Unique Aspects of Product Management in B2B SaaS
B2B: “Business to Business”. In simple terms, your product is made for and sold to organizations to address their business challenges.
SaaS: “Software as a Service”. In addition to the IP and the packaging of your software, you also host it for the consumers.
“Multi-tenant” Copyright: Goran Begic
Product management is more sought out than before. At the same time, product management as a discipline is as misunderstood as ever (see this video). I thought that it would be good to revisit a couple of unique points about being a product manager for a SaaS offering with a focus on serving large, Enterprise clients.
I wanted to write about this topic for quite some time, having been through the initiation process earlier in my career. Every time I would describe the experience and generalize it to all of B2B and all of SaaS, I would quickly realize why it is important not to extrapolate a single person's experience to many companies out there competing for business clients' attention and budget. Please take the following post as a starting point for the discussion. If you are making a leap from a traditional software business to a multi-tenant environment, this can be a reference.
- SaaS and B2B
First off, let’s deal with some pre-conceptions. The moment we hear Software as a Service offering, or something to that nature, it is easy to immediately assume self-service, easy onboarding, ease of use, and other good things associated with a high-velocity adoption model. Not all SaaS offerings in a B2B world work this way. It is also easy to assume that SaaS means a relatively new business or a market segment. That has also not been true for some time either. Finally, product management is organized differently in different organizations. In general, the bigger the company, the more opportunities for siloes exist. That’s a story for another day. In summary, keep an open mind when you read this.
2. Ops is a Part of Your Value Proposition, Roll Up the Sleeves
A few days ago, I had a chat with a friend who said: “Huh, one of our clients was using our service in a way that it was not designed for. The use case ramped up the cost to us to the point where we're spending more serving this client than they are paying us for the service.”
If you are in a traditional business software world where somebody needs to download and install or deploy your product before consuming the new value, the operation cost is pushed to the end-users or the respective IT organizations. The impact of critical defects and errors is often not immediate; It takes time for your software to get installed and adopted, end-users to be trained, all custom mods updated, etc.
Things are different with SaaS solutions. When you roll out an update, all your customers get it immediately after the push. If you are not careful, lack of automation or quality issues can easily lead to nasty surprises and service disruption.
In the ideal world, you benefit from the same strategic skills as your traditional software peers, and you can use these skills to partner with the Operations team or with your agile DevOps teams. In the messy, imperfect world, in addition to your strategic product management skills, as a PM in SaaS, you need to embrace the tactician in you in order to:
- Find time to learn about your product operation, the people who ensure service availability, and their challenges.
- Learn about the established emergency procedures and key contacts, including those in your customers’ organizations. If you promised delivery of a fix or a new feature for something that will impact your client’s business process and things did not go as planned, be ready to help your team and the clients weather the storm until the issues are resolved.
The strategist in you can help you:
- Partner with the engineering teams to reserve cycles for engineering excellence and automation and take an active role in ensuring that cycles spent on automation reduce the number and type of emergencies.
- Design a controlled rollout of the new features and functionality to get some feedback before you make the updates available to the majority of your clients.
3. Pace of Renewals and Adoption
This is another topic where theoretically, the delivery model should not make any difference to the nature of the product management job. Still, in my experience, organizations that deliver SaaS tend to offer flexible monthly pay-as-you-go services or annual contracts. Combined with the faster adoption of the new value that you so tirelessly work on delivering, your sales representatives may be knocking on your door more frequently and with more creative ideas than you may be used to in the traditional business software world.
Reducing time to value accelerates all aspects of the business around it. Everything moves faster. Defects and performance issues are more visible; there are more “special feature requests” and other ideas on how to increase the average sales price. This is where your strategic skills can help. Clarity of vision, agreement on business priorities, clearly articulated tradeoffs, and executive team buy-in are your allies.
The less clarity you have about when to say no, the more willing you are to accommodate “special requests” that can eat into the engineering capacity or cost of service, the more time you will spend in the crisis management mode.
- Work with your DevOps teams to improve planning estimation.
