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The incumbent’s playbook for launching a vertical SaaS product (Directions EMEA 2017)

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The incumbent’s playbook for launching a vertical SaaS product (Directions EMEA 2017)

Presentation held at Directions EMEA 2017 in Madrid.
Been on the market for decades? Living from upfront license revenues and services that you sell alongside? Think of developing a SaaS product, but not sure where to start? Think of building a vertical Microsoft Dynamics 365 SaaS app/product? Come and join me, and I will share my experiences with you from building www.just-plan-it.com on Azure and integrate it with Dynamics 365. I will provide real life experiences, share tips and tricks, books to read and tools to use on that journey. My purpose is encouraging you to go the SaaS development route as you as an incumbent have a huge advantage over funding series driven start-ups: you know your market and have you a sustained cash flow to finance growth. In essence, I will cover the following questions:
1) How to identify and validate market demand?
2) What the heck is an MVP (minimum viable product) and how can it help?
3) How can I easily start the inbound lead generation journey?
4) How to organize development to stay at the “pulse of the market”?
5) How to measure and manage initial success?
6) Why is user onboarding so crucial and difficult?
7) How to prepare for scale?

Presentation held at Directions EMEA 2017 in Madrid.
Been on the market for decades? Living from upfront license revenues and services that you sell alongside? Think of developing a SaaS product, but not sure where to start? Think of building a vertical Microsoft Dynamics 365 SaaS app/product? Come and join me, and I will share my experiences with you from building www.just-plan-it.com on Azure and integrate it with Dynamics 365. I will provide real life experiences, share tips and tricks, books to read and tools to use on that journey. My purpose is encouraging you to go the SaaS development route as you as an incumbent have a huge advantage over funding series driven start-ups: you know your market and have you a sustained cash flow to finance growth. In essence, I will cover the following questions:
1) How to identify and validate market demand?
2) What the heck is an MVP (minimum viable product) and how can it help?
3) How can I easily start the inbound lead generation journey?
4) How to organize development to stay at the “pulse of the market”?
5) How to measure and manage initial success?
6) Why is user onboarding so crucial and difficult?
7) How to prepare for scale?

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The incumbent’s playbook for launching a vertical SaaS product (Directions EMEA 2017)

