In our last SaaS discovery article, How SaaS Discovery Can Predict The Success or Failure of Your Application, we identified the major components of the SaaS discovery process, which include:
- Define the problem statement
- Define the proposed opportunity
- Define the market and customer
- Segment the market
- Target the market segments
- Position the solution
- Develop the roadmap
- Develop the business case
In this article, we’ll be diving deeper into the third element - defining the market and customer. Keep reading to learn about this critical element of the SaaS discovery process.
Why Defining the Market and Customer is so Important
Each of the discovery process elements affect and contribute to the potential success of a SaaS application, but the first three are the most critical. Why? Because they are the potential deal-breakers. And while defining the problem statement and proposed opportunity are critical, the market and customer definition element is the one which steers the development direction. It’s also the element which is typically the most idealized and inflated by new SaaS businesses.
Like many entrepreneurs, SaaS business owners are fueled by the idea and promise of their application, and often believe that the market is vast and users will be abundant. That entrepreneurial spirit and optimism is one we love and share. At the end of the day, however, the numbers don’t lie.
When properly executed, an in-depth analysis of the potential market and customer will very quickly sober the starry-eyed entrepreneur, which is a great thing. When the SaaS business owner truly understands and sees the potential market, only then are they able to make the sound business decisions required to further their application’s development.
How we Define the Market and Customer
Defining the market for a SaaS application works in much the same way it would for any new product or service. We seek to understand:
- The Total Market - Through the use of several research and analytic techniques, we work to determine what the total market looks like. Will your application be able to serve several thousand, or several million users? Much will be dependant on the industry, population with that industry, and current competition.
- Available Market Share - We seek to uncover how much of that total market we may be able to potentially capture. Will your application be capturing market share through the acquisition of new users, or will we have to focus on enrolling existing users of a competitor’s app? Understanding this will often dictate and drive the speed and order of feature development.
- Customer Definition - Within the market, we look at who is using the application and how they are using it. When we understand what is and isn’t important to a potential user, we can then define a customer voice which will speak to their individual needs.
Metisentry on Defining the Market
Metisentry knows the importance and value SaaS discovery can provide, especially as it relates to defining the market and customer for new SaaS apps. If your SaaS business is just starting out, gaining a true insight into your market will help drive every other element of your marketing and development. At Metisentry, we’ve helped SaaS businesses define and refine their markets based on our research. This, in turn, has allowed them to better focus on the segments of their market who will be best served using their application. Contact us today to learn more about defining the market and the SaaS discovery process as a whole.