Selling Your Software: Separating Fantasy from Reality
Matt: Hi and welcome to Saas-Story In The Making. This is Matt, your host, and I’m very excited today. I’ve got Stuart Marshall live Australia with me. Stuart, how are you doing?
Stewart: Very well, thanks mate. Yourself?
Matt: Good. I’m doing great. Stuart, he is the man. He is a co-founder of SaaS accelerator. He has done a lot over the years and software. He’s built tool solutions. And these are things that are used around the world. He is a speaker. He is an innovator, and he’s the bestselling author of doing it for money. Which sounds a bit crude, but I like the title. Really what that book does, it gives five core principles that you can use to support your future decision making. So Stuart, what haven’t you done?
Stewart: I’m really bad at geography, in truth. That largely sums it up. No, I’ve spent my career in it. I kind of fell into it when I was a delinquent teenager. It seemed like a good thing to learn about in the late 80s. And it felt like home from the day I got there. A sad truth that I try not to tell too many people about.
Matt: And I understand you’re an Englishman who found yourself down under.
Stewart: Yeah, I got a job in 1996 working for an Australian software company for the UK, office of an Australian software company. And it was in the world of high speed development tools. Did that for a few years in the UK and then came to Australia. Visited, loved it, and then sent an email to the boss said, can I come and work for you in Sydney? And he said yes. And the immigration people still haven’t caught up with me.
Matt: And I guess they’d never let you leave.
Stewart: No, I tried to leave but the English kept sending me back, so.
Matt: Perfect. So, well I want to learn more about SaaS accelerator. Tell me what you’re doing with that and how it’s going.
Stewart: Okay, so SaaS accelerator is a curious idea really, but one that in the modern world is an absolute necessity in my opinion, because I have a bias. But what happened was I was approached by Joanna Inch towards the end of last year and Joanna Inch is a Technical Marketing Queen, as far as I considered. Massive experience with the likes of Lenovo, Navman, has done great wonders with them. And she said to me, she’s really interested in software as a service and is a geek wannabe. And anything I say about her will diminish her utterly brilliant skills. So I kind of leave it there. But she said, Look, I’m really good at marketing side of things, but I don’t really know a vast amount about software and I want to do SaaS as a niche. Can you help me? And I said, well, funnily enough, I don’t know much about marketing, but I do know quite a lot about software. So yeah, let’s get together. And so we kind of view the world of SaaS through a very simple lens, which is there are two sides of the fence. There is the world where you’re trying to fill a funnel, a sales funnel with your side of things, where you’re trying to get the customers and you’re looking for good quality customers. You want them to come in, and then use a product and love the product and not leave. Yeah, let’s keep our churn rates down to a minimum and so on.
Now, what we find, of course, is that that’s actually not the case. What we find is that we get lower quality customers coming in because people spread the net wide, don’t focus on a niche. They go into the funnel, you get lower quality customers, who don’t want to pay as much money and also want a good fit for the product. The worst part about that is very often what you actually find is that the people making the software in the first place are very much focused on the technology. They love the tool they’re making, it’s their baby. They come along, and they make something… And they’re not really thinking about the needs of the customer specifically, they’re more interested in the technology they’re producing. The result is that you end up with an ecosystem or platform, whatever you wanna call it, where customers aren’t really that happy. And they find that they’re not being looked after, they’re not being given the level of service that they would necessarily want. You know, the platform may well work but if you’re not getting the support you need, if there isn’t sufficient training, documentation, help tutorials, all of the stuff that we think of beyond the physical, the actual software itself. When that doesn’t exist, then because it’s a subscript, typically a subscription environment or even it’s the usage environment, whatever it might be. Customers tend to look at it and they’re a bit more critical. And they said, well, look, you know, I’m not paying much money, maybe I can go elsewhere, maybe there are alternatives. And of course, if we go look in the market now at SaaS products, they’re every just about every business has 9 or 10 major competitors. We think of CRM is a good for instance here. You know the likes of Zoho, HubSpot. Yeah, I’ve seen hundreds of the things. I think I saw a statistic the other day, which is like 7000 platforms, simply in the marketing space alone.
