Somewhat over a yr ago, my co-founders and I noticed that our company had an existential problem.
The product we were building and selling – a SaaS platform for sales engineers – quickly became obsolete due to artificial intelligence.
As we tried to assume how our software would fit into an AI-enabled future, we realized that there simply wasn’t going to be a future where humans interacted with our software the way they do today. The world of SaaS tools will ultimately be killed by AI-native interfaces.
We had to begin over and build a future-proof product from scratch. And if we were to survive, we needed to do it without losing most of our customers.
Here’s how we did it.
Same results, whole recent world
Please note that this was not a case of selling customers on an existing platform enhanced with AI capabilities. Instead, we needed them to adopt a completely recent AI-powered product that might completely replace existing workflows.
For a while, we wondered if we should even expect our clients to maneuver for us.
The reality, nonetheless, was that our goal was still to unravel the same problems – and much more with a recent vision. Our current customer was still our ideal customer profile. They bought us to unravel a specific problem: improving the sales productivity of sales teams selling complex products.
Our goal was to supply the same results, but much more effectively. Instead of providing a SaaS system to trace the work done by humans, we would supply an AI system that would do the work itself.
As CEO, I noticed that it was my responsibility to tell our customers about such a radical change. I contacted many of them through every channel I could find – private emails and personal emails LinkedIn messages and in many cases I have planned Buzz calls to debate details and answer questions.
The message boiled right down to this:
Three forms of customer migration
For a startup founder, explaining the vision is easy. Things get tougher when you begin getting involved in contracts.
When we were considering about how to maneuver our customers from their existing contracts to a recent product, we discovered that we needed to have three forms of conversations.
Our customers paid for user licenses and our approach depended on their level of use inside our existing product. The first group of customers were those who were essentially fully leveraged and reliant on our existing SaaS product.
For these clients, our approach was essentially to create a recent net cross-sell cycle, helping them secure a recent budget for the recent product we were selling. We expected that they might unlock budget over time as users migrated from the old platform to the recent one, but these high-usage customers needed our help to assist them chart a recent direction and secure additional budget.
While these were difficult conversations, most SaaS customers are typically not 100% leveraged. For customers with some bandwidth, we were capable of offer an indirect path. We took the unused amount and offered it as a credit to make use of the recent service.
This way, they might prepare for the transition by providing some users with the recent service as a delegated team; when it is time for renewal, these users will give you the chance to assist manage change and support the remainder of the organization.
The final group of customers were those who were untapped but didn’t have significant change management needs. These firms – typically smaller, more agile organizations – could simply move their existing expenses from point A to point B. For these customers, we just turned off the SaaS, launched a recent AI platform, and provided the same level of coaching that we would supply to a net recent customer.
Result? In all three groups, over 80% of our customers have already migrated or are in the technique of migrating to the recent platform. While it wasn’t easy, the result was a sustainable company that is now built to thrive in the era of artificial intelligence.
What we learned
When we were deciding what to do with the roadmap for our suddenly disappearing products a yr ago, we adopted a specific motto: Instead of waiting for the ax to fall, prepare for a world where you have no head.
Today, there are tons of of SaaS firms that are eagerly waiting for the moment when artificial intelligence will make their products or services obsolete. Instead of attempting to squeeze the last drop of revenue out of an inferior product, we decided to position a bet and mix into the fog.
During this process, we learned several key lessons:
- Tear off the patch: Although the decision seems easy in hindsight, the change itself needed to be handled very delicately. We needed to re-evaluate team members to find out who could support the recent product while maintaining the existing product, in addition to lay off employees who now not fit the recent company vision. We also needed to persuade our investors that we were still on the right path. The longer we wait to alter the platform, the tougher the change could be – now is the time to act decisively.
- Don’t sugarcoat the situation: In all our conversations with employees, investors and customers, we told them a easy, unvarnished story. By being brutally honest about how we view the market, we have retained great credibility at a time when it might be fair to query our judgment.
- Look for easy compromises: We could take a “take it or leave it” approach to our clients. We believed in our recent product and saw no long-term future for our old one. However, a rigid approach would likely result in much greater customer churn, although we were still solving the problems they bought us for. Finding a pleased medium and supporting firms that needed to stay on a legacy SaaS platform allowed us to retain more customers and maintain a stable business during a period of disruption.
We have finally found one more silver lining in a yr stuffed with disruptions. In talking to our customers, several of them were nearing renewal and had no plans to proceed using their previous SaaS platform. But a recent AI platform? They not only renovated, but expanded.