Why Custom Development is a Death Trap for SaaS Businesses

November 9, 2012 Yoav Schwartz

Your customers’ feedback is the most important asset you have when building your SaaS offering. Get it often, and make decisions based on what you hear. That being said, don’t offer custom development. Period.

If you run a SaaS business you may have already suffered through a custom development cycle. If so, you’ve likely frustrated your customers, hampered your productivity and put your road map in a coma.

Of course, when you’re starting out your business you need to take money from wherever you can get it. And often times, custom developing for an early adopting customer (especially one who’s willing to pay), makes a lot of sense to get your budding business off the ground. But that opportunistic mindset is only beneficial in those very early days. Here’s why…

Your product (or “platform”) is growing in complexity. As you bring on more users you’ve also got a responsibility to them as a whole to keep adding value. If you’ve got paying users, or customers, that responsibility deepens – you’ve got to provide a great product and service while continuing to evolve your core offering so that they can justify the monthly dollars spent.

Every customer has different needs and many probably use your product in different ways.

If this hasn’t happened yet to you, I’m confident it will: one of your customers will come to you with a feature request that’s really important to them, and they’re willing to pay.

Here are your next thoughts:

1. Does this feature add value to a large portion of my customer base?

2. How is this custom dev money going to look on my balance sheet?

I’m glad you asked yourself #1. It’s the most important question. But it’s also the only question you should care about.

You are not a custom dev shop. Most custom dev shops have the flexibility to start with a blank slate, build something to spec, and then get out of the way. If they’re good, they can deliver when they said they would at the price they quoted.

You don’t have that flexibility. Your product is gaining in complexity. It has many moving parts that have been carefully put together to put you one step closer to your big vision. When you add a feature, you have to consider how it impacts every other portion of your offering. So inevitably, adding a seemingly small feature takes longer for you than it would for a custom shop starting from scratch.

More importantly, when you’re done developing this feature, you have to support it as it’s now part of your offering.

Was that feature really serving the greater good, or does it have a whole bunch of bells and whistles only valuable to that one customer that paid you? More often than not, if a company is paying for development, they’re going to want input on its design and functionality.

Here’s where the frustration probably kicks in across the board. It’s taking longer than expected. Your customer is upset with the delay, and even more so with you suggesting to increase the price. Or, you realize you’re wasting resources on this one feature so you start to think of ways to get it out faster. That attitude inevitably gets reflected in the final deliverables – the feature’s not up to par, but you can’t scrap it because your customer’s been waiting and is constantly reminding you that you’re failing to meet the obligations of your agreement.

So you launch the feature and you hate it. You’ve just put a mark on your otherwise beautifully crafted product for a few extra dollars. That’s not big picture.

Yes, there are those magical moments where your customer comes to you with a dev request that happens to align perfectly with your roadmap. And to that I say, congratulations – you’ve figured out what your customers want! Imagine how happy they’ll be to know their request is coming, and won’t cost them anything extra. A win-win.

The bottom line is, don’t bend for one customer’s request if it doesn’t align with your vision. Listen to them all and make the best decision as to what should and should not be part of your offering. Don’t be afraid to say no, and better yet, share your vision (without too much detail) so that they can understand the incredible future that lies ahead.

Your customers, even those that don’t get what they want today, will benefit in the long run from this holistic approach.

I’ve learned this lesson the hard way. But at least now I have something to read and share when the next custom dev request comes in.

Good luck with your SaaS business.

Yoav Schwartz

CEO, Uberflip

About the Author

Yoav is the founder and CEO at Uberflip and is responsible for driving the mission, vision, and goals of the company. He spends considerable time working with his team to continuously delight and surprise Uberflip's customers.

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