Selling, building, and growing your product are the 3 core challenges of building a SaaS company. 3 must-read books that capture each one.
There are way too many “read these books for success” lists around on the internet.
I do not intend to add another one.
However, looking back on my journey as the Founder & CEO of Yonder, a B2B SaaS company, three books perfectly illustrate the three key challenges of building a SaaS company:
- Selling your product
- Building your product
- Growing the user base of your product
Before we start looking at these three challenges, let me add a personal note.
In my humble view, there are only two ways to start a B2B SaaS company. Either you sleep in the server room, building a product and praying that somebody will ever buy it. Or you run around selling a product that doesn’t exist yet and build it once a first customer confirms interest.
We chose the second option. That’s the reason I read the following three books in the order, as outlined below.
Selling your product
Entering Startupland by Jeffrey Bussgang describes all commercial functions a young company needs, and how they evolve when the company grows.
I love the terms “jungle”, “dirt track” and “highway” to describe the stage of a company. This is helpful, as not all commercial functions are needed in the “jungle” or “dirt track” phase yet. Focus is key in any startup, so knowing in which phase your company is and using plain terms for it makes a lot of sense.
The book also gives an unvarnished insight into what startup life is really about, providing helpful guidance for hiring and new hires. When selling B2B, new hires often come from larger companies, and they often need a cultural adjustment when joining a startup.
Building your product
Building Great Software Engineering Teams by Josh Tyler describes how to recruit, hire and manage the engineering team that builds your product.
My favorite chapter in the book describes why Josh Tyler doesn’t allow Java in technical interviews. He argues that just because Java can be used for almost anything, it’s often not the best choice. Engineers who know only about Java aren’t curious and learnable enough to thrive in today’s fast-moving, full-stack software universe.
The technical and commercial functions in a SaaS company often have very different priorities, interests, and mindsets. As the CEO of a SaaS company, I am spending time on both the technical and commercial side, trying to balance the two sides.
Growing the user base of your product
The Cold Start Problem by Andrew Chen bridges the technical and commercial sides of a SaaS company amazingly. It’s all about how you grow the user base of your product, using examples from well-known companies such as Slack, Tinder, Uber, and more.
Growing users is all about creating network effects. To understand what a network effect is, consider the telephone: The value of the telephone system increases exponentially with the number of users joining the network. It’s the same for all SaaS products that require interactions between users.
Here, the commercial and technical sides of a SaaS company come together. What unique feature could we throw into the market to reach the tipping point of increasing numbers of users beyond all expectations? How hard will it be to build this feature, and what tech talent do we need to accomplish this?
Conclusion
Even from this summary of three books, I am still awed by how fascinating and multi-faceted the world of SaaS is. And still, when I read these three books I came across so many passages that sounded familiar.
At the end of the day, it isn’t that complicated to build a SaaS company. Don’t read more than three books. Most of the challenges in this industry are similar for all SaaS companies. Most of the challenges have been overcome. So stop reading and just do it.
