1
The metrics you use to determine growth will change as your company grows
What growth? - what metrics are you using to tel...
What roadblocks:
-Define – strategy
-Partner - what need, but not good at and/or doesn't
make sense to build
... if not ch...
-Define - problem if CEO can just say "this is what
we need; go build & sell"
Need many ideas, several investigations, few...
Invest in selling more current products for your current
market = market penetration
Invest in building new products for y...
Where grow: (Later you can fill out what are the appropriate values for each
dimension for your company)
Similar customers...
Customer pain?
Sufficient to buy?
Top problem of economic buyer?
Big enough market?
Market growing?
Changing?
Just because...
Where should we go?
Problem?
Opportunity?
Why will we be successful there?
Solution
Unique offering, breakthrough?
Why you...
I don’t listen well, but it always seems that I hear the
same story …
We should build spicy mayonnaise, our customers
need...
10
This all assumes a green field – no existing products or
contention for resources
However usually as your company grows yo...
Relatively low market share of a slow growing market –
liquidate / divest of the dogs
Relatively low market share of a fas...
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14
15
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Growing your SaaS Product Business (with speaker notes)

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Make decisions on how to grow your SaaS product business including how to:
-Measure growth and define success
-Identify common roadblocks to company growth
-Determine where to focus your efforts
-Refine company & product portfolio strategy and trade-offs
-Assess different potential opportunities

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Growing your SaaS Product Business (with speaker notes)

  1. 1. 1
  2. 2. The metrics you use to determine growth will change as your company grows What growth? - what metrics are you using to tell your story; rally the troops, your clients, investors -Product capabilities – do you have a vision? Is it on contrast to competitors? -Cash - living hand-to-mouth; what is your burn? -Customer adoption – both growth rates and brand name customers -Revenue growth - better be recurring; how many people have more than 50% revenue non-recurring (services)? Not good for a SaaS business -Churn (better be less than 10%; your fault much less 10%); or NPS (net promoter score) asking your clients “how likely would you recommend our product/service to a friend or a colleague: scale 1-10” 0-6 = “Detractors” (-1); 7-8 = “Passives” (0); 9-10 = “Promoters” (+1) – as a percentage across all customers (should be positive!) -Customer Acquisition Cost Ratio (new gross sales annualized / sales & marketing cost annually); ideally close to 1 (or more) -Market share ("#1 or #2 or go home”) and recognition (Gartner, industry awards) -Profitability 2
  3. 3. What roadblocks: -Define – strategy -Partner - what need, but not good at and/or doesn't make sense to build ... if not changing as the company grows; that is a problem 3
  4. 4. -Define - problem if CEO can just say "this is what we need; go build & sell" Need many ideas, several investigations, few prototypes, one offering -Design / develop – iterate quickly with customers because you aren't right (prototype, quick release cycles) -Market / sell - what is conversion rate at each stage of market / sales funnel? What should be improved? 4
  5. 5. Invest in selling more current products for your current market = market penetration Invest in building new products for your current markets = product development Invest in selling your current products for new markets = market development Invest in building new products for new markets = suicide leap 5
  6. 6. Where grow: (Later you can fill out what are the appropriate values for each dimension for your company) Similar customers: Often more of the same customers is the best way to go. Bigger / smaller customers: Later considering going up market (larger customers) or down market. Industries / verticals: For example may be primarily sell to high-tech and want to sell to retail or government. or Geography: Often less product development and more marketing / sales activity. Both can involve a channel strategy Products/Services: more to current market and customers - what else would they buy from you? Ideally it is the same economic buyer and they purchase in the same way. Now pick one: Focus, Focus, Focus – are you a $10M/yr SaaS company and opening an office in China? Hardest thing to do is to decide what aren't going to do; not going to be 6
  7. 7. Customer pain? Sufficient to buy? Top problem of economic buyer? Big enough market? Market growing? Changing? Just because you have something you think people may find useful It does mean they have sufficient pain and sufficient resources to buy it Remember the total market is smaller than your addressable market and your share will be smaller still Define your market as something that you can realistically become the #1 or #2 vendor 7
  8. 8. Where should we go? Problem? Opportunity? Why will we be successful there? Solution Unique offering, breakthrough? Why you? Competition? How do we get there? Business Model How make money? What money need? Team? (Build? Market? Sell?) 8
  9. 9. I don’t listen well, but it always seems that I hear the same story … We should build spicy mayonnaise, our customers need it and it is so easy to build and it is so easy to make money. But we build software (a very specific type of software) not mayonnaise, we don’t know how to make mayonnaise Just because there is an opportunity, doesn’t mean you need to or can take advantage of it
  10. 10. 10
  11. 11. This all assumes a green field – no existing products or contention for resources However usually as your company grows you have to make product portfolio decisions
  12. 12. Relatively low market share of a slow growing market – liquidate / divest of the dogs Relatively low market share of a fast growing market – divest of most of the question marks; accelerate a few Relatively high market share of a fast growing market – great, but others are coming; invest! Relatively high market share of a slow growing market – great, harvest (but maybe invest some to lower attrition) 12
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