Building a SaaS startup with WordPress
Last week at the WordPress London Meetup I gave a talk about SaaS and WordPress. It’s a subject very dear to my heart. At the start of the year, we launched YoGrow. Our startup is gaining traction and it wouldn’t have happened without WordPress.
The story isn’t that simple. There have been ups and downs. There have been some big learnings.
In the talk, I had two big takeaways I wanted to share.
- How a SaaS mentality to building product will change the way you approach all your business.
- Why WordPress is the ideal platform to build a SaaS product with.
So there are my two big statements. The first is a little broad, so bear with me!
First – The Slides from WordPress London
Here are the slides from the talk. At WordPress London, we also had Slide Karaoke – something I’d never seen before. Any audience member can jump up and do a presentation based on some random slides. We had some slides from WordCamp London and it was a blast.
I look forward to seeing someone doing Slide Karaoke with my slides one day!
Why build a product?
But before I get into what SaaS is and why it fits well with WordPress, let’s talk about why to build a product.
For the last five years, I’ve been giving my full attention to growing Raison as a WooCommerce agency. We grew to four people last year. We were focused on our e-commerce niche and were successful. However, it became apparent that we were hitting a ceiling. We were stretched by the days we worked.
It’s all because we were selling hours and there are only so many hours in the day. You can bring in more people; you can increase your rates and you can optimise the value proposition for your clients. But the scalability of your work is always limited. You are still selling hours.
It’s why many agencies are focusing on selling recurring maintenance packages and scaling that side of their business.
In any case, the attraction to product is that it is considerably more scalable. You can create something that can grow beyond your development. The return on investment from your labour can be huge.
Did you get the feeling there is a BUT coming up?
Well, of course, it’s not as simple as that. In particular, there is the risk of failure that accompanies the product.
When you are doing client work, you have a concrete service to sell and you have a payment schedule set out from the outset. You are getting paid. It’s a guaranteed cash flow.
With product you are speculating about a potential return. The risk potentates a reward.
I would go so far to say failure is guaranteed. It’s a part of the product building process.
The key is to embrace failure. Measure failure. Use failure to help you grow. It’s something I’ve found a SaaS approach to product development has allowed us to do.
Hang on, what is SaaS
SaaS is an acronym for Software as a Service. It’s easier if I present a few examples for you.
Think: AirBNB, Dropbox, WordPress.com, HappyTables, Shopify and the like.
They are described as hosted services. Some have subscription business models too. It’s an area of tech that has become broad. It’s a big grey area and lots of companies consider themselves a SaaS.
For me SaaS means something a little different. I like to stretch the analogy a lot. For me, SaaS means a method to develop to your product with Risk.
It means getting from Underpants to Profit without failing. It’s a process as much as a platform.
Where do Startups go to die?
Let’s look at why startups fail. What risks were missed and sunk ships? From this, we can get a better understanding on how we should set sail.
Life Is Too Short To Build Something Nobody Wants #LeanStartup #HappyStartups #RunningLean https://t.co/R81uVnXIx6 pic.twitter.com/s4HkFrHBTM
— @lucaleonardini (@lucaleonardini) April 7, 2016
There is a fantastic website called Autopsy which looks into this. The reasons are varied but can broadly be grouped into failing to get a good Product Market Fit (PMF).
That’s a jargon word, but means exactly what it says. It means not having a product that the market want. That people want. Perhaps it’s too expensive. Perhaps it’s solving a problem that doesn’t exist.
One famous example is the Segway. Many thought it would be a huge success and transform personal transportation, however, the price point of £3000 was too high and there was minimal personal uptake. The startup failed.
It’s key to know your market. If only the Segway team had investigated the price thoroughly before development.
It’s that simple. You just need to ask and get feedback. The discovery phase is critical to get a product that fits the market. Once you’ve learned the problem and the market you can minimise the risk.
Having a feedback engine to drive your startup development
We first launched YoGrow as a WordPress plugins called Grow with WooCommerce. It was a free plugin hosted on the WordPress repository.
Seeing if people used our product and getting feedback was important to us. We wanted to minimise our risk. We thought the free WordPress repository would be ideal to get this feedback to inform our development.
We had intentions to monetise our service with a premium version to purchased in addition to the free version.
Despite our sentiment being in the right place, we didn’t get any results from the repository. I’ll share some of the issues we faced because it reveals how a SaaS approach is much more suitable.
Our challenges with the WordPress repository
Successful products have a simple engine at their heart. They embrace feedback to refine their offering and achieve product market fit.
The WordPress repository hinders this process. It provides minimal insights into your user’s behaviour, limits you from contacting the users for feedback and fails to present updates to the user base.
