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CV Partner’s Erling Linde shares his key strategies for building a sustainable SaaS enterprise from the ground up.
In the evolving landscape of Software as a Service (SaaS), building a successful, sustainable and fully functional product is a challenge that demands a dedicated approach. To this point, there are several distinctive strategies that leading SaaS innovators routinely adopt in the interests of longevity.
Over the last two decades, the SaaS market has become an increasingly lucrative and enticing proposition for anyone with a vision for change. Accounting for 47pc of venture capital expenditure in 2023, SaaS owes much of its popularity to the remote working structures imposed during the pandemic.
Putting universal demand aside, scaling a SaaS business is difficult without the correct knowledge and planning. This means focusing on everything from product development to navigating competition. So, for those looking to join the race, these are the key strategic ingredients for long-term success.
From idea to execution
The foundation of any SaaS venture revolves around a unique concept. However, it is imperative to recognise that ideas, in themselves, hold no intrinsic value. With a global population exceeding 8bn, the likelihood of someone else having had a similar idea is high. The true differentiator lies in execution. Even if a concept has been attempted before and failed, a different approach or execution can lead to unprecedented success.
Successful SaaS start-ups validate the market’s willingness to pay early in their journey. This entails more than just a well-marketed landing page; it involves a concise strategy to acquire interest.
A noteworthy example is Planhat, who, initially, operated on a micro scale, with founders. This validation and iterative approach is essential for transitioning from a concept to a sellable product.
To B2C or B2B
In a post-Facebook, Instagram and X era, the choice between developing a business-to-customer (B2C) or business-to-business (B2B) software service is pivotal. As a founder, it’s easy to perceive B2C as the ultimate goal, especially when drawn by personal experience.
However, the focus on solving business problems in B2B offers its own tangible benefits which ought not to be underestimated. Gaining insights into the purchaser or organisation willing to invest in the software is crucial, particularly when assessing the significant investments businesses are prepared to make for enhanced efficiency and cost savings.
Identify global use cases
The quest for a real use case with clear friction is of course important. Find something you do in the office once a day that takes 30 minutes, and therefore has some value to automate.
Take CV Partner’s offering as an example in aiding the efficiency of bid proposals. Each consultant must maintain an updated CV or résumé, often even in two languages. Without CV Partner, every single résumé, CV and case study on file has to be updated manually by bid managers searching for content and case studies that fit the requirements of the bid. With the software, however, the process is automated and precious time saved.
Though tempting to commit to a regional specialisation, it is often better to avoid localising a product unless you absolutely have to or are legally required to. Instead, embracing international use cases can significantly expand the total addressable market (TAM).
A prime example is Netflix’s network, which took the decision to expand slowly, to corroborate the regional market. It wasn’t for 13 years after Netflix was founded that the first international market was launched, in Canada in 2010. This strategic decision allowed the company to cater to customers worldwide, becoming the international success it is today.
Target audience
Choosing between a niche focus and a broader approach is a strategic decision that requires a balance between expertise and versatility.
Another bone of contention is deciding what size enterprises your software should be targeted at. This involves a delicate balancing act.
On the one hand, smaller to medium-sized businesses are often easier to proposition. On the other hand, larger corporate clients tend to offer quicker growth opportunities. In the case of Hubspot, the journey began with targeting smaller clients, before transitioning to larger customers with compliance, integration capabilities and a robust API being paramount.
Word of mouth
Building a SaaS product in collaboration with customers is vital. Every interaction, from meetings to support tickets, provides valuable insights.
One example is Productboard, a SaaS company that enables companies to help their customers focus on goals. Using a system for gathering insights is an important aspect of having a customer-centric approach.
Creating a great product with an exceptional user experience (UX) activates the holy grail of B2B: word of mouth. Canva’s success in turning users into ambassadors underscores the impact of achieving this milestone.
Keep things simple
You shouldn’t assume that current processes are the most efficient – understanding this is pivotal. Dissecting current processes and identifying patterns that cause friction can lead to transformative solutions.
Reduce complexity where you can. It’s much easier to not build something, than to build it and then have to remove it later because of faults, low usage or cost. Instead, have in mind how the product will look several years down the line, and base decisions on that. This process, done early, will go a long way to future-proofing the product.
Company culture
SaaS companies, like many others, require efficient decision-making and company structure. If you want to scale, you must hire people and delegate. Accepting that progress may be slow initially is painful, but it is vital to share knowledge and thoroughly onboard new employees.
More often than not, being patient means that operations quickly regulate and end up improving. It’s the only way to maintain a sustainable SaaS business. Although it is starting to become a cliché, it remains true – always aim to hire people who are better than you. Ultimately, those that you hire will become the ones who will hire the subsequent round of people – you need to trust them for your company to live on.
Setting out a clear vision for the company culture should not be underestimated. Ensure the company values are set out right from the start. What makes your company special? What are you doing differently to others? What are the core values that are important for you?
And one of the hardest things to do, but with the biggest benefit to the company, is to offboard those who don’t align with the values or fit at the company. Employees with a different value-set can, in the worst cases, bring down not only other employees, but also how the company is perceived from the outside.
The journey from concept to building a successful, sustainable SaaS product is marked by clear strategies that encompass the importance of execution, validating market interest, strategic focus, identifying repeatable use cases, embracing international opportunities, maintaining a user-centric, innovative approach, and strategic scaling.
In the intricate landscape of SaaS, these provide a roadmap for sustainable growth, ensuring that every decision contributes to the long-term success of the product and its users.
By Erling Linde
Erling Linde is the founder and CEO of CV Partner, an automation solution which tailors CVs and case studies for bids and proposals. He has a master’s degree in computer science from the Norwegian University of Science and Technology. He has extensive experience as a software developer and consultant.
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