Is your B2B SaaS struggling in a saturated market? Do you know the hacks and tricks of staying competitive in the increasingly crowded B2B SaaS market? If that’s your current dilemma, then this is your episode. With our guest Alan Gleeson, we talk about how to curve a niche and become competitive in the B2B SaaS market that is becoming crowded daily.
Why you should listen to Alan – He has gained immense experience from his involvement in the B2B SaaS market since browser software rendering became possible. Furthermore, Alan has worked as a consultant to more than 50 B2B SaaS companies in different countries. He has seen the inside of a lot of Google Analytics accounts at different growth levels, gaining a valuable understanding of growth drivers in a saturated market.
Why start a B2B SaaS in a crowded market –B2B SaaS businesses are becoming more and more successful and have relatively low startup costs. On the other hand, he identifies the primary difficulty as the B2B SaaS market’s competition due to the growing number of competitors. A very specialized or niched, obscure startup struggles with poor Google exposure or a competitive market sector that is oversaturated calls for a strong differentiation strategy. He characterizes competition as beneficial for a startup with a well-developed strategy.
What should be in place before venturing into a competitive B2B SaaS market – You need to be aware of the table sticks features expected of the specific market category. Also, it is necessary to satisfy the product-fit requirement by initially gathering the required research. Key areas include competitor pricing, core features, search engine marketing companies, and a well-defined ideal customer profile. It would be best to consider only commercializing your B2B SaaS after validating all the assumptions.
Understanding your ideal customer profile – Our guest expert argues that it is paramount to understand your buyer persona to tailor your competitiveness strategy appropriately. A clear understanding of the various personas and their different needs greatly helps to gain a competitive advantage over the competition.
Other common mistakes for B2B SaaS in a crowded market – Startup B2B SaaS companies often make mistakes with market entry in areas of focus, differentiation, and cost leadership. For instance, copywriting requires skilled personnel to produce content that is easy to comprehend and targets the ideal buyer persona. As such, free product offerings in the early days can help generate valuable user feedback that can, in turn, inform the strategy for differentiation and competitive advantage. Secondly, blunders happen around positioning. Ideally, a B2B SaaS should seek the right position for their ideal customer profile to help busy customers notice the business from the long list of competitors.
Strategies and processes of winning in a crowded market – Alan advises that a B2B SaaS needs to take note of areas they are disproportionately strong and craft a competitive go-to-market strategy. He terms it a “picking a fight” strategy. Secondly, a clear differentiation strategy starts with a narrow niche market and then expands thereafter after gaining valuable feedback and resources to scale the business.
Importance of market knowledge in a niche market – It is helpful to be affiliated with 2 or 3 co-founders with a solid understanding of the niche market. That relationship helps to get early users from existing contact lists. Furthermore, addressing potential friction in the processes that result in high switching costs would be best.
Challenges of building B2B Saas in a crowded market – Alan observes that bootstrapping a B2B SaaS becomes increasingly challenging in a saturated market. He advises that you should consider bootstrapping for a while instead of perpetual bootstrapping until you gain significant traction. After that, a go-to-market strategy to raise finance would be necessary. Also, it would help if you were affiliated with companies with similar ICPs and varied approaches to boost your competitiveness in the marketplace.
Alan further calls out B2B SaaS businesses that go to market with poorly designed products, which hurts their competitive ability. Also, hiring is increasingly difficult for startup B2B SaaS businesses because they are unknown brands. Finally, he advises against following common industry approaches that do not serve your chosen niche area.
How do you plan for Contento to remain competitive – Our guest reveals that they plan to take advantage of the new niche area, Headless cms, that separates information and presentation. Contento seeks to leverage this fast-growing niche that offers incredible speed and security potentially to B2B businesses. Also, Alan says Contento would seek to focus on buyer personas by building less technical sites relative to the competition.
How does indirect marketing help B2B SaaS in a crowded market? Alan foresees artificial intelligence increasing competition in the B2B SaaS market because many businesses will seek affiliates with businesses serving similar personas. This becomes a potential growth area because of the growing difficulty of curving your own audience.
Advice to SaaS founder with 10k MMR – For the early stage, Alan advises that a startup SaaS should seek to leverage their network significantly, conduct organic acquisition instead of paid, be more resilient, and validate assumptions about the product and market. Also, he cautions against trying to scale too early and hiring until key growth signals have been attested.
