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Finding SaaS Product-Market Fit

saas product market fitFinding product-market fit is a central, early stage challenge of every startup. SaaS startups, however, have unique advantages. Unlike consumer Internet products, SaaS products are essential business tools. SaaS customers take them very seriously. SaaS customers want to provide feedback and they want to see that feedback acted upon in a timely fashion. In other words, SaaS customers want product-market fit as much as the SaaS vendor. Unlike offline B2B products, the SaaS product creates an always-on connection between the SaaS company and the SaaS customer. By leveraging that connection, the process of getting and acting upon SaaS customer feedback can be automated and accelerated.

This is the fourth post in a series that explores the importance of SaaS customer alignment. Previous posts in the series have focused on establishing SaaS customer alignment throughout the SaaS customer lifecycle, creating a list of SaaS Customer Alignment Tips along the way. This post continues that list, but take us back to the earliest and arguably most important stage of SaaS customer alignment: finding SaaS product-market fit.

Try, try, try again

There have been many great books and articles written on the topic of product-market fit. Surprisingly though, you are unlikely to find any better advice than that given in the old nursery rhyme: “If at first you don’t succeed, try, try try again.”

saas product market fit customers

Of course, you don’t want to just try things at random. You want to try things that will systematically improve SaaS customer alignment and move your SaaS business closer to product-market fit. You need to test your current product-market fit, then make adjustments in the right direction based on the results. In other words, you need to create a continuous loop of SaaS customer feedback and SaaS product development that increases product-market fit on each iteration: listen, build, deliver…listen, build, deliver…try, try, try, again. The unique advantages of SaaS, however, allow you to increase the velocity at which you ‘try, try, try’ and accelerate your path to product-market fit.

SaaS Customer Alignment Tip #13

Let Your Customers Be the Judge

saas product market fit thumbsWhen angling toward SaaS product-market fit, it is essential to understand the different roles played by the product and the market. The product proposes and the market judges. SaaS startup founders, product managers, UI designers and software engineers all have strong ideas and even stronger attachments to the SaaS products they build. This vision and ownership is an integral aspect of technology innovation. Once that innovation is out there, however, you need to get the clear and unbiased appraisal of your potential SaaS customers. Talk to them. Listen to them. Build a customer-focused culture that continually seeks to understand and better meet the needs of your SaaS customers.

saas product market fit customers

SaaS customer focus doesn’t mean SaaS product design by committee. After the market judges, its the product’s role to re-propose. Beyond modest improvements to existing features, it is unlikely that the feedback you receive will translate verbatim into the capabilities your SaaS product needs to reach product-market fit. You may need to innovate and provide an unforeseen solution to an unforeseen problem. You may need to walk away from a particular segment of the market, because it will never fit. It is also unlikely that your second or your third try will be perfect. The faster you iterate, the faster you will achieve product-market fit.

SaaS Customer Alignment Tip #14

Accelerate Feedback through the SaaS Product

product market fit accelerateGetting direct, in-person feedback from your customers should be at the top of your priority list when you are working toward SaaS product-market fit. That said, your SaaS customers will naturally spend much more time in front of your SaaS product than they will in front of you. Don’t waste it. In the same spirit as SaaS Customer Alignment Tip #8, the best time to get SaaS customer feedback is real-time.

Open as many feedback channels as possible to your SaaS customer directly inside your SaaS product. New feature requests, current feature ratings, bug reporting, support inquiries, and so forth are just one click away from the events that precipitate them when you enable them inside your SaaS product. Long before SaaS product usage data helps you convert trials and reduce churn, it should help you improve SaaS product-market fit. Product usage metrics provide unbiased insight about what is being used and what isn’t. It can also tell you what is being used with difficulty versus what is being used with ease. By turning on real-time feedback directly within your SaaS product, you accelerate the SaaS customer side of the listen, build, deliver loop and increase the velocity at which you approach SaaS product-market fit.

SaaS Customer Alignment Tip #15

Go All Out Agile

agile marketingAgile software development has seen wide adoption throughout the software industry. However, there is one often overlooked aspect of agile software methodologies that has been lost in their loose translation from their agile manufacturing roots: the customer. Many software engineering teams turn to agile as a means to increase productivity and manage risk. However, the primary goal of agile is not higher productivity; it is increased responsiveness to customer needs. In most agile software development teams, the product manager provides a surrogate voice of the customer. This is not enough. A fundamental tenant of agile is that the output of your team, your SaaS product, must be of value to the customer, otherwise it is not real output. That is, features that have no value to the customer are waste.

agile marketing goal

Adopting agile software development in your effort to achieve SaaS product-market fit is a good idea. Complementing it with agile marketing that plugs unbiased customer feedback directly into the software development process is a great idea. Agile should not end at the SaaS product manager. SaaS product and marketing managers shouldn’t just gather and analyze customer feedback, they should take the lead in collecting as much of it as possible and sharing it with the entire team to reinforce a culture of customer focus. Bring the feedback gathered through SaaS Customer Alignment Tips #13 and #14 full circle and make it the foundation of your SaaS product development process.

SaaS Customer Alignment Tip #16

Automate SaaS Product Integration, Testing and Deployment

product market fit automation

Like agile, automated integration, testing and deployment have seen wide adoption in the software industry. And like agile, they are often pigeon-holed as engineering best practices. They are not. They are SaaS business best practices, because they enable rapid reaction to market demand and specific customer needs. Automated testing is particularly important when you are redesigning and refactoring on a regular basis to improve SaaS product-market fit. When combined with agile software development and agile marketing, they create a SaaS product delivery machine capable of rapid innovation that follows the SaaS customer’s lead and drives rapidly toward SaaS product-market fit.

Read the original blog entry...

More Stories By Joel York

Joel York is an Internet software executive and popular SaaS / Cloud blogger at Chaotic Flow and Cloud Ave. He is well known for his work in SaaS / cloud business models, sales and marketing strategy, and financial metrics. Professionally, he has managed global sales and marketing organizations serving over 50 countries, including local offices in the United States, United Kingdom, Germany, and India. He holds degrees in physics from Caltech and Cornell and received his MBA from the University of Chicago. Joel York is currently VP Marketing at Meltwater Group and Principal at the Internet startup consulting firm affinitos.

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