Powering SaaS Scale-Ups as a Fractional CTO / COO

On June 22, 2021, SaaS Backwards podcast author Ken Lempit invited Michael Richardson, founder and managing director of Tech-Azur, to join him on Episode 12: Powering SaaS Scale-Ups as a Fractional CTO/COO. 

After all, what got your SaaS Funded is not what will get your SaaS Scaled.

While revenue growth is being achieved, the criticality of operationalizing the SaaS business for scale is often a blind spot for ambitious SaaS CEOs. It’s understandable because different skill sets are required, and growth generally comes well before scale to fully validate the business model & market. The Good News for SaaS stakeholders is that you don't have to learn everything about the achievement of scale the hard way.

In this podcast, hosted by Ken Lempit in his SaaS Backwards series, Michael M. Richardson drills down deeply into what it takes to build a scalable SaaS business.

Why Would CEOs or Boards Need a Business Transformation Agent?

Michael's take is that the SaaS industry is a customer-centric business, but it’s often anchored to their initial platforms. Such ties bound them, whereas SaaS businesses need to revise and rebuild organization and operation to scale and grow:

“...what got you funded won't get you scale from an operational perspective.’

While previous customer success is all CEOs’ but being a natural-born rainmaker doesn’t imply skill in business operationalization. 

With experienced external resources on-tap, your SaaS core team can remain focused on the immediate – with the impact of their efforts being amplified through the application of seasoned operational scaling experience in parallel.

That’s where advisors from Tech-Azur might help. Their goal is to help SaaS enterprises overcome the growing pains and scale smoothly.

Turning Vulnerability Into Strength

Coming up with the next subject, Ken Lempit got curious about how well the CEOs accept the idea they need a hand to achieve scalability and business growth.

After all, executives have that inherent desire to seem impeccable and all-knowing, especially when they host presentations for partners. But on the other hand, Michael Richardson encourages them to represent their vulnerability as their strength. Eventually, all partners realize the necessity of continuous improvement.

“I think recognizing that the thing to do is to resolve any issues and not to mask those or not to pretend like they're not there...”

Bridging Communication Between Different Parts of the Business World

So what are some particular benefits the businesses get when bringing in an external fractional CTO / COO? Suppose it happens when the company closes in another funding round.

CEOs can get much more at this stage if they stay core-team focused instead of emphasizing reports and board presentations too much. The prime objective is to incentivize the core team’s progress. That implies enabling funds and resources to amplify the team’s efficiency and fill out the soft spots. 

A seasoned advisor’s supervision would help assess resources and build a growth-oriented, comprehensive methodology to bridge communication between SaaS businesses and stakeholders. SaaS service C-level management can still focus on products and customers. Meanwhile, the virtual executive will delve into key investors' concerns and translate them into a to-do list with weak points to deal with.

Learning How to Scale Both Teams and Operations

Let’s discuss Stripe’s case as an example. It's a usual suspect, illustrating a situation when chief executives might achieve more with proper advisory.

Head executives from enterprises like this need to learn how to scale operations both technically and through team capabilities deployment. The leap to another funding round won’t be possible with the same teamwork, organization, and technology stack that brought the company to where it stands. A sustainable and scalable operating model must include aspects that were secondary in the early days. Such are new quality systems, employee management strategies, and industry compliance standards. These are crucial for sustaining and nurturing customer success.

Fostering Business Growth with Operational Optimization

Where might Tech-Azur’s advisors step in when there’s a burning need for optimizing operations?

‘In SaaS space founding teams often consist of people that are natural salespersons,’ Michael said. ‘They are really great at recognizing pain points they’re solving. They typically gather around their mates who know the score and bring in breakthrough technology. But they struggle with jumping to the next stage once they've brought a product to the market.’

Leveraging DevOps capabilities would be of assistance. But to succeed in operationalizing SaaS services, executives need the operational help of tech advisors and interim fractional CTOs:

• They manage re-training or recruiting tech-savvy staff.
• They suggest new retainment tactics to engage and encourage talents.
• Most importantly, they instruct and supervise the launch of new developments to help avoid incoherence that burns the company’s time and resources.

Rapprochement Between Operations and Sales

Aligning sales and marketing and removing distinctions between their KPIs – that’s the next topic Ken brought up in the discussion.

Michael recalled working as virtual COO for an IoT firm whose founding team missed out on a real sense of marketing. But branding and product positioning directly impact operations. So besides digitizing operations, he also solidified the marketing vision.

Situations when ‘sales almost wagging the dog of product management’ force companies to create environments that allow them to fulfill their commitments.

The times of dev and sales departments' contradiction and incoherence are almost history. Shared goal setting across sales, marketing, and product management is now the real thing in IoT and SaaS services. And it’s feasible with proper methodology. 

‘Rapprochement between operations and sales is what people genuinely anticipate, in your opinion?’ Ken asked.

‘That is exactly it,’ Michael confirmed. ‘Again, this is one of those complete blind spots in most SaaS organizations.’

Seeking Advisory Before the Actual Funding 

‘Does it pay for a founder to seek someone like Tech-Azur as they're getting close to funding?’ 

‘Yes, we’re working with a founding CEO right now,’ Michael replied. ‘He found out that it might be difficult to present ‘how’ to support his ‘what’. So that was very wise of him. I’ve assisted him as a fractional CTO to crystallize how his platform should be delivered to investors, specifying the use of funding.’

Far-sighted founders shouldn’t neglect the advisory on operational improvements and integrations. Tech-Azur’s approach isn’t about bringing in the whole team but delegating a professional with a knack for tailoring roadmaps.

Understanding What It Takes to Drive Revenue and Grow Business Capacity

SaaS experts might lack knowledge of building and scaling up the organization to boost profitability.

It’s generally unrealistic to expect someone super deep in addressing pain points and responding to market demands to be the same pro in growth strategy. So the purpose of Tech-Azur is to bring the part that’s generally missing. And it better be introduced before the first crash.

‘How have you positioned that for your clients? How do you measure that success?’ Ken asked.

‘Some scoping should precede operation optimization,’ Michael answered. ‘So we speculate as to what would be the right set of services and what technical and organizational background should underpin it. I guess time-boxing of goals truly matters at the start.’

It’s required to define short-term and long-term goals. In this connection, success metrics reflect the completion or capability of completion of specific things within the set timeframes. And, of course, there should be outcome evaluation.

Last but not least, advisors aim to discipline the process.

‘SaaS business activity is all about deliverables. We ensure that operations really live up to the potential of the client’s platform.’

Listen to the whole episode embedded below to learn more. 

For a personal consultation, contact Tech-Azur’s team and start paving the way to your company’s operations success!