After the previous article "Summary of Ten Years of Experience: 9 Tips for International SaaS Entrepreneurship" was published, it was reprinted by many media and many friends also gave feedback that it was very helpful. I would like to thank everyone for their recognition. Therefore, I hope to continue to combine my entrepreneurial experience in the international SaaS field over the past ten years and my observations of other SaaS companies in the industry to summarize more entrepreneurial experience and share it with you. In the process of starting a business, I believe many entrepreneurs will encounter the following problems: How should I configure my team? Should I focus on building a product development team or a marketing and sales team? Should I distribute my team around the world or concentrate it in one region? I have discussed these issues with many founders of international SaaS companies, and found that there is no standard answer. The differences in customer types and growth strategies of different companies will also lead to significant differences in the corresponding organizational structures. Here I summarize some common features to share with you: Next, I will use this table as a basis to further discuss the organizational structure of international SaaS companies, focusing mainly on team configuration. It is important to note that the company’s positioning and organizational structure are not set in stone once they are chosen on the first day, but will gradually adjust as the company develops. For example, Notion and 1Password started with individual customers and then gradually developed towards corporate customers on the right. We at AfterShip started with small business customers and gradually developed towards medium and large customers. In the process of target customer transformation, the required organization will also be constantly adjusted.
# International SaaS company for individual customers Many people may think that international SaaS must be To B, but in fact some SaaS products started out as To C products. For example, Notion and 1Password both started with individual customers, polished their products to be simple and easy to use, and after acquiring a large number of individual users through the PLG (Product-Led Growth) method, they began to move into the direction of corporate users. There are many differences between individual customers and corporate customers: First, the number of individual customers is far greater than that of corporate customers. There are 8 billion people in the world, but only 330 million businesses[1]. Anyone we meet on the road may have used some SaaS products for individual users. For example, they may have used Notion to organize notes, or subscribed to membership of iQiyi or NetEase Cloud Music. But if we want to find some medium to large corporate clients, we usually need to go to special industry events or ask for help from connections. Second, the payment unit price for individual customers is lower than that for corporate customers. For most individual customers, they may be willing to spend tens to thousands of dollars to subscribe to a SaaS service, but few individual customers are willing to spend tens of thousands to millions of dollars to subscribe to a SaaS service. For companies with annual revenue of several million to hundreds of millions, they are more likely to spend tens of thousands to millions of dollars to subscribe to a SaaS service. Third, the decision-making chain for individual customers is shorter than that for enterprises. For individual customers, if they think the product is useful, they will pay for it. For enterprises, purchasing a product often requires approval from key decision makers such as business managers, IT, and finance. Fourth, the product user and purchasing decision maker of an individual customer are the same person. For individual customers, they usually buy products for themselves (or their family members), so the product experience is very important. If the product is not easy to use, individual customers may not renew their subscription. For corporate customers, the boss may buy products for employees. At this time, even if the employees (users) do not like some products, the boss (customer) may still be able to successfully renew the contract in the future if he/she thinks they are valuable. Regarding the difference between users and customers, I recommend everyone to read "SaaS 102 | Why do we need to distinguish who is a customer and who is a user?" Based on the above characteristics of individual customers, we will find that if we want to make an international SaaS product for individual users, the best approach is to make the product simple and easy to use, and then grow through PLG. This also led to different focuses when we formed the team: 1. Because the average order value is relatively low, it is necessary to reduce the cost of acquiring customers as much as possible. SaaS products for individuals usually do not form a dedicated sales team. Instead, they drive growth through PLG methods such as content marketing, SEO optimization, and product fission, and guide customers to purchase packages online on their own. 2. Because of the large number of customers, if the number of customer service staff also increases with the number of customers, it will be difficult for the company to make a profit. Therefore, products for individuals usually give priority to guiding customers to solve problems independently through online help documents, and then recruit a small number of customer service staff to handle specific types of customer problems; 3. Because the essence of PLG is to make the product simple and easy to use, a large number of product development personnel is needed in the early stage. The large number here does not refer to the absolute number of people, but to the fact that compared with the number of marketing, sales, customer service and other teams in the same company, the number of product development team is larger; 4. Overall, the number of people required to provide SaaS for individual customers is usually smaller than that required for SaaS for enterprise customers, especially in the early stages. Therefore, when the number of people is small, you can choose centralized office, hybrid office, or hybrid office (partially centralized, partly remote).