A successful feedback loop keeps showing the updates from which more insights can be garnered.
The only details that can be surmised from the repository dashboard are the number of installations that have occurred and what version has been installed. You can’t even see active users or activations.
The one thing that we did learn is that only 20% of users were updating their plugins.
So even if when we did push updates we were not getting these updates in front of our users. We couldn’t get the feedback engine turning and it was stopping us from creating a great product.
A quick note to say that I have spotted Freemius creating a WordPress plugin analytics tool. I hope this resolves some of the frustrations that we have experienced.
Why SaaS was a better fit for us
We hosted for a few months and had a lot of downloads. We were not getting feedback, other than a few five-star reviews that were saying they liked what we were doing.
We decided to move to a hosted SaaS solution.
This way we would be free from the repository regulations and could capture email addresses to communicate with our users and learn insights about the use of our product.
We would be able to learn and iterate to create a better product.
The plan was to achieve a product market fit and avoid the autopsy website!
We would also be able to push updates that our users could then discover and provide more feedback on. Something we could see wasn’t possible with the WP Repo.
SaaS and an evolving Minimum Viable Product
An MVP (minimum viable product) is a barebones solution to the problem you are solving. However a startup should constantly be refining the problem and the solution, so this is not necessarily static.
The key is to add and expand to create a better product market fit. Rather than building your product in one swell swoop only to discover the assumptions that it rested upon were groundless, you can minimise risk with a modular and piecemeal approach.
Add as required. Test and refine.
This lowers your risk. You’re building tools that the market wants. Using the market as your guiding light rather than your limited set of assumptions.
The SaaS model lets you work in this manner. You can be assured that all the updates are used by active users. You’ll also be able to keep them unto date with regular communication about the progress you’ve made and also request their feedback.
Something magical can happen at this stage. Your users can see progress and actively jump in. They’ll want to provide quality feedback that can steer you towards a successful product market fit.
The key here is to build and grow your MVP into a fully functional service while moderating the risk of failure.
So why WordPress and SaaS?
Well, you probably shouldn’t start with WordPress.
Your first MVP is often considerably simpler. I’ve seen some fantastic tech startups use a TypeForm to test their initial solution.
We used a Google Spreadsheet to similar effect.
This initial test may inform the set of requirements you’ll need to expand the service (and they might inform the assumptions you had made as well).
The next stage will follow and it will need to be a hosted solution. As a WordPress developer, it was tempting to jump into bed with WP as I knew it. Better the devil you know and all that.
However, we should be realistic. WordPress is not for all occasions. For instance, if it’s discovered that your users need to access the service from a mobile platform then you’ll be stretched to find a suitable companion with WordPress.
It’s an obvious example to illustrate a point.
That said, there are plenty of times to use WordPress. In fact, it’s a great platform for the methods I’ve been talking about. It’s great for building bit by bit, quickly, with minimal risk and with feedback.
WordPress has a lot of out-of-the-box functionality that’s required for a hosted service. It has a fantastic user management system with multiple roles and the ability to add custom fields. There are some great tools that can be plugged in to create login and registration areas on the front-end too.
There are custom post types too, which are great for you to build your CMS setup.
There is also the API, which means that you’re future-proofing your service. You’ll be able to integrate and extend beyond the WordPress base.
Those are some of the functional benefits of WordPress, but more significant I think are the existing integrations and plugins that can be used to test, measure and learn. Tools that can help power your feedback engine to create a solid product-market-fit.
Most services have already created an integration with WordPress. You’ll be able to plug in and go. This saves you development time and lets you run a leaner startup.
One of the best integrations we’ve been using is segment.com. This integration tracks events and identities of users into its database. This information can then be syndicated to other services. This single integration enables many others. We’ve added custom tracking events so we can get insights into what are being used.
It’s all part of the feedback process. Don’t go by your intuition and assumptions alone. Check what the users want. Measure the market.
Ultimately, this gives you the freedom to pivot. Because you can easily understand what users are using and not use but also because the platform itself gives you this freedom. It’s easy to adjust your functionality to accommodate paid subscriptions or free signup for example.
Mistakes we made with WordPress
This freedom is also dangerous. It’s very tempting to forget the modular approach and add too much. We were always mindful not to add too much but I think we were guilty of bloat at the start.
The problem with bloat is it is distracting. It can obscure the problem and the solution. The products that are most successful always keep the focus tack sharp on the problem.
Stay focused. Ask Questions. Get Feedback. Always check if a feature add’s benefit to the problem and doesn’t distract from it. Don’t assume this, check this with the market.
Part 2 – I’ll post again soon about the second part of this talk where I talk about when to launch, traction and some of the specific integrations we’ve used. Coming soon.