Matt: That’s amazing. You know, similar to that what you’re talking about, I actually saw a statistic that five years ago, the average SaaS company had 2.6 competitors. Last year, they had 9.7 competitors. So you talk about entry into the marketplace. These companies they’re competing with a great many more systems and usually more sophisticated, more agile, and they really need to understand how to get better, how to sell better so that they can rise to the top.
Stewart: Absolutely, and this is so much about what I refer to as the service economy now. There is clearly a market, the SaaS market this year, I think – prior to COVID – Gartner was talking about, I think 160 billion this year. I think that’s the number for this year. Yeah, well, that’s a gravy train that’s gonna keep going for a while, right. And we can all get in on that. So there’s plenty of money out there. There’s plenty of opportunity out there. But it is those who provide the high quality service, which is something you do before and after sale, that will get the business and will keep the business. I mean, this is about turning customers into raving fans. You know, we can’t, you can’t just… It’s not the 80s anymore. It’s not the 90s. We can’t just sell a piece of software, and have all of our dirty laundry locked in customer sites. What we now have is when we sell software, we have an internet, which is absolutely awash with information and conjecture and a whole bunch of stuff about absolutely everything. And if you’re a good business, you’ll have your forums available, people can see them because they’re part of your sales collateral just as much as they’re part of the UK ecosystem.
We can’t just hide in the corner anymore, everything is out there. It’s entirely transparent, and those that are being seen to be doing the right thing. And that goes a long way beyond just the software itself and the services to go around that. Those who are doing the right thing behaving ethically and all of these things, they’re the ones who will get the business today and tomorrow.
Matt: Yep, yep. I totally agree. And I want to ask you as part of your philosophy, you’ve created the four P methodology to a successful SaaS business. So can you tell me a little bit about how that works?
Stewart: Well, this is this is… One of the one of the great trials for any service business explaining what it is that you do. So people say what do you do? Well, I help SaaS businesses stand out, become sustainable and scalable. And the next question, someone says, well, how do you do that? Yeah. And then you’re in a situation you say, okay, well, well, what I’ll do is I’ll turn up and it will be brilliant. Okay, now, well, yeah, we need to be a bit more articulate than that. So we come up with this a four point methodology. And we break the world down into this idea that there are four fundamental areas that we need to look at. The first is the platform itself, which is because I love I’m a big fan of alliteration, I said, that’s all about the solution, the systems and the strategy. So this is about the technology that we’re making, how we make it, how we do our day to day development practices, how we deal with this sort of never ending cycle where we’re continually updating software almost on a daily or weekly basis. So we look at the platform. The next side of that is then we’re talking about the people that are involved. And this is the customers, prospects, those we close, those we’re hoping to close, whatever position they’re in. And we’re talking about human centricity. This is a key subject in my book and it’s a key subject that I talk about on a regular basis. Because when we’re talking about building software, we’re not just building software for the fun of it, we’re actually building it to solve a human problem. So we need to look at our world through the lens of the people that use the software, and how it’s going to work for them. And I’m talking about how it supplies their needs, and even a few of their wants as well.
Then we’re talking about the idea of how we actually go and promote this idea. So it’s about promotion and the campaign content and conversion. Which is, you know, really getting into your side of things. So, and this is about how we tell the story. How do we take what we’ve made this tool that solves a problem? How do we present that to an extraordinarily busy market and rise above that? And of course, this is where Joe comes in, because it’s her expertise. So we’ve got this idea, we’ve got a platform, we know who we’re doing it for, we’re going to go out there and tell them. But then we look at that and go, well, gosh, that’s a hell of a lot of work I’ve got to do for myself. How do I do all of these things? I’m not expert in a great many of the actions that we need to be involved in and so our fourth piece partners. Now the idea of partners is courses that they are the experts in their field so we give them a piece of the pie and they deliver for us. And this is what provides us with the scalability. Because if, for example, I suddenly go through a new marketing campaign, and I’ve got to now train 10,000 new customers. If I’ve got a scale that within my own business, that’s extraordinarily difficult. If what I’ve done is develop a partner network that can deliver it for me, then I’ve got a great, much more flexibility in the system. We combine those four, then we get to accelerate, then we get a platform that we know is solid, is robust, is looking at the needs of our people. We’re telling a good story about it and we’ve got people who can deliver the service that we need to deliver.
