9 B2B SaaS Frameworks for Growth
Published on @June 15, 2021, by Jan Kuzel
If you're a busy SaaS founder looking to better understand how to grow your product, this article is for you. Most of these principles are actually valid across a wide range of enterprises, even if you're an owner of a cookie-making factory or freelance wedding photographer. Today we call these principles the Growth, but essentially all this is Marketing (before we started to understand Marketing as the part that is only about an acquisition, advertising, social, and branding)
By reading it, you will first understand what matters most if you want to succeed. Then what are your specific options to achieve success, and lastly, get an action list of frameworks that will be your Growth 101 and teach you the most critical questions regarding your product and how you should go by answering them. Let's dive in.
Table of contents:
- 9 B2B SaaS Frameworks for Growth
- Quality of decisions
- The myth of a great product
- How to cultivate Growth
- Questions you should know answers for
- What problem does my product solve?
- Jobs to be Done
- Customer-Led Growth
- How big is the market for my product?
- Total Addressable Market
- 8 Ways to Build a $100M Business
- What is the place of my product in the market?
- Positioning (by April Dunford)
- Positioning (by Ryan Singer)
- Does my product offer anything new and unique?
- Product-Market Fit
- Uniqueness vs. Value
- What acquisition channels will I prioritize?
- Bullseye Framework
- Acquisition Channels (proactivity vs. specificity)
Quality of decisions
Knowing what to do with your SaaS product is everything. Everything from launch, branding, design, development, marketing, positioning, pricing model, growth strategy, hiring, financing, and more. The quality of all your decisions will determine the level of your success.
We live in an age of infinite leverage, and the economic rewards for genuine intellectual curiosity have never been higher. ~ Naval Ravikant (2020)
Founders today have to deal with inhuman pressure to make these quality choices. Even the most talented and hard-working founders can hardly know everything by themselves, especially at a level deep enough to compete with the best domain experts out there.
There has never been a better time to be a nerd. In the past century we've seen a continuous transfer of power from dealmakers to technicians — from the charismatic to the competent — and I don't see anything on the horizon that will end it. ~ Paul Graham (2021)
The myth of a great product
From what I see, founders are often either development-product focused (CTO's) or sales-management focused (CEO's), a co-founder combo of these two is quite common, yet today their usual focus is far from enough to be able to succeed. It used to be, but the times have changed.
Distribution wins. The game has changed. ~ Brian Balfour (2018)
"Just build a great product" is a mantra that used to be somewhat accurate, and many still fiercely believe in it, but it's not true anymore. There are terrible products that have grown $1B+ and great products that haven't grown at all. This was always true by the way. History holds many cases of inferior products with superior strategy winning the game, like how VHS won over Betamax.
Focus on Growth is even more important today though, building great products is not as difficult as it used to be. Building perfectly aligned products that the market is hungry for, that have a distribution plan, a growth mechanism, built-in growth loops, that are well-positioned and unique, that are marketed efficiently through the right channels - that is difficult.
If we look at research done by Failory in 2021, we will conclude that the single biggest cause of failure are Growth-related issues. Designing and developing a great product is not the problem.
Another research from CB Insights from 2019 states "No Market Need" as the single biggest reason, again a problem caused by a weak Growth strategy.
So please, don't just build it and expect that they will come. They won't. Planning how they should come is a critical component of a successful product. Not to mention, don't even start building products that nobody is even asking for.
How to cultivate Growth
Ideally, it would be best if you got an experienced growth person involved. Early, because the more you postpone it, the bigger the challenge it will be for them to catch up and help you focus the product in the right direction from the get-go. If you can't afford to hire a full-time growth veteran, continue reading. Here is the list of all your options sorted by their priority:
- have Growth-oriented co-founder
- hire experienced Head of Growth as one of your first employees
- hire experienced fractional CMO and let them help you hire a growth junior to be mentored by them and do the bulk of the work
- hire an external Growth mentor on a monthly retainer to give you regular feedback
- get yourself educated in Growth by the recommended list of courses and books (coming soon)
- read this article and utilize the following frameworks to kickstart things quickly
Questions you should know answers for
These are, in my opinion, the most critical modern frameworks and techniques that will help you kickstart your new SaaS product or pivot your established product with slowed Growth. I will present them primarily with common questions founders have. As a founder, you should answer all of these questions at least on some basic level; if you can't, you will quite likely struggle, will have to get through things just based on your slow and unreliable intuition, or need to rely on pure luck.
What problem does my product solve?
Jobs to be Done
Probably the most interesting framework to explore why people really do things is Jobs to be Done (JTBD). The theory is that people "hire" things for a certain "job". The output of the JTBD framework are "job stories". For example, if you are reading this blog post, your story might go like this: "When the monthly growth of my SaaS product started to flatline, I wanted to learn more about Growth tactics, so I could figure out how to increase the monthly growth again."
If you know the dominant job stories for your product, you will be able to make much better decisions about the product's roadmap, choice of acquisition channels, and the copywriting used in marketing. You will be able to address the customer's motivation much more accurately.
Is a framework that is all about bringing the focus back to the customer. If you want to understand the problems of your customers deeply, you will need to talk to them. Talking to customers is the first step, that many avoid, despite being only the beginning of starting to understand your customers. The next step is having a system to properly analyze the insights and turn the feedback into action. That's where the CLG comes in.
It was created by Gia and Claire from Forget The Funnel. It actually heavily utilizes the earlier JTBD framework but goes way beyond it. It's like the JTBD framework on steroids, more actionable evolution of it specifically for SaaS. If you want to untangle the chaotic mess of customer feedback and get clear patterns as well as plan for your Growth, then I highly recommend diving deep into it.
