Advice to SaaS providers: stick to your knitting

Ed Sim, of BeyondVC, recently posted on how the larger SaaS providers encounter sales process issues as they break into the enterprise sector.

The issue Ed raised is how SaaS providers have had to morph their sales approach to mimic the traditional approach employed by large on-premise software giants such as SAP, Oracle, and Microsoft. In other words - dedicated sales teams spending long sales cycles to pitch to key business-unit and procurement executives. This is a far cry from the viral marketing approach where the goal is to entice the direct user to give your software a try for 30-60 days free of charge. Top-down versus bottom-up.

It is easy to understand the motivation for a SaaS provider to lust after the enterprise space. Salesforce.com is of the size where achievement of quarterly growth targets can be difficult if it constrains itself strictly to the SMB market.

Using Salesforce as an example, going after the enterprise with your standard SaaS offering is a not always a smart move. The Salesforce value prop is predicated on two factors; (1) its "no-server-required" deployment model, and (2) how its functionality targets the needs of the SMB salesperson and SMB sales manager. While the enterprise is hip to notion of cost savings with a SaaS deployment model (factor #1), the other side of the value prop falls apart because the software is geared towards the needs of SMB, not the enterprise. Sure, there are similarities in the functional needs of "Bill." a sales manager for a 14-person manufacturer's rep firm, and "Sally," one of 3 divisional managers working leading a 2,000 person sales force. Then again, there are vast differences in how Sally and Bill manage their respective sales teams.

We echo Ed's advice to stick to your knitting. If your app is geared toward a certain audience, then don't try to over-reach into what you consider to be a tangential segment of the market. Salesforce has, for the time being, avoided painting themselves into a corner by providing a Platform-as-a-Service model (Force and Appexchange) that allows extensive customization to become a better fit for the enterprise. However, they are also a bit of an anomaly because unless you are publicly traded, you probably won't have the necessary capital to mimic this strategy. Thus, "stick to your knitting" and focus on your primary and secondary personas.