It was an interesting evening spent with services founders discussing about transitioning from services to SaaS at GVFL Limited. Here are some notes on what we discussed:
๐ ๐๐๐จ๐ฎ๐ญ ๐๐จ๐ข๐ง๐ ๐๐จ๐ญ๐ก ๐จ๐ ๐ญ๐ก๐๐ฆ ๐ญ๐จ๐ ๐๐ญ๐ก๐๐ซ
In my limited experience, doing both services business and a SaaS business together is extremely difficult. Both of them require more than your full time attention and come with very nuanced problems to be solved. Some founders are able to do it. Most companies that do this achieve a really large scale in one of those two and then start the second one. I wouldn't recommend.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ซ๐ซ๐ข๐ฏ๐ข๐ง๐ ๐๐ญ ๐ฉ๐ซ๐ข๐๐ข๐ง๐
As a service business, pricing is simpler. It is cost + margin. In SaaS however, it is difficult to arrive at a cost based pricing. Most folks recommend value based pricing but in early stages, it is unclear - the amount of value your SaaS will build for your customers. I'd recommend competitor benchmarking and then speaking to a lot of customers while running experiments. Pricing, much like user research, is an on-going exercise. It is never complete. Hubspot is $2B in ARR - changes pricing every 6 months.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ฎ๐ข๐ฅ๐๐ข๐ง๐ ๐ญ๐ซ๐ฎ๐ฌ๐ญ
I wrote a post about building trust as a SaaS company a while back. Here's the link --> https://lnkd.in/dTVuX_9F
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ก๐๐ง๐ง๐๐ฅ๐ฌ ๐ญ๐ก๐๐ญ ๐ฐ๐จ๐ซ๐ค
At Clientjoy (Acquired by Synup), we tried over 10 GTM experiments. 3 of them worked. The one that worked best was building resources that answered our prospect's most difficult questions (not ebooks, not blogs - but spreadsheets or cheat-sheets). We got about 17K subscribers for these resources. 5K of them became our customers over next 18 months.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ข๐ง๐๐ข๐ง๐ ๐๐จ๐ฆ๐๐จ๐ซ๐ญ ๐ฐ๐ข๐ญ๐ก ๐ฌ๐ฆ๐๐ฅ๐ฅ ๐ญ๐ข๐๐ค๐๐ญ ๐ฉ๐๐ฒ๐ฆ๐๐ง๐ญ๐ฌ
As a services company, we are comfortable with monthly ticket sizes of $4K to $15K. SaaS most likely is 500 times less than that. Building comfort with small ticket recurring payments takes some adjustment. Having customers who you've never spoken to also takes some adjustment.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ก๐๐ง๐ ๐ข๐ง๐ ๐ฆ๐ข๐ง๐๐ฌ๐๐ญ ๐จ๐ ๐ญ๐ก๐ ๐ญ๐๐๐ฆ
Services business has Clients and these Clients have requirements. SaaS companies have customer cohorts and these cohorts have problems. The mindset required to deal with clients vs customer cohorts is very different. Building that thought process within yourself and the team becomes important. The team will have to go from understanding requirements and giving quotes to listening to problems and identifying insights.
There were a couple more things discussed as well. Do join in the next time if you are around. Thank you Jatin and eChai Ventures for having me in this conversation.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐จ๐ข๐ง๐ ๐๐จ๐ญ๐ก ๐จ๐ ๐ญ๐ก๐๐ฆ ๐ญ๐จ๐ ๐๐ญ๐ก๐๐ซ
In my limited experience, doing both services business and a SaaS business together is extremely difficult. Both of them require more than your full time attention and come with very nuanced problems to be solved. Some founders are able to do it. Most companies that do this achieve a really large scale in one of those two and then start the second one. I wouldn't recommend.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ซ๐ซ๐ข๐ฏ๐ข๐ง๐ ๐๐ญ ๐ฉ๐ซ๐ข๐๐ข๐ง๐
As a service business, pricing is simpler. It is cost + margin. In SaaS however, it is difficult to arrive at a cost based pricing. Most folks recommend value based pricing but in early stages, it is unclear - the amount of value your SaaS will build for your customers. I'd recommend competitor benchmarking and then speaking to a lot of customers while running experiments. Pricing, much like user research, is an on-going exercise. It is never complete. Hubspot is $2B in ARR - changes pricing every 6 months.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ฎ๐ข๐ฅ๐๐ข๐ง๐ ๐ญ๐ซ๐ฎ๐ฌ๐ญ
I wrote a post about building trust as a SaaS company a while back. Here's the link --> https://lnkd.in/dTVuX_9F
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ก๐๐ง๐ง๐๐ฅ๐ฌ ๐ญ๐ก๐๐ญ ๐ฐ๐จ๐ซ๐ค
At Clientjoy (Acquired by Synup), we tried over 10 GTM experiments. 3 of them worked. The one that worked best was building resources that answered our prospect's most difficult questions (not ebooks, not blogs - but spreadsheets or cheat-sheets). We got about 17K subscribers for these resources. 5K of them became our customers over next 18 months.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ข๐ง๐๐ข๐ง๐ ๐๐จ๐ฆ๐๐จ๐ซ๐ญ ๐ฐ๐ข๐ญ๐ก ๐ฌ๐ฆ๐๐ฅ๐ฅ ๐ญ๐ข๐๐ค๐๐ญ ๐ฉ๐๐ฒ๐ฆ๐๐ง๐ญ๐ฌ
As a services company, we are comfortable with monthly ticket sizes of $4K to $15K. SaaS most likely is 500 times less than that. Building comfort with small ticket recurring payments takes some adjustment. Having customers who you've never spoken to also takes some adjustment.
