How to Not Suck at SaaS: Focus on Customer Development

May 18, 2010

My first take on this topic in last week’s post got a lot of attention, but not the attention I intended. You won’t see many comments on my blog, but you will find many at the SaaS LinkedIn Group where I reposted it, which were primarily focused on an emotional response in reaction to my provocative title (I think the word suck had the most to do with it.)

The group missed the point I was trying to make: software developers need to engage their users/customers in usability testing at the onset of the product development process. And I highlighted Steve Krug’s approach which he lays out in his book Rocket Surgery Made Easy.

Let’s also extend the concept to the overall business development of a startup. I have heard much about Steve Blank’s book the Four Steps to the Epiphany. I’m ashamed to say that I haven’t read it… but from the reviews I’ve seen, I guess I should.

But I did go through his online presentation about The Customer Development Methodology. My key takeaways from the presentation were:

  • Don’t exclude your prospective customers from the early product development cycle. Don’t try to go out with a fully baked beta assuming that if you build it they will come. Engage your prospects early on, build in their feedback within an agile product development cycle.
  • Don’t ramp up your sales and marketing support before you release your product. The founders should be the first marketers and the first sales reps. More on this in Sales Learning Curve and the Renaissance Rep.
  • Begin the customer development cycle right along the product development cycle. Have measurable customer development milestones that mimic the milestones of product development. Make them meaningful and don’t make them about the product.
  • Stop selling your product and start listening for the customer’s pain point. Learn how the pain manifests itself and how the customer wants the pain relieved.
  • Develop a repeatable sales and marketing process. More on SaaS Sales Models here.
  • Adopt an Agile approach to your customer development cycle.
  • Only begin ramping up your company once you have figured out the true alignment between your target customer, their pain point, your solution and the sales/marketing experience that your customers wants to be taken through. Read about the Ideal Path to Expansion Stage.

And the absolute last thing you want to do is raise venture capital. I refer you to the concept of the Lean Startup by Eric Ries.

The Chief Executive Officer

Firas was previously a venture capitalist at Openview. He has returned to his operational roots and now works as The Chief Executive Officer of Everteam and is also the Founder of <a href="">nsquared advisory</a>. Previously, he helped launch a VC fund, start and grow a successful software company and also served time as an obscenely expensive consultant, where he helped multi-billion-dollar companies get their operations back on track.