saas businesses, unfair distribution advantages and the legend of david and goliath

SaaS Businesses, Unfair Distribution Advantages, and the Legend of David and Goliath

Based on Sujan Patel’s blogpost

https://www.chargebee.com/blog/saas-unfair-advantages-sujan-patel/

Life’s unfair.

The Philistine crowd jeered. David stood unfettered, against the 8-foot-tall menace.

The Philistine crowd jeered. David stood unfettered, against the 8-foot-tall menace.

The giant smirked. The little shepherd boy didn't stand a chance.

But David knew better.

But David knew better.

He couldn't hear the crowd. He had nothing to lose.

His mind attempted to grasp with firm resolve, the task that lay before him.

He loaded his catapult as the giant stood distracted, from a vantage point that was poised for a deadly blow.

The giant couldn't see, he wouldn't.

Well, the rest is...

Ok, the story should draw your attention to a few things.

Goliath was oblivious to the threat David posed.

Goliath was oblivious to the threat David posed.

His metric was SIZE and that's all he chose.

But David had a few unfair advantages that Goliath really didn't stand a chance against.

But David had a few unfair advantages that Goliath really didn't stand a chance against.

● His catapult● His fearlessness● His focus ● His vantage point

That's what an unfair advantage is really.

That's what an unfair advantage is really.

It's that nucleotide of success embedded in your DNA, that the competition, no matter how

massive they are, cannot recognize, let alone, hope to replicate.

Now, with this premise, let’s get down to business. Shall we?

Incumbents in the software industry seem light years ahead.

The Software scene seems like a heavily crowded night club filled with A list celebrities.

The Software scene seems like a heavily crowded night club filled with A list celebrities.

Intimidating.

But this deck is an ode to the countless little guys who have hit it big, regardless.

But this deck is an ode to the countless little guys who have hit it big, regardless.

And a little peek at how they developed unfair distribution advantages.

Here's what’s in store: We've taken a close look at some of the phenomenal, disruptive, fearless SaaS businesses.

We followed their story from start to finish, rummaging through facts and anecdotes in search of patterns.

Here's what’s in store. We've taken a close look at some of the phenomenal, disruptive, fearless SaaS businesses.

And 10,000 Google searches later, this is what we found.

And 10,000 Google searches later, this is what we found.

Note: Any company’s success is due to a complex interaction between a number of variables. We’ve hoped to organize this information into an easily understandable and possibly useful format.

There are 5 ways in which these guys have created Unfair distribution advantages.


1. Intimate Design


2. Ingenious early adopter marketing

1. Intimate Design


3. Niche targeting

1. Intimate Design



3. Niche targeting4. Relentless differentiation

1. Intimate Design



3. Niche targeting4. Relentless differentiation

5. Challenging stereotypes

1. Intimate Design


OK, I know you don't have all day. So here's how we are going to do this.


1. Explanation of the category itself and what I mean by it.



2. Illustration of the category with a real life SaaS success story.



2. Illustration of the category with a real life SaaS success story.3. The Unfair act: Definition of a key decision the company took, that gave them an unfair advantage over incumbents.



2. Illustration of the category with a real life SaaS success story.3. The Unfair act: Definition of a key decision the company took, that gave them an unfair advantage over incumbents.

4. Matching Davids: Other companies that fit into this theory, just to make things extra clear.

Intimate Design

Design around the customer’s innermost, unspoken desires and you will create something truly irreplicable.

Intimate Design

Irreplaceable = Slack

Toppled Goliaths

It’s no secret. Businesses love Slack.

Epiphany:

Users desperately needed a break from work while they work.

Epiphany:

Unfair act: Slack introduced social media like fun and addictive interaction within team communication. Wish granted.

Users desperately needed a break from work while they work.

Matching Davids

Matching Davids

The simplest way to sign and complete any document, digitally.

Matching Davids

The simplest way to sign and complete any document, digitally.

Unfair act:

DocuSign designed around the need for simplicity inherent in signing contracts. It begged the question “why am I not using this?”

For more stories and observations on SaaS, head over to our blog ---->

www.chargebee.com/blog/

http://www.chargebee.com/blog/


Ingenious early adopter marketing


A well-executed early adopter marketing strategy is almost always an unfair advantage over the competition.


I know what you’re thinking.


I know what you’re thinking.

The gold standard of referral programs that SaaS companies still aim to replicate.

