Innovation Cluster Admin, Autor em Innovation Cluster

2025.01.23

AI-Driven Vertical SaaS: A Golden Opportunity for Startups to Disrupt Niche Markets

By Mehdi Sanjari, PhD, PEng
CEO at Ai-Innovate | mehdi@ai-innovate.com

The software-as-a-service (SaaS) industry is undergoing a seismic shift driven by the growing sophistication and accessibility of artificial intelligence (AI).

This revolution transforms SaaS from a broad, horizontal market to a more focused, vertical approach—where startups are uniquely positioned to create highly specialized solutions that address deep industry-specific problems. By leveraging AI, startups can break into niche sectors and solve real-world issues long overlooked by traditional horizontal SaaS providers.

The Vertical SaaS Revolution: A Game-Changer for Startups

The ‘verticalization of everything’ is not just a passing trend—it’s a profound shift in how software is developed, marketed, and delivered. This trend refers to the increasing focus on developing industry-specific solutions rather than one-size-fits-all products. In the past, SaaS products often aimed to cater to a broad range of industries with generic solutions. However, with the rise of AI, startups no longer have to compete in saturated horizontal markets where they struggle to stand out. Instead, they can focus on deep, specific challenges within an industry, offering highly specialized products that deliver unparalleled value.

For startups, the vertical SaaS model offers an opportunity to craft Minimum Viable Products (MVPs) that target niche problems with laser-like precision. An MVP is a version of a product with just enough features to satisfy early customers and provide feedback for future product development. By focusing on a well-defined vertical, startups can quickly iterate and reduce the risks associated with broad product development. This strategic narrowing of focus can increase the likelihood of achieving product-market fit and enable startups to dominate specific sectors.

How Startups Can Capitalize on the Vertical SaaS Trend

1. Identify High-Impact Problems in Niche Markets

The first step in developing a successful vertical SaaS product is identifying high-impact problems in niche industries that are ripe for innovation. Many sectors, such as construction, agriculture, healthcare, and logistics, still rely on outdated systems and inefficient workflows. These are prime areas where AI-powered automation can create significant improvements. For instance, in the construction industry, AI can be used to optimize project scheduling and resource allocation. In healthcare, AI can assist in early disease detection and personalized treatment planning.

For example:

Agriculture: AI can detect defects in crops or monitor soil health, helping farmers improve yields and reduce waste.
Legal: Startups can build AI tools to automate legal document analysis, reducing law firms’ time and costs.
Manufacturing: AI-driven solutions can predict equipment failures, allowing for timely maintenance and reducing downtime.

Tip: Industry-specific incubators or accelerators are great places to gain insights into pain points that need addressing. Attending niche conferences, engaging with mentors, and networking with potential customers early on can help validate your ideas and uncover high-impact problems.

2. Leverage AI for Specialized Solutions

Today, startups do not need to build AI models from scratch. The entry barriers to AI development have been lowered thanks to open-source models, pre-trained datasets, and cloud-based AI services. Startups can now prototype solutions quickly, iterate based on feedback, and refine AI models with industry-specific data to create MVPs that provide tangible, real-world value.

Examples include:

A drone-powered AI system for mining that detects metal contaminants in stockpiles.
AI tools for healthcare that analyze medical scans to detect abnormalities faster and more accurately.

Tip: Many accelerators offer resources such as data-sharing agreements or access to exclusive datasets, which can significantly accelerate the development process for AI solutions.

3. Build MVPs That Solve One Clear Problem

One of the most critical aspects of building a successful vertical SaaS product is focusing on one clear problem. Rather than attempting to create a broad, feature-rich product, startups should focus on solving one significant pain point with precision. This enables faster development cycles, reduces costs, and ensures quicker feedback from early adopters.

For instance:

An AI model that counts crops via drone imagery, helping farmers monitor their harvest.
A legal AI platform that assists small law firms in managing contracts more efficiently.

