Thread by @prasanna_says

Maslow's for biz
aka
@upekkhaAcc hierarchy of B2B needs

Every product bought by a business, meets one or more needs within the organisation. Founders who understand this hierarchy of needs make faster progress towards PMF in a B2B/SaaS context.

hackernoon.com/upekkhas-hiera…

[thread]

From lowest in the hierarchy, upwards:
Regulation aka laws & govt.
Workflow aka productivity
Topline aka revenue
Bottomline aka profit
Brand/Innovation aka future-proofing

Regulation: Business must 1st get their regulatory ducks in line.
CPA, CS, fin, env, approvals: govts extract a pound of compliance

It's a commodity chosen by functional personnel — i.e. CPA will choose accounting sw

Market shifts Sales Tax -> VAT -> GST trigger upheavals

Workflow: In many mkts, biz runs on pen/paper, some've moved to Excel, very few’ve to sw, & even fewer to SaaS workflows

Provide higher productivity than plain sw (or excel/pen/paper) & become a tool used all-day every-day!

1st Enterprises adopted, 2nd mid-mkt & now SMBs

Workflow.2: In mkts where time-valued-as-money, where employees know their ‘hourly wage’, and mgrs are careful about how their team spends time, workflow productivity software sells well

Human capital intensive orgs desperately seek to improve work force productivity

Workflow.3: At the high end, Consider Google whr developers cost $200K/yr, i.e. $100/hr. saving an hour a month per employee, for 100 employees in a division, is $10,000/month
A team lead in that situation who can understand the productivity gain is very likely to pay for it!

Topline: In fast-growth markets, topline increase is the key driver. Net profits are still critical, but cost attribution is hard, and the number of moving parts, and growth in the org make improving bottomline much less predictable.

Topline.2: In fast-growth markets, the company valuation is a multiple of revenue. So a $ of revenue increases the valuation

An increase in RATE of revenue increase (ie growth rate increase), increases the MULTIPLE itself!

So a product that yields more topline sells

Topline.3: This is why you see martech/salestech software sell so easily. But it's also easy-come, easy-go in many cases. If it works, it stays, if it doesn't it's gone. And VP Sales, VP Marketing are always on the lookout for a new competitive edge so they're early adopters too.

Bottomline: As an org matures & growth slows, net profit is wht investors and stakeholders ask. For eg: Oil & Gas: growth is limited, costs are well modeled. Increasing topline is nearly impossible, but improvements in their cost structure show up on the bottomline ie, profit!

Bottomline.2: prods with demonstrable RoI are prized. While company wide in slow growth mkts, it's also true for groups that are cost-centers

Profit-centers will tend to prioritize topline growth over bottomline growth, unless they have clear mandates to focus on the bottomline.

Bottomline.3: Selling to CIOs, CISOs, CFOs, falls into this bucket. Not usually early-adopters & are willing to wait & follow Gartner

Clear attribution of bottomline improvement will win deals, but need to show case studies in similar companies with same infra/process/software

Bottomline.3: A lot of company wide software is sold this way. ERP, MRP, planning, automation, AI-automation, energy savings, all try to show an RoI based on savings relative to current spends.

The Future: What’s left after you’ve got profit & growth? Investing in the future.

Improving brand gives future returns in customer stickiness, reduced acq costs, & inc ARPU. Traditionally only large enterprises invested in brands, since the RoI is very long-term & unpredictable

Future.2: Selling a product that improves a customer’s brand image has it’s own uncertainty. This year’s priority might not be there next year.

Future.3: Innovation is also intangible. Hard to nail RoI in innovation & yet it is necessary. Got buy in from VP Strategy, or VP Innovation? Great! Beware shifting strategies & changing winds of innovation
Managing workflows for innov teams, can be good mix of workflow/future

Mismatches: Selling productivity to a small business that’s growing super fast or in survival mode. Pure productivity increase is unlikely to appeal to these buyers, unless the time saved can be better spent on increasing topline or bottomline.

Mismatch.2: Selling productivity to a cost center is likely to be harder than selling bottomline improvement. Not all productivity increase translates to bottomline improvement, so attribution and closing-the-loop are important.

Mismatch.3: Selling topline/bottomline to an individual/team. Most teams are cost centers, and talking to them about revenue impact may be above their paygrade. Individuals care about their own productivity, manager’s care about their team productivity.

Overview: The exact same functional product can meet one or more of the needs above, and your choice, as a founder, of the segment, positioning, makes a huge difference. This can be captured by a framework called Jobs-to-be-done.

Eg: Documentum vs SharePoint. Functionally similar. Documentum is for markets where regulation is key — Pharma, Legal. Sharepoint is team productivity. Tickets sizes vary widely, downstream integrations & features are substantially different
At the end of the day both store docs!

Eg: learning management systems. Within that MindTickle helps increase revenue through sales training, and an Adobe Captivate aims at regulation (mandatory trainings).

@upekkhaAcc we help founders navigate this hierarchy to get the max bang out of their product/positioning/targeting
Taking founders to their 1st million ARR and shooting for $10Mn+ ARR

Want specific actions to take as a founder & more nuance?
hackernoon.com/upekkhas-hiera…

Questions?