Dan Martell started his first business when he was 17 years old and has since built five technology companies, four of which have found major success. He has invested in more than 40 successful companies, four of which are now billion-dollar companies: Intercom, Hootsuite, Udemy and Getaround. Today, Martell coaches 600+ SaaS founders, including the popular online businesses ClickFunnels, Proposify and Carrot.
It’s not every day that you get to sit down and glean insights from one of the world’s finest serial entrepreneurs. SaaS Mag had the privilege of asking Dan Martell, award-winning SaaS founder, investor and coach, what every SaaS founder wonders: how did he find success? Martell, with his cheeky Canadian smile, wanted to assure of this: it all started from a modest beginning.
The early stages
At 11 years old, Dan Martell was diagnosed with ADHD. At the age of 13, he was introduced to drugs. He grew up in “the system” – moving throughout group homes, foster homes and crisis centers. By the time he was 15, he found himself under the influence and in a high-speed chase with the police. He survived despite the odds and ended up sentenced to prison.
Saint John Regional Correctional Centre, an adult prison for youth on the east coast of Canada, was where Martell carried out his prison sentence until his release. Martell was relocated to Portage, a drug rehabilitation center in New Brunswick Canada, that he described as “one of the most magical places in the world.” He spent 11 months working on his emotional intelligence, rebuilding trust with family and building self-esteem by sharing his story and finding healing in the purpose he had now found in life.
At the end of the program, Martell befriended Rick, the maintenance man at Portage, and helped him clean out cabins onsite. Portage was built on an old church camp, and while Rick and Martell were cleaning a room they had never been in before, he found a yellow Ziff Davis book on Java programming.
Martell got to a computer and entered the code he had found in chapter one. His input caused the computer to say, “hello world,” and instantly he knew he had an interest in coding. Prior to this spark, he lived with the constant thought that he was mediocre, at best, in life. After this experience though, he felt he might be gifted at computers.
The year Martell left Portage coincided with his last year of high school. He transitioned to a new school to avoid his old peer group and stumbled upon their offering of computer programming classes.
Martell soon learned that what he experienced that day in the cabin was just computer programming basics, but he was grateful for his naivety at the time. It is what led him to pursue the career that changed his life trajectory.
The road to success
Martell’s ventures weren’t always successful, though. His first two start-ups were rocky.
“I wasn’t thinking big enough the first time around. I started a company called Maritime Vacation, specifically maritimevacation.ca, a vacation rental site, that should have been a tremendous success. Think Airbnb or VRBO. The main problem? The name and it’s limited scope it had in Canada. After I created it, I found out about atthecottage.com and realized I had made a mistake in choosing the domain name I had. I realized then I was thinking too small.”
The takeaway? Don’t limit yourself through small thinking.
That wasn’t the only lesson Martell learned from his first venture, though. He said that he initially built Maritime Vacation for his dad, but that it wasn’t his passion. The second lesson: solve a problem in the market that you have a passion for.
While explaining the failings of his second company, he began to share his biggest piece of advice: plan for success. “I think a lot of people plan for failure. What about success? What if you are successful? People climb to the top of the success ladder only to realize they are not absolutely in love with what they do. That is why I believe it is so important to not only think big about your successes but to also make sure you are passionate about your venture.”
Knowledge is power
Martell’s humble beginning shone through as he talked about his success in the SaaS space. He went on to explain that the book on computer programming he found in the cabin in Portage was not the only book he attributed to his transformation. When he was 23 years old, he found out about a book called Love is a Killer App and bought the book on audio CD. Dan considered himself a bad reader then, so he enjoyed books on tape because he felt with his ADHD, he could finish them with greater ease.
This book created a catalyst for change in Martell, as he realized the importance of having a growth mindset, personal development and continued self-education.
He knew he wanted to be his own boss, so he began to prioritize educating himself. He obtained an incredible appetite for learning. He has now read over a thousand business, marketing, sales and personal development books, and continues to read daily.
Passing the torch of knowledge
Today, Martell uses his knowledge of SaaS founding, scaling and exiting to coach some of the best entrepreneurs in the world through his SaaS Academy program. At SaaS Academy, founders go through rigorous training on how to take their SaaS business to the next level: converting and attracting leads while expanding their customer base and increasing revenue.
While Martell spends his time coaching thousands of people each year on growing their SaaS startups, SaaS Academy wasn’t his first way of spreading his knowledge. Earlier in his career, he’d been on the board for a local technology accelerator, and in 2008 he started a blog. He also shared advice on social media from the very beginning of his career.
Then, he got the idea for a YouTube channel after he sold his company Clarity, a technology company offering advice from world-class experts.
“There was a 10-year window where I built and exited Spirit, Flowtown and Clarity. That period of my life was exciting, but I knew I needed a break. My family moved not to start another company, but to rest,” he said. “Until I met a man named Travis Houston, who inspired me to start my YouTube channel.”
Martell was taken aback by the idea of starting a YouTube channel. He knew he loved to write and produce content on social media platforms, but to be on video for the entire world to see? That was a different story altogether.
His fear was an indicator that it was time to try something new. He didn’t let being scared keep him from developing a new skill. He had just scaled back from an 80-hour work week, so he knew he had the time on his hands. He decided to give it a shot.
His final inspiration came after a friend of his was given a life changing diagnosis. When Martell asked this friend his inspiration, he claimed that his children motivated him to continue to pursue a good life despite only being told he had just two years to live.
Thus, the early days of YouTube for Martell were for his sons. He wanted to have something they could look back on if something were to happen to him unexpectedly, like it did his friend.
Soon, his friends began to take interest in his YouTube business principles.