- Pay careful attention to dependencies in the delivery of new capabilities outside of your zone of influence.
- Create a channel for feature requests (and any “special client requests”) so that you can be aware of them as early as possible.
- Establish clarity of business and technical objectives and use it to prioritize ruthlessly.
- Organize regular communication channels with the executive team about the priorities, recent decisions, and the impact of tradeoffs.
4. Business Process Integrations
You envisioned it; you built it, you host it, but the chances are that your service is consumed as a part of a larger business process. Each of your large customers has a slightly different place in the process for your service. Each of them has slightly different priorities, and many of your clients are used to requesting the tune-up of your product for their specific needs. After all, they are paying you “big money” for the service, and they are used to getting the customization that they need from the traditional software vendors.
Let me be clear. You want to be integrated into the customer’s business process. Since the business process integration is an important aspect of your offering, you need to manage the special requests and, more importantly, architect your solution so that it can be extended and updated without disrupting the remainder of your user base and other “special clients.”
4.1 Manage requests from each of the special clients in addition to the offering in general
The first step is the management of enhancement requests for each of the “special clients.” It starts with one special client, but if you are not prepared and if your business is doing well before you know it you will have 10 or 20 special clients. 10 or 20 special clients means that you have 10 or 20 important renewals that are always around the corner. The requests for enhancements will end up being chips on the bargaining table.
In my experience, your clients will rarely manage their enhancements themselves. They will not continuously prioritize them or check with the originators of the request to see if they are still relevant, etc. If unprepared, you will receive an urgent email from sales asking you to join the client's meeting, where they will go through a laundry list of requests collected since the last renewal conversation. Many of these requests will be out of date, there will be no clear priority between them, and you will need to make quick decisions.
4.2 Make sure that your solution is architected for adoption in the client’s business process.
That shiny product dashboard that you and the team have been working on may provide a nice high-level demonstration. Still, it may be the API that will allow you to make the integration possible, and it will also help you address the large number of enhancement requests that your client needs to fit your service in their business.
As a product manager, you are not a likely candidate to actually do the architecture and the implementation. You are, however, a member of the team accountable for the continued success of your product or service. If your business objective is to meet the need of Fortune 500 clients, anticipate customization and architect how to deliver business integration without sacrificing usability and quality of the service for your other clients.
5. Quality and Volume of User Experience Data
Thanks to Joe Pelletier for reminding me of this advantage of the hosted solution that can have a profound impact on the product management work. It has to do with the availability and precision of usage data.
I want to be careful with this because of all the privacy and regulatory implications, but in general, some type of service usage data is always going to be available for a hosted solution. An example would be user activity over time, performance data, etc.
With traditional software, the usage information can still be made available but…
- The collected data will likely not be complete, whether due to connectivity issues or delays in adoption, or the frequency of data collection.
- You will need to work harder to integrate instrumentation into your application and potentially, also invest in developing the back-end service to process the data if such capability is not provided through the application platform.
Clearly, with more complete usage data and other relevant metadata in your SaaS offering, you have an opportunity to make timely adjustments to your service, or to create completely new offerings with confidence. For anybody in the SaaS world competing with traditional software solutions, this is a textbook example of Unfair Advantage.
All this means that if you work on a SaaS offering, you are likely to spend more time analyzing more sophisticated patterns of usage. It would be foolish not to. On the side of traditional software, unless you develop a solution for instrumentation or user interaction you will end up relying more on fragmented, or subjective information.
The only word of advice I can share is — make sure you balance the quantitative and qualitative data when making decisions.
In Conclusion
I hope you appreciate this walk through the world of product management in B2B SaaS and some suggestions to help you excel in this role. Most of the topics that I covered here are relevant only if your business is doing well and you have a reasonably good understanding of your product-market fit. If you are still experimenting, plan for success. Good luck!
Reference:
Here are some interesting reads on related topics:
What metrics to monitor as a B2B SaaS company? | by Minh VH | Qualgro Partners | Jan, 2021 | Medium
