Questions like ‘Is our pricing right? or ‘Should I build this feature a
competitor has?’ drive SaaS founders crazy. Experienced founders have dealt
with these same questions so what do they advise? See below.
Related: 25 Companies Show You Their Best SaaS Pricing
Model
Popular read: 3 Simple Powerful Writing Lessons for Any Startup
Founder
12 questions we worry about
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Are we going for a large enough market?
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Will our plan work?
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Are we talking to our customers enough?
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Should I build this feature a competitor has?
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Is our pricing right? How should we price our product?
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Should we be more data driven?
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Others do simple things that work. Why are we finding it hard?
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Is passion bullshit? Is being money driven the real underlying thing?
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Should we hire that skilled person we’re not sure of?
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Should I really ‘be myself’?
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Do we need to get on Techcrunch or some other big paper?
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Should I be doing customer support and selling?
1. Are we going for a large enough market?
The answer? Pick a large market, even if there’s lots of competition
I’ll assert that market is the most important factor in a startup’s success or
failure
— Marc Andreessen, Co-founded Netscape, VC - link
Too many entrepreneurs go after tiny markets and then charge too little to
really make a difference
— Erica Douglass, Serial Entrepreneur - link
You can’t judge the market for a five star hotel by building a seedy motel
— Des Traynor, CSO, Intercom - link
Drift intentionally picked a crowded market.
“If you’re not first, you have to find a way to stand out. And so we entered
that market knowing that we had to go out create a new category and be the
only way to conceive of it,” Read more about Drift’s strategy and why they
coined a new
term
Upscope aims to ride a growing wave
Here at Upscope we looked at the market and were inspired by Baremetrics
‘riding a growing
wave’
Companies were moving from desktop apps to web apps and 100,000s of them have
installed live chat systems. Upscope
co-browsing, which lets you see the users
screen instantly while live chatting, can ride a growing wave.
So, what’s the problem?
Even given these market advantages it’s still damn hard work!
Imagine if it wasn’t?
I can’t imagine what it would be like in a small tight market, with more
competition, chasing fewer customers at potentially lower prices.
Also, at the start, I would never have imagined doing as Drift did,
intentionally picking a crowded market. Now it makes more sense.
2. Will our plan work?
Have conviction in whatever the next step is
"I’d rather have conviction and be wrong than have doubts and be right"
— Fred Wilson, VC, Union Square - link
Why is conviction so important?
Why do most beginners fail and why do a few make it work first time?
See Tristan’s discovery of why beginners failed at kite surfing
“Beginners half-ass it.
If you don’t pull hard, your kite moves slowly and gives you less power.
It’s not rocket science, yet 99% of beginners only pulled half way.
When it was my turn, I shut my brain off, and did exactly what the pros were
doing. I pulled hard, and waited for my kite to get low before pulling back. I
was out of the water speeding on my first try.
So why do most beginners only pull halfway?
Because they feel shy.
They aren’t comfortable in this new situation so they tiptoe around instead of
“jumping in”.”
Read more on Tristan’s experience of learning to kite
surfing
3. Are we talking to our customers enough?
No. Nobody understands that feature you spent 2 hours renaming
Surprisingly few companies take the basic step of attempting to learn about
their customers
— Eric Ries, Lean Startup Legend - link
Does anybody really care, or are they giving you polite nods and little more
— Steve Blank, Mr.Customer Development - link
Here’s what Intercom’s co-founder discovered
“After about 10 conversations my research findings concluded that it didn’t
matter what label we used. No one fills in that part of the form. They didn’t
even know what it was for.”
Read more on why Intercom’s Des Traynor says you should talk to
customers
4. Should I build this feature a competitor has?
The answer? Your competitor’s software is also wrong
Startups are primarily competing against indifference, lack of awareness, and
lack of understanding — not other startups
— Chris Dixon, Entrepreneur, Investor - link
It’s not your purpose to “beat” another company. It’s your purpose to define
yourself on your own terms
— Jason Cohen, Founder, WP, Smart Bear - link
Do you want to be different from 99% of other companies? Be honest. Be
genuine
— Jason Cohen, Founder, WP, Smart Bear - link
Even a $500 million market is too small for a mega-corporation to attack
— Jason Cohen, Founder, WP, Smart Bear - link
When you look at your competitors, remember that everything looks perfect at a
distance
— Bob Parsons, Founder, GoDaddy - link
Groove found that their big competitor’s software isn’t right either
“Groove isn’t right for everyone, and neither is Zendesk. Or Uservoice. Or
Desk.com.
But by building the best damn support software possible for our small-ish
niche of potential users, Groove can become the no-brainer best option for
enough customers to still achieve our goals as a business.”
Read more on why Groove don’t stress over
competition
Gosquared knows people buy from people they like and trust
“People buy from people they like and people they trust. They buy based on
what they hear and what they feel. They buy to solve problems.”
