You’ll never truly understand how to lead a SaaS company until you’ve done it firsthand. But it always helps to get advice from someone with experience.
Dan Robinson, current Advisor and former CTO at Heap, shares five essential learnings from nearly a decade of building a SaaS business.
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1. What Your Job Is (And What It Isn’t)
Your Job is to Make the Company Win
A CTO may imagine their primary job is to provide technical expertise, lead engineers, and help build the product. While all of these functions are necessary, they are secondary and serve every leader’s main objective, as described by Robinson: “Your job is to make the company win.”
This guiding light is vital for CTOs and leaders to understand because what the company demands from you to win will change as your business scales and evolves.
Keep Your Identity Small and Flexible
So, you have to get used to letting go since change is constant. But if you attach yourself too much to a specific thing, it will become too closely associated with your identity, and it will be harder to let go as things change and you are needed elsewhere.
2. Strategy Should Be “Obvious”
SaaS Is Checkers, Not Chess
“Strategy for a SaaS company, I argue, should look kind of obvious. Specifically, if you have a clear understanding of the business and the market and what customers are trying to do, the right strategy should seem kind of obvious and simple.”
When creating a winning business strategy, it may be tempting to overthink and craft elaborate plans to beat your competitors. But what tends to work most often is meeting a customer’s needs most effectively. Cleverness is not your friend regarding strategy; it just makes your plan brittle.
Engineering culture usually rewards complex and clever solutions to problems, but when it comes to business strategy, simple wins. CTOs must remind themselves of this constantly throughout their careers.
The Hard Part of Strategy is Context
Your strategy should seem obvious. However, you mustn’t miss the context. If you understand the market, the ideal customer, and the product, you’ll be more successful in developing a simple strategy. Once you do your homework on understanding context, the strategy should come easy.
Software is Fractal
A SaaS product is richly nuanced and contains multiple layers. This is because business and human needs are also subtle and complex. Therefore, any successful feature you launch will generate more subfeatures and additional investment that seem obvious after the fact.
Leadership needs to consider funding areas, not just a single feature, because more supplemental subfeatures and finetuning will be required every time. In addition, expect competitor functionality to have more than meets the eye. So, don’t underestimate the work it takes to make your own version of a feature to compete in the market.
Ultimately your technical moat will come from the depth of capabilities, not a single functionality. Robinson says, “Your technical moat is not usually some unique, specific piece of technology. For most SaaS…it’s this accumulation of feature-laden and third-level investment in these features.”
3. Taste the Soup
You can’t fully understand something unless you engage with it directly. As a leader, it can be easy to become removed from the actual context of the product and business operations as the company scales.
Leadership needs to find a way to keep a finger on the pulse of the hard realities of customers and internal teams.
Use the Product; Talk to Users: Keep Doing Things That Don’t Scale
Throughout every stage of your company, executives must continue to do things that “don’t scale.” This is about engaging with your teams, hearing directly from customers, and using your product.
Robinson shared an example from his experience. At some point, Heap leadership decided to set aside a week for a product boot camp, where they would do a deep dive and use their product as their customers do. As a result, they quickly discovered valuable insight that they didn’t have before, leading to improvement in multiple areas of the company.
This doesn’t mean that the execs always need to do on-the-ground work. Leadership needs to delegate to the talent they have hired. But taking the time to understand your business will help in the long run.
4. Energy > Time
Understand The Energetic Cost of Everything
“People run out of energy; they don’t run out of time.” Most people end their day when they begin to lag in productivity, not when their time is up. However, so much discourse focuses on time efficiency and time management to further productivity. Since the real bottleneck is energy, you should focus on managing motivation.
Leaders need to understand that they themselves can drain their teams. Still, on the flip side, they can also drive their team’s energy by motivating them, showing appreciation, and rewarding their employees.
5. The Value of Experience (And the Limits of Intelligence)
Pattern Recognition: It’s Hard to Know What “Good” is if You Haven’t Seen It
“Experience building companies gives you pattern recognition.” Robinson points out that experienced leaders have seen common wins and pitfalls, so they will recognize the same patterns the next time they see them. If you are an inexperienced leader, you don’t have that data set yet, so align yourself with a more established person in the industry to help guide you.
This is especially important to understand how healthy an area of your company is; if you haven’t seen the successful or “good” version yet, you may need to rely on the advice of someone with more experience.
Playbooks: You Can Do Things 3x Faster When You’ve Done Them Before.
Experienced execs will know how to solve similar problems that pop up based on their past experience, so resolutions happen faster. They will have a developed playbook for wins and losses that your company can leverage.
Experience tends to make people credible. These leaders should level up the caliber of talent around them.
- Understand your real job –– making the company win
- Winning business strategies are simple and obvious, not complex and clever.
- “Taste the soup” and never lose connection with the core of your business.
- Energy is a greater productivity driver than time, so find ways to energize your teams.
- Experienced leaders bring pattern recognition, problem-solving playbooks, and credibility to your company.