The Next Step in the Japanese SaaS Market: Product Strategy in the Growth Phase

Horizontal SaaS is gaining popularity, Vertical SaaS is starting to emerge, and some players in each industry are achieving PMF. This reflects the current state of the SaaS community in Japan.

Under these circumstances, the SaaS industry has been discussing PMFs very extensively. However, the growth phase that follows PMF is an area that requires more attention and discussion. In this article, I will outline the key considerations for product leaders of startups and new businesses that have achieved PMF within specific target segments, particularly in the Series A-B stage.

What is the Growth phase?

What is the growth phase of a startup or new business?

As indicated in the diagram above, it is what is greeted after the PMF is realized in the core target segment. Therefore, this is the time to aim for market share gains by strengthening marketing and systems after securing a certain order rate and introduction rate.

What is the growth phase of a product?

During the growth phase, product priorities can be divided into three areas: product vision, product development and infrastructure, and product organization.

Product Vision

First, the product vision. As it is a highly abstract concept, there are many elements to be cleared from various perspectives.

• The product vision must be able to survive the growth period, starting from the MVV.
• Is the core of the solution clear and what will not be done for the next 2-3 years?
• The direction of the solution must be aligned with the Biz leader.
• Pricing must be appropriate for Growth.

First, the company needs a product vision that can sustain it through the growth phase, aligned with its MVV (Mission, Vision, and Values). As a company, we will be embarking on a growth phase, both in terms of capital and human resources, and this requires a higher level of alignment as an organization. From a product perspective, the first checkpoint is whether or not the product vision has been verbalized in a way that will allow the company to survive the growth period.

It is not enough to simply be aligned in the product organization, but it is essential to be in alignment with the business-side in order to grow. It’s important to ensure that the solution’s direction is well-defined, including what will not be pursued over the next 2-3 years and the clarity of the solution’s core. Naturally, this direction must be well aligned with the Biz leader and they must be able to work together as one.

In addition, this policy is not only a development roadmap and solution design, but also includes pricing in order to provide the solution to users. Pricing should be neither too high nor too low and must align with WTP (Willingness To Pay) to facilitate growth.

As mentioned above, the four checkpoints are to ensure that the product vision is consistent with the MVV, that sufficient TAM is captured, that it is aligned with the business-side, and finally that it is reflected in the pricing.

Product Deployment and Infrastructure

Next, once the PMF is confirmed in a certain user segment, the company will seek to deploy multiple products and expand into other industries in parallel.

• When developing multiple products, the extent to which they should be based on the PMF should be discussed, and the concept of priorities should be drafted.
• If it is Horizontal, the segment of the industry to attack must be clear, and the functional differences to be filled must be visible (the same as above for multi-product development.
• The product must be ready to withstand extreme use cases and the number of users as it continues to grow.

First of all, if multiple products are to be deployed, it is necessary to discuss how much of the infrastructure should be built upon and clarify the concept of prioritization. Although there is a way of thinking to simply deploy a second or third product, it is common practice to base the common parts of the products around data.

The second point is that with Horizontal SaaS, the industry segment to be attacked is clear, and the functional differences to be filled are visible (the same as above for multi-product development). But in the case of Horizontal SaaS, you need to go beyond the industry, and additional requirements are likely to emerge. It is essential to supplement these requirements, put them on a firm roadmap, and proceed with development.

Lastly, the product must be prepared to handle extreme use cases and a growing user base. This is often overlooked compared to the above two points, but as you expand your user segment, extreme use cases that were not previously envisioned will emerge. You should regularly check performance and other factors.

Product Organization

Lastly, the organizational aspect: In the growth phase, product strategies become more diverse. In the growth phase, product strategies become more diverse, and the organization needs to be expanded accordingly.

• In order to realize the product strategy, the capability of the Product Management team, which will be the difference between the two, must be clarified, and actions for hiring and transfer must be taken.
• Assuming that junior members will join the team, the user feedback collection process, roadmap, and PRD format must be in place and operational.
• Product leaders, who will be busy during this period, have time to think about non-linear growth and new things to try out.

In the growth phase, it is not enough for the CEO, CTO, or ace PM (Product Manager) to work hard and make breakthroughs, as in the PMF phase, but it is necessary to function as an organization and bring about growth. Especially in the case of SaaS, there are many ways to achieve growth, and the diversity of PMs will be required. In order to realize the product strategy, the current status and ideal of the product team will be clarified, and how to fill the gaps will be considered and concrete actions will be taken.

In addition, since a certain amount of resources are needed during the growth phase, few companies will be able to have all senior PMs. Therefore, it is also important to format key documents in anticipation of junior PMs coming in, and to have processes in place for things like budgets and roadmaps that need to be established on a regular basis.

Finally, as we enter the growth phase, tasks often fall closer to the CPO and VPoP and become bottlenecks, but since this is also the starting point for starting something new, it is important to remember to always delegate authority in order to maintain growth.

What I think about actually supporting SaaS

I wrote it down again, but I think that 1. pricing of the product vision and 3. issues around the organization tend to be put on the back burner. Pricing is not only something that sales planning and PMM should think about, but PM should be involved as well since it is closely related to bundling.

Also, many product managers tend to want to create value through their products, but the growth period is a time when the importance of the organization and structure increases. Unlike aiming for and achieving PMF with a single-minded focus, the importance of taking an approach to eliminate bottlenecks in the growth process by picking up on the infrastructure and performance is increasing. Therefore, it is necessary to construct a strategy from a broad and defensive perspective and build an organization to realize it.

Conclusion

In domestic SaaS, the focus of discussion is on PMF, but of course, Growth is also important after that, and requires equal or greater consideration, trial and error.

The role of a Product Leader is evolving, making this a key time to test their skills. For more information, please contact