๐ ๐๐๐จ๐ฎ๐ญ ๐๐ก๐๐ง๐ ๐ข๐ง๐ ๐ฆ๐ข๐ง๐๐ฌ๐๐ญ ๐จ๐ ๐ญ๐ก๐ ๐ญ๐๐๐ฆ
Services business has Clients and these Clients have requirements. SaaS companies have customer cohorts and these cohorts have problems. The mindset required to deal with clients vs customer cohorts is very different. Building that thought process within yourself and the team becomes important. The team will have to go from understanding requirements and giving quotes to listening to problems and identifying insights.
There were a couple more things discussed as well. Do join in the next time if you are around. Thank you Jatin and eChai Ventures for having me in this conversation.
The eChai Effect - In Their Words
โYou donโt plan to build a company via eChai. You just keep showing up โฆ and one day, you realize you did.โ Iโve known Jatin since 2012, when I was still deciding what kind of second innings I wanted to play as an entrepreneur. Over the years, through events, chai breaks, intros, and seemingly small conversations, eChai helped shape not just Upsquare but also refined the lens through which we see collaboration. At Upsquare, weโve hired talent, met partners, discovered co-investors, and built lifelong friendships. One of our joint ventures exists today only because a casual eChai memory sparked a deeper trust. Now, as we build House of Starts โ our venture builder โ eChai continues to fuel our mission: co-creating a shared future. eChai isnโt just a startup network. Itโs a trust network. And for business builders like me, that makes all the difference."
Utpal Vaishnav
Founder @ Upsquare & House of Starts โข Angel Investor + LP
โWhen we launched LegalWiz.in back in 2016, concept of procuring legal and compliance services through a digital commerce platform wasn't as prominent in India. eChai played a significant role in providing the early adopters, and building significant positioning in the startup fraternity.ย Overtime, eChai grew to be a massive network of like-minded entrepreneurs and extended that benefit to all the members in a true "co-rise" spirit. I personally love to attend eChai events, learn from subject matter experts who share relatable and actionable insights and experiences.ย For startup journeys, it is so important to be surrounded by people who can add relevance, perspective, and push you to do better. Most importantly a group of people where you aren't being judged about things going right or wrong, but be a motivational force that keeps you going, yet keeping you in check. eChai is that place for me!โ
Shrijay Sheth
Founder at LegalWiz.in and Hire4Higher Consulting
"From late-night brainstorming over chai to early morning founder calls, eChai has been more than just a network for me; itโs been home base for ideas, impact, and inspiration. What started as a simple meetup years ago turned into a powerful movement, connecting founders, creators, and dreamers. Iโve had the privilege of seeing startups find product-market fit, marketers (like me) find unexpected collaborations, and most importantly, people finding their tribe. เคธเคเคเคเฅเคเคงเฅเคตเค เคธเคเคตเคฆเคงเฅเคตเค โ Let us move together, speak together. Itโs not just a verse from the Rigveda โ itโs how Jatin and the entire eChai community truly operate. We donโt just network, we grow together. Forever grateful to be a part of the eChai Effect.
Jaydip Parikh
Chief Everything Officer at Tej SolPro
eChai Partner Brands
eChai Ventures partners with select brands as their growth partner - working together to explore new ideas, open doors, and build momentum across the startup ecosystem.
