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We've invested too much in that category
Published 19 days ago • 6 min read
The Middlefrom GrowthCurve
Three ideas to level up your week.
Hey Reader,
Welcome to The Middle, your midweek rundown of the most interesting things we've read this week.
I’m knee-deep in NFL Scouting Reports to see who my Buffalo Bills are going to take in the first round on Thursday (it better be a wide receiver). If you’re an NFL fan shoot me a reply and I’ll send over my favorite meme of your team.
Quick Reminder: The Level Up Webinar series continues in May with the Big 3 of Subscription Revenue (ARR, GRR, NRR). You can sign up here.
Jeff
PS: (If you want to sponsor May's Level Up Webinar, send us a reply - we will have ~800 registrants)
Want that promotion to Director, VP or even a C-Level executive? Then you’d better be able to speak the language of the business, a.k.a. financial literacy.
In a self-paced 2 hours and 20 minutes, #CoverYourSaaS will give you the layman’s version of SaaS financials.
Now not every company can take Hubspot’s approach, but this relates to the idea of inversion.
The Hubspot founders (Brian Halligan & Dharmesh Shah) asked a different question than just any founder.
The standard question might be: “How do we go dominate [this market]?” A founder might think that winning means building the same product at a lower cost, gaining the largest market share, and dominating the competition.
Brian and Dharmesh asked a question that had more to do with the customer than the market: ”How do we solve the customer problem in the SMB space?”
They wanted to make the best solution for the customer: what that meant wasn't the #1 solution in one category, it meant playing at a high level across many categories.
That sounds complicated for the business, but for the customer, it means a platform that can handle everything they need to be successful.
So, let’s check in on HubSpot…
205,000 customers $2.17B Revenue $33B Market Cap (wowza...)
"We're different than our competitors" - Every B2B SaaS Company
But are they truly different?
Software companies become homogenous over time: they all solve the same problems in relatively the same way (and some might just do it at a cheaper price).
Map & Fire: Two Thirds of B2B brands lack strong differentiation
So, what does that mean for the 66% that have not found differentiated value? It's hard to stand out in the customer's mind. So you most likely revert to driving down your ACV to win. Your customers don't stay and your growth problem is now a retention problem. Oof.
Small variations in your product could be the key to your differentiation. Eric Sink wrote the 22 Immutable Laws of Marketing and Law #2: The Law of the Category hits home:
New entrepreneurs tend to think purely in terms of finding a product which is better than the competition. But so very often, it is more important to be different than to be better. Every difference defines a category. And for each category, somebody is the leader. In other words, a large market is really just a cluster of small markets.
Every customer-facing role needs a differentiation story to win at their job. Without it, they're competing on price and that’s never a place you want to be.
AI Corner: Building A Scaled Customer Video Script
Your team might be thinking "I'm not a content creator". Great place to use AI so that we're not starting from scratch. Here's a way I've used it to build a video script:
You are on the Customer Success team at [Company XYZ]. Our main persona that we focus on is [TITLE] and they typically work at companies like [A,B,C]. Today, your task is to create a script for a short 3-5min video about our new product features. Here is some initial information to help you with the request: 1. [New product features] 2. Key points to cover: [Description of new features, benefits for the customer, how to use]
If your team is using AI in your day-to-day work, press reply with a specific tool or prompt that you use so we can highlight you.
Whenever you're ready, there are 3 ways we can help you:
CoverYourSaaS is a financial literacy course for SaaS leaders. It teaches you the fundamental language of business, SaaS metrics, and how to maximize your impact. This course sets the stage for you to make informed, focused, and profitable decisions. Purchase the course here.
Our Level Up Webinar series continues May 22 at 12pm ET with the Big 3 of Subscription Revenue (ARR, GRR, NRR). Save your spot here.