The incumbent’s playbook for launching a vertical SaaS product (Directions EMEA 2017)

Subtitle
The Incumbent’s Playbook for
Launching a Vertical SaaS Product
Lessons learned with and from an ongoing transitioning process
Dr. Martin Karlowitsch
CEO | Co-Owner - NETRONIC Software

Subtitle
www.directionsemea.com
DISCLAIMER ;-)
This presentation is not about Dynamics NAV.
It is also not about Dynamics 365.
It is about building a SaaS business, when you already have an (on-prem) business.
For that – of course – both NAV and D365 can be wonderful triggers.

4Take-Aways
JUST.
DO.
IT.
NOW!

Martin Karlowitsch
CEO | Co-Owner of NETRONIC Software
Chief Enthusiast of just plan it
Strategy
Innovation
Sales & Marketing
Responsibilities

NETRONIC –
Gantt Charts for Visual Scheduling
• 42 years old company
• Independent & privately owned
• We visualize time- and resource-
oriented planning data
• 3 Business lines
• Tools for software developers
(Gantt chart controls)
• Visual scheduling add-ins for
Microsoft Dynamics NAV
• www.just-plan-it.com: SaaS production
scheduling for job shops & small
make-to-order manufacturers

Where we came from
1. We are a software product company (and always have been one)
2. 80% of our revenue is licenses & maintenance (since more than 40 years!)
3. In 2016: 100% of the business was “on prem”
Setting The Scene
Here is where we came from, what we did and what I will share today
What we did
1. We built a standalone SaaS product
2. We started integrating it with D365 as “connected app”
What I will share
1. Experiences made building & launching a SaaS product (as the kind of company that we were ;-)

The Playbook’s Agenda
1 The Job To Be Done
Your key to identifying a SaaS opportunity
2 The Minimum Viable Product
Your key to validating that there is market demand
3 Commitment to Focus & Long Game
Your key to organizing for execution
4 User Onboarding (The Customer Journey)
Your key to getting an R from the I
Your keys to unlocking some doors that might feel as being closed for you today …
Phantasy, Imagination & Day Dreaming
Your key to preparing for scale5
We are here …

Subtitle
The Job To Be Done
Your key to identifying a SaaS opportunity

”We saw
what you do
for NAV.
Can you do
this for us as
well??”

Subtitle
Was exciting, but nothing I wanted to do every day
(and what we could afford every day ;-).

• Reasons for winning custom projects (not very often)
• Client used an ERP, which did not have proper scheduling capabilities
• As ERP customer, client was used to paying money for custom developments
• Client lost customers as improper scheduling led to late deliveries
• Reasons for not winning custom projects (very, very, very often)
• Client had no ERP and looked at software “as commodity, not as luxury”
• What they all had in common
• Make-to-order manufacturing: small batch sizes
• Job shop type of production: each job is unique
• Delivery time & commitments most critical issue
• Were compelled by visual approach to scheduling
First Lessons Learned

Subtitle
Why not building a
standard SaaS
product for them?

Subtitle
• “Will not work.”
• “Each manufacturing
site is unique.”
• “You need to
understand the
individual processes
to consult them and
make scheduling
work for them.”
• bla bla bla

What You Should Look Out For
Structural similarities:
micro vertical or
distinct business
process
Obstacles hindering
companies to grow
Things of which
common sense says
“this will not work”

Getting there was
a long, long way.
Wish I would
have been aware
of ONE thing
before …

• Purpose
• Provide a theory of why an innovation is successful
• so that you can manage the process of identifying innovations
• rather than depending on good luck.
• Basic idea
• What job did you hire that product for?
• Good news
• Some jobs are timeless, but the solutions may not be
Purpose & Basic Idea & Good News
What job did you hire that product for?

