扩展 SaaS 业务的方法
原文链接:Ways to Expand Your SaaS Business
If you’re a high growth company, it’s imperative to find ways to expand. The market rewards growth, and the power law dynamics of startup outcomes (i.e. most value accrues to the winners) mean that growing fast and winning your market carries outsized rewards.
Many teams approach the question of how to expand their business as a free-form brainstorming exercise. But in my opinion, this is the wrong approach. B2B software is conceptually simple:
- You build it
- You sell + market it (note that the order of bullets 1 and 2 can be flipped…)
- You support it
- You count the money
There are only so many ways to expand a SaaS business, although execution is complex and nuanced. As a result, SaaS growth is a multiple choice question rather than a free-response essay. And since it’s multiple choice, techniques like process of elimination, pattern-matching, and even guess-and-check can all work when figuring out how best to grow.
This knowledge of how to grow your business exists in many SaaS executives’ heads, but I rarely see it formalized. Tweet at us or reach out via email if you have other ideas.
Go Up-Market
The most common way to expand a business is to go up-market. Sell more expensive products to a larger, more enterprise-y buyer who can pay more.
Thousands of SaaS companies follow this path to growth – Dropbox, Jira, ServiceNow, and more. Enterprise customers pay more, churn less, and are often willing and able to increase their spend in ways that smaller customers can’t.
This strategy usually entails building out a broad but straightforward range of enterprise features. And since it’s harder to sell to the enterprise, you often need multiple layers of sales and marketing, legal, security, and other mature capabilities to have a shot. These significant GTM functions often come to dominate your company’s culture at scale (see: Salesforce, Oracle, Adobe).
Consider going up-market if:
- Your product solves a big need that you can charge a lot of money for: adding revenue, saving significant costs, or allowing businesses to become more compliant with regulations.
- You have the will and skill to build a mature go-to-market motion with a small army of salespeople and a robust marketing function.
Go Down-Market
The opposite strategy, which is much more rare, is to go down-market towards smaller customers. The advantage – you can often run a more efficient go-to-market motion by selling to smaller companies – combine some marketing with a smooth onboarding flow and the money makes itself. As a result, many dominant companies like Canva, Figma, and Dropbox have a strong base of smaller customers.
Example: Atlassian purchased several down-market products to offer cheaper solutions – examples include Trello and Statuspage.io. Figma has successfully built a suite of free and SMB-ready features to solidify their grip on the lower end of the market.
Consider going down-market if:
- Your product can deliver value almost immediately. SMBs typically don’t like to wait to see value.
- You have very strong design and product skills on your team – efficient onboarding is critical to winning in the SMB market.
Expand Product Lines (Same Buyer, Same Industry)
Sell your existing buyer a feature that is slightly related to your original product line. This strategy often increases both value per customer and differentiation: I get more $, and I also sell you a more comprehensive suite of functionality.
This is one of the hardest strategies because it requires gaining product/market fit with a new product line – as a result, many enterprise companies with slower R&D choose to acquire a proven product rather than roll the dice on building a new one. But the differentiation benefits mean that this is one of the highest payoff strategies, and almost all large SaaS businesses start new product lines over time (notable exceptions such as Zoom and Snowflake often have a very strong ability to expand into both higher and lower market segments).
Adding new product lines for an existing buyer is generally easier but has a lower payoff. Adding product lines that unlock an entirely new buyer has a higher payoff but is much riskier – for example, trying to expand from a sales productivity tool to a marketing productivity platform.
Example: Salesforce (and many, many others) built Machine Learning or AI-branded products that could be upsold to existing customers. For that matter, Salesforce has acquired all manner of products to expand into different areas of SaaS, such as support, social marketing, and ads. Adobe acquired EchoSign and moved to a Legal / Administrative buyer, which was quite different from their traditional creative buyer for the Creative Cloud. AWS and Azure have taken the opposite strategy and used their superlative product development skills to build a wide array of new product lines.
Consider expanding product lines if:
- You are very strong at product development and can build new products (e.g., AWS).
- Your market is one in which adjacent markets are predictable and product line expansion carries less risk (e.g., AWS again).
- You have a lot of money to acquire strong assets.
- Your GTM team can be retrained on a more complex suite of products.