Software as a Service (SaaS) businesses have been attracting a lot of attention in recent years. As Marc Andreessen has argued ‘Software is Eating the World’. However, for startups looking to build the next unicorn the SaaS journey can be daunting as you look to avoid the SaaS Startup Graveyard.
The good news is that help is at hand, and there are a number of great resources that you can leverage to navigate the stormy seas. The following represent 10 key tips to read up on to help ensure your success.
Goodman delivers a phenomenally candid insight into her journey with Constant Contact, and the challenges they faced, as well as reaffirming the notion that there is simply no silver bullet when it comes to accelerating growth.
“So, the long, slow SaaS ramp of death is that it just takes a long time to get to minimum critical mass.”
Long sales cycles are the bane of all startups lives, and Redpoint VC, Tom Tunguz tackles the subject brilliantly:
“Faster and more frequent sales cycles enable quicker experimentation and ultimately a more rapid discovery process to the right initial sales process.”
Janz dissects the market into different buckets; ranging from flies (single users), to elephants (large enterprises) indicating the best strategies to help startups effectively reach your target market. A compelling read.
4. Three SaaS Sales Models by Joel York
York outlines the various ‘routes to market’ from self service to field sales, indicating how pricing, and feature complexity combine to impact your chosen sales model.
“Choosing the right go-to-market sales model for your SaaS startup can be a make it or break it decision. Choose right and you grow smoothly from seed funding to A round to B round and beyond. Choose wrong and you spend precious cycles chasing your tail as cash runs out.”
Back in 2003, Fried was one of the first to talk about topics like onboarding and ‘optimising for the blank slate’ (the screen you see when you sign in to a data rich application devoid of data). Obsessing over details like the blank slate and onboarding will help reduce churn and enable your users to obtain value early on in their product journey. First impressions most definitely matter when it comes to SaaS businesses.
Skok is one of the leading commentators when it comes to SaaS, consistently producing high quality articles of real insight. The manner in which he makes SaaS metrics accessible means that his blog is a must read for any SaaS entrepreneur.
Paul Graham is another VC who continuously delivers compelling content and this essay is no different. In it he reminds startups that they have to engineer initial growth by getting out and actively engaging with the target market. He describes how you need to do extraordinary things not only to recruit users but also to keep them happy (retain them).
“The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.”
Tunguz reminds readers of the importance of delivering value early in the customer’s lifecycle, arguing that those software applications that take time to deliver utility are often the most frustrating to use.
“The best products reward users as quickly as possible after installation and account creation. But it’s easy to forget about this and as a result, watch conversion rates from download/install-to-active fall.”
Lemkin is known as the Godfather of SaaS for good reason, and his Quora responses alone (25M+ answer views at the time of writing) are the stuff of legend. When it comes to SaaS metrics there will always be competing views as to which ones are the most important for your SaaS business. For Lemkin however, lead velocity rate is king!
Suster from Upfront Ventures is probably one of the most open, transparent and insightful VC’s on the planet. He is a prolific blogger with Both Sides of the Table one of the most popular startup blogs available. Similarly, his frequent SnapStorms ensures he remains ahead of the curve using new media to get his message out. Picking one blog from his back catalogue is nigh on impossible, however The Silent Benefits of PR is certainly one of his stand out ones when it comes to lessons for SaaS entrepreneurs.
Finally, in my attempt to keep this blog digestible I’ve capped the resource list at 10 leaving no room unfortunately for Joel Spolsky, Jason Calacanis, Patrick Campbell , David Cancel or Lincoln Murphy.
Alan Gleeson is a B2B Marketing Consultant based in London with a passion for helping SaaS businesses to grow.