10 Things the Best Software Companies Have in Common
IN THE BUSINESS WORLD, if there’s a simple way to do things, there’s also likely a software application that will complicate it. Are you reporting expenses? Enter each line item one by one, categorize and tag it, provide justification and other context, submit it for approval, sign the receipt, scan it and email it to accounting with the expense report number in the subject line. Oh, you forgot to also write the expense report number on the actual receipt before sending it? Well, scan it again and issue a correction. Sound familiar? Good thing you’re not being paid to do your actual job.
This is a prime example of software-as-abarrier (SaaB), a term coined by Matt Wallach, co-founder and president of Veeva Systems. SaaB is a phenomenon wherein technology goes from an enabler of the business to an obstacle. It complicates ordinary business functions and impedes users’ productivity.
“SaaB makes routine business tasks and processes more difficult because of technology that doesn’t work well … It complicates, rather than simplifies,” Wallach says. “When software doesn’t work as intended, the business rejects it and people don’t use it.”
And if users are unable to reject it—if they are wholly dependent on SaaB for core business processes—the company inevitably suffers from productivity loss and lower employee morale, not to mention plenty of hallway cynicism. Not exactly a winning combination.
Getting Technology Out of the Way
It’s easy to dismiss SaaB as rooted in heavy IT-footprint legacy systems. But that’s not necessarily the case. When new software is introduced to the organization, business users tend to roll their eyes and groan at yet another system that will encumber them. Experience has taught them that the system may have been designed with their goals in mind, but no thought has been given to the user experience. Chances are that during the product search, the buying group prioritized price and other vendor requirements over user experience.
But the goal of business users is not to use software to get the job done. Their goal is to get the job done, period. Software is simply an enabler for them. If they can get the job done effectively without software, they will. This important point is often lost on product teams.
As a product leader, your goal should be to build software that is so simple and intuitive that users don’t even think about it as they do their jobs. Consider your Amazon shopping experience. If you need a new item, you simply pull up the app on your phone, search for the item you want, click the “Buy now with 1-Click” button and voilà, it arrives in two days. If you already know what you’re looking for, the entire process takes seconds. If you don’t know what you’re looking for, your effort is dedicated to the actual task at hand—the act of shopping—rather than fumbling through the process. You never actually think about the fact that you’re using a sophisticated software app. The technology completely fades into the background, where it belongs.
This is not to suggest that all corporate software can or even should be as simple as the Amazon experience. Business tasks are typically much more complex than online consumer shopping. But there is a reason so many company processes are still tracked and managed using spreadsheets: They’re easy to use. After more than a decade of smartphone usage, business users have become accustomed to more intuitive consumer experiences. Now, they’re asking, “Why on earth are we still putting up with bad software at work?” They want, even demand, an Amazon-like experience where they never even have to think about the technology or the process.
Getting to Software-as-an-Enabler
Whether we realize it or not, we’ve entered the era of software-as-an-enabler. Examples of software that has moved past SaaB includes Workday for HR, Spoonfed for catering management, Slack for collaboration and, at least in my view, Veeva for, well, everything it has touched so far. And there are plenty more. What do leading business software systems have in common?
1. Ride the Cloud
The most innovative and beloved software companies built in the past decade have all been cloud-based. That’s not a coincidence. Not only can they benefit from more nimble software development, they can also leverage cross- and even trans-industry experiences. I am admittedly biased, but unless we consider niche applications, I can’t foresee many examples of custom, on-premises software that will be better than their commercial cloud-based competitors in the coming decade. Perhaps more than anyone, Salesforce pioneered the shift to the cloud. There is a reason major legacy software companies like Oracle are completely reorienting their strategy and following suit.
2. Remove Friction
SaaB is essentially another word for friction. HubSpot has grown from nothing into a $400 million machine in just over a decade by building products that remove friction for its users. The top thing HubSpot’s customers say they love about the company is simplicity. It’s been so successful for them that CEO Bill Halligan is expanding the company’s focus on lowering friction from the product interface to the entire customer experience. “Friction is the enemy,” he says. “Our entire customer experience has to be 10 times lower than the competition’s.”
"All the strategy in the world will not help you if your organization does not wholeheartedly embrace a culture of user-centricity."tweet
3. Build a User-Centric Mindset
As the saying goes, culture eats strategy for lunch. For product leaders, this means that all the strategy in the world will not help you if your organization does not wholeheartedly embrace a culture of user-centricity. Too frequently, process gets in the way. You’ll need to hone your team to lead with the customer in mind. This requires getting your product managers out into the field on a consistent basis to really feel the pain of users’ daily business chores. You’ll find that they’re often encumbered by internal processes that your software doesn’t address. Or perhaps worse, their pain is actually amplified by your solution. Without such insights, it’s difficult to build any customer empathy or to design user-centric products. All of this should seem obvious, but it is quite surprising how little some product teams really understand the customer perspective.