Advice to SaaS founder with 1M AAR – To increase competitiveness in a crowded market, our guest expert says that a B2B SaaS with 1M AAR should seek to choose a strategy they have more success with. Also, the founder should leverage the services of freelancers because the resources are not big enough to hire full-time CMOs across departments.
Key Time codes
- (0:30) Introduction to today’s topic and guest
- (1:26) Why you should listen to Alan
- (1:26) Why start a B2B SaaS in a crowded market
- (4:08) What should be in place before venturing into a competitive B2B SaaS market
- (6:34) Understanding your ideal customer profile
- (7:18) Other common mistakes for B2B SaaS in a crowded market
- (10:21) Strategies and processes of winning in a crowded market
- (12:50) Importance of market knowledge in a niche market
- (16:25) Challenges of building B2B Saas in a crowded market
- (21:18) How do you plan for Contento to remain competitive
- (25:56) How does indirect marketing help B2B SaaS in a crowded market
- (28:20) Advice to SaaS founder with 10k MMR
- (30:48) Advice to SaaS founder with 1M AAR
- (34:45) Alan’s contact information
Intro to Alan Gleeson
00:30 – Joran Hofman
Welcome back to another episode on the Grow Your B2B SaaS podcast. We discuss all topics on how to grow your B2B SaaS. With the rise of node code, tools, and AI, some markets will be really crowded as it’s easier than ever to start your own SaaS.
Today we’re going to talk about that how to win in a crowded B2B SaaS market. We’re going to do this with Alan Gleeson. He’s the founder of Contento. He’s definitely practicing what he preaches. Contento is a headless CMS built for marketing sites, which is of course, a highly competitive market. Before starting Contento, Ellen worked in almost 50 B2B SaaS companies, where most of them were VC backed, which gives a really great perspective as they were in different industries, stages, and even countries. Nearly all of them were in a crowded B2B SaaS market, which makes him the perfect person to talk about this topic.
01:21 – Joran Hofman
Welcome to the show, Alan.
01:22 – Alan Gleeson
Thank you so much for having me on. Looking forward to talking through it with you.
01:26 – Joran Hofman
Likewise. So I always do an intro. I always like to ask this question as well. Why should people listen to you today?
01:32 – Alan Gleeson
I guess one of the reasons there’s a few gray hairs for those who see it on video will see, but I’ve been involved with B2B SaaS since the Internet was fast enough to actually render software over the browser. I started my career shipping software into retail stores. I think that gives me a bit of longevity in the space. Secondly, which you alluded to earlier, having been a consultant to approximately 50 B2B SaaS companies spanning the US. UK. Europe and Ireland, I’ve had an opportunity to work with a big number of VC backed, predominantly B2B SaaS companies at different stages of growth in different countries. I’ve been fortunate to work with some great companies and have picked up lessons along the way that I think helps inform my view of the world.
02:19 – Joran Hofman
Exactly. You’ve been looking into many kitchens, as we say in Dutch, seeing how other companies do it.
02:24 – Alan Gleeson
Well, from my perspective, yeah, it’s looking at Google Analytics. Right. That’s typically the window in the world where you look at the data.
02:30 – Joran Hofman
02:31 – Alan Gleeson
Lots of Google Analytics from different companies over the years to help understand the drivers of growth.
Why start a B2B SaaS in a Crowded Market?
02:38 – Joran Hofman
Exactly. Let’s start with a really, maybe basic question, but also an important question. Why would you even have to consider starting a SaaS in a crowded market?
02:48 – Alan Gleeson
Yeah, so look, SaaS is a very attractive industry sector but it’s very exciting. There’s been a lot of growth in SaaS in recent years driven by a whole host of reasons remote working, being won, the cost of starting up has decreased as well and obviously a very attractive unit economics if you get SaaS right. The flip side is there’s huge numbers of companies that are deciding, hey, let’s do a startup. You come across two scenarios that are quite common.
Your startup is very niche and obscure and you look in Google search volumes and you can’t find that many people searching for it. Or you’re in a category that already exists in which there is lots of competition, in which case you then have to craft a strategy to say, okay, competition can actually be good because it validates that there’s a market for what we want to offer.
03:36 – Alan Gleeson
You’ve got to look at how do you then craft a winning strategy in that context. From my own perspective, we at content to offer what’s called a content management system. A CMS, which essentially is what you use to power your website WordPress, is the dominant player in the market and has been there for over 20 years but there are hundreds of others, if not thousands of CMS. Therefore, again, building a startup in this space isn’t very competitive, means I’d have to come up with a plan that gives us a fighting chance of success.
