"What does every start-up in SaaS/B2B need to know to be successful?"
The SaaS/B2B business model realizes both its revenue and vision long-term. Expect this to apply to positive cash-flow as well. This means burn rate (the rate at which money is spent or "burnt") remains critically important. Know your burn rate.
The next step lies in understanding the type of SaaS offering you represent. Consider the following:
- Pricing remains proportional to value.
- Understanding the repercussions of the two extremes below and where your offering falls relative to them:
- Extreme on the low end: Low cost means high volume. High volume means you cannot afford to talk to customers in the long-term. This also means shorter sales cycles before revenue is realized. Cancellation impacts are minimized providing this is not indicative of a systemic issue (determined by % of cancellations per month).
- Extreme on the high end: High cost means low volume. You can afford and should talk to customers to facilitate both implementation and effective relationship management. High cost also means longer sales cycles which hurts cash-flow both in terms of waiting to acquire a customer AND individual cancellations have a greater impact on the company.
Whether a long-term part of the plan or not, expect a fundamental requirement for an on-boarding team either to grow with a high cost offering or shrink as your implementation increases in sophistication towards a self-serve path. Understand that the self-serve realization takes time with SaaS! I have seen many companies falsely believe their solution realizes self-serve status.
With that, here are the steps I believe are worth considering:
1) Know exactly what the minimum viable product is. It needs to work which means it needs to solve the base problem it was intended to. Additional changes and functionality will remain constant. Do not less this prevent you from getting it out there and soliciting feedback.
2) Get feedback from users as soon as possible. It doesn't matter if they pay for it initially or not. All you care about is the feedback to point out critical areas that prevent convenience of the basic solution from being realized. Fix these immediately, take the additional feedback and implement after reviewing for relevance and as bandwidth permits.
3) Get your first paid customers. Counts when the money reaches the bank account and has been there for at least 30 days. Babysit these first customers even if long-term this is not possible because of the offering. This means find out everything about them as it relates to the software:
- How often the use it
- What they like about it
- What they don't like about it
- How it integrates with their processes and systems in place
- How easy is it for them to navigate the system
4) Create and communicate a tentative technology road map. Make this at least a year in advance and communicate it to your customers. If the want a feature you don't have, rather than risk them cancelling, let them know what the future plans are. Some of them will stick it out and wait for it rather than go through the pain of implementing a replacement solution. This is not written in stone (hence tentative) allowing you to pivot when realizations are made that prioritize certain development focus as more critical.
5) Embrace on-boarding with both hands and both legs. You need this department no matter what the offering, how low or high and what the long-term is. This team is how you get better. They speak with the customer every day. Leverage this communication to derive the insight necessary to drive immediate and relevant change in the offering. Create processes to gather feedback and aggregate the data to drive informed decision making.
6) Understand the future of on-boarding. If you cannot afford to sustain on-boarding long-term, then your goal is to translate what they do and the problems they communicate. Learn how to solve intuitively into the offering. If this is implemented correctly, expect a decrease in calls per client within a certain time period. This metric addresses volatility in sales volume associated with marketing and sales effort performance to provide insight into progress towards this goal.
Applying an understanding of the above from the beginning drives comprehensive choices that serve your long-term success. Welcome to the cloud!