Innovation or Creative Imitation? How to achieve the best of both worlds

How to think about building and selling software products

Disclaimer* I’m no SaaS expert or a VC. This is purely based on my own experience running NextBillion.ai and selling an infra/API product.

As first time SaaS founders, we were quite confused on how, what, when and why to build a specific product/feature. Even more confusing was how to sell what we build. Then came an added complication of how I delegate selling to someone. Once all this was sorted, the next step was to do it efficiently, repeatedly, across multiple geographies and multiple product lines as we grow. Getting my drift? Well, I still don’t.

So if you are an early stage company haggling with all sorts of questions, this article is for you. We got our sales cycle down from 90+ days to 28 days. We had 1 customer in 2020 going up to 16 in 2021 and by mid 2022, we have 50+ customers in 20+ countries. This did not happen magically nor would it have ever happened with our old product+sales strategy. We got here in a very calibrated fashion building a very robust process across product, sales, GTM/marketing and customer support. I’m hoping our experience in early stage growth can help others answer some critical questions.

We are a long long way from building a proper company and are iterating everyday, but this has given us some comfort in the last 6 months pre series B. Also remember, lions share of revenue for Apple is still Iphones. Microsoft is Office. Amazon is AWS. Meta is news feed ads and Google is search. These guys are the most innovative companies.

Productisation (The Core)

We are a platform company and platforms are never really ready. So, the most important first step is getting your anchor product ready. Ready meaning production ready that a customer can use to run their operations, not engineering ready internally to test. I’ll discuss the difference more. For us, it was the Distance Matrix API.

Old sales cycle (When we were internal product ready) 12–16 weeks

• Almost everyone we spoke to resonated with the need of a better, cheaper and quicker alternative to Google API’s
• But our whole thesis was “innovation” beyond cheaper and quicker. It was accuracy, custom model based on vehicle type, business type etc
• For that, our engineering ready product needed data inputs from the customer which meant opening a can of worms. As first time founders, we never understood the friction, seeking anonymised data can cause
• This usually took 4–6 weeks of legal clearances, all sorts of compliance checks. We were not ISO/CSOC certified etc. So we lost out on many customers while wasting time thinking our product was ready
• In the off chance 5–7 customers gave us the data, we ran models for 3 weeks, they tested it again for 3 weeks so overall cycle was almost 12 weeks for us to get to commercials
• Then 80% of our customers said, we were better, cheaper and quicker, but for them to really switch, the accuracy % vs price comparison had to be stellar and this is where we were spending a LOT to acquire customers

New sales cycle (production ready API’s) 4–8 weeks

• As innovation was our pitch, many companies worked with us to calibrate and test whether our tech checks out. But in reality, most enterprises just wanted to get started with calculating distance and time in the most efficient way. That’s all. Everything else comes later
• They also wanted it at scale (larger matrix sizes) that load quickly (<50ms) and at times wanted to not have the headache of worrying about costs if their own operations scale
• This is where we “creatively imitated” a few existing techniques with a new era enterprise twist. We partnered with companies including data providers, traffic layers, providers of other unique datasets etc and built a state of the art matrix API which was out of the box. Anywhere in the world.
• Even though this was far more innovative, it now came in a package that customers already understood, had budgets for, so it was easy to get started
• We finished our pitch, generated a 21 day trial and boom. People began using our platform literally on day 0

Moral of the story. Innovation is cool. But innovation that does not sell makes no sense. So instead of innovating on core models, algos and building a data platform, we got a product in market that buyers were searching for, and wanting to use

In early stage SaaS, this is very important. Not just to impress investors, but for the moral of your team, general happiness of the board and to keep things rolling. Using the same productisation strategy, we now have many more modules on the platform ready to sell. They’re lightweight, nimble, ready to use and most importantly, they sell!

GTM Muscle (Bottoms up)

While building lightweight API products sounds cool and consumption based revenue is cooler. The real reason we saw traction was investing in GTM muscle from very early on. For this, we followed what top SaaS companies like Freshworks and Zoho have done. Build a massive demand gen pipeline. Service this with BDR’s. Pass onto sales only if needed and have excellent support across tiers.

We built the whole team in house step by step. The most important components of this engine are

• Demand Gen- Digital marketing, Developer forums, Graphic design, Website front and back end, SEO
• PMM- Product launches, new product research, landing pages
• Content- Blogs, Webinars, Videos, Website
• Event and PR- Sponsorships, Attending events, Partnerships

In the mapping world the number of issues are too many. Route and time being off is very common. But the reality is you cannot serve every customer, every issue globally. So it was crucial to have support but for the right tiers and communicate the capabilities clearly.

We are still in high double digit customers but early signs of this model taking off seem encouraging.

Sales Muscle (Top down)

We hired our sales team before productisation or almost when we were there. Depending on the vertical, the advice we got varied a lot. But the general rule of thumb is founder led sales should drive the company till $1m ARR and we followed the same.

We also understood relatively quickly that we needed a mid/senior level sales team as the nature of the product is very technical. As much as we dumbed down the overall pitch, it was still very technical compared to selling messenger or video conference applications. Infra sales are hard! Most importantly, we were able to crack our $25-$75k ARR contracts without sales/solutions intervention but the minute we were dealing with larger enterprises and longer sales cycles, we needed the group to keep at it.

So my advice is to invest in both sales and marketing at the same time. It also helped us calibrate in a proper data driven way on where to invest. Ex: We were not getting significant ROI in sponsoring very expensive events and having large booths. Also the overall logistical cost was super high. But we only got to know this after spending on 10 events and at the same time investing in low touch digital demand gen. So once numbers spoke, it was easy to, say, reallocate efforts away from event sponsorships and double down on digital (at least for now). Be aware this will keep changing as the company evolves

Customer Success (The glue)

If you think your SaaS business needs a customer success team, you are in a good place :) It means you are doing well. Customers are using, testing and giving feedback. Nothing feels better.

Invest in Customer Success at the same time as you are in GTM and Sales. The worst thing that can happen is you have customers and have no support to make them successful. Bring on a team, have a proper metrics dashboard on tracking success and link the CRM to the goals overall. We are still a long way in this but have begun building the foundation.

In early stages, having good sales people also helps here because of their desire to keep customers happy. Not just sign them and move to the next customer.

Finally

I began this post trying to solve the innovation vs creative imitation problem and ended up speaking about a lot of things. But at the core, my messaging is simple. Innovation is tough to sell. But important. So make something that already sells while innovating on top. If you intend to only innovate, then your product may/may not ever be ready for the market. In high growth SaaS companies, that is why you see many people building similar things over and over again. Because the market for that product always exists.