Experience the revolutionary SaaS inside sales model for small businesses

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- The greatest thing about SaaS is that it's completely equalized the playing field. Think about it, a CRM system or a marketing automation system or even a project management system that is used by a very large sophisticated enterprise is also used by a small business. A two-person company or even a 50-person company. And that is incredible because software allows these smaller companies to really compete with these larger companies in terms of how they run their business, how they market, how they sell, all of it. This makes for a massive opportunity for SaaS founders like us, because we can go after this really large total addressable market called SMEs or SMBs in a certain way if you're in the U.S., depending on where you are. These are small, medium size businesses. Generally speaking, the definitions do vary. Up to 500 employees, maybe going up to 750. And these are businesses that essentially focus on the lower end of the market. And the power in this is that it's a huge total addressable market. They're hungry for software and ways to differentiate. They do have budget for software but at the same time, it's also hypercompetitive because obviously, it's so lucrative. So here's the big question. How do you actually win and build a really massive SaaS business serving the lower end of the market? Massive market, lots of opportunity. How do you win? So in this episode, I'm gonna walk you through the three principles you absolutely need to know to build a really massive SaaS business, serving the SME or the SMB market, the lower end of the market. Intro. (upbeat music) What's up, everybody? Welcome to Unstoppable. I'm TK and on this channel, I help SaaS founders like you grow your SaaS business faster with an unstoppable strategy. Now, if you are new to this channel, welcome. I drop an episode every single Sunday with actionable strategies on how to grow your SaaS businesses faster from the trenches. So if you're new, be sure to hit the Subscribe button and that bell icon. That way, you'll get notified every single time I drop an episode with the TK energy. Now, if you're already part of this channel, if you're part of my coaching program, if you're part of this community, my people, welcome back. It's really awesome to see you over here. So when I started ToutApp, this was my last SaaS company, we pioneered the sales engagement space. Sales engagement was not a thing when we started it. And so we had to go after sales people because no sales leaders were thinking about systematic outbound emails. So we had to go after sales people across different industries, different size companies and say, "Hey, if you wanna generate pipeline for yourself, use our emailing tool to actually send out emails, cold emails so it's streamlined and automated." And needless to say, we couldn't quite get the sales people in the super large companies 'cause those systems were locked down. But we were able to get sales people in all different industries in the lower end of the market. And through that journey, obviously, you know, we scaled and we went upmarket. We eventually sold to the enterprise and we sold the company to Marketo, which is a marketing automation tool focused on the mid-market, which went on to the enterprise. Anyway, all of that happened. But to get that initial traction and to break into the market, to bring this new tool, this new category, to build this category, we focus on the lower end of the market and figured out how to build a lot of revenue really quickly. So in this episode, I'm gonna take everything that I learned and distill it down to the three principles you absolutely need to know to actually build a massive SaaS business, focusing on the lower end of the market because the dynamics there are different. So if you're excited to dig into principle number one, go ahead and smash that like button for the YouTube algorithm. It really likes it when you do that. And let's go into principle number one. Principle number one, if you're targeting the lower end of the market is to be product-led versus having a talk to sales or a demo. This two reasons for this. If you think about the lower end of the market, these are essentially people that are leading, managing, running the business and also doing. They are kind of like founders like us. In fact, we are SMEs, technically. We like to call ourselves startups, but still. And in that stage of the market, people are super busy. The last thing they wanna do, the last thing they have time to do is to book a demo or to talk to sales. Also, when they do buy the ticket size, meaning the average deal size, it's not gonna be that large to begin with. They're gonna wanna tip dip their toes 'cause they don't have a lot of budget. They're lowering in the market. And so because of these two things, the best thing that you can be doing is to actually remove friction in terms of the sales and marketing process and actually be product-led. And what that means is it doesn't necessarily have to mean that you put them right into the product. What you wanna do is get them into some sort of an aha moment. This could be getting them into the product and starting a free trial or do going for a fremium version. This could also be getting them into a separate SaaS tool that helps them understand their business and the transformation you're trying to teach them. It could also be you're educating them in a certain way and getting them into the product in a different kind of creative way where you're educating them and they're using some sort of software component but it's not necessarily inside the product yet. There are lots of creative ways to be product-led