B2B SaaS from idea to exit — Things we learnt
Over the past 2.5 years we successfully built, scaled and exited TargetingMantra a B2B SaaS based personalization service for ecommerce and online travel. Having build a team of 25 folks and got over 60 clients across India, SEA and US we learnt a thing or two about building B2B SaaS businesses. Sharing what we believe are things that matter beyond a great product and supreme value proposition.
Prepaid Product: I can’t emphasise this enough. If you are building a SaaS product, think prepaid and not postpaid. You don’t want to be in a situation where most of your revenue will take way too long to show in your accounts.
The billing cycles if you are lucky will be about 60 days and on average around 90–120 days. And as a rule of thumb, larger the account, longer the settlement cycle. This is true for most Indian customers. Customers from the west though are prompt when it comes to payments.
Integration ease: Remember companies use SaaS for its quick turnaround and fast implementation. If your product requires more than a few lines of core more than a single JS library, you are looking a very long integration time (sometimes 10 months as we found out). If it means stripping down a few features for the ease of implementation, do it right away.
Go Niche: Focus on solving one or two pain points and give only a couple of features. Don’t go on to create a product that is a beast. We at TargetingMantra had made perhaps one of the best and complete personalization solution with over 20 features spanning across -homepage, product page, cart page, emails, notifications etc. While this made out product the most comprehensive solution, it also meant we had to deal with a large number of stakeholders and long (very long) integration cycle.
Pivot quick and forget existing revenue lines: There will come situations where you will realize that you need to pivot and focus in another direction. At that point, it would be hard to let go off your existing revenue stream and you will find it hard to focus on whats best in the long run. In such a situation, sit with your core group and take the hard call. Write it on your board and communicate it to your clients and most importantly your team. Bite the bullet before it bites you.
Easy to explain metrics: Have super easy evaluation metrics. If you have to explain or put tool-tips on your charts, the battle is lost. Simple open rate vs revenue contribution through widget xyz will work better and incite lessor debate.
Find the right client fit and de-prioritise the rest: Not all sized clients will work for you. Some will be too small and some will just be too large and debate endlessly on make internally vs buy externally. Also your product may only work best beyond a certain scale/data/traffic.
In the first few months, find the right size of clients and focus on them. Don’t get tempted by small clients which may give you a small bump in the revenue but take away precious tech bandwidth. Hard to let go off any revenue but take the hard-pill.
Small engineering team with razor sharp focus: Build a hand-picked team and keep it small. Small team means you will think better and prioritise better when it comes to new features. Also it means your team will have to build and test one feature complete before it can move on-to something else. Developers don’t like devops but its the only thing that matters for customer delight. Build a small team and focus on only the things that matter.
