How to Not Suck at SaaS: Focus on Customer Development
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.
How did the team at SurveyMonkey know it was time revamp their pricing strategy? Find out which signals tipped them off and how they made it a success.
Mike Walsh, CMO at Reflektive, has gone through multiple pricing processes and has developed his own framework for assessing the situation and then developing pricing that is appropriate and effective. Learn more about his 4-step framework here.