#081: Prioritizing Multiple Product Lines, Industry Selection Framework, Value Chain Expansion
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One ‘How To’:
Prioritization With Multiple Product Lines
As you expand into multiple products, you'll constantly battle the prioritization game. It’s important to define your prioritization strategy, but also how/when you launch net new product lines.
Some aim to get each product to "customer happiness" before moving on to the next one. Apple is famous for getting products to near perfection before launching them.
Others get each product to the point where most customers won’t be thrilled, but it’s at a point where they won't churn either. This is the approach of most b2b SaaS companies that serve Mid Market or Enterprise.
And finally, some companies “move fast and break things” and are ok with launching products really early, knowing churn could be significant. Why? They like to see the early feedback before investing heavily in a new product line. Facebook is famous for this.
What’s your take / approach? There is no right or wrong answer here.
Let me know and I’ll share back the poll findings in a future newsletter:
One Biz Story
My Framework For Industry Selection
If you're aiming to build a vSaaS solution it's imperative that you study a multitude of industries.
Develop a scorecard that helps you pick one that gives you the best chance of success.
Below are the exact phases I go through to identify the best possible opportunity to go after.
Phase #1
How big is the industry?
How many businesses are in the industry?
What percentage are SMB’s, MM’s, ENT’s?
Are their compliance / regulatory requirements?
Is geography important?
How operationally complex are these businesses?
Phase #2
Business operating overview & customer lifecycle
SaaS stack - what do they use / how do they use it / commentary on sophistication, opportunity, etc.
Today’s consumer experience & opportunities for improvements
SaaS Competition Overview & Ranking
Phase #3
Customer calls/visits
PE/VC funds calls
Map out SaaS product opportunities that drive REVENUE, decrease COSTS or CHURN, or support compliance.
Phase #4
Continued customer calls / visits and industry conference attendance
Build out mockups / wireframes of the SaaS offering you can build and the benefits it would drive
Financial model build-out
Phase #5
Demand testing - go sell the wireframes of your SaaS solution and see the type of traction you get. Be rigurous in channel testing. It's not just about the product, you also have to find a GTM motion that WORKS in a cost-efficient way.
Continue iterating product offering until you see that your are solving a burning problem A LOT of businesses are willing to pay for
Phase #6:
Build out your product - ideally use the capital from pre-sales efforts to fund it's development.
Build & sell. That's the game!!!
The output of this though is typically a long form memo that proves to YOU, unbiasedly, that you've found something really exciting / interesting.
Remember, SaaS company building is typically a 10+ year jourrney. So make sure you choose wisely!
One vSaaS Breakdown:
Value Chain Product Expansion
Extending your product line to cover every aspect of the businesses you serve is KEY in vertical software.
Here’s an example of the Senior Center customer journey:
Study the lifecycle of the businesses you serve.
There is SO MUCH you can optimize, consolidate, improve, eliminate, etc.
When was the last time you really mapped it out?
Have a product or service that would be great for our audience of vertical SaaS founders/operators/investors? Reply to this email or shoot us a note at ls@lukesophinos.com