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The Handbook

Last Updated May 19, 2020
Reading Times:
Summary only: 1 minute
Full guide: 6 minutes


This handbook is meant to be a summary of our preliminary results. For more detailed info, we'll link you the respective full guide. Within each meta-category, we order each SaaS category by rough order of importance.

We intend for this handbook to be most useful for startups up to around 20 people; it may still be informative if you're a later stage startup, but our testing and recommendations are, for now, solely from the perspective of an earlier-stage company.

Initial Formation

Essential, and typically needed early in your startup's life

Incorporation Service

Formally incorporating your company reduces liability, allows the company to pay taxes on revenue, and enables ownership (which in turn enables founder vesting, outside investment, and employee equity grants). While the actual incorporation is important, a lot of important legal setup occurs post-incorporation, which should be handled by the incorporation service.

Best in general

When we tested ourselves, we thought Clerky had the most error-proof formation process and high-quality guidance through each step of the formation process. No formation errors were reported in our founder survey. We think this is due to its focus on startup incorporation, which comes with a downside: it only incorporates C-corps.

If you need an LLC
Stripe Atlas
We think that Stripe Atlas' incorporation offering is quite strong if you want to incorporate as an LLC, and would recommend them if this is the path you want to take. However, we found that their post-incorporation guidance for C-corps is substantially worse than Clerky's, and their required bank account for C-corps is with a poor banking partner.
Some of the Alternatives We Tested
  • Lawyer-led process: The route to go if you need special provisions, which doesn't happen too often. We found that Clerky is otherwise faster, cheaper, and generally more reliable.

  • Gust: Has a robust incorporation process with parity to Clerky's, but the pricing model (subscription) isn't well-aligned.

  • LegalZoom/BizFilings/etc.: Cheap, with support for many states and company types. However, doesn't deal with any post-incorporation matters, which is arguably more important than the incorporation itself.

Store of Money

We believe there is no reason to keep your startup's fundraise in a zero-interest bank account. A 1.00% annual yield account would be thousands/tens of thousands of dollars for a typical early-stage fundraise. That said, yield rates are currently depressed due to COVID-19. We don't think it affects our overall recommendations, for reasons we discuss in-depth in our guide to Stores of Money, but it does mean that there's less incentive to switch accounts if you already have a bank account.

Our ideal store of money, but has enrollment restrictions
Brex Cash
Gave us the highest risk-free yield without any work from us, and made some uniquely-friendly product decisions that we couldn't find at any other bank that we tested. The caveat: we don't think you can get an account if you're not already a Brex Card holder.
Slightly lower yield, but widely-accessible
High risk-free yield without any work from us, albeit with a bit less transparency into interest rates and a $250k deposit requirement for higher yield. Fundamentally a startup-for-startups bank with the high user-friendliness that we'd expect from a neobank.
Some of the Alternatives We Tested
  • SVB: Good default yield through SVB Edge and high yield on higher deposit amounts were quite easy to attain. Our main qualm, however: SVB seemed to have more dark patterns than the other banks we tested (e.g. making it extra difficult to close an account).
  • Traditional Big Bank (e.g. Wells Fargo, Chase, Bank of America): In general, they have comparable yield to more startup-friendly financial institutions, but aren't as user-friendly.
  • Fidelity: Quite powerful in terms of micro-optimizing yield, but we think it is way distracting for startups — enrollment and onboarding takes an exceptionally long time.

Understanding Your Users

Essential and typically needed early in your startup's life

Web Analytics

Without using an event-based analytics tool, which tracks the interactions your users have with your product, you won't know how your users are using your product. Michael Seibel would argue that this just as important as actually building out the product. You can read more about this in our full guide to web analytics tools.

Ideal tradeoff for an early-stage startup

Gave us auto-tracking functionality, which we think is an exceptionally good safety net, although we think many startups use this functionality wrong. It lacks some of the extensibility and more advanced analysis capabilities of its competitors. That said, we think this tradeoff best suits an early-stage startup.

For high usage on a free plan
Amplitude's startup deal provided the most generous free plan of any analytics product we tested. Much of their product is aimed at later-stage companies, but their free plan and startup deal really stands out for an early-stage company.
Some of the Alternatives We Tested
  • Mixpanel: Jack-of-all-trades, but which we think is better for larger companies than early-stage startups. Requires more discipline to maintain than Heap, and its startup deal, while quite good, isn't as generous as Amplitude's. Its main differentiators come from extensions and advanced analytics, but this mainly benefits larger companies.

