The Art of SaaS Review: What SaaS Is and How to Do It Right

The Art of SaaS Review: What SaaS Is and How to Do It Right process.st /art-of-saas-review/ 9/5/2017

Ben Mulholland September 4, 2017

The Art of SaaS shows that even industry veterans are sick of unnecessary jargon and bloated descriptions.

Rather than spending thousands of words (or multiple books) trying to explain every variation of the SaaS model, it draws from the experiences of Dr. Ahmed Bouzid and Dave Rennyson in order to cover all of the basics of a quality SaaS business in less than 60 pages.

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Being so short, an Art of SaaS review might seem redundant at first. Why not just read the book in about an hour and learn what the authors believe to be: What SaaS is The bargain between vendor and user The importance of uptime (and how to maintain it) The three priorities all teams should share The three practices which achieve those priorities The structure of every team, and how they should be managed Well, in this post I’m going to cover both the core takeaways of The Art of SaaS and the context surrounding the book itself by drawing from other figures in the field.

I’ll show you why this odd little volume is worth reading and what pitfalls to avoid when taking it at face value.

Let’s get started.

Both authors have vast experience with SaaS businesses Before we get into the nitty gritty of The Art of SaaS , you need to know who wrote it. While our previous book reviews on the Process Street blog have only skimmed over the author(s), it’s hard to take such a short book with such a large scope seriously without knowing why it’s worth listening to the person or people who wrote it.

The Art of SaaS doesn’t stop to justify itself, so instead you need to know whose authority its points are coming from.

Ahmed Bouzid is the founder of Witlingo and a former Amazon Alexa Executive, and so has years of experience running (and successfully growing) SaaS businesses. Despite this, when looking at some of the questions he was commonly asked, there was a consistent problem.

He realized that there were few resources out there which boiled SaaS down to its core elements and cut through the jargon.

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There are countless free resources which give vague (or low-level) definitions of what SaaS is and how to start a business, but very few give specific guidelines in language that anyone can understand. If you don’t know precisely what kind of business model you’re following, your customers will be alienated when an update or decision doesn’t align with the product vision they signed up for.

Dave Rennyson, meanwhile, was President of Angel.com and is the current Senior Executive VP and CRO of MicroStrategy. As opposed to Bouzid, Rennyson was driven more by his own experiences to share what he’d learned through every stage of running a SaaS startup, and exactly what it takes to make one successful.

In his own words;

“At Angel.com we had the fortunate opportunity to build a SaaS business nearly from scratch, and to witness its evolution through its various phases… We learned a lot during the intervening years and we are writing this book to share our learning.” – Dave Rennyson, PRWeb

While both of these figures are far from unbiased on the topic of SaaS, their vast experience in the field shows why The Art of SaaS is worth a read. It’s a highly condensed (if rose-tinted) view of what SaaS is and how to make it work.

Having said that, I’ll be bringing in the opinions of other senior figures in SaaS to contrast what they say to highlight the areas where The Art falls flat.

Key takeaways from The Art of SaaS The Art of SaaS is difficult to summarize, since the entire book itself is a highly condensed summary of “true” SaaS. While only 55 pages long (excluding the contents), Bouzid and Rennyson manage to cover everything that, in their minds, constitutes a working SaaS business.

From the ideas and promises all “true” SaaS is built on to the structure of your teams, important metrics, and hiring suitable employees, there’s very little information which isn’t useful to know if you’re part of the SaaS sphere.

However, to give you an idea of the core content, I’ll cover some of the biggest takeaways below.

The premise of SaaS Bouzid and Rennyson define SaaS companies as those which provide reliable access to software through a client’s web browser, and which run on a subscription model rather than a one-time fee.

No downloads are required to access this software – there is one central version which users access, and so everyone runs on the same version of it.

In turn, this means that all customers receive software updates at the same time, and all customer data is stored on a single database.

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Due to there being no downloads, an immense amount of trust is also being put into the vendor’s hands – if the business breaks that trust or its customers’ expectations, many will leave due to feeling their business is not secure in your hands.

This premise fits what many others (including Jason Lemkin, the “godfather” of SaaS) consider to be SaaS, so no real surprises there.

