Episode 2 — How to pick a SaaS product that has the highest chance of success

By the end of this article, we’ll have picked a SaaS product to make and explained in detail the process we’ve developed to limit our chances of picking a total lemon.

Let’s dive in.

Suppose you’ve sat down and given some real consideration to what SaaS product you should make. In that case, you already stand a better chance of avoiding the bullet that's gunned down countless fresh-faced SaaS products.

And that bullet is:

A lot of SaaS founders have the same challenge. They’re a solution on the hunt for a problem.

“What can I make?” and “What would I like to make?” are the worst places to start when considering what SaaS to build.

If you start from this place of self-service, you’ll have to be the luckiest person (or team) alive to accidentally hit on a solution to a problem that a load of other people will pay to have solved.

Because that’s what we should be doing here; solving problems.

And much like the axiom that ‘There is no I in team’, there is equally no I in problem.

Building a profitable product is about solving problems and convincing your audience that your product is better than any other solution in the market - or at least, better for them.

In an ideal world, you would want to disrupt the market.

An important note about disruption

Disruption is a phrase that I frequently hear and is commonly misused. We often joke about it in the office.

So.....I’m just going to clear this up.

Come a little closer now...

Doing something slightly different from the competition is not disrupting the market.

Turning the status quo on its head and making the competition irrelevant is the true meaning of disruption.

It’s actually….disruptive.

For example, Spotify.

Like many, I used to make a weekly pilgrimage to my local record store to buy CDs. Then Amazon made it really easy for me to get them online.

Then Spotify said, “Hey, just rent more music than you could ever hope to listen to”, all for a tiny monthly fee.

They truly disrupted the music distribution industry by completely changing the model.

Amazon removed one level of friction, and then Spotify took all the friction away. Removing friction (hassle) is a common theme among disruptive startups.

Netflix has basically done the same for an adjacent industry.

These companies solve many pain points for their subscribers, mainly convenience and cost - and critically *this is important* — They were designed to do this from the beginning; it was not a side-effect.

It’s not about ‘what it does’; it’s about ‘the pain it solves’.

“Going to Blockbuster is a pain. Wouldn’t it be better if people could have what they want, when they want it, without leaving their homes?”

They started with the problem rather than the product.

You should do the same. You must.

How to figure that bit out

When your prospective audience doesn’t know why they should buy from you, and if your solution doesn’t solve a pain they keenly feel, they won’t buy.

Plus, if you don’t know what problems you solve, you also don’t know who has these problems.

You don’t know to whom you should market your problem.

You’re in a big fowl-tasting pickle, to be sure.

Rewrite the following sentence for your product:

We help X audience to Y so they can Z.

The official line from European airline easyJet is as follows:

easyJet aims to make European air travel easy, enjoyable and affordable for customers, whether for leisure or business.

Or.. simplified further (by me): Helping Europeans fly around Europe cheaply, so they can spend more cash on other bits of their trip.

If you can’t do this for your product right now, you need to stop and figure it out.

If you want people to buy, you need to be clear about the problems you solve.

As hard as it can be to hear, your customers do not care about your product; they care about their goals and the problems that stand in their way.

No Pain. No Sale.

Swipe files

I’ve made a brand positioning spreadsheet to help you with this. You can swipe it for free (it’s not gated).

Now, let’s find some pain and poke It

With all that in mind, we need to find some pain, see who else is out there solving it and then see if we can come up with a better solution.

Because a few of us are working together, we consolidate all our ideas into an idea-grading spreadsheet.

This is affectionately known as ‘The List of Mostly Bad Ideas’ spreadsheet.

Named as such to remind us that most ideas are indeed terrible and not to get carried away by a passion project that no one needs.

Better still, it helps us avoid following an idea with a poor chance of success.

Check out our list here.

Even if you’re already way past this stage and have a fully functioning SaaS, put it in the spreadsheet and answer all the questions.

It might help you reaffirm your positioning and give you more laser focus.

When starting out, this spreadsheet will help you keep your product ideas together and make sure you ask the right questions.

For each idea, we want to know the following:

• What pain(s) it solves
• Who needs this solution
• What the estimated market size is (TAM)
• Who else is doing it
• Is the market saturated
• Could we really be better / different
• Can we be passionate about it?
• Do we have any moral objections
• Estimated complexity

Keep adding ideas until you feel like you have a winner.

We identified early on that we want to target a specific audience - B2C SaaS - or, at the very least, build a tool that includes them.

We don’t want to build a tool that exclusively adds value to B2B SaaS businesses.