  • Google Analytics: Has poor event-based analytics support, but can provide good demographic/referral information. We'd recommend GA as a complement, not a replacement, for a bona-fide event-based analytics tool.

  • PostHog: Free and open-source (i.e. able to be self-hosted), although it's still decently far from feature parity with other event-based analytics tools, and usability could be better.

Non-Essential, but often quite useful early on

Live Chat
Live chat is usually the best way for a user to express a concern or frustration, give feedback, and ask questions about your product. As live chat has much lower activation energy than most other communication channels (e.g. email), it can often become an insight-generating machine for your startup.
Best end-user experience
Testing is done, preliminary writeup is in progress
Much more affordable long-term
Testing is done, preliminary writeup is in progress
Some of the Alternatives We Tested
  • Drift: Some of the best end-user UI/UX apart from Intercom and free/affordable. Unfortunately, we've seen it repeatedly suffer from engineering issues (e.g. being flagged as malware by Adwords, css position issues causing the widget to disappear, etc.), and can't recommend it as a result until we see greater technical stability.

  • Olark: The most pure live chat tool, in the sense that unlike most other competitors that have extended functionality (e.g. customer support CRM, email outreach, etc.), only offers live chat. In practice, however, it isn't as optimized for synchronous communication as other tools (e.g. it's abnormally difficult to respond to chat from a mobile device).

Session Replay
Testing is done, preliminary writeup in progress

Day-to-Day Operations

Essential, but can usually delay adoption for a bit

You'll eventually need to pay your founders and other employees, and deal with the legal and tax requirements associated with payroll.
Our recommendation
Testing is done, preliminary writeup in progress
Some of the Alternatives We Tested
  • Rippling: Rippling is more geared towards making HR work at scale — many of the problems it focuses on (e.g. creating accounts for new employees, IT setup/management, etc.) aren't that relevant for a typical early-stage startup.

  • Zenefits: Payroll plays second fiddle to other HR work, notably employee benefits. Yet the opposite tradeoff (better payroll, worse benefits) is better-suited for earlier-stage companies.

  • ADP/PayChex: The large, established incumbents in the space. They have the most functionality, but aren't focused on early-stage startups, which causes the experience to suffer.

Non-Essential, but often quite useful early on

Business Credit Card
In Progress.
Business Phone Number
Testing is done, preliminary writeup is in progress

Non-Essential early on, but can become quite useful later

Testing is done, preliminary writeup is in progress

Getting Customers

Essential, but can usually delay adoption for a bit

CRMs help you keep track of dealflow, partnerships, etc. There is a huge range of CRMs geared towards a variety of functions. Virtually all startups will need to use a dedicated CRM as soon as they launch and start sales, and we've focused on this usecase. We'll evaluate vertical-specific CRMs (e.g. customer support CRMs that come bundled with live chat software, for example) in their own categories.
Our recommendation; perhaps counterintuitive

Airtable isn't a bona-fide CRM, but we found that for many of the early-stage startups that we talked to, Airtable was a better fit. By nature, it is flexible enough to support an early-stage company's changing requirements as they're figuring out their sales process. This flexibility also means that there's no weighty, unused functionality, which means that your much more likely to keep your CRM up-to-date, and therefore, actively use and reference it.

Some of the Alternatives We Tested
  • SalesForce: Very likely to become the default choice once you start scaling your sales org, but you won't have to worry about that for a while as an early-stage startup. Is powerful to the point of being entirely overwhelming for a typical early-stage startup (analogous to Fidelity w.r.t. stores of money).

  • HubSpot: Better UI/UX than Salesforce, but lacks the integrations and more innate salesperson familiarity of Salesforce. Otherwise suffers from the same problems as SalesForce.

  • Copper: A quintessential startup-for-startup CRM with a focus on end user-experience. However, we found that Copper still enforces too much structure to the point of overwhelming a lot of early-stage startups.

Building Product

Essential, but can usually delay adoption for a bit

Web Error Tracking
Testing is done, preliminary writeup is in progress

May be essential for your specific situation

Static Site Hosting
Testing is done, preliminary writeup is in progress
Credit Card Processing
Testing is done, preliminary writeup is in progress
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Simon Herd
Transferwise should be considered for banking and credit cards. Having a multi-currency credit card and being able to avoid exchange fees could improve startups' bottom line by 3 to 6%. It did for us.
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