B2B SaaS startups have become extremely popular in India and lots of startups are exploring this business model. Indian companies believe they have an edge in this space because they can create them at a lower cost as compared to players in other parts of the world.
However, there are very few success stories yet to emerge with only a handful of companies in the space exceeding $10 Mn Annual Recurring Revenue ARR in sales. As an industry, it is still a decade or more behind Silicon Valley where Salesforce pioneered a new era of SaaS products.
There are, however, some obvious tactics and strategies which can help an SMB and developed market focussed-startup whose path would be very different from an enterprise-focused product.
SaaS Startups Should Rely On Simplicity
SMBs will have users who aren’t necessarily savvy unless the entrepreneur uses the system himself/herself. This is why it’s very important that these companies make their end-user the hero. The platform should be as idiot-proof as possible so that the user can go ahead and start playing with it immediately without requiring any hand holding.
The best way of doing this is by starting with the basics, so he doesn’t get overwhelmed. Keep it simple, and reveal advanced tools step by step only after a user has mastered the initial steps. This way they can explore the platform systematically because the modules are exposed sequentially. It’s a good idea to also pop up a new tip every time a user logs in. This way, he can become a power user without getting stuck or frustrated. You need to get these customers to become your champions, and act as your advocates. It’s a good idea to feature them prominently on your site so that other users can connect with them.
Narrow The SaaS Feature Set
Many platforms pride themselves on how many features they offer because they want to be everything to everyone. This makes their platform complicated and intimidating, which means that the user requires a lot of human hand-holding to be able to start using it.
This creates a barrier because it’s expensive to provide this kind of support. It reduces adoption rates, and it’s one of the reasons why a lot of potential customers will refuse to take the platform for a free trial spin; and even if they do they will abandon it because it seems to take too much trouble and effort.
Low Touch=Low Cost
The trick is to make the platform self-service, so that the end-user can do everything for himself, without any human intervention. The problem with Indian business owners is that rather than adopt a DIY (do it yourself) mindset, they take a DIFM (do it for me) approach. In fact, because they have paid a fee, they demand this! This is why so many Indian Saas startups avoid signing up Indian SMEs as customers!
Employing a field sales force for SMBs that pay under $3,000 a year for your product is likely to be a disaster as you will never recover your costs invested. An inside sales team trained for support + sales hybrid roles is scalable and will give you profitable conversions at every scale. This is even better for Indian startup since the inside sales costs will be much lower than the US or European-based startups giving a much better-operating profit number than your competitors.
Increase Barriers Of Exit To Your SaaS Product
Design your product in a way that once the user starts using your software, his chances of migrating are very low, because of high switching costs. Since you now have a recurring revenue, you will become profitable and investible quickly, allowing for exponential growth. This is why it’s important to have a lot of domain experts in SaaS startups,, who help your programmers to design a platform which your customers can fall in love with.
[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]