Don’t Kid Yourself- SaaS is F***ing hard!
I’ve been thinking about this post since doing my seminar last week for Rackspace.
Too often SaaS is seen as a technical problem.
It isn’t.
In fact, the technical part is the easiest part of the equation to solve in SaaS as it’s the only part truly in your control.
Markets with Invention Risk are those where it’s questionable whether the technology can ever be made to work – but if it does customers will beat a path to the company’s door.
Markets with Customer/Market Risk are those where the unknown is whether customers will adopt the product.
And he gives us a really nice diagram to analyse with:
Market Risk vs. Invention Risk – Click to Enlarge
He goes on:
For companies building web-based products, product development may be difficult, but with enough time and iteration engineering will eventually converge on a solution and ship a functional product - it’s engineering, not invention. The real risk in markets like Web 2.0 is whether there is a customer and market for the product as spec’d. In these markets it’s all about customer/market risk.
It doesn’t matter if you’ve got a brilliant solution if you can’t find a customer who wants those problems solved.
Even brilliant people solve problems that don’t need to be solved- Kent Beck gave a really nice example recently…
But too often they’re talking to me too late in the process.
They’ve developed software and are wondering why it isn’t selling or their Customer Acquisition Cost (CAC) is too high.
In the old days with legacy software, the big upfront cheques solved your CAC problems. With SaaS you get paid monthly and if the customer doesn’t like it, they go away. So if you’re product doesn’t work for them, you’re in big trouble.
That’s why SaaS is so F***ing hard.
