Over the years, I’ve had the honor of being part of some incredible software-as-a-service (SaaS) companies. And now, as part of my work at Mindshare Ventures, I continue to work closely with and invest in SaaS startups trying to scale.
After running many a strategic planning session, one begins to see the patterns: yes, each company has different challenges and thus prioritizes its goals differently, but the goals actually remain the same. They can be summarized into three or four “macro goals” or broken down into a dozen or two “micro goals,” but Mindshare Ventures now recommends seven goals that we believe to be “just right” :-). They are outlined below and are how I deconstruct an analyze a SaaS company’s operational performance.
* I’d like to recognize and credit the great work of BoomStartup, a seed accelerator based in Salt Lake City, Utah, for coining the phrases we use in goals 2, 3, and 4.
** The 7 goals below, while devised for SaaS business models, would be applicable to most other businesses.
1. BUILD awesome products that solve real problems
There is a misconception out there that crappy software can still be the basis of great companies; I’m afraid I disagree. While big, established companies in stages 4 or 5 may be able to rest on its reputation and laurels for some time with less-than-compelling products, I believe that all great software companies are product-led: they have awesome products.
Even more importantly, building an awesome product isn’t enough; it must solve a real problem that the customer thinks is worth solving. This is the oft-discussed “shark bite” (big) vs. “mosquito bite” (small) debate: awesome products that solve shark bite problems are recipes for enormous success. This is another way of thinking about the venerable “product-market fit” criterion: a product that fits the market’s needs.
Product and Engineering teams are typically responsible for this goal.
2. ATTRACT a lot of high-quality leads
OK; we have an awesome product or two and they address real-world problems that customers care about; now what? Our next goal is to attract the right sorts of leads…and a lot of them. The more high-quality leads we acquire, the more chances we have to pursue a new customer who’ll love our product(s).
Marketing organizations are typically responsible for this goal.
3. INTERACT with leads turning them into interested prospects
What’s next? Our leads must be engaged in some way to nurture them and turn them into prospects who are interested in our company and our product(s). This can sometimes feel like a mass-training function if the product is still early on the hype cycle.
In business-to-business (B2B) companies, Sales Development organizations are typically responsible for this goal and are typically part of the Sales organization; in business-to-consumer (B2C) companies, this function may be rather automated and part of Marketing.
4. TRANSACT with prospects making them our customers
This is the money goal…literally. A software company isn’t a business unless it transacts with its prospects turning them into contracted customers. This is about scoping a solution, agreeing on equitable pricing, and signing a contract that specifies all of the terms and conditions of the relationship.
Sales is hard. It’s one thing to talk to prospective customers and get them excited about your product; it’s an entirely different thing to get a signed contract. It’s this distinction that separates average salespeople from great ones: the great ones are OK making us feel uncomfortable enough to actually sign :-).
Naturally, this is the responsibility of the Sales organization. In many B2B companies, there is a Channel Sales organization that leverages channel partners.
5. DELIVER more than promised to retain our customers
If only our goals could end with TRANSACT :-). It’s never that simple. As those of us who’ve spent much of our careers on the post-sales side will tell you, a signed contract is only the beginning: it’s now time to deliver what was promised, when it was promised, and with on-going service and support that convince customers they should stay.
This is another very difficult goal that depends on so many variables outside of the responsible organization’s control: how stable is the product that was sold, what expectations were set with the client during the sales process, and what “unknown unknowns” are discovered only after the implementation process has started.
This is the honorable responsibility of the Client Services organization. They tend to be the unsung heroes of software companies.
6. DELIGHT our customers so they are brand ambassadors who grow with us
Retaining our customers is a worthy goal, but a loftier one is delighting our customers with our product(s) and service(s) that they’re more than just a customer: they’re a brand ambassador who is willing to serve as a reference for us to prospective customers. As any experienced software sales executive and they’ll admit it: few tools in their tool belt are as effective as great references from delighted customers.
Delighted customers don’t just serve as references, they tend to grow their financial relationship with a company. Organic growth is the result of delighted customers.
This goal is frequently shared by the Client Services and Sales organizations collaboratively.
7. OPERATE a talented, engaged, and efficient organization that executes with minimal friction
Finally, and certainly very importantly, is the goal of making the first six goals possible: administering all of the internal functions needed to make for a successful company: recruiting and engaging great talent, providing the necessary services and support for that talent, and ensuring that the company’s finances are well-accounted for. This goal is about making all of the others goals easy and frictionless.
This goal is shouldered by a number of organizations across the company including Finance & Accounting, Human Resources, and internal Information Technology (IT).