Toppled Goliaths

Unfair act:

1. Referral = Additional data space -> Simple idea

Unfair act:

1. Referral = Additional data space -> Simple idea 2. Seamless invitation and frictionless sign up ->

Perfect execution

Unfair act:

1. Referral = Additional data space -> Simple idea 2. Seamless invitation and frictionless sign up ->

Perfect execution

40x users

6 M

onth

s

Matching Davids

Matching Davids

Tinder took a dating industry veiled in privacy and turned it on itself with its brilliant albeit cheeky early adopter marketing.

Epiphany:

People want to find other people they have seen or know on dating sites.

Epiphany:

Unfair act:

I. Head to sororities - Get women to sign up.

Unfair act:

I. Head to sororities - Get women to sign up.II. Head to corresponding fraternities. Display

local women that the men knew.

Unfair act:

I. Head to sororities - Get women to sign up.II. Head to corresponding fraternities. Display

local women that the men knew.III. An avalanche of word of mouth, the dating

industry will never be the same again.

Unfair act:

Niche targeting

Niche targeting

Be a visionary, look at trend lines and crystal balls. Grab onto a growing, profitable niche and slowly move up-market with value added services.

Targeting the right niche, right at the beginning, is key.

Targeting the right niche, right at the beginning, is key.

Classic example:

Toppled Goliaths

Unfair act:

Unfair act:

Online streaming, cheap subscription rates and lots of content catered to a (then) small group of Internet savvy customers. The niche grew, so did Netflix.

Matching Davids

Matching Davids

Epiphany:

Matching Davids

Epiphany:

A small group of not-very-tech-savvy business people did not have the know-how to use and manage API integrations.

Matching Davids

Unfair act:

Matching Davids

Unfair act:

Zapier catered to their needs by providing an easy way to push data between dozens of web apps without coding knowledge.

Matching Davids

Unfair act:


Result:

Matching Davids

Unfair act:


Result:Today, Founders of tech businesses don't really need to know how to code.

Relentless Differentiation

Relentless Differentiation

Stand out at all costs, be keenly aware of your core identity and communicate it with clarity and unyielding frequency.

“A business needs to differentiate itself” - Captain Obvious


We don't mean just differentiate, we mean differentiate relentlessly.



Take Salesforce.



Take Salesforce.

They didn't just differentiate, They used EVERY POSSIBLE OPPORTUNITY to stand out in the CRM space. This was unprecedented at that time.

Unfair act 1:

Unfair act 1:

The Logo: “No Software” differentiated it from a near obsolete and ill-suited software industry.

Unfair act 2:

Unfair act 2:

The Pricing Model: Tiered pricing with increasing costs for increasing functionality tiers - competitors weren’t doing it.

Unfair act 3:

Unfair act 3:

The Corporate Culture: Drove interaction between customers, executives, administrators and partners at events like Dreamforce and changed the scope of the net promoter score in the industry.

Matching Davids

Matching Davids

1. Reapplied the concepts that made Linux great.

Unfair acts:

Matching Davids

1. Reapplied the concepts that made Linux great.

2. Differentiated and disrupted by satisfying the need for collaboration.

Unfair acts:

Challenging stereotypes


All the SaaS giants challenged and questioned industry wide assumptions. You should too.


Dating services are supposed to be shrouded in privacy, Tinder asked “Why so?”


People always want to store their chat content permanently, Snapchat asked “Why so?”


Workplace communication tools must look and feel professional, Slack asked “Why so?”


It is impossible for a group to work on code at the same time without crippling each other. GitHub asked “Why so?”

A shepherd boy has no chance against a 8-foot-tall Philistine warrior. David asked “Why so?”

So beyond all the parameters we've mentioned here, David’s victory seems to be a product of

his character rather than

his catapult.

Maybe it's not so unfair after all.

Maybe it's a question of quirky thinking, fearlessness, and sustained, untiring effort.


Maybe it's a question of quirky thinking, fearlessness, and sustained, untiring effort.

Farewell, until we meet again...


What unfair advantages do you feel a startup can use to stand out in a crowded marketplace?

Tell us about it: Tweet @preethishreeya|@chargebee

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What unfair advantages do you feel a startup can use to stand out in a crowded marketplace?

Tell us about it: Tweet @preethishreeya|@chargebee

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For more stories and observations on SaaS, head over to our blog ---->

www.chargebee.com/blog/

