Leveraging the Law of SaaS Gravity

From a software engineer's perspective both business models, selling license and providing software as a service (SaaS), seem to involve a good deal of writing and shipping code. So how hard can it be to transition towards a SaaS delivery model?

A lot of companies, teams, and myself struggled with this transition. Getting product management, engineering, and operations shifting mindset from license to SaaS proved to be one of the hard challenges. My background is in Enterprise Software and B2B SaaS. Being highly motivated for success I found myself and teams I managed increasing the energy to achieve success while not making a lot of progress. This was not due to a lack of a convincing value proposition or a minimum viable product. We had first paying SaaS customers and a solid pipeline for growth.

Over the years I learned the subtle differences between on-premise software and SaaS that seem all to obvious once understood. To my surprise, it turned out to be very difficult to pass on my learnings to others to help them avoid mistakes I did in the past. I still have not cracked that nut. Here is an attempt, calling on gravity to help explain how product management and engineering can benefit from changing perspectives.

Law of SaaS Gravity

Your SaaS product roadmap is strongly influenced by three gravitational forces:

Coming from the software license world, I found that product management and engineering typically have the strongest focus on the capabilities. For on-premise software, this is the place to shine - shipping new features with every release. When these teams are tasked to build SaaS products, a common source of frustration for them is the shrinking capacity that can work on new features. What is diverting the capacities away from features?

How do these Forces pull on Roadmap Priorities?

Getting too close to the operational gravity can come in many forms. Very typical are situations where SaaS products cannot be operated flawlessly. For example, upgrades or patches require downtime or a lot of manual work, new features shipped cause detrimental effects for end users or failure to meet the promised SLA. The natural effects of this force are unsatisfied customers, escalating customers, customer attrition. Losing customers cause slower growth or shrinking revenue, bad reputation, dwindling margin; a vicious cycle. The closer you get to this force, the more roadmap capacity will be given up to fix the root causes or you risk going out of business.

On-boarding has strong gravity but fortunately a much more positive spin. With a successful SaaS offering you want to grow your customer base as quickly as possible. If customers are ready to adopt your SaaS offering, any friction to get them on-boarded will need to get resolved. For B2C SaaS offerings this is all about making this a 100% self-service experience, for B2B SaaS this typically requires getting data integration done quickly. Having troubles to scale on-boarding at the pace of market demand will cause actual growth to fall behind the potential. Because SaaS companies are addicted to growth, this should and will not happen. Roadmap capacity will be sucked up to get the scaling right up to a point when there is no more capacity available.

With your SaaS product in place and users adopting, new and updated features are key to attract and retain users. With operations and on-boarding sufficiently under control, the product & engineering organization will want to maximize the relevant feature output with the remaining capacity.

Product and engineering organizations that transition from on-premise to SaaS often keep their focus on features as this mattered in the past. Keeping the focus too narrow on features is like fighting gravity. A common symptom of fighting gravity are product managers and engineers that complain about operations or professional services teams. From their perspective they keep them from being productive as they cannot work on the next feature. Discussions about stability in production or slipping timelines in on-boarding projects are perceived as distractions. If you believe in the Law of SaaS Gravity, a change in perspective is required or you risk getting too close to the gravitational forces of operations and on-boarding.

Slingshot - Leveraging SaaS Gravity for your Advantage 

Experienced space engineers know how to leverage the gravitational forces to their advantage. Slingshots or gravity assist [wikipedia] are ingenious ways to leverage gravitational forces in space flight. For SaaS, getting product and engineering teams to embrace the importance of operations and on-boarding is key. This change in perspective or mindset is the slingshot equivalent. Operations and on-boarding need to be top of mind for product managers and engineers. That way you will make sure that you do not end up in the sun. If you leverage the mass of operations well, you can achieve a higher velocity in shipping features.

Building capabilities to collect telemetry on user adoption, capturing and tracing exceptions in production to understand impact and root causes, building an infrastructure for fast and reliable deployment into production; all these are non-trivial things that need engineering capacity to build and maintain. None of these capabilities have a direct benefit to end users but are the foundation of what users implicitly expect: availability and continuous updates. Same goes for on-boarding. Listening closely to your professional services teams or partners (in B2B) will help to surface limits of scalability. Getting customers on-boarded faster will excite your end users. Capabilities to remove these limitations should be first-class citizens on your roadmap.

Product and engineering teams that embrace operations and on-boarding will naturally make the above-mentioned capabilities first-class citizens of their SaaS roadmap.

Mission accomplished?

When building and offering SaaS products, it is essential to provide excellent service availability and to enable easy adoption. The Law of SaaS Gravity is my attempt to help product and engineering teams to understand the importance of operations and on-onboarding, especially if they transition their business model from license to SaaS.

I hope these musings were helpful. I am constantly trying to learn and pass on learnings - happy to receive your feedback.