If you’re a SaaS founder or a leader in a SaaS startup, hopefully this post will help you increase your competitive advantage, making everything from your product roadmap to content marketing more effective.

Software is philosophy powered by code, how good is yours?

After 9 years of investing in SaaS startups, one of my key learnings has been that the handful of those who go on to achieve significant impact and success share one common trait: a powerful philosophy.

Let’s understand the power of Philosophy with a sales scenario

In the early days of enterprise sales at a company such as Xerox, the performance of sales teams varied widely despite having the same product and client base.

Why? It's all boiled down to their philosophy around their sales approach.

An average salesperson would methodically call leads, moving on quickly if there was no immediate response. In contrast, a top performer would prioritize leads based on potential, use warm connections over cold calls, and secure definite follow-up appointments. This simple yet effective strategic approach which led to relative outperformance was philosophy in action.

Now, let's introduce software into the scenario. Early CRMs didn't just digitize sales processes; they encoded these successful sales philosophies. The best software came from those who understood the underlying philosophy of their domain.

For example, imagine if Tom Siebel, with his deep sales knowledge, teamed up with an engineer to create a sales software. Even with limited resources, their software, ingrained with Siebel's sales philosophy, would outperform others. This was the birth of Siebel, predecessor to Salesforce.

Takeaways for SaaS Founders

It's not just about coding skills; it's about what your software teaches and enforces. As a SaaS founder, you should look to crystallize and refine your software's underlying philosophy.

Case Study: Credgenics

Credgenics exemplifies the power of a strong philosophy in SaaS. Their guiding belief, efficient use of real-time customer data across systems, revolutionizes loan collection for financial institutions.

Problem statement: Streamlining Collection Processes

Facing fragmented and outdated data, traditional collection processes were inefficient. For example, banks wasted resources on unnecessary follow-up calls to borrowers who had already settled dues or contacted them at inopportune times such as calling before they had their paycheck. Credgenics found 100s of such inefficiencies.

Credgenics' Innovative Approach

Credgenics addressed these inefficiencies by integrating a system that provides real-time data to all collection process nodes. This enables timely, relevant actions, reducing resource wastage and enhancing customer experience. For instance, by aligning collection efforts with borrowers' salary dates, the system not only improves collection success but also respects the borrower's situation.

Impact of a Philosophy-Driven Model

Credgenics' success underscores how a well-defined philosophy can lead to practical, effective solutions in the industry. Their approach demonstrates the tangible impact of aligning a product with a deeply considered philosophy.

Let me leave you with a 5-point framework to evaluate Your SaaS Startup’s Philosophy

One line Description: Can you describe your product’s underlying philosophy in one simple sentence?
Consultation Impact: Have you made a positive impact on customers without relying on a finished product?
Prototype Testing: Have you demonstrated customer success with just a basic Excel version of your philosophy?
Buyer Persona Insight: Can you confidently represent your buyer persona in discussions within your customer's organization?
Expert Endorsement: Have top experts in your field recognized that your philosophy builds upon their insights?
Value Metric: Do you have a clear, measurable metric that demonstrates your product's effectiveness?

Reflecting on these questions will help you gauge the strength and practicality of your SaaS startup's philosophical foundation.

Would love to hear your thoughts, critique and questions if this message resonated with you!

Pratik's Unity

Software is philosophy powered by code, so how good is yours?

Dear Young VC: Your next big win is in the unproven