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If you’re asking yourself whether your business is market-ready, you’re in great company. Determining the timing for the release of a SaaS is one of the main conundrums faced by old and new founders alike.
The premature release of a product that has major overlooked software flaws can turn off potential customers immediately, with no chance to remedy the bad first impression.
Waiting too long, on the other hand, carries its own risks.
Any delay in release also delays income; any unexpected expenses could put the business at serious risk of flopping before it even sees the light of day.
Imagine this: you’re weeks away from release and have run out of seed money earlier than anticipated. The entire budget has been spent on R&D with nothing left for customer acquisition. With no clients at this stage, you also have no revenue to redress this imbalance. The only way out is to increase seed money from your own pocket, or raise external capital – and desperation is the worst place to negotiate from.
The second risk stems from your competition.
You analyzed the landscape, found an untapped niche, had a great idea for a solution, and are now building a business around it. The problem is that you’re not the only one looking at that landscape. Chances are, someone else spotted the same opportunity, and is developing a solution of their own.
SaaS is one of the fastest growing sectors of entrepreneurship. The resources to found a business, be it information, hardware, or finance, are available to an ever-growing pool of people.
Make no mistake: in this climate, developing a SaaS business is a race. Wait too long to go to market with your nearly-finished product, and you’re essentially stopping 100 meters from the finish line to tie your laces, giving the competition the best chance of catching up. That gap in the market you spotted? It could disappear right out from underneath you.
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SaaS Business Go To Market Steps:
If your SaaS is either in the final stages of development, or the early stages of going live, ask yourself the following questions:
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Is more than half your budget still going to R&D?
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Is less than a third allocated to marketing and customer acquisition?
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Do you feel like the finishing touches are dragging out indefinitely, and pushing you over budget?
If the answer to any of those is ‘yes’, read on. You could be making one of the critical mistakes many first-time founders make at this stage.
The first mistake is to over-develop the product before you go to market.
It doesn’t have to be perfect to be making you money.
It’s only natural to want to make the best product you possibly can. A passion for creating something amazing is probably what inspired and fueled your journey into founding a business to begin with.
But here’s the thing. You don’t need to sacrifice ‘great’ for ‘good enough’, at least not forever. Fundamentally, ‘great’ in this context means catering to the needs of your audience. A perfect solution for a non-existing problem is still a terrible product.
No matter how well you know your audience, there will inevitably be requirements or ways of using your software you can’t anticipate. Failing to anticipate customer usage most likely isn’t an oversight on your part either: their needs will be as unique as your clients, and be shaped by their team, geography, current software solutions, and so forth.
Don’t be afraid to get your rough drafts out there and in the hands of some beta testers. The earlier you involve testers and potential clients, the more likely you are to create something that is truly beneficial to them, and avoid wasting money overdeveloping dead ends.
Especially in the case of SaaS models, R&D is never a finished process. To stay at the top of the market, you will have to keep developing the product regardless of how good it is at its launch. So let go of the idea of perfect, and get it out there to make you some money!
The second mistake is to overspend on the product, and underspend on customer acquisition.
All too frequently, customer acquisition is either underfunded or overlooked entirely during this stage of development. The ‘if you build it, they will come’ motto could not be less true for SaaS businesses.
Simply put, you won’t attract customers if you’re not directly marketing to them. A significant portion of the budget needs to be allocated to customer acquisition as soon as the product is anywhere near the stage of being ready to go to market.
That doesn’t mean pulling all resources from R&D; once you’ve brought some customers aboard, you can start redirecting funds to engineering to complete the finishing touches.
The key here is that customer acquisition should happen simultaneously with those finishing touches, and not wait until after the launch of the ‘perfected’ product.
Consider the three main steps of the launch cycle:
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Pilot it
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Nail it
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Scale it
The sooner you can effectively go from the drawing board to the pilot stage, the higher the chances of success.
Am I Really Ready to Go To Market?
Still wondering whether your product is ready to go to market? Here are three signs that it’s time to take your SaaS to the next step, according to each stage.
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‘Pilot it’ 🧑✈️ beta testers are giving mostly positive feedback
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‘Nail it’ 🔨 10 unaffiliated customers who haven’t churned
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‘Scale it’ 🧗 ready for funding
Sign 1: Pilot it 🧑✈ beta testers are giving mostly positive feedback
The purpose of beta testers is two-fold. On the one hand, they will help you iron out the bugs in the software before it’s fit to go to market.
On the other, beta testers will help determine who your ICPs (Ideal Customer Profile) are, and in some ways more importantly, who they are not. That means narrowing down who to target through customer acquisition and avoiding the pitfalls of developing software solutions for clients who ultimately won’t bring in enough revenue to justify these development costs.
Once the ICP-like beta testers are sufficiently happy with your product, it’s time to acquire your first real clients.
You can attract your first customers and incentivize them to provide ongoing feedback by offering early-bird subscription rates.
Success in this stage is achieved by really listening to the feedback and adapting your product to it, even if it deviates somewhat from the original idea. This is its most malleable point before the nailing and scaling cycles, which means the closer you can get to creating a perfect solution for your ICPs, the more money it can make you in the long run, and faster.
Sign 2: ‘Nail it’ 🔨 10 unaffiliated customers who haven’t churned
The golden rule of SaaS businesses is that if you can acquire 10 unaffiliated customers, i.e. clients who have no personal connection or incentivized loyalty to your business, you can acquire 100. At that point, it’s simply a matter of time and reach.
If those 10 haven’t churned after a full billing cycle, you know the product is good enough. Keep just enough funds in R&D for upkeep and finessing, and allocate the rest of the available resources to customer acquisition:
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Start cold calling and emailing potential leads
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Send resources to leads to make your product most attractive to them
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Create SEM (Search Engine Marketing) paid advertisements
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Run A/B testing to determine which campaign strategies work best in three subcategories:
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Keywords
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Advertisements
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Landing pages
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Create comparison pages on your website highlighting why your product is the best solution in your market corner
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Run targeted paid advertisements against competitors
Don’t hesitate to experiment with different marketing techniques to see what’s most effective for your product.
Sign 3: ‘Scale it’ 🧗 ready for funding
‘Is dinner ready yet?’
‘Well it has to be, I’m hungry.’
The ‘needs must’ approach may seem like a seriously back-to-front way of determining whether your SaaS is ready to go to market or not.
But consider this. Your resources (probably!) aren’t unlimited. If you’re getting close to empty pockets, it’s high time to stop nitpicking and just get it out there, flaws and all.
If you’re looking to raise funds, whether it’s through an angel investor or a venture capitalist, you need to demonstrate your profitability. The only real way to show that your business can succeed at scale is with actual revenue figures.
Quality may be the most important factor to you, but generally speaking, angels and VCs aren’t searching for perfect software, they’re targeting a great investment opportunity with fast and reliable returns.
The better your early numbers look, the better deal you’ll be able to negotiate yourself, too.
This equally holds true if you’re bootstrapping the business: your SaaS’s financial survival depends on becoming profitable through steady growth. And that means acquiring some clients, pronto.
The take-away is this:
Good is better than perfect; now is better than later.
So, are you ready?
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