Read more on how Gosquared had competition
everywhere
Problogger realised there’s not enough time to be defensive
“I see the online publishing space as having so many opportunities at the
moment that there is enough room for more than any one player.
To get defensive about staking your claim takes your attention away from
expanding your own business in a positive way.”
Read more on Problogger’s 3 reasons not to care about
competition
Upscope’s experience
Our biggest problem is clearly communicating how co
browsing is miles ahead of old school
screen sharing.
In fact, if our customers knew of a good big competitor then we’d benefit
as someone else did the work to explain how incredible ‘co
browsing’ is for sales and support.
5. How do we get our pricing right?
The answer? Price based on value.
Ultimately, we want to build a pricing model that aligns us with the success
of our customers — not one where we’re making money off of the people who
never even use our product.
— *Dave Gerhardt, Drift
As Appcues discovered:
“Heck, one customer even said to us: ‘You guys should find a way to charge us
more. $450 isn’t enough — we should be paying you well over $1k’
So after some brief analysis, we developed a new value-based pricing strategy
and planned the switch.”
See 25 companies explain the pricing model that worked for
them
6. Should we be more data driven?
Not at launch but certainly when you have enough data
Early in a startup, product decisions should be hunch driven. Later
on, product decisions should be data driven
— Fred Wilson, VC, Union Square - link
When you have a small dataset and lots of variables, you can’t predict shit
— Andrew Chen, Entrepreneur, Former VC - link
Vanity metrics: numbers that give the illusion of progress but often mask the
true relationship between cause and effect
— Eric Ries, Lean Startup Legend - link
An obsession with the problem you’re solving gives you control
Here is VC Fred Wilson’s take on it
“Domain expertise to the point of obsession is highly correlated with the
most successful entrepreneurs in our portfolio.”
Read more by Fred Wilson on successful
startups
A test to see if you make the same mistakes we did.
Here is a slightly unfair test.
What market should Upscope be focusing on?
Here are the clues:
-
Upscope is like instant screen sharing. No downloads. You click once to
see the user’s browser and click again to remotely guide them. -
It integrates with major live chat companies and works well with phone
calls / VOIP. -
The first 10 people paying were SaaS companies who wanted to support their
users. -
Those first 10 had a mix of complicated software like CRMs and a few with
what appeared to be relatively simple interfaces. -
They told us they wanted Upscope for supporting users who contacted them
via Intercom/Drift/Zendesk or some other live chat tool.
Given this early information, what would you have done?
Who would you have marketed Upscope to?
Take a note of it before you read on.
By analysing the data of who used
Upscope 9 months after launch,
including how much they used it and who with, we know the major factor was not
complicated software but whether the software had NON-TECH users. Also, the
heaviest users by number of hours screen sharing were onboarding staff and
there was a natural overlap between sales, support and onboarding at times.
This changed our marketing and product plans.
It’s an unfair test in many ways but it’s one we faced and we made assumptions
and marketed based on those initial buyers and it was off.
When someone new signed up we could imagine what sort of problems they had and
imagine how they’d use it for support. This is confirmation
bias.
A more regular analysis would have saved us from that and also saved months of
misdirected marketing.
7. Why is this so complicated? What’s the simple way of doing this?
This is not checkers; this is mutherfuckin’ chess — Technology businesses tend
to be extremely complex — Ben
Horowitz, Entrepreneur, VC -
link
It’s not simple. Some people are lucky the first time but serial
entrepreneurs are not.
There’s a comment by Naval (angel list co-founder) made in a podcast saying
that ‘some’ first time founders may not know the role luck played in their
early success and so might not be able to do it consistently because they
didn’t learn some of the basics others had to go through.
Here are some key quotes from startup founders in Paul Graham’s essay.
“I’m continually surprised by how long everything can take. Assuming your
product doesn’t experience the explosive growth that very few products do,
everything from development to dealmaking (especially dealmaking) seems to
take 2–3x longer than I always imagine.”
“Most hacker-founders would like to spend all their time programming. You
won’t get to, unless you fail. Which can be transformed into: If you spend all
your time programming, you will fail.”
Most people find startups are complicated, take a long time and involve doing
things they don’t want to do.
Read more in Paul Graham’s essay
Upscope marketing is easier now that we know the complications
It takes a long time for kids to learn how to write.
They learn the alphabet, sounds, words, sentences, meaning and so on.
Eventually, writing a paragraph is simple.
If you know all the complications, then it’s simple.
Within marketing we needed to learn SEO, using tools like SEMRush, on-page
optimisation, topic clusters for strategic linking, copywriting hacks, how to
distribute, doing roundups, getting ideas… it goes on.
It’s simpler now?
Yeah but just look at the journey from hating SEO to using
it.