  1. 1. Subtitle The Incumbent’s Playbook for Launching a Vertical SaaS Product Lessons learned with and from an ongoing transitioning process Dr. Martin Karlowitsch CEO | Co-Owner - NETRONIC Software
  2. 2. Subtitle www.directionsemea.com DISCLAIMER ;-) This presentation is not about Dynamics NAV. It is also not about Dynamics 365. It is about building a SaaS business, when you already have an (on-prem) business. For that – of course – both NAV and D365 can be wonderful triggers.
  3. 3. www.directionsemea.com 4Take-Aways JUST. DO. IT. NOW!
  4. 4. www.directionsemea.com Martin Karlowitsch CEO | Co-Owner of NETRONIC Software Chief Enthusiast of just plan it Strategy Innovation Sales & Marketing Responsibilities www.directionsemea.com
  5. 5. www.directionsemea.com NETRONIC – Gantt Charts for Visual Scheduling • 42 years old company • Independent & privately owned • We visualize time- and resource- oriented planning data • 3 Business lines • Tools for software developers (Gantt chart controls) • Visual scheduling add-ins for Microsoft Dynamics NAV • www.just-plan-it.com: SaaS production scheduling for job shops & small make-to-order manufacturers www.directionsemea.com
  6. 6. www.directionsemea.com Where we came from 1. We are a software product company (and always have been one) 2. 80% of our revenue is licenses & maintenance (since more than 40 years!) 3. In 2016: 100% of the business was “on prem” Setting The Scene Here is where we came from, what we did and what I will share today What we did 1. We built a standalone SaaS product 2. We started integrating it with D365 as “connected app” What I will share 1. Experiences made building & launching a SaaS product (as the kind of company that we were ;-)
  7. 7. www.directionsemea.com The Playbook’s Agenda 1 The Job To Be Done Your key to identifying a SaaS opportunity 2 The Minimum Viable Product Your key to validating that there is market demand 3 Commitment to Focus & Long Game Your key to organizing for execution 4 User Onboarding (The Customer Journey) Your key to getting an R from the I Your keys to unlocking some doors that might feel as being closed for you today … Phantasy, Imagination & Day Dreaming Your key to preparing for scale5 We are here …
  8. 8. Subtitle www.directionsemea.com The Job To Be Done Your key to identifying a SaaS opportunity
  9. 9. ”We saw what you do for NAV. Can you do this for us as well??”
  10. 10. Subtitle Was exciting, but nothing I wanted to do every day (and what we could afford every day ;-).
  11. 11. www.directionsemea.com • Reasons for winning custom projects (not very often) • Client used an ERP, which did not have proper scheduling capabilities • As ERP customer, client was used to paying money for custom developments • Client lost customers as improper scheduling led to late deliveries • Reasons for not winning custom projects (very, very, very often) • Client had no ERP and looked at software “as commodity, not as luxury” • What they all had in common • Make-to-order manufacturing: small batch sizes • Job shop type of production: each job is unique • Delivery time & commitments most critical issue • Were compelled by visual approach to scheduling First Lessons Learned
  12. 12. Subtitle Why not building a standard SaaS product for them?
  13. 13. Subtitle • “Will not work.” • “Each manufacturing site is unique.” • “You need to understand the individual processes to consult them and make scheduling work for them.” • bla bla bla
  14. 14. www.directionsemea.com What You Should Look Out For Structural similarities: micro vertical or distinct business process Obstacles hindering companies to grow Things of which common sense says “this will not work”
  15. 15. Getting there was a long, long way. Wish I would have been aware of ONE thing before …
  16. 16. www.directionsemea.com • Purpose • Provide a theory of why an innovation is successful • so that you can manage the process of identifying innovations • rather than depending on good luck. • Basic idea • What job did you hire that product for? • Good news • Some jobs are timeless, but the solutions may not be Purpose & Basic Idea & Good News What job did you hire that product for?
  17. 17. Subtitle “People don’t want to buy a quarter inch drill. They want a quarter inch hole.” - Theodore Levitt
  18. 18. www.directionsemea.com 1. In our tech world, we generally think of ourselves as drill makers. 2. We think about features. 3. We think about attributes like bigger, faster, sexier, cheaper. 4. We see what other drill makers are doing and do the same. Let’s Be Honest We all are product & technology people … and this is a problem ;-)
  19. 19. www.directionsemea.com How We Look At Our World As product people, we tend to be blind
  20. 20. www.directionsemea.com As Product People We Tend To Be Blind Here are some competitors of the drill maker Faster Easier Cheaper With less damage For hanging pictures
  21. 21. www.directionsemea.com Defining the Job to Be Done Make this the cornerstone of your process to find innovation A „job“ is the progress a person is trying to make in a particular circumstance. • Progress • Represents movement toward a goal or aspiration • A job is always a process to make process, it‘s rarely a discrete event • Circumstance • A job can only be defined (and a successful solution created) relative to the specific context in which it arises • Dimensions • Functional • Social • Emotional
  22. 22. Subtitle Finding the Job to Be Done “One thought experiment we’ve found helpful to really grasp a job is to imagine you are filming a mini documentary of a person struggling to make progress in a specific circumstance.” (we actually interviewed people)
  23. 23. Subtitle Now I have the idea for my “product”. But, how to start?
  24. 24. Subtitle www.directionsemea.com The Minimum Viable Product Your key to validating that there is market demand (without spending a fortune)
  25. 25. Better timing: I read the right book while we were starting 
  26. 26. www.directionsemea.com Purposes • Test a product hypothesis with minimal resources • Accelerate learning • Reduce wasted engineering hours • Get the product to early customers as soon as possible The Minimum Viable Product MVP is a concise summary of the smallest possible group of features that will work as a stand-alone product while still solving at least the “core” problem and demonstrating the product’s value. The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. Perspective • Revenue (customer value, not technology) • Riskiest assumption is not whether something can be built, but rather would customer X pay price Y • If you fail, fail fast Definition, Purpose & Perspective
  27. 27. www.directionsemea.com The Minimum Viable Product An Image Is Worth Than Thousand Words (1) Eric Ries, The Lean Startup
  28. 28. Subtitle Biggest hurdle: Be 100% convinced (and get your team behind it) to ship something into a B2B market that everybody regards as “not ready”.
