Organic SaaS Growth: #23 The SaaS GTM Mega Series: Best Product Always Wins

What Defines ‘Best’?

Craiglist, Reddit, and Hacker News may not have the most modern UI, and they might not be the 'best’ in the eyes of the designers, but users love these products.

Similarly, you can have a product that is not an engineering marvel, and your developers are not in awe of it, but your users still find it 'best'.

The market bestows the title of best to a product, not developers, designers, or investors.

Simply put, a product that delights its market most is the best in its category.

When users interact with your SaaS product, they don't just interact with its features. They interact with your whole ecosystem — messaging, pricing, community, customer support, documentation, and even organizational culture. When aligned with a single focus of user delight, all of these together results in the best product.

Next time when you come across a successful product that is not ‘best’ in your eyes, consider looking at its whole ecosystem from the eyes of its target market.

If you understand this, you will:

1. Never spam users' inboxes
2. Never create clickbait-ish 700 words, keywords-filled, value-less blogs
3. Create detailed help guides
4. Provide customer support yourself as founder at least for the first 12 months
5. Design pricing to maximize value creation for the users and your business
6. Build templates, integrations, and plugins to eat away all complexities from your users' lives

You don’t have do it all on day one. Just embark upon a relentless pursuit of user delight and take one step at a time in the right direction.

Winner No More Takes It All

During the early 2000s, Salesforce was the only SaaS solution in its space, but tens and hundreds of SaaS CRM businesses are thriving in the market today.

Google Analytics has long enjoyed a monopoly until the likes of Mixpanel and, more recently, Fathom Analytics, and Simple Analytics arrived on the scene with their differentiation.

With its suite of 40+ apps, Zoho competes against giants like Google and Microsoft. It is a bootstrapped, large and profitable organization.

DuckDuckGo proudly exists against mighty Google search and has an extremely loyal audience.

Protonmail is a statement of privacy against the likes of Gmail and has acquired more than 50 million users in just seven years.

None of these products have beaten their respective market leaders; but they are winners in their own terms. They exist in a different realm within the same market.

The SaaS market has gone through a transformation that not many are talking today.

The availability of options has captured the users' imagination and resulted in the rise of micro-niches within market segments.

I will argue that you can enter a market (even if it is crowded) and build a profitable SaaS business if you can:

1. Focus on just one niche within a market segment
2. Discover a growing problem they face
3. List out different solution POVs to solve that problem
4. Select the POV that is upcoming, has emotional connection with the audience but not yet serviced by many products
5. Build your product strongly positioned around that POV

For example, as the pro-privacy movement gained momentum and people voiced their concerns against cookies, new products were born to service them. Fathom Analytics, for example, leveraged anti-cookie POV and offered an alternative to mighty Google Analytics to a niche audience.

Take a stand, focus on a POV and design the product around it. Don’t hesitate, don’t build for all.

The market continuously evolves and desires new improvements. Thus people always have untapped needs even if the state-of-the-art product currently serves them.

All you have to do is to carefully choose the battleground and then prepare for it thoroughly.

An Inquiry Into the Art of Building an MVP

Ever since Eric Ries popularized the term 'Minimum Viable Product', many successful businesses have been built by first launching an MVP.

A minimum viable product is the most basic representation of your overall product vision and delivers its core value proposition.

For example, if you aim to build a CRM, an MVP can be a spreadsheet, and if you desire to develop a product recommendation engine, an MVP can be manual curation of the products.

You can build an MVP in less time and with a low investment than a full-featured product. It helps you validate your idea, gain early users' feedback and fine-tune your product roadmap. An MVP also helps build better products in sync with the market needs. If you play it correctly, an MVP can enable you to build a community of supporters primed enough for the final launch.

But the success of an MVP is not guaranteed. Browse through online communities of entrepreneurs, and you will realize that most MVPs never materialize into a viable business.

There are many factors for it, from unviable ideas to ineffective marketing, but from a product point of view, most MVPs fail because they are unthoughtfully designed.

They just don't deliver the value they promise.

Even though an MVP is a simple product but it is not a half-baked product. It has very few features, but it does the work it promises and does it efficiently. It should amaze users with its capability of delivering one simple promise.

There is a differentiation between technology and value. An MVP can be a low-tech product that you put together in a few hours, but it has to deliver the value in the most user-friendly way.

MVP Success Framework

An MVP is the leanest representation of your ideas. There would possibly be more than one solution to the problem you are solving, and you might have a long list of features you want to build. For an MVP, you have to select only one solution and a few features that most closely represent your overall product vision.

A good heuristic is to figure out the riskiest assumption — something critical for your product's success and test it using MVP. For example, you would want to test if your market really has the pain you have identified, or is it big enough for them to take action and change the status quo, or will they be comfortable using it at a price point that makes it profitable for you.

Over the years, I have developed a helpful framework to finalize MVP design. It relies on five essential parameters to select the best idea from your list of all ideas:

1. Ease of building: How easy is it to transform your idea (and features) into a minimum viable product? If you have two options to build an MVP, say an spreadsheet template and a no-code single-feature app, which one of them is easy for you to make?
2. Affordability: Which of your ideas requires the least amount of resources?
3. Ease of use: Which one of your options will be easy to use for your users? A spreadsheet template might need to be downloaded first, while an app can be used instantly.
4. Value Quality: Which one of your options will provide the most value to your users? An MVP can be easy to use, but it may or may not provide the most value.
5. Model Fit: Which of your options goes well with your overall product vision. Users might use a template, but will they sign up, make an account, upload their data, and use an online version of your MVP?

Generally, I prefer to give equal weightage to all these parameters.

However, depending on your special case, you can assign some of them more weightage than others. For example, if you are building a side project and speed is going to be slow by default, you can assign it a low weightage.

A few strategic warnings

Before we move to the next section, I would like to share a few strategic warnings that will save you from committing mistakes:

1. By virtue of being a minimal product, your MVP is bound to receive criticism from a certain section of users. Don't let such criticism dishearten you. Keep an unwavering focus on your goals - validate the ideas, gather insights to improve the product roadmap, and build a community of those who support what you are doing.
2. Don’t ignore user feedback. Make it super easy for MVP users to share their feedback. Focus on qualitative feedback at this stage. Make capturing user feedback a priority.
3. Be strategic about how much of the overall product vision you reveal in your MVP. Copycats are a real threat during early stage, and even if they don't win, they are unwanted distractions.
4. Market your MVP well. Don't let it fail due to bad marketing. Do your best to test your idea's merit.
5. Don’t launch a sub-standard MVP. Your early users won’t like it and will never come back. Be careful about cognitive-biases of early users.

The Fountain of Profitable Insights

While building a SaaS product, you have choices — what features to build and which direction to take your product.

When wearing a product manager's hat, it is vital to be prudent in your product decisions.

Building features that no one wants can kill resources, waste opportunities, and cost you market trust. On the other hand, prioritizing features that have an enormous impact on your users' lives can kickstart the growth of your business and generate new revenue.

Thus, listening to the market and collecting insights is a time-tested strategy.

But, not all market insights lead to viable and profitable business decisions. Most insights never dig beyond the surface and, at best, lead to mediocre success.

Profitable insights do not originate in a vacuum, and you can not rely on occasional bursts of insights to build a thriving business.

Compelling insights that resonate with your market need a fertile ground of systems and automation.

In this section, I am sharing the design of the fountain of profitable insights that will continuously generate profitable insights for your business.

The fountain of profitable insights is a dashboard cum database. You can build a simple version of it with Google sheets or a sophisticated version with web pages on your admin panel.

Here are the main data streams for it:

1. Micro-surveys: Integrate close-ended survey questions within the app to track a few key metrics. These are multiple-choice questions, and users have to click on an option to answer. Provide an option for the users to enter text feedback with the question. Micro-surveys best measure net promoter score (NPS) and performance-related metrics. For example, if you sell project management software and have 'the number of projects' per team as an important metric, design your survey around it.

