How to Start a Series A Fundable SaaS Business — A 15 Page Guide to Acquiring Customers and Reducing Churn
Summary: <br> <br> Software as a service is the new heroine.<br> Companies and individuals sign up for free trials and are instantly hooked. It is a hell of a drug.<br> For B2B customers this is especially true. Most businesses hate change. When the ball is rolling, the last thing you want is overhaul the entire new system. You stick with what is working, the easy solution. Even if it means a few more dollars. Dollars be damned.<br> Time is money to these guys and saving days, weeks or even months from switching software is usually a no-brainer.<br> If your product solves a pain point for companies and customers, you are in business.<br> Software is eating the world.<br> You have probably heard this. It is true. AWS, Salesforce, Slack, Shopify, Intuit…<br> These companies don’t have physical assets. What they provide and sell is a service, a SaaS product.<br> These are some of the most valuable and powerful companies in the world. They don’t focus on physical products. They aren’t buying real estate. They don’t invest in cars, gold or bitcoin. They build businesses others NEED to have and are willing to pay for.<br> The beauty of SaaS lies in the margins. Once a piece of code is built, it costs almost nothing to run and maintain. You can scale servers, bring on more devs and the costs never balloon out of control. They stay very small and manageable — a low percentage of the actual price.<br> And more and more, companies are moving towards these models. The reason: revenue. Recurring revenue is king. It is the thing all investors and VCs look for. It is the mark of a healthy business.<br> How consistent are your cash flows? That is business basics 101. Money in versus money out.<br> The 7 keys to killing it with SaaS<br> <br> Part 1. Acquiring customers<br> In its simplest form, acquiring customers is a must for every business. How do you get individuals or organizations to pay? That is the big question.<br> And for every business this is different, not the approach but the end result.<br> To get customers, you need to get in front of prospective customers. You need to show the value of your product and explain how it will make their lives better, easier etc…<br> (For sake of argument let’s say you have an awesome product)<br> (If not, please stop reading and go talk to customers. Figure out what the heck they want and would pay for. Find their pain and fix it.)<br> Okay. So assuming you have a good product, how do we get you users, customers, etc…<br> The strategy depends on the product, the market and the price point. The higher the price, the more touch points you will need with prospective customers and the harder it will be to get impulse buys or downloads.<br> Let’s cover the strategies and pros and cons of each.<br> Ways to get customers:<br> <br> Referrals<br> Paid Ads<br> Social Media<br> Affiliates<br> Partnerships<br> Marketplaces<br> Content Creation<br> <br> 1. Referrals aka Word of Mouth<br> This is the best, most popular and scalable way to build a business. When your product or service is EPIC and people love it, they talk about it. Every new user they bring is gold. $0 CAC.<br> But it is really goddamn hard. Things don’t just GO VIRAL. There is a science and a bit of luck involved.<br> <a href="https://en.wikipedia.org/wiki/Net_Promoter" data-href="https://en.wikipedia.org/wiki/Net_Promoter" class="markup--anchor markup--p-anchor" rel="noopener" target="_blank">Net Promoter Score</a> or NPS is the best way to measure virality. It involves polling customers to find their thoughts and affinity towards your brand/product and how likely they are to share with a friend.<br> There are a lot of ways to increase NPS — the most obvious are a great product and killer customer service.<br> But virality can also be engineered.<br> Airbnb offers a free stay for any friend you refer. Groupon gave great deals for large groups.
