Yesterday I asked Shaunak Roy, CEO of Yellowdig, for his expertise around the question: How to create predictable traction in a new SaaS category?
Shaunak is on a mission to make classroom learning more joyful, active, and engaging – and is, with that, creating a new category in a dense market.
His answer is a valuable one:
“SaaS is transforming from becoming a tool to solving business problems; it’s becoming more important to talk about “outcomes” in concrete terms.
With this, there is a shift from paid-per-license to paid-for outcomes in the B2B space. Pay-per-license doesn’t make much sense unless it is a point solution, which is increasingly rare.”
Here’s the thing
What Shaunak refers to is a perfect example of trait #5 in my book: Remarkable SaaS companies create new value possibilities. It’s one in the category business model change. Combine this with a remarkable product, and you have an irresistible cocktail.
And this is precisely the ammunition you need to create predictable traction in a new category – for two reasons
- Overcome the mental hurdle: novelty is often not enough; it needs to do something significantly better
- Overcome the business risk dilemma: You’re asking them to make the jump into the unknown – and that comes with significant risk
Therefore combining a new product with a new business model as a vehicle to enter a new category is a route worth exploring.
Christian Owens, CEO of Paddle, shared a great example in the podcast I posted yesterday.
They created a new category by offering a complete payments, tax, and subscription solution for SaaS businesses, combined with a business model that de-risks everything for their customers: % of transactions (instead of standard one-size-fits-all fees), including a range of compelling guarantees.
The result: short sales cycles, customers prepared to pay a premium, predictable traction, and very defensible differentiation.
Question for you to reflect upon
How can you extend your SaaS product with a business model and guarantee that makes doing business with you irresistible for your ideal customers?
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