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MenuWhat are the main challenges facing B2B SaaS startup CTOs with regard to product development?
I suppose the answer varies depending on the growth stage of the startup.
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I was just speaking with a colleague about this as we are both starting new startups and were reflecting on our previous projects together. In hindsight we recognize that one of the main challenges was proper expectation setting around adoption and engagement. If someone else is setting those expectations for you, it can be challenging to live up to them unless that person is familiar tech startup analytics. Not every business is a unicorn. You have to learn how to survive and grow when things don't go viral. Once you set expectations accordingly you're able to focus on what really matters and hone in on the user experience to identify what is sticky. You may have a long roadmap of features on your wish list, but it may not be what people want or need. Be open to pivoting and listen to your users.
One of my favorite quotes is actually by LinkedIn Founder Reid Hoffman, "If you are not embarrassed by the first version of your product, you’ve launched too late." Being in tech B2B and product development for almost 9 years now, I completely agree with this statement. There is so much you can learn from getting your product out into the world and in people's hands; invaluable lessons that you can't learn coding in a silo.
Here's a great book for user engagement analytics: Lean Analytics. Also, happy to share my experiences on this topic.
In my experience the hardest thing facing a CTO is the very nature of the ever-changing world of web applications. In other words, stuff changes real fast!
We started prototyping an MVP back in November 2015, and now since we've been looking to pivot, we've found that we're approaching our stack very differently. Frameworks have been updated, some drastically, some open source software we used is now deprecated and non-supported, other software we built our app upon has shown to not be scalable enough, and so on.
One has to just make a decision to commit to their stack and work with it, or (if absolutely necessary) make sure that the application you are building is built in such a way that you can still take it apart and put it back together again on a different stack – which we did actually.
For me personally, I like to make sure that the application is well documented from the beginning and designed first on paper (or online sketches), with a database structure clearly defined, routes documented, and the flow of the user experienced explained in human-readable text. If that is done well, then changes to the stack will have a lesser impact on the path to your MVP.
Also varies depending on product, which might be a...
1) Front facing Website
2) Membership Website
3) API
Each have their own unique characteristics.
In general though, all systems bottleneck around disk i/o, so if you have a database heavy application, ensure you have someone who understands how to design tables for extreme speed.
And if you still require more speed, run a memory resident database, which must...
1) Sync from disk to memory when database server starts.
2) Periodically sync from memory to disk during runtime.
3) Do final sync, when ever database server stops, to bring disk backing store consistent.
Memory resident databases are a bit tricky + produce blazing fast throughput.
Trying to build technology around an ever-shifting business model is super tricky.
Finding reliable help is also a common challenge.
Related Questions
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I've been working on an app concept for 6 months and built an MVP. Is it better to pay a development firm to build or hire a developer as a cofounder?
I have built two software companies by hiring out the development work. I sold one for a decent sum during the dot com era (circa 1999). I remain a shareholder in the other one. I currently work with amazing development company on behalf of one of my clients. Here are some things to consider. 1. Do you really want to give up equity? If not outsource. 2. How fast do you want to get to market? If sooner than later, outsource. 3. How capitalized are you? If undercapitalized, either outsource offshore (which runs about 20% of US rates), or bring on an equity development partner. I offer a free call to first time clients. Let's chat and I'll give you some great advice from three decades of experience. Just use this link to schedule the free call: https://clarity.fm/kevinmccarthy/FreeConsult Best regards, Kevin McCarthy Www.kevinmccarthy.comKM
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Does anyone know of a good SaaS financial projection template for excel/apple numbers?
Here is a link to a basic model - http://monetizepros.com/tools/template-library/subscription-revenue-model-spreadsheet/ Depending on the purpose of the model you could get much much more elaborate or simpler. This base model will help you to understand size of the prize. But if you want to develop an end to end profitability model (Revenue, Gross Margin, Selling & General Administrative Costs, Taxes) I would suggest working with financial analyst. You biggest drivers (inputs) on a SaaS model will be CAC (Customer Acquisition Cost, Average Selling Price / Monthly Plan Cost, Customer Churn(How many people cancel their plans month to month), & Cost to serve If you can nail down them with solid backup data on your assumption that will make thing a lot simpler. Let me know if you need any help. I spent 7 years at a Fortune 100 company as a Sr. Financial Analyst.BD
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Freemium v.s. free trial for a marketplace?
It depends on a number of factors but I'd boil it down to two key things to start: 1) What is your real cost to provide a free plan or trial? 2) Who exactly is your customer and what are they used to paying and who and how do they pay today? When you say "online workforce marketplace" it sounds as though you're placing virtual workers. If that's the case, or if you're paying for the supply side of the marketplace, the question is how much can you subsidize demand? Depending on where you're at in the process, I'd also question how much you can learn about the viability of your marketplace by offering a free version, assuming again, that free is actually a real cost to you. I was part of a SaaS project that started charging people for early access based mostly on just a good landing page (we clearly stated they were pre-paying) and were amazed at the response. I've also run a SaaS product that offered free trials and realized that the support costs and hand-holding and selling required to convert from free trial to paid wasn't worth it, this despite the product's significant average ARR. You might be better off providing a "more information" sign-up form (to capture more leads) and let them ask for a free trial while only showing your paid options. I've been amazed at the lead capture potential from a simple "have questions? Click here and we'll contact you" This is all the generalized advice I can offer based on the limited information I have, but happy to dive-in further if you'd like on a call.TW
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How do you get a product prototype developed in China sitting in the US?
It varies and it's very very specific to what you want to develop. The concrete design of your circuit matters. Also prototype building costs are usually a factor 10-100 higher than series. If you already have your prototype then you can shop around various manufacturing companies. To do that, you need Gerber files (your PCB design) and a bill of materials. You also need to think about casing: designing it and creating the mold is expensive. If you don't have your prototype yet, I recommend having it engineered in eastern Europe. Custom engineering is cheap there and high quality. IP protection is a problem. One thing to do is to distribute the work to different manufacturers. For the design phase you are safer if you design your prototype in Europe or the US where international patent laws apply. I could give you more specific advise in a phone call, getting to know a bit better what you are trying to build.GF
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How important is coding knowledge in starting a SAAS business? Should I start by learning code or just get started on the idea? Book suggestions?
I started a large SaaS Company for B2B where perfection in code is as importante as it gets. So here is my advice, DON'T CODE until you know what the Saas Really is. First start understanding what the problem REALLY is. Interview people and actually spend 100% of your time doing Customer Discovery. (This sounds easy but it is a skill you'll have to develop far more important than coding). Once you understand what the problem is, come up with a value proposition. Still no code. Then make a sell. If you can actually find things already existing that you can Hack and put it together then use that. Then make another sell. If you can sell it to at least 50 people if you are B2C, or if you are B2B you should have at least 1 customer. Once you do that then start automating some parts of the solution that you have hacked and so on. But THE most important thing is to be in constant conversations with your customers and hot leads. Remember you are a customer making machine not a coding machine, the first one is where the money is. Hope this helped you, if you want to talk more about customer discovery and customer development, just give me a call.JC
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