Hola from Playa Del Carmen,

You’ve got an in-house application that you think everyone in your industry could use, now you just need to turn it into a business.

• What pitfalls are you missing in your SaaS journey?

• What are the steps you need to take?

• Where should you start?

I have done this multiple times now, failed more than I like to admit, and finally learned how to do it the right way.

I was requested to write this article by a client and friend of mine and as I started writing it, I realized there was no way it would all fit into an email. So I wrote a long-form, 6k word article on this as well which is published here.

If you want the short version, read the email below. If you want a deep dive, take a look at the article.

Enjoy!

A lot of successful SaaS systems start this way, but a lot more fail. But yes, I am telling you there’s a chance you can get your system to market. If you’re going to do it though, there are a lot of things you’re going to need to know.

🪩 Is it worth it? Let me work it.

The first question to ask yourself is “Can I make any money doing this?” 

The formula is simple, how many companies like yours are out there that would buy this product for how much money and how many can you sell to in a timeframe which equals profitability? This also helps dictate how much money you need to raise because you’re going to have some upfront and ongoing costs that need to be accounted for as you implement your product into those businesses.

You also need to ask yourself if you want to give away the secret weapon your team has been using to increase efficiency and profitability.

More on Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market here.

📏 Ensuring Market Fit: Validating Your Idea

Now you need to answer the following questions:

1. Is the system you’ve built useful to the rest of the market?

2. Do competitors exist that are very difficult or impossible to beat?

3. Is the market large enough and will it pay enough to make it worth launching a business around this tool or system?

Here are a few of the places and ways you can go about answering these questions:

1. Tradeshows - Go to the big yearly tradeshow or convention for your trade organization and see what’s going on in the industry. It’s important to realize that since you’ve been building this in-house app for a while, the rest of the industry may have moved to a tool that does as much if not more than your tool does.

2. Call your industry friends - Asking around for what other people are using and how they are using it is an easy and very effective way of searching. Very often, you’re friends will give you a live tour of competitors’ systems.

3. Google it - Since you know from your friends and from that Tradeshow you went to some of the major competitors, just type into Google “alternative to [NAME OF COMPETITOR]” and you’ll get a number of additional competitors to check out. For each one, call them and do a demo for your business. Do a deep dive here and don’t skip doing demos, there are more than likely a lot more competitors than you expect.

🚩 Red Flags

Here’s your quick RED FLAGS list for things you may have found:

• The industry is shrinking

• The market isn’t very big or there are a very limited number of buyers

• There are monster-sized competitors

• The MVP you need to reach to be viable is very large

• There are government compliance requirements that could take years to accomplish

• No one at all is doing anything close to what you’re doing

• It's not possible to validate a distribution system or partner for your SaaS

See each item above explained in the blog article.

📬 Distribution Strategy

Before you can finish wrapping up your initial planning, you have to know how you’re going to take this thing to market. A lot of new founders working with in-house applications just assume they’ll go to a few tradeshows as exhibitors and that will be enough.

Think again.

Before you get started, you need to understand what steps you’re going to take to press a button or make a phone call once the system is completed that generates hundreds or thousands of sales, and you need to validate that process more than almost anything else.

More SaaS businesses fail because they can’t get traction on distribution than anything else. It’s usually because they didn’t validate the product or market well enough, but some still get ready to distribute and fail from there.

So don’t let this happen to you!

🤘 Go To Market Systems

Items you need to consider in building your go-to-market strategy include systems including:

• Growth through partnerships

  • Building great partners before you launch

  • Creating a partner distribution strategy

• Building a B2B sales team

  • CRM

  • Sales leadership

  • Account executives

  • SDRs

• Demand & Lead Generation

  • Content marketing / SEO

  • Public relations

  • Pay-per-click advertising

  • Trade shows

  • Podcast

  • Community building

  • Outbound Email

  • CRO

  • Newsletter

  • and more

Get an in-depth explanation of each of the items above.

🗺️ Your Money Map

At this point, you should have been able to determine the following items:

• You can make money from this endeavor

• There is space in the industry for your product

• People want what you’re selling

• There are no major red flags, or if they are you have a plan to work around them

You need to build a financial model to understand your costs and how they grow, your revenue, and what will drive it, and bring it together with your capital outlay to understand the path to profitability.

If you need help with it, just send me a message and I can help you.

🏗️ Architecture Concerns

With the in-house tool in our example, just like most in-house tools, you’re just supporting your team. Managing a system of 100 concurrent users is a lot different than managing a tool for 10,000 concurrent users. Architecture considerations change at scale, and the way you build a tool for a few people has very often completely different considerations than building a tool for many people.

Below are some of the things you need to consider about in-house vs. distribution-ready architecture:

• Single tenant vs. multi-tenant

• Transactional emails

• System architecture scaling

• Implementing automated regression test and a more thorough QA team

• Developer documentation

• Customer documentation and a technical writing team

• Implementing system setup options

• Admin panel

• Integrated billing systems

• User Activation

• Tracking tools

• Lead scoring systems

• All kinds of other integrations

See each item above explained in detail here.

