According to Datalabs by Inc42, India has an astonishing 8,633 SaaS startups. A report published by Google India and Accel Partners stated that the Indian SaaS industry will be valued at a staggering $50 billion by 2025.
From developing chatbots for enterprises to building cloud management solutions, the SaaS space in India is growing rapidly.
But, just like every other business, it comes with its own set of challenges. Acquiring customers and winning their trust is no breeze (given the sheer number of options customers have to choose from). Consider this: We had 150 digital marketing tools to choose from in 2011. In 2018, the list has grown to a mammoth 7,000 tools.
New businesses are starting up faster than ever. The key to success is to stick to the fundamental rule: build a product that adds value to customers’ lives every day. Here are some key lessons I picked up during my entrepreneurial journey.
Think Like A Scientist – Don’t Assume Anything
It’s a natural tendency for most of us to assume we “know” our stuff. We’re designed like that. But there’s a good chance that we’re wrong.
And then there are trailblazers (Freshworks and Zoho) who’ve done something in a certain way that has worked for them—but it might not work for everyone.
Yes, I am suggesting not to rely on gut feeling or the unicorns.
The key to solving any problem is to start from the first principle: a basic assumption that cannot be deduced any further.
The idea is to give up all the biases we have. Start with the fundamental questions: Are we absolutely sure this is true? Has this been proven?
A popular example is that of Elon Musk and how he started SpaceX. When he wanted to build rockets in 2001, the first problem was how much does it cost to build a rocket currently?
He started collecting data on how much will every part cost. Eventually, Musk found that it costs just 2% of the price quoted by Airbus and Boeing—the only 2 rocket manufacturers in the world at the time. So, he sourced all the parts directly from manufacturers and built the rocket in-house. Instead of focusing on the current scenario, he went ahead and developed his own solutions at 1/10th the cost.
Forgetting the current solutions and assumptions, you deconstruct a problem to its most basic level and build a solution from the ground up.
We have to keep asking. Why is this like this? And why is that?
Many scientists and successful entrepreneurs practice this technique to come up with unique theories and ideas. In their words, it’s “the ultimate truth”.
Price Your Product Intelligently (Don’t Underprice It)
In SaaS, we are just as good as the value we deliver to our customers. Purchasing decisions in a company are made by gauging how effectively the product solves a problem (the time or the resources it saves, or the process it simplifies). It’s seldom about the price.
It’s never a good idea to use pricing as a competitive advantage. If we lower prices in a bid to attract customers, it’s going to hurt the business in the long term.
Being a cheap product might help gain some initial traction. But, devaluing the product would also affect how people perceive the brand. There are many studies that indicate brands are perceived as “second rate” when they give out too many discounts or sell their products at throwaway prices.
If you ever hear a customer saying you are overpriced, they probably mean it does not provide enough value to be charging that price.
The key should always be: Increase your value.
Add more features.
Remove outdated features.
Make your interface friendlier.
Give top-notch customer support.
Don’t cut down your price. That’s just a short-term tactic.
Market Like A Leader
The best marketers tell stories. A “story” is a language that a company’s audience speaks. It has drama; it invokes emotions; it engages them.
When Zendesk found out that a lot of people were searching for “Zendesk alternatives,” they went ahead and created a fake grunge band called the Zendesk Alternative! They purchased zendeskalternative.com and hosted a hilarious video of the upcoming (fake) band.
They created an entire world around it—the band had social media presence on Facebook, Twitter, and MySpace, and they were listed on Bandcamp and Reverberation.
But, the website didn’t tell people what Zendesk does. It was a story of how the fictional band was frustrated about someone stealing their name. The musicians admitted their need for Zendesk’s services and wrote a song about the significance of customer support.
It did a perfect job of charming the audience and it landed the pole position in search results for that term. It was a great story. It triggered emotions. It made customers feel closer to the brand.
Humans remember stories more than they remember facts. Stories are how most people make sense of the world around them.
As a brand, we should tell people why we exist (as opposed to what we do). The first step for any business should be to build a brand narrative—creating a clear perception of the brand in the mind of the audience.
People trust us when we tell them something that aligns with how they view the world.
Take time to get inside the minds of potential customers. Pay attention to the pain points they talk about in sales conversations.
Interview current customers to know their passions, fears, and values. Find ways to connect with the emotions they experience (hope, joy, excitement, longing, and more).
Build Customer Success Early
Every SaaS startup’s success is intertwined with the success of its customers. If customers derive value from the product, they will continue using it.
Customer success is the way of ensuring customers get the desired outcome from using the product—by actively engaging with them and helping them get the maximum from your product or service.
“When should I start thinking about customer success?” is a question that baffles a large number of startup founders.
I’d say the moment we have one large customer or a handful of medium-sized customers. We don’t really have to hire a customer success manager right away. We should start by fostering a customer success mindset across the organization—the willingness to help customers as much as we can. Here are a few things you can do to that end:
- Start recording the feedback from all channels in a spreadsheet. Build a process to work on them, and tell the customer if you implement a suggestion.
- Every support call can go beyond solving the problem at hand—check-in if the product helps them achieve their business objectives.
- Set up a post-interaction survey. If a customer is not satisfied even after you have resolved the issue, get in touch with them to understand their expectations.
- Write a few blog posts that help customers understand how to get the most from the product.
If we have to put a number to it: I’d say it’s a good time to focus on customer success as soon as we hit $100K in Annual Recurring Revenue.
Go Beyond “Good Design”
It’s already well-known that great design can be a strong differentiator in SaaS. Startups need to have a consumer-apps-like focus on design, but it goes much beyond just the aesthetics. Looking good is a must-have—but not a winning stroke.
Great design lies at the intersection of an aesthetically-pleasing user interface (UI) and great user experience (UX). The UI is how your product looks and UX is how your product works.
A lot of SaaS startups make the mistake of focusing just on the look and the feel of their product and usability tends to become an afterthought.
The key is: placing equal emphasis on visual appeal and usability.
We should remember that with every new feature we add to a product, it becomes more complex for the user. We have to shoulder the responsibility of keeping things as simple as possible. Hide the less-used features under settings. Make new features easy to access. We have to proactively collect data on how users interact with our product and tweak things accordingly.
At every step of design, we have to keep a few aspects in mind:
- Visual design
Piecing the little bits together goes a long way in helping your users derive the most value from your product.
The global SaaS market is expected to grow to $143.7 billion in 2022. But, running a Saas startup in India comes with it own set of challenges.
The adoption is low. It’s still very hard to sell SaaS in India. Global prices don’t work for Indian customers, and a self-serve, low touch model of customer acquisition and onboarding is difficult to crack.
It’s possible to get past this by selling to customers internationally — but a larger base of potential customers locally would do wonders to the ecosystem.
An Indian startup that has grown to a $10M Annual Recurring Revenue by selling to the domestic market — we are yet to see that.
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