Growth Hacks: The Mindset Behind the Most -Competitive SaaS Businesses

Growth Hacks: The Mindset Behind the Most -Competitive SaaS Businesses

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The Mindset Behind the Most -Competitive SaaS Businesses

It’s never been easier to start your entrepreneur dream and found your SaaS company. On the report of 99firms, besides the publicly traded companies, there are over 10,000 private SaaS companies. On top of that, according to the SaaS sales benchmarks, software development companies with an annual growth rate of 20% have only an 8% chance of surviving.

Running competition.

So while this massive growth isn’t expected to slow down soon, with the market getting more crowded and saturated, how to stand out in a scenario fiercer than ever?

When you hear stories about how tiny SaaS start-ups turned into multi-billion dollar businesses, there’s something in common among them. To become a successful SaaS company, you have to think out of the box. Whether is Dropbox offering cloud storage for referral, or Spotify launching a freemium business model that bridges the gap between piracy and the pay-per-track model of iTunes, what these companies have in common is the growth hacking mindset.

Board of Ideas
Team defining their strategy for each quarter.

Recently OpenView asked 19 SaaS specialists what were their predictions for 2021, and one quote in specif got stuck on my mind:

“COVID has challenged so many businesses to adopt SaaS and also drastically changed the sales process. I think we will see a meeting in the middle once lockdowns ease up. More companies will try to integrate a product-led growth approach into their SaaS software to accelerate sales, simplifying the process and cut down on P&L from field sales. “ — Francesca Krihely, Senior Director, Growth Marketing at Snyk

And that couldn’t be more true. Much more than just a buzzword, this change of mindset has allowed creative SaaS founders, product managers, marketers, engineers, and designers to achieve disruptive growth through a data-driven approach that allows teams to find hidden opportunities within their product, business, market.

How SaaS growth teams are performing

The State of Growth Report is a survey conducted by GrowthHackers that gathered insights from over 2000 growth practitioners all around the world. From strategy to the success rate of experiments, the report brings a series of information that can help growth teams to experiment with what works best for their business.

This year’s report is an interactive dashboard that you can filter industry, geography, company size, and size. Thinking about the importance of growth hacking to SaaS companies, here are 3 key takeaways when applied this filter:

  • Like most growth teams worldwide, the majority of SaaS respondents admitted that managing the growth process is their biggest challenge, followed by running experiments. Once a team has a well-defined metric that contributes to long-term sustainable growth for the company, the high-tempo growth hacking process can be broken down into a four-step process (ideas-prioritize-test-analyze). With this system in place, you’re armed with data to create experiments with clear hypotheses, supporting evidence, and goals.
  • When asked about having defined or not a North Star Metric (NSM), 46% of SaaS respondents said that they have it defined. According to Sean Ellis, this is the single metric that best captures the core value that your product delivers to customers. Further analyses of this survey showed that having an NSM setup is a common feature among successful teams since it’s a critical part of alignment between your team and rapid and sustainable growth.
  • Two other factors that characterize successful teams are: having people with data science on the team, and the use of behavior tools. For SaaS companies that answered the survey, data scientists are present in 42% of the teams, and behavioral data tools, like Mixpanel and Amplitude, are present in only 34% of their stack of tools. When adopting a data-driven approach, you’re escaping from biases, you empower your team, and they gain the flexibility to keep the growth engine working.

That’s just the tip of the iceberg. Curious to dive deeper into this report and make your analysis? The State of Growth report counts with other statistics that will help your SaaS company to learn more about the practices of the best-performing growth teams in the world.

The State of Growth report.

The Mindset Behind the Most -Competitive SaaS Businesses was originally published in Growth Hackers on Medium, where people are continuing the conversation by highlighting and responding to this story.

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