Matt: I love it. I love it. Fantastic. And, you know, I’ve been in SaaS a lot of times as you know, and I never thought of it in those terms. But looking back in my experiences, absolutely those were what we were trying to deliver all those four P’s and I think that you’ve really encapsulated it and made it very easy to understand and digest as well.
Stewart: Well I like to think that I’m a reasonably well educated man, and I’m reasonably intelligent, but…
Matt: I think it’s very true, you know, getting that that product market fit and making sure that you can, you know, not just have a great product, but get it over the line, make sure you’re marketing effectively, selling it effectively. That’s a big step because so many effect comes from the attack. They had an idea or they came upon an idea, and they built a product to solve that idea. And that product can be a good product, but then then it’s a another leap to get it to the market, the market is adopted to be able to grow and scale your business.
Stewart: Well, those of us who remember the battle between VHS and Betamax.
Stewart: Yeah, the qual….
Matt: I’m not gonna claim that I know that.
Stewart: Sadly, I can’t deny it. It was a battle the Betamax lost despite by all, you know, commentary being the superior product. And we see this battle ho on, you know throughout the world in various formats. Things come along, they are good at the time, they are great on the day. But what matters is that you get fans who will use them, you get people who use them with our industry, individuals, the consumer, whatever. However, we will look at that, unless you are getting the support for your product, It’s not gonna work. It’s not gonna survive. Yeah, I mean, it’s just a simple matter of math come the end of it.
Matt: Yeah, yeah, for sure. So I want to ask you, you know, when we’re thinking about people building these new SaaS systems that are coming out. And I see a lot of good ones. But what do you look for in a SaaS company and its leaders? You know which traits and characteristics are…?
Stewart: For me, absolute number one is focus. What are they looking at? What are they focused on that? Now, phrase that I use a lot is if you’re looking at the technology, you’re missing the point. And, that’s the truth. Again, this is another theme that goes throughout my book. Nobody cares about the technology. Most people don’t care how the engine in their car works. Or they have a basic idea that fuel goes in, there’s an explosion. Fortunately, a nicely contained one and the car moves forward. Yeah, we like that, we go around. Yeah, we can use the technology, fine. We don’t have to care how it works. The problem for a lot of SaaSly leaders is that they are so focused on the problem they’re solving. So focused on how they solving it and the technology they miss the point, which is actually looking after people. So I’m interested in people whose focus is not the technology. I’m looking at those who are focused purely on the problem they’re solving and who they’re solving it for. If they’re doing that, if that’s what they’re looking at, everything else is fine. Now, there are going to be management issues, there are going to be a whole bunch of, you know, sundry requirements and things that are difficult and have to be worked through. But it starts with mindset of the individuals concerned.
Matt: Yeah, I think focus is key, and there’s all kinds of experts who’ve written on the subject. You know, you’ve got Warren Buffett and he said, Take your top 25 things you need to work on, order them and then look at the top five and forget the rest. Those are, you know, you think about when you’re planning your goals, you know, The Book Traction, really good book about how to run your business. That talks about, you know, come up with one focus for the year. This is your one overarching goal. Don’t have six, seven, because if you have that many focus, nothing is a focus.
Stewart: Sorry, I say similar thing when it comes to software design and software development. It’s very easy in the commercial world to getting to a point where you go, well, it’s all about new features, always about new features. I’ve got to get the new feature, I’ve got to get the new features. And the answer is no, you haven’t, you need some new features. But your core product is going to address 90% of the requirement. If it doesn’t do that, it’s not going to survive anyway. So you’ve already got your core functionalities in place. And the extra little bits that you can make, are not going to sell a great many of your products. They’re not. They’ll keep a few people a little bit happier. There are things that you can do in terms of the service you deliver and how you help the people use it, that are far more important than a new feature. So you know, you can have iterations where yes, we’ll have a feature iteration, we’ll do some work and we’ll produce some new stuff. Then we’ll stop and then we’ll make sure that we’re offering good service. Then we’ll fix up to make sure that bugs are fixed, little bits of enhancements are done. Everything is polished, keep improving the quality, rather than the quantity.