What is Customer-Led Growth? Customer-Led Growth (CLG) is a strategic approach that leverages customer insights to qualify and quantify customer value, then operationalize and optimize the end-to-end customer experience. Customer-led growth does not presume what marketing, sales, or product experience your business should offer.
How big is the market for my product?
Total Addressable Market
A common blind spot that founders miss is that they will decide to build a product without even checking if there is a market for it. By now, you should understand what your potential customers want and how your product might come to meet that expectation. Perhaps you have different variations of your product that target different markets. At this point, you should take a moment and really think through what your TAM is.
8 Ways to Build a $100M Business
Now that you have some idea about the size of your market, it's time to consider what your customer's ARPA will have to be. If you have big ambitions and figure out that your TAM is pretty small, and that you initially wanted to build a product with small price, this is the moment where you can calculate estimation of the total revenue you would be able to capture with such target market and price, and maybe you realize you are aiming too low and will need to rethink your plan.
Five years later: Five ways to build a $100 million SaaS business
What did I learn from that experience? First, if you want to write a killer blog post, it helps if you take a difficult question and simplify it drastically, give it a catchy headline, and add pictures of cute animals.
What is the place of my product in the market?
Positioning (by April Dunford)
It doesn't sound like it, but how you position your product is absolutely critical. It can make a difference between $0 business and $1B business. The best (by far!) framework for positioning comes from the book Obviously Awesome by April Dunford. I actually met April in person, she even signed my copy of the book :). What she created is nothing short of amazing and I think her 20-minute video where she explains why Positioning matters and gives a compressed overview of the whole framework is a must-watch for every founder.
One quick takeaway from Positioning is realizing that your competitors are not necessarily just companies with similar products to yours, but also other alternatives (what is alternative to a Taxi? Uber? yes, but also walking), sometimes the other alternative is your biggest "competitor" and if you don't address it in marketing, you're missing out.
Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It
Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It [Dunford, April] on Amazon.com. *FREE* shipping on qualifying offers. Obviously Awesome: How to Nail Product Positioning so Customers Get It, Buy It, Love It
Positioning (by Ryan Singer)
If you still don't get positioning, then go for the talk from Basecamp's Head of Strategy, Ryan Singer. His explanation of positioning on the story of Snickers is sure to make you stop, think and question everything you thought you know about customers' motivations.
Does my product offer anything new and unique?
We already touched on the uniqueness of your product in the positioning, but I wanted to make it a separate question because PMF is a framework that strives to measure it. It's simple, ask your customers how would they feel if you stopped existing. If at least 40% would be very disappointed then you are likely to have achieved Product-Marke Fit. What does that exactly mean? Companies that grew very fast and achieved unicorn status had over 40% on that question.
I have found that it does actually somewhat correlate with the company's monthly growth rate. Basically, if you're not unique enough, you are easy to be replaced and your customers don't really feel much pressure to stay loyal to you. That's not a good foundation for great growth. High PMF is the explanation why some companies do achieve really high growth rate despite doing almost everything wrong (bad support, buggy product, lackluster sales, and onboarding). As well on the opposite, why some companies that do everything perfectly have a low growth rate, their uniqueness is low, their PMF sucks.
This aspect of uniqueness is something that founders should always have in the back of their minds. Many founders build another alternative to X, that does the very same thing with slightly different design. Often their only differentiation is slightly lower price. Well if you aim to just make a lifestyle business for yourself, make enough to sustain yourself and grow slow, that can still be fine. But if you are more serious, you will need to figure out really unique value proposition.
Something to consider here is that if you google the PMF value of famous companies, often you will find values of 40-80% on the question, but keep in mind, this was the result when they were at their most unique place. For example, Slack had 51%, but this was at a point in history where Slack was the only tool of its kind, I seriously doubt that their number is over 40% today when Microsoft Teams and countless other alternatives exist. They were able to grow and achieve a good market share while they had that massive Product-Market Fit so it's okay if it's not that high anymore.
PMF Score examples
At SatisMeter (where I work) we have a ready-made template for the PMF question that you can launch for identified users of your platform and quickly learn your score. I recommend running the PMF survey once a year and adjust your roadmap accordingly to always head in the direction of opportunity and differentation.
Product Market Fit Survey (PMF) | SatisMeter
Perfect for estimating your Product Market Fit, PMF surveys help you gauge your customers' dependency, helping you see how likely are you to gain a traction.
Uniqueness vs. Value
If you marry the ideas of Product-Market Fit (uniqueness) with Total Addressable Market (value), then you get this chart by Guy Kawasaki. As mentioned before, if you have a product that has a market, but you're not differentiated, you will have to compete on price.
What acquisition channels will I prioritize?
Gabriel Weinberg and Justin Mares in their book Traction suggest that there are 19 different channels for your acquisition and that you should pick three to start with. I recommend going through the options and assigning the top 3 channels to specific people in your team.
Here I list my summary of the channels together with examples.
Acquisition Channels (proactivity vs. specificity)
If you're confused about which marketing channels to pick, maybe this infographic from RightPercent will help you hone down your focus.
The Essential Guide to Marketing Channels in 2021 - Right Percent - Scale Your B2B Business with Paid Advertising
How do you know which marketing channels are right for your business before you spend time and money testing them? You never know 100% - but there's a methodology to narrowing down your options. Just find out where your business is on the below chart: