Organic SaaS Growth: #18 The SaaS GTM Mega Series: Field of possibilities

1. Growth strategies as a function of business stage

Consider this — An entrepreneur launched a basic functional product and acquired a few carefully selected early users to validate the idea.

The three-member founding team is now fully occupied resolving support tickets and gaining user insights to build a valuable product.

A few online marketers got wind of the traction and approached the founder to appear on their podcasts. Having listened to superstar founders on podcasts, they appeared on one of them and liked its high. A few more interviews and traffic to their landing page jumped multifold. Someone told them to double down on what works, and they went all-in — social media, interviews, podcasts, 24x7.

All kinds of users are now using the product, overwhelming the small team and delaying timelines. They can't distinguish between the ideal user and others and find it challenging to prioritize feature requests.

They managed for a few weeks, but now user complaints are piling up. Their best customers, who used to be their advocates, are dissatisfied and have left. The churn rate has gone through the ceiling, investors are sending mails after mails, founders are bewildered, and their business is a falling comet.

What went wrong?

During the early stage, the entrepreneur should have stayed focused on working with a manageable number of carefully selected ideal users to validate their idea. The last thing they needed was to get distracted by publicity.

Even though real events inspire the case study above, it's not a commentary on the adverse effects of PR. Instead, it aims to bring home the risks of mismatch between growth strategies and the stage of a business.

There are two lessons here:

1. Growth strategies are unique to a business.
2. Growth strategies are unique to the stage of a business.

Decide on key metrics at each stage of your business and then calibrate your growth strategy to move the needle during that stage. Every time your business transitions from one stage to another, growth activities will change accordingly.

A key inflection point in the life of a SaaS business is product-market fit. Before you reach PMF, all your growth activities should focus on reaching PMF. Once you find PMF, you growth activities should focus on high decibel growth. Andrew Chen has talked about this concept here.

2. What is Organic Growth?

Consider this — you have just finished building a product and, after announcing its launch on Twitter, decided to run Facebook ads to bring people on your landing page.

After a month and $2000 in ad spend, your landing page got 4000 unique visitors out of which 70 people found the concept interesting enough to signup for a free trial. 20 out of these 70 completed the onboarding as the rest either found the onboarding too complicated or could not understand the UI altogether.

At the end of the 14-day free trial, one user upgraded to the $29 a month paid plan. With acquisition cost of $2000, it will take more than five years to break even. On surveying the rest of the 19 free users, you realized that:

1. They didn't understand the product, could never use its most powerful features and stopped using it midway through the free trial.
2. The product is not valuable to them at the price point offered.
3. They didn't use the product after day one as the product lacked stickiness, and they just needed it for one time. The product was not just for their use case.

Will increasing the ad budget from $2000 a month to $5000 result in higher growth? I doubt it.

However, if you can:

• Find a group of people whose most burning problems are solved by your product.
• Meet them where they hang out a lot during their most hopeful time of the day.
• Tell them the ways your product specifically solves their problems.
• Handhold them with empathy while they absorb the first experience of your product.
• Then make them an offer that feels like a steal.
• Help them transform their lives using your product, and
• Manage all of this seamlessly.

...then, you have set in motion the wheel of organic growth.

Thus the six core pillars of organic SaaS growth are:

1. Market
2. Product
3. Price
4. Economics
5. Machine
6. Distribution

Organic growth leads to and exists at the intersection of the best fit of these six pillars.

A common misconception and attraction for Organic SaaS growth is that it's free. In reality, organic growth is low-to-medium budget instead of being free. You won't be spending huge money on paid promotions, but you will still invest time, energy, and resources researching, designing, and implementing various strategies.

Then what is the most significant advantage of organic growth strategies?

It is the possibility of building a competitive moat at the intersection of low risk, high value, low cost, and medium efforts. Someone can copy your Facebook ads, landing page, and even your pricing page, but it's almost impossible for anyone to copy the best-fit of all six core pillars of your SaaS business.

