Before launching products, the first step that successful SaaS companies take is defining the business. It's a crucial element in ensuring sustainable growth, consistency, and direction of the company. But what does "defining the business" mean, and why is it so important? There are a few different ways that this step can make or break the future success of a SaaS business.
Direction, vision, and consistency
When defining the business, what companies are doing are actually ensuring that there is a clear direction for the business. While dealing in an industry as fickle as SaaS, businesses who struggle to establish just who they are and what they do and where they want to go, will continue to struggle until they go under. While testing and adjusting is good later down the road to optimize the business and improve sales, starting off by saying "we'll figure it out as we go" is the wrong approach.
Defining the business can make sure all initial founders, investors, and employees are on the same page about what goals you are trying to achieve short term to reach your bigger future goals. It also makes sure that your business trajectory makes sense, and that you can visualize the steps that need to be taken. When you define the business from the start, you are establishing the foundation for a consistent and strong business moving forward.
Branding, marketing, and culture
Another crucial reason for defining the business early is to ensure that the branding, marketing, and even company culture are consistent. While all of these things should evolve and mature, it can be extremely difficult to grow a business where each stakeholder has a different version of what you stand for and how you present yourself. SaaS companies with strong company cultures from the beginning tend to be better at securing and keeping top talent as well.
As your business starts to gain customers and get traction, what do you think will happen if you suddenly change your whole look, or mission. This can cause confusion with existing customers, or even make potential customers unaware of who you are, especially if you haven't already established a great loyalty.
Growth and scaling priorities
How do you know what your priorities are for your SaaS business without first establishing your roadmap and mission? Growth phase can be a particularly tricky time for vulnerable SaaS companies, and without the proper foundation and processes already created, you may find your business to be in a precarious position.
How do you know who your first hires should be? How do you know where you want to allocate resources? Not all SaaS companies are the same, and while you can follow in the footsteps of some of the tech industry's best success stories, you need to define your business in your own way. Thinking early on about what you will do when ___ happens makes you prepared, agile, and forward thinking. Elements crucial in the SaaS business.
If there was a clear cut recipe for success, then all companies would be a Salesforce. But the truth is, they are not. The best you can do is follow a basic guideline of the steps you should take to build a strong SaaS company, poised for scalability and success, starting with first defining the business.
Want to learn more about how SaaS companies succeed starting by defining the business? Get access now to our new e-book: The Five Steps of SaaS Success