The single biggest problem start-up B2B SaaS platforms face is how to solve the “chicken and the egg” participation puzzle all two- or more sided platforms face.
The Chicken and Egg Problem:
The supply side won’t engage until there is sufficient volume on the demand side; the demand side won’t engage until there is sufficient volume on the supply side. But once both sides are there, the platform often grows rapidly. Economists call this “cross-side network effects”. VCs call it the “marketplace problem”.
There are several good techniques for solving this conundrum without breaking the bank–though few “silver bullets”! A B2B platform can never escape the fact that, sooner or later, it is going to face the prospect of selling to more than one customer type simultaneously. This fact of life for platforms means doing what most SaaS companies do just once, multiple times:
- Finding product-market fits (plural!)
- Communicating distinct value propositions to distinct sides of the market
- Building different sales processes and organizations for customer bases with potentially different ARRs and LTVs
I routinely find clients in multi-sided businesses are trying to sell to different sides with the same message and sales strategy. This approach is rarely successful. A proper SaaS sales strategy for a multi-sided platform always consists of more than one strategy and message!
SaaS Sales Strategy Case Studies
- For one start-up, I visited clients with management to help develop product-market fit and build a sales deck for one side of the market. I then assisted with creating value analysis (ROI) tools, sales process definition, and sales recruiting.
- For another start-up, I helped the company learn to sell to the sourcing and procurement buying center by developing sales training, sales decks, and white papers.
- For two companies I have instituted two-sided models in a previously one-sided business. In both cases, I developed the value messaging for the “newly monetized” side as well as the inside sales team necessary to implement the SaaS sales strategy.