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:
👉 𝐀𝐛𝐨𝐮𝐭 𝐝𝐨𝐢𝐧𝐠 𝐛𝐨𝐭𝐡 𝐨𝐟 𝐭𝐡𝐞𝐦 𝐭𝐨𝐠𝐞𝐭𝐡𝐞𝐫
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐚𝐫𝐫𝐢𝐯𝐢𝐧𝐠 𝐚𝐭 𝐩𝐫𝐢𝐜𝐢𝐧𝐠
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐭𝐫𝐮𝐬𝐭
I wrote a post about building trust as a SaaS company a while back. Here's the link --> https://lnkd.in/dTVuX_9F
👉 𝐀𝐛𝐨𝐮𝐭 𝐜𝐡𝐚𝐧𝐧𝐞𝐥𝐬 𝐭𝐡𝐚𝐭 𝐰𝐨𝐫𝐤
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐟𝐢𝐧𝐝𝐢𝐧𝐠 𝐜𝐨𝐦𝐟𝐨𝐫𝐭 𝐰𝐢𝐭𝐡 𝐬𝐦𝐚𝐥𝐥 𝐭𝐢𝐜𝐤𝐞𝐭 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐜𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐦𝐢𝐧𝐝𝐬𝐞𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐭𝐞𝐚𝐦
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐝𝐨𝐢𝐧𝐠 𝐛𝐨𝐭𝐡 𝐨𝐟 𝐭𝐡𝐞𝐦 𝐭𝐨𝐠𝐞𝐭𝐡𝐞𝐫
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐚𝐫𝐫𝐢𝐯𝐢𝐧𝐠 𝐚𝐭 𝐩𝐫𝐢𝐜𝐢𝐧𝐠
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐭𝐫𝐮𝐬𝐭
I wrote a post about building trust as a SaaS company a while back. Here's the link --> https://lnkd.in/dTVuX_9F
👉 𝐀𝐛𝐨𝐮𝐭 𝐜𝐡𝐚𝐧𝐧𝐞𝐥𝐬 𝐭𝐡𝐚𝐭 𝐰𝐨𝐫𝐤
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐟𝐢𝐧𝐝𝐢𝐧𝐠 𝐜𝐨𝐦𝐟𝐨𝐫𝐭 𝐰𝐢𝐭𝐡 𝐬𝐦𝐚𝐥𝐥 𝐭𝐢𝐜𝐤𝐞𝐭 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬
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.
👉 𝐀𝐛𝐨𝐮𝐭 𝐜𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐦𝐢𝐧𝐝𝐬𝐞𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐭𝐞𝐚𝐦
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.
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