#advice

SaaS startups should aim for the recurring revenue they earn from each customer to grow over time. This week, we cover the foundational strategies for achieving recurring revenue expansion.

As B2B SaaS startups achieve scale, they gain the ability to achieve massive revenue growth by simply better monetising existing customers. This week, we explore some pricing strategies that make this type of revenue growth easy.

A self-service experience, including a free trial or freemium plan, is a cost-effective way to sell a product that is capable of selling itself. Many startup leaders underestimate how much work it takes to truly make this work, though. This week, we explore how to deliver a self-service SaaS experience, and how to decide whether this strategy for growth is right for you.

For many SaaS companies and startup leaders, the 2022-2023 recession will be their first. This week, we look at how SaaS companies can optimise costs, adjust their value proposition, and build a strong business during a recession.

As startups achieve product-market fit, product strategy simultaneously becomes more important and more difficult. Startups become unfocused by chasing new opportunities when they should be optimising what they’ve already brought to market. This week, explore the importance of focus as you scale your SaaS company.

This week, we explore the difference between vertical and horizontal SaaS products and how verticalisation can be the best way to win in the increasingly competitive software-as-a-service market.

As your startup grows, responsibilities that used to belong to a single individual will be owned by teams and, eventually departments. This transition is where startup operations become critical. This week, we explore some of the rituals teams should adopt for continuous improvement.

When you build a startup, it can feel like you’re constantly solving new operational problems within your teams. This week, we explore how by solving each problem in the right place in your business, you can build a simpler and more operationally effective business.

Many early stage startup leaders struggle to accurately calculate the important SaaS-specific business metrics because their profit and loss statement isn’t well-structured for a SaaS business. This week, I’ve compiled some simple tips for aligning your P&L with SaaS norms.

Partnerships can drive growth and augment your product at all startup stages, but getting started is difficult. This week, we explore how partnerships typically work for B2B SaaS startups and how to start utilising them.

As your startup grows, your team will get busier. More customers means more onboarding tasks, professional services projects, and support tickets. While this is a great problem to have, many startup leaders find it difficult to determine how many people they need in each team. Fortunately, some simple capacity modelling can simplify this process.

One thing I’ve noticed when talking to startups is how DevOps and product management are adopted to solve many of the same problems. While I think most companies will eventually require both, I’ve come to believe that it is more valuable to invest early in DevOps than product management.

By being intentional about what types of experience are most important for each role, and considering team-wide capability rather than individual capability, leaders and founders can create powerful teams and nail the first and most crucial step of startup building.

Many leaders view their responsibilities as a list of leadership and management tasks they need to complete. This mindset ignores that the best way for a team to get most things done is through shared ownership and leadership. This week, we explore why leaders should delegate to shared responsibilities rather than individuals.

While many product development leaders obsess over the positive habits their teams should adopt, they rarely pay enough attention to the downside of bad habits and over operationalisation.

Assembling your team is one of the most important responsibilities for any founder or leader. But, most startups I’ve worked with fail at effectively onboarding new staff, which can lead to false starts and failure.

This week we explore a versatile research exercise that can help you to pivot or improve your product based on the needs of your users.

Sales model innovation is the most underrated challenge in conversations about product-market fit. Failing to experiment and innovate on the sales layer causes many startups to lose hope in markets, problems, and solutions with huge potential. Founders assume that because their solution isn’t selling, it must be an inadequate solution, or the market and problem they’ve identified are not big enough. Many teams expect product innovation to solve the product-market fit problem single-handedly, so they abandon anything that isn’t easy to sell, and burn their early-stage runway on product iterations. Often, some discipline and experimentation in the sales process could’ve successfully brought their early solutions to market. The problem with the typical framing of the product-market fit mental model is that it suggests that a startup will succeed so long as it finds a big problem and solves it. Unfortunately, it is rarely this simple. I encourage startups to adopt a disciplined, data-driven approach to marketing and sales to expand their criteria for product-market fit to consider the suitability of the sales model to the market and the product.

Investing in product design (i.e., user experience and user interface design) can lead to fantastic outcomes for product development teams of all sizes because it reduces the number of iterations required to produce a great product or feature. However, most product companies approach product design in manner that excessively slows down the development of new solutions and blows out budgets. This has led to product designers being ostracised from many initiatives and decision-making processes/rituals. By embracing a DesignOps approach to product design, companies can instead move faster and get more done with less resources.

Most startups are idea-rich and resource-poor. Founders and product managers are constantly bombarded with feature requests, so a lack of ideas is rarely the biggest problem. At the same time, startups typically try to achieve something ambitious with limited resources. Startup success is thus heavily dependent on what you say yes and no to and how you prioritise these initiatives against each other. I encourage teams to focus on complex problems faced by many rather than those faced by few. This is the best way to differentiate your product and find product-market fit.

Despite all startups being resource-poor relative to what they are trying to achieve, many founders invest in solutions (e.g., specific product features, technology improvements, and internal systems/processes) that require effort beyond what is desirable from an ROI perspective.

Startup success is all about momentum. This is because startups do not have a great starting position to fall back on — they typically start with no customers, a small team, and no viable product. This means that you’re catching up for as long as you’re a startup. You’re catching up to the incumbents you’re trying to disrupt, to the competition which got a head start, to unrelated businesses with whom you’re competing for investment capital.

For many enterprise SaaS products, a layer of professional services is essential because enterprise customers tend to have diverse needs from each other. Professional services enable deeper customisation on a per-customer basis while keeping the core product focused on the target market rather than the needs of specific customers. Another benefit of providing in-house professional services is that they can provide a significant revenue stream during the early days of finding product-market fit. Many bootstrapped companies use this revenue to keep the lights on as they build recurring revenue momentum.

While every company should approach this somewhat different, there are a handful of principles that apply to most product companies that I think you should consider.

Customer success is a critical function within the B2B software industry. It is typically staffed by customer success managers who are tasked with managing the experience of existing customers throughout their journey with the product, with the assistance of automation. Every B2B software startup eventually finds itself in need of a customer success function, but most struggle to spin one up without a few hurdles and misfires. This is because the focus of customer success is very broad, with diverse goals and roles required to succeed.