In-App On-Boarding, Upgrading, and Downgrading in Next Gen SaaS

Continuing with ideas on next generation SaaS success like integrations and APIs, there’s another important component about the self-service nature: they’ll all have in-app on-boarding, upgrading, and downgrading. Much like the consumerization of IT has affected the B2B user interfaces and experiences, buyers of SaaS products want that experience to extend to all aspects of the product.

Right now, too many SaaS products don’t have a strong in-app on-boarding process and instead resort to support sites and quick start guides combined with helpful people. Instead, the buyer wants to be able to jump in and go through a structured process where they can have as much or as little automated hand-holding. Think of a series of steps with specific instructions, tasks, and videos to watch. The best form of service is self service that’s comprehensive.

After in-app on-boarding, the next area next generation SaaS products will all have is in-app upgrading and downgrading. Much like Slack is famous for only charging for active users (see their pricing), too many SaaS apps require reaching out to a customer success manager to upgrade, and don’t allow downgrading until the contract is up for renewal. Needs change and users should be able to upgrade and downgrade in the application immediately — it’s a much better user experience.

Look for in-app on-boarding along with easy upgrading and downgrading as part of the next generation of successful SaaS products.

What else? What are some more thoughts on in-app on-boarding, upgrading, and downgrading as part of SaaS apps?

Demonstrating Product Value in the Application

One of the on-going challenges, and opportunities, for a SaaS application is to show the user the value they’ve received using the product. At Pardot, we worked hard to show the product value through revenue generated, marketing pipeline, and campaign ROI. Of course, demonstrating product value took time depending on the volume of leads, marketing activities, and length of the customer’s sales cycle.

Here are a few thoughts on demonstrating product value in the application:

Revenue Generated – Connecting the product to revenue generated is the ultimate in showing value. If there’s ROI, prove it.
Time Saved – Most applications have a time saving element. Quantifying it can be hard but worthwhile.
Items/Objects Used – Reminding the users of the volume of product usage — invoices sent, contacts created, etc. — helps realize the value.
Email Updates – Sending product usage summary emails to the user keeps the value top-of-mind on a regular basis. Weekly emails are recommended.

Entrepreneurs would do well to ensure that the product demonstrates its value to the end-user.

What else? What are some other ways to demonstrate product value in the application?

Evaluating New Product Ideas

One of the on-going challenges in a startup is evaluating new product ideas. As the product achieves product/market fit and the customer base grows rapidly, more new product ideas come in from customers, prospects, partners, and all internal teams (sales, support, success, strategy, etc.). Here are a few ideas for evaluating new product ideas:

Overall Strategy – How does the new product idea fit in with the overall strategy? Is it consistent with the current direction or offer a different direction?
Existing Customer Base – Does the new product idea help 80% of the existing customers? If not 80%, then what percentage will find value from it?
Desired Customers – Does the new product idea help 80% of the desired customers going forward? How does the existing customer base differ from the desired customer profile (startups often go up-market over time)?
Request Quantity – How often has this idea come up? How many “votes” does it have from customers?
Backlog Priority – Where might this new idea fit in with the backlog? How would it be prioritized?

New product ideas never stop. Entrepreneurs would do well to create a process to store, evaluate, and process new product ideas.

What else? What are some more thoughts on evaluating new product ideas?

Daily Active Users in B2B SaaS

Continuing with assessing product/market fit, one of my favorite metrics is daily active users (DAUs). Now, DAUs are more commonly associated with B2C products like Twitter and Facebook, but they’re directly applicable to B2B SaaS products as well.

Why are they so important for B2B SaaS? The best indicator of success for most SaaS products is the fact that the customer continually uses the application. In most applications, this is signing in and using the platform. In a limited number of applications, this is using the API programmatically on a regular basis (e.g. integrating it into another application or workflow). Regardless, product usage equals product value. And, product value is a key element of product market fit.

Entrepreneurs should monitor their daily active users and understand the correlation between product usage and startup success.

What else? What are some more thoughts on daily active users in B2B SaaS?

A Bumpy Ride for the First 10 Customers

Continuing with the post Assessing Product/Market Fit, there’s a related point that the first 10 customers of a startup often have a bumpy ride. As part of assessing product/market fit, if numerous customer requests and product issues are signs that product/market fit isn’t in place yet, it follows that it’s common for early customers to have problems as product/market fit is so hard to attain.

Here are a few thoughts on the challenges of the initial customer experience:

Work to be overly accessible and available as customer feedback and quick resolution of issues are critical
Know that problems and bugs are common as it’s nearly impossible to test every use case (it’s more important to move fast and iterate than try and be perfect)
Understand how the customer interacts with the app using a product like FullStory or Hotjar
Proactively reach out to the customer on a regular basis (e.g. weekly), eventually using a cadence system like SalesLoft or Trustfuel

The first batch of customers almost always have a bumpy ride. Entrepreneurs should recognize that this is normal and work hard to still provide the best experience possible.

What else? What are some more thoughts initial customers having a bumpy ride?

Assessing Product/Market Fit

One of the never-ending startup discussions is around assessing product/market fit. Product/market fit is the idea that the product’s form and functionality meets the needs of the market. Fit isn’t an on/off item, rather it’s a continuum with various dimensions. And, for entrepreneurs without product/market fit, not much else matters.

Here are a few ideas for assessing product/market fit:

Passionate Customers – If you told your customers that the product would be shut down tomorrow, how loud would they complain?
Customer Requests – How well does the product solve the customer’s problems today in it’s current form as opposed to needing further customizations?
Customer Referrals – Of the last 10 customers signed, how many referred another potential lead?
Limited Product Issues – Of the last 10 customers signed, how many ran into product issues or bugs?
Daily/Weekly Active Users – Do the customers use the product in a consistent daily or weekly fashion over an extended period of time (e.g. 4-6 weeks)?

Ultimately, assessing product/market fit is about assessing how much value customers are receiving from the product and the actions they are taking (e.g. regular usage, referrals, etc.). Product/market fit is the first critical milestone in the entrepreneurial journey.

What else? What are some more thoughts on assessing product/market fit?

Feature Rich vs Feature Niche

When building a software product, there’s a human tendency to go broad and add every feature a customer requests. Yet, some of the most successful products do a limited number of things well and eschew the bloat found in most applications.

I call this the feature rich vs feature niche conundrum.

Feature rich products have dozens of modules and hundreds of functions. Feature niche products have a select number of modules with only the most valuable functions.

Pardot is very much a feature rich product with dozens of B2B marketing modules. Calendly is very much a feature niche product doing beautiful, simple scheduling.

Entrepreneurs need to be intentional about their product strategy and consider the feature rich vs feature niche trade-offs.

What else? What are some more thoughts on feature rich vs feature niche?

Customer Discovery to Understand the Problem

Early on, it’s critical to understand the customer’s problem. Too often, entrepreneurs come up with an idea that’s good to them, but falls flat with the potential customer. Use customer discovery to understand the problem without trying to sell them on the existing idea.

Here are a few things to keep in mind with customer discovery interviews:

Don’t lead the witness —it’s all too common to try and guide the potential customer down a path that’s consistent with the existing idea
Ask broad, open ended questions (remember the old adage: humans have two ears and one mouth for a reason — listen twice as much as you talk)
Work to understand how things work currently with as much minute detail as you can uncover
Find out what the ideal solution would be if time and money were no issue (if you could wave a magic wand and have anything you wanted , what would it be?)
Never show any prototypes you might have until after you’ve asked all your main questions (don’t introduce bias!)

Entrepreneurs would do well to use customer discovery to deeply understand the customer’s problem, and work to ignore their existing ideas.

What else? What are some more thoughts on customer discovery to understand the problem?

Note: Read The Mom Test.

Drop the Second Product

Recently I was talking to an entrepreneur that had just started getting traction on a new product. After digging in, it was clear they still had a prior product they were selling and supporting, even though it only had a handful of customers. My advice: drop the second product.

Here are a few reasons why a startup should only have one product:

Talent – The best people work on the most important product. Second products inevitably languish without the right talent.
Limited Resources – Startups are inherently resource constrained. If one product has limited resources then two products are going to have even more limited resources.
Go-To-Market – Customer acquisition is the biggest challenge for startups. Dividing go-to-market across two products makes it even more challenging.
Speed – Startups beat large companies due to speed. Spread the efforts over multiple products and the speed is impacted. Stay fast and nimble.

Drop the second product. Entrepreneurs would do well to focus on one product and do it well.

What else? What are some more thoughts on the idea that startups should only have one product?

Customer Acquisition As the #1 Challenge

As the cost to build an app has gone down over the last 10 years due to open source and cloud computing, the number of apps as grown. Now, there are dozens of apps that do the same thing in every category imaginable. The result: customer acquisition is the number one challenge with so much noise in the market. And, it’s only going to get more challenging.

Here are four things to work on to build a customer acquisition machine:

Community – Work towards 1,000 true fans. Start small. Find the first 10 that care. Then the first 100. Nurture the community and grow it over time.
Content – Write original content. Make a statement. Have a strong opinion. Put new ideas out there. Find a rhythm.
Engage – Connect with people. Target best-fit accounts. Run a process. Follow the account-based engagement best practices.
Experiment – Follow the Traction book. Constantly experiment. Try new ideas like micro apps and social selling.

Customer acquisition is the most difficult challenge required for startups to succeed. Invest in it early and build the expertise over time.

What else? What are some more ways to build a customer acquisition machine?