As a startup or scale-up, you may have already created a great product, but have you considered what type of software or services company you want to be? This decision is crucial as it will impact your ability to execute and will curate your early customers.
It will also affect how your company's support functions make assumptions and decisions about your operating model and structure as you scale. For instance, your sales team could derail your vision for a product's operating model when trying to win a customer. Custom change windows, forked code bases, personalized pricing, and contracting all add cost and complexity.
Therefore, it's essential to know what type of company you want to be and ensure your team understands this too.
SaaS companies typically sell the same generic product to every customer with very few feature or functionality customizations. This type of standardization allows them to automate and scale rapidly with modest headcount growth. Although customer stickiness is low, a low cost to serve plus a high volume of customers provides excellent margins. On the other hand, system integration or development houses typically sell complex custom design solutions to customers with custom features and functionality. Their ability to scale revenues comes from their ability to hire and maximize leverage from staff. Yet their solutions are very sticky, which provides high lifetime customer value and significant margins in later years.
If you try to build a SaaS platform with a custom development house mentality, you will never get the leverage from a low cost to serve. If you try to be a Systems Integrator but offer no flexibility, you will struggle to remain sticky. Therefore, be mindful of the company you want to be and make sure your team understands what that means.
So, consider what type of company you want to grow and ensure that your whole operational and delivery team understands.