   

   Save the user-wise results of these surveys and track the average of each metric month-on-month. When analyzing this response data, dig deep into product usage behavior and support tickets of users who have given low ratings.
2. Mining Past Data: Past data is the goldmine of hidden insights. It’s an important topic, and I have written about it in detail in the 21^st issue of this newsletter. Click here to read it.
3. Users-led product roadmap: Let users have a say in your product roadmap by building a system to rank and schedule new features based on their demands. When a user requests a new feature, add it to a list. Every time a different user requests the same feature, upvote it. In addition to upvotes, consider other factors like efforts (in weeks) needed to build that feature, its alignment with your overall product roadmap, etc. Use customer support tickets and your help forums to receive feature requests.
4. Qualitative Insights: Gather qualitative insights, categorize them under major categories and add them to your spreadsheet. A few helpful places to get qualitative insights are reviews of your competitors, social media, and online forums. Build this repository of qualitative insights routinely.
5. Signup and use your product: Once every few weeks, use your product as a new user. Install a new browser or use incognito mode and open the homepage of your SaaS website. Signup, select a plan, make payment, and complete the onboarding. If you come across improvement ideas, add them to your spreadsheet.

If you let the fountain of profitable insights guide your product roadmap, your product engagement, north star metric, and the net promoter score will increase as customers get more value.

Design Principles For A Full SaaS Product

After you have successfully launched an MVP, it’s time to sprint towards building and lunching a full product.

I am going to share six design principles to help you design your full SaaS product without wasting resources and without building useless features that no one wants.

1. Design for a persona

I discussed in chapter 2, that the best way to gain traction is to focus on one target market at a time. Thus build the first version of your SaaS product only for that target market and keep everything aside. It will make your product lean, narrow, and resonate with your chosen market.

When you focus on building for a specific market, you reduce cost, speed up the development, and develop massively impactful features.

From a product development perspective, research your market to uncover user behavior insights. For your chosen market segment, you should be able to answer:

1. What is their primary motivation for signing up for your product?
2. How does this motivation rank among other priorities in their day-to-day lives?
3. How are they currently solving their problem?
4. Which is the ONE most significant value your product offers them?

2. Build around a POV

Often there are multiple ways to solve a problem, and people prefer solutions that resonate with them. As a SaaS founder, most likely, you have observed a problem and have a strong opinion on how that problem should be solved. Build that opinion and point of view within your product. Not everyone in your target market will agree with your opinion, but those who do will readily adopt your product.

If you are building an email software, it will be an uphill task to compete with mighty Gmail until you bake your anti-spam, pro-privacy opinion into your product, like Basecamp did with Hey App.

If you are building a newsletter platform, you will find it impossible to compete with a giant like Mailchimp until you build your native revenue-generating opinion into your product like Substack.

When you improve upon existing competition in ways that represents your unique problem-solving approach and make users' lives better, you readily attract new users and build a moat around your business.

The only catch is that the market should be facing a real problem ignored by all existing solutions.

3. Reduce time to value discovery

Most users signup for software products under high uncertainty — they have a problem that they want to solve as efficiently as possible, but they are not sure if the app they are signing up for is the right one.

No one wants to waste their time and money on products that can't be of any value to them. Thus most users go through an emotionally vulnerable state while signing up for a new software product.

User’s journey to value discovery:

1. Confusion: How can I solve my problem?
2. Search: What are my options?
3. Decision: Ok! this one.
4. Action: Signed Up.
5. Anticipation: Is it what I thought it to be?
6. Achievement: Oh Wow!

All a user want is to quickly and reliably move from step 1 to 6.

If users can't understand the value they get from a product, they abandon it after signing up.

When you design your product for quick value discovery, say in minutes of signing up, not in days or weeks, you improve product activation by a huge margin.