What needs to be in place before competing?
04:08 – Joran Hofman
Yeah, and we’re definitely going to talk about the plan and I think you mentioned it, right? If there’s competition it’s good because there’s a market and having a strategy to win is definitely important. Before you even, I guess, start with the strategy, or maybe the strategy is a place to start. What in your opinion should be in place when going into a competitive market?
04:29 – Alan Gleeson
The first thing is you got to know the basic feature set, right? There’s this concept of table stake features and by that I mean you got to have the features that the market expects you to have. Now the kind of quick way to do that is you go to something like G2 or Captera and you look in the category and you look at the naming of the category and the participants and you’ll see the features listed.
You don’t want to be going in aggressive on marketing if you haven’t really got the table stakes features in place, right? So that’s a big gotcha. Secondly, you want this concept of product market fit, ideally. You do want to have this kind of period of initial build and initial marketing. That’s very much you being the receiver of research, right? You’re treating it almost as a research project till you get to the point where you validated certain assumptions you made and are then happy to start looking at commercializing because that will often entail people and money and cost and you don’t want to do that prematurely.
05:26 – Joran Hofman
Yeah, that’s really nice. I think the G2 is really simple one but really effective one and really important one. You can steal a lot of ideas or a lot of things people need or they like they don’t like from the reviews they leave basically.
05:40 – Alan Gleeson
Well exactly. Or you go to the pricing pages of the competitors that you think are broadly in the category and you look at the features that they list out and then you make a call which are the kind of the features that you believe are core and drive a lot of value. Which of these features that they’ve added in over their ten or 15 years of their kind of lifecycle which you think actually they’re not really that valuable for the cohort that I want to target so you don’t need to worry about those but you’re being really tight on the kind of core basics that you would require. You could look at search engine marketing industry as an example, right.
06:22 – Alan Gleeson
If you’re looking to enter that market you could really cut down and introduce a product with much tighter feature set at a much lower price point that might meet the needs of earlier stage startups like your one and like mine.
06:35 – Joran Hofman
Exactly. There it all comes down to your ideal customer profile. Every podcast so far that has been mentioned know who you’re selling to and then from there you can actually build a product of course they want.
06:46 – Alan Gleeson
That’s actually a key point. Right, so there’s this notion of buyer personas are ideal customer profiles and there can be multiple ones and they can have different needs and requirements but the more about those the better then you can have an effective strategy. From our perspective, the people that we know is the technology person will invariably involved in a website decision, the marketing person may be involved in a website decision and often agencies or external freelancers might be brought in. There are kind of three clear buckets so you really got to know those personas and the requirements to then help shape your strategy.
Common mistakes while building a SaaS in a highly crowded market
07:19 – Joran Hofman
I think one common mistake maybe is not having your persona in order before you set the surgery. Are there any other common mistakes companies making while building a SaaS in a highly crowded market?
07:29 – Alan Gleeson
Yeah, I think the next piece is if you’re trying to protect cash, which many are, there’s an inherent tension because you can get things wrong. Right copywriting is an example so you can have a junior person in the team write the copy with the website but actually it’s quite a specialist scale writer and therefore if they don’t have the domain expertise or they don’t know the personas, the chances the copy won’t resonate. You miss a trick, you’re trying to save cash, but then you’re not bringing in expertise when needed. A secondary point is having a clear positioning strategy. Right? If you go back, this is not new, right. Competition has always been here.
08:07 – Joran Hofman
08:07 – Alan Gleeson
There’s a famous American academic, Michael Porter, who wrote in like 1980s, he wrote about Porter’s Five Forces, but he also wrote about Porter’s generic strategies. Right. He was talking about what were the strategies you should use when thinking about market entry. He talked about focus and he talked about differentiation and he talked about being cost leaders. Right. They were the kind of buckets that he was arguing. I think that’s the same point. A modern day take on it is someone like April Dunford who’s written a great book called Obviously awesome and she’s very much espousing the fact that you need to make it easier for buyers to buy. You got to be able to really articulate how you are different and positioning yourself really clearly so that busy buyers can have a clear sense as to where you’re positioned relative to the other choices that they have when they’re looking at the consideration set.
09:00 – Joran Hofman
Yeah, and I think these two really work together, right? The copywriting and the positioning. Because if you have the positioning right, the copywriting can be really related towards your ICPS.
09:09 – Alan Gleeson
The tricky thing is if you don’t have hundreds and thousands of users and customers, it’s harder to execute.
