Go Big or Go Home: A How-To Guide to Scaling Software Development in a SaaS Business
There are lots of topics to address when it comes to scaling—everything from sales to marketing to HR to product development and more. But since we know a thing or two (or twenty!) about software development, we are going to keep playing in our own sandbox and focus on the top tips and tricks on the engineering side of scaling.
To start, you have to understand why scaling a SaaS business is so important in the first place. From there, you can dive into the top six things to keep in mind when scaling software development efforts. It goes a little something like this:
- Know why scaling is so important in the first place.
- Build your development team with scaling in mind from the opening tip.
- Hire all senior engineers for the first four dedicated teams.
- Invest in technology that drives automation.
- Align your product roadmap around customer benefits.
- Measure, measure, measure—and then measure again.
- Make product adoption easy.
- Some final thoughts.
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1. Know why scaling is so important in the first place
When you live in Silicon Valley as we do, you can’t go to your daughter’s soccer game without overhearing someone saying either “product-market fit” or “scaling.” These buzzy terms have become so ingrained in the lexicon of Startup Land that if you’re in the industry, they’re the elevator music constantly playing in the background of your life. (This may cause you to drink a lot of bourbon, but hey, we’re not complaining.)
And though the ubiquity of these terms occasionally makes you feel like screaming into a pillow, they’ve become maxims for a reason: They’re actually true.
If your startup—or your new product line if you work at a larger company—doesn’t have “product-market fit,” that product is pretty much dead on arrival. Your product has to meet a need in the market and start to catch fire with customers (whether they be individual consumers or businesses) or it may not succeed. You’re better off throwing the keys in the bushes, jumping on a plane to somewhere balmy, and putting your toes in the sand.
But if you’re reading this, you’re likely one of the rare lucky ones that have either found –or are firmly on the path to finding – product-market fit. Congrats. Now it’s time to get your hiking boots on and climb the next big mountain: scaling. SaaS startups that struggle to grow revenue faster than their expense line end up being money losers even if they have an in-demand product.
But startups that do scale enjoy a flywheel effect—it’s a virtuous cycle of customer growth that fuels more customer growth. (Kind of like a dentist who also sells candy. The kids will always be back for more.)
Fact is, if you don’t scale, then it’s likely that your well-funded competition will beat you to it. The one who scales first usually wins.
(Insider tip: If you want to learn from the best—listen to the podcast Masters of Scale. Hosted by one of the top VCs and entrepreneurs in the world, it’s an insight-packed audio vessel of goodness.)
So without further ado (btw why is it spelled differently if I “bid you adieu”?), let’s come in hot to the top things to keep in mind when scaling your software development efforts in a SaaS-based business:
2. Build your development team with scale in mind from the opening tip
One of the benefits of living in Silicon Valley is the view—you get to see lots of ways startups build software teams. And a lot of dumpster fires. We can tell you with certainty that a surefire way to end up in the hot trash bin of tech history is to start with a ragtag team of freelance developers all working in an uncoordinated way.
Granted, it’s usually cheap, so it’s tempting. But you’ll be loading the bench with a hodgepodge of zeroes and ones. You may hit short-term product goals (like pushing out an MVP) but your patchwork of a code base won’t be built to withstand the scaling process.
So what should you do instead? Be super methodical in terms of how you build out your development team from the very beginning. There are two key principles to follow here:
The first piece of (strong) advice is to look at building your team remotely
Of course, here at TurnKey we are a little biased (okay, incredibly biased), but it’s not from nothing. We know from experience that using offshore software development talent from around the globe is the most cost-effective way to meaningfully scale.
The reason it is so advantageous is because not enough A-level software development talent exists locally. Even here in Silicon Valley, where SaaS businesses think software developers grow on trees, finding great talent is much easier said than done.
Looking at a more global talent pool is not only smart, it’s a necessity.
Also, as your platform becomes more complex, you need to start adding specialists that have deep expertise in specific technologies. You might live in a great town, but the law of averages would suggest you simply can’t find all the top-notch talent you need locally.
You need to access the specialty talent where they live, which is usually in a remote location from where your company is based.
Bottom line: Hiring everyone locally—especially specialty developers—dramatically limits your ability to scale.
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Second, start with a great tech lead
In the early stages of building a software development team, many people start by hiring strong individual contributors. This is a rational approach—when you don’t exactly know what you’re going to need, you get a little bit of everything. And if you are a technical founder, this is probably okay because you know where to put the glue.
But if your company is like most startups, your software development team quickly starts looking like the Star Wars cantina: really interesting folks that are all in the same room, but not exactly vibing.
Hire a tech lead first (assuming that tech lead isn’t you). This person will bring order to the team, and will ensure that you are getting the highest level of productivity with all the developers rowing in the same direction.
Trust us: Don’t create a self-directed software cantina, create a coordinated software team! (Then go to the cantina.)
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3. Hire all senior engineers for the first four dedicated teams
Wanting to get more for your money is logical. It’s just not the way to go when you’re building a software development team. We see tons of people stepping right in the cow pie with this one—hiring a bunch of junior engineers with a few seniors thrown in for good measure.
