Successful SaaS Solutions Start with a Minimum Product Viability (MPV)
Achieving a successful SaaS Business starts not with a perfectly formed SaaS platform, but by achieving a Minimum Product Viability (MPV) SaaS platform. That is the essential first must have goal for any successful SaaS business. But an MPV SaaS solution is not just a working model: but one that delivers the real value proposition which your SaaS solution promises.
The ‘real SaaS MPV goal’ is not often fully understood as to what it must achieve to avoid pre-launch failure for SaaS businesses. Too often SaaS MPV’s are half hearted aspirational “nice to have features. Compared to a successful SaaS solution of ‘must have’s’ SaaS solutions. That’s what makes a successful SaaS business, they always start with a robust MPV.
Business leaders’ are often told that shifting to a SaaS model ‘build it and they will come mentality,” but they won’t come, if you don’t achieve a robust SaaS MPV. You won’t compete within your chosen market. Just being an online SaaS product does not make your business achieve success. If the SaaS MPV does not actively compete, then it will not succeed. So MPV is often a misunderstood or omitted market entry goal. MPV means your software as a service actually wins target audience customers making you a player within the market. Once you get this right then you can look at your SaaS pricing model.
Launching without a MPV
Too many companies start trading without achieving a clear MPV. They build it, launch their marketing and sales plan and start trading and hope. But their SaaS fails to deliver to their target audiences. Pressure on SaaS businesses is to get there quickly. That often leads to trials which do not convert. Channel partners do not actively resell, Uncertain customer acquisition plans and confused pipeline management. All resulting in SaaS metrics such as cost per customer acquisition continually increasing. That leads to high burn rates of cash and pressure on leaders to chase customers. Pressure to play catch-up replaces ensuring the SaaS delivers its fundamental goal, that of real tangible value to the customer.
The alternative risk in not looking to achieve a robust MPV is that effort, resources and personal energy are lost in developing the wrong elements of the SaaS business. Rushing to market, often means that the marketing and sales drivers forward leaving the core offering behind. This leads to over promising and a confused set of priorities. for the company. Resulting in leaders trying and patch together into a coherent product or service offering.
SaaS Require Robust MPV
SaaS MPV metrics must be clear. MPV must be a tangible goal with a viable product offering. If you take your service online is must do more than just exist. Now I am not saying it needs to be perfect. But a over-polishing a SaaS solution is one of those very dangerous assumptions we will come onto shortly, but simple migration of a product online is not a SaaS MPV.
For Minimum Product Viability to be achieved, a SaaS solution must successfully compete within its market(s). It must win new customers for it to achieve MPV status. Too often the model of lower cost looks good on paper, especially to the accountant, investors and banks. Which is supported by competitor analysis and trend analysis but without any evidence of actually being able to win target segment customers.
Don’t Hit and Hope with SaaS
The built and they will come mentality often leads to the knee jerk reaction from companies to offer discounts to customers to gain traction right from the start. The downside of that tactic is that the predicted customer revenue targets aren’t met if you give it away. Giving it away also means that customers do not value your SaaS offering resulting in:-
1. Poor customer quality
2. Low engagement and low retention rates.
3. Poor product development which damages the core SaaS product.
4. False success metrics driving poor service and innovation
5. A SaaS business with short term mindset
The other major challenge of giving it away on day one to gain traction is that once the opening price perception is set it is difficult to reset. Initial target audiences are typically early adopters who usually are your target premium customers, they expect certain valuable features within the MPV that tie them in, which if not immediately available mean that they will abandon the SaaS solution. It is also difficult to recover your market or premium market price unless you have large marketing budget to support the opening offer discount.
Measuring MPV requires leaders to not only check it works (and that is never a given with IT) but also that it achieves MPV as an offering. Does it do what it needs to do for the customer.? Does it meet the complete customer requirement of the value proposition? So do not just focus on the pure IT but on the whole value proposition to measure the MPV status. Test it with pilot groups, measure not only it looks good, but does it replace what they were doing? If not it needs to do more.
