Questions like ‘Is our pricing right? or ‘Should I build this feature a competitor has?’ drive SaaS founders crazy. Experienced founders have dealt with these same questions so what do they advise? See below.
12 questions we worry about
- Are we going for a large enough market?
- Will our plan work?
- Are we talking to our customers enough?
- Should I build this feature a competitor has?
- Is our pricing right? How should we price our product?
- Should we be more data driven?
- Others do simple things that work. Why are we finding it hard?
- Is passion bullshit? Is being money driven the real underlying thing?
- Should we hire that skilled person we’re not sure of?
- Should I really ‘be myself’?
- Do we need to get on Techcrunch or some other big paper?
- Should I be doing customer support and selling?
1. Are we going for a large enough market?
The answer? Pick a large market, even if there’s lots of competition
Drift intentionally picked a crowded market.
“If you’re not first, you have to find a way to stand out. And so we entered that market knowing that we had to go out create a new category and be the only way to conceive of it,” Read more about Drift’s strategy and why they coined a new term
Upscope aims to ride a growing wave
Here at Upscope we looked at the market and were inspired by Baremetrics ‘riding a growing wave’
Companies were moving from desktop apps to web apps and 100,000s of them have installed live chat systems. Upscope co-browsing, which lets you see the users screen instantly while live chatting, can ride a growing wave.
So, what’s the problem?
Even given these market advantages it’s still damn hard work!
Imagine if it wasn’t?
I can’t imagine what it would be like in a small tight market, with more competition, chasing fewer customers at potentially lower prices.
Also, at the start, I would never have imagined doing as Drift did, intentionally picking a crowded market. Now it makes more sense.
2. Will our plan work?
Have conviction in whatever the next step is
Why is conviction so important?
Why do most beginners fail and why do a few make it work first time?
See Tristan’s discovery of why beginners failed at kite surfing
“Beginners half-ass it.
If you don’t pull hard, your kite moves slowly and gives you less power.
It’s not rocket science, yet 99% of beginners only pulled half way.
When it was my turn, I shut my brain off, and did exactly what the pros were doing. I pulled hard, and waited for my kite to get low before pulling back. I was out of the water speeding on my first try.
So why do most beginners only pull halfway?
Because they feel shy.
They aren’t comfortable in this new situation so they tiptoe around instead of “jumping in”.”
Read more on Tristan’s experience of learning to kite surfing
3. Are we talking to our customers enough?
No. Nobody understands that feature you spent 2 hours renaming
Here’s what Intercom’s co-founder discovered
“After about 10 conversations my research findings concluded that it didn’t matter what label we used. No one fills in that part of the form. They didn’t even know what it was for.”
4. Should I build this feature a competitor has?
The answer? Your competitor’s software is also wrong
Groove found that their big competitor’s software isn’t right either
“Groove isn’t right for everyone, and neither is Zendesk. Or Uservoice. Or Desk.com.
But by building the best damn support software possible for our small-ish niche of potential users, Groove can become the no-brainer best option for enough customers to still achieve our goals as a business.”
Read more on why Groove don’t stress over competition
Gosquared knows people buy from people they like and trust
“People buy from people they like and people they trust. They buy based on what they hear and what they feel. They buy to solve problems.”
Read more on how Gosquared had competition everywhere
Problogger realised there’s not enough time to be defensive
“I see the online publishing space as having so many opportunities at the moment that there is enough room for more than any one player.
To get defensive about staking your claim takes your attention away from expanding your own business in a positive way.”
Read more on Problogger’s 3 reasons not to care about competition
Our biggest problem is clearly communicating how co browsing is miles ahead of old school screen sharing.
In fact, if our customers knew of a good big competitor then we’d benefit as someone else did the work to explain how incredible ‘co browsing’ is for sales and support.
5. How do we get our pricing right?
The answer? Price based on value.
Ultimately, we want to build a pricing model that aligns us with the success of our customers — not one where we’re making money off of the people who never even use our product.
— *Dave Gerhardt, Drift
As Appcues discovered:
“Heck, one customer even said to us: ‘You guys should find a way to charge us more. $450 isn’t enough — we should be paying you well over $1k’
So after some brief analysis, we developed a new value-based pricing strategy and planned the switch.”
6. Should we be more data driven?
Not at launch but certainly when you have enough data
An obsession with the problem you’re solving gives you control
Here is VC Fred Wilson’s take on it
“Domain expertise to the point of obsession is highly correlated with the most successful entrepreneurs in our portfolio.”
Read more by Fred Wilson on successful startups
A test to see if you make the same mistakes we did.
Here is a slightly unfair test.
What market should Upscope be focusing on?
Here are the clues:
- Upscope is like instant screen sharing. No downloads. You click once to see the user’s browser and click again to remotely guide them.
- It integrates with major live chat companies and works well with phone calls / VOIP.
- The first 10 people paying were SaaS companies who wanted to support their users.
- Those first 10 had a mix of complicated software like CRMs and a few with what appeared to be relatively simple interfaces.
- They told us they wanted Upscope for supporting users who contacted them via Intercom/Drift/Zendesk or some other live chat tool.
Given this early information, what would you have done?
Who would you have marketed Upscope to?