The mental math guides this decision, with the general idea that many hands make for light work.
The truth is actually the opposite: The more junior engineers you have on your team—especially at the start of building a team—the less productive you are and the less able you are to scale.
Also, with more junior engineers, you accumulate more tech debt because the developers don’t have the experience to know what problems they may encounter later. And they often lack knowledge around how to turn a good feature into a great one.
In short, the money you save by hiring a few junior engineers versus one or two senior engineers just isn’t worth it. You pay 20% more for the senior developer but you get 200% the productivity and you de-risk your platform. As a result, your total cost of ownership is lower, plus you have a much greater ability to scale.
4. Invest in technology that drives automation
Another key mistake companies make when creating a software development team is they either don’t systematically test their code or they test it all manually.
This too is usually done for financial reasons: It’s cheaper not to invest in QAs because engineers can test their own code, right? Not if you want them to focus on engineering. That’s like asking a writer to edit their own novel—you need fresh eyes and an independent perspective in order to find the holes.
The same holds true for those doing manual testing. Yes, you should be applauded for testing at all—good job, gold star for you. And you figure you’re being fiscally responsible, which also gets you some snaps.
But by not spending money on automating the process, it’s actually costing you more in terms of time, effort, and quality. Spending more now actually ends up being significantly cheaper over time.
5. Align your product roadmap around customer benefits
Many software engineers build product features that they would like themselves versus what the market actually wants. This isn’t a criticism—in fact it makes sense since these engineers are heads down working on building great product all day, not out talking to customers.
Which is exactly why it’s so important that the rest of the organization provides the software development team with the data they need to create a scalable product roadmap. This data then gets translated into customer benefits, and those benefits become the North Star for the software development team.
(Customer benefits are the things that will most influence a customer to buy your software. This could be things like speed of implementation, ease of search, ability to generate leads, etc. Again, this will be specific to your product.)
Once you have the most essential customer benefits identified, the rest of the product roadmap can be organized around delivering these benefits in ever-improving ways. By doing so, you take out all the guesswork—and the endless debate within your software development team about how to organize the roadmap—and ensure your team is battle-hardened for the scaling process.
6. Measure, measure, measure—and then measure again
Another great cliche in the SaaS business world is “you are what you measure.” (That means that because I don’t measure the pint of ice cream that I throw down every night, I am not made of ice cream, right?)
But cliches—whether subscribed to or not—are based on a universal truth, and none more so than when developing SaaS products. Similar to the customer benefits discussion above, you need to be sure that your software development team is also aligned around the key metrics that are most reflective of a scalable product.
These metrics will be customized to your product and/or category, but usually include such technical items as percentage of downtime, number of bugs per release, number of new feature requests, and more.
And while these technical metrics are important, it’s also wise to incorporate metrics that are more business-facing too, such as conversion rates, customer renewal rates, churn rates, and the like. This ensures that your software development team is being measured on all the key drivers of the company.
7. Make product adoption easy
Software engineers love solving hard problems and find comfort in complexity. Customers, not so much. In fact, it’s typically the exact opposite.
So when you’re scaling your software development team, make sure to always include a special section of your product roadmap that is specifically dedicated to the ease of product adoption. Otherwise, your developers may be building an onboarding process that is squarely in their sweet spot but hits a sour note for your customers.
Providing a seamless process for product adoption is the greatest grease for the scaling skids because it makes it easy for new customers to buy—and stick with—your product. If there are hitches or confusion in the product on-ramp, then your product is likely to sputter.
Keeping your software development team firmly focused on ease of adoption is the best way to make sure you are going to be sailing in smooth waters towards strong customer growth.
Some final thoughts
When building your software development team, you’ve got to be in the weeds and in the clouds all at once. TurnKey can help you scale your SaaS business by advising you to spend money where you need to (and when), helping you measure tech and business metrics, and creating a scalability plan that has your customer at the center of it.
Understanding scalability is one thing, implementing these tips and tricks is another. That’s where we come in!
IF YOUR PLATE IS FULL, PASS THIS ONE TO US. TURNKEY WILL HELP YOU GO BIG SO YOU DON’T HAVE TO GO HOME HUNGRY
How do you scale a SaaS business?
If you want to scale your SaaS business, we recommend following the tips above! Start by building your team remotely (saves you money so you can invest in senior engineers), put a great tech lead in place, align, measure, and keep the customer in mind. Or…call us, maybe.
What are SaaS metrics?
There are two kinds of SaaS metrics—technical metrics and business-facing metrics. Technical metrics include things like percentage of downtime, number of bugs per release, and number of new feature requests. Business-facing metrics include conversion rates, customer renewal rates, churn rates and more.
I only have one pile of money. Isn’t it better to hire a bunch of junior engineers instead of just a couple seniors?
Though it seems like this would be the case, it’s actually completely wrong. Invest in less senior engineers –even if more expensive on a per-developer basis – and enjoy way, way more bang for your buck. And hire them remotely (with TurnKey) and your dollar will stretch even further!
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Startup and scaling
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