“What is SaaS? Software-as-a-Service. So, it’s web services, broadly speaking, that people pay money for every single month… The definition can be fairly broad… The common denominator is… [customers] pay every month, and one way or another you sell and market it.” – Jason Lemkin, speaking in episode 597 of This Week In Startups

The bargain at the heart of SaaS Here’s where The Art of SaaS begins to get more specific than other sources. Bouzid and Rennyson say that at the heart of any SaaS company there is an implicit bargain between a vendor and their customers.

“I, the vendor, will assume the risk of building and hosting a piece of software for a large customer base, but in exchange, my buyers will use the software and the service that I am offering them as is.”

– The Art of SaaS, p.12

Going even further, The Art says that any failures in this bargain are the result of false expectations being given to your customers. If they sign up and immediately begin asking for things beyond your service’s scope, your marketing has either not been clear enough or has given the wrong impression.

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art of saas review - false advertising While figures like Jeff Kaplan agree that SaaS puts a greater responsibility on the vendor to maintain a consistent service and takes strain off the client, very few (if any) talk about the opposite side of the bargain set out above.

Admittedly, marketing is usually the party at fault if your clients have received a false impression of your business, but that’s not to say that that SaaS as a whole constitutes a special “bargain” relationship.

The statement is a decent high-level summary of the vendor-customer relationship, and of the importance of accurate marketing and customer care, but don’t expect everyone to be aware of this when signing up.

Uptime is everything The most common element through the entire book is that, according to the authors, if you do not have 100% uptime, you need to try harder.

As I’ve already mentioned, Bouzid and Rennyson stress the level of trust that SaaS requires to work effectively.

You’re asking customers to put their business at the mercy of your service, and no matter how drastic the benefits may be, if it cuts out at random intervals they will take their business elsewhere.

“Anything less than 100 percent uptime breaks the promise of SaaS.” – The Art of SaaS , p.13

If your service is down, their business won’t work because of you.

Now, while 100% uptime is a noble goal, in practice it’s not feasible. It’s certainly possible to get into the high 90s with careful security procedures and pre-production testing, but technically any downtime (scheduled and publicized or not) results in a sub-100 percentile figure.

The solution? Always strive to be as close as possible to that goal.

It’s inevitable that downtime will occur, and Lincoln Murphy covers the topic (and how to deal with it) extremely well.

He, Bouzid, Rennyson, and many others suggest that the best way to handle downtime is to schedule it and announce clearly to your customers when (and how long) it will be. That way, even if you don’t have 100% uptime, your customers know what to expect and can prepare in advance.

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If your service suffers from unexpected downtime, make sure you communicate clearly and effectively what the state of the issue is and (when you know it) what caused the issue, what could have prevented it, and how it will be avoided in future.

While it might not get you up to 100% uptime, both of these practices will soften the effect of any downtime or at least any negative impact on your affected customers’ opinions of your service.

Processes, monitoring, and testing are crucial Backing up how important uptime is, The Art of SaaS also gives some pointers on how to achieve that elusive (and ultimately impossible) 100% rating. It says that every team in your business needs to hold three aspects above all else: Document processes and write standard operating procedures to follow Consistent monitoring of everything from bugs to how your customers use the service Testing everything thoroughly to both highlight flaws and measure your success Although I’m not exactly impartial on the topic, here on the Process Street blog we’ve shown time and again how important processes and procedures are, and how they form the core of any functional business, be it SaaS or otherwise.

Take the project proposal template below for example. By following this every time you need to create a project proposal you’ll have a consistent format, naming convention, and so on, no matter who creates the proposal.

By documenting methods for everything you do more than once you’re bringing consistency to everything you and your teams do. Not only that, but you’re opening the door to reliably testing individual elements of your processes to measure the effects they have.

Monitoring factors from service and feature usage to the status of known bugs gives a comprehensive model of how your service is currently performing, and can serve as an early warning system for problems. By measuring the performance of your employees you also can help them to overcome any difficulties they’re encountering and celebrate their successes.

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Finally, testing allows you to improve both your business and SaaS product as a whole, and to catch potential bugs before they’re released to your customer base. Catching bugs this way can help prevent unexpected downtime, and large portions of the testing can be automated to save your team the trouble.

