Secret To SaaS Success: Recognize That You're Not Selling Software

By Dharmesh Shah on March 7, 2017

I've been working in the software industry for over 25 years. Pretty much my entire professional career (if you don't count that stint as a night clerk at Red Roof Inn).

Back in the late 1900s, when you sold software, you sold software. What your company produced was a large set of properly aligned bits (software). You then got those bits to your customers somehow (floppy disk, DVD, FTP, whatever). And, then those customers installed those bits on a computer of their choosing and if all went well, they'd get some value out of it. But, that wouldn't always happen. Often, they'd fail to ever install it and get it working. Or fail to learn it. Or fail to use it properly. Basically fail to get the value expected -- or the value promised, or sometimes any value. Ironically, the higher the purchase price was, the lower the chances of seeing success. History is replete with multi-million dollar software purchases that never saw the light of day. As an entrepreneur, this pains me. Most start software companies to make money, they start companies to solve problems.

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Now, fast-forward to today. It's 2017. Many software companies are now Software as a Service (SaaS) companies. What they produce is the same as before: A large set of properly aligned bits (software). Only now, instead of shipping those bits off to the customer somehow, they "host" those bits on the customers behalf and off the benefit of that software as a service.

Makes sense, right?

Now, naive folks that are new to SaaS often make the mistake of thinking they're still selling software. They're not. Because...

SaaS = Success as a Service

If you're in the SaaS business, the only way to survive in the long-term is not to just deliver software. It's to deliver success. You have to actually deliver the benefit that the software is promised to provide. And, if the customer fails to get that benefit then you have failed. Do not pass GO, do not collect $200.

The reason for this new bar is relatively straight-forward. Back in the old days, you got paid for your software upfront and though you wanted your customer to succeed, and maybe even labored to help them succeed, if they didn't succeed, well, such was life and you moved on. Today, if the customer doesn't succeed, they cancel. In a month, in a quarter, in a year -- but eventually, they cancel. And, more likely than not, if they cancel, you've lost money. The math won't work.

So, to survive and thrive in the long-term, you can't sell software, or even access to software, you have to sell -- and deliver -- success.

Let me give you a concrete example and some lessons learned from my company, HubSpot, which provides marketing/sales software. HubSpot is a textbook SaaS company. We're about 10 years old, and we're now public [NYSE:HUBS].

Here's what we invest in (because it works):

1. Onboarding. If you help customers get started with your product, they are more likely to do so. Ideally, your software is so simple and intuitive and easy that customers just get up and running and succeed on their own. But, if you have a relatively broad or sophisticated product, customers will often need help. In those cases, onboarding works.

2. Education. HubSpot has HubSpot Academy, which is a team that helps educate people on inbound marketing. Interestingly, they don't just invest in HubSpot customers, they educate the broader marketing industry.

3. Community. HubSpot hosts inbound.org, an online community built for marketers. It allows them to find the best content (curated by the community itself), discuss topics of interest, post jobs and find jobs. It acts as the premier professional network for marketers. The community has over 200,000 members now.

So, why does HubSpot spend millions of dollars educating and supporting marketers? It's simple. because we've realized that our success depends on the success of our customers.

We've learned and accepted that we're building a "Success as a Service" company.

Topics: saas
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Why This New Chatbot Is More Likely To Get You Promoted Than Fired

By Dharmesh Shah on July 14, 2016

Confession: For the past several months I've been furiously coding away on a new project as part of HubSpot Labs. It's called GrowthBot. It's a chatbot for marketing and sales people -- and anyone looking to grow a company (like startup folks).

The launch has gone well, and my bot is currently happily handling thousands of messages. Things like "show me companies in california that use HubSpot" and "who are the top influencers about landing pages". GrowthBot can answer most of these, and thousands of others. So, overall, it's been a good day.

But, anytime bots come up in conversation (no pun intended), especially with media folks, people seem to frequently wander into the "are bots going to replace humans?" arena. Some wonder "will this bot cause people to lose their jobs?" I can't speak for all bots, but for GrowthBot, the short answer is no.

I'll explain with a visual:

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The way I like to think about it is not, Human vs. Bot, but Human + Bot. The bot amplifies what you can do. The bot is an exponent.

It's not smart enough to write a blog post -- but it can tell you what posts about a particular topic people are sharing. You just ask: "what are the top posts this week on product marketing?"

It's not smart enough to automatically run a campaign to drive traffic to your website -- but it can answer questions about how your website traffic is doing. "How was organic traffic to the site last month?" And the bot also tells you how that compares to the prior month. You can compare results year-over-year (Yes, June is a slow month, but is this June slower than usual?)

It's not savvy enough to close a deal for you, but it can help you find potential customers by asking: "show me law firms in Boston that use Google Apps". (Assuming you're trying to sell SaaS software to law firms and are looking to find firms that are modern enough to use Google Apps).

So, you're still doing the creative, meaningful work.   GrowthBot is just making you better, stronger, faster. It gives you access to information you may not have had access to before. It can surface insights that you may not have come up with on your own.

By the way, it's completely free and easy-peasy to try out. Nothing to download. Nothing to install. No forms to fill out. No credit card required.

Just head over to http://growthbot.org and say hello. I'm not saying it is guaranteed to get you a promotion, but you never know. It may just put that small spring in your step and data in your head. 

 

 

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It's a bot to help you with your marketing and grow. You can research your competitors, improve your SEO and a lot more. http:/GrowthBot.org