4 Questions to Ask Before Renovating Your SaaS Product

With startup funding on the decline in the SaaS sector, more and more companies will face the realization that there is no quick exit and that building a long-term business is imperative. When the dust settles, some of these companies will have made it into adolescence but will face an entirely new problem: they will be forced to renovate their products.

During your company's pre-adolescence, your product was cajoled by silver bullets and was a lab for “experiments”. Your product was rattled by strategic shifts. Your company continually added the next can’t-miss feature like clockwork. Meanwhile, Engineering layered tech on tech to make sure that they could keep up with the Product demand.

Now you’ve got that product/market fit that you craved and your product needs to be pared down, refocused, and ready for the growth wave of the company as you double down on your chosen audience.

During several startups, I’ve had the distinct pleasure of presiding over a renovation, a punted renovation, and a current renovation. Renovating a product is not for the faint of heart. And that is why so many companies fail to do it when they absolutely must. Bummer for them, because failing to renovate at the right time is like trying to head out to sea when you forgot to pull up the anchor.

Before you embark on renovating, you should be able to answer the following four questions and answer Yes to at least three. If you can’t answer Yes to three of these questions, do not renovate and continue to live in your starter apartment with boxes of stuff in the hall. If you can answer Yes to three, take the body blows and begin your renovation.

1. Will your company achieve new efficiencies from renovating?

By renovating, will you better achieve software scale and free yourself from relying on creatively-used people and processes? At Lithium, the problem was multi-tenancy. We had a cloud solution without cloud scale because we weren’t truly a multi-tenant database. We had to rev up lots of humans to spin up lots of databases; product rollouts were an exercise in manually flipping lots of switches.

At Bitly, our evolution has been full of rises and falls and rises and our paid and free products have developed at different paces. For our smallest customers, this means that we can't give them the experience they need to liberally try our paid products before buying. And for our largest brands, we still don't quite map to the way that large-scale procurement and user management works at the biggest companies. These are the types of things you work on when you are doubling down on a business that is scaling but, before that, may be needless. Before then? You create workarounds that are known to few that are left to some poor Product Manager and engineering team to unwind.

New Bitly vs. Old Bitly. Check the ocean floor on Old Bitly. Great for a young company with a jocular attitude. Bad for an Enterprise Sales team trying to sell into the largest brands in the world.

The same is true for crufty features. Is your company needlessly supporting older features from a prior strategy that deserve deprecation? As a Product Manager, it’s always hard to take something away. But learning how to sunset features that are used so infrequently is an art form that begs perfecting. At Bitly, we had some features that were used by as few as 3000 users on a monthly basis. When the Bitly denominator is almost 1 million MAUs, it’s not feasible to keep a feature alive for .3% of the user base. It’s better to spend that time and product real estate on features that adhere to the new mission, no matter how promising they were at one time.

2. Do you have support of the CEO and the Board?

Support may be a strong word. Assent is probably a better one. No CEO or Board will ever bless a product renovation. I remember when I casually dropped in my first board meeting at Bitly that I intended to rebuild the platform to make it more SaaS and Enterprise-ready, one of the most supportive VCs I know, Bryce Roberts, cautioned that he’d “never seen it work”. And I know that my man Mark Josephson, Bitly CEO, was game. But he had a nervous look and a little lip quiver.

And it’s easy to see why. There is no sexy new line of business, and few new features to upsell since you’ll be tying up all the resources working on the same stuff you already have. How are you going to keep your growth rate up?

The answer is that your company will need to refine Marketing and Sales muscle during this time by working vertical use cases and proof points with the product you already have. Companies as illustrious as HubSpot have come through the valley of the renovation and lived to thrive and IPO. It must be done. This leads me to…

3. Is your company ready to invest in Sales and Marketing?

One nice thing about hunkering down and renovating the product is that it gives the rest of the business time to play catch up where needed and move forward in areas that can ultimately lead those businessy features like user management, SSO, etc.

Investing in Sales and Marketing during this period is imperative. Most SaaS companies start as product and tech-based companies but ultimately have to build competency in Sales and Marketing to convey the product’s benefits and vision and to translate the product into solving more specific customer problems. No product, no matter how good, drives its own adoption. It takes use cases and proof points culled from current customers and, more importantly, a focus on target verticals. Rebuild time is the time to get your go-to-market really crisp, double your Sales and Marketing headcount, and figure out how to scale the business side.

4. Do you have a business that can support change management for your paid customers?

This is where you have to be honest with yourself. Building the new product platform is part of the challenge. Moving your customers over is another. With Free users, this is a little more straightforward. You roll out your product to a small percent, hold it at that percent and get feedback, then repeat that a few times until you’ve worked out all the kinks and get to 100%. You’ll invoke some ire on Twitter from the trol…er…heavily-invested users but the process is devoid of handholding and largely automated. The question here is more, “Can you take the heat?”

Getting bushwhacked by your free users on Twitter is no fun.

Taking a rebuilt product to market with Paid customers is a different story. It requires a different level of patience from the Product and Engineering teams, with the realization that you will be living in a dual state for a while as customers make their way from the old mess over to the new hotness. After all, the .3% that didn’t matter on the Free side of the house may represent your highest-paying customers on the Paid side of the house.

More than patience from the Product and Engineering side, a rebuilt product rollout requires a Customer Success department that has solid customer relationships and up-to-date information on its customers. And, from a company perspective, it requires a Customer Success team that exists more to nurture than to sell. Moving paid customers over to a new product will usually require a slightly new type of setup and that new type of setup, when done correctly, requires a more intimate knowledge of each customer’s business problems and org structure. This is the type of knowledge a trusted nurturer would glean over time.

Sometimes, you have to move sideways to move forward and renovating your product is just that. And there will be dog days. But I guarantee that it sets the company up for bigger and better Enterprise scale and presents a new palette to work with. Now you just have to be able to answer 3 of the 4 below:

1. [Y/N] Will you company achieve new efficiencies from renovating?
2. [Y/N] Do you have support of the CEO and the Board?
3. [Y/N] Is your company ready to invest in Sales and Marketing?
4. [Y/N] Can your business support Change Management?