I was talking to a friend and recounting my experiences building multiple SaaS startups and why SaaS is generally a tough nut to break into. While I was talking to her, I started asking myself with the benefit of hindsight “What would I do differently the next time?”. Here are a couple of things I would have done differently, irrespective of what I was building.
This was the top-most thing that came to my mind when I asked that question, for a good reason. Price influences many things: Your customer segments, your retention, sales and renewal cycles and most importantly MRR/ARR. If you price something too high, you will need to come up with a significant differentiation w.r.t your lower priced competition. If you price something too low, you will need to go through motions of raising the prices slightly and risk drawing ire from your early users. What about Freemium? Better have a good reason for doing so.
Research, experiment and choose your price carefully!
Understanding and mapping this audience will help you understand how they influence your Sales and Product strategy. There are three major buckets you can divide your SaaS customers into: Significant Gainers, Outsourcers and Underserved segments. Significant Gainers are the accounts who will end up as a net-net ROI gainers. Outsourcers are typically large accounts & have a good mapping with your offerings, they may end up outsourcing all of their headaches on to you. Underserved accounts are not completely sold by your offerings or there is a good lapse in the expectation, price or (worse) their ROI. It’s always a good idea to try and balance all of them in a way that you don’t become a service shop for your top 10-20% accounts and under-satisfy the rest.
Try to map the ROI, their impact on your revenue and roadmaps before you onboard accounts.
Break the journeys down and map them to specific stakeholders. If you want to onboard accounts where the annual ticket sizes are more than 25K$+ spend some time here. Acquisitions of large accounts typically have four specific journeys:
At every step of the way you will meet different POCs/Teams handholding & influencing the specific journeys. Understand how other deals have gone through these stages and make it brain-dead simple. It seems obvious but in retrospect, this is mostly an after-thought and not the first thought.
Optimize to get to “I need this now”, “This looks good” and “This is approved” mails as quickly as possible.
When you build a tool that solves (one or more) problem(s), understand that there are a number of possible solutions. Understanding the market’s expectations continually can only happen if you ingest valid feedback at proper places. The most significant places are: Whenever demos/pitches happen, and whenever someone churns. Pitches are akin to coffee dates, sometimes they just don’t work out. Be prepared to get all sorts of feedback if done right. Existing accounts are like married couples and as with every failed marriage, the reasons are typically a mismatch in expectations or not being respected in the relationship. Try to solve for this before the dwindling bottom funnel becomes a problem!
Failed expectations typically end up in churns, so avoid it like the plague.
Intuition and Opinions will rarely ever take you far along the right path. Everyone (including me) has an opinion on making things work and building something. That doesn’t mean whatever works for you is wrong, learn to differentiate between signal and noise. But always remember when the map doesn’t match the territory the map is wrong. I wish I had listened to customers more than thought leaders and filtered signals from various noises. Be open to change at every step of the way - it’s the only way to grow. Look (upto) at companies that disrupt themselves or cannibalise themselves, as they can teach you a lot. Nothing is truly one-size fits all!
If you make the same mistake twice, it’s not a mistake anymore, but a f@#kup!
Note: This is mostly a collection of stuff I messed up on, that doesn’t mean there will be a 1-1 mapping with whatever you are doing. Remember to have fun while building, & ship stuff you are proud of! :)
P.S: I would love to know more about what you think about the same? Also thanks to Bhavya for reviewing and suggesting edits to the early drafts for this post.