(Editor’s note: Clate Mask is co-author of the New York Times bestseller Conquer the Chaos and CEO of Infusionsoft. He submitted this column to VentureBeat.)
It used to be that software companies could become very large – and very successful – by putting a bunch of “shelf ware” into the market. In other words, it didn’t matter whether the customer used the software. As long as the customer paid that fat licensing fee, the vendor was happy. In the old enterprise software world, many large companies were built on this model.
Web-based software (hosted, SaaS, on-demand, in the cloud, etc.) is different. If the customer doesn’t use the software, the vendor is unlikely to achieve success since the customer pays on an ongoing basis instead of paying a large licensing fee. If the customer doesn’t get value, the customer stops paying. Simple as that. This model is great for aligning the interests of the customer and the vendor, which is why it has become the norm over the past 10 years.
So, for the vendor, the game is all about usage of the software. To break this down a little further, I like to think of this in terms of three foundational strategies that accelerate usage (thereby leading to success for Web-based software start-ups).
Obviously, the vendor must have a great product that meets the needs of a specific target market. Beyond that, there are three strategies can make or break the success of the company.
- Focus on the Minimum Viable Product. This keeps the product from becoming “bloatware” and delivers the precise benefits the target customer is seeking.
- Fast Implementation. A fast implementation process allows the user to experience the benefits of the software quickly and does wonders for word-of-mouth marketing.
- Add Usage to Employee Metrics. Sales, support, and product employees who are measured and compensated on customer usage rates ensure everyone is aligned to the customer’s needs.
When these strategies are pursued, alignment with the vendor and customer naturally falls into place. Glowing customer remarks start pouring into the company. Employee morale skyrockets. Momentum builds. And the market takes note of the solution’s effectiveness.
Of course, all of this depends on the basic premise of a good product that is tailored to a clear target market. As long as that premise is true, these three foundational strategies will accelerate usage of the product and lead to great success for the web-based software start-up.