For idea generation, remember we’re looking for pain points that we could profitably solve. If you have customers, talk to them! Dig for some pain, and if you start hearing the same things, look online to see if you can find more people in the same situation.

One good indicator is that there are already profitable companies solving the problem.

If the market is growing and you can see some openings where you could slide in with a different / better product, then go for it.

Project management was fully saturated, and then monday.com appeared, and with some solid, consistent and aggressive marketing, they exploded into the space.

This shows that there is always room for a better product, a better business model or a more aggressive marketing campaign.

If you’re experiencing pain yourself, do try and validate that there are many other people around the world that have the same problem too, or you’ll sink time and money into a product that only a few, or worse, only you need.

Ask me how I know.

We have a shortlist - now what?

This didn’t happen overnight.

We spent time on this. We talked a lot by the coffee machine.

We spoke to our clients, did our research, talked some more, reviewed our validation criteria again, and then wrote our shortlist.

We started with 20 ideas, and we whittled them down to:

• Point-and-click testimonial maker
• Trigger-based emails and in-app messages (for upselling)
• A customer support ‘bot’ that triages support requests. Maybe an AI thing.

We’ll pose these ideas to our clients/audience and see what they say.

As I said earlier, we don’t want to invest time in a product no one wants. I don’t want to know if it’s cool. I want to know that a genuine customer base will pay for what we build.

There are excellent tools to help you find and poll your target audience en masse. And I highly recommend you make use of them.

Tools such as Catalyx can help you to access a huge potential audience and ask them some direct questions before you jump off the deep end.

Or, if you’re on a tight budget, you can do the legwork yourself by reaching out to the communities that host your customer base. It’s a lot more work, but you should invest time here.

We want to reduce as many risks as possible because it increases our chances of success.

We’re also in a lovely position of already having a customer base from other businesses. This is a massive advantage for us as we have a direct line to an audience that already knows us.

We can get their honest opinion about our product ideas. Sometimes, you can get a client to sponsor a product - but we’re not going into that for this project.

Now, before you go and talk to your audience (and client’s if you can), make sure to have a little brand positioning in place so they can understand your idea and how it would benefit them.

So, write the 'We help X audience to Y so they can Z' for each product and then conduct the polls. If you poll in different places simultaneously as we did, combine the results and then make a decision.

Getting users before we have a product

The overwhelming response was that we should build a tool to reduce customer service costs. Our enterprise customers spend tremendous sums on support agents, a huge pain point.

Even a 10% reduction in support agency costs for an enterprise company would be a significant saving. A solution that our clients indicated they would be thrilled to pay for.

Smaller SaaS companies were thrilled that their customers could be automatically hand-held through their self-service support.

As a result, the aforementioned company is no longer tied up in dealing with support requests. Instead, it can focus on the product (without harming its reputation from disgruntled early adopters bemoaning their terrible customer support on social).

Plus, their customers have a more pleasant experience and are more likely to stick around.

Everybody wins. Which is nice.

The other two ideas received mixed feedback.

The tool that makes it easier to collect testimonials was deemed ‘exciting’ and 'a good idea', but in that muted tone, that really means ‘I suppose it’s ok, but not for us.’

Our idea doesn’t have a direct or easily accountable way of affecting revenue, so it’s not a mission-critical priority for many.

Simply put, the pain is not significant enough to drive action.

If we solve the accountability problem, we could more actively turn testimonials into marketing tools.

We’ll update the Bad Ideas List, but we’re shelving testimonials.

The event-based in-app email system received warmer feedback than the testimonial ideal.

On the whole, people could see the benefit. Because that benefit could be measured - we can see how many event-triggered emails led to successful up-sells - our audience said they would consider implementing something similar.

So, this is a winner too.

However, the reaction we got for reducing service agency costs was electric. This is a natural and immediate pain with an obvious financial upside.

As such, the appetite for a solution was big. We could have sold it today if we had it now.

We’ve gone from fifteen ideas to one validated idea.

So now, we know what to build, who we’re making it for, what problem we’re solving for them and also…and this is my fave bit…we already have a small receptive audience to whom we can sell.

And we don’t have a product.

We don’t even have a name.

—

In Episode 3, you’d probably expect us to show you how to find a memorable name for your product, the best methods to get an incredible domain name and start rolling on designing an all-conquering masterpiece of a logo.

But of course, we’re not going to do any of that.

What we are going to do instead is waaaaaaay more important.  

Check it out ->

— Mark

Up Next

Episode 3 — How to use your target audience to validate your SaaS product idea

Starting with all the ways in which we can fail, so we can do our best to avoid at least the traps we can forsee.

ZERO to ONEMark Neale