4. KISS: Keep It Simple, Stupid
Simplicity is at the heart of user-centric design. Think back to the Amazon experience. I’m not talking about just the user interface. The entire process is designed to enable the user to accomplish his or her goal of making a purchase: Search is simplified, the highest-rated options are easily identifiable without even reading the reviews, and a simple one-click button allows you to complete your purchase with no need to enter any detailed information. Even shipping is an integrated part of the buying experience that requires virtually no action. Of course, tracking is also automatically done for you, and product returns are a snap. Sound vaguely familiar? It’s exactly what HubSpot is trying to do in the B2B world!
5. Focus on Rapid Design Iterations
Another best practice: Start with the minimum viable product (MVP) and focus on fast iterations to build out the product. Delivering a complex and comprehensive product with full functionality on day one not only delays your launch, but also increases the likelihood of bugs and failures—all of which lead to poor product adoption. Instead, let your customers get their hands on the bare minimum and then guide you on what’s next.
6. Configure, Don’t Customize
I’m a big believer that configurable beats customizable, though not all customers agree. They love the idea of custom solutions built specifically for them. The problem with custom systems is that they were built for one customer with one specific need at one specific point in time. They do not have the ability to adapt to changing markets. As a result, they become rapidly outdated and stale, have difficulty connecting to and maintaining integrations with ever-changing external systems, experience a general lack of innovation and are extremely costly to upgrade when the time does come. All of this leads to vastly higher ownership costs over time and frustrated business users. Most successful B2B software companies today offer configurable solutions that are easily updated on a regular schedule instead of custom SaaB-type offerings.
7. Balance Innovation and Core Development
Another commonality among market-leading companies is that they rigidly employ a strategy that balances future innovation with current product development. Google, for example, spends about 70 percent of its time building out its core products, 20 percent on innovation and 10 percent on what is over the horizon for the next five to 15 years. That 10 percent is dedicated to creativity and imagination, and it’s critically important to the long-term success of the company.
Other companies follow a 40-40-20 approach, but there is no one winning ratio. Each organization follows its own path. However, they all understand the need to continue to evolve their product as their customers and markets change, while also dedicating appropriate effort to ensure that the software works as promised. Too much focus on innovation means that users can’t do their job today, while constantly being mired in today’s issues means users won’t be able do their job tomorrow.
8. Get Intelligent
The rise of artificial intelligence (AI) has given customers hope that repetitive tasks such as back-office operations (or employee expense management) will be entirely automated, opening employee time for higher-value work. But more important than realizing productivity gains, AI systems solve a myriad of problems, such as helping financial analysts calibrate portfolios, alerting loss-prevention teams to possible fraud, helping recruiters identify qualified candidates, recommending new ways for sales and marketing to interact with their customers and countless more value-add ways of doing jobs better. To stay competitive, product teams should think about how AI can help remove friction from their users’ experience.
9. Connect Customers to an Ecosystem
Your customers will love you if your system connects them with a broad ecosystem of partners and other peers. An open API connected to a wider industry-cloud empowers them to substantially expand their capabilities. And that is exactly what many of these software companies are enabling. Moreover, they know that their customers don’t want to be in the business of maintaining integrations; they just want systems that work. So, they remove the SaaB and take ownership of connecting customers to the broader business ecosystem—and it pays vast dividends for them.
10. Develop Your User Community
In the same spirit, a well-connected network of business peers offers customers a significant incentive to use your system and builds a substantial competitive advantage for you. People may replace software, but they are far less likely to leave peer communities. As an added bonus, communities often serve as strong promoters of your brand, provide invaluable feedback and are a fantastic source for new hires or, for that matter, your own future career opportunities. For product leaders, it’s best to work with your marketing, support and services counterparts to build your community. Winning software companies like HubSpot, SoFi and others actively cultivate strong networking communities, and so should you.
Moving Beyond SaaB
Product teams today have a unique opportunity to overcome the legacy of software-as-a-barrier. Expensify has done it for expense management and Okta for secure and simple identity management. Many other companies are also reinventing what it means to offer business software. They have developed a formula for success that hinges on the cloud, simplicity, user-centric design and more. By learning from their experiences, product leaders can reimagine what it means to be a B2B software company.
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