Matt: It’s great. So what tips would you give SaaS leaders on how to scale and how to scale globally?
Stewart: Don’t ever think about scaling globally. First one.
Stewart: Think about winning your hometown, think about winning ever, I chatted to a young guy recently he’s he and his brother are bootstrapping a thing, which is a community engagement app. And the idea behind it is really good. And he wants to roll out across Australia. Great, I mean absolutely wonderful, great, lovely ambition. But the practical reality is, he hasn’t got it in 10 cafes around where he lives. He hasn’t filled his little corner of Sydney. When he’s filled his corner of Sydney…
Matt: You gotta own your home market. I agree with you, you gotta own your home market. Global happens once you’ve got a base to go from. I get a lot of a lot of questions, a lot of guys I just put my speech on top some people from India soon. They want to break into the Australian market and the question I’m going to ask them, almost straight away, is are you the biggest game or one of the biggest games in your hometown, your home city? If you’ve scaled to where there is massive volume locally, solved a… An Uber is a great example, this Uber were really big in San Francisco. Then they spread throughout California, then they spread throughout the West Coast, then they spread through USA, whatever the actual town was. But they started small with good where they were, demonstrating the value of the market in their hometown, then they moved to the next one, the next one, the next one. Facebook exactly the same, started at Harvard, spread to university, spread, and so on. That’s how it works. You can’t have this idea of just of we’ll have world domination. It doesn’t work. And there’s a reason for this though, as well, and this is something that that gets lost a lot. We were talking the other day that if you want to conquer the US market, then a good start point will be to look like you’re a US company.
Matt: For sure.
Stewart: Now, that’s a cultural requirement. That’s not anything… I mean, there’s a there’s a few things you can do about having, you know, an American business, and being registered in the US and all that. But in terms of the way the product works, and what it does is a cultural requirement. It has to suit the culture of the people who want to use it. If I take the software I make today for the US market and go and dump it in Japan, the Japanese have a very different perspective on what screen should look, like how data that should be on the screen, how it should work, and so on. They have a very different quantum, Europe is different again, Australia is directly, I mean smallest market but again, everywhere we go, there are cultural requirements. So we can’t just make one and hope it’s a good fit. And we’re back to the beginning, we’re talking about individuals, we’re talking about the needs of humans. They’re the people who are going to buy whether you’re business to business, business to consumer.
Matt: Totally agree. Well, you’re spouting out some amazing knowledge here, Stuart, I’m loving.
Stewart: Thank you.
Matt: I feel like we could go on and on for hours, but we do have some time so I want to make sure that we fit within that time commitment. But this has been fantastic. I love it. There’s a lot of great things that our listeners can take from this that they can apply. What is the best way to get in touch with you if they want to learn more?
Stewart: By far the easiest is to go look for me on LinkedIn. Stick me in Google, stick my name in Google, I should turn up.
Matt: Okay, Stuart Marshall. There you go folks.
Stewart: Make sure you spell it right.
Matt: Absolutely. Well, this has been great, Stuart. I appreciate it. Hope you have a great rest of your day there down in Sydney.
Stewart: We’re in COVID lockdown there so it’s a nice quiet time for everybody. We’re all sitting inside talking to America most of the time, I think.
Matt: Every day is just like the last when you’re in lockdown, that’s for sure.
Stewart: Pretty much.
Matt: Well, don’t go to stir crazy on me.
Stewart: Not a chance.
Matt: All right, great, my friend. Well, I appreciate it. And take care.
Stewart: Thank you so much. And, chat soon.
Matt: All right, sounds great. Take care my friend.
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