09:14 – Joran Hofman
09:14 – Alan Gleeson
You’re in your early years, you might struggle, particularly enterprise applications, you might struggle to get big numbers of customers on. You have to use proxies whereby you might in some instances speak to buyer personas that represent your target group and try and get insights for them. Are you going to give some friendlies essentially free access to your tool in the early months and years so that they’re getting to use it? Not through having to commercially buy it, but at least they can give you feedback and engage and offer testimonials and social proof and all the good things that you need, which are much easier for mature companies to get access to. But much trickier in your early days.
09:50 – Joran Hofman
Yeah, exactly. It all starts with people using your product know exactly what you offer and then from there you can start reshaping your ICP because it’s never set in stone.
10:00 – Alan Gleeson
I think the beauty of SaaS is you can use data to inform decisions. You can look at analytics from product usage to see the areas that people are getting stock of and it’s back to daily active usage and session times you can get data. How often are people logging into your application and how frequently are they using. These are again, proxies for are they getting value or not from us?
Strategies on How to Win in a Crowded SaaS Market
10:20 – Joran Hofman
Yeah, definitely makes sense. We talk a bit more high level. You already mentioned check G two, make sure the positioning is right, make sure the copy rating is right. Can you share some strategies or processes you’ve used to win in a crowded market?
10:34– Alan Gleeson
Part of it. Another thing is looking at the kind of your hidden powers is the wrong word, but where you think you are disproportionately strong. Again, to use an example for us, right, we could look at content management systems and say how do we craft a strategy there? One is you pick a fight, right? You pick a fight and you start saying X is bad, you don’t personalize it, right?
It’s a bit like I think David Cancel from Drift a few years ago started saying forms on website are broken. Why do we still use forms? We should use chat bots. For me, if I’m picking a fight I can say, look, WordPress, right? WordPress has huge amount of advocates for it. Going back to my ideal customer profile and my niche, I want technology companies using our product because I think WordPress is not a great solution for scaling technology companies.
11:20 – Alan Gleeson
I can craft content around that and craft a narrative. I think that’s one thing that you do want to be trying to say what are the push and pull factors? Some of them may be, look, we’re really strong with these features but simultaneously we can see that the market are having problems with other elements. Picking a fight is definitely a good approach and then having a clear differentiated strategy, which again is tricky, right, because often VC backed startups want markets to be as big as possible. It seems really counterintuitive to try and pick as narrow a market as you possibly can.
That’s the right approach and you can go broader down the road but in the early years you got to go as narrow as you can that’s still commercially viable. In our instance we can see that WordPress is perfectly fine for a personal website or for a small business that doesn’t really create a lot of content and isn’t scaling whereas we can see for positioning ours that actually it’s just not a good fit for scaling technology companies and therefore they are looking at a whole range of other options.
12:20 – Alan Gleeson
If we can position ourselves as a credible provider in a vertical that we actually have lots of relationships and contacts and network with and that’s the third point, right? There are three of us that are co founders, we all come from a B2B SaaS world, so we know that world. It wasn’t as if we picked a random category, it was one that we’re from. We’ve got existing relationships and we’ve got contacts and we know the ecosystem. That again helps us short circuit the kind of early years around trying to get traction.
12:50 – Joran Hofman
Yeah, and I think this is a really important one because if you are going to go really niche. You have to know the market. If you have three co founders or three founders who know the market, then it’s going to be really helpful because as you mentioned, the market, you have relationships, so it’s easy for you to get those early users on and to get feedback as much as possible and as quick as possible.
13:09 – Alan Gleeson
That’s it. Because we’re all in a busy world, right, where we’re all playing a similar strategy in B2B SaaS.
13:15 – Joran Hofman
13:15 – Alan Gleeson
One of the strategies is creating content. This podcast is an example of creating content. Another is outbound and using outbound techniques to try and raise awareness. Actually your kind of ecosystem between the six or seven teammates you may have, will have contacts if they send an email to someone that they know, it’s going to get open. If you have an overlap with that market and then the other piece that’s kind of linked to that is you can’t do this unless you’ve got a compelling proposition.
No one’s going to do you a favor. If you say, look, this is worth a look, they’re going to take a look because they’re known to you. The only other thing is if there are switching costs, because often there are a couple of things going on. Either they’re using a competitive solution or maybe they’re using Excel or Google Docs equivalent to manage the process.
