SaaS Interviews with CEOs, Startups, Founders
Top 3 Considerations When Growing Your Business from Single Product to Multi-Product
13 Jul 2023
Chapter 1: What are the top considerations for expanding from a single product to multiple products?
I'm very excited to share this recording with you guys, which happened at our conference, sasopen.com, with over 100 speakers, all founders of B2B SaaS companies. We have a very high bar for what speakers share on stage, so you're going to enjoy this episode where we dive deep into revenue graphs, real tactics, and real growth metrics.
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Thanks for having me. My name is Yuri Ferber. I am CEO and founder of Britech.
Chapter 2: How can value chain adjacency influence product expansion?
Britech is a SaaS for investment management. So over the next 20 minutes, I'm going to show you how and why you should expand your product from a single to multi-product. So I'm going to talk about value chain adjacency.
How to do it if you can build the product you can buy it or you can partner now and buy later and the importance of segmentation in customer support and customer success as well So this is our this is my company revenue growth over the last five years and This is happening only because we also have multiple products.
By the end, I'm going to show the impact in the revenue growth of having multiple products, of course. So very important when you expand your product roadmap Build your next product. Of course, you start with one product. When you go to the next product, very important if you stay in the same ideal customer profile.
Because it will be easier to sell to the same client than to acquire a new client. It's always this. So staying in the same ideal customer profile, it will allow you to upsell to that customer and also will be cheaper and you are going to have more retention. Why do you have more retention?
Chapter 3: What strategies can businesses use to expand their product portfolio?
Because when you have multiple products, same client using your multiple products, you start locking up your clients. So usually, one product consumes data from another product. And this creates a lockup. And it's great for mitigate your churn. And there are some effects, of course, that I'm going to talk later.
In our case, we start backing eight years ago, backing with one product for one customer profile. And nowadays, we have like seven products for seven different profiles. and serving like 30 different use cases for this customer base. So this is very interesting because it creates a lot of opportunities to monetize your product portfolio. Let's jump into section two.
There are many ways to build, to expand your product portfolio. Of course, you can use the traditional way of building, as you probably did in the first product. You have your CTO, you have your team of software engineers, and you just build a new product. Of course, you have to... pay attention to things like product market fit, as my friend earlier in this session just showed you.
So product market fit is one thing that you must worry when you create a new product. You can have a product market fit product, but probably you don't... It's not a... When you create a new product, you have to be worried if you reach the product market fit for that new product. A second way to expand your product portfolio is to buy.
You can buy another company, or you can buy the intellectual property, or you can... The third option, you can partner now and buy later, or maybe buy later. So what I mean by that? I mean that if you find another company that has another product, not similar, but adjacent to your product, and something that you can sell to your customer base, maybe you can partner with that company
Bring that product to your product, so make it embedded in your product like a white label.
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Chapter 4: What are the benefits of staying within the same ideal customer profile?
And after some time, you can maybe... buy these guys, okay? So the advantage of doing this way is that you don't need money to acquire these guys, as when you buy the company, you have to, of course, use money. But if you partner now and buy later, you can experiment if that product really has a market fit with your current product portfolio. And another important thing is,
So you are bringing new people to your company. Are you sharing the same values? The product is really selling to your customer base. So after some time, 6, 12, or maybe 18 months, you can start to realize if it's working or not. And when you do stuff like that, partner now and buy later, of course, you have to take care of a lot of different things. First, you have to have it on paper.
And start with a partner contract. And stuff like revenue sharing, how much are you going to share with the partner? What are you going to do? Are you going to support the partner product? So your support team is going to support your partner product. Ideally, yes, but sometimes it's not so easy to do that. So as more as you do using your partner product, as more you can retain from the revenue.
So you can maybe share 50 or less percent as more as you can. you do with that product.
Chapter 5: How does segmentation impact customer support and success?