No matter what way you look at it, thorough testing is a win-win situation.

While other elements such as centralized chat software and document storage are also key to running a smooth business, these three pillars are crucial to making SaaS work as a model. Even if The Art of SaaS isn’t breaking new ground by saying this, it’s still useful to have in such a high-level summary of SaaS as a whole.

Speed, reliability, and connectivity are king Just as Bouzid and Rennyson state that processes, monitoring, and testing are crucial practices in SaaS, they also believe that speed, reliability, and connectivity are the core principles behind almost every aspect, practice, and decision in such a business.

Whether you’re approaching your customer support, feature releases, or sales department, your team (and product) needs to be fast to capitalize on opportunities, reliable in their performance, and stay transparent in what they are doing and how they are doing it.

Going even further, they also state that the same ideals should be portrayed through your product and team to the customers, be it through the tone of your marketing or your integration policy.

“To prosper, a SaaS cloud needs to be able to connect to other SaaS clouds… Such integration must be made easy to enable the proliferation of value-added solutions and the emergence of a healthy and thriving cloud ecosystem.” – The Art of SaaS , p.19

If you’re unsure as to how to handle a situation or how you should be prioritizing a certain set of tasks, just ask yourself whether it furthers those three principles for both your team and customer base.

The Art of SaaS‘s failings With authors like these, it’s inevitable that The Art of SaaS gives the sector as a whole glowing praise. However, it surprised me just how strong the language they use can be sometimes, to the extent that large sections could be considered preachy or compromised in the process.

If you’re looking for an impartial look into what SaaS is and the core foundations of a SaaS business, this isn’t it.

“SaaS is a way of being. It is a way of life, a world conception, a paradigm, and an ecosystem.

Some even say that SaaS is a religion.” – The Art of SaaS, p.7

Having said that, they describe themselves in the blurb as “passionate evangelists” of the SaaS movement. While that doesn’t make the book any less biased, you can’t say you weren’t given fair warning before reading it.

Their passion for the topic isn’t a bad thing, but when assessing the SaaS model (or, really, any topic) as a whole it’s just as important to know what an author isn’t telling you. They don’t stop to spare breath for alternative models or to detail the disadvantages of the practice – it’s up to you to go out and research the other side of the coin.

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Admittedly, many others such as Brandon Gaille who provide rough overviews of the disadvantages of SaaS often don’t support their points with evidence, but it still pays to know what the potential pitfalls are.

The Art of SaaS is also a little odd because it doesn’t encompass what most consider to be SaaS. Instead, the authors are targeting a specific branch of the model, which they call “true SaaS”. This might sound off-putting, but in practice this means that the model they’re talking about is nothing but the bare bones of the platform.

So, while the specifics of Bouzid and Rennyson’s work aren’t applicable to every software or SaaS business (eg, hosted platforms), they still serve as a great introduction to the practice at its most basic level.

Finally, the book (as some seem to have misunderstood) should not be read as a guide on how to start a SaaS business. The blurb states this clearly:

“The Art of SaaS is a primer on the fundamentals of building and successfully running a healthy SaaS business…” – The Art of SaaS , blurb

This is the authors telling you that you can’t read the book and instantly set out to make your fortune. Instead, it serves as a condensed method to discover the fundamentals of what makes a successful SaaS business, and how to effectively structure the teams that are involved with that.

In the midst of vague resources which largely parrot each other’s information and points, The Art of SaaS isn’t setting out to tell you what you can already easily find. Instead, it’s giving you the wider context you’ll need to begin to understand the SaaS sector, and potentially form your own business.

Despite its bias, The Art of SaaS is an invaluable look at the business model While I’ve already provided the core takeaways in this Art of SaaS review, I would highly recommend reading it to anyone who works in SaaS, wants to set up a SaaS business, or who’s just interested in the topic.

This book might only cover a select slice of how a SaaS business can be set up and run, but with the wealth of experience that both authors have to offer it would be a crime to straight-up ignore what they have to say. If nothing else, it can provide a perfect summary of what SaaS is and how it works to a confused friend or family member.

Just remember – don’t take it as gospel. Research other views on SaaS, then use what you’ve learned as inspiration to build a “true” SaaS business model.

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