Subtitle
“People don’t
want to buy a
quarter inch drill.
They want a
quarter inch
hole.”
- Theodore Levitt

1. In our tech world, we generally think of ourselves as drill makers.
2. We think about features.
3. We think about attributes like bigger, faster, sexier, cheaper.
4. We see what other drill makers are doing and do the same.
Let’s Be Honest
We all are product & technology people … and this is a problem ;-)

How We Look At Our World
As product people, we tend to be blind

As Product People We Tend To Be Blind
Here are some competitors of the drill maker
Faster
Easier
Cheaper
With less damage
For hanging pictures

Defining the Job to Be Done
Make this the cornerstone of your process to find innovation
A „job“ is the progress a person is trying to make in
a particular circumstance.
• Progress
• Represents movement toward a goal or aspiration
• A job is always a process to make process, it‘s rarely a discrete event
• Circumstance
• A job can only be defined (and a successful solution created) relative to the specific context
in which it arises
• Dimensions
• Functional
• Social
• Emotional

Subtitle
Finding the Job to
Be Done
“One thought experiment
we’ve found helpful to
really grasp a job is to
imagine you are filming a
mini documentary of a
person struggling to
make progress in a
specific circumstance.”
(we actually interviewed
people)

Subtitle
Now I have the idea for my “product”.
But, how to start?

Subtitle
The Minimum Viable Product
Your key to validating that there is market demand
(without spending a fortune)

Better timing:
I read the right
book while we
were starting 

Purposes
• Test a product hypothesis with minimal resources
• Accelerate learning
• Reduce wasted engineering hours
• Get the product to early customers as soon as possible
MVP is a concise summary of the smallest
possible group of features that will work
as a stand-alone product while still
solving at least the “core” problem and
demonstrating the product’s value.
The minimum viable product is that version
of a new product which allows a team to
collect the maximum amount of
validated learning about customers with
the least effort.
Perspective
• Revenue (customer value, not technology)
• Riskiest assumption is not whether something can be
built, but rather would customer X pay price Y
• If you fail, fail fast
Definition, Purpose & Perspective

An Image Is Worth Than Thousand Words
(1) Eric Ries, The Lean Startup

Subtitle
Biggest hurdle: Be 100% convinced (and get your team
behind it) to ship something into a B2B market that
everybody regards as “not ready”.

Subtitle
“We only build for early adopters. If people do not like (yet)
what we build, they are not a good fit for us.”
See the difference? We select our (early) customers, not vice versa.

Build & Measure & (Re)Build & …
“If you fail, fail fast”  You only can fail fast, if you recognize that you fail
Hypothesis
Build
Measure

Value
Prop
Tagline Name Logo
- Whom to we sell to?
- Which 3 problems do we
solve?
- What is unique value prop?
Done 100% internally
Making a short and clear
statement to nail down the
value prop
Done 100% internally
Cost us <150$.
Gave five 15$ jobs to
different people and then
continued with best
www.fiverr.com
Made two ½ day
workshops with agency.
Their job: not to come up
with a name, but to
challenge us with
(strange) naming ideas
Hired help
Prerequisites for our MVP
Getting our sh#! together

Website
Basic website. We built it on HubSpot
and I highly recommend this software
to achieve proper Inbound Marketing.
Video
150$ on fiverr ;-) – Introducing the
idea in 60 seconds.
Call-to-action
„Request a trial“  people could not
sign up by their own. We wanted
them to engage with us first.
Google AdWords
Best way to do Market research at
controllable cost.
Our Minimum Viable Product
The Ingredients

Surprise, Surprise
Happened in first (!) month that website was live

Subtitle
At that
moment
we knew
that we
“were in
trouble” ;-)

Subtitle
It’s the customer, who brings a product to living.
It’s repeat customers, who make it real.

Subtitle
Commitment to Focus &
Long Game
Your key to organizing for execution

Subtitle
Having a
paying
customer
(not “a user”)
is the very
latest
moment,
in which
you need
your CEO’s
buy-in.