14:00 – Alan Gleeson
You got to think about how you can switch them because of course, inertia is a very common problem, right. You got to take as much of the friction out of the process. For our instance, we do a free migration for website. We’re saying, yeah, we could see that would be a source of friction. We’ll take it away from you now, we won’t do it forever, but in our first few years it makes perfect sense to do it. Again, you’re trying to jump the fence, as it were, and think from the buyer’s side of the fence, what are the worldview that they have and what are the bits that are going to be troubling them that you can then try and reconcile with your sales process or with your copy.
14:35 – Joran Hofman
Yeah, exactly. The more targeted you are, and as you mentioned a couple of times already, like really get your positioning right, the more easy it is to also say no. Because I think a lot of companies, maybe one mistake they make is to try to sell to everybody at the beginning. If you can sell no, then this is going to help you as well.
14:52 – Alan Gleeson
This is it.
14:53 – Joran Hofman
14:53 – Alan Gleeson
So it’s a key point. Again, go back to the WordPress analogy, right. As that has evolved over 20 years with a very rich plugin ecosystem to try and cater for every need, I find the interface of WordPress pretty unintuitive because they’ve tried to cater for lots of different reasons and lots of different needs where by us being really focused on the requirements of powering. A B. Two B. SaaS website.
We know the world, right? All of my 50 odd clients, they’ve all had CMS. I’ve always gone in and looked at them and obviously had to provide feedback on them and I’ve seen the marketing team that are working on them. I can get an understanding of some of the challenges and frustrations that customer profile has. If we can create a genuinely intuitive UIUX that is easy for marketing people to use you’re straight away tackling a big problem that many of them have with legacy solutions.
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Challenges and obstacles when building a SaaS in a crowded market
16:25 – Joran Hofman
Let’s talk fun things. Challenges, obstacles, maybe mistakes. Can you tell us, I guess, either of these things while building a SaaS in a crowded market?
16:35 – Alan Gleeson
Yeah, look again, serendipity and timing is also a factor which people don’t want to consider because you can be early to a party or late to a party. So timing is definitely important. There are a few things that I think are worth reflecting on. We touched on it before the call, actually, you and I, briefly. I think it is getting harder to bootstrap some of these businesses. I do think if you can bootstrap for a while and get some traction, you’re in a much stronger place to go out to market and to raise some finance. So I think that’s a good strategy. I think to bootstrap the whole way is getting increasingly difficult. Why? Because you need route to market, you need access to customers and therefore we can see that certain channels are getting very costly and difficult, google being one.
17:20 – Joran Hofman
17:20 – Alan Gleeson
Google is a key route to market, right, from organic search point of view and from paid ads. The paid ads piece is getting very expensive. You do want to have a varied approach and this is why things like affiliates come in as well, right? If you can identify similar companies that have similar ideal customer profiles, it makes sense to collaborate, right? It doesn’t have to be a straight affiliate commission type playbook, although that’s always useful. You can do things like guest posts on each other’s blogs to help with the domain authority, the website, but also to give fresh content to audiences that don’t have them. These are some of the things to think about. I guess there’s other things that I think are also worth reflecting on in terms of mistakes, right? We’re early on the journey, we’re hoping we won’t make too many. You do make mistakes when you’re a newly founded team and you got to learn quickly from them.
18:10 – Alan Gleeson
Hiring is challenging at the moment because you’re an unknown brand, so you can get hiring wrong quite easily. The other thing is there was this old notion that’s getting a lot of, I guess, push for early stage startups and it talked about shipping early when you would be embarrassed, right? Which I get. It’s something that I also push back against quite heavily because I think in some ways, going to an earlier point, if I want to use my network for good effect, I don’t really want them clicking around a badly designed application that reflects badly on the founders and doesn’t give them any confidence that you’re creating a great product. So I think that’s one mistake. I see where people take it at face value. That because certain VCs in the US are saying ship early and be embarrassed that you follow like gospel. Which brings me on to my last point, which is that a lot of the playbooks that we see are USVC led playbooks, right?
19:05 – Alan Gleeson
That’s a crucial differentiation for us in Europe because the big difference I see working for US clients versus European is there’s just a huge resource gap. They raise a lot more money, they tend to have a lot bigger teams. It’s much easier then for them to talk about inbound marketing and talk about all these tools you can use and all these different playbooks. It’s a much different scenario in UK and Europe when you got a very small marketing team who are trying to do 50 different things at once and are ridiculously budget constrained. Again, I think the point is the advice and all the content out there, you got to put it through a filter. You can’t just take it at gospel because otherwise you end up doing playbooks that are not a good fit for your playbook, which your playbook has to be shaped by your unique circumstances and resourcing is a key one.