Take a note of it before you read on.
By analysing the data of who used Upscope 9 months after launch, including how much they used it and who with, we know the major factor was not complicated software but whether the software had NON-TECH users. Also, the heaviest users by number of hours screen sharing were onboarding staff and there was a natural overlap between sales, support and onboarding at times.
This changed our marketing and product plans.
It’s an unfair test in many ways but it’s one we faced and we made assumptions and marketed based on those initial buyers and it was off.
When someone new signed up we could imagine what sort of problems they had and imagine how they’d use it for support. This is confirmation bias.
A more regular analysis would have saved us from that and also saved months of misdirected marketing.
7. Why is this so complicated? What’s the simple way of doing this?
It’s not simple. Some people are lucky the first time but serial entrepreneurs are not.
There’s a comment by Naval (angel list co-founder) made in a podcast saying that ‘some’ first time founders may not know the role luck played in their early success and so might not be able to do it consistently because they didn’t learn some of the basics others had to go through.
Here are some key quotes from startup founders in Paul Graham’s essay.
“I’m continually surprised by how long everything can take. Assuming your product doesn’t experience the explosive growth that very few products do, everything from development to dealmaking (especially dealmaking) seems to take 2–3x longer than I always imagine.”
“Most hacker-founders would like to spend all their time programming. You won’t get to, unless you fail. Which can be transformed into: If you spend all your time programming, you will fail.”
Most people find startups are complicated, take a long time and involve doing things they don’t want to do.
Read more in Paul Graham’s essay
Upscope marketing is easier now that we know the complications
It takes a long time for kids to learn how to write.
They learn the alphabet, sounds, words, sentences, meaning and so on. Eventually, writing a paragraph is simple.
If you know all the complications, then it’s simple.
Within marketing we needed to learn SEO, using tools like SEMRush, on-page optimisation, topic clusters for strategic linking, copywriting hacks, how to distribute, doing roundups, getting ideas… it goes on.
It’s simpler now?
Yeah but just look at the journey from hating SEO to using it.
8. Is passion bullshit? Is being money driven the real underlying thing?
When you work hard you become good at it. You enjoy doing what you’re good at. It becomes your passion. Money follows.
What a bunch of BS. ”Follow Your Passion” is easily the worst advice you could ever give or get
— Mark Cuban, Entrepreneur*
Follow your effort.
This is Mark Cuban’s perspective.
"Let me make this as clear as possible
1. When you work hard at something you become good at it.
2. When you become good at doing something, you will enjoy it more.
3. When you enjoy doing something, there is a very good chance you will become passionate or more passionate about it
4. When you are good at something, passionate and work even harder to excel and be the best at it, good things happen."
Read more on why Mark Cuban says to follow your effort
Money does not lead, it follows. It’s a lot easier to enjoy building a product that gets daily love from users. Those MRR stats are nice to look at when they’re based on good work.
9. Should we hire that skilled person we’re not sure of?
The answer? Hire people, not skills. Hire people with integrity who can figure it out.
Hire people, not skills
“Cultural Fit (45%)
Scrappiness and Drive (35%)
Intelligence and Experience (15% and 5%, respectively)”
It’s incredibly hard working with people who drag you back.
We want a new hire to drag us forward.
Different areas have different personality requirements but integrity and giving a damn about the customer, wanting to learn and develop, that’s an attitude we want to invest it.
10. Should I really "be myself"?
Investors like the weird ones
“Investors are not looking for someone that looks like them.
They like people who do things that normal people aren’t capable of, and they know that that capability often correlates with eccentric people. The last thing you want to do is wash away your own personality in some doldrums of blue and khaki.”
Read more on the weird ones by Jason Freedman
An added note
I think being yourself is speaking your truth and not necessarily saying every single unfiltered dumb fuck thing on your mind.
11. Do we need to get on Techcrunch or some other big paper?
Your customers don’t read Techcrunch.
The Techcrunch audience is fickle
“And if it is, you’re in for a tough ride. This audience is fickle, moves quickly, and looks at a lot of sites for about five seconds before clicking the back button. If you do get the big swarm of traffic run the stats on how many visitors stay longer than 5 seconds…seriously.”
Producthunt is great in the early days for getting feedback and validation + a good backlink or two but the rest of world does not read Producthunt.
I also went through a process of ‘Get on techcrunch / guardian / bbc / other publication” in the past and then I heard about people getting on a smaller site and getting more customers. Why? That smaller site had a relevant audience.
PR works in different ways for different startups at different stages.
For SaaS startups, it might be that getting on a publication only automotive sales execs read is far more important.
Also, if you’re going to reach out to bloggers then consider this:
12. Should everyone be doing customer support and sales?
You’ve always been selling. Having everyone do customer support is a secret weapon
The single best decision we ever made was to make customer service everyone’s job
— David Cancel, Founded Compete*
You’re selling to your team, you’re selling to investors and to your family
“Selling the upside and your vision requires understanding other people’s motivations and values”
Making customer service a religion is a secret weapon
“Looking back at the last 1.5 yrs since we started Performable, one thing is very clear: the single best decision we ever made was to make customer service everyone’s job.”
Thanks for reading.
Next: See a great post on SaaS pricing models.