Don’t Build the SaaS Around the Audience, Build the Audience Around the SaaS
From 2007–2015 I ran what were then called “infoproduct” businesses. Businesses where I was the thought leader, and I created online courses around my expertise.
In 2014, I parlayed this expertise into my first SaaS business, MeetEdgar. MeetEdgar was a runaway success, and the story ended for me with a successful exit.
Since the term infoproduct is pretty dead, lets call now call it an online expert business. This is a business that really centers on the creator, their skills and also their image and personality.
Experts are different from influencers — an influencer shows their life and promotes other people’s products (sometimes launching their own physical product line).
An online expert makes money from online courses (the new name for infoproducts!), coaching, consulting, newsletters, podcasts, etc. They have a certain area of expertise that they teach and create content about.
Expert businesses are ALL about the audience. In fact, they often create their audience before their product. They might create a bunch of content about their topic on LinkedIn, TikTok or Twitter then create a course or membership based on the sub-topic that their audience shows the most interest in.
This is a proven model, and because it works so well for experts the model has trickled over into the SaaS world.
If you visit IndieHackers you’ll hear the advice to create an audience first, so that you have someone to sell your SaaS to. They’ll even tell you that the audience can steer the direction of the features created in the SaaS.
But for almost every SaaS business, this is terrible advice that will lead to a huge amount of time wasted under the guise of “marketing”.
It shows a fundamental misunderstanding of the difference between expert and SaaS businesses, and how the customer’s buying process is dramatically different in each. (More about that soon.)
As someone who has been on both sides, I’ve been super surprised by some of the core differences between each model. And if you’re in one wanting to switch to the other, I want you to go in with eyes wide open!
So let’s do it — how does a SaaS business compare to an online expert business?
It’s MUCH Easier To Sell An Idea Than a Tool
This idea is so counterintuitive that almost no one sees it coming.
Before I launched MeetEdgar, a social media scheduling tool, I sold a course with a methodology for social media scheduling.
I figured if people were willing to buy the course, they’d be willing to pay for the tool to just do it for them without all the complicated spreadsheet management the course involved.
And my thesis turned out to be correct — but not for the reasons I thought.
When Edgar launched in 2014, social media scheduling tools were an established category. Buffer & Hootsuite were already popular, prospects were actively looking for a SaaS solution.
Edgar was able to enter an existing category and add an innovative take it. The business took off, reaching $1m ARR 11 months after launch.
But despite it’s fast growth, I actually found it MUCH HARDER to sell a SaaS than a course! I could not understand this at all — why would you want to pay hundreds of dollars for a course that does nothing on it’s own when you could pay $50 a month for that work to just be done?
You Pay For a Course Once, You Pay For a SaaS Again and Again
Online courses are a one-time buying decision.
If the expert can get you excited about the course and make big enough promises, you will shell out hundreds or thousands for these imagined outcomes.
They “get” you in a hyped-up launch and you buy. That’s the model.
(Speaking of that — did you know almost every course business is entirely launch-based and sells basically nothing on “evergreen”? Yeah, not exactly how they make it sound.)
A SaaS however, is an ongoing subscription (duh). If you aren’t using it, you aren’t going to pay for it. The business could use similar methods to get you hyped about all the incredible outcomes that will come from their tool, but when the next month rolls around and you haven’t actually picked the thing up, you’re going to cancel.
The dirty secret of online courses is how little they get opened.
The truth is, the course model does not rely on customers consuming the content. It’s a one-time sale. And surprisingly, you can even get customers to purchase even more programs from you, even if they never cracked open the first one! New dream outcome, new purchase.
Customers Don’t Impulse Buy SaaS
Customers don’t impulse buy SaaS (and if they do, they likely won’t stick around long).
The creator model generally works like this: create an audience, get them excited for your new thing, they buy it*.
*(Notice “make the thing” isn’t a step — that’s because that often happens AFTER the sale!)
The SaaS model works like this: create a product, explain the use case, prospects research the category and choose one.
Just think about each model from a buying research perspective.
What’s the last SaaS you purchased? For me, it was a new split testing tool after Google Optimize shut down.
Did I research options? You BET I did, extensively. I compared prices, tried out different tools, and chose a winner. (By the way, a low price point was a key factor in my buying decision.) And if I didn’t actually run split tests on it, I would cancel it straight away.
Compare this to a course. If you buy a course, you’re likely following the creator and found out about it from their marketing. Let’s say it’s a course about copywriting. When you heard them announce it, did you go out and research and price-compare other copywriting courses? The answer is likely no. You heard about it, you trusted the creator, you bought it. It’s a completely different process.
(Yes, sometimes we actively look for education in a certain area although this tends to be free resources like blogs and videos. Even then, purchases usually follow an audience-first model: we subscribe to someone’s youtube videos about the topic, get to know their content, THEN buy.)
Why It Almost Never Works to Create a SaaS Around an Audience
There was a time when every course person wanted to get into software, and I saw SO MANY half-baked software attempts that flopped.
Here’s how the story usually goes:
Let’s say the expert has an engaged audience around time management. So they think OK let’s do a time management SaaS! It can include a calendar and a to-do list, I’ll get recurring revenue and be a gazaillionaire!
Sometimes the launch even works OK — the audience is excited and wants to support their beloved creator by trying out the tool. They get some buyers.
But the buyers quickly realize . . . wait there is much better software out there for these problems (in this case, a ton of excellent and free calendars and to-do lists).
The expert did not actually work out the business case for viability around a new to-do/calendar tool and how much people would pay for it. They just tried to create “something softwarey” around their niche.
Even worse are the glorified spreadsheets — they sell what’s basically a branded spreadsheet with their special “categories” as columns. This might work as a free download, but no one is paying for it month after month!
SaaS Marketing Is Completely Different
Marketing is my wheelhouse, and I have sold $10m+ in both online courses and SaaS subscriptions.
I kinda know what I’m doing here.
And I can tell you that the marketing strategy for SaaS’ vs online experts is COMPLETELY different.
When I promoted my online courses, I followed the industry standard of a launch model. (Where you “launch” the course with a big promotion and open sales only for a limited time.) I created a schedule for the year, and put marketing budget behind these large launch events.
(I actually really miss those big wall calendars where you’d get your whole year mapped out!)
In my SaaS businesses, we don’t map out our marketing plans over the year. We create marketing flywheels that keep growing. SEO, google ads, cold outreach — whatever it is, you’re improving a marketing system that attracts qualified leads and turns them into customers.
And speaking of qualified leads, that’s a whole different game in the two models.
Because goooood luck taking someone who is mildly interested in your category and selling them a SaaS!
Let me give you an example: this year I have been working on increasing my cooking skills. I read cooking blogs, look for recipes, and follow my favorite creators on instagram.
However, I have ZERO use or desire for a cooking-based software product. They can be my favorite chef ever with the best recipes, I’m just not interested. Putting all their recipes in a database and calling it a SaaS ain’t gonna cut it.
But what could they sell me? They could sell their audience group or 1:1 cooking lessons, or an ebook of recipes.
SaaS businesses need to target people who are either actively looking for their solution (this is always best!) or have a very strong and clear use case for it. Not people who just have a related interest. And an audience signals people who like your content, not people who have a problem that they need software to solve.
Content Marketing Still Works For SaaS
My SaaS Paperbell (c’mon over coaches!) relies heavily on content marketing. We’ve created an extensive library of blog posts that are highly targeted for our target customer, and this is a super effective discovery mechanism. I’m not saying content doesn’t work for SaaS.
What I AM saying is the content should not come first. Don’t build the SaaS around the audience, build the audience around the SaaS.