today. And the key here is if you're targeting the SMEs, the small, medium size enterprises or the SMBs, small medium size businesses, I know slightly different definitions but roughly the same category, the lower end of the market, you have to figure out a way to be product-led where you get them to an aha moment as early as possible versus asking for their precious time that they don't have to get on a demo or on a sales call. Once you've figured out that piece, the second principle that we learned that really helped us was to establish a fremium model and a free trial model. And this principle goes in two parts. The first thing that we did that really worked well for us was just to move all the pressures and said let's get them into the product. And for us, it was the product. We also had a manifesto that we got them into, but really, it was like, let's get them into the transformation we're trying to do and get them into an aha moment. The other thing that we did is we recognize that look, they are not ready to spend money. They're not blowing what money. They don't even know if this is a transformation in that very little time. So we wanted to remove as many barriers as possible to get them into the product. We didn't ask for a credit card. We didn't even tell them that it's gonna cost a certain amount in the early days. And then eventually, we switched from the fremium to a free trial model saying, "Look, it's gonna cost $30 a month, but you can start right now completely for free. And you don't have to think about anything for 30 days and really see if you can get value from the product." And the reason this was important was because the lower end of the market while they do have budget, while they do have money, are generally very conservative in spending that money. And so the bar is that much higher to prove that you can actually deliver value to their business, to their day-to-day lives. And so you wanna get them into the product as quickly as possible. Along the lines of that principle, what was super important for us was to actually figure out a clear path for upgrades and upsells. This meant that if we just had the fremium version, we had to craft the product and the experience in the product in a way where they would need to upgrade to a higher tier soon enough. For us, it was very simple. You can send five emails for free and then you had to upgrade. Or you can use it for 30 days and in order to unlock the additional feature, you had to upgrade. And we were very, very thoughtful about how do we get them to an aha moment for free and then actually asked them to upgrade as they use the product more and see the value in the product. This is super important because this is the only way you can actually make the math work in the lower end of the market. Lower end of the market is high volume, high churn. That's just the nature of the market. So that means that you have to bring on new revenue and customers faster than you are losing customers. Otherwise, you'll never hit escape velocity. And the only way you can do that is by focusing on getting people into that aha moment, which is principle number one, being product-led, and also making sure that the people that are successful are spending more and more and using the product more and more. And that way, the lifetime value of the customer goes up. The stickiness goes up for the ones that stay. And as you add more people, even though a bunch of them will churn, the ones that do stay will end up paying more over time because they get more value from the product. So principle number one is product-led. Principle number two is free trial or at least a fremium, depending on what you can afford depending on the unit economics, but having a clear pricing strategy and a product activation strategy is super important. Now I do have principle number three, but before I go into that, let me just pause here for a second. I start to see the power in this. I'm starting to see the power of how this huge total addressable market, this incredible opportunity, although competitive, you can actually go in to win if you do it in a differentiated way. If you think about removing the friction, if you think about the lifetime value of the customer, if you think about the activation points, if you think about these pieces, are you starting to see how powerful this can be? It's very lucrative. It's very exciting. And you can build incredible massive SaaS businesses by targeting this market. And then once you hit escape velocity in this market, you can always choose to go up market. We certainly did this. If you're starting to see the power in this, can I just get a yes in the comments below? Also, smash that like button for the YouTube algorithm. It really likes it when you do that. Now, if you're at that stage where you're looking to grow your SaaS business, depending on the market you're going after, likely the SME market or the SMB market if you're still watching this video or maybe not. If you're looking for a clear go-to market strategy on how to grow your SaaS business faster, I encourage you to check out my SaaS go to market coaching program. I'll tell you more about it at the end of this video. I'll link to it below, but let's go into principle number three because this is what really brings it together. Principle number three is if you're going after this massive market, that is competitive, but massive, which means that there are a lot of treasures out there, right? Then you have to have to nail a wildly differentiated value proposition and messaging. It is a noisy world. These business owners, these managers, these employees at SMEs are getting hit up all day long because there's lots of SaaS companies that are going after them. And a lot of times, you know, with the founders that I work with, I see two modes. One is I'm not touching the lower end of the market. I'm just gonna go off market right from the beginning. And that's perfectly fine. That's a decision you can make. Another one says, "You know what? It's too early to really convince the higher end of the market so we'll start in the lower end of the market. We'll get this working and then we'll go upmarket." And that's fine too. And I've done that myself and I've helped founders do that as well. But either way, what you absolutely need to nail to really differentiate in SaaS today is this principle number three. You need to have a wildly differentiated value proposition and a message. Why should they use your software? What does it mean for them? Why should they do it now? 