💪 The SaaS Business Org Chart

You’ve been building an application using either an agency or an in-house team, but more often than not, your in-house team members have full-time jobs doing things for the business and can’t come over to your new SaaS business without filling their positions.

What does your SaaS org chart look like?

You’ll want at least a CEO or business unit manager, and people to fill roles in the following departments. This does not mean you need to fill your company up with people before they have work to do, only that you need people to do the work. 

• CEO/GM

• Director of Operations

• Customer Success

• Customer Support

• Product / Product Ownership

• Development / Engineering

• UX / Design

• Finance / Accounts Receivable

• Human Resources

• Sales

• Demand Generation / Marketing

You won’t need one person in each role to start and you can have one person do multiple jobs and you can bring in consultants and agencies to fill certain positions or roles. But as your business and revenues grow, you’re going to need to start filling in these positions. 

❤️ Retention & Churn Reduction

After you’ve had a few sales on an in-house system, you’re going to start getting a lot of requests for new features, people upset about things, and notes on how you can improve. You’re going to need people and systems to manage all of this. 

Some of the things that you’re going to want to consider include:

• Implementation team

• Support team

• Ticketing system

• Customer Success team

• Regular customer interviews

More on the list above here.

📈 Scaling

You’ve done it! You got the thing off the ground! Congratulations!!!

Sales are starting to come in, your departments are starting to fill up, revenue is looking better and you’re not eating into your investment capital as much. A path to breakeven is visible. Now you need to start optimizing and running more efficiently. It’s time to start looking at things like:

• Pricing strategy will change over time

• Product-led growth 

• Culture management

• Company management systems

• Performance management systems

• Board management

• Raising Capital

• Regulatory Compliance and Data Security

• Infrastructure scalability and reliability

Scaling and management systems are some of my favorite things to work with teams on. So much so I built an entire company around it.

🔥 Getting Started

As you can see, moving from an in-house application to a SaaS business is an endeavor. It’s not as simple as launching an application, it’s the launch of an entire business, and an entire industry to learn.

The challenge that so many in-house teams run into on this kind of project is that they don’t know what’s coming at them because they are not operating at the top levels of their own business or have not started a business before, and especially have not started a SaaS business before. Most people just don’t know all the pieces that need to come together to make it all happen.

I hope I have given you at least a good idea of what’s going to be needed to get your in-house app commercialized and what it’s going to take to help you get this business going.

For a deeper dive, here’s the full article.

And if you want more great content about building SaaS businesses, leadership, management, and a few insights into my life, get on my email list!

🎖️ Potential Hires

People come to me looking for help connecting them to work opportunities every so often. These are all people I have worked with or met personally, but I don’t put their contact info here. If you want more info, just respond to this email and I can get you directly connected.

1. Accounts Receivable Manager: I worked with this person for a while and they are fantastic at collecting receivables that most people can’t collect. This person is looking for full or part-time work.

2. Senior Account Executive: This person currently works at a big tech company in the US that has topped out and he is looking to do something similar, but without having to work 80 hours a week so he can spend time with his kids. This person is looking for full-time work.

3. Technical Project and Program Manager: A friend of mine is downsizing their business and has to let go of one of their top project managers and asked me for help getting her a new job. I haven’t worked with this person before, but a trusted friend speaks very highly of her. This person is looking for full-time work.

4. Senior Product Owner: This is a product owner that I have worked with in the past. They are great to work with and I would highly recommend them. I recommended to this person that they become a product owner-trainer to help train other PO teams. If your product team needs some help, this is a great person to speak with. This person is looking for full or part-time work.

5. E-Commerce Executive: This person is transitioning from an entrepreneurial venture back to employment after achieving a successful exit. Solo entrepreneur with seven years of experience in brand building, supply chain, and Amazon. A real innovator visionary and somewhat of a perfectionist.

6. Data Analyst / Project Manager: This person has multiple degrees, is a very hard worker, and has experience in customer support, technical support, building financial reports, and much more. He is also out of Colombia, so may come at a bit of a discount compared to American workers.

🌴 Other Cool Stuff

1. I’ll be speaking at DCMEX! I will be speaking on executive leadership and management systems in my talk “The top 3 tools every CEO needs.” I am hoping to get some more speaking gigs lined up for this year, and this is a rockstar awesome start.

   

2. Appsumo deal of the day, at least for me, is definitely Minvo.pro. I sent this over to my buddy Peter Lewis asking what he thought and he responded that he already bought the 3rd tier version. I picked it up and was so happy I did. Here’s a quick video I did from it.

   

3. We are starting to get our summer plans worked out. We were originally thinking it was going to be Prague to get away from the Mexican heat, but we’re leaning toward Montreal now. So many friends have said it is one of their favorite cities in the world, so Montreal, here we come!

   

4. I’m heading back to Atlanta next week to go to a wedding and do some business meetings. If you’re in the ATL and want to meet up, let me know!

   

5. The rebrand of the JHMG website is coming along. It’s not finalized, but it is looking good! I am very excited to get this rebrand done and add a LOT of content to the site about all of our consulting offerings. We’ve been working on this stuff for over 2 months now and I think it will go live sometime in April.

Until next time, keep the ideas coming!

-Jason