19:56 – Alan Gleeson
So does that make sense?
19:58 – Joran Hofman
That definitely makes sense. I wrote a lot of comments here, I think start with the last one you mentioned is indeed don’t just follow any playbook, make sure it does fit for you 100%. I also agree with shipping early can be damaging because if you are going to be really focused, if you are going to pick a certain niche, indeed you don’t want to burn your network on an app which is not really working or not really doing what it should. Maybe a dilemma, but we haven’t shipped too early either. Or at least I haven’t used my network at the beginning. Find some other beta testers before I really started to push things out to my own network.
20:32 – Alan Gleeson
That’s exactly it. And that’s a similar approach. I’m adopting the same thing. I have socialized the fact that this is coming soon for us. It’s an enterprise type application, right? It’s powering a website. We want to get it right. And therefore, yeah, I’m delaying shipping. This is why you got to reflect on some of this advice because it’s all very context dependent. I know, I think from your notes earlier, it also varies whether you’re on ten K MRR or 10 million AR. Right. The playbook differs greatly whether you’re VC backed or you’re bootstrapped and what the stage of your business lifecycle is again. Junior people can miss this nuance because they probably don’t have the experience you and I have. That kind of helps shape our view of the world.
How does Contento Succeed in a Crowded Market?
21:18 – Joran Hofman
Yeah, exactly. Let’s talk about contental for a bit because as we mentioned already a couple of times, it is in a highly crowded market. How do you see contento succeed?
21:28 – Alan Gleeson
Yeah, so what’s happened is there’s been a new category that has emerged in recent years. Right. It’s called Headless CMS, which is a technical term, but what it means is there’s a separation of the front end and the back end. Instead of having one platform that you log into the way it was always done with WordPress and some of those early website builders, it’s a complete separation. Right. Going back to my point, it’s not for everybody, but it’s a really fast growing niche. Lots of players that have raised a lot of money, predominantly in the US. We can see a trend towards that category. We are in that category, but we noticed a couple of things with that category. For one, there’s a lot of focus in the early years on B to C, an Omnichannel. We’re seeing very little focus on B2B in particular.
22:21 – Alan Gleeson
We’re saying, okay, all these big brands are consumer brands that are moving across. Why? Because they probably want the security that Headless brings. They want the speed. It’s a kind of very high performant methodology and obviously they’ve got access to their own in house team of developers to create beautiful websites. So we can see the category emerging. As I said, it’s typically omnichannel and consumer brands that are to the fore at the moment in terms of using those platforms. Second thing is going back to the personas, I get confused when I land on a lot of these sites because they’re very technical. They use language like webhooks and composable architecture and data lakes and whatever else. They’re very much targeting the buyer persona of CTO.
23:06 – Joran Hofman
23:07 – Alan Gleeson
Which is for those that have a CTO that leads the decision as to your website. As I alluded to earlier, marketing often plays a big role in deciding on the platform you use. We’re then deliberately trying to appeal for the nontechnical users. Our logo has this YinYang symbol which would be a traditional Chinese symbol, which is again, trying to reflect the fact that we’ve two distinct personas. I’m writing a lot of content for our blogs because I’m a nontechnical founder. If I read the blogs on many of those that are competing with us in the headless CMS space, I haven’t got a clue. I do not know what they mean because they’re targeting people that are familiar with the jamstack and Netlify and react and script. So they’re the basis for differentiation. Now, of course, the other thing is we’re making an assumption that our application will be used to power B to B SaaS website.
24:03 – Alan Gleeson
That means the others all have this kind of open box whereby you have to go in and try and configure it probably the agency that builds it configures. Whereas with us we make assumptions that the primary use case is for managing websites, which means we can put in certain features for that use case. Whether that’s enough to win a viable part of the market, we’ll have to wait and see. That is where we’ve got to from our initial attempt to carve out a viable niche. First we’ll have to come back at a later date and assess whether that’s been successful or not.
24:36 – Joran Hofman
Yeah, but you’re making assumptions, of course. You’re making educated assumptions because you have the three co founders coming from the niche already. So I think that’s important to say. It’s almost impossible not to make assumptions.
24:49 – Alan Gleeson
24:49 – Joran Hofman
You have to, but at least you’re making them on your own knowledge and your own background, which is, I think, really important.