Here are two strategies to design a pro-user SaaS product for quick value discovery:

1. Effortless Navigation: Ever tried signing up for a product and wondered what to do next? I experience this often and then go straight to Google to search 'how-to' video for that product. It sounds counterintuitive, but many products have confusing onboarding that frustrates interested users and motivates them to drop out. You can improve onboarding by designing effortless navigation if you reduce users' thinking and let them intuitively know what to do next. Simplify the text, ask for less information per step, add labels and tooltips, and remove unnecessary design elements.
2. Only activation matters: Consider this — 10 new users have completed the onboarding on a given day but on checking their activity after a week, you realize that only five users are actively using the product. At the same time, the other five never came back after the first session. Now, it's only when a user is actively using your product that they can meaningfully be a part of your growth — generate usage data, improve the product by suggesting improvements or pointing out bugs, and add to your revenue. Therefore, when it comes to SaaS growth, only activation matters. It is an excellent strategy to tweak your onboarding flow to lead to higher activation naturally. Suppose you are selling a CRM, force users to add or import contacts upfront. If that seems a stretch, then think of kickstarting their activation with demo data. If you are selling a design app, then it is a helpful strategy to offer users different templates instead of starting with a blank canvas. Suppose you are selling remarkably new software with a new use case with no earlier precedence, then taking them through mandatory guided onboarding will help in higher activation. Possibilities are endless — an important question to ask yourself while designing onboarding flow is: what is absolutely essential to enable users to engage with the product actively? And then create key interactions. When you implement this new onboarding, you might see a higher dropout during onboarding, i.e., fewer users might complete the onboarding. Still, a higher percentage of them will use the product actively, eventually leading to higher growth.

4. Think incremental but don’t start with zero

Building a market product is different from building a hobby project. You have to keep an eye on the changing market trends, make for your audience, and outperform your competitors for a market product. Neither can you launch a substandard product nor spend five years building a perfect product. You have to live at the intersection of speed and quality. Say no to the pursuit of perfection and the complacent and blase attitude leading to the launch of an inferior product.

You would do great by incrementally improving the product while starting with a high baseline. The incremental improvement approach provides you time and market feedback to build a product that users desire. It also lets you establish your business as a going concern and eases resource constraints.

A high baseline means launching a superior first version of your product. It should amaze users and paves the way for a loyal audience. At the same time, competitors must be in awe of it and feel a bit discouraged. A high baseline also helps you build a team of A-players and establishes a high-performance culture.

An important aspect of incrementally improving the product is handling bugs. Instead of frowing upon bugs, expect them. Along with that, build systems for their detection and resolution.

5. Understand the non-correlation of efforts and value creation

Resources and efforts invested in building a product do not correlate with its success. That's why features, updates, and new products launched by big tech giants fail routinely.

The success of a product depends on its ability to deliver value to its users. Whether it's a highly sophisticated technology product or a scrappy 'built-in-an-afternoon' product, it will be a success if it can eliminate the complexities of its users' lives.

When it comes to winning a market, it's less about the efforts you have put in and more about the value users derive from using the product.

6. Resist the urge to be the God

God is omnipresent, and so is Google.

The width and depth of Google's (and other tech giants) reach may sound fancy, but it is not something an early SaaS business should try to imitate.

You may feel like building a mobile app in addition to your web app, but if there are no compelling reasons, you should resist such urges.

Navigating through bugs and updates with limited resources is a strategically challenging task. And in the early days, you will have to make many decisions without having complete information.

Focus on long-term vision but with regular quick wins. There will always be new shiny objects — a new mobile app, an annual conference, international growth, etc. But you can't do it all. Learn and practice the art of taking no-action. Don’t build something without compelling features. Make decisions at the intersection of maximizing ROI, staying cash flow positive, and aligning with the long-term product vision.

If you sell to large enterprises, you will routinely receive requests for custom features. My general advice for you is to be least enthusiastic about entertaining such requests. In most cases, one-off requests cost much more than their revenue potential. However, if such a request resonates with your long-term product vision, you should study its viability.

