The document summarizes 5 traps to avoid when building a SaaS business: 1. Choosing the wrong customers from the beginning and focusing on top-down sales instead of building a customer base from the bottom-up. 2. Having the wrong mindset, especially outdated sales and marketing approaches that fail in the current SaaS market. 3. Lacking proper architecture like not following an API-first approach. 4. Lacking focus and trying to operate all business processes instead of concentrating on the core competence. 5. Lacking scalability by not automating processes soon enough or offering the right payment methods based on business volume. Automation and payments should scale as the

1. 5 traps you should avoid building a SaaS
business
Dr. Ricco Deutscher
CEO / billwerk GmbH

2. Trap #1:
Wrong customers

3. Situation at the beginning
We started a software product
company with a DAX member as
customer from the beginning
The company had a lighthouse
customer and was profitable from
day one
A previous company

4. Situation after 12 months
Customer required custom
development
Lack of innovation
Lack of market adoption
Low company valuation
Key question: How could we
implement our target business
model?
Previous company after 12 months
Why?

5. billwerk after 2 years
Our customer
base is our source of
knowledge and
innovation

6. Trap #1:
Wrong customers
Build your customer base
bottom-up, never top-down!

7. Trap #2:
Wrong Mindset

8. Situation
• We hired a senior CSO with a
good track record
• Traditional sales approach based
on outbound cold calls
• Cost per lead was high and
quality was low
• Reason: There was a small
window of opportunity to sell,
which is unlikely to hit by a cold
call
Conclusion
• Changing market paradigms
require different approaches, also
in sales & marketing
• A good track record matters, but
the ability to change approaches
is even more important
• Recruit the right mindset!

9. Trap #2:
Wrong Mindset
Old-school thinking fails
in the SaaS market!

10. Trap #3:
Lack of Architecture

11. Backend
Web Frontend
Backend
Web Frontend
Marketing Campaign
My first web application 1999
manual process
Quelle: Bundesarchiv, Bild 183-1987-1230-017 / CC-BY-SA 3.0
other web applications

12. Backend
Web Frontend
Backend
Web Frontend
My first web application 2002
automated process
Marketing Campaign other web applications

13. My first web application 2003
Backend
Web Frontend
Backend
Web Frontend
Application Programming Interface
User Interface
Marketing Campaign other web applications

14. Backend
Web Frontend
Backend
Web Frontend
One API only!
Our company today
Subscription Management other service plattforms

15. Trap #3:
Lack of Architecture
Follow an API-first
approach from day one

16. Trap #4:
Lack of Focus

17. 17
Sales
website
Service
provisioning
CRM
Customer
Payment
management
Financial
accounting
Reporting,
monitoring &
analytics
Billing &
invoicing
Customer &
contract
management
Discounts &
coupons
Product
catalogue
Customer-
Self-service
Debtors
management
& dunning
Merchant
SaaS process landscape

18. 18
Sales
website
Service
provisioning
CRM Payment
management
Financial
accounting
Reporting,
monitoring &
analytics
Billing &
invoicing
Customer &
contract
management
Discounts &
coupons
Product
catalogue
Customer-
Self-service
Debtors
management
& dunning
In 1999 we operated all processes …
Process landscape in 1999
Customer Merchant

19. 19
Sales
website
Service
provisioning
CRM Payment
management
Financial
accounting
Reporting,
monitoring &
analytics
Billing &
invoicing
Customer &
contract
management
Discounts &
coupons
Product
catalogue
Customer-
Self-service
Debtors
management
& dunning
... but this was our core competence
Process landscape in 1999
Customer Merchant

20. 20
Sales
website
Service
provisioning
CRM Payment
management
Financial
accounting
Reporting,
monitoring &
analytics
Billing &
invoicing
Customer &
contract
management
Discounts &
coupons
Product
catalogue
Customer-
Self-service
Debtors
management
& dunning
Leading SaaS providers operate only, what their core competence is.
Everything else is outsourced to partners.
Process landscape today
Customer Merchant

21. Make or Buy?
Disadvantage
• Solution fulfils
requirements
perfectly
Advantage
• High costs
• Low innovation
• High project risk
• High time-to-
market

22. Trap #4:
Lack of Focus
Avoid “not-invented
here” syndrome!

23. Trap #5:
Lack of Scalability

24. When should a process be automated?
Too late
• process is not
stable yet
• business volume is
low
Too early
• process is a
bottleneck for
business growth
• process costs are
significant

25. What payment means should a SaaS merchant offer?
8
Share of
recurring
payment
means
Payment amount
10
0%
100%
50 200 1k 5k
On Account
Mobile
Payment
Credit card
SEPA Direct Debit
PayPal

26. Example: process automation at billwerk
Process At the beginning Today
Recurring billing automated automated
Recurring payments
SEPA Direct Debit
Credit Card
On Account Payments
manually via bank
not offered
manually via bank
automated via PSP
automated via PSP
manually via bank
Debtor Management / Dunning automated automated

27. Trap #5:
Lack of Scalability
Automate your SaaS business
as soon it stabilized!

28. Dr. Ricco Deutscher
CEO | billwerk GmbH
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Thank you
for attention

29. Dr. Ricco Deutscher
CEO | billwerk GmbH
Scan to connect
& download
Thank you
for attention