# International SaaS company for small business clients Of the 330 million companies in the world, only 351,000 have more than 250 employees[2], and the vast majority of the rest are small business customers. Compared with individual customers, the average order value of small business customers is higher, but their number is relatively small. Compared with medium and large enterprise customers, small enterprise customers have lower average order value, but because the team size is small, there are usually not too many levels, so the decision-making chain is also shorter. During this phase, we also mainly use PLG to drive company growth by providing different levels of packages to meet the needs of small business customers at different stages. (Image source: https://www.aftership.com/pricing/tracking) For SaaS products for small business customers, the product development team still accounts for the largest proportion of people in the company. However, you can consider whether to configure some marketing teams based on the differences in product types and customer unit prices. There are no mandatory requirements for the office model. You can choose the office model and office location based on your company's situation. The following are the advantages and disadvantages of different office models: Take AfterShip itself as an example. We did not have a dedicated marketing and customer success team before 2019. At that time, the main teams were located in Shenzhen, Hong Kong, India and other regions, adopting a hybrid office model (establishing different offices in different regions + partial remote work). The products mainly achieved growth through PLG, and then our entire R&D team worked together to drive PLG through optimizing SEO, content marketing and product fission. If you want to know more about PLG, I recommend you to read "The essence of PLG is to make good products and let customers become your sales."
# International SaaS company for medium-sized enterprises According to HubSpot’s definition[3], mid-sized companies are typically those with between 100 and 1,000 employees and annual revenue between US$50 million and US$1 billion. These companies have dedicated IT budgets, which typically account for 4% – 6% of total revenue[4], and total budgets range from a few million dollars to tens of millions of dollars. For this type of customers, although we can still acquire customers through PLG, we also need to start having a dedicated marketing team to carry out market promotion, and at the same time form a dedicated sales team to specifically follow up on some enterprise-level customers with higher average order values, using a combination of PLG + SLG + MLG. Because the average order value of SaaS products for small and medium-sized enterprises is much higher than that of SaaS products for individual users, these enterprises will also have higher requirements for product services. For example, customers would like to have a dedicated salesperson to provide them with services rather than purchasing packages by themselves on the product page, so we need to form a dedicated sales team. For example, customers would like to have dedicated customer success personnel to help them use the product. When encountering problems, they will also have higher requirements for customer service response speed, so we need to form a dedicated customer service and customer success team. Therefore, in this type of company, the number of people in the marketing + sales + customer service + customer success teams will be similar to the number of people in the overall R&D team. At the same time, when forming a team, it is best to form a team locally in the target market (especially marketing, sales and customer success teams), because only by being local can we better understand the local market culture and establish trust and cooperation with customers. If it is challenging to initially build local teams, we should at least build marketing, sales, customer success and customer service teams in the same time zone to ensure that we can respond to customer needs in a timely manner. # International SaaS company for large enterprises According to HubSpot's definition, large enterprises usually refer to companies with more than 1,000 employees and annual revenue of more than US$1 billion. They have IT budgets of tens to hundreds of millions of dollars each year, and the average customer price for purchasing a single SaaS service may reach more than one million dollars. For many SaaS companies, every large enterprise customer they acquire represents a significant increase in the company's revenue and brand. In order to win this type of customer, in addition to making the product itself good enough, we also need to make the company's brand and service good enough. First, we need to establish local marketing teams, sales teams, and customer success teams in the target markets to have face-to-face contact with customers and partners and build deep trust and connections. For these large enterprise customers, they have neither lack of money nor lack of choices, so they tend to choose the best SaaS products in this segment on the market. Therefore, we need to enhance the company's brand influence and shape the image of the industry's best solutions by participating in more authoritative industry events. At the same time, communicate and cooperate more with agencies, because many large companies will choose to let agencies help them select solutions. During this stage, we mainly adopt the growth strategy of SLG + MLG as the main and PLG as the auxiliary. Because no matter