This series is for SaaS technical and non technical leaders to provide a framework outline for building, aligning, or pivoting their SaaS business model.   Evaluating a new or existing venture, planning a product launch, or pivoting from high growth to profitability, required a thorough understanding of the framework for SaaS business modeling.  This series is intended to provide guidance and provoke thought and discussion.  It is not an all inclusive guidebook. 

Over the last 25+ years developing software and the last 10 years as a SaaS software advisor, Chief Technical Officer or Chief Product Officer I have learned many lessons. Some of them the hard way.  I am often approached by leaders of SAS software companies, SAS software entrepreneurs, or service company service or product companies that have built or intend to build a SaaS software solution to accompany the product or service. 

A clear market problem statement (see last post) should then connect directly to the product via a SaaS software  “core value statement (CVS)”.   The CVS is a message to convince the user, in one sentence, the tremendous business value of using the software.  

                       Market problem ←  → Core value statement

The core value statement then becomes the “true north” principle for product development.  A well conceived SaaS software product will solve that market problem for 80% of the market users.  There will always be opportunities to grow and tackle more edge cases.  The 80% rule means that there is sufficient value, for enough of the market to be successful  (e.g. profitable).  

Entrepreneurs in general, and specifically in SaaS software, have an ADHD problem. But they need to get OCD in a hurry (attr. @Greg Head).  A deliberate focus on, and continuous connection to the market will prioritize product ideation and engineering execution.

There are three common mistakes SaaS companies make when building and deploying a SaaS product.  

1. Attempting to serve more than a single, focused market segment (as defined by a persona). If your product best serves the consumer market, focus on a B 2 C strategy.  It may be that there are opportunities via channel strategies B2B2C, for example, and or pure B2B enterprise.  Alternate models may look enticing for your product.  Focusing on one market segment or problem will yield much better results. 
2. The second problem is failing to continually validate your solution in your defined market.  Product owners tend to get swayed by a few customers and prioritize the roadmap based on those requests rather than the broader market problems. The goal should be to hit 80% of problems,  not 100%. Every edge case need not be solved to create value with the product.  
3. The third problem is failure to use a lens to prioritize product development and the lens is very simple:
   1. Does this feature increase the value of my products such that I could potentially raise the price or increase my business value statement? 
   2. Does this feature reduce churn? and 
   3. Does this (proposed) feature increase the service addressable market.

Building a well architected SaaS software product or platform to solve a market problem also will guide the company directly to the best channel deployment method.  “Scaling with resilience” is the mantra of great SaaS companies.  That is the subject of the next post.  Stay tuned.