Welcome to the third and final chapter of the Leaseweb SaaS Sessions series, where we examine important choices SaaS suppliers are making in the technology sector. Among them: how to deal with development talent shortages, ways to successfully acquire and retain customers, and the ‘always-on’ infrastructure needed for scaling a SaaS business.
Developers, Developers, Developers
Developers are at the heart of every software company. Who could forget the speech by former Microsoft top executive Steve Ballmer? (If you can’t remember, maybe this will jog your memory). Having top developers is particularly crucial for SaaS providers – and while demand for experienced developers is high, there is a massive shortage in the labor market. How can SaaS companies overcome this to attract and retain talent?
One solution that has historically worked well is to look for employees abroad. However, recruiting and retaining good developers in the Netherlands is a whole other story. Gert Kwetters of Visionplanner has taken different approaches over the years to try and build his team. “In the Netherlands,” he says, “we have our heavyweights, in addition to around thirty developers in India. We have an architect in the Netherlands who coordinates with the local manager in India, which works well. We then tried to set up a development center in Barcelona to centralize operations – and even repatriated Dutch employees there – but in the end, it only resulted in a high staff turnover.”
Rob Coppen, who runs various SaaS solutions at Yellowtail, says that using “different blends of talent works best for us.” At Yellowtail, “for some products it is not relevant to recruit developers and bring them to the Netherlands. For others, it is key to use developers who work closely with the product team. It all depends on the product.”
The struggle to find top talent extends to virtually every tech sector. Arno Witvliet, Chief Sales Officer at Leaseweb, has experienced this firsthand: “We recruit our colleagues from all over the world and help them relocate to where we need them. Soon after, we had several cases where promising employees were hired by other companies right under our noses for much more money.”
The best solution, according to the SaaS roundtable, is to fill the most critical positions close to the source and hire for remaining positions elsewhere – preferably where the highest concentration of talent is. “At Yellowtail, development activities have been divided over three locations – with product development in Naarden, software development in South Africa, and product maintenance in India. It is key to manage all of that effectively,” says Coppen.
Science Or Sales
Customer acquisition is the key to success for any company, and SaaS suppliers are no exception. However, SaaS companies have an added challenge in determining how to best display and sell their products. Michel Chevalier at NMBRS opted to make their website the major sales channel. “Now, it’s no longer necessary to see your customers in person,” he says. “I don’t need to get into my car and go to customers anymore. It’s smarter to go to a trade fair and then sell our products by phone. If I need the complete picture of a customer, I can go on our website and learn everything necessary to sell to them.”
According to Arno Witvliet, the best approach is to smartly differentiate your commercial strategy based on the nature of the business, the needs of the customers, and the size of the deals. “Management needs to build a good team, and then ensure that people are leveraging individual skills and experiences for the betterment of the team,” says Witvliet. “Sales enablement materials should further explain what value your product or service brings to the end customer, instead of only communicating functions & features.”
Witvliet has used his time at Leaseweb to redesign the sales teams to reflect this strategy: “Our senior salespeople were often managing relatively small accounts and transactions, while the junior sales were aiming to bring in the new business. We switched that around. Now we have a talented inside sales team that focuses on transactional business, key account managers who support our largest customers, and a new business development team with a clear mission to onboard big new accounts.”
SaaS services depend on a stable ‘always-on’ infrastructure. With the emergence of public cloud platforms, SaaS providers are facing fundamental choices on what kind of infrastructure to choose. While there is no ‘right’ platform, some are better choices than others due to a company’s differing needs, desired platform features, and specific customer requirements.
The SaaS roundtable found three fundamental components necessary for reliable hosting: flexibility, stability, and independence. “It’s important to be able to add new features,” says Martijn de Wilde from Postex, “because we need to be able to run everything independently. This gives us a very stable application.” At NMBRS, Michel Chevalier agrees, and says that “it’s so important for our environment to be flexible and stable. This way, we can focus on features instead of maintenance.”
As Leaseweb is a cloud hosting company, Arno Witvliet brings an even deeper understanding of the client-facing implications associated with choosing the right hosting infrastructure. “Many of our clients easily spend 10–15% of their revenue on infrastructure services, and they would love to cut costs on the big expenses. The use of open source tools and operating systems can for example result into savings on expensive license fees. Furthermore, the public cloud is rarely cheaper than a private cloud or even a dedicated infrastructure solution, especially if your business does not require maximum flexibility. Public clouds can also never entirely guarantee steady performance, as the infrastructure is built to be systematically overbooked.”
In the end, the most important thing to ensure a SaaS company’s success is to bring cost bases down and guarantee services to their clients. The ultimate infrastructure that accomplishes this will depend on a specific company’s needs, desires, and ambitions.
I hope that the SaaS Sessions installation provided a useful inside look into the ambitions, challenges, and opportunities SaaS providers face today. For any questions, comments, or feedback, please do not hesitate to reach out to me or my team at email@example.com.
A special thanks to the five Dutch SaaS entrepreneurs that participated in our roundtable event and made this series possible:
Gert Kwetters, Visionplanner
Martijn de Wilde, Postex
Rob Coppen, Yellowtail
Michiel Chevalier, NMBRS
Joris Moolenaar, Karify