Starting a SaaS looks easy. Ok, not easy, but, at least easier than other businesses. You can work from your home, you can automatize a lot of processes, you can serve many customers at the same time, you don’t need a warehouse, nor a physical office, nor any kind of infrastructure.
Starting a SaaS is easy because the entry barriers and the barriers to exit are low.
Starting is easy, but once you are in the arena, keeping a SaaS is not easy at all. There are at least three lessons about SaaS that you must keep in mind:
Everything is already done
What do you want to offer to your customers? A service to analyze their webpages? It is already done. A service to automatize their newsletters? It is already done. A service to keep track of projects? It is already done.
First lessons about SaaS we can learn from the laws of marketing: If you are going to make anything, it is probably already done. Even if you are going to do it better, the first law of marketing says: being first in the market is better than having a better product. So, unless your product is going to be revolutionary, you are going to have trouble marketing your products.
Only the winner wins
Think about two companies that provide e-mail services. Gmail and Outlook. Which one would be the third one?
Even worst: think about two companies that work with e-mail marketing. MailChimp and…
The eighth law of marketing says: In the long run, every market becomes a two-horse race. Coca Cola and Pepsi, Burger King and McDonald, Android and iOS, Intel and AMD, Nvidia and AMD, etc.
You cannot improve MailChimp, you cannot improve Hootsuite. You cannot improve Gmail (ok, maybe you can, look next point). The winner gets 99% of the market and you are going to compete against the 99% of companies for 1% of the market.
These lessons are more or less useful for every market, but this one is especially a lesson about SaaS.
Making is easy, marketing is hard
So you have done a revolutionary product. It is better than Gmail, it is better than Hootsuite, it is better than MailChimp. It is even better than the three combined! You have a god tier product and it is life-changing. You have done it from scratch and it is flawless. It works perfectly and there is nothing even similar in the world. You have the most wonderful product ever. The problem is that, even if they are lying, that is what everybody says with their products. So, why somebody is going to believe to you?
Making a product is more or less easy. Making is just you against coding, there is no competence. Making is “singleplayer“: it is compelling, it is satisfactory, you can improve an change things as long as you want, and nobody is going to disturb you while you are doing it etc. But then you have to sell it.
Selling is the hard part. Selling is competing, is not only have a good product but is also having a better product than the competence. Selling is telling everybody about your product, make them believe it and then make them using their money to use it.
Probably you have heard histories about VHS and BETA, about Apple Vs MS-DOS, maybe you have heard about the video game console Dreamcast: having the better product is not enough. Fourth law of marketing says: Marketing is not about products (features or quality) but about perceptions (how people perceive products).
So, even if you have the best product ever, even if it is true, you need your clients to know it and feel it.
These are some of the lessons about SaaS that you can learn from the laws of marketing. Can you think of any other?