Things to remember when setting up a SaaS business.
June 8, 2012
I decided to post some tips for people who are in the process of setting up a SaaS business. I’ve recently been involved in developing, launching, supporting and marketing of two projects. So these are the things I’ve learned. This list is far from exhaustive, so feel free to suggest other points.
Focus on building the actual product, don’t invest your time in writing code which is not vital to your software’s USP:
This means integrate other software which is non-core to your product:
- support / helpdesk: zendesk or desk
- recurring billing: recurly, spreedly, paypal, …
- invoicing and administration: xero, freshbooks
- smtp, whitelist monitoring, click/open tracking: sendgrid
- hosting of assets : amazon S3, …
- analytics: google analytics, mixpanel, …
- media conversion: transloadit
It’s the core of those companies to help you with certain aspects, they will always have more, better features than developing it yourself. Do yourself a favor, pay the money and integrate. Give your own development hours a cost, see how it matches up to the cost of using an external service and making the decision will become a no-brainer.
Automate wherever possible, but do it after launch.
Automation is really important in a SaaS, but don’t spend to much time on it before your actual launch. Most tedious task will come up after you have your first customers. So see what’s costing you a lot of time and prioritize accordingly.
- It’s really no work to start doing invoicing manually, take one hour every week and send out invoices to the customers you charged the past week. Automating this is a lot of work and really not worth it in the beginning (execpt if your doing your invoices via recurly).
- I don’t like sending automated welcome mails to new users. I check out their email domain, do some searching and send them a personalized welcome mail. Part of this email is standard pre-written copy, part of it will be personalized (gmail canned responses yeah!). If I really think their a good fit for our service, I’ll put in my cellphone number as well.
Think about customer support
When you’re launched and you’ve got some users signing up (maybe free users), your customer support email will be first in line to get actual sales, customers will (subconsciously) be testing you based on your ability to help them with their problems. So get your shit sorted. Every software ships with bugs and faults, so you can test as rigorously as possible, you will ship software with bugs. So it comes down to being able to find and fix your software quickly. Being transparent and reactive in customer support will be your first and most important weapon of choice. It’s not the actual problem that will frustrate your users most, it will be the not-knowing-when-it-will-be-fixed that’s really going to bother them.
Here are some of the things you should consider:
- Get an “emulate” function in place, emulate will enable you to login as a user without having access to their password (yes you should always encrypt user passwords in your db). Being able to see what this user has done to break something is really important. If you need 3 mails back and forth to find out what’s actually going wrong you’ve lost already. So this is a really powerful tool. Be aware of doing stuff for your customers, they need to be in control of the software and do the stuff themselves, otherwise you’ll be getting phone calls of customers “Hi, I’ve made a typo in your software and currently don’t have access, can you fix this?”.
- Try to be fast in answering your customers support especially when you’re just starting. Those first 20 customers are probably the most important customers you’ll ever have. They will make or break your business, so service them as hell. Make sure they’ll love you and never leave you again.
- Make it incredibly easy to deploy code. This will help speed up the process of fixing issues with your code. I just type ./exportLive.sh and all my code goes to the server without any downtime. Really important.
- Guidance: put an example item in your interface, which first time users can use to start playing around. We have a value in place in our db (is_first_login) which helps us adding more guidance for first time users. More copy, tutorials, …
Marketing/Sales
- Sales is not about funnels, tracking, conversion, … Sales is about trust. “I trust you to do this for me and in return I’ll give you X amount of money each month.” So your homepage should be about trust, trust by testimonials, trust by company logos, trust by honestly answering the questions of your prospects. Google Adwords does not automatically mean sales, there is a lot more to it.
- However, being able to see what the bottleneck in your sales funnel is, will help you as well, but this starts to become important once you’ve got hundreds of people visiting your homepage daily, probably not from day one.
- Be able to quickly give your users a trial version of your paying plans. It should just be like: login, search the user, upgrade, done! It will help you in closing certain deals.
- Get on the phone with hot prospects, you’ve got someone interested in your service: there is no email or promotion in the world that will convince people more than a simple phone call: Be honest (you’ve worked for months on this, so you know your stuff), try not to oversell what you have, End the conversation with a good action (I’ll give you a trial for 2 weeks and will call you back after this period).
- You probably have a blog where you will be posting regular updates on new stuff in your service, but most of your users won’t be reading it. Make your recent blogposts available in your backendinterface, and send out regular newsletters which have extracts of your most important blogposts. I know it’s like kicking in open doors but so easy to forget.
- Feedback is a powerful sales tool: ask for feedback, involve users in the process of building new features.Everybody likes to feel important, we’ve regular phone calls with our customers (but also prospects) about certain features where we discuss wire-frames, homepage designs, … People like to be involved and they will also love you for involving them in making your service better.
Whoa this list became a lot longer than I initially intended, I’ve the feeling there still a lot more stuff to cover, but I’ll leave it at this for now.