If you’re in the early stages of selling a SaaS product and don’t yet have product-market fit, you’ve probably got the acronym backwards. At early stages, the acronym SaaS stands for Service as a Software (not, Software as a Service).
It’s not your technology that wins, but the insights you generate by seeking fit with your Ideal Customer Profile.
The key to building an effective go-to-market strategy for a SaaS company is to avoid the scale trap and put your runway to good use by working closely with early customers to solve a specific problem.
Service First Makes for Better Software
People don’t care about your products. They care about their problems. If you can partially solve their problem today as Service as a Software and more fully overtime as Software as a Service, then you will increase your chance of winning.
This requires you to initially be high-touch and low-tech.
Servicing your customer accelerates your learning. This is critical, as learning precedes systematic revenue.
It can take years to build a self-service product. So, build a service-first culture and leverage that approach to build what your customers want.
Your best opportunity to learn and build a product that serves a market need is by manually servicing your customer.
Lead with Service (and Predictable Revenue with Follow)
We know you’re used to hearing from investors about predictable, “SaaS” revenue. If you’re pre-product market fit, push back! Tell your investors that you need to lean in with services while you’re searching for product-market fit and building a more whole and complete solution.
Taking a software-first approach before you find product-market fit will lengthen your learning curve, reduce your runway and stifle win rates.
Humans might not scale efficiently, but neither do startups that build interesting features without solving a market need. Before you find product-market fit, remove “scale” from your vocabulary and adopt a service-first mindset. This is the most effective way to go-to-market as an early stage SaaS company.
A Service-First Mindset
A Service as a Software approach helps you develop deeper insights into the problems that you’re solving and build a more robust and stickier software solution for your market.
As a SaaS founder searching for product-market fit, you should rejoice when your early customers are asking for service.
Service as a Software is more than an important mindset to help you focus on problems over features. In certain circumstances, a service-first mindset can help you beat the competition. Tom Tunguz, an investor at Redpoint, penned a great blog post on this topic.
Selling Vision vs Reality
Service as a Software does not mean you need to abandon your vision. It means stop selling your product to customers as if it’s whole and complete.
Recruit early partners who share your vision and are willing to implement your reality.
As an early-stage founder, that reality is riddled with “happy accidents.”
Your startup is a series of experiments in search of a business model. You need to be constantly asking yourself WWBRD (What Would Bob Ross Do). He would celebrate being less wrong tomorrow than he is today.
Be like Bob – be a learn-it-all, not a know-it all!
So, how do you identify and recruit early partners?
SaaS Go-to-Market Strategy: Recruiting Early Partners
The gospel of SaaS go-to-market strategy starts with your Ideal Customer Profile. That’s because not all revenue is created equally. So, which customers do you go after first?
The framework for answering that question starts with asking it slightly differently – “Which customers are open to sharing my vision while accepting my reality?”
The answer is in Geoffrey Moore’s must-read book, “Crossing the Chasm.” The people most likely to share your vision with an appetite for accepting your reality are referred to as Innovators and Early Adopters.
Innovators and Early Adopters are willing to take the risk associated with working with incomplete products to realize a shared vision.
Innovators represent about 10% of your market and will provide you with great product feedback, but they rarely have budget. That means they are useful in the pre-revenue stage.
Early Adopters represent another 10-15% of your market and they have budget. They often buy because they seek a competitive advantage.
It’s vital as a SaaS founder searching for product-market fit to recognize that all commerce is human-to-human.
Businesses don’t buy anything; people do.
Your early customers do not rely on your product to solve their problems. They rely on you!
Learning Precedes Revenue for SaaS Go-to-Market Efforts
To effectively achieve go-to-market success with your SaaS company, you need to accept that learning precedes revenue. By adopting a Service as a Software mentality, and focusing on learning through the service you provide, you will accelerate your path to product-market fit.