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How to start a B2B SaaS venture

How to start a B2B SaaS venture

How to start a B2B SaaS venture

Six steps to help you start your SaaS business.

Diarmuid Glynn
Diarmuid Glynn

May 17, 2022

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After co-founding, selling, and subsequently departing from my first startup, I realized that, for my next move, I wanted to do it all over again– with the benefit of hindsight. So began the journey towards assembling a great team to build another innovative SaaS product.

The second time around, I wanted to follow a more systematic process to decide what product to build. Below is a high-level overview of that process, in the hope that it might help other budding entrepreneurs.

TL;DR: find a common business process that, re-imagined with modern tech, benefits a decision maker with a budget.

1. List some candidate business processes

You'll have to either mine your own experience or seek input from others to identify a list of candidate business processes. If you're having trouble finding interesting business processes: leverage your network, and if that fails: try cold-outreach.

Apr 2019
I focused on mostly HR-related processes that I was familiar with from my first startup such as office layout, org chart management, and sales commissions. I probably invested dozens of hours in this research process.

In the subsequent steps, dispense with the less promising concepts. You can't explore every idea in full depth, so you'll need to use your best judgment to identify where the opportunities lie.

2. Understand how those processes work and why

Document all you can about how each candidate process works. You need to establish the process requirements, and how they tend to vary between companies. It's also critical to understand the stakeholders, and the value they get from the process.

May 2019 - Jul 2019
I organized lots of information (process requirements, high-level concepts, etc) in Google Drive and shared it with various stakeholders.

3. Verify that a decision maker with a budget cares about this process

There is little point investing time in a business process if nobody with a budget cares about it. Benefiting the company as a whole is not enough. You need to have a rough idea of which "role" in the company would buy your product, and why.

If an individual with a budget doesn't care then effectively the company doesn't care either.

For instance, if you're simplifying financial forecasting / reporting in SMBs, then you probably want to target the CFO. If you're optimizing recruitment at large enterprises, then you want to target the head of recruitment (or whoever above them has a budget, perhaps the VP of HR).

Sometimes it's tricky to figure out who "cares" about a problem, what their typical "title" is, and whether they have a budget or can influence someone with a budget. Answering these questions can take time, but it's a critical exercise.

Another issue is that sometimes a problem is too diffuse. You might be tempted to say "this problem hurts everyone a little, so the CEO is the target". But the CEO has a short list of things they care about, and you need to ask yourself whether this problem is in their top 10 (or, ideally top 3) list of problems. If it's not, then you're going to have a tough time selling to the CEO.

4. Write spec detailing how the business process could be implemented with modern tech

My preferred way of doing this:

  • Write the spec with Google Docs
  • Balsamiq to create UX wireframes, which are annotated and pasted into the Google doc

These specs should mostly consist of mock-ups, showing the main workflows in your software:

The goal at this stage is to document functionality, not to finalize the UX.

Jul 2019 - Oct 2019
I wrote a couple of hundred pages of specs at this stage, for several different product concepts. Check out an excerpt from my ~40 page office layout spec to get a flavor of the content.

5. Obtain feedback on your spec from relevant stakeholders

Collect as much critical feedback from relevant stakeholders as possible, updating the spec as required.

Nov 2019
We interviewed dozens of people in sales and finance, and it became clear that sales commission was a real problem for lots of people, and that we could potentially build a great solution. Fragile spreadsheet-based solutions were prevalent, salespeople were frequently frustrated, and incentive plans often failed to achieve the company/employee alignment that was their supposed purpose.

6. Pick whichever candidate spec seems most promising, create high-quality prototype

Figma is an awesome tool for prototyping software. Implement your spec as a sequence of workflows in a Figma prototype.

You're now ready to UX test, pre-sell, and potentially fundraise based upon your prototype!

Dec 2019 onwards
We built a Figma prototype and collected feedback from early potential customers. The prototype and customer commitments played a critical role in our fundraise successes: €1M pre-seed, €3.5M seed. Our seed round was led by Cavalry, who I can highly recommend.

Final thoughts

There is no "silver bullet" that guarantees startup success. Agility and good judgment are more important than unthinking adherence to this, or any other, process. So don't forget to assess the degree to which your circumstances differ from my own, and consequently whether to heed or ignore the particulars of my advice.

And most importantly of all: good luck in all your efforts!

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