This article is compiled from an Extreme New Live Share.
Current Survival Rules Link to heading
Currently, the nation, enterprises, and employees are all facing difficulties. At this time, don’t think too much about scaled growth; the most important thing is three words: survive.
In the course of Zhuge Intelligence’s development, we have also experienced several minor cold winters and faced several critical moments. Looking back, our understanding of these three words “survive” was not deep enough.
Why Must We Survive? Link to heading
With the development of the digital economy, China’s SaaS industry and enterprise services will continue to develop and penetrate.
- If you don’t survive, you will become cannon fodder for history.
- If you survive, you will usher in new growth.
How to Survive? Link to heading
Everyone must objectively analyze their current resources and tasks, then make decisive decisions:
- Focus, cut off products that should be cut.
- Clearly calculate customer acquisition costs.
- Don’t waste sales expenses.
- Improve unit economics and per capita efficiency.
Advice for Series B SaaS Companies Link to heading
By Series B, the business model has basically been validated, and it’s time for scaling. In the current economic climate, everyone’s business is challenging.
First Thing: Account for Two Ledgers Link to heading
Financial Ledger
- Financial statements, income statement
- Main business revenue
- Cost composition and expense composition
Business Ledger
- Number of new customers
- Sales conversion rate
- Customer renewal rate, retention rate
After clearly accounting for these, determine:
- What is the actual customer acquisition cost for a customer?
- What is the average payback period?
- If costs are high, what are the main reasons?
- Which segments should be scaled back and integrated?
Second Thing: Strategy Adjustment Link to heading
New Customer Strategy
- Abandon inefficient traffic acquisition methods.
- Shift to deep, segmented market approaches.
- Find the customers with the best PMF among existing customers.
- Focus on vertical fields, point-to-point new customer acquisition.
Existing Customer Strategy
- Pay more attention to existing customers; it’s easier to achieve growth from them.
- Check if renewals are being handled adequately.
- Discover value potential from existing customers.
Generally speaking, if your existing customer renewal rate can reach 50-60%, there is certainly room to reach 80%.
Reflections on Product Evolution Link to heading
Since research and development began in 2014, it has been approximately 8 years. During this process, we have witnessed the rise and fall of various industries, and also seen the internet gradually penetrate all walks of life as an infrastructure.
Evolution of the Internet Link to heading
- 2015-2016: O2O food delivery and ride-hailing services, connecting people, information, and services.
- 2016-2017: New retail, online and offline integration.
- 2019: Digital transformation.
- Present: Industrial Internet, digital economy foundation.
Zhuge’s Positioning Evolution Link to heading
Initially, Zhuge’s target customers were internet companies and even developers. Our tools and products were more about improving productivity.
Now, with the internet penetrating traditional enterprises, it’s a logic of industrial upgrading. We must respect the production relations within the industry and its business logic.
Agile, Closed-Loop, Open Link to heading
A characteristic of Zhuge Intelligence products is helping customers start with specific scenarios:
- Through an agile approach.
- Through a closed-loop approach that allows customers to see results.
- Through open capabilities that integrate with the customer’s existing IT.
Agile Link to heading
Instead of a top-down approach that destroys the original system, it’s about finding opportunities within it. Gradually moving from one scenario to more scenarios, this is scenario agility.
Closed-Loop Link to heading
When enterprises try new things, they worry about outcomes and effectiveness. From doing one thing to generating incremental ROI, that is a closed loop.
Open Link to heading
Zhuge Intelligence’s user segmentation value, product capabilities, and analysis results can be accessed via API, and real-time data can be accessed via PaaS.
PMF Priority Link to heading
“Don’t blindly go to market before Product Market Fit is found.”
PMF (Product Market Fit) refers to the optimal fit between product and market. GTM (Go To Market) is when a product enters the market.
Blindly going to market before PMF is found means your persona might not be clear, and your GTM strategy might not be the most effective. You might invest a lot of time and effort into advertising and building a sales team, but essentially, poor PMF is due to an unclear customer strategy and product strategy.
True decisions are always few and effective.
Three Steps to Deep Dive into Vertical Industries Link to heading
Step One: Select Industry Link to heading
Do not enter blindly. Start with general scenarios across industries, choose the industry where PMF is best, and assess how the business model of this industry is changing.
Step Two: Find the Fit Link to heading
The fit between the product and the customer’s future business growth.
Step Three: Get into the Business Link to heading
Understand how leading and mid-tier customers conduct their business? Where does their main business revenue come from? How are internal responsibilities divided?
At the same time, balance several roles within the business:
- Product User: Does it significantly improve efficiency of use?
- Decision Maker: Does it increase ROI?
- Middle Management: More concerned with SOP.
Biggest Lesson Link to heading
“Don’t blindly enter multiple industries before PMF is found.”
Business within each industry is very segmented, and the needs and operations of different sub-segments vary greatly. When deeply engaging in a vertical industry, the first thing is focus.
Furthermore, each industry has its development stage and rhythm; it’s essential to enter a thriving industry at the right time.
Original link: Extreme New Dialogue