saas-company-strategy

Who do you want to be when you grow up?

Stijn Hendrikse
Aug 1, 2019

Are you a daisy or an orchid? Both are great. But you can’t be both.

When assessing the competitive playing field of any Software Product Category, we can use the following model:

 

saas-company-strategy-1

 

It’s important to realize that each of these quadrants provides a healthy opportunity to create a valuable, profitable business. It’s hard to optimize for multiple quadrants though.

Here are some of the trade-offs that are easier to master when you know what you want to be(come):

Technology

  • A value player will invest in technology to bring down the on-boarding-, service- and operating cost of the SaaS Service (the so-called “Cost-to-Service”, CTS)
  • A Premium player will invest in R&D and Visionary Product Leadership.

Go-To-Market

  • Premium niche players will likely go direct.
  • Value and Volume players will allow a channel to control (part of) the relation with the market, and just add their unique piece of technology to the value chain.
  • Niche players will hire experts in their vertical or segment to give them unique credibility and specialization in a small (but profitable) market.

Customer Success and Support

  • A value or volume player will optimize for low-cost, self-service support, and easy on-boarding.
  • Premium players will invest in Customer Success teams, consulting departments and paid premier support services to maximize individual customer delight.

Strategy

  • Niche and Premium players will likely build (and protect) their Intelectual Property.
  • Value and Volume players are more comfortable with licensing, buying or partnering.

People

  • Value and Volume players can get by with great utility players who can get the job done for a relatively low cost.
  • Premium and Niche players probably have to pay a premium to get the best people for their sales, services and engineering teams.

Marketing

  • Finally, marketing will be very different for each of these 4 quadrants. The difference from branding, positioning, messaging, pricing and campaign perspective are vast.

So make up your mind, and then optimize for the quadrant you pick.

Subscribe by Email

No Comments Yet

Let us know what you think