5 Growth-Hacking Secrets for Your SaaS Business
This article is included in Entrepreneur Voices on Growth Hacking, a new book containing insights from more than 20 contributors, entrepreneurs, and thought leaders.
Building a business from the ground up can be a slog. You've spent a lot of time coming up with a unique SaaS idea that cold-generates value for your target audience, and now you just want to see that business grow.
SaaS, short for "Software as a Service," describes a software-licensing and delivery model where cloud-based software is licensed via subscription and is centrally hosted. And, this may be your business model.
If so, the prospect of using that model to become a 10-years-in-the-making "overnight" success may strike you as distinctly unappealing.
That will mean you'll have to find a way to hack your way to growth. Here are five growth-hacking secrets for your SaaS business.
1. Give away something valuable.
To convince people to use your service, consider giving something away. A 30-day trial is commonplace and not much of an incentive. Likewise, an iPad giveaway might be a way to drive some initial interest, but is too generic an offer to be valuable -- particularly if it isn't connected to your service in some way.
But there are other useful ideas out there: When Dropbox first started, it gave away a lot of extra storage through its referral program. Whenever you sent a friend or colleague an invite to join, and they followed through, Dropbox granted you more storage.
This turned out to be a great strategy for the company, whose product was virtual storage space in the cloud. Its customers helped spread the word about the service, and pretty soon Dropbox grew like crazy. Incidentally, PayPal did something similar -- it initially awarded $10 for each referral. Who wouldn't want a bit of extra cash? Paypal saw huge growth as result of this promotion.
How can you get your own customers involved? What can you do to get people to market your business for you?
Follow the lead of Dropbox and PayPal: Consider giving away something that connects directly to what your business offers. Share the fruits of your labor without giving away the entire farm.
2. Leverage the 'freemium' model.
People love free stuff, and offering your service for free can be a great way to get some early traction.
Is your value proposition hard to understand? Is it a sophisticated software service that requires user education? Is it complex, or just hard to explain in other ways?
You need potential users to see the value in what you offer. In a situation like that, the freemium business model can really work. Evernote, for instance, experienced a lot of challenges in the early stages of its business. But, by offering its software for free, it was able to grow its user base and help people understand the value of its offering.
Today, you can still sign up to Evernote for free; the company has pricing plans for power users, as well.
3. Create compelling content and grow your email list.
If you want to build your business with content, you have to be sold on the idea 100 percent. You can't dip your toe into the water and expect to see results. You must commit to steady, regular and, most of all, quality publishing.
Content, however, can be a great differentiator in a crowded market. Some experts even say it's the only way to differentiate yourself from other businesses.
When Buffer App first made an entrance into the social media tool niche, it was just one among many. But, by creating incredibly valuable content and sharing it on social media, it was able to attract a huge audience over time.
Content often goes hand in hand with building an email list, and having a large database can easily translate into more traffic and more money. Noah Kagan of AppSumo was able to build an email list of over 700,000 members by leveraging a variety of different tactics, many of which were connected to content. This allowed him to get his service out to a huge buying audience.
Building an audience and an email list takes time. But once you've done the work, you'll have built a loyal following that will take interest in whatever software you release.
4. Make partners out of your competitors.
Odds are that you've already done a competitive analysis, so you know whom you're up against in your market. You've thought about what your differentiating factors are, and how you're going to innovate and stand out from the crowd.
What you may not know about is the potential opportunity to leverage the popular platforms others have created. Is there a giant in your industry that has a majority of the market share? If so, becoming a direct competitor could be the path of greatest resistance. But, if you can make a partner out of that business, you can hack your way to big growth that way.
This is exactly what Airbnb did when it recognized the ubiquity Craigslist had. Craigslist was already dominant in the rentals, temporary residence and vacation-home market when Airbnb started looking to grow its own user base.
So, instead of investing increasing amounts of money into advertising, Airbnb did something smart; it asked users to add their personal listings to Craigslist as well. This wasn't exactly easy, since Craigslist did not have an API (meaning an application program interface whose protocols and tools help build a new software application).
Airbnb managed to figure things out with a bit of coding wizardry.
5. Make your offering exclusive.
Exclusivity stands as a prominent strategy for growing a SaaS business. For one thing, it allows you to scale your business without feeling a huge amount of pressure. Another important component to this strategy is that, psychologically, people want to be a part of the "in crowd" -- not left out.
LinkedIn achieved this exclusivity by making its social network about professionals. And Google did it with gmail -- you had to get an invitation to get your personal inbox.
Social media scheduling tool Edgar is another great example of an "exclusive" software. If you go to Edgar's homepage, you'll see that the only thing it lets you do is enter your email address to request an invitation.
So, do the same. Appeal to the "cool kids" by creating a compelling reason for people to sign up; then get them to share your service with their friends.
Another way to hack your way to profit is to buy a SaaS business. Even if you know your way around only a couple of niches, you can often find a business well-matched to your skills.