In the past two years, three of my Vancouver-based Software-as-a-Service clients achieved significant growth milestones, or what we often refer to as an “event.”
In my quest to improve upon my own ‘hit rate’ and help other Canadian SaaS companies achieve similar outcomes, I thought long and hard about what each of these three has in common in terms of their approach to growth.
It would be disingenuous to suggest that I was the X-factor with each of these so let’s dismiss that notion outright. Before they brought me on board, all three of these companies believed in a shared methodology. The lesson they can teach all of us is really quite simple — but it represents a blind spot for most early-stage SaaS companies.
Your growth market and your current market of focus are two different things
If you operate a software company that has raised a seed round or bootstrapped together some monthly recurring revenue (MRR), then I’ll bet you have that slide in your fundraising deck. It’s the one that clearly identifies your addressable market and your immediate plans to start capturing market share. But I would be willing to wager that your true go-to-market strategy lacks the fidelity necessary to actually establish the momentum you are envisioning.
What 7Geese, klue, and Lendesk all understood was that to start putting wins on the board, you have to stick to a very specific story for a very narrowly-focused target market at the outset.
Lendesk began by targeting tech-savvy Canadian mortgage brokers (a much smaller niche than you might think), klue put its laser focus on B2B SaaS companies with 500+ employees AND a dedicated in-house competitive intelligence Product Marketer. 7Geese has been in the game for a long time but they still position themselves, both in terms of product and messaging, for growing SaaS companies within a very specific headcount range. As a result, there is no waste when it comes to marketing or sales resources — everyone and everything is marching to the same beat. And that includes product.
Like attracts like
Your $1B addressable market dreams are still valid, but where, specifically, are your next 20 sales going to come from? Imagine if your brand positioning, all of your marketing and sales assets, and especially all of your case studies, were all from a very specific and clearly defined market niche. How powerful would that be on your next sales call?
The more you can focus your messaging on the specific pain points of a very specific customer, the easier it will be to attract and convert them.
Gaining SaaS traction: What this looks like in practice
I have some version of this conversation two or three times a day, so I know the kind of resistance I’m bound to receive with this bit of advice. I expect that you will not feel comfortable rewriting your homepage to address the needs of a tiny sliver of your intended market.
But what if you tested a lean campaign and focused your Eye of Sauron on just one small market niche?
Consider what these assets would do for your win rate:
- A vertical-or industry-specific landing page
- Laser-targeted “top of funnel” awareness content (gated!)
- Relevant email nurture content
- Specific “just like them” case studies
The right content will shorten your sales cycles and boost your conversion rates. You know it’s true. You likely even envision having industry-specific sales and marketing assets one day, but have you tried even one yet? Yes, this requires a non-trivial paradigm shift. Start small and then repeat, instead of waiting to have the means to create specific messaging for all of your potential niches. Once you’ve cracked the code on one market you can expand into others with the same dance. (CMND + F and replace [vertical] with [new vertical]) You get the idea.
Lower CPAs make for hefty Series-As
Everybody talks about “traction” and I’m as guilty as anyone. I probably say it 30 times a day, and that’s just in the business context (add my mountain biking and cyclocross obsession and it’s much higher). But it succinctly communicates the momentum and repeatable processes that early-stage SaaS companies need to establish. You’ve got a finite amount of runway (that you would prefer to spend on product dev) and you need wins on the board, fast.
Instead of trying to boil the ocean, try getting a small pot boiling first, then repeat your successful playbook in subsequently larger or adjacent markets.
As you continue to drop your cost per acquisition (CPA) and establish the lifetime value (LTV) of your customers, your milkshake will bring all the VCs to the yard.