📕 Outlining the preliminary DD phase, Growing opportunity in niche vertical SaaS, The evolution of customer service teams…
Happy Friday! The vertical SaaS market (startups that offer a full suite of functions to companies in a specific sector) is looking as strong as ever, tripling in the last decade. That growth stems from companies realizing that they can scale more quickly and efficiently by consolidating their stacks.
But to date, most of that market is focused on large SaaS verticals and not smaller niches, which have been forced to cobble general-purpose software together to address their needs. These niches are a more interesting target given their untapped potential and are also easier to sell than horizontal software (which offers one function to companies across all sectors) because when you focus on one industry, you can become an expert. We’d personally much rather take that angle than try to create a super product that solves all industries’ needs.
📍The 2020 buzzword for SaaS product teams is feature-less roadmaps. Rather than getting into the weeds of specific features, these roadmaps reflect a broader strategic view which is driven by a company’s North Star Metric (or other KPIs). Feature-less roadmaps certainly have their downsides, namely that they don’t give your customers or marketing team a clear idea of what’s to come. But the big win with feature-less roadmaps is that they enable your product team to be agile; by focusing on big picture outcomes, they can quickly adapt to changes in the environment (COVID anyone?) and customer attitudes.
📹 Ready for some case study inspiration? Customer engagement video platform Bonjoro’s earned media strategy increased their qualified leads 30% in six months by relying on two key principles: highly personalized pitches and prioritizing quality over quantity. So before messaging podcast hosts and journalists, they tuned into the last episode or read recent blogs so their outreach showed that they actually did their homework. Their approach to webinars was a little more off the beaten path, instead of leveraging the audience size of media companies, they collaborated with similarly sized companies who either provided complimentary services or had a similar target market. This enabled them to tap into a more engaged audience, ultimately driving stronger leads to their website.
🤯 Few things are as anxiety-inducing as the preliminary diligence founders face when they decide to sell their company or take investment, partially because if you haven’t gone through it before, you don’t know what to expect. The SaaS CFO does a good job of summarizing what early DD really entails, from the first call to the preliminary metrics list and financials. We find some founders struggle with putting together a well-formatted SaaS P&L, and there’s a good template linked in the article if you fit into that category. Other areas we suggest double-clicking on understanding the firm’s motivation (for example, would you be a stand-alone acquisition or bolt-on?) and their relationships with other portfolio companies.
🎧 Not so long ago, customer service was viewed as a necessary but non-profitable department of businesses. Companies have since recognized its impact on revenue growth via customer loyalty, retention, and advocacy, and are always looking to find better ways to measure the value that support brings. Measurement is especially important now because the bar is rising – 73% of support leaders believe that their customers’ expectations are increasing, and only 42% think they are actually meeting them! Intercom suggests that responsiveness is the most meaningful support trait to customers, citing that when Zapier reduced their average ticket times down to one hour or less, their churn also went down 4%.
🧘🏻♀️ As we’ve shared before Basecamp’s David Hansson and Jason Fried believe strongly in achieving more by doing less – they built a billion-dollar company on the principle. In It Doesn’t Have to be Crazy at Work, they break down their almost zen-like approach to scaling, which focuses on three core ideas to dismantle hustle culture:
Build your company like a product - continually evaluate aspects of your culture that are working and revise what doesn’t. Ask hard questions, you won’t always like the answers but it will give you valuable insight on ways to improve.
Strip away distractions - we’ve all sat through meetings and thought, “this should have been an email.” So actively work to limit the time your team spends in unnecessary meetings.
Don’t set goals - this is a tough one for us. They claim goal setting is a way of comparing yourself to competitors and while that can be useful, it also detracts from allowing your team to do their best work. Instead, they suggest being obsessive and completely focused on what you’re doing rather than others.