8. Is passion bullshit? Is being money driven the real underlying thing?
When you work hard you become good at it. You enjoy doing what you’re good
at. It becomes your passion. Money follows.
What a bunch of BS. ”Follow Your Passion” is easily the worst advice you could
ever give or get
— Mark Cuban, Entrepreneur*
In the startup world, if your primary focus is on making money, you usually
won’t make money
— David Skok, Serial entrepreneur, VC - link
Follow your effort.
This is Mark Cuban’s perspective.
"Let me make this as clear as possible
1. When you work hard at something you become good at it.
2. When you become good at doing something, you will enjoy it more.
3. When you enjoy doing something, there is a very good chance you will
become passionate or more passionate about it
4. When you are good at something, passionate and work even harder to excel
and be the best at it, good things happen."
Read more on why Mark Cuban says to follow your
effort
Upscope’s perspective
Money does not lead, it follows. It’s a lot easier to enjoy building a product
that gets daily love from users. Those MRR stats are nice to look at when
they’re based on good work.
9. Should we hire that skilled person we’re not sure of?
The answer? Hire people, not skills. Hire people with integrity who can
figure it out.
Hire and promote first on the basis of integrity, second, motivation…
— Jay Meattle, Doer, Shareaholic - link
The four most powerful words coming from a new hire are: “I’ll figure it
out.”
— David Cancel, Founded Compete - link
Each time I have built a team, personal traits — not professional skills —
have been what propelled the company forward
— David Cancel, Founded Compete - link
Hire people, not skills
“Cultural Fit (45%)
Scrappiness and Drive (35%)
Intelligence and Experience (15% and 5%, respectively)”
Read more on why David Cancel thinks this is even more relevant
now
Upscope’s experience
It’s incredibly hard working with people who drag you back.
We want a new hire to drag us forward.
Different areas have different personality requirements but integrity and
giving a damn about the customer, wanting to learn and develop, that’s an
attitude we want to invest it.
10. Should I really "be myself"?
Yaaaaaaaaaaas.
That’s the biggest message from Jobs’ life. Don’t try to be like Steve. Don’t
try to be like anyone
— John Lilly, Former Mozilla CEO, VC - link
Figure out exactly what you need and just ask for it. Don’t play games, don’t
posture, don’t hint
— Jason Freedman, 42Floors - link
Be yourself. Abnormal people create abnormal returns
— Jason Freedman, 42Floors - link
Investors like the weird ones
“Investors are not looking for someone that looks like them.
They like people who do things that normal people aren’t capable of, and they
know that that capability often correlates with eccentric people. The last
thing you want to do is wash away your own personality in some doldrums of
blue and khaki.”
Read more on the weird ones by Jason
Freedman
An added note
I think being yourself is speaking your truth and not necessarily saying every
single unfiltered dumb fuck thing on your mind.
11. Do we need to get on Techcrunch or some other big paper?
Your customers don’t read Techcrunch.
Your market is most likely not the people who read Digg. Nor the people who
read TechCrunch
— Rob Walling, Serial solo entrepreneur - link
The Techcrunch audience is fickle
“And if it is, you’re in for a tough ride. This audience is fickle, moves
quickly, and looks at a lot of sites for about five seconds before clicking
the back button. If you do get the big swarm of traffic run the stats on how
many visitors stay longer than 5 seconds…seriously.”
Read Why a link from Techcrunch will not make you
rich
Upscope's experience
Producthunt is great in the early days for getting feedback and validation + a
good backlink or two but the rest of world does not read Producthunt.
I also went through a process of ‘Get on techcrunch / guardian / bbc / other
publication” in the past and then I heard about people getting on a smaller
site and getting more customers. Why? That smaller site had a relevant
audience.
PR works in different ways for different startups at different stages.
For SaaS startups, it might be that getting on a publication only automotive
sales execs read is far more important.
Also, if you’re going to reach out to bloggers then consider this:
Can you tell a story about the product that would make a blogger say, “Holy
crap”
— Tony Wright, Entrepreneur, Designer - link
12. Should everyone be doing customer support and sales?
You’ve always been selling. Having everyone do customer support is a
secret weapon
It may not be in their job descriptions, but everyone in a startup should be
selling
— Martin Zwilling, Startup Professionals - link
The single best decision we ever made was to make customer service everyone’s
job
— David Cancel, Founded Compete*
You’re selling to your team, you’re selling to investors and to your
family
“Selling the upside and your vision requires understanding other people’s
motivations and values”
Read more by the Pandadoc CEO on sales as an essential
skill
Making customer service a religion is a secret weapon
“Looking back at the last 1.5 yrs since we started
Performable, one thing is very clear: the
single best decision we ever made was to make customer service everyone’s
job.”
Read more on David Cancel’s customer service advice
Thanks for reading.
Next: See a great post on SaaS pricing
models.
