Ep. 78 Is Your Business Model Getting in the Way?

One of the Holy Grail's of business life is a SaaS business where customers sign up and you get high margin revenue every month like clockwork, with a minimum of customer support. Investors love this model. Founders crave it. But I find that getting too attached to a business model can get in the way of bigger growth. Why is that? Because customers don't really care about your business model. They care about their pain being solved Let's make this tangible. When I was leading my first startup, I was fully on board with the SaaS model, and was very disciplined about not letting too much service and support creep in and diminish our margins. But we ran into a problem. We discovered our customers actually needed that service and support. Without it, they wouldn't buy and we couldn't grow very fast. Once we added in support and services, we went from $200k to $1M in less than a year. Recently I've worked with two Founder clients who started out thinking they would make a data oriented product for a niche industry and build a SaaS business around it. But as they got into it, both of these Founders collided head on with a stubborn reality: the data/SaaS issues did not on their own solve an important enough pain. Because of this, they got a lot of "that's interesting's." But not the kind of traction they needed. It turned out, the SaaS component of what they offered, only addressed a small part of the customers' pain. And not enough to make it a "Stupid Offer" So they zoomed out, focused on the biggest, most important pain they could saw, and saw that the SaaS they were building was really the underpinnings of a market place model that customers got REALLY excited about. While Marketplaces are a bigger lift to create, that was the big exciting opportunity. In this week’s Rocket Ship Founder Podcast, I talk about taking a closer look at your business model. I cover: - Why Offer-Market fit trumps Product-Market fit in understanding your model - How to use Offer-Market fit to sanity test your business model - How to know when your business model might be getting in the way This 14-minute episode will change how you look at one of the most fundamental aspects of your business. To your success!