What is B2B SaaS and why am I interested in it?
B2B SaaS refers to companies who offer a software-as-a-service targeting business users.
It represents a huge growth area particularly as lower barriers to entry, easier access to capital and the attractive unit economics of SaaS businesses. At the core of it is offering a solution in the guise of software as a service i.e. whereby usage and cost are closely aligned.
It is an endlessly fascinating area for me- SaaS businesses are not easy to build, but if you can stay the course the business model can be extremely profitable.
Some of the attractive elements of B2B SaaS include:
Subscription based revenue model where you can drive annual recurring revenue (rather than one off)
Low marginal costs associated with ongoing usage (in many software applications)
Ability to constantly improve the application on a very frequent basis using data from users to help shape improvements
Significant value to users compared to the cost incl time savings, process efficiencies etc
Large market opportunities in many sectors incl an increased ability to profitably serve niche areas
Some of the challenges include:
Increased competition in most sectors
Better funded US companies can dominate markets
Resource constraints are typical in most pre Series B EU startups
Lack of domain expertise - SaaS is still pretty new (I remember the days of accessing the web via 56k dialup)
Increased wage inflation / weak talent pool for experienced SaaS leaders in Europe
Cost of acquisition continues to increase as marketers look to raise awareness in a noisy ecosystem
It takes time to hit scale-up territory (think 5 -10 years +) a time frame at odds with most VC backed companies
Despite all of this:
I am very optimistic that B2B SaaS companies will continue to grow and thrive in Europe.
How people like me help SaaS Founders?
Having worked in SaaS since the web became fast enough to deliver software via a browser I’ve experienced many of the challenges that get thrown up along the way and thus I can usually fast-track solutions (or at least signpost how / where to go to fix an issue). So if you are seeking to grow your B2B SaaS business get in touch. I am always keen to chat to SaaS founders of B2B businesses.