'Cause people are busy, especially in the lower end of the market. And this means that you really have to craft a perfect value proposition. You really have to position your product in a certain way. You really have to get the messaging and the narrative around your product in the right way. And you have to take it to the market and educate them about it. If you don't do that, you'll be yet another SaaS and people will ignore you or not even see you and you'll never see the light of day. And this also means that you actually have to have a very well-defined go-to-market strategy. You have to get specific around what part of this SME market that you're going after. That's where an ideal customer profile comes in. You have to think about, how do we actually position ourselves and message this and have the narrative? And you have to think about how do we actually bring this message in front of these people. That's what this principle number three is about. You have to have a wildly differentiated message to bring to this market. And when you do, they'll see, oh my God, we need to do this. And then they'll actually go into your product get to an aha moment. You'll actually get them in with very little friction but over time, you'll be able to convert them and they'll pay more and more because they get hooked. And as you start to do that, you'll start to scale. You start to build a massive company and you'll also have the option to go upmarket as you scale and hit escape velocity. That's the power in this model. So to recap, if you wanna build a massive SaaS business going after the lower end of the market, SMEs SMBs, then principle number one. You have to be product-led and think about how to actually get people into the product quickly 'cause these people are really, really busy. You have to learn how to actually remove as much friction as possible, including your pricing strategy. So getting them in under fremium or a free trial without a credit credit card and then ensuring that they actually upgrade is a clear upgrade path increase at LTV . It's super important. And then number three. you actually have to have a differentiated message. A differentiated value prop that you bring into the market and you have to have a way to bring it into the market. And you do these three things, you'll be able to build a massive SaaS businesss, serving the lower end of the market, which will also create optionality for you to eventually go upmarket if you wanted to, which is also awesome. Now you might be wondering, okay, how do I do these pieces? How do I actually build out a differentiated message? How do I create a proper pricing strategy? How do I actually bring this message into the market so that people discover my product? How do I instrument my product? This is exactly what I go into inside of my SaaS go-to market coaching program. Inside of this program, we help you actually craft a proper scalable go-to market strategy so that you can actually take it into the market differentiate yourself and start to scale, depending on the specific part of the market you're going after. We have over a hundred founders that we've worked with inside of the program. You work directly with me when you join. And we've worked with companies that are in the lower end of the market, in the mid market, in the enterprise. And we know exactly how to craft a differentiated go-to market strategy to help you scale for each of the segments that you're going after, depending on your company's strategy. So to learn more, just go to tkkader.com/gtm. tkkader.com/gtm. All the details are on the program are over there. And if this looks like a fit and you'd like to work together, you can fill a little form and you'll get on a call and we'll dig in to exactly what your challenges are , if we can help. And if we can't, we're off to the races. We'll start working together right away to help you build a differentiated go-to market strategy so you can build a massive SaaS business and accelerate your path to the next stage of growth. Just go to tkkader.com/gtm. Lastly, if you got value from this video, please smash that like button for the YouTube algorithm. We put a lot of love into these videos. We're bringing you actionable tactics from the trenches. It's not theory. We're actually doing this day in and day out. I've done this for the last 15 years. I now work with founders to do this. So we wanna bring in as much value as possible. So be sure that subscribe button and that bell icon 'cause I drop a video every single Sunday. So that way you'll get notified on future videos that I do. And also you have a fellow founder, a team member, the part of a Slack community or WhatsApp group that would get value with this kind of type of content, please share it with them. It just means the world to us. And lastly, remember, everyone needs a strategy for their life and their business. When you are with us, yours is gonna be unstoppable. I'm TK. We'll see you in the next episode. (melodic music)