Tip: Partnering with niche industry communities or groups can help identify and refine high-priority problems. These relationships can also lead to pilot projects and beta testing opportunities, which are invaluable for improving your product.

4. Partner with Hardware Providers for Full-Stack Solutions

A strategic partnership with hardware providers can give startups a competitive edge by delivering full-stack solutions. For example, collaborating with drone manufacturers, IoT device makers, or sensor providers allows startups to create integrated solutions without investing heavily in hardware R&D.

Tip: Many hardware manufacturers are eager to partner with AI startups to differentiate their products. Attend industry events and forums to find potential hardware partners that can complement your SaaS offering.

5. Test and Iterate Quickly

Speed is crucial for startups, especially when it comes to launching MVPs. The goal is not perfection but rather rapid deployment in controlled environments, where real-world data can be gathered to refine the AI models and improve the product. The more feedback you receive from early users, the faster you can iterate and scale.

Approach:

Launch pilot programs with a select group of clients to validate your solution.
Use real-world data to improve the AI model’s performance and accuracy.

Tip: Joining an accelerator program gives startups access to pilot opportunities, mentorship, and resources that can help them test and scale their products more efficiently.

The Role of Incubators and Networking in Vertical SaaS Success

Incubators and accelerators play a crucial role in the success of vertical SaaS startups by providing essential resources, mentorship, and connections within specific industries. Many of these programs are tailored to certain sectors, making them ideal for startups targeting vertical SaaS solutions.

Benefits of Incubators:

Access to mentors who have deep industry expertise.
Networking opportunities with potential clients, investors, and partners.
Guidance on validating ideas, building MVPs, and scaling solutions.

Networking Strategies:

Attend niche industry conferences and events to build relationships with thought leaders and potential collaborators.
Leverage online communities and LinkedIn groups focused on your target vertical to gain insights and make connections.
Partner with established companies within your industry to gain credibility and increase market access.

By combining incubators’ resources with strategic networking, startups can accelerate their entry into vertical SaaS markets and increase their chances of long-term success.

Why Now Is the Time

The rapid democratization of AI tools and increasing technology adoption across industries make now the perfect time for startups to dive into vertical SaaS. The barriers to entry are lower than ever, which means startups can establish themselves as leaders in emerging vertical markets before larger competitors catch up.

When addressed with precision and scalability, niche markets can evolve into billion-dollar opportunities. Startups that successfully tackle narrow but high-impact problems can grow to dominate entire sectors by expanding their solutions over time.

Final Thoughts: The Vertical SaaS Opportunity is Here to Stay

The verticalization of SaaS, powered by AI, is revolutionizing industries and creating fertile ground for startups to innovate. By focusing on high-impact problems within specific sectors, leveraging AI tools, and utilizing the resources of incubators and strategic networking, startups can develop industry-leading solutions that redefine how entire sectors operate.

The message for entrepreneurs looking to make their mark is clear: Identify the vertical, apply AI, network strategically, and build with purpose. The future of SaaS is vertical—and the opportunity for startups to lead this transformation has never been greater.

Growth Ideas Innovation Strategy

2024.08.15

Adopting an Olympian Mindset Can Supercharge Your Innovation

Rooting for our Canadian athletes in the Paris 2024 Olympic Games has brought new energy and excitement. It has brought us together, creating vitality, unity, and patriotism.

While watching Olympians compete, it’s hard to believe a person can run, swim, or cycle that fast. However, if you have ever competed in any sport, you know that those 60-second races, 40-minute basketball games, and record-breaking weight lifts represent countless hours, weeks, months, and years of dedicated training, discipline, and sacrifice to achieve the medal.

The same is true for growth-stage companies launching new, innovative products. As consumers, we see flashy news headlines and digital ads promoting a product. For innovators, those marketing initiatives come after months or years of long days, failures, overcoming roadblocks, and forgoing an easier path to bring their innovative ideas to market.

So, if you are an innovator working hard to market your product or service, let’s look at how adopting Olympian characteristics can propel innovation and success forward.

