In the third webinar of our collaborative webinar series with Lighter Capital, we examined the ways you can build SaaS products that scale. Once you’ve brought your product to market and begin to understand your audience, how do you make money? Dustin Bruzenak, Chip Pedersen, and Jim Moar share their expert opinions.
Three Metaphors to Consider
Jim tells us, “Think of growing your business like a series of rocket launches. Hopefully the first rocket is successful, but naturally, it’ll reach a point of returning to earth. You need to be well prepared for your next rocket launch…
“My lead VP had two good ways to think about this. One, your market growth is a set of concentric circles. Markets 2, 3, and 4 are the next rings surrounding the first market. A mentee of mine started with solo yoga entrepreneurs. He’s now moving into yoga studios and has a plan in place to move into broader areas of fitness.
“Another concept is that of a Trojan Horse. With that, you can gain quick entry into a marketplace, and figure out what you can add to your offering for someone who’s already familiar with you.”
Make Plans, Not Promises
VCs want to see you being thoughtful about ways to move past your first market. Do that through careful strategy.
Dustin shares, “VCs are sick of seeing someone say, ‘This is a trillion dollar market, and we’re going to take 1% in right away’ – they want to see the specific steps you plan to take. If you have a planful way to attack that market, along with realistic goals, your investors will be impressed. They’re investors, they really don’t get dollar signs in their eyes. You aren’t going to blow their socks off with big numbers. That strategy may have worked in 2007, in the era of the App Store boom, or in 1998, in the era of the web boom. Those days are long over. If you go to the right investor, they understand the market already, and so you need to be realistic and specific when you want to partner with them.”
Little Things Mean A Lot
From his extensive experience working in the game industry, Chip knows that little adjustments and experiments can bring significant rewards, and that it takes many of these small victories to add up to success.
“When we went to the moon, we didn’t go to the moon immediately. We got it off the ground, got it into orbit, tested getting to the moon, and THEN put a human on it,” Chip explains. “Do a series of small trials and experiments. In real estate, they say what matters is location, location, location – with our field, it’s content, content, content.”
“In our bowling game, we found out players liked custom bowling balls. With fishing games, they wanted different types of lures. So we just gave them what they wanted! These small things made big differences. It’s like watering a plant and watching it grow. If you can get to the point where you do experiments every two weeks, that’s great. That’s what the big companies are doing now, even at their massive size. You want to make sure you’re making the right bets with your money, and that’s by making very small ones. The goal is to learn with each step. One or two steps might not necessarily move your needle, but you grow a great business by combining those small steps.”