How I Would Start a SaaS Business Today in 2020
Last year I did write on how to start a SaaS business.
I took everything that I learned from my journey of taking ToutApp from zero to seven million ARR and selling it.
Then working at Marketo, which bought ToutApp, to actually turn that company around and sell it to Adobe.
Well something interesting happened. Given everything that’s going on in the world right now, with COVID and Coronavirus and pandemic and everything, there are more people thinking about starting a SaaS business than ever before.
And at the same time, the rules of the game have completely changed. So I figured it’s time for another article.
Knowing everything that I know and knowing everything that is going on, if I were to start a SaaS business today, in 2020, here are the three things that I would follow.
Welcome to Unstoppable, I’m TK.
On this website, I help startup founders like you create and execute an unstoppable strategy to grow your SaaS business.
I bring an episode every Sunday and every Wednesday. So if you’re new, welcome.
Be sure to hit the subscribe button and that bell icon so you get notified every single time I drop the TK energy.
Okay, so if you are starting to think about starting a SaaS business, and you actually wanna take the plunge, congratulations, you are awesome and I’m really excited for you!
Now given the strange environment that we find ourselves in right now in 2020, here are the three things that I would do to actually make sure you’re optimized for success.
So if you’re excited to dig in, be sure to smash that like button for the YouTube algorithm and let’s get right into it.
So step one of starting a SaaS business is I would get very, very specific about the market.
The market and the ICP is probably the most important thing for you to get focused on.
Mediocre teams coupled with a great market can build incredible companies.
Some of the best teams in the world, if they actually assembled and went after a shitty market, they would still have a huge slog ahead of them.
Meaning, more than product, more than go-to-market, the market you go after and the ideal customer profile you’re going after is the most important decision you can make when jumping into a SaaS business.
And that’s more true today in a economic downturn during a potential recession than ever before.
The simple way to figure out what your market should be and what your ICP should be, is you actually want to ask yourself who do you want to serve and who, which group of people, do you have domain knowledge around?
I remember there was one time, I met these two dudes and they wanted to revolutionize the wedding industry.
They were both single, they had never worked in the wedding industry, and they’d never even contemplated getting married.
Here’s the thing, a market could be great but could be terrible for you. So what you really wanna figure out is what is a great market, what is the ICP, and who do you wanna serve that you actually have domain knowledge in.
You have a unique point of viewing. So that’s step number one. Once you have step number one down, the next thing you wanna look at is product.
What urgent problem are you solving for that group of people that want to go after?
Now there’s a very specific thing here relevant for 2020.
The bar is higher than ever for anyone to spend money with you, especially in an environment like this.
However, some of the best companies, the best companies in the world were started during downturns like this, during tough environments like this.
If you check out this last episode that I did around building recession-proof businesses and how to position them the right way, you’ll see that some of the most amazing software companies were started 10 years ago, during the last economic downturn.
In 2008-2009, that’s when a lot of these companies were started and I go in in that video on exactly why.
I’ll link to that below, don’t worry. But the reason, the real reason for it, is because the bar was higher and they worked harder to hit it.
How do you do that? How do you make sure you’re building the right product and solving for the right problem? You really have to be focused on two things.
The two things that always work and particularly works in environments like this are products that actually drive cost savings or products that help them make more money.
If you can figure out how to orient your product to actually drive cost savings or you can figure how to orient your product around helping them make more money then you’re gonna be successful.
So you if you can orient yourself that way and you can build and craft the product problem that way, you’re gonna be a lot more successful in this space.
Now before I go into number three, let me just pause here for a second. If you’re starting to get some ideas on the type of SaaS business you wanna build, or you’re going through my checklist, and you’re like: “You know what, that idea I was thinking about makes more sense than ever?”
Can I just get a “Yes!” in the comments below because I’m excited for you. While you’re at it, smash that like button if you haven’t already, for the YouTube algorithm.
Now, here’s the thing.
This is a very differentiated way of going after it. A lot of people just start with the solution and then try to figure out how to do go to market and how to market it and find a market for it.
The trick here is I’m asking you what your domain knowledge is. I’m asking you who are the people you want to serve.
I’m asking if you’ve got a unique point of view. And I’m telling you that whether it’s you can come up with a product that drives cost-savings or makes more money, because those are the ones that sell the best.
So I’m having you go through some specific questions that really qualify you to the right idea, for this economic environment and just in general, for any SaaS business.
If you are digging into this and you want some more help, I have a ten point checklist that you can go through to actually craft your strategy for your SaaS business.
I’ll link to it below and I’ll tell you more about it at the end of the video. But let’s go back into it and go into Number 3.
The third thing is you gotta to figure out your go to market. Where do they hang out, and can you actually build an audience?
More importantly, do you know five people that are in this market?
That are in the market for a product like this, that actually has this problem.
Five specific people that know about this problem has this problem that you can go talk to right now.
If you don’t, then I would not even think about this step yet, I would go back to step one and two because you fudged it, and I’m calling you out on it.
You have to get super specific about who your market is and what the problem is and what you’re solving.
You have to be able to find five people in your network that has this problem and talk to them.
If you cannot do that that means you’re not getting specific enough on the strategy around your SaaS business and in a market like this you will likely not succeed.
Once you have those five people and you talked with them and you’ve validated it, here’s what I say.
Build an audience while you’re building your product. I talk to a lot of founders and they’re like: “Yeah, we’re gonna build this thing.
We talked to a few people, we have a vision, we’re going to go build it out, then we’ll hire a marketing person, they’ll figure out how to get it in front of people and we’ll get some sales.” Wrong!
That is completely incorrect. The right way to build SaaS businesses today is to start building an audience of the market you want to serve, talk to them about the problem that you have, and then start to build the product in parallel.
So that you have a group of people that’s constantly growing, that agrees with the problem and the point of view that you have and you’re solving it through a product that they want.
If you’re starting to see the difference in this approach if you’re starting to see the power of building an audience while you’re doing all these other things, also hit me with a “Yes” below in the comments because I want to hear from you.
So, the summarize, to start a business today in this environment, a SaaS business. A. It’s a great time to do it B.
The bar is higher but if you actually hit that bar you are more likely to become on of those iconic companies.
To recap, the three things are
Number one, get focused on the market and ICP, who do you want to serve.
Number two, What is the exact problem you’re solving, is it urgent enough, is it driving cost savings and making them more money?
And number three, what is your go to market, where do they hang out and how do you build an audience for these people while your building out your product?
Now, I have a ten point checklist that goes more into details around these.
So if you’re interested in building a SaaS business, and you’re serious about it, go ahead and download my ten point SaaS checklist. It’s super easy to follow and it’s a worksheet that you ask you a bunch a questions and you just fill it out.
And there’s even a live training associated with it where I walk you through how to build that thing out.
So there’s a lot of training I have to help you get started the right way for your SaaS business.
So just follow the link below or go to tkkader.com/SaaS-checklist and you can go download it for free.
And lastly, if you got value from this video please smash that like button.
If you have a friend that you want to start that company with, be sure to share this video with that person.
If you’re part of a Slack group or a mailing list where you can share this video with other founders or pre-founders, please do that, it would mean the world to myself and my team.
And if you want to be notified about the next blog and you are new, be sure to subscribe and hit that bell icon.
And lastly, remember, everyone needs a strategy for their life and their business, but when you are with us yours is going to be unstoppable.
All right, I’ll see you in the next blog now.
Talk to you later.