Is a fact, that SaaS (Software as a service) is one of the fastest growing business models in recent years.
But why is the SaaS model products are so popular right know?
- It is affordable. There are no upfront implementation costs. 🔪Death to big licenses.
- If it doesn’t meet our expectations or doesn’t fit our processes, we simply unsubscribe in the next period.
- Scalable.
- Popularization of subscription services. Netflix effect.
More and more entrepreneurs are building Saas products. I’ve been working with them for a few years from now😀, so during this post, I’ll be telling you all the pros and cons of this business model.
After analyzing and helping growing startups with the Saas model, I have seen many successes and many mistakes, So…
How do I think the first stages of a Saas product should be?
Let’s start at the beginning.
Service first, to make better saas products
Your competitive advantage it´s your knowledge.
People don’t care about your Saas product. They care about their problems. If you can solve them, even partially, through a service and gradually start implementing functionalities and automations, until you become, in time and form, a software as a service, it will increase your chances of success.
Are you going to spend months developing a product with no user contact until the final implementation?
Unfortunately, the most common case scenario is:
I raise a small round or start with my own resources, months of product development, launch and this is the result:
There are only a few months left in the cash register, and the product that has been developed is not what your customers really need.
B2b Product management. Start thinking of the service as a software, not the software as a service.
Your number one goal in pre-seed and seed stages is to get to know your customers’ needs and learn how to address their problems.
This requires you to have a high level of contact and little technology until the time comes. Servicing a client accelerates your learning.
Many funds like founders who launch startups because of a problem they have identified during their professional life. So create a culture of service first, and then leverage that approach to create what your customers want.
But, what do you mean by this?
It means that you should resist the temptation to focus on the implementing code and spend the time (and initial funding) working closely with your first customers to solve a specific problem. A problem big enough to sustain and productize.
Develop the MVP with as little layer of technology as possible.
Nowadays there are many “no code” tools that allow you to generate apps, landings, automations without knowing how to program.
But, as in everything, there are certain models in which this is not possible.
So how do I do it?
This is not about not using any technology, only the necessary. For me, a business has to have a very careful front end (the part that you can see), and the back end must be 4 monkeys.
Ask yourself:
- Is it necessary to implement automations if I have 5 customers and this process will not be a bottleneck until you have 50 customers?
- Is it necessary to develop all the functionalities when I can connect a backend with an excel that executes macros and connect to other services?
- Is it necessary to implement that top functionality, when there is a free software or service that does something similar and I can use it to validate the need?
Don’t be ashamed for leading in service
The investment ecosystem puts pressure on double digit growth for Saas and this pressure is passed on to the founders, which is not always correct. Don’t start the house from the wall, everything needs time to mature.
If you go faster but in the wrong direction, you are further and further away.
It’s true that humans don’t scale, but neither do startups that create products that don’t solve needs.
In the early days, you’re not ready to scale. A service-first mindset, helps you adapt to a market need and ultimately to something worth scaling.
Adopt a Mindset Service first
A service-first approach helps you develop deeper insights into the problems you are solving and create a more robust product for your market.
But be careful not to become a slave to service. Even the best b2b saas products starts with service.
Many startups also end up being very service-dependent, as they end up creating ad-hoc solutions for their customers. No one said this was easy. 😎
Create a mindset that deals with solving problems, rather than a mindset of implementing functionality.
Although it may seem a contradiction, having a service-first mentality, is having a product-led company, since we don’t implement features, until we validate that we really solve a problem that customers are willing to pay for it.
I hope you liked this post and I am happy to hear your thoughts and your experience building a Saas.
As a Saas growing company, you’d want to keep track your performance and bechmark your Saas metrics, so, check out this solution: