SaaS: Seven simple rules

Cloud computing seems to be catching up everywhere. Thanks
to the early success of hosted email, CRM, web conference meetings, project
management, etc, we now see many entrepreneurs with fabulous ideas in
technology, business change and social services, who plan to leverage the cloud
or service their customers or make that extra competitive difference to change
our lives.

Thankfully, there is no dearth of inspirational and useful
information too. Whether you are a beginner or an expert, you can easily find
fascinating thoughts, dos and donts, reviews, hands-on guides, free logins,
blog reviews, reports and analysis available on the webabout how companies
should use the cloud in general and others on the areas of how best to use or
launch online services.

The SaaS Venture

My experience from evangelizing for entrepreneurs/customers across the world
is filled with many such exciting learnings. Truth is simple and here are my
simple seven ways to make that big difference ON how you offer and breed early
success with your SaaS venture.

While this new on-demand world seems quite unfamiliar to most of you, it is
in fact a lot simpler than expected. Think about driving into a large shopping
mall, parking your car, getting a movie ticket and paying for what you use by
the quantity or on usage basissimple! This is a new method of delivering
automation fit for your taste and paid as per use.

Customers love it, they get the best without being
discriminated, infrastructure companies make more from their one-time
investments month after month and entrepreneurs get to innovate all the time for
every buck they earn more. Superior standards of service drive profitability and
not just availability. This brings me to the first and most important point, I
would like to address to everyone heading this way:

Small is big, business is simple: Focus on customer needs
and not segments or pricing. The segmentation holds true when it comes to
certain types of businesses as you evolve, but it does no good to your on-demand
value driven SaaS when you are booting up. Every customer is a king and you must
build relationships and not just contracts to become successful. Without them,
none of us will exist. Its all about service when it comes to your SaaS
business and your tiniest account will generate nothing less than $1,000 in less
than two years time.

Focus on farming, stickiness is the key to success: There
is an old saying in golf, your drive shot only counts for 37% and the rest 63%
is left for your other strokes to par the hole. Getting a customer who has a
need might be the most important task of your sales team, but in the on-demand
software as a service world it is not so much about sales. Customers demand
greater service, quicker response time, they want you to listen and factor their
needs. If you want to succeed as a service provider, your business must be
equipped to learn, adapt, release and get ready once again to reiterate as a
continuous exercise.

Precipitate or perish: When you are running a small
margin, horizontal SaaS applicationsuch as tax, audit, CRM or even a campaign
management toola direct marketing and sales process is more preferable than a
margin split channels play. But that does not mean you dont precipitate and
build it all by yourself. From IP rich business solutions to generic
applications, one must precipitatemix thoughts/share web services,
opportunities and learn to cook half baked partial solutions into multiple
offerings to drive higher solid numbers. Committing to building a shared
ecosystem for higher sales, better services and towards creating newer offerings
along with partners are a key recipe for success. Remember you are in this
business of committed monthly recurring revenue (CMRR) and not license sales and
it will take ages to hit a higher scale without multiple channels play.

Sell first to build later: One of the prerequisites of
building a successful SaaS business is lowered costs with zero capital
availability and the target to achieve rapid customer scale. You must have a
lean-mean and loosely held passionate entrepreneurial team equipped with all the
modern tools of innovation such as Twitter, Facebook and LinkedIn and customers
to shape your imagination into a working solution as you sell. Whats so
different about this approach? Instead of burning your cash, waiting for a
lengthy period to raise capital, design, build and then sell, you dont build
until you have a customer sale in place. In other words, you first sell, and
then you prototype, design and buildthe other way around.

Stick & a carrot, get your trump cards right: Success of
an online service is determined by customers and softer challenges such as
culture play a key role in adoption. Getting the idea, functionality, usability,
processes and delivery right only assures you of a good chance of a fair
evaluation and not adoption. That my friend is a combination of a stick and a
carrot, and bells and whistles if all goes well. You have to learn to turn and
apply them both to drive sales at customer locations. It will be hard to sustain
a hard sell and too painful to live with only a soft one.

Design to destroy or should we say innovate: Start with a
single form and one process rather than ten. If the first one doesnt work for
your customer, none will. Most often you will find genuine roadblocks in the
adoption of your SaaS solution, and you should learn new things which will
demand you to change your course and destroy to design another one. Keep your
focus on your customer and say to yourself all izz well.

Harvesting your wins: Cross sell or up sell, partner sales
or direct salesas a SaaS provider you must learn to harvest your success. That
is the best way to justify your efforts and investments from your customer
engagement and get to the next one sooner. How you do this is left to your
budgets, but if I have to play your role, I would rather use my customers
strength and worries to secure another sale!

But above all, launching and running your software at
your service business is a game which can only be played and your success is
tied down to your customers win. Keep your costs low, increase penetration and
get ready to iterate and leverage the cloud in every possible way.

Sunny Ghosh

The author is CEO, Wolf Frameworks

maildqindia@cybermedia.co.in