24:56 – Alan Gleeson
Yeah. Flip side is, so the other co founders are very technical, so I’m not. So there’s a sort of balance there. But we’re not arrogant either. We recognize that you can have assumptions, but assumptions need to be validated and the truest test of validating is will people subscribe to it. We’re on that journey, but we will look to learn this early stage phase is tempted to rush to commercialization. Right. You can almost need to treat it as a discovery phase, which is almost like an academic research project, which is difficult.
25:25 – Joran Hofman
25:25 – Alan Gleeson
There’s a guy in the US called Steve Blank and another guy called Eric Reese and they talked about the Lean Startup methodology where they talked about the early years being almost to validate your assumptions. And I think they’re totally right. The problem is you’ve also got a runway and cash burn. So you’re trying to marry both worlds. Right. If you can balance those kind of competing objectives, I think then you’re in good shape.
How does indirect marketing help with succeeding in a crowded market?
25:48 – Joran Hofman
There has to come bread at the table at the end of the month or VCs have to be happy at the end of the month. So you have to indeed balance. Them is focusing on affiliate marketing, which is like an indirect marketing channel. How do you see indirect marketing helping companies to succeed in a crowded market?
26:06 – Alan Gleeson
Yeah, look, I think it’s going to be a big growth area. I think we’re going to face some uncertain years in terms of the mass adoption of AI and we’re already seeing some evidence of that. I think if you’ve got similar personas and really clear personas and that you can identify other companies that serve similar customers with kind of complementary solutions, I think it’s going to be a real growth area provided the kind of transaction costs of managing the process are low. Right.
There’s nothing worse than having a high transaction cost managing any affiliate relationship when the value isn’t there. I think if you can reduce the friction in managing, why then would you not use affiliates a lot more? I think it’s broader than just sticking a product on a catalog page or in an app store. I think you can definitely evolve it into co creation of content or joint webinars or reciprocal blog links or whatever so that you’re thinking of it more holistically and saying it’s getting harder to create your own audience.
27:12 – Alan Gleeson
Everybody is trying to build audience. We can see the likes of substac taking off and newsletters taking off. Audiences are shrinking. We talked about intense competition earlier, so the more you can leverage other third parties for mutual benefit to do it in a sensible way, I think it’s going to be a big growth area.
27:30 – Joran Hofman
I think we’re both the perfect example. We both focus on B2B SaaS companies. A logical move for us would be after the podcast recording to see how can we help each other because we’re not competitors, but we are focusing on the exact same niche.
27:44 – Alan Gleeson
I think, look, the other thing is startups should help other startups if they can. It’s easy for startups to default to the market leader, but we want a rich ecosystem, right. If it can be done in a way where startups help each other provided and this is the key point, the product has to be in good shape and deliver real value.
We talked about that earlier. Once you tick those boxes and you’re comfortable, this is a really good solution, whatever that may be. We know then the likes of your company in mind that we face challenges acquiring customers at scale. If you can do it in a way that’s certainly not salesy but mutually beneficial, I think it’s in everybody’s interest to do so.
Advice for founders growing to 10k MRR
28:22 – Joran Hofman
Yeah, exactly. We’re coming to the end and I’d like to ask these two questions at the end, when we talk about succeeding in a crowded market, what kind of advice would you give SaaS founders in different stages to begin with? Somebody who’s growing to 10k MRR?
28:38 – Alan Gleeson
Yeah, so that’s obviously an earlier stage company, right. I get back to some of my earlier points that would have been around that you got this inherent tension because at that stage, you’re probably fairly resource constrained. You’ve got to leverage your network really heavily, but you’ve also got to realize that you’ve made some assumptions about the market that you need to validate them. Right. Being creative and being resilient are going to be key traits. Similarly, you don’t want to be burning cash on paid acquisition at that stage. You’re trying to largely do organic acquisition at that phase because what you want to avoid is getting a scenario where your cash burn gets too big because we know developers are expensive. In the early days, you want your main spend to be on salaries for the few product builders right. Only put on the kind of burners in terms of paid acquisition and marketing budget.
29:35 – Alan Gleeson
When you feel that sufficient cash flow is coming in and enough evidence that suggests that there is a market there that your product meets the need of. Because you go back to the point you’re making assumptions in the early days, and you almost need to discount the few that are maybe friendlies so that they’re great to have. Right. You don’t want to get into this world where you’re artificially validating your assumptions. It’s when you start winning new business from people with no contact or no relationship with you and they onboard successfully and they stick around and they get value from the product. I think then it’s a case of going and raising finance if that’s the route that you need to do, or trying to get of a war chest together to go more aggressive in marketing. You don’t want to be trying to scale prematurely.
