I guess in some ways SaaStr is a digest of mistakes we all make in recurring revenue businesses, how to avoid them, or at least, make fewer.
There’s one important mistake folks tend to make consistently in the early days. It’s the mistake of thinking anyone, any company, actually needs their product.
And because they think anyone actually needs their product, they underoptimize their initial go-to-market strategies, or worse, don’t even really have a good one.
My point is just this: I know your SaaS product is wonderful. But the 6,000,000 or so businesses in the U.S. alone somehow managed to survive, sell their products, find their customers, and otherwise pay their employees without your Wonderful New SaaS Product.
Few businesses are actually desperately searching Google for new B2B SaaS services.
Ok, fair point. But so what? Just these 4 related learnings:
- In the early days, don’t delude yourself that the Product alone will ever get you any customers. There are now 7 trillion SaaS products, and we all already have the ones we need to survive. We have CRM, call center, Gmail, web site, Slack, a sales team that does close deals without your product, a marketing team that does acquire leads, etc. We already have all of it.
- So … Focus on “High Affinity” prospects and customers. The ones that really, almost instantly, can improve some part of their business 10x with your product. That you can close, at least with a handshake if not a check, in one meeting, one call, one demo — because (x) they absolutely, positively both need you and (y) know they need you once you show them you finally have “the solution” they’ve been waiting for.
- Don’t sweat the “Medium and Low” affinity prospects that never seem to close. These are the ones that could clearly benefit from your product, but don’t really seem to respond after a demo, sign-up or trial, no matter how good your drip marketing is. It’s OK. You’ll get them later, once you have a Mini-Brand (more on that here). When you are a New Vendor with a product no one has ever heard of and no one even knew they needed, you aren’t going to get any customers other than the ones with an extreme need for your solution. The ones that can get High, Almost Instant ROI. The ones that already know they need a Solution to a Big Problem and haven’t found that solution before.
- Get off your Mac and spend more time with High Affinity prospects. As a corollary, be careful not to waste too much time in the early days with in-bound sign-ups and leads that aren’t High Affinity prospects. Better to reach out, do out-bound, and get warm intros to companies that you have strong reason to believe can improve something 10x overnight with your product.
Customers aren’t stupid. They only take a risk with a new vendor and a new solution when it either: (x) creates dramatic, 10x cost savings over night in an important cost center, and/or (y) solves a big problem for them that wasn’t solved before.
Don’t waste time, or delude yourself, with your product and engineering team, on any customers you can’t deliver one of these huge ROI benefits to in the early days.
Later, once your have a brand, and people come to know you as a vendor on the Stuff We Should Buy List … then you’ll close Medium and Low Affinity customers left and right.
But in the early and early-ish days, don’t get distracted. The Medium and Low Affinity customers will not only suck up a ton of your time, but worse, they’ll give you confusing product feedback disguised as reasons they aren’t buying today.
Focus on the real, honest, true “our product can truly make a 10x impact” leads. Not the 2x.
At least until you have 3-4 folks on the sales team. And maybe, much later.