Book a 30 minute meeting to discuss

In the face of the widespread adoption of SaaS-based products and a thriving startup market, certain crucial investment areas are often overlooked or deprioritised during the revenue "gold rush" that follows when a decent product-market fit is achieved.

Revenue growth inevitably drives businesses, and that's perfectly acceptable; I'm not suggesting that we suppress a market sensation. However, to ensure that the market is served day in, day out, and that hard-won revenues continue to grow, it's essential to ensure that the foundations on which they're built are sufficiently attended to.

Four key foundations are crucial for your business’s success. With simple rules around them, these foundations will maintain your business’s relevance. They also help your products retain customers and the wider market’s confidence.

Derived from a career leading SaaS product delivery and service improvement, these foundations, although intrinsically technical, are actually agnostic and relevant across all functions of your business. A weakness in Stability in Technical Operations, for example, may result in an outage. Another in Sales may result in losing your best performers. You will find fault cases for each foundation in any area of your business, which makes this model an effective way to drive alignment, build autonomy amongst your teams, and also allow a shared language between functions when discussing priorities.

The foundations are prioritised from 1 to 4. They need to be developed in unison or, at worst, in sequence. A business that is insecure will only survive for so long, even if it is rock solid on Stability. Similarly, your people will only be able to execute with Speed, if the other three foundations are solid, and they are allowed the autonomy to do what they are employed to do.

These four foundations are easy to remember, critical to implement, and elemental to the long term, efficient viability of your SaaS product, the performance of your people, and the overall success of your business.

Foundation 1 - Security: The Prime Directive

If your product is not secure, you do not actually have a business. You may think you do because you have managed to attract lots of customers, and your product may even work perfectly and address the market with a killer fit. However, without security, it can be taken away at any moment, either destroyed by malware or insidiously leaked away through poor employee engagement and a lack of controls on data and IP.

This is why security must be the prime directive for all your people and the business as a whole. Whether to protect you from cyber incidents or disgruntled staff, a well-honed responsive business to all security matters is the absolute essential foundation of a SaaS business. Everything should start from here as soon as customers begin to buy.

SaaS businesses need an emergency interrupt procedure that can be invoked when even the suspicion of a breach or problem arises. Then the appropriate processes, data capture, and technical or legal responses need to kick into action. Given the data protection legislation and compliance requirements on businesses today, it's essential to recognise how availability and data protection overlap, which takes us on to...

Foundation 2 - Stability: Avoiding Customer Churn

If your product is secure, it must also be stable. Otherwise, customers will churn, even if they love the product.

This is a common struggle for many SaaS businesses, even some of the biggest ones. While the occasional outage can be forgiven, repeated outages, especially for the same reasons, will cause customers to tire and users to give up on the service. To avoid this, a continuous improvement culture needs to be instituted. It should be easy for your people to habituate and use to drive improvements and progressive service performance.

There are many methods for achieving this, but my advice is to keep the blame component out of the process and use retrospective analysis to fully understand where errors have occurred. If you know what went wrong, you can usually fix it, especially if it was human error. As Mr. Robot said (in S2.Ep4: eps2.2_init1.asec), "The only way to patch a vulnerability is by exposing it first." This applies to people as well as systems, although for it to work with people, they need psychological safety and a high level of trust within your leadership. Developing a practical measure of customer experience, especially the impact of service interruptions, is necessary to expose service issues and drive cross functional remedial action.

Foundation 3 - Scalability: Ensuring Efficient Growth

To achieve success, it is important that your product is both secure and stable. As hyper-growth looms large, it is crucial to efficiently meet the demand.

Scalability is the key to your business's growth credentials. If the platform on which your product operates is not scalable, bottlenecks, deadlocks, bandwidth and capacity shortfalls can effectively take your system offline, causing a dreaded "partial outage" and setting you back to Foundation 2. Assuming that capacity isn't an issue, the key imperative is to ensure that the technology that your product utilises can keep up with growth in an efficient way.

Although rapid growth is desirable, it is far more favourable when the costs to support that growth are not directly proportional to the growth in subscribers. While businesses may be tempted to ignore efficiency trends while growing rapidly, the investment needed to unhitch customer growth from infrastructure growth can suppress margin performance in the short term. This issue gets more expensive to address over time, so it is better to take the cost of efficiency as early as possible or, even better, to build scalability in from the start. It is much easier to do this in today's technology context than in previous decades. However, if scalability is not attended to properly, costs can grow in line with customers, which will hungrily eat into margins every day.

Foundation 4 - Speed: Fit For The Future

Speed to market, speed to adapt, speed of execution; it's a whole business thing

An old, monolithic software architecture, that has some foundational weakness or legacy within it, will drain the margin out of your business insidiously and increasingly over time. A failure to invest in core technology, beyond just adding in more and newer compute horsepower, is one of the greatest drivers of inertia and overall Enterprise Value I have witnessed. Don’t misunderstand me, many businesses are able to generate market leading positions from this situation, with massive revenues and profit, but the latent cost is often massively underestimated, if recognised at all. The impact is that more and more people, infrastructure and human intervention is required to keep the previous three foundations in check.

The onward cognitive, and practical, load across your organisation will be crippling and everything will move in slow motion. Sales will become perennially frustrated at the lack of product development. Your product will begin to lag, as disruptors climb their own growth curve, cross their chasms, and begin to take you on in the market. Your people will spend a lot of their time tending rather than growing. All this inefficiency often drives leadership to look for culprits or easy wins. Then, as is often the case, when the pressure is on, a micromanagement culture that is high on direction and short on autonomy and trust prevails. This loads even more inertia on to an already heavily burdened cultural chassis. Trust is Speed, as explained By Stephen M.R. Covey in The Speed of Trust. (Thanks to Will Seward for the book recommendation).

So, speed is the exit measure of getting the Four Foundations of SaaS in shape. If you don’t you’ll ultimately bsee the consequences in Speed; in how quickly you can respond to market changes, how responsive and innovative your staff are in dealing with change, and how easy it is to attract the best people to come and work for you. Even if you manage to avoid the other foundations becoming existential issues, if you don’t get the investment right across all four foundations, it will eventually hit your Speed.

For more information, if you have an questions/feedback, or you’d like to discuss these foundations in detail, get in touch using the CONTACT link in the footer below.

<aside> 🏢 Company Information

Privacy Policy | Cookie Policy | CONTACT | HOME | LinkedIn


© Wolfen Consulting Ltd. 2023 All rights reserved.


Powered by Fruition