For B2B SaaS, “Better Mousetraps” Simply Aren’t Good Enough Anymore

It’s challenging for a traditional SaaS company to be successful in today’s market.

A version of this article first appeared on LinkedIn

In today's overcrowded SaaS market, startups typically don't fail because of technology issues, but because they don't gain enough traction in the market. The barriers of entry are low so competition is plentiful.

Distribution is one of the largest determinants of startup success. In this saturated space­– where thousands of cloud-based applications and services are being promoted daily– it’s become increasingly difficult for new products to get noticed and gain traction.

I speak from experience when I say this, breaking through all the cloud noise is tough. The cold calls, LinkedIn messages, all the predictive sales tools­– they’re failing. As I write this, I’ve already received new messages from random companies telling me about a “revolutionary” cloud app. They just need 10 minutes of my time to transform my business. Sound familiar?

Buyers are tuning out and just saying no to the endless SaaS infomercials.

Buyers need better models

For SaaS businesses to succeed, they need to be more than just an improved digital interface. They need to add immediate value in order to cut through the noise. “Better mousetraps” simply aren’t good enough anymore.

We are asking buyers for their time. Without real value provided upfront, they will tune out.

No more moats

We are undeniably in an era where software is being democratized, and not only in the world of SaaS. Savvy entrepreneurs are finding new ways to make excellent products and services accessible to wider markets all better, faster, and less expensive.

In the furiously competitive world of tech startups, traditional SaaS businesses often don’t present significant enough moats to prevent competitors from replicating solutions/features and competing away profits.

What if a competitor or upstart decides to offer your solution for free and monetizes in entirely new ways? The value proposition has to change as buyers are demanding products and services that sacrifice nothing when it comes to functionality but give them back serious time and dollar savings.

The shift to new models, either through subsidizing a component of the offering or giving it away in its entirety, is inevitable. This new model is one that founders, and investors alike need to account for. This isn’t an epiphany. Rather, it is a reminder that our most innovative thinking often stems from questioning the rules we’ve always assumed to be absolute.

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