whether the leads come from sales development, marketing activities, partner introductions, or customers come to the website and leave contact information on their own, dedicated sales staff are needed to communicate and follow up. It should be noted that selling products to these big customers is only the first step. We need to have a dedicated customer success team to enable customers to use the products more deeply and thus achieve further revenue growth. Because for large corporate customers, in addition to the products and services they purchase now, they have many other needs. We can guide them to choose more of our products and services on the premise of serving them well. For example, if a customer originally only used AfterShip Tracking for express tracking, we can later guide him to use AfterShip Returns for returns and exchanges, use AfterShip Email to acquire new customers, and so on. In addition, many large enterprises have many branches in different regions. Large enterprises usually do not use our products in all markets and branches at the beginning, but choose one or two to see the results. If we help our clients achieve good results in the North American market in the first year, then when renewing the contract we can try to continue to promote our products and services to their European market, Asia-Pacific market and other regions. In this case, for some large enterprise customers, we even need to consider having multiple marketing, sales, and customer success team members to serve a large customer. Second, we need to deploy local product development teams to quickly respond to the needs of major customers. Because the business scenarios of large corporate customers are usually more complex and they have more requirements for system development, docking, product capabilities, data security and compliance, etc., it is best for us to deploy product development teams locally to communicate in depth with customers to support the needs of large customers. In this process, a question that many people may encounter is: What if a big customer makes some customized requests? Here I recommend two solutions: One is to cooperate with other SaaS companies and connect to another SaaS system to meet customer needs. The same requirement may be customized for our existing system, but for other companies it may be one of their standardized functions. Take Shopify as an example. Sellers who open stores on Shopify certainly have many different needs besides building websites. However, Shopify does not rely entirely on its own capabilities to develop these functions. Instead, it connects many different SaaS products through the application market to meet customer needs. The second is to find local partners and let them meet these customized needs. In many markets, there are actually some specialized companies that can help customers with customization. For customer requirements, if we determine that we can meet the customer's needs in a standardized way and reuse them for more customers in the future, we can consider letting our product development team do it. If this demand is inconsistent with our product planning direction and is difficult to reuse for other customers, then we can find other partners to meet this demand. Third, establish a 7*24-hour customer service team and guarantee service SLA. SLA refers to Service Level Agreement. In layman's terms, it means that the service provider promises to provide a specific service level within the agreed time, otherwise it will bear corresponding responsibilities or compensation. Take the services we provide at AfterShip as an example: (Image source: https://www.aftership.com/pricing/support) We not only provide 7*24 hours customer service, but if customers purchase the corresponding silver/gold services, we will also provide higher value service support and clear service SLA. If your main customers are all in the same market, then you may want to consider establishing a local marketing and sales team. If your customers are spread all over the world, you may need to set up customer service teams in multiple locations around the world or in a certain region, and then use 24-hour shifts to achieve this effect. If you want to build a customer service team for international markets, India, the Philippines, and Mexico are generally good choices. # Summarize In this article, I share with you the organizational structure design and the logic behind different types of international SaaS companies during the entrepreneurial process for your reference. It is worth noting that even for the same SaaS company, the main customers may be different at different stages, which will also lead to constantly changing requirements for the team. Take AfterShip as an example. Our main customers in the beginning were small and medium-sized sellers who wanted to do e-commerce, so we did not form a marketing and sales team or a customer success team before 2019, and relied solely on PLG to achieve growth. Later, as our target customers began to shift to small and medium-sized enterprises and large enterprises, we began to set up marketing and sales teams and customer success teams around the world, hoping to drive the company's revenue growth through PLG + SLG + MLG. During this process, we also stepped on many pitfalls, which led to the sharing of this article today. [1] https://www.statista.com/statistics/1260686/global-companies/ [2] https://www.statista.com/statistics/1261035/large-global-companies/ [3] https://blog.hubspot.com/sales/enterprise-sales [4] https://techvera.com/how-much-should-a-company-spend-on-it/ |
