Should You Build a Feature Just to Close a $50k Deal? Probably, In the Early-ish Days.

Q:  Does the wise advice to always say no to sponsored features would also apply to a SaaS startup selling to mid-market (ACV 20k to 50k+) and has yet only 2 clients?

No. This is not wise advice, it is bad advice in many cases. As long as the deal size is big enough.

If a potential deal, is > $20k-$50k-$100k+ in the early days, you should consider one-off features if:

  • the paid feature would also benefit other similar customers, now or in the future;
  • the feature is or should be on your roadmap for the next 24–30 months or so; and
  • your gut and experience as CEO tells you it’s a good, high value feature that adds to the value of the company and worth building.

If all 3 criteria are met and a customer is willing to pay up to push out a feature early, I would suggest at least strongly considering it.

Because in that case, it’s no longer a custom feature. Instead, it’s getting paid to learn about the future of your company. Early.

Having said that, do NOT build an “early”/”custom” feature if:

  • The customer won’t pay up. It’s not important enough for them, or just as importantly, you, if they won’t.
  • If the customer won’t be one of your largest customers. It is too distracting otherwise.
  • You don’t think other similar customers will also pay up for the feature down the road.
  • Your gut says it is just too distracting. Any “one off” feature is a distraction. But your job as CEO is to know when it crosses the line.

A bit more here: One Simple Rule on When to Build a “Custom” Feature | SaaStr

Having said all this, certainly some disagree. A great deep dive here with Loren Padelford, head of Shopify Plus, their more enterprise offering:

 

Published on November 9, 2020

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