For one reason or another, I’ve ended up cofounding many B2B SaaS startups over the years. They’ve become a passion of mine, especially since B2B SaaS has rapidly replaced the on-premise business model.
I thought, considering my experience, I’d share my perspective on building B2B SaaS startups. I’d advise against thinking what I have to say is scripture. While I’ve been in the startup space for over a decade, a blog post does not allow for me to provide the kind of personalized recommendations that would help your business.
|REMEMBER||Always seek out second, third, fourth opinions from experts who truly care about you and your business.|
Side note: If you’re interested in reading more about executive roles in startups or assembling your founder team, check out ‘What Makes an Excellent Startup CTO’ and ‘How to find a technical co-founder.’
It’d be hard to discuss B2B SaaS startups without knowing what those terms mean. They’re pretty simple concepts, so we’ll quickly get the necessary definitions out of the way first.
Businesses don’t have to be exclusively B2B or B2C. As you can see with the restaurant example, the supply chain involved in bringing food to your table involves both services. SaaS, too, can target individual customers as well as businesses. Adobe Creative Suite, for example, is offered to both parties.
SaaS is crucial for startups because it keeps everything convenient for you, the service provider.
When dealing with the on-site model, it’s a convention for the client to pick and choose what they want. This means you need to customize the process for each customer. SaaS has made things much easier, as your customers get to use the new and improved service as you make updates to it.
You don’t have to go back in the archives to update any individual client’s system. Since you, the service provider, completely manage the software, you have more control over what packages you provide and when updates/maintenance occurs.
While B2B SaaS obviously involves one business providing software services to another, you are, in reality, building a product for and selling it to people. People who have different roles, responsibilities, agendas, and professional problems within one business.
A company is never monolithic, even if its employees share some of the same philosophies or beliefs.
Questions to consider
Take Slack, a business communication platform I utilize with my startups.
I reckon they didn’t target major corporations when they were first offering their SaaS. Even now, they probably don’t. For good reason.
Slack Technologies’ SaaS just doesn’t fit the big business culture and M.O.
While employees of smaller companies tend to have interactions with all levels of the business, a software engineer isn’t going to have access to the C-suite. Kevin Scott (CTO of Microsoft) probably doesn’t want to open themselves up to chat messages from one of the company’s salespeople. The chain of command and communication at corporations like Microsoft have long been established.
Targeting the right business is one thing. The executives, the managers/admin, the marketers, the engineers, they all have their own needs.
Think about a CRM platform like Salesforce. Executives, for one, aren’t using the software often, if at all. Salespeople all of the workday, sales managers some of the day, and so on.
The trouble is, you’re often pitching your software to the C-suite—the very people who probably aren’t your regular users within the business. Obviously, you aren’t going to primarily build your hypothetical CRM to directly meet the needs of C-level executives.
By establishing a clear target audience (salespeople) and focusing your efforts to creating the best SaaS for them, their performance should improve. That makes the sales managers look better, and the company obviously grows (i.e. what the C-suite ultimately wants).
So you please everyone by focusing on how you can create the best product for your target user within the business. This isn’t to say you shouldn’t develop features to make fringe users appreciate your product.
Imitation is the greatest form of flattery. How many times have you heard that one?
When one company makes a popular innovation, best believe all will follow.
Features, UI, best practices, people are constantly copying finding inspiration in others’ work. That’s why you can’t expect to completely stand out from the crowd on your service alone.
Whether you like it or not, you need to consider carving out a unique brand identity. This isn’t anything new for B2B SaaS or marketing in general. Your business probably won’t survive if people don’t connect with your service.
How do you build connections, then?
It begins, again, with your target user, your primary user.
You’re building a product for them, to help them perform their job, make their life easier. How can you do that well if you aren’t acutely aware of their professional problems? If somehow, you aren’t proactively learning about your target users’ problems, you should start offering your SaaS to some of them for free. Keep in touch with them as they test your service out, ask how you can improve it so they can, in turn, do their jobs better.
Hopefully, they’ll feel like you’re there to truly help them, not simply using them for just another sale.
Again, we’re talking about people-to-people interactions that go deeper than B2B SaaS. You’re a person, selling to people. The humanity there is something that you should lean into, not avoid. Speak their language, speak to their pain points.
Side Note: If you’re worried about losing money, free trials are the backbone of SaaS marketing. Don’t believe me? Have a look at one of your favorite B2B or B2C SaaS websites? I guarantee you you’ll find those companies offer a free trial/demonstration.
Think about creating lines rather than points.
Set your KPI and keep prospective investors updated on how your business is progressing.
|REMEMBER||Investors aren’t shelling out their money for an idea. They want to see numbers, cold hard data.|
Sometimes we can get obsessed with acquiring money when we should really be focusing on improving the service first. What are your users saying? What improvements do you need to make? How’s your approval rating from people who actually use your product?
Documenting multiple points over time will let you draw lines, capture trends. Investors will not be able to see the overall progress of your business, but also extrapolate what the future could be. A few great points and bad points don’t accurately capture how your startup’s performing over a meaningful period of time.
B2B SaaS ain’t easy. It’s one of the most competitive spaces out there. A handful of tips probably won’t drastically change your startup, but maybe it’ll give you a few things to ponder.
Any tips you’d like to add about B2B SaaS survival? I’m sure there’s great advice I’ve left out. Just keep in mind that nothing will replace personal suggestions/recommendations from mentors who know the details of your business. That’s better than any blog post out there.
Since you’re here, I’m looking to partner with serious entrepreneurs who have bold ideas and realistic plans.
First-time founders, I know, find it especially hard to avoid all the pitfalls of building a business from the ground up. My extensive experience as a startup CTO and technical co-founder has given me a lot of wisdom I’d like to offer to you and your startup. From bootstrapping to scaling, I’ve done it all—multiple times over.
If you think you’ve got a game-changing idea, please get in touch!