Time To Make Decisions
These are just examples. But you need to get this answered. Your (live & paying) customers may be around for a while.
How will they work? Which established processes need to get kicked aside
for the “new thing”? How do you measure success?
Decide about organization
SaaS is a „long-term revenue game“. Are you prepared of a few years
paying more than you earn? How will you finance this?
Decide about budget & financing
This is the toughest one. Will these guys do is as “side project” or will this
“new thing” become their main and only focus?
Decide about focus
Whom from your people will you assign to the new way of building
technology? Who will do the Marketing? Who will do sales & support?
Decide about the team

Our Decisions
Disclaimer: Did not happen in one meeting; happened over 6-12 months learning & doing
BUDGET
Decided against a „start-up bet“.
Will finance from company‘s cash
flow, and the profit of the existing
business.
THIS IS ONE OF OUR HUGE
ADVANTAGES OVER
START-UPS.
TEAM
Development: built small team
(from internally plus 1 new hire).
Product Mgmt: myself
Sales: myself & my brother
Marketing: initially my spare time
hobby; now scaling up
FOCUS
Development team: almost 100%
focus on just plan it; no distraction;
no other products; no need to
deliver billable man-days
Management: >25% of time spent
on just plan it
ORGANIZATION
KPI: not margin, not revenue – but
website visits, visits-to-trial
conversion and new customer wins
Process: introduced agile
development (2 weeks sprints).
Use Jira.

Subtitle
We run this as “start-up within the
company”.
(Almost) no single rule that applies
for the rest of our business
automatically applies for just plan it.
We take the right to unlearn, and to
make completely new experiences.

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• Proven value
prop P
• Slowly, but
steadily growing
product P
• Marketing
engine running P
• Constantly
signing new
customers P
TIME TO RELAX?

Subtitle
User Onboarding
(The Customer Journey)
Your key to getting an R from the I

Why User Onboarding Is Crucial
Enthusiasm
(Likelihood of
subscription)
Time
Peak of
inflated
expectations
Trigger
Disillusionment
Slope of
enlightenment
Plateau of
productivity
Comment: curve = “technology hype cycle” used by Gartner; based on ideas/observations from Geoffrey Moore

Poor User Onboarding
Enthusiasm
(Likelihood of
subscription)
Time
Peak of
inflated
expectations
Disillusionment
Slope of
enlightenment
Plateau of
productivity
„ONBOARDING
CHASM“
Trigger
User does not
subscribe. x

Good User Onboarding
Enthusiasm
(Likelihood of
subscription)
Time
Peak of
inflated
expectations
Disillusionment
Slope of
enlightenment
Plateau of
productivity
Trigger
User
subscribes.
From here
To here
Takes users ..
P

A New Perspective Helped Us A Lot
SaaS = Software as a service
SaaS = Success as a service

What We Are Doing At The Moment
Taking a holistic approach
Organic
search
Adwords
Webseite
Landing
Page
Signup page
& process
First-time
usage
Repeated
usage
Subscription
Ongoing
usage
Advanced
usage
Anonymous user Trial user Customer
Basically, we currently try to define for every step the
“minimum path to awesome”

Wait a minute …
Time to
recommend
something to
read again

• In-app messaging/chat
• Intercom
• Tested also Drift and SnapEngage
• User analytics
• Mixpanel
• Briefly tested also Hotjar
• In-app user tutorial
• Appcues
• Looked also at WalkMe and UserLane
Building SaaS Drives Using SaaS ;-)
Tools we currently try and/or consider using to help with the onboarding challenge

Subtitle
Phantasy, Imagination &
Day Dreaming
You key to preparing for scale

Subtitle
How would this feel, if we would have
50-100x more customers?

• Features
• Constantly enhance; but never ever lose sight of customers (SMB job shops)
• Processes
• Automation, automation, automation (e.g. ordering, payment, billing, messaging, etc.)
• Sales & Marketing
• Build customer success team (attract, convert, close, delight)
• Technology
• Build API to be „integrate able“ and „3rd party ready“
Addressing Scalability
Preparing for growth

Subtitle
Let‘s Get in Touch
MARTIN KARLOWITSCH
CEO | Co-Owner
NETRONIC Software
Email: martin.karlowitsch@netronic.com
Twitter: @mkarlo
LinkedIn: https://www.linkedin.com/in/martinkarlowitsch/
Blog: blog.netronic.com/exec-corner (coming soon)
Thank you very much for your attention
(on a Friday morning after a cool party :-)

The incumbent’s playbook for launching a vertical SaaS product (Directions EMEA 2017)

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