Business Development and SaaS startups should really go hand in hand. However it seems as though far too few startups think about it, or for that matter execute on it. It may be a false sense of security on behalf of founders because for now, it seems as though things are getting much easier and much less expensive when it comes to starting a SaaS company.
Founders now have at their fingertips a wider range of tools and technology to build and market their brand – which means that they can now reach out to a wider market base for a much lower cost. However starting a SaaS company and actually being successful with a SaaS company are two very different things.
Yes, software as a service (SaaS) businesses would seem to enjoy more opportunities because of the huge demand for and relevance of their offers in the global marketplace. However (or perhaps due to this situation), they also face some challenges.
First of all potential customers are increasingly demanding better products, better services and amazing customer support, so what ever you are building better be damn good. Second of all the competition for SaaS startups is fierce and will no doubt continue to increase, because of the lower barriers of entry.
It can also be difficult to stand out from the competition and if you want your business to stay ahead, it is important to be more pro-active than ever when it comes to your business development strategy.
The first mover advantage in most cases does not hold true any more – and that execution of your strategy (or at least having a strategy) and not being first is going to be the determining factor.
To make sure you don’t fall in a trap and are able to compete and execute your vision and become successful with your SaaS startup and not fail, I made a list of some of the things that you should be thinking about in regards to your Business Development Strategy:
- Define your value proposition: Many SaaS companies, and for that matter many companies still think about features and write at their audience and not to them. They don’t understand that the service or company they built is there to solve a problem or to deliver a solution to their customers. Make sure that you talk to your partners and customers and develop your value proposition with them in mind. Use the insights to make sure you deliver it right.
- Make a plan: I am a big fan of planning. I learnt this the hard way from my last company as I was trying to do everything and trying to be everything to everyone. I was not focused enough on being proactive and instead I was being reactive. If you don’t have a plan, then you won’t know where you are or how you are going to get to where you want to go. Once you reach product market fit with your SaaS company, make sure you have a plan – even it it’s a MVP ( minimum viable plan)
- Develop Processes: Processes are very important. They are going to let you scale your business without you having to try and micro manage everything. If you have processes in place, it will be easier to bring in new people and to execute on your plan because people will have direction and will understand what it is they should and should not spend their time on.
- Look for the right business development (and sales and marketing) people. A business development role usually requires a mix of strategic, sales and relationship-building skills, making it a challenge to seek the right people for your team.The tasks and responsibilities of business development managers and staff depend on each business, so the first step is to be clear about your set targets so you can zoom in on candidates who can deliver what you need.
- Select the right partners. A vital part of business development in SaaS companies is going to be to look for partners (including larger distributors, value added resellers, trusted advisors and affiliates) that will help you scale and grow without having to increase your own staff beyond what can be profitable. If you are able to execute the partner strategy right then you can reap the rewards and increase your revenue via these partners. Some companies that have executed this in the right way are Xero, Hubspot,Shopify and WPengine.One thing to remember and which may sound counter-intuitive to a SaaS startup, is that you’ll need to be extra-choosy when selecting partners. Don’t just say yes to everyone, because that might stretch your attention and resources too thin. Take time to identify and clarify your criteria and most urgent gaps that need to be addressed, because that will guide you on selecting the partners to put on top of your list.
- Measure outcomes. When you’re dealing with limited time and budget, you need to be vigilantly monitoring and measuring the results of your SaaS business development efforts. You don’t want to continue spending time and money on things that don’t deliver returns.Make sure you establish the right evaluation methods that will enable you to determine if a project or strategy is working or even worth it, or if it’s time to turn to other, more fruitful ideas.
- Keep testing and optimizing: It is no longer true that you can just set it and forget it. Things evolve, technology changes, new competitors come in, new markets evolve and old ones die out. Your good partners may leave you, so make sure that you know what is working and what is not. If things are not working change them – if you have a hypothesis test it.