Building a successful software-as-a-service business requires an extreme cultural focus on the product that has more in common with consumer packaged goods than enterprise software. In my last post, I provided a summary contrast between SaaS and enterprise software business models. If you look down the SaaS side quickly enough, you should see a tight correlation of ideas around the product itself. In fact, if you can get your head around two fundamental assumptions about SaaS products, pretty much everything else follows.
I believe almost all significant SaaS failures can be attributed to violating one or both of these product fundamentals. Here are some absolutely deadly mistakes that are a direct result of failing to adhere to these tenets.
Business plan failure – Insufficient demand
Designing the product for a niche market that is too small and too demanding
Launch failure – High cost per lead and low conversion
Failure to master online marketing and to build it into the product, e.g., ignoring SEO because it is some kind of black art and prioritizing advanced product features over the ability to provision a trial account and buy online
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