For B2B SaaS start-ups, what you do in your early days of marketing and sales can set you up for long-term success (or send you back to the drawing board).
As you begin your GTM strategy and marketing mix, startups face two different challenges. You’re often in an underdeveloped or new market, or you’re in a well-established market with heavily funded competitors.
Regardless of market definition, you must bring your minimum viable product (MVP) to market and achieve product-market fit (PMF).
Before we get any further, let’s break down these two acronyms:
A minimum viable product is the most basic version of your SaaS product that you are able to put in front of your core customers. It may not look pretty, but customers should find it useful enough to use it on a consistent basis in order for you to gather data and receive feedback.
Pro tip: An easy way to determine whether your MVP is actually viable is by simply asking those customers: “Would you pay for this product?” If they say yes, then you now have a viable MVP.
Defining Product/Market Fit is simple to identify: you have customers who pay and stay. Companies that achieve PMF likely have around 5 to 10 customers, which typically equals out to $1M in ARR. See the shortest definition of PMF here.
To best understand which stage your product falls under, it’s important to learn about three things:
Here’s a high-level overview of what this process typically looks like for SaaS start-ups.
Once you’ve reached PMF, take a breather and pat yourself on your back. That is no easy feat, and you deserve to celebrate. However, make sure you come back with a renewed sense of vigor because you’re now ready to scale.
Going from MVP to PMF and PMF to T2D3 growth are two of the biggest challenges B2B SaaS companies face and oftentimes fail to achieve. This tends to happen because they either rush through the process and move onto the next step before they’re ready or they end up focusing on the wrong KPIs to signal success like the number of leads instead of feedback from leads.
That’s why understanding this entire process and where you currently stand in the process is extremely important as a leader. It will help you set realistic goals for your team and ensure they are spending their time on the right priorities.
Becoming a unicorn doesn’t happen overnight contrary to what it may seem like on the outside. It usually requires dedication, commitment, and it doesn’t hurt to have a team of professionals who have experience working with B2B SaaS startups.