I was talking to a couple of influencers in the Indian SaaS space and the talk revealed some interesting points:
- What Indian IT services was 30 years back, SaaS is at present.
- SaaS products are typically B2B-focussed, solving some real business needs, mostly point solutions.
- In the next 10 to 20 years, over five companies will dominate the Indian SaaS industry with revenue close to $1 billion. For e.g. Zoho. In IT services. it was TCS, Infy, and Wipro. Now it seems the first lot of SaaS unicorns are on the way with Zoho and some others.
- There would be hundreds of Indian SaaS companies with revenue over $10 million. Currently, the number is similar in IT services.
I am excited to be a part of this journey. I worked in IT services, ran an IT services venture and now I run Interview Mocha – a SaaS B2B product. At present, Interview Mocha is in the product market fit and growth phase.
I wanted to share my journey with other Indian SaaS entrepreneurs so that they can avoid the mistakes I made, and scale in a quick and efficient manner. The process, however, is not so quick. According to SaaS enthusiast Jason Lemkin, “Scaling to $1 million is the hardest part of creating a SaaS startup.”
And the first $1 million sets the foundation on which you will be building your $100 million business.
Most Indian SaaS entrepreneurs have an IT services background and don’t have an unfair advantage (like me) in SaaS. If you are one of them, you need to first unlearn IT services.
I respect IT services, it was what India needed and has made India the power that it is. But unfortunately, running a SaaS business is altogether different from running an IT services business.
In IT services - A customer feels the need and narrates the problem. You are the service provider. For a SaaS product - you are a ‘problem finder’. You need to understand the customer’s problem in depth.
Vishal Sikka says, “We are trained to solve problems, not trained to find problems”.
In fact, on several occasions, we even have solutions ready, before we fully listen to the customer’s problem.
In IT services - To acquire customers, you need to show relevant case studies, do pre-sales activities and then get a big purchase order. This means a significant amount of money from each customer.
For a SaaS product – For getting even $499, you need to create a working product that solves a real need, generate inbound or outbound demand, bring on board a user and convert him/her into a paid customer. The process is all about getting smaller orders, in the beginning, nurturing and creating value for these customers and waiting patiently for the big purchase order.
In IT services – Category leadership is not a must. There is enough market space for everybody, which includes thousands of players. Business grows with the number of head counts.
For a SaaS product – You must work for category leadership. There can only be a few players in the space. Others will not grow or even die eventually.
Now here is my experience on how I unlearnt IT services. (Interview Mocha has close to 1,000 customers from 60+ countries with US as a primary focus).
- Join an accelerator, in my case it was GenNext Hub. Their structured programme helps you learn frameworks and acquire the right mindset in a fast and efficient manner. In case you are unable to do this, there are other ways such as following influencers, blogs, events such as SaaSx, iSpirt and reaching out to mentors. Do remember, you are not the first one who is doing this. Be informed and learn from communities.
- Be clear with the customer segment and needs you are catering to. Always talk to customers, always.
- Have plans, track and measure. It helps you improve each week, each month and each quarter.
- Be ready with the product roadmap. It helps you focus and solve the business needs that matters.
- Traction triumphs everything. Customers are the best investors, partners and stakeholders of the companies. Acquire, manage and grow hundreds and thousands of them.
- Be well-funded, and decide the sources from where you will get these funds. I believe the customer is the best source. Whether it is a scooter or a luxury car, it can’t run without fuel.
- Don’t be a pressure cooker. Party regularly. Work happily. Most product companies, including Interview Mocha, believe it is very important to unwind to be happy at work.
- Don’t be rigid. After all, one of the definitions of a startup is this: A temporary organisation designed to search for a repeatable and scalable business model. Be open to change.
- This last point is an important one and applicable to most B2B SaaS companies. Unless you have a strong and valid reason, don’t focus on India as the market, at least for the first couple of years. And yes, most of the successful IT services companies weren’t India-focused.
All the best! Welcome to the world of SaaS.