3 Olympian Characteristics that Apply to Innovation

Strong Work Ethic

Hard work pays off. Plain and simple. Substitute an athlete’s grueling training sessions and strict diets for late-night brainstorming sessions, endless research and prototypes, and many “back to the drawing board” moments, and the journey to success is mirrored by an innovator’s experience.

Whether the hours are being put in a gym, office, or lab, it takes unwavering dedication and an ability to roll up one’s sleeves to achieve progress. To achieve truly impactful results, learning to maximize your productivity is crucial. This approach will enable you to harness your efforts effectively instead of spreading yourself too thin without making tangible progress.

Perseverance

Do you think an Olympic Gymnast has never fallen off a balance beam or fumbled a vault landing? Behind those perfectly executed routines are many falls, frustrations, and injuries despite many hours of training and practice.

The only way an athlete can compete at the highest level of sport is to have perseverance because failures and mistakes will happen no matter how fiercely they chase success.

For innovators, ideas are not developed into a market-ready product in the first, second, or third round of development. Technology can be uncooperative, market research may suggest pivoting in another direction, and customers may want a different solution. The key to success in innovation and business growth is to persevere through these struggles. You’ll often learn more from failure than success.

Coachability

Coachability may not be a characteristic that comes first to mind when comparing Olympians to innovators. In both scenarios, success will not happen if the person is unable to receive expert advice or constructive criticism.

Despite their unbelievable athletic ability and drive, Olympians keep improving their physical and mental performance by being receptive to personalized coaching that considers each athlete’s unique capabilities and drive.

As a growth-stage company, you must proactively seek and accept feedback and advice. It will help your product or service meet the needs of your target audience. You can receive coaching from potential customers, industry experts, market surveys, and business mentors whose professional experience and wisdom are invaluable to entrepreneurs.

Business Incubators Help Propel Innovation

As an innovator, you also possess Olympian potential. To bring those talents to light and grow them requires trusted, experienced mentorship from a business incubator. Being paired with the right mentor or coach keeps you moving in the right direction and helps close the gaps in your knowledge, skill, and experience.

Innovation Cluster Peterborough and the Kawarthas’ Regional Incubator, located 1.5 hours east of Toronto, supports hundreds of growth-stage companies to launch and commercialize their innovative products and grow their businesses. Learn how you can become a business Olympian by filling out an inquiry form today. We can help you on your innovation journey.

Innovation

2023.08.23

Reflection Beyond Conferences: Elevating Canada’s Incubators with the Power of Collaboration

Amid the profound societal changes catalyzed by advancements in AI, human-machine augmentation, and cybersecurity, a significant yet under-discussed trend has emerged. This crucial trend emphasizes the importance of authentic human connections and collaborative efforts within the relationships between the incubator, founder, and ecosystem.

Innovation and collaboration are vital drivers in today’s startup scene. Recent events have highlighted the relationship between incubators, founders, and the broader ecosystem. In our first blog in this series, Camila will explore themes such as changing demographics, collaboration, and culture.

Changing Demographics and Global Outlook

Entrepreneurship isn’t just for the young and academic; it’s a global and diverse movement.

Entrepreneurship is not solely for the young and academic; it’s a global and diverse movement.

One key insight shared by successful incubators is the evolving demographics of entrepreneurs. Surprisingly, only 30% of startups now originate from universities. Instead, most entrepreneurs (averaging 37 years old) bring valuable experience and capital, reshaping the startup landscape.

Universities, colleges, and professionals are essential to target when promoting incubators’ services. The days of only students being risk-takers are long gone!

The Innovation Cluster Peterborough and the Kawarthas (“ICPK”) not only nurtures entrepreneurs from Trent University and Fleming College but also supports them regionally and globally through different programs: the Regional Incubation Program and the International STARTup Visa Program. Out of the current 100 clients, ICPK ensures diversity and inclusion in demographics such as age, culture, background, and expertise. The incubator has more than 45 clients with a Ph.D. as the highest level of education; other clients include parents who have worked on their side hustle for over three years and individuals from science, manufacturing backgrounds, or trades. ICPK has clients from Eastern Europe, Latin America, Africa, and more, maintaining a robust, diverse, and inclusive client portfolio that inspires various generations and cultures.

