Peter Bjørn: When I say business strategy to you then what does that actually mean?

Daniel Nackovski: So for me, business strategy is a broad concept that entails a few different elements. But first and foremost I see it as something that frames our business – who is it that we want to be? To whom? What value are we going to deliver and how are we going to deliver that? That for me are the core pillars of a business strategy and then it gives you somehow like a guiding compass for where your business needs to go in what type of direction. It could look very different for different businesses, but I think those are, in my world, the core pillars in that strategy.

Thomas Sjöberg: Yeah, I was going to say it starts with the culture, right? I mean sometimes people say you should put the customer first but you should actually put your employees first because if they are happy, they are also making your customers happy, right? So you need to create an environment of trust, of innovation, of also feeling that empathy for the customers. So I think if you have that in place then you can start to work on your go to market strategy or your product strategy and all of the other as well. If you don't have it, everything could just implode.

Peter Bjørn: Yeah, but I agree with you. I think culture is super important and something that eats strategy for breakfast and also like marketing products and these strategies. But I pretty much agree with you, like somehow you need this overall framing, overall direction and the way I articulate it typically is like there are some trade-offs you need to make, there are some choices. So it's that balance and actually being as clear on the trade-off as like on what really matters is key. Especially also with these SaaS business models. This is the kind of customer we go for, this is the need I want to solve, this is how we set up the business to deliver on that. To be really clear about that. Because then it's much easier to develop the product strategy, the marketing strategy and so on. But of course, culture is sort of an underlying foundation.

Daniel Nackovski: There was an interesting concept from one of the CEOs in our network that we just heard the other day where we talked about organizational structure and he had, in my opinion, a very interesting spin on this. He said when it comes to strategy and who you want to be and so on, you want to mimic the NASA model where he said their mission is to put a man on the moon. That's their starting point. And then they look inwards in order to put a man on the moon. What does our organization need to look like? What type of skill set do we need? What type of teams do we need? What type of tech support do we need? And it sets the plan. A little bit of strategy, but the mission drives how you form yourself and structure yourself.

Thank you once again to Thomas and Daniel for a wonderful conversation at Tech BBQ. 

If you’re like me and love to learn more about the B2B SaaS world, I would highly recommend joining the SaaS Nordic community. They offer so many awesome ways to get involved in the community and learn something new, no matter what stage your business is in:

➡ SaaS Nordic slack community

➡ SaaS Nordic CEO network

➡ SaaS Nordic Excecutive network

➡ Podcasts

➡ SaaSiest TV

And make sure you save the date for the next SaaSiest conference!

📅 18-19 of April, 2023 in Malmö, Sweden

It’s already in my calendar!

Peter Bjørn: What is it that you find so interesting about SaaS businesses?

Daniel Nackovski: I think there's a few things. First of all, it has to do with our own background. This is where we come from. We couldn't do this in healthcare or in food tech or whatever. This is our bread and butter. This is an industry and space we know. And then I think the second element that we appreciate is the SaaS business model, the entire subscription model and so on and how you can exponentially scale very fast if you get that right. So there's a beauty in the model and we also appreciated that we don't believe that you can templify your way to success. But there are certain models that are more applicable than others, so if you know who those are and what those are, you can build your way to success in a rather structured way, and we appreciate that.

Thomas Sjöberg: I've been working both on the sales and marketing and product side, and as a SaaS company, since you are sort of delivering the service directly to the customer, you work very close to the customer. So instead of just shipping the product and they install it in a server hall and so on and you never see the customer again, you work with the customer each day and they can leave you each day.

Peter Bjørn: And I actually think, of course I'm also in love with SaaS businesses, but I think one part that I really appreciate is this really honest relationship between the SaaS company and their customers because it's all about creating value. So if you as a SaaS business can create value for the customers, they will stay. If you cannot create value, they will go. So it's not just talking about a partnership or relations, it's actually delivering that in real time.

Daniel Nackovski: Exactly. It's very black and white. And we even see a trend now where people went from having a vendor customer relationship, then they talked about it's a partnership, now it's a strategic relationship. You want to find customers that believe in your mission and that's not only just by using your product, but can also give feedback into your organization – how you can get better, how you want to take the next step. So that's where we see the market moving and that relationship just gets even more important between the vendor and the customer.

Thomas Sjöberg: A lot of these SaaS companies come with something transformative. They are doing something completely different. They are digitizing something that was done in another way or where that was custom built and cost a lot of money to maintain. They come with these standard solutions. And another thing that I think is really nice is the ecosystem that is built around these solutions where they hook into each other and you sort of can build your own stack of technology or services that you can work with.

Daniel Nackovski: Sometimes we talk about are you a medicine or just a vitamin? Yeah, you can live without the vitamin, but the medicine you need for life support. And sometimes we look at it as well. Like there's these companies that are groundbreaking that have invented something new, solving a new problem, whether that's climate change or whatever it is. But you can do great things in, just like Thomas said, inventing a new way of solving an old problem. So sometimes it's enough to see like, what are the issues that are out there, that have been out there for many, many years. We're just going to solve them in a more efficient way. You don't have to reinvent the wheel, you don't have to find and solve the energy problem every time.

We even see a trend now where people went from having a vendor customer relationship, then they talked about it's a partnership, now it's a strategic relationship. You want to find customers that believe in your mission.

Peter Bjørn: But then how do we become that medicine? Because I saw a recent statistic, there was like one said 110,000 SaaS companies in the world, one at 170,000 and they all want to be medicine. So we have basically 100 whatever thousand SaaS companies calling on businesses. Of course that's not the case, but what is in your experience the key ingredients to become this must-have?

Thomas Sjöberg: Yeah, I think it's about really understanding the customer and the customer pain. And I think some of the best SaaS companies and the founders have really also felt that pain themselves. I mean, they have faced that problem in their previous position or the previous company and so on. So I think that is key. It can be hard to just sit on the paper and design your SaaS company and think that it will be the thing people need. So I think you need to stay very close to the customer when you develop the product and moving forward as well.

Daniel Nackovski: Yeah, I agree with Thomas. It all comes down with the pain. And that pain needs to be big enough for the organization and for the right people. Because if they don't feel it in the balance sheet somewhere, it's not big enough of a problem. So somehow you need to translate that pain, link it to the right people and link it to a budget exercise. Otherwise it's just a nice-to-have. And if we figure it out, we'll tell the world, it will make us rich. If there's a silver bullet how to get there, I think everybody's looking for it, then whoever finds that is going to be filthy rich. But I think that's also the beauty in our business. There's different ways to get there.

Thomas Sjöberg: Yeah, and I mean, looking at the product-led growth company is a lot about making the end customer fall in love with your product. So they want to use it more, they want to tell others about it and it can sort of grow in the organization. So find a product and that's the user experience that is easy to use, that quickly can solve some real problems for you.

Peter Bjørn: If you think of SaaS businesses broadly, the one you engage with each and every day, and ask them what is your number one priority, then what would they say?

Thomas Sjöberg: So I would say that scaling is sort of the main thing because it happens a lot with your company as you scale both your organization, and when you go international as well. So it's a big challenge for many companies.

Daniel Nackovski: Yeah. And I think especially in times like these now we live in a changing world, changing times. There's two things that come to mind. It is people. So everybody wants to make sure their people are happy, their employees are content, that they don't leave them, because that is essentially the core asset of every company. And the other element that we see now is we've also seen a little bit of a shift from scaling and growth at all costs to moving to profitability. So the existing customer relationships become even more important now. So we see a lot more talking about net dollar retention and so on. Also because the VC world suddenly values that a little bit more. So it's been an interesting shift in our world.