn claiming that the Pandemic was the “great accelerator”, I wonder where they are now.

Here’s the harsh reality: The Pandemic didn’t accelerate anything.

RTO is returning. The saving rates for consumers, which peaked during the Pandemic, have now normalized (source) to normal growth trajectories. All these Pandemic-boom businesses that thought they would grow forever are down 70%+ compared to 2022.

Basically, 2022 wiped out all the Pandemic growth.

And tech CEOs were not immune from the hype during those good years…

  • They saw their friends hiring fast and growing fast and they felt FOMO. So they did the same.
  • They saw their friends buying NFTs and talking about crypto. So they did the same.

But the “same” has led so many people down a path of peril.

The biggest mistake was myopic.

When things are good, we feel like they’ll be good forever. And we make unnecessarily aggressive and short-sighted decisions.

It’s really hard to ignore the hype, but boring, sound business practices never get old:

  • Keep a safe profit margin. In 2021 and 2022, we never got below a 20% profit margin. We never went on a crazy-aggressive hiring spree that affected our bottom line. Be ruthless about your finances. It’s your oxygen.
  • Prioritize what actually helps your goal. I think of business like a diet. The candy tastes delicious and gives us a short burst of energy. That might sustain us for a bit, but then we crash and we have long-term health problems. Instead, learn to love the healthy, balanced diet.
  • Do more with less. Craigslist makes $1 billion per year with 50 employees. You don’t need 20 people for a million-dollar tech company.

Use these principles and learnings the next time you face a boom-or-bust cycle.

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