“Here is one thing I have learned about life: a lot of people want your advice, but don’t want to ask you and bug you. Then there are a lot of people that will never get to know you that know of you. They often want to learn from you, but they have no idea how. The last type of people? The ones who will ask for your advice and waste your time. So, what did I decide to do? Find an efficient way to share my knowledge with all of them.”
He went on to do just that. He began publishing content every Monday for five years, never missing a week. He began to see traction with entrepreneurial friends and started to notice that middle school-aged kids were following his videos and leaving comments. This diverse following inspired him to keep producing information and sharing everything he knew.
The content on his channel began to change. Martell credited his friend Jared Belimo for pushing him to lean into motivational speaking on his channel. He recalled, “He told me that sometimes people just need a little bit of inspiration to get moving. He inspired me to share my hardships, my challenges and all that I faced in life that led me to where I was today.”
This is when his YouTube channel really began to kick off. People started to consume his content and he would get requests left and right for business consulting and coaching. At first, he was hesitant about the idea, but then remembered his core value: push past fear. So, he pursued coaching. He fell in love with coaching and found joy in being along the ride for people’s journeys.
“I get to see hundreds of clients and their journeys. We have a very structured growth program where I see clients from the ideation phase all the way to the scaling phase. I watch people transform not only their businesses but their teams, their company culture and themselves. Their mindsets change and so does their vision for what is possible.”
While Martell was happy with his channel and the opportunity to share his advice elsewhere, he soon began to realize that if people don’t pay, they often don’t pay attention. “If people do not invest in it themselves, they will not show up. Freemium does not work in content where people are doing self-help. They might consume information, but they are not motivated to take action.”
As a result, Martell created a model where clients can get the most value via a paid services model.
Today, Martell not only has the privilege of coaching the best entrepreneurs in the world, but he has the largest training and coaching company for SaaS entrepreneurs in the world. His YouTube channel now has 67.2k subscribers and his YouTube videos have reached hundreds of thousands of views.
After hearing his fascinating story of growth and entrepreneurial fame, we asked him to give our audience a taste of the information he shares with founders at SaaS Academy and his YouTube audience all over the world:
Retention drives growth
“Retention is key when driving growth,” he said. “If you don’t keep your customers that you’ve already sold to, you will hit your churn ceiling – the point where your percent churn and number of clients you add in every month cancel out. When you hit this point, you will flatline your growth curve and your company is done.”
His number one piece of advice? Fight to keep your customers. And if they do leave, figure out the answer to these questions: What caused them to leave? Where did they switch to? What were they frustrated with? He added, “Don’t spend all of your time on marketing until you have a great retention engine. People are too quick to look for silver bullets in marketing tactics when they completely ignore the fact that they have customers coming and leaving.” Fight for your customers and fight for your company. “Create and keep” was the motto he ended with.
Understand the relationship between your production and engineering
“You know you have a problem when you keep building features, but your numbers don’t get any better. You need to have someone that is overseeing product management.” Martell likened it to that of a restaurant owner: “If you are a restaurant owner but you never taste the food coming out of your kitchen, that is a red flag. But if you have a chef who isn’t tasting their own food, you have a major problem. You will lose customers and you will not get positive feedback on your dishes.” He went on to say that this is the same for production and engineering. You need feedback and you need someone overseeing production. “Especially if you are in the early days, fix your numbers. Fix your retention, fix churn and fix activation. A lot of founders are focused on launching new things to stay competitive when really you just need to create an excellent product that customers will stick around for.”
Know your metrics, use available online resources
“Every SaaS founder needs to know their numbers. You need to instrument the data and build the tool set that will give you reports. The cool thing about being in SaaS is you can monitor everything. You can monitor every aspect of the product, from the clicks to the data that was entered.”
Martell gave examples of tools for SaaS entrepreneurs to use to measure their metrics, including Profitwell (a subscription for business financial metrics) for finding out financial metrics and Stripe for payments. He also mentioned Segment (a customer data platform) and ChartMogul (an analytics platform for SaaS companies).
“These are the numbers you should know: How many customers went from active to inactive? Are you monitoring risk? Do you know the lifetime value of your customers? Do you know how much it costs you to acquire a customer? These are all fundamental data points that are essential that you understand. Map them out on a weekly basis and set targets for them. Are you getting better? If not, then you are focusing on output more than moving your needle towards outcome.”
Business coaches help you avoid past failures
Martell hired his first business coach when he started to build his third company. Why? He had already failed twice and wanted to learn from his mistakes. Martell introduced us to his coach, the man who shared incredible lessons and strategies that landed them a business in the multi-million-dollar range after a four-year period. He showed Martell how to navigate everything from the legal side of things to the financials. The company, Spheric Technologies, was acquired four years later. Martell called it a ‘wild ride’ with 150% growth, award winning service and a world-class company and team.
“People often call me the CEO or the manager. There is a difference between being a leader and being a manager. Leaders lead through challenges and people follow them regardless of if they are getting paid. Why? They feel they have purpose in the mission. They are energized by their leader and they have mutually aligned goals.” Managers? Well, according to Martell they “only make sure they get things done.” Martell described himself as a left-brain computer guy. He was good at building systems and making sure people were productive. What he wasn’t good at? Communicating vision. “You need to connect your work to your vision. Build the people and the people build the business. This is what I have learned through my experience.” In short, to be a leader and not just a manager you will need to instill your vision and inspire your people to action. If you are a successful leader, they will be able to build your business to where you want it to go.
To sum it all up: “Educate yourself and become a lifelong learner. Hire a coach and have someone that has experience in the places you would like to go. My business coach helped me get there. Learn how to develop, grow and lead people. If you act like a manager, your best people will leave and find someone else to follow.”