Sequencing Business Models: Can That SAAS Business Turn Into a Marketplace?

Sequencing Business Models: Can That SAAS Business Turn Into a Marketplace?

In the ever-evolving world of business, companies are constantly seeking new ways to grow and expand. One trend that has emerged in recent years is the transition from a Software as a Service (SAAS) business model to a marketplace model. But can this transition actually work? In this article, we will explore the potential challenges and opportunities of this shift, and provide actionable advice for companies considering this move.

SAAS, or software that businesses access online and purchase via a subscription, has become increasingly popular in recent years. Companies such as Slack, Adobe, and Atlassian have found success with this model. However, as SAAS has moved into more niche verticals, the opportunities for extension platforms have dried up. As a result, companies are now looking at consumer marketplaces as a new potential growth lever.

Marketplaces, on the other hand, are platforms where sellers provide their services to attract additional buyers. Buyers come to these marketplaces to seek out services and find new suppliers. Marketplaces often process transactions and charge a commission or lead generation fee. The idea behind transitioning from a SAAS business to a marketplace is to help businesses attract more buyers by aggregating them on a platform and aiding in their discovery of new suppliers.

One of the key challenges in this transition is changing the incentive structure for the entire company. Founders need to ensure that the growth of the company revolves around the new marketplace initiative. This can be done by either making the entire company's growth revolve around the initiative or creating a new team with separate goals and reporting lines. By doing so, the company can shift its focus towards the marketplace model and allocate resources accordingly.

Another challenge is changing the company culture and ensuring that employees are fully invested in the new business model. This often requires bringing in new blood with consumer product development backgrounds and recruiting internal resources who are passionate about the opportunity. By building a team with the right expertise and mindset, companies can navigate the cultural shift and align their resources towards the marketplace model.

Before making the transition, founders also need to confirm that there is a demand side to the market and that it aligns with their customers' business models. Marketplaces can fail if there is no actual demand for the services being offered. Furthermore, founders need to ensure that the characteristics of other successful marketplaces align with their own. Marketplaces are often built on under-utilized fixed assets, and hitting minimum scope for the demand side is crucial for success.

Now that we've explored the challenges and opportunities of transitioning from a SAAS business to a marketplace, let's shift our focus to another topic: product marketing tips to help startups cross the chasm. These tips can be applied to any business looking to expand and reach a wider audience.

The first tip is to prioritize feature announcements. Startups often have limited opportunities to hold the attention of their target audience, so it's important to prioritize feature announcements that are truly significant and impactful. By focusing on the most important and valuable features, startups can avoid losing the trust and attention of their audience.

The second tip is to stay focused and responsive with weekly sprint cycles. Just like in agile project management, it's important for marketing teams to have an agile workflow. By constantly refining their approach and having open discussions with the team, startups can ensure that they are staying focused and responsive to the needs of their audience.

The third tip is to put the product on the shelf and then get it off the shelf through effective product marketing. Product management handles the development of the product, while product marketing is responsible for getting it into the hands of customers. This involves competitive research, positioning, messaging, and getting involved in beta testing. By effectively marketing the product, startups can bridge the gap between product management and sales.

The fourth tip is to treat launch day as just the beginning. Launching a product is only the first step in the journey. Startups should continue to promote and educate their audience about the product long after the initial launch. This can be done through speaking at events, doing media interviews, hosting webinars, and writing guest blog posts. By treating their work as a book tour, startups can keep the momentum going and reach a wider audience.

The fifth and final tip is to empower customers to do the talking. Word of mouth is a powerful tool for marketing, and startups should leverage the positive experiences of their existing customers. This can be done through case studies, supporting customer talks at industry events, and encouraging customers to share their success stories. By empowering customers to be advocates for the product, startups can attract new customers and drive growth.

In conclusion, the transition from a SAAS business to a marketplace model can be a challenging but rewarding endeavor. By addressing the key challenges of changing the incentive structure, shifting the company culture, and confirming the demand side of the market, companies can successfully make this transition. Additionally, by following the product marketing tips of prioritizing feature announcements, staying focused and responsive, putting the product on the shelf, treating launch day as just the beginning, and empowering customers to do the talking, startups can effectively cross the chasm and reach a wider audience.