First decide what is your strength.

The two main bottle necks I see in building a saas company are product and distribution.

By product I mean what are you solving. You can build anything under the sun. But does it really provide value is a tough question to answer. The best way to answer that question is to do sales.

Sales brings us to distribution. Distribution is basically another word for sales but there is more to it. Distribution also includes how will the user buy your product and how you will on-board the user.

Figuring out product and distribution applies to all kinds of saas products be it for enterprise or SMEs. Of course the methods of solving for each are drastically different.

When my brother and I started sumtracker we did not properly define what do we solve. We decided we solve inventory management for everyone. We didn’t pick any particular customer profile or problem area in inventory management. Because of this we suffered a lot. We kept on building features on customer requests and our product went haywire. Doing sales was very hard. We didn’t have any qualifying criteria for customers. On-boarding customers was a long and frustrating experience for us and probably for the customer too. There was no direction in our approach. It was like doing services but for very less money and carrying the weight of a complex codebase for no reason.

It became clear to us that we need to stop what we are doing.

We did stop and took a 5 months break. We decided to give sumtracker another shot and this time we chose a customer profile; consumer brand startups. But we were not really sure what is the exact product we should build in the area of inventory management. We went along with the pitch we had learned from our experiences so far; manage internal inventory movement data to maintain accurate inventory levels. After working with several clients we again felt that we are repeating the same mistakes. Our product problem statement was still not well defined. This time the answer was not to do more sales since we already had done some sales. We needed to do market research and learn more about what problems we had discovered so far and what products are available in the market to solve those problems. And find out all the products our customers or potential customers use.

It is best to do this kind research very extensively. We did find out many products and found out where we lagged in giving a closure to our problem statement. This time we defined our product as inventory and order fulfillment for online sellers. This changed everything for us. Now we know how to qualify our customer, anyone who sells online and needs to fulfil orders and manage inventory. It is easy for us and even the customer to figure out if they need sumtracker. Finding this was a long journey which involved; working with clients to find out what they need, studying what is already out there and designing an amazing product.

Defining your problem statement is essentially defining your target market and what problem you will solve. These 2 things make up what we call as the product and solves the first bottleneck in building a saas company. If you are a product guy and someone gives you a well defined problem statement you can start building the product. Building the right product will take time and is a journey rather than a single event. But what matters is you know in which direction to move.

A great product still needs distribution. Companies with good distribution and a bad product will survive but no company can survive without distribution. Setting up distribution is a chicken and egg problem. I thought of many different methods of distribution like outbound inside sales, lead generation via ads and app stores of big companies. Each method seemed to take up a lot of time and money. So we had to choose the method which suits us best given our skills and resources.

A note for new founders is that you should move to figuring out distribution when you are sure about the product definition. If you doubt that the problem statement or customer profile is not tested go back and clear that before proceeding.

My brother and I love to build products more than marketing. So we decided to go with the distribution method which gives us more time to work on the product and to make the onboarding DIY. We also don’t want to hire sales and marketing staff for now. The app store method is the best option considering this. Outbound sales is the most time consuming and expensive. Inbound lead generation on-boarding can be made DIY but it is expensive to run ads.

As I mentioned before distribution involves 3 things; sales, purchase and on-boarding. The app store method gets good marks on all 3 aspects. But a big tradeoff is that you have to work on your product a lot to make it DIY. This can be very expensive. So choose wisely based on your skills and resources.

The conclusion for us is that we are building sumtracker which is an inventory and order fulfilment software for online merchants and we will be launching our app on several app stores. The first one is the Shopify app store.