Is Your SaaS Company Sitting on a Gold Mine?

Product development is a process close to many of our hearts. From ideation and design to production, test, and launch, and the thousands of steps in between, it...

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Product development is a process close to many of our hearts. From ideation and design to production, test, and launch, and the thousands of steps in between, it is a journey with many twists, turns, cul de sacs, and milestones. On such a journey, it helps to keep to have a well-defined destination in mind, even if you have no idea how you are going to get there. As Steve Jobs put it “you’ve got to start with the customer experience and work back toward the technology – not the other way around.” As always, there is wisdom in Jobs’ words and many of the successful companies we read about have done an excellent job of identifying a customer problem, coming up with a solution, and figuring out the small matter of the technology that makes it all work along the way.

But what if, in the process of developing your product and focusing all of your attention and efforts on a specific problem, you managed to inadvertently solve another, even bigger problem along the way? Necessity is the mother of invention after all – so if faced with technological hurdles on the path to your desired customer experience, you will do everything possible find a way past them. The thing is that the obstacle in your path might very well stand in the way of other companies on a different path and clearing the way for others might well be where the real value lies in your business. Let’s move out of the abstract here and look at some concrete examples.

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Dinein.co.uk is a UK startup that entered the relatively crowded restaurant delivery space in 2011. Its offering is comparable to services like Just Eat, FoodPanda, Delivery Hero, and Deliveroo in that it allows the end user to order food from restaurants which don’t normally offer a delivery service. Nothing special there, right? Wrong. They say that in a gold rush, it’s a good idea to sell shovels and in its attempt to cash in on the restaurant delivery gold rush, Dinein has managed to develop quite the sophisticated shovel indeed. The company has solved the logistical technology problem of its delivery service to such an extent that it is now selling a SaaS Dispatch product that allows any delivery company to assign delivery tasks to its drivers in real time based on their current and future locations. Presumably, Dinein’s original intention was to optimize its delivery offering by creating a system that allowed for the fastest, most efficient delivery of restaurant food. The result, however, may mean that it will become a SaaS logistics company rather than a restaurant delivery company.

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For another, bigger name example of a company that has solved a problem for other providers in the process of developing its own customer-facing product, we need look no further than Box. Back in April, the cloud storage giant announced the launch of Box Developer Edition which allows developers to spin up their own instance of Box and bring the functionality of the enterprise collaboration platform into their own application. According to its blog, the company has spent the best part of ten years developing robust technologies in storage such as “full text search, content encryption, advanced permissions, secure collaboration and compliance – all the capabilities that you as a developer would have to build yourself when working with commodity cloud storage.” Despite his visionary status, I doubt that it was part of Aaron Levie’s original idea for Box to build a platform for developers (correct me if I’m wrong) but rather, it was a realisation along the way that a lot of the technical problems it had resolved could be repurposed and used to create another revenue stream in a market less crowded than cloud storage.

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While the by-products of Dinein.co.uk and Box may not have been intentional from the outset, I would wager that Docusign’s by-product of a Digital Transaction Management (DTM) solution became apparent earlier on in the process of developing its e-signature product. There was a clearly identifiable customer need to digitize the signature process but Docusign recognized that simply replacing the paper process with an online one would not be the optimal experience or even fit for purpose. Instead it set about not only solving the e-signature problem but also resolving a number of peripheral issues relating to compliance, security standards, encryption, data privacy, authentication, and enforceability, and went from simple signature capture to the secure management of documents throughout the entire transaction journey. From the technology and expertise developed by Docusign in this area came its DTM offering and sees it leading the way in a new category in cloud services.

What about your company?

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So, are you missing out an untapped revenue stream in the form of a solution that you have come up with in the course of your product’s development? You don’t want to be the SaaS equivalent of the dairy companies that dumped their whey by-product for years before realizing that there was a huge market out there for it as a protein supplement. I’m not suggesting that you rethink your entire business model and proposition but I have spoken to lots of SaaS companies who, when I ask them what differentiates their product from competitors, tell me “we’ve devised a really clever way to do X” or “we’ve come up with a sophisticated algorithm to do Y”. Is that differentiating competitive advantage you have developed something that could be useful to other companies or in another market? Now, I ain’t saying you’re a gold digger… but use your imagination because you could be sitting on a gold mine.

By Michael Cullen @michaelcullen87

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