Fahad's Notes

Design is how the thing works!

People think design is what it looks like and the job of the designer is to Make it look visually good!. That's not what we think design is. It's not just what it looks like and feels like. It is how the thing works!

Components

1. User Research
2. Interaction Design
3. Visual Design

Subscription based

Recurring revenue

Cloud based

Even though the term landing page is not new to me, it is today that I understood what it is & specific purpose we have it. It is a webpage with the objective of converting visitors of a website into leads.

I am listing out mandatory components of a good landing page(based on the inputs from my team & from some material I read)

1. A concise, offering-focussed headline: Visitor should understand what’s in it for them within seconds of arriving
2. An image that represents the target audience: It should illustrate how a visitor will feel once they receive the offering offer
3. A clear call to action button (form link embedded) that stands out within the page: Clearly inform what you want visitors to do
4. The description needs to be clear and concise: Guide the visitor to take the action you want
5. Crisp testimonials that act as social proofs: Social proof is an effective persuasion technique to ensure desired actions

Few best practices to ensure the best results

• Limit the number of input fields to what is absolutely necessary
• Have a Thank you mail to acknowledge the application receipt
• The page is configured in such a way to have a minimum loading time

I had the opportunity to participate in the business performance review of an early-stage startup. I want to share my learnings and observations here -

Learnings

• Our team had done an exercise before the review, to figure out the cash flow situation of the company. We relied on the founder to update the data in our worksheet. Few hours before the review, he expressed doubts about the updated numbers. This put us in a predicament(if we do not have clarity about the numbers, the whole exercise becomes futile). We could have easily avoided this by requesting the financial statements before the exercise. The availability of statements would not only have avoided unintended errors but also acted as a verification. So, the learning here is “Trust but verify”.

• Lack of accounting discipline was very evident in the way these founders works. A founder stated that he used to look at cash in the bank to evaluate the runway. Even though he has taken big strides from that point, a lot more discipline needs to be inculcated on this aspect.

• Another bias we have as humans is we take action based on what we feel is right. If a founder makes his or her decisions likewise, it would put the future of the organization at risk. Decision making should be based on the generation of the best possible economic outcomes. This is a mindset change that every founder will have to undergo to increase the odds of success.

Observations

• The founder was speaking less during the discussion, which was counter-intuitive to me. The comfort level he had with my team would have been a probable reason for it. But, I feel it is worth looking at it.

• The founders were very clear on ending an association they had with an incubator. I think it is worth understanding the reason for it.

In this article, I try to throw light on how SaaS companies can maximize their revenue by following value-based pricing. Before I delve into the pricing of SaaS product, let me start off with -

Factors that are considered to price of any product

1. The economic value of the product: The price of the product should not be more than the economic gain to the customer
2. The total cost of delivering the product: The price of the product should not less than the unit cost of delivering the product
3. Competition Pricing: The price of the product should not be higher than the price of a competitive product. Demanding a higher price should be by delivering more value
4. Customers willingness to pay: Customer should be willing to pay the price

One or more of the factors might be less important for certain products & hence we should make the decision for the type of product.

Pricing of SaaS products

When we look at early-stage SaaS companies, pricing is an important lever which the founders pay the least attention to & as a result, they generally end up underpricing their products; due to the fear of losing customers.

Then what should be the approach to maximize revenue? - Price for the customer. 

SaaS products do not work like commodities & the value the product gives each customer is different, which means that there is case for customer-based differential pricing.

How do we apply the above pricing framework to a SaaS context — Should add examples

• Figuring out the ideal consumer persona(ICP) & then the economic value the product can give the customer(for each ICP)
• Price more than the competition by providing more value to the consumer or by offering a product that is not available in the market. If we can't do both ensure the pricing is competitive. Providing more value would be easier for B2B SaaS companies as against commodity businesses
• If the customer's willingness to pay is lower, educate & negotiate with the customer on the economic value gains that they can derive from using our product. This step would also be easier for B2B SaaS companies
• Always ensure that the price is higher than the unit cost of product delivery. This would mostly be the case for SaaS companies, but it should be validated

I hope this content is useful. Do let me know your feedback through the comments section.