W07 - How SaaS Can Do B2B Well

This week I read Jerry’s recommended book, The SaaS Startup Roadmap, and—combined with a recent now-removed article on my public account titled “There Isn’t Much Time Left for Feishu”—I want to discuss iterative thinking about B2B.

• The essence of SaaS is renewal; everything should be built around forming an immediate feedback loop.

  • The author says the first stage of a SaaS startup is generating product ideas and choosing a business model, with the core being the lean startup methodology. Build an MVP, meet customers as early as possible, and iterate continuously. Anything that impedes forming a feedback loop should be treated cautiously. For example, in sales when choosing between direct sales and channel partners, prioritize the immediate feedback advantage of direct sales.

  • A merchant platform’s business cannot be benchmarked against a pure SaaS model. We incorporate many consumer-facing logics, and the essence is definitely not renewal. I think “repeat visits” better capture our nature. It can be partially understood as retention, but small businesses have short lifecycles, so retention has a natural ceiling.

• Pursuing ultimate efficiency and experience does not serve all of B-side needs.

  • B2B customers’ core demands center on three things: making money, financing, and efficiency. For merchants, making money is the top priority. Therefore, for SaaS providers, delivering exceptional experience and efficiency should not be the primary objective. Only those SaaS products that improve merchant revenue significantly by boosting efficiency are sustainable long-term. A few examples: a service provider shared how optimizing the order of dishes for a hotpot stand improved staff picking efficiency. I recently saw an automated weighing station in a supermarket that recognizes items and can multiply operator efficiency or even eliminate the role. These are efficiency tools that can be quantified in terms of revenue. Feishu employed 10,000 people to pursue ultimate experience and efficiency, which in many domestically “people-driven” companies isn’t easily bought in, such as Xiaomi and Didi.

  • Can Business Cards be used to drive operations along this line? For example, how much money can Business Cards save customers? Customers who use Business Cards operate better, so how much more do frequent Business Card users earn on average compared with non-users?

• Outstanding B2B companies understand fundamental commercial logic and deliver advanced operating ideas to their customers.

  • Only companies with a coherent philosophy have a chance to build great B2B products. From this perspective, I think Feishu does very well. Feishu approaches customers from a consulting-service perspective, using tools to help clients enhance organizational capability and restructure management processes, influencing customers with its own advanced ideas. Whether every customer needs something that advanced is a matter of demand.

• SaaS is sales- and marketing-heavy.

  • A SaaS company’s organization comprises marketing, sales, product/engineering, and service. Once a product has been validated, marketing and sales become increasingly important. I previously had trouble distinguishing between marketing and sales; this time I learned some basics and felt this is a deep area. Both marketing and sales serve the L2C (Leads to Cash) process. Marketing’s role is to move from “potential customers” to “target customers,” and to cultivate “interested customers” from that group. Sales’ role is to convert “interested customers” into final “paying customers.” After L2C there’s another funnel: CSM is responsible for converting “paying customers” into “renewing customers.”