5 Tips for SaaS Business Success
With February came another exciting event in our webinar series: Learning from the Best SaaS companies, with guest speaker Boris Wertz. Wertz is the Founding Partner of Version One Ventures, a fund that invests in early-stage founders across North America. He has years of experience investing in consumer internet and enterprise companies and was generous enough to share his insights on how to create business success in SaaS. We talked about all things SaaS, from reducing the friction of initial engagement, to one of Wertz’s biggest tips, leveraging the preexisting to build something even more effective. Growing innovation is absolutely crucial and if you keep reading, you’ll learn our top tips for SaaS business success.
When speaking about the critical importance of reducing friction, Wertz shared some wise words. “If you can reduce the friction of engagement for a new user, you’re onto something.” People want a user experience filled with ease, not hard work, and that’s the simple truth of it. The example of YouTube came up in the webinar, and how a lot of their initial success can be attributed to their easy video upload experience for users. It makes the service highly requested and attractive to clients.
Leveraging the Preexisting
Another tip for the SaaS industry is remembering that there is no need to build everything from scratch. Leverage whatever you can that is already out there! As Wertz puts it, there is a lot of technology and infrastructure that can be “stacked” to create something unique and meaningful. And it has never been easier to do so. In this case, “it makes no sense to reinvent the wheel.”
Capital efficiency was another topic that was touched on during this webinar. Being capitally efficient is one of the most important ways to ensure SaaS business success. Wertz gave the example of Slack, the highly profitable chat room app that connects all members of an organization. When they focussed on capital efficiency, they saw immediate results. Capital efficiency refers to when more annual recurring revenue is created in a year than burned. Something to keep in mind is that a big part of capital efficiency is market efficiency as well. Staying informed about pricing and upselling and expanding your business for current clients can help you stay above the curve and avoid churn.
Developing a New Category
It’s been said before, but still rings true; if you can find a hole or area of need in the industry and find a way to fulfill it, you’re on the right path. Developing a new category can be difficult but it’s not impossible. The app Slack is an amazing example here as well! They had no enterprise sales at first but as the problem of communication within organizations evolved, they found increased success. One strategy to get started is to solve a small problem for a small group of customers but then expand from there. Wertz gave the example of Hootsuite, the popular social media management platform. They were able to pick up on a trend that needed some work and although they started small, they quickly multiplied in size.
Creating a Great Team
As with any other situation, having a skillful, enthusiastic team is a big part of achieving your organization’s goals. Communicating the importance of having the ability to learn and stay intellectually flexible is crucial when evolving your SaaS processes. A team that keeps a growth mindset while exercising a strong work ethic will quickly rise through the ranks. Finally, having team members that comprehend the power of storytelling is a big benefit. When interacting with clients or even within the organization, understanding how to sell an idea or weave emotion and meaning into it is a big bonus.
Want to learn more about creating SaaS business success? Read our blog Microsoft Tools to Grow Your SaaS Business.