Designing the Perfect SaaS Business (Steal My Checklist)

Summary

In this video, a seasoned SAS founder shares a personal checklist for creating a successful SAS business. The video outlines essential criteria, such as focusing on B2B, choosing vertical or orthogonal markets, and leveraging existing market demand. The founder emphasizes the importance of identifying a clear pain point, reaching customers online, and offering a solution to a significant problem. The checklist also highlights the value of choosing a proven market with a disliked incumbent and understanding the competition. Viewers are invited to explore an in-depth course on building a SAS business and even win a private session with the founder.

Takeaways

• 😀 Founders should focus on building businesses with the right foundations, not relying on luck or spontaneous ideas.
• 😀 A clear checklist of attributes can increase the odds of building a scalable and successful SaaS business.
• 😀 Selling B2B (business to business) is generally more reliable than selling B2C (business to consumer) for SaaS businesses.
• 😀 Vertical SaaS businesses (focused on specific industries) have an advantage, especially for bootstrapped founders.
• 😀 Horizontal SaaS businesses (aimed at multiple industries) can be harder to market and support compared to vertical ones.
• 😀 Orthogonal SaaS products target specific job roles across various industries, which can also be a successful approach.
• 😀 A strong advantage in the target market (through passion, expertise, or network) can help founders stand out and succeed.
• 😀 Online reach is crucial for SaaS businesses; being able to reach customers via online marketing makes the process easier.
• 😀 Selling to one or two decision-makers, rather than a committee, simplifies the sales process and increases chances of success.
• 😀 Entering an existing market with a large hated incumbent can offer an opportunity to attract customers and talent by learning from competitors' mistakes.
• 😀 Identifying a deep pain point (aspirin) rather than a nice-to-have feature (vitamin) is essential for building a valuable SaaS product.

Q & A

Why is it better to sell to businesses (B2B) rather than consumers (B2C) when starting a SaaS?

Selling to businesses provides stability and the potential for higher pricing. Businesses are more likely to invest in software that solves their problems, especially if it's scalable and can save them money or increase productivity.

What is the difference between vertical SaaS and horizontal SaaS?

Vertical SaaS targets a specific industry (e.g., real estate, gyms), while horizontal SaaS focuses on tools applicable across multiple industries (e.g., email marketing, scheduling). Vertical SaaS is easier to market because it serves a niche with specialized needs.

What is 'Orthogonal SaaS'?

Orthogonal SaaS targets a specific role across various industries. For example, a SaaS product designed for HR professionals but applicable to multiple industries. It combines the focused approach of vertical SaaS with the broader reach of horizontal SaaS.

Why is having a founder advantage important when starting a SaaS business?

A founder advantage can be a personal connection to the market, such as prior experience, a strong network, or deep knowledge of customer pain points. This advantage helps build trust, and market insight, and improve product-market fit.

How important is it for your SaaS product to be marketed online?

It is essential for your SaaS product to be easily marketed online. Effective online marketing through SEO, content creation, and social media increases visibility, customer acquisition, and business growth.

What role does the decision-making structure in a business play in SaaS sales?

In SaaS sales, having one or two decision-makers is ideal. It simplifies the sales process, as fewer people need to be convinced. It's even more effective if the person experiencing the problem is the same one making the purchasing decision.

Why is it beneficial to enter a market with an incumbent that people dislike?

Entering a market with a disliked incumbent gives you the opportunity to offer a better solution. Customers are already dissatisfied, making them more open to switching to a new provider that promises a better experience or more effective results.

What does it mean if a market has customers actively searching for solutions?

If customers are actively searching for solutions, it means there is demand for your product. Even if competitors dominate search results, this indicates an existing market and a potential customer base that you can target with a better offering.

Why is solving an 'aspirin' problem more effective than solving a 'vitamin' problem in SaaS?

An 'aspirin' problem refers to urgent, pressing needs that customers need solved immediately, making the product essential. In contrast, a 'vitamin' problem is a nice-to-have solution that may not be as urgent, leading to lower demand and harder customer acquisition.

What's the difference between competitor pain and customer pain in SaaS market entry?

Competitor pain occurs when you enter a competitive market and outperform established players, while customer pain refers to markets with few competitors but harder-to-educate customers. Ideally, focus on competitor pain, but avoid markets with both competitor and customer pain.