WHY LEAN SOFTWARE STARTUPS SUCK

The ideas behind lean start-ups are great

✅ Build some kind of MVP and get it out for review

✅ Customers test the product and report back

✅ Data is measured and turned into insights and improvements

There’s just one problem.

SAAS products cost quite a lot of money to build.

In fact, lots of money.

And I mean shitloads.

$100,000 MIGHT get you to market, but that’s hardly “lean”.

It doesn’t guarantee you’ll get traction either.

Or revenue for matter.

And success definitely isn’t guaranteed.

And once it’s spent, it’s gone. The bills from the day after launch will still need paying.

I KNOW from talking to many struggling entrepreneurs.

There are of course stories of the successful lean start-ups.

Slack and Dropbox come to mind.

But for every big winner, there are thousands of wrecks lining the SAAS highway, and they failed for a variety of reasons according to the data I can find.

But if there’s one common thread that holds them together it’s this.

Entrepreneurs didn’t invest in their ideas.

They didn’t seek partners and investors.

They didn’t hire advisers to help them avoid the pitfalls.

They instead tried to do it all on a shoestring budget.

So enough with the notions of lean.

It’s time to back yourself and your idea.

So why not swap some of your IP for someone else’s cash and experience.

There’s no prize for failing with style.

#MrSaaSSays

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SCALING NEEDS PEOPLE

I’m very pleased to add Australia’s largest software supplier to my client list.

I’m using my decades of know how to help the NSW Government with its award winning digital transformation.

They provide more SaaS platforms than any other organisation in Australia.

Healthcare, housing, transport, policing and recreation to name but a few.

And those are just the external ones.

They have many more hidden from public view.

Not too long from now, tens of thousands of years 12 students will anxiously await their HSC results.

An annual event that waits for no man or woman.

It’s software as a service and it must be RIGHT NOW.

The rest of the year, it’s ghostly quiet.

A platform that’s hardly used, but come December demand will spike.

Still, these are the problems of business and software ownership.

One day quiet, next day slammed,

Good to know these guys and girls are on it.

But like so much in the SaaS world, it’s the scale that brings challenges

So the question is, are you ready?

Could you cope with a sudden influx of customers?

Could you onboard them effectively?

Provide training and boots on the ground if need be?

Scaling a SaaS solution demands more than just additional computing power

As ever, if you’re looking at the technology, you’re missing the point

#MrSaaSSays

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UNDERSTANDING PRICE VS COST

Developing software is very expensive, and commercial grade SaaS comes at a premium.

It’s often hundreds of thousands just to get going.

Offshoring is an option though.

A tiny team here and 10x as many where wages are cheaper.

Or perhaps some cut price locals working at a peppercorn rate for the experience?

You might even ask little nephew Jimmy.

That WordPress website he made was pretty good, right?

These are the cheap options and as ever, YOU GET WHAT YOU PAY FOR

If all you look at is the price, your perspective is very limited.

PRICE = WAGES + OVERHEADS

But you should be assessing the cost

COST = WAGES + OVERHEADS + OWNERSHIP

Ownership covers all the other stuff you have to sort out.

  • Code rewrites due to poor design and architecture
  • Sloppy coding practices
  • Sub-par testing
  • Customers lost to a poor user experience
  • Missing help and inadequate training
  • Increased support costs
  • And missed opportunities

They’ll add up to a pile of cash downstream, and far more than you would have spent getting it right in the first place.

Scrimping on price will cost you in the long term.

So, pay for high quality professionals, apply commercial grade rigour, and demand quality at every turn.

The price will go up today, but if you’re playing the long game, the cost will be far less tomorrow.

#MrSaaSSays

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5 TIPS FOR WINNING THE LONG GAME

Software and SaaS is expensive to make, and even more so to maintain.

But while the costs will just keep on coming, world class SaaS vendors look beyond the short term, because they know success comes from building a solid foundation and lasting relationships.

So here are 5 tips to help you stay the course.

CORE DESIGN

Look beyond your minimal viable product, and take the time to get your core design right.

If you don’t, you’ll pay for your mistakes for many years.

QUICK AND DIRTY

It starts with one little band aid, but soon there are many, and before long, you have an ugly mess that’s hard to maintain.

Quick and dirty is always slow and expensive at scale

NEEDS NOT WANTS

Customer demands change with the weather, and they want everything now.

Customer needs change far more slowly.

So focus on their needs, not wants.

RESPONSIVE NOT REACTIVE

Communicating with your customers is good, but you don’t have to jump the moment they demand something.

Every feature you publish is yours to maintain for ever more, so take your time and make only what’s necessary.

CUSTOMERS AREN’T EQUAL

You’ll lose some.

They die, go out of business, weren’t a good fit and so on.

You can’t change that, so don’t try to be all things to all people.

Concentrate on your niche, and give them the best possible service.

#MrSaaSSays

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ENABLING 2-SIDED SAAS MARKETS

Many new SaaS platforms connect two groups of people.

For example, DoorDash connects food vendors and consumers.

These are two sided markets and they create complications and additional costs.

So, how do you avoid the pitfalls?

Those who’ve read enough of my content will know that I always start by asking 2 questions –

First, what’s the problem you’re solving?

Second, whose problem is it?

Answering these is easy enough for many platforms such as the myriad CRMs, but what if there are two targets?

Who are you really writing the software for?

Do you have to favour one over the other?

From a sales and marketing perspective, the answer is yes.

One will be harder to get on board than the other, so they’ll take the lion’s share of your efforts.

But what about development of the platform itself?

It has to serve two masters, so how do you choose where to focus your scant resources?

Well, as ever, technology is an enabler.

When it does its job right, it delivers value.

So if you follow the value, your path forward becomes much clearer.

A little technology and some manual systems can get you to market, but scaling requires expensive automation.

So, before you spend big on technology to feed two mouths, start by feeding one first.

Which one?

The one that delivers the best value to your people.

#MrSaaSSays

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