$100 million in Annual Recurring Revenue (ARR) is the holy grail for many SaaS startups. It’s a milestone that separates the unicorns from the also-rans. But how do you get there when you’re targeting a market segment that most investors and competitors ignore?

In a recent episode of Category Visionaries, Kyle Hanslovan, CEO and co-founder of Huntress, a managed security platform, shared insights into the unconventional path that led his company to this coveted milestone.

Embracing the Unsexy Market

Most cybersecurity companies chase enterprise clients, viewing them as the path to rapid growth and big paydays. Huntress zigged where others zagged.

“There is a poverty line that exists between enterprise and mid market SMB companies, and we’re for those folks that are the 99% that are usually ignored,” Kyle explains.

This focus on small and medium-sized businesses (SMBs) wasn’t just different—it was seen as downright misguided by many. Kyle recalls, “From the Angels to the series A all the way, believe it or not, into series B was the first time I got conviction for SMB. So that is five years in, people did not believe in my go to market.”

But Huntress saw an opportunity others missed. By serving the underserved, they tapped into a vast market with less competition and a desperate need for accessible cybersecurity solutions.

The Channel Partner Masterstroke

Huntress’s growth strategy hinged on a clever go-to-market approach: instead of targeting SMBs directly, they partnered with managed service providers (MSPs).

“We’ve got about 4000 of those. And they bring us to about 110,000 of those SMBs,” Kyle shares.

This approach allowed Huntress to scale rapidly without the need for an enormous direct sales force. But success didn’t come overnight. Kyle’s early strategy was hands-on and time-intensive:

“I ended up pitching my first handful of customers and was like, I will work for free one day a week in your office to learn more about MSPs. And I did that for probably the first two and a half years just to learn.”

This deep dive into the MSP world gave Huntress invaluable insights, allowing them to tailor their product and messaging perfectly to their channel partners’ needs.

The Total Cost of Ownership Edge

As Huntress grew and competition in the SMB cybersecurity space heated up, they maintained their edge through a focus on total cost of ownership (TCO).

Kyle breaks it down: “Even though my product isn’t the cheapest, if you combine the cost of acquisition plus the cost of the operations or humans to manage it, plus that opportunity that you could be doing other things and those three things into TCO or total cost ownership. I am the lowest total cost of ownership and we just disproportionately win our deals.”

This focus on TCO rather than just upfront cost became a key differentiator, allowing Huntress to win deals even against larger, better-funded competitors.

Data-Backed Conviction

Throughout Huntress’s journey to $100M ARR, one factor remained constant: the team’s unwavering conviction in their strategy, backed by hard data.

“I had the people telling me the stories, people showing. I had the data that I was building from the bottom up on saying, look, this is how big the total addressable market is. That kept me going,” Kyle explains.

This data-driven approach not only kept the team motivated through tough times but also helped them refine their strategy and convince skeptical investors.

Evolving with the Market

As Huntress approached the $100M ARR milestone, they faced new challenges, including the rise of AI in cybersecurity. Rather than getting caught up in the hype, Huntress took a measured approach.

Kyle sees AI as a tool for augmentation rather than replacement: “We found very few cases where AI truly replaces, but many cases where it augments.”

This pragmatic approach to new technologies has allowed Huntress to stay relevant and continue growing even as the market evolves.

Lessons for Scaling to $100M ARR

• Don’t fear the unsexy markets: Sometimes, the biggest opportunities lie where others aren’t looking.
• Leverage channel partners: The right partnerships can dramatically accelerate your growth.
• Focus on total value, not just price: Understanding and communicating your total cost of ownership can be a powerful differentiator.
• Let data drive your conviction: When the conventional wisdom says you’re wrong, let your data tell you you’re right.
• Stay adaptable: Be ready to evolve your approach as the market changes, but don’t get caught up in every new trend.

Huntress’s journey to $100M ARR is a masterclass in unconventional thinking and unwavering focus. By targeting an underserved market, leveraging smart partnerships, and maintaining a data-driven approach, they’ve achieved what many thought impossible.

As Kyle looks to the future, his ambitions are clear: “You’re protecting 300 or 400,000 of us SMBs. How do you protect the 34 million that are in the US alone, let alone the hundreds of millions across the globe?”

For Huntress, $100M in ARR isn’t the end goal—it’s just the beginning of their mission to democratize cybersecurity for SMBs worldwide.