Evolution of the SaaS Startup

Scaling those Adolescent APIs

I'm pretty interested in how Software as a Service startups scale, and their go to market strategy is changing almost on a yearly basis. Reading about SaaS articles is a great way to familiarize yourself with the changing reality. Witness this in visual by Clement: 

Circa 2006

Circa 2011

• Mobile appstores + Inbound marketing practices 

Circa 2016

• Greater complexity 
• More SaaS competition 
• More emphasis on content marketing
• Greater emphasis on long-form whitepapers & API automation 
• Plugin ecosystem with optimal customer choice 
• Mobile API design for responsive design and multiple touch-points
• Streamlined interface 
• Automation support with more emphasis on machine intelligent customer success

YES

How we convert leads to SaaS has changed with intermediaries, directories and partner integration sites. For a niche SaaS dependent upon other API integrations, this is even more difficult. 

1- Mobile Stores

2- Product Hunt

3- App Directories (Getapp) 

The SaaS Model 

The SaaS model has evolved from a full-featured cloud web client (do-it-all interface) to rather, an API driven ecosystem of related Apps (plugins, APIs, bots, automation - whatever you want to call it!). 

Lead Generation 

Is cost effective to set-up and may be said to have typical phases which are: 

• beginning, disappointment, growth, stagnation, strategy reboot, growth

BDG-SRG Model entails that content marketing takes time to generate leads and is starting to become more efficient (depending your vertical and market) than cold calling or other lead gen strategies. 

• native blogging
• guest blogging 
• social blogging (Pulse, Medium, Instagram, Tumblr)
• Infographics, White papers, Webinars, Surveys, Influencer Lists
• Product strategy 
• Drip Email / Newsletter
• Intercom Automation (FAQ automation) 
• Visionary content
• Customer centric Content
• Segment and or Vertical Specific targeted customer centric content
• Thought leadership that adds value to everyday lives of your audience
• Tying SEO into organic distribution channels, paid distribution and best ROI partner and industry guest blogging
• Video content that converts on your key landing pages! (mobile CRO)

From Proof of Market to Scale

Here is where most SaaS startups bite the dust. For good reason, the strategy and plan here is key. 

• Customer Acquisition Costs (CAC) are everything! 
• Sales cannot convert without Sustainable Lead Gen strategy and efficacy 
• Cold calling is dead
• Striking the right balance between frequency and quality of Content Production is key 
• Optimizing Content distribution is MORE important than content production (to scale this has to happen in weeks, not months!)
• Researching how to brand and reach your audience (channel-fit, growth-hacking channels effectively, leveraging partners and industry blogs to your benefit) 
• Contacting journalists, influencers and freelancers to do articles on you! (Twitter advanced search FYI!)

Healthy SaaS companies spend less to acquire customers WHILE yielding a positive financial return over the lifetime of the customer.

This is what VC will want to know, are you doing this, can you do this, and when?

If SaaS companies win through efficient sales and marketing, then it stands to reason your initial sales and marketing hires will be the deal-breaker often in if your Startup SaaS can make it past year 2 or not. 

Building Customer Relationships via Social Selling 

If in 2016, a SaaS Sales (acutally ADRs) team is focused on developing genuine long-term relationships with our customers guess what: 

• In the digital age this can no longer just be done via the phone
• Has to include social selling (social media at the service of rapport building) 
• People don't have time to be bugged by repeated phone calls! 
• Sales reps without social selling skills don't correspond to a SaaS environment or the typical SaaS consumer! 
• Marketing people without writing/content production skills, don't correspond with the lead gen requirements of a SaaS environment for the kind of content that will help build thought leadership for your SaaS Brand. 

THE IDEAL SALES-ADR REP 

• Social selling toolkit/training/certification
• Passion for product
• Exhibits a relentless focus on customer satisfaction 
• Possess strong written skills (move away from oral skills!)
• Knowledge of Salesforce.com 
• Experience in prospecting
• More product orientation, curiosity about the actual interface, not just the pitch! 

AVOID BOTTLENECKS

• Simplify lead qualification for the rep to get credit
• Don't over qualify leads
• Let the same rep lead the customers through the entire process till customer success takes over (no intermediaries). This is about rapport building. 

REWARD THE PIPELINE NOT THE SCORE

• Have a percentage of commission (say 40%) that is shared among the ENTIRE sales team (this promotes collaboration, team work and unity)
• Reward the quality of the pipeline, rather than lucrative contracts signed 
• Compensate quality of the pipeline instead of just the quantity (e.g. does that customer turn out to be engaged with the SaaS product?)
• Monitor KPIs that link the sales source to the entire customer lifetime journey in your product. 
• Promote internally, the best ADRs can become Account Executives. 

ADAPTING STRATEGY TO YOUR TYPE OF SAAS

The two SaaS categories that I like again from Clement are: 

• Vertical SaaS: software which answers the needs of a specific industry (ex: software for the healthcare, agriculture, real estate, finance industries)
• Horizontal SaaS: products which focus on a software category (marketing, sales, developer tools, HR) but are industry agnostic (ex: SalesForce, Slack, Zenefits, Workday)

1- Where do your customers reside? B2B, B2C, Hybrid or Partner affiliated (e.g. API dependent) 

2- What are the top keywords of your industry vertical?

3- In what online publications/channels/blogs/networks and offline conferences do those keywords reside most prominently and powerfully?

4- Can your SaaS or product category create its own disruptive voice in those channels? If so, how?

CONCLUDING THOUGHTS 

• Chances are there are SaaS companies out there like you, don't reinvent the wheel, learn from their experiences and mistakes. 
• Don't underinvest in sales hiring, typically they are part of the key to scale early on.
• Don't underinvest in content marketing, typically this is one of the keys to bolstering lead gen traffic 
• Don't let co-founders get in the way of these guys from doing their jobs, then there is a lot of redundancy that can sabotage a company. Co-founders have their roles in the company and they should abide by them.