SaaS Founders Going Up-Market Should Narrow Focus Rather than Expand

SaaS Founders Going Up-Market Should Narrow Focus Rather than Expand

Covering too much surface area decreases trust almost immediately.

SMB is a different animal than Enterprise. Many SMB businesses like to have one provider for more tasks and expect that their needs are not as sophisticated, so it's easier for vendors to cover multiple areas at a low depth.

Enterprise is different. If there are 10-12 vendors in each major software segment, and a relatively new entrant you've never heard of starts to say they cover 3-4 segments than what are you supposed to think? This vendor does not truly understand the depth of the problem in this segment of software. The founder is still at a 10,000 foot view.

Furthermore, there is often a much more lucrative opportunity to be unlocked by focus. If you are at a 10,000 foot view, you probably also don't have a clear understanding of the VALUE of solving this problem (instead, you have a cursory one).

So it means, you have no idea how to prove the ROI of your solution in this segment. Which means you struggle with justifying your newly Enterprise-level price (which is often still much less than a true Enterprise service).

Which defeats the purpose of going up-market in the first place. Focus solves a lot of problems. As you go up-market, if you have 4 areas today, sometimes you might consider picking 1 instead.

After all, if your supposed top area doesn't generate significant value, then items 2 3 and 4 often will not either. Which kind of defeats the point, right?