30:24 – Alan Gleeson
You want to make sure that the signals for further investment or hiring are pretty strong and that they’re not ones that you’ve misconstrued, which is easy. Right. We all want to be successful. Right. We want to be more conservative about how we read those signals.
30:41 – Joran Hofman
Exactly. You have to be honest with yourself definitely in this stage because you can burn the company and burn yourself out and burn your runway pretty quickly.
30:50 – Alan Gleeson
Advice for Founders growing to 1M ARR
30:51 – Joran Hofman
If we go one stage further, what kind of advice would you give somebody who’s growing towards 1 million?
30:57 – Alan Gleeson
Yeah, look, I think at that stage, you’re ramping up your sales and marketing efforts, so you’re switching from being more product centric to probably investing a bit more resourcing in sales and marketing. Again, going back to the playbook, you got to try and decide which of those two, even though they complement each other, and you ideally would run two of those, but which of those two is the more likely to give you most results? Right. You’re probably bulking up your teams at this stage, but you can’t fully resource sales and marketing, so it’s picking from the early stages, which had you some success with. The other thing is, I’d still use freelancers quite a lot. I’m a great believer in freelancers. I think that’s still not a big enough kind of journey to say actually let’s resource up fully across the different functions. That was one of the kind of raise on detriment from my previous consultancy business was that those chief marketing officers in Europe were very expensive and they were hard to find.
31:54 – Alan Gleeson
Companies that would have fit into this bucket could have got away with two or three days a month. Having someone like me come in, set strategic direction, set decisions around prioritization, set decisions around resourcing, without needing to put a full time CMO into situ and obviously accelerating your cash burn. There are some of the things I think that are worth thinking about.
32:17 – Joran Hofman
Yeah. I guess here the misconception is often freelancer are more expensive, but in the end they might not because you don’t need them the full time. You can actually have certain days, have them do the things you want them to do and then create a strategy around things.
32:31 – Alan Gleeson
Exactly right. Before I transitioned into contento, I had clients at one in Belgium that to a point. They had five or six in the marketing function. They were modestly priced. Once I came in like a detective, shining my torch around, trying to see where the issues were, it was quickly obvious that they were off track in a couple of serious areas. I could then, in a very small engagement, a couple of days, provide a lot of value to the CEO to say, look, these are the things you need to fix. It included analyzing personnel in the team and saying, look, these people are great, let’s really work with them. These people are probably not at the races and therefore you’re probably best moving them on if you can.
33:14 – Joran Hofman
Yeah, makes sense. We are coming to the end. Any final thoughts you want to share with other B, two B SaaS founders?
33:23 – Alan Gleeson
I think the kind of point that we touched on earlier, which I think is an important one, is it’s a difficult role. There’s a club of B, two B SaaS founders out there. We’re all busy, but we can help other B, two B SaaS founders. It can be as simple as, let’s say you want to do a search engine optimization tool. Maybe you don’t go with one of the market leaders and you pick someone that’s earlier on their journey.
The beauty of SaaS, of course, is you can probably buy for a couple of months and then turn it off if it’s not fit for purpose. I guess the message is give order B to B SaaS founders time, because others won’t. Potentially there can be low cost tests that aren’t that risky, that mean that you can both benefit from that ecosystem a bit more.
34:07 – Alan Gleeson
That will be one piece of advice.
34:10– Joran Hofman
Yeah, I really like that because it’s easy to go with the bigger names, but if you can help each other this way, you’ll probably get a lot more benefit out of it from it as well. Because you probably get onboarded, probably get a lot more attention than when you go for a bigger company where you talk with account executives or any other kind of roles.
34:27 – Alan Gleeson
Again, you can do other things to help each other, provided you’re happy with the offering. Give them good reviews in G two captera do, testimonials, do, whatever, just to help you, because you get your name out on third party sites, but also you’re helping them in the early years. Get some social proof.
How to get in contact with Alan
34:43 – Joran Hofman
Nice. It’s exactly what we’re doing right now at rates. It’s fun to hear. Final question if people want to get in contact with you, what would be the best way to do? Yeah.
35:03 – Joran Hofman
We’re definitely going to add the link so people can find you if they make any spelling mistakes. Thanks again, Allan, for coming to the show today and sharing all your knowledge.
35:12 – Alan Gleeson
Thanks so much for having me on. It’s been great.
35:14 – Joran Hofman