There were several exciting panels in SaaStr 2018, we believe even established companies can benefit from these insights and we have gathered our notes on the ones we have attended. The conference was mostly focused on revenue generation, growth and scaling under the SaaS model and the challenges that come with this territory. The speakers were usually representatives of the companies who have achieved these in difficult market spaces.
The first panel we will be sharing in this post is titled “Growing and Scaling SaaS Businesses from $1 million to $500 million in Annual Recurring Revenue with Intercom”. In the panel, they talked about the importance of measurements and scales guiding the growth process. It’s required that the company, aiming for these objectives to create hundreds of measurable parameters and boil each of them down to a single scale. For example, one scale for the funnel, one scale for evaluation, etc. It is always more beneficial and valuable to focus on the problems your users/customers are having instead of focusing on the solutions and then try to create a problem to fit that. Once you figure out what the problem exactly is and solve that, your customers will see that value too.
When the customer comes in for the first time to figure out what is it that you do, what more can you do for them and how exactly can you help them, you have to focus on and perfect the on-boarding process for that customer. It’s imperative that you find out what exactly does your customer want, and how can you provide that with the satisfaction required for the customer to subscribe to your services. Your product should always be focused on a specific customer problem or “pain point”. And serve your customers painkillers, not vitamins for the pain. The easiest way to accomplish this is to do it in real time, as each customer is still unique.
After that, we joined in on the 10 Non-Obvious Things about Scaling SaaS with HostAnalytics panel. Here we learned that the first question we would want to answer is “What is the cost of every $1 annual recurring revenue (ARR) the company earns?”. Most venture capitalists will be looking to your business proposal from this frame. In order to keep the ARR at a maximum, you need to keep your “churn” (loss of subscribers) to a minimum. Usually, people miss the point where your churn might be higher than what you’d like, but you might still have the opportunity to keep your ARR high through upsells. For example, in the metrics HostAnalytics introduced where your score needs to be between 0 – 1.0, you might have a 2.0 churn rate (higher than your expectations) when you factor in the upsells that rating will go down to a 0.3. In the eyes of the VCs, this will move your business from a disaster to actually really profitable. If you are selling your services at $100 price, and even though some are discontinuing you can still sell $50 products to most of the remaining customers you are still profiting.
While these panels were mostly on the business side of the issue, we also had the chance to listen to a panel given by Grammarly on Integrating AI into Day-to-Day User Activity with Grammarly on the technical side. Here Grammarly focused on the customers’ reluctance to trust AI and its implementations touching on their day-to-day business. According to them, the biggest challenge lies in convincing the users to do the task that is being controlled by the AI. In order to get past this issue, Grammarly chose an area that is currently being used by their customers frequently (everyone sends emails) and focused on only one use-case in this area (“Grammarly helps you write better emails”). This way you would be proving that AI will make the process more convenient and therefore providing encouragement for the customers to try the other features powered by AI.
While SaaStr was pretty amazing by itself, it was astonishing to see so many companies and products managed to find themselves a spot in their respective markets amongst the top 10 companies in the field such as Google, Amazon, and Facebook. The CEO of Highfive explained this in the panel named “Catch Them Standing Still: How to Outmaneuver the Giants in a Mature Market with Highfive”. In short, they recognized their size as an advantage rather than the opposite. It is much easier to maneuver the field when you don’t have departments full of people all trying to coordinate. Even before the wheels start turning in these large companies, the smaller startups just need to gather a few people on a team, work on the product and release the solution. There is a catch though, the capabilities of the team members are crucial here, and every team member needs to pull more than their own weight.
The key lesson we took away from SaaStr 2018 (on top of meeting wonderful people working in various fields and technologies) is that you need to position yourself for advantage. Even things that look like a significant disadvantage can become an advantage if you can recognize it early enough and plan accordingly.