  29. 29. Subtitle “We only build for early adopters. If people do not like (yet) what we build, they are not a good fit for us.” See the difference? We select our (early) customers, not vice versa.
  30. 30. www.directionsemea.com Build & Measure & (Re)Build & … “If you fail, fail fast”  You only can fail fast, if you recognize that you fail Hypothesis Build Measure
  31. 31. www.directionsemea.com Value Prop Tagline Name Logo - Whom to we sell to? - Which 3 problems do we solve? - What is unique value prop? Done 100% internally Making a short and clear statement to nail down the value prop Done 100% internally Cost us <150$. Gave five 15$ jobs to different people and then continued with best www.fiverr.com Made two ½ day workshops with agency. Their job: not to come up with a name, but to challenge us with (strange) naming ideas Hired help Prerequisites for our MVP Getting our sh#! together
  32. 32. www.directionsemea.com Website Basic website. We built it on HubSpot and I highly recommend this software to achieve proper Inbound Marketing. Video 150$ on fiverr ;-) – Introducing the idea in 60 seconds. Call-to-action „Request a trial“  people could not sign up by their own. We wanted them to engage with us first. Google AdWords Best way to do Market research at controllable cost. Our Minimum Viable Product The Ingredients www.directionsemea.com
  33. 33. www.directionsemea.com Surprise, Surprise Happened in first (!) month that website was live
  34. 34. Subtitle At that moment we knew that we “were in trouble” ;-)
  35. 35. Subtitle It’s the customer, who brings a product to living. It’s repeat customers, who make it real.
  36. 36. Subtitle www.directionsemea.com Commitment to Focus & Long Game Your key to organizing for execution
  37. 37. Subtitle Having a paying customer (not “a user”) is the very latest moment, in which you need your CEO’s buy-in.
  38. 38. www.directionsemea.com Time To Make Decisions These are just examples. But you need to get this answered. Your (live & paying) customers may be around for a while. www.directionsemea.com How will they work? Which established processes need to get kicked aside for the “new thing”? How do you measure success? Decide about organization SaaS is a „long-term revenue game“. Are you prepared of a few years paying more than you earn? How will you finance this? Decide about budget & financing This is the toughest one. Will these guys do is as “side project” or will this “new thing” become their main and only focus? Decide about focus Whom from your people will you assign to the new way of building technology? Who will do the Marketing? Who will do sales & support? Decide about the team
  39. 39. www.directionsemea.com Our Decisions Disclaimer: Did not happen in one meeting; happened over 6-12 months learning & doing BUDGET Decided against a „start-up bet“. Will finance from company‘s cash flow, and the profit of the existing business. THIS IS ONE OF OUR HUGE ADVANTAGES OVER START-UPS. TEAM Development: built small team (from internally plus 1 new hire). Product Mgmt: myself Sales: myself & my brother Marketing: initially my spare time hobby; now scaling up FOCUS Development team: almost 100% focus on just plan it; no distraction; no other products; no need to deliver billable man-days Management: >25% of time spent on just plan it ORGANIZATION KPI: not margin, not revenue – but website visits, visits-to-trial conversion and new customer wins Process: introduced agile development (2 weeks sprints). Use Jira.
  40. 40. Subtitle We run this as “start-up within the company”. (Almost) no single rule that applies for the rest of our business automatically applies for just plan it. We take the right to unlearn, and to make completely new experiences.
  41. 41. Subtitle • Proven value prop P • Slowly, but steadily growing product P • Marketing engine running P • Constantly signing new customers P TIME TO RELAX?
  42. 42. Subtitle www.directionsemea.com User Onboarding (The Customer Journey) Your key to getting an R from the I
  43. 43. Subtitle
  44. 44. www.directionsemea.com Why User Onboarding Is Crucial Enthusiasm (Likelihood of subscription) Time Peak of inflated expectations Trigger Disillusionment Slope of enlightenment Plateau of productivity Comment: curve = “technology hype cycle” used by Gartner; based on ideas/observations from Geoffrey Moore
  45. 45. www.directionsemea.com Poor User Onboarding Enthusiasm (Likelihood of subscription) Time Peak of inflated expectations Disillusionment Slope of enlightenment Plateau of productivity „ONBOARDING CHASM“ Trigger User does not subscribe. x
  46. 46. www.directionsemea.com Good User Onboarding Enthusiasm (Likelihood of subscription) Time Peak of inflated expectations Disillusionment Slope of enlightenment Plateau of productivity Trigger User subscribes. From here To here Takes users .. P
  47. 47. www.directionsemea.com A New Perspective Helped Us A Lot SaaS = Software as a service SaaS = Success as a service
  48. 48. www.directionsemea.com What We Are Doing At The Moment Taking a holistic approach Organic search Adwords Webseite Landing Page Signup page & process First-time usage Repeated usage Subscription Ongoing usage Advanced usage Anonymous user Trial user Customer Basically, we currently try to define for every step the “minimum path to awesome”
  49. 49. Wait a minute … Time to recommend something to read again
  50. 50. www.directionsemea.com • In-app messaging/chat • Intercom • Tested also Drift and SnapEngage • User analytics • Mixpanel • Briefly tested also Hotjar • In-app user tutorial • Appcues • Looked also at WalkMe and UserLane Building SaaS Drives Using SaaS ;-) Tools we currently try and/or consider using to help with the onboarding challenge
  51. 51. Subtitle www.directionsemea.com Phantasy, Imagination & Day Dreaming You key to preparing for scale
  52. 52. Subtitle How would this feel, if we would have 50-100x more customers?
  53. 53. www.directionsemea.com • Features • Constantly enhance; but never ever lose sight of customers (SMB job shops) • Processes • Automation, automation, automation (e.g. ordering, payment, billing, messaging, etc.) • Sales & Marketing • Build customer success team (attract, convert, close, delight) • Technology • Build API to be „integrate able“ and „3rd party ready“ Addressing Scalability Preparing for growth
  54. 54. www.directionsemea.com 4Take-Aways JUST. DO. IT. NOW!
  55. 55. Subtitle www.directionsemea.com Let‘s Get in Touch MARTIN KARLOWITSCH CEO | Co-Owner NETRONIC Software Email: martin.karlowitsch@netronic.com Twitter: @mkarlo LinkedIn: https://www.linkedin.com/in/martinkarlowitsch/ Blog: blog.netronic.com/exec-corner (coming soon) Thank you very much for your attention (on a Friday morning after a cool party :-)

Notas del editor

  • Message = we tried to sell projects and built prototypes; so in the end, we built unicorns
    No repeatable, not scalable

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