Over-polishing your SaaS MPV
I have worked with several SaaS start-ups and migration SaaS brands who face the eternal problem of over polishing their MPV. Failing to set a MPV goal with a timeline means that many companies keep playing and tinkering with their SaaS product rather than get it out there.
The challenge is that everyone has thoughts, features and layouts they want to see, so the more people involved the more the pull and push from 3rd parties to meet their expectations or perceptions. The nature of every increasing committees is to tinker and therefore delay. Continuing to over-polish is a major issue for many SaaS businesses. They ask too many people to review it and each has a view, but continual reviews and tweaks delay the acid test ill it work in teh real world.
Everyone has an opinion and no matter how valuable it is the MPV goal must define the MINIMUM, not the optimum or the ideally would like. These should be in secondary releases onwards as upgrades and add-ons. An MPV must to have a launch deadline in place with clarity of what that SaaS will deliver and how it will be upgraded over time to meet specific needs. A soft Beta test launch to a target audience will test and validate the MPV objective, which if you have followed the classic MPV creation model (below) will enable you to get to market with a credible SaaS solution.
What makes a successful MPV? One that delivers the SaaS value propositions’ core elements. When entrepreneurs or leaderships teams are building their SaaS businesses model they must start by thinking through what are the core elements we MUST HAVE rather than those we would LIKE to HAVE. Those core elements must engage with their target audiences both directly and through whatever channels to market they intend to operate with or through.
That MPV, what you go to market with to prove the concept and launch your business with has to contain the MUST HAVE‘s that both challenge and disrupt the market your SaaS model is entering, if it is to succeed.
So the MPV must be robust, not aspirational. It must do deliver the core value proposition, not be full of we will do this at a later stage. The phrase “You never get a second chance to make a great first impression.” Defines the need for a robust SaaS solution MPV within any market. If it is not robust in delivering those core value proposition elements then it won’t challenge or disrupt the existing players whether they be physical or SaaS competitors. Lets look at how to create a Robust MPV.
Create A Successful SaaS Business
1a. Firstly identify the success criteria that will indicate whether or not the SaaS solution will be successful
1b. Then identify the business needs of the sector today and over the long-term.
2a. Map out the customer / user journey(s)
2b. Then segment the core user groups (called the actors)
2c. Clarify the journey end point (end goal)
2d. Then mark all actions the user must take to meet that end goal, and then simplify them as much as possible, less is more.
3a. Write down the action the user completes when using the product
3b. Write down the pain points for each action
3c. Write down the gains for each action
3d. Summarise the pains and gains into opportunity statements
3e. Use “How might we” statements or a similar method to summarise the pains and gains you have identified, prioritise and
4a. Use opportunity statements to finalise your core “must have” features and ensure they are built into a coherent MPV model.
4b. Provide a breakdown of the features to include in the product roadmap, identifying each feature element.
4c. Use a prioritisation matrix (or similar method) to prioritise features creating a complete MPV customer journey to build and launch with.
4d. Identify other features to be launched as 2nd phase onwards and use target customer audience or beta test launch feedback to validate these feature in subsequent launches.
4e. Identify Key SaaS metrics including UX, channel partner and disputer effect metrics to measure your MPV launch with.
Successful SaaS
Get your MPV wrong and it is difficult to make a comeback. Understanding your core audience (it may not be big but it must be defined and reachable). Many SaaS MPV are done below the radar, with soft launches to target audiences either directly or through selected or exclusive channel partners to provide validity of model and ensure MPV has been achieved.
Going big too soon is often appealing but rarely successful. Think about achieving viability then scaleability with a proven model to solve a tangible issue for a target audience and you are more likely to succeed. Research your target audiences’ specific needs and plan points and ensure that your MPV focuses on delivering the results they need, rather than trying to do too much. Add value and then keep on adding more value is what makes a successful MPV for a SaaS business.
Richard works with SaaS entrepreneurs in developing their SaaS solutions, to learn more and contact Richard Gourlay click here now