From Seed to Series C: Find Product-Market Fit and Scale with Marc Freund and Five Tool

by | Jul 21, 2022 | Business, SaaS Founders

Marc Freund discovered his love for startups in the unlikeliest of places: UPS. It was while working here that he caught the entrepreneurial bug.

Though he started in the package delivery company’s accounting department, he eventually found a position in new product development. This role was empowering and helped satisfy some of Freund’s ambitious spirit, but he soon learned that this freedom had its limits, particularly after one of his projects failed to take off.

“I didn’t just want to be a cog in a machine,” Freund shared about his feelings after this incident, but he did not let this deter him. Within six months, he enrolled in an MBA program with a focus on entrepreneurship and went on to get his degree.

A few companies later, his success landed him the role of head of marketing at FieldEdge, but there was still more he yearned to accomplish; specifically, he wanted to start an agency of his own.

Using the experience he gained over his many years of consulting, he co-founded Five Tool in 2017 with the goal of helping SaaS companies – from Seed to Series C and beyond – find product-market fit and scale. He describes the agency’s mission: to “help clients’ dreams become a reality by helping their end customer find the product that makes their dreams a reality.”

Founding Five Tool

Most businesses are created around a pain point – some problem that a new venture is necessary to solve. For Freund, this pain point was realized while working with other agencies in his former positions. “I knew they were placating me. I would tell them, ‘Tell me things that make me unhappy, if you know what the right move is,’” he states.

Most of the agencies Freund worked with either withheld complete honesty to keep him happy, or their goals were disjointed from his. These experiences helped guide him in founding a new company focused on managing client expectations, delivering desired results, and communicating openly and honestly, however unpleasant that honesty might be.

Five Tool is a company that is invested in ensuring the businesses they work with are successful at connecting with their core customer base, and through experience, Freund knows that this approach can be difficult. But as he says, “You can write fluff pieces, and you can write pieces that you feel are going to genuinely help people, and the latter of those is infinitely harder. But there’s such a buzz that comes from getting a great result that you worked hard on.”

Five Tool was founded on the principles of doing what it takes to make the right moves for companies and approaching these interactions with honesty and transparency. This level of communication has served them well in their operations so far, and in the five years since its founding, Five Tool has gone on to see success with a myriad of companies.

How Far Has Five Tool Come since Then?

Five Tool currently functions with two distinct services, which Freund describes as “lead generation” and “development.” Lead generation focuses heavily on SEO and PPC marketing, while the development side focuses more on technical applications like marketing automation. While these are two separate areas, they do not always work exclusively, as the development tools often amplify the lead generation services.

For instance, Freund shares that their work with building landing pages – naturally supports SEO, PPC, and drip campaigns. This collaborative process is one of the reasons that Five Tool maintains strong relationships with its clients.

“[One company] told us they loved that we were willing to understand their industry before executing on the strategy and that we were transparent about our best idea of what would work and the point at which we would pivot,” he recalls.

This was just one bit of feedback that helped Freund and Five Tool understand that their guiding philosophy had shown in their work and made them stand out from other agencies.

He goes on to share a story about one of their projects for another company, where he and Five Tool recommended a long-term change that would cause a drastic drop in site traffic in the short term. Their foresight was correct; this drop did happen, but Freund and Five Tool had stressed that this was a necessary hurdle to ultimately achieve the results they desired. The business trusted Five Tool and persisted through the drop in traffic, and soon enough, they saw better results than ever before.

This company appreciated Five Tool because of the agency’s willingness to advocate for the right move even when immediate optics might look bleak. Honest communication and transparency, Five Tool’s core commitments, served them well in this scenario and in many others.

His Key Advice for Scaling

To ultimately grow a new business, he recommends focusing on mastering a specific market and then expanding from that solid foundation. “The only way to scale is to get really good at one thing because people will pay someone way more to do one thing perfectly than they will to do 10 things mediocrely,” he points out. Down the line, your business could have several different areas of expertise once you have the resources. But in the interim, it is best to nail down your niche.

Freund also describes what founders can do to maintain growth within their businesses once it becomes time to start outsourcing.

“One of the biggest faults of founders is not trusting other people to do the work,” he acknowledges. Founders often want to understand and manage every aspect of the company and handing off responsibilities as the business grows – though necessary – can be difficult. Building a process for onboarding is a reliable tactic that Freund says has made this experience smoother.

He details his effective 4-step process for onboarding staff into a new responsibility: “We have a very straightforward approach to this, which is 1. I do it, and you watch me, 2. I do it, and you help me, 3. You do it, and I help you, and then 4. You do it on your own, and I help you.”

He also stresses the importance of treating new agencies you work with the same way you would treat new hires: Onboard, train, and monitor them, and do your best to set them up for success.

In addition, Freund says it is essential for a company to invest both money and time into marketing, as “throwing 10k a month at an agency and then being inaccessible is the surest way to light that money on fire.”

Though hiring an agency can be valuable for long-term business growth, he cautions against relying on an agency to learn.

He describes: “One of the best professors I ever had said, ‘Never outsource your core competency.’ I’m a firm believer that knowing what keeps your ideal customer up at night is a core competency. Don’t rely on an agency to figure that out. In fact, don’t even consider hiring an agency until you know that.”

There are three additional pieces of advice Freund imparts, which he learned through the trial and error of scaling Five Tool over the last few years: Have processes in place (and document them), narrow your market, and talk to experts in the field rather than trying to figure everything out yourself.

The Present and Future of Marketing

Freund further emphasizes the importance of “niching down” your market and channels due to the broadening of the market, especially in response to the gig economy.

“There are so many more startups that have access to the people and resources that only the big guys used to have. So, there are hyper-specialized people leaving SaaS to go consult all over the place,” he explains.

Freund points out that for new companies, it’s becoming easier to find someone who is hyper-focused on your specific market and goals, so reaching out to larger agencies and paying more isn’t always necessary.

He feels that bigger advertising agencies won’t be around for much longer, and the ones that do remain will have deeply established relationships and an undeniable track record.

In terms of content, Freund suggests that it is most useful for building brand awareness and displaying your expertise. Most online information has become a commodity, so “gated content requires being truly unique in order to be effective.” He also says that Google is closing the SEO loopholes (e.g., keyword stuffing and the skyscraper technique), effectively prioritizing content that is truly useful or educational.

“The objective is to force websites to create content that is useful for people, not content that is appealing to the rules of a machine like Google’s algorithm,” he states.

As for the outlook for Five Tool, the agency will continue having honest conversations with clients and helping to build those lasting relationships between businesses and their consumers, which will help ensure their longevity even in the expanding and evolving market. Check out Marc Freund, Five Tool, and their B2B SaaS marketing services on their website.

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