As we progress in the series, I will discuss each pillar in detail.

3. Value vs Glitter

Glitter is vanity, noise, and perception of constraints.

Vanity is far more prevalent than you would like to believe. So many people fall for vanity because it's often disguised as value.

Glitter comes in many forms; an excellent way to differentiate it from value is to see it in relation to your KPIs. For example, prime office location and podcast appearances are vanity metrics during the idea validation stage.

It will take clarity to thoughts for you to stay away from glitter, more so when it's everywhere on the internet, always trying to steal your attention one way or the other. Sometimes SaaS founders go through the phase when nothing works. During these bewildering times, they look at success stories of other businesses on social media and try to copy their growth activities - social media, cold emails, webinars, new funnels, blogs, ads, and everything in between.

This is no strategy; this is madness.

It is difficult to say which growth strategy will work for your business at the onset, but one thing is certain, if you are doing something just because ten other people are doing it, it will not work.

It may seem difficult not to fall for the noise in these low signal-to-noise times. But the risk of giving in to the glitter is multifold - loss of effort, loss of resources, loss of time, loss of other possibilities, and finally, the loss of hope.

One fail-safe to guard against glitter is to take common wisdom with a pinch of salt, for common wisdom is superficial.

4. The Quest for Leverages

A great many businesses have been built on leverages unknown or unavailable to their competitors.

Some have used the leverage of low-interest debt to fund geographical expansion, some have used the leverage of technology to beat the retail giants, some have used the leverage of deep customer insights to offer better services, and some have used the leverage of the network, aka 'who all we know' to close enterprise deals. The list of leverages is endless.

A business that has discovered and successfully implemented leverage is a business on wheels - customers love it, competitors can't get their head around its growth.

Same laws of nature govern our lives; some people struggle with basics while others achieve great heights within those similar constraints.

The truth is, leverages are the secret growth levers of visionaries.

But leverage is leverage if it's used — if someone born with a good voice and natural musical talent chooses to work as a bank clerk, it's leverage wasted. On the other hand, when a SaaS entrepreneur decides to relocate to the US a few years ahead of his business's listing on Nasdaq, it is a great leverage discovered and implemented. As a SaaS founder, your responsibility is to discover and then use the unique leverage that your business potentially has.

I am going to share two approaches to discover leverages:

1. Dissected scenario planning: I had learned this on my first job, where I used to design circuits and write code for microcontroller-based products. Over the years, I have learned to apply it to other areas of my life. Dissected scenario planning breaks a problem into many small ones and then brainstorms each part independently but keeps its relational dynamics intact with other parts. Often people don't realize, but most of the success in business and life at large is about scenario planning and making a choice.
2. Always Go Lean: Sometimes, there is a tendency among SaaS founders and marketers to continuously think about what more they can do when they should think about what more they can prune to simplify the operations and increase output. Optimization leading to improved results is a far better strategy than adding new things that make processes bulky. Suppose you are doing cold outreach, brainstorm ways to improve conversions per 100 emails instead of buying millions of email contacts. If you are doing webinars, strategic thinking should focus on improving conversion to paid users per 1000 viewers instead of webpage traffic. When you go on this quest for being lean, you will discover high output actions that will need similar efforts but result in 10x output. These high-output actions will open the gates of secret leverages.

5. The Organic SaaS GTM Model

Information is not knowledge. It has to be churned and transformed in the actionable form before you can absorb and experience it. Information that can not be transformed into actionable steps is often fluff that you should avoid. Throughout this series, I will make my best attempt to transform the insights into actionable steps and sometimes even mathematical models for you to see them in action easily. Thus I will share templates, models, documents, and other resources along with these chapters.

Today, I am going to share a model that will help you systematically approach growth. As we progress in this series, I will add more functionality to it and keep it updated with each post. All you need to do is to work along and update the model for your business.