Are You Collecting Underpants or Winning by Design?
I recently had a coaching session with a SaaS founder in the supply chain sector. Initially, we were going to dive into pricing strategy, but we never quite got there. Instead, the conversation took a turn that made me reflect on a common pitfall among entrepreneurs, particularly those in the tech world.
The founder was passionate about his product. He had a clear vision of dominating several markets, building freelance sales teams, and scaling quickly. But as we started talking, I noticed something was missing.
When I asked about the basics – audience segmentation, lead generation costs, and conversion rates – his answers were vague or nonexistent.
It reminded me of the old “South Park” sketch where the characters’ plan to get rich follows this logic:
- Collect underpants
- ???
- Profit!
Let me link it here: https://www.youtube.com/watch?v=a5ih_TQWqCA
It’s funny, but also a perfect analogy for how many entrepreneurs approach their business, particularly in the early stages. They focus heavily on building the product (step 1: collect underpants), but they don’t know what step 2 is. They assume that if they just keep collecting those underpants, somehow profit will follow.
But as we all know, that’s not how it works.
The Trap of “Product First, Sales Later”
The founder I was coaching was a textbook case of what happens when entrepreneurs focus too much on product development at the expense of understanding the market, sales, and the economics of growth. It’s easy to fall into this trap. After all, if you’ve poured your heart and soul into building a product, it can feel like the world should naturally line up to buy it. But that’s rarely the case.
Without a plan for generating leads, converting those leads into paying customers, and understanding the cost of each customer acquisition, even the best product is destined to fail. Worse, the longer a company operates in this mode, the harder it becomes to course-correct.
The Importance of Metrics-Driven Sales
One of the first things I do in my coaching sessions is develop a business case based on metrics. This might seem daunting at first, but it’s critical for understanding the potential for growth and profitability. In this founder’s case, he had no clear business case in mind. He hadn’t set clear revenue goals for 1, 3, or 5 years, nor did he understand the key metrics needed to achieve them.
It’s not uncommon to encounter founders who don’t know how to calculate these numbers right off the bat. That’s okay. The key is to start somewhere, even if it’s based on industry averages, and iterate as market feedback comes in. The business case doesn’t have to be perfect from day one, but it provides a baseline to measure progress and make informed decisions.
Some of the critical metrics I asked this founder to consider included:
- Annual Recurring Revenue (ARR): How much revenue can you expect from your audience annually?
- Segmentation: Are you breaking down your audience into clear segments with tailored marketing approaches?
- Conversion Rates: What percentage of your leads are converting into customers?
- Cost Per Lead (CPL): How much are you spending to acquire each lead?
- Cost Per Acquisition (CPA): What does it cost to turn a lead into a paying customer?
These aren’t just numbers—they’re the roadmap for growth. Without them, scaling a business is like driving blindfolded.
How to Win by Design
So, how do you avoid collecting metaphorical underpants and actually make it to the “profit” stage? It comes down to having a design for success—one that incorporates sales, marketing, and feedback loops. Here are some steps to help you win by design, not by accident.
1. Set Clear Expectations
Before diving into any initiative, whether it’s building a product, launching a marketing campaign, or hiring a sales team, set clear and measurable expectations. Define what success looks like for your business in 1, 3, and 5 years. This isn’t just about revenue goals. Think about other key performance indicators (KPIs) like customer acquisition costs, customer retention rates, and the lifetime value of a customer.
By setting these expectations early, you can ensure that your actions align with your goals, and you’ll have a clear sense of whether you’re on the right track.
2. Start With a Business Case: Keep the end in mind at first
Every initiative in your business should start with a business case, even if it’s a rough one. Use industry benchmarks to guide your assumptions and refine them as you gather real data. This not only helps you set realistic goals but also ensures that you’re thinking critically about how to allocate resources.
A good business case answers questions like:
- What’s the potential revenue for this product or service?
- How much will it cost to acquire customers?
- What are the risks, and how can they be mitigated?
- What’s the expected return on investment?
3. Market Feedback is Gold
Don’t wait until your product is “perfect” to get it in front of customers. The longer you wait for feedback, the more you risk building something that no one wants. Instead, get market feedback as quickly as possible, even if that means launching with a minimum viable product (MVP).
Customer feedback will inform your business case and help you refine your product and sales strategy. It’s much easier to iterate when you’re getting real-time insights from the market.
4. Price Based on Opportunity Costs
When you’re just starting, pricing can be tricky, especially if you don’t have a lot of budget to work with. One approach I recommend is to price based on opportunity cost rather than what the market is currently paying. Think about the biggest pain point your product or service solves for your customers and price accordingly.
If your solution saves them time, money, or effort, they’ll be willing to pay for that value, even if it’s above market rate. This is especially important for SaaS founders who often undervalue their product in the early stages.
5. Start With a High-Margin Model
One of the best ways to fuel growth, particularly in the early stages, is by starting with a high-margin service model before fully scaling into a SaaS business. Many successful SaaS companies began as service-based businesses. By offering a done-for-you service that solves your customers’ problems directly, you can generate the revenue needed to invest in building and scaling your software.
This model allows you to validate your market, build relationships with customers, and generate revenue while refining your product offering.
6. Sales is a Marathon, Not a Sprint
Finally, understand that sales is not a quick win; it’s a marathon. Consistent action is required across the entire sales funnel, from lead generation to nurturing to conversion. Establish a clear process for each step of your funnel:
- Lead Generation: How are you bringing new prospects into your pipeline?
- Sales Pitches: Are you tailoring your message to different audience segments?
- Follow-Ups: Are you consistently following up with leads and customers to maintain relationships?
One of the biggest mistakes I see is founders who think that a single sales pitch will lead to a conversion. In reality, sales is about building relationships over time. It’s about trust, persistence, and delivering value at every stage.
Conclusion: From Collecting Underpants to Winning by Design
At the end of the day, building a business is about more than just having a great product. It’s about having a plan, setting clear goals, and making data-driven decisions along the way. The founder I coached was collecting underpants—he had a vision but no roadmap. To win by design, you need to understand your market, establish a business case, and continuously refine your approach based on real-world feedback.
So, ask yourself: Are you collecting underpants, or are you designing a path to profit? The difference between the two could be the success or failure of your business.
If you’re ready to take the next step toward building a profitable strategy, schedule a complimentary consulting session with Wingmen Consulting. Let us help you turn your vision into results.
