The TiE Mumbai group and Seedfund got together to host a breakfast brainstorming session on Software As A Service today at Mocha Mojo, Bandra. BTW, great location for meetups of up to about 45 people. For evening meetups: This place serves booze too :)
Thanks Anand for inviting me and allowing me to share my thoughts and experience on growing and marketing a SaaS business. I have been in the business for 4 years now and honestly have learnt a pot-load on various issues that startups go through when building a pure-play SaaS business. It is a different game altogether.
I recall the following points that we discussed and also thrown in a few of my thoughts. If you attended the session and have something to add then please use the comments below.
On Target Market Focus
Unless you are Google (or started a SaaS business in the early 2000), SaaS businesses that market to everyone will have a harder time acquiring customers. You need to have a focus and a small group of people (Designers, Accountants, Freelancers etc.) that you are selling to. Win those over and then move onto the next group.
On Handing Feature Requests
“Please add just one more feature” will keep coming. Especially, if you try to sell your SaaS app via offline means. That is a big no no. Remember that you are not building an app that everyone in the world can use. Learn to say no to feature requests. Historically, people only use around 20% of the features of a given product. You need to make sure that your first release is a working solution and then build upon it slowly. Your first few customers (if you know your right target audience) will help you build the next version of the product. In India, people are used to buying customized products with lots of features. They treat SaaS vendors as web developers. They will soon realize the buying something out of the box with a few less features (being very cost effective) solves their need.
Cardinal rule of SaaS: You can’t please everyone. Learn to say no and build for a smaller audience.
Giving away your product for free is good but trial plans work too. They give a sense of urgency when the trial period comes to an end. Whether to go freemium or not highly depends on your industry type and target audience.
The overall user experience holds a lot of importance. People are getting used to consumer technologies like Facebook, Twitter etc. and will want similar experiences when they ask for an enterprise tool. There is absolutely no room for poor UI. A positive experience will differentiate one app from another.
On Self-Service SaaS
Ideal SaaS is creating a friction-less, self-service model. Sell to the SMB and then gradually move up. Marketing SaaS to large enterprise customers in India is difficult but not impossible. Workday did it by selling 200,000 seats to Flextronics.
On Product Development
Building for yourself is the best way to build a product. Get your version 1.0 out, gather feedback and iterate. It is important to get something out the door then sit and plan for weeks.
In my experience, forward-thinking Indian companies/entrepreneurs are getting ready to power their business with SaaS. They understand the cost-savings, reduce overheads and always-on access that comes with a SaaS product. They understand that it is wise to concentrate on what is core and outsource the rest by using SaaS/Cloud services.
Next 2-3 years will be very interesting to see how all of this shapes up here.