After some time, as I said before, if you six, 12, or 18 months, or 24 months, it depends, there's no magic number, after you find out that product from your partner is working, You're really selling it to your customer base. Maybe you start to think about how to acquire these guys. So the acquisition, you should have, since day one, a formula to price that cost of acquisition.
So you can buy these guys or even you can... equity swap. So rather than buying them or buy the IP or buy the IP and the team, you can maybe bring these guys to your company and give your company's equity in exchange of their product. That's the third option. This is, by the way, the way I like more. Again, talking about Yeah, so build is the first way. Buy is the second way.
In my opinion, the best way is partner now and maybe buy later if it's working. Let's jump to section three. So we are talking now about segmentation. Segmentation is very important because, you know, You can have a great product, but if you don't serve your customer base well, you're going to have churn even having a great product.
So in my opinion, too, if you are a vertical B2B, you must have segmentation in your customer support and your customer success teams. So both teams will need to have domain expertise on what you do. So if they talk the same language of your client, it's going to create a value and it's going to create a bond and the churn will be dramatically reduced.
Chapter 6: What role does customer success play in upselling new products?
So segmentation is very important. And customer success, by the way, customer success for me is they are the guys that upsell. So again, going back to that example, you have a product, you partner with another company to add their product to your offering, Who does that? In my opinion, the customer success is the one that upsells. Because why is that?
Because for me, customer success is like CRM 2.0. So these are the customer relationship managers, very close to the clients, but they need to understand the client business. And so they are talking to the client on a frequent basis, so they will know the best time to upsell or to sell a new product to that same client. And the sales teams, they are worried about bringing new clients.
So you segment, you leave the sales team acquiring new clients, and you have the customer success team, of course, making sure everything is working and upselling new products to your client base. We believe it. This is a page from our website. We believe it so much that you can see in our product page, this is our products.
In our product page, we highlight our customer success team and our customer support team. So, again, you can have a great product, but you need to have customer success and customer support serving your clients very well and keeping your churn very low. So, I show you...
These three most important things, I think, is important to take care when you are expanding your product portfolio from single to multiple products. But let me show you the impact when you have a multiple portfolio in your company, what happens to your growth.
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Chapter 7: How can partnering with other companies benefit product expansion?
Again, if you keep your churn low, and what is low? Usually, So less than 9% per year is a good metric for a low churn. So if you have a low churn and if you have multiple products, you can have a net dollar retention higher than 100%. In our case, we are working in the range between 110 to 120%. And what is the impact of having a high net dollar retention?
The growth coming from the customer base is huge. If you take a look at, for example, 2019, 27% of the growth came from the customer base. If you take a look at 2020, 30% came from the customer base. And if you take a look at 2021, Two-thirds of the growth came from the customer base. Only one-third came from new clients.
So this is only possible if you have multiple products and you are constantly, frequently upselling to your customer base. Yeah, that's it. I'm open to questions. Please.
Thank you for the talk.
You mentioned that you should target the same ICP. For us, our ICP are other businesses because we are B2B SaaS.
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Chapter 8: What is the impact of multiple products on revenue growth and retention?
Thank you. Yeah, our ICP are other B2Bs. What are your thoughts of targeting the same company but different department within those companies, right? Because Right now, we serve, let's say, the operation department, but maybe we can come up with a product that serves their sales department. So even though it is the same ICP, the same company... Another department. But another department.
What are your thoughts about that? Or should we, like, stay within the same department and not go across departments?
Yeah. When I say ICP... It can be a different persona inside the same company, but not the same user. So in your case, we have the same situation in our company. First, again, if one department that is your client is saying good things about you, your company, this is going to help a lot. Because the first thing is when the new department will buy a product from you is ask the other departments.
So again, customer support, customer success, key in this moment. So it's not a problem. It's considered the same ICP, another department, so very important. If you have big corporations and you have products to sell for the entire company,
This will work, and I don't know how young is your company, but if you have multiple products, you are going to experiment net dollar retentions in high levels. Thank you very much, guys.
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