Another approach is to think in terms of APIs — give users the power to use your software the way they deem fit. Suppose you see considerable interest in your API. In that case, you can also think about launching an app marketplace for your software where independent developers can create apps to supercharge your software instead of investing your dev resources in building new features.

Three Critical Areas For Eternal Conquest

Let’s break a SaaS product into three parts that are critical for its success and study each of these parts independently.

1. Sign Up/Demo Booking Process

While designing your sign up process, dig deep into the behavioral and situational triggers of your audience:

1. How do they like to sign up?
2. Does your homepage offer enough motivation for them to signup?
3. What could stop them from signing up?

A common blindspot in the signup process is the non-inclusion of profitable use cases. Within your target market, profitable use cases might exist that are not evident on the surface, but you will find them if you dig deeper. You expand your revenue-generating abilities by incorporating such use cases within your signup processes.

For example, if product demos and sales drive your B2B SaaS business, think about prospects who have used your product in their previous organization, have buy-in from their current CXOs, and just want to use the product right away instead of spending days with the demo booking process. Will you benefit from offering a self-serve kind of onboarding to these prospects?

Think about building features that are suitable for different use cases and can be used in different ways.

2. Onboarding

Onboarding flow is the first interaction of a new user with your product. Correctly done, it leads to higher activation, retention, and growth. On the other hand, confusing and inefficient onboarding flow confuses users and alienates them.

The first step to building an efficient onboarding is to define onboarding success KPIs — how do you measure when a user has successfully onboarded? What do you want to achieve by successful onboarding?

Also, consider goals and outcomes that a user would like to have after investing 10 minutes interacting with your product.

Once you have clear KPIs, work backwords and design the flow.

3. Engagement

Users keep using a SaaS product for a long time when they consistently derive value from its repeat usage.

Thus, high engagement leads to stickiness, which leads to higher lifetime value.

The foremost question you should answer to build a highly engaging product is why they should use the product repeatedly for a long time?

One approach to answer this question is to develop a deep understanding of your real customers, their desires, and emotional triggers and then build features around them.

There is a systematic way to improve the stickiness of a SaaS product, and I will discuss it in detail in chapter 12.

Execution Nitty-Gritty

We have covered a lot of ground till now. If you are wondering — all of this is cool, but where do I start? Here is the process that I recommend:

1. Define your product in a line, detail how it works, and create a list of top competitors for reference.
2. Finalize and create a list of all features. Add a line for each feature explaining its working.
3. List all the web pages that form UX flow. For each web page, write down two details — what action a user will take on it, and why?

You now have a basic design of your product, on top of which you can build detailed UX flows, wireframes, and messaging.

Transforming your product if you are already in business for years without success

Transforming the product of an existing business can be a tricky proposition as users are actively using it. There can be a variety of challenges, such as:

1. Figuring out the improvements
2. Allocation of dev and PM resources
3. Change management and the acceptance of changes by the existing users

In my experience, the best place to start exists at the intersection of the lowest hanging and massively impactful opportunities instead of a complete product overhaul.

By virtue of being in business for quite some time, you have the luxury of digging into customer support and forums data. Discover most requested opportunities that also happen to be easy to implement. It could be a new feature, a new integration, or a new dashboard design.

Build and ship a few such updates and see your users' responses. Make sure to update your help documents for users to refer to. If needed, create 'how-to' videos and link them to your forums for easy discovery.

Gradual changes in the product, user testing, and well-crafted help content will lead you to the path of growth transformation.

A note on Product vs Distribution

If you stroll the Internet, you will come across well-meaning people comparing product and distribution, weighing one more than the other. The ways of the online world are translucent — offering insights without any context.

As a SaaS founder, it's not a question of one versus another for you. Product and distribution are not competing; they are not mutually exclusive; for one to be the best, the other need not be the worst.

In my opinion, you should actively build distribution a few months before the launch of your MVP, allocating resources so that neither you neglect the product nor the distribution. As your business grows, create systems for distribution and community to throw useful product improvement insights and improve the product to make distribution easy.

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