Our mission as incubators is clear: we must break down barriers for local entrepreneurs and open their eyes to both local and global opportunities. Often, Canadian markets move at a slower pace compared to their U.S. counterparts. Therefore, our responsibility is to nurture a global mindset from day one, empowering them to seize opportunities beyond borders. With the STARTup Visa Program, for example, ICPK supports clients landing in any province in Canada, allowing them to be where their business will be most successful. However, most STARTup Visa clients prefer to establish themselves close to the Cluster, feeling supported where they can network and hit the ground running with the right mentors. They have also established a strong relationship with ICPK and its ecosystem after at least a year of working with them, using Community Futures Peterborough, Peterborough Chamber of Commerce, and RBC, among others, to set up their business here while keeping international markets in mind.

A global outlook is critical for long-term success in today’s interconnected world. Startups must adopt this perspective from their inception to thrive on the international stage. #SupportLocal is just one part of the equation. Most of ICPK’s regional clients in Peterborough have ideas to expand in the U.S. in the medium term, knowing that the U.S. tends to support business faster than Canada.

Key Insights:

The demographics of entrepreneurs are shifting. Universities no longer dominate the startup scene; experienced professionals are stepping in.
Surprisingly, only 30% of startups now come from universities. Instead, most entrepreneurs, averaging 37 years old, bring valuable experience and capital.

ICPK’s Inclusive Approach:

Diverse Client Portfolio: Entrepreneurs from universities, various professional backgrounds, and global locations.
Emphasis on Global Opportunities: Encouraging a global mindset for long-term success.

Mission for incubators:

Break down barriers for local entrepreneurs and foster a global mindset from day one.

Startup Fundamentals

2022.11.01

What is a Minimum Viable Product (MVP)?

When first developing a product, it can take a lot of time, effort, research, testing, and funding before a product is finalized and ready for the market. After such a large investment, the last thing you want is to discover that consumers don’t want to buy your product or have found major flaws. To avoid finding yourself in this situation, we recommend developing a minimum viable product (MVP) — a basic model of your product that will attract early-adopter customers and give you the opportunity to finesse the final version based on their feedback.

Why is a Minimum Viable Product (MVP) so important?

MVPs were introduced by Eric Ries as part of his Lean Startup Methodology — a process that builds businesses and products based on consumer needs rather than developing a product and then hoping it sells.

Having an MVP allows you to learn the maximum amount of information about your customers by using minimum resources and effort, and observing how they respond to the earliest version of your product.

Collecting valuable data about your customers and their feedback gives you the opportunity to make adjustments before launching your final version, eliminating the risk of pouring thousands of hours and dollars into a product that is not desired by consumers.

What are the key characteristics of a Minimum Viable Product?

1. Fast and Cheap

If your MVP takes two years to create and piles of cash to produce, it is not an MVP.

2. Enough features to attract early customers

Your MVP only needs basic features, but at the same time, it needs to have enough features to attract early adopters.

3. The positives of releasing the MVP outweigh the negatives

Releasing an MVP means leads to first customer impressions and it also gives your competitors the chance to see what you’ve developed. The benefits you gain from your MVP such as retrieving valuable customer feedback should outweigh any risks.

4. Your method for submitting customer feedback must be easy and work

The primary purpose of a minimum viable product is to know what customers think about it. You need to create a convenient and easy way for people to send in feedback.

An example is a software company offering a free upgrade of their next released software version to all customers in exchange for submitting their thoughts about your MVP.

When is it good to release a Minimum Viable Product?

Your startup may choose to develop an MVP because you want to:

Launch a version of your product into the market as quickly as possible.
Test an idea or feature with real customers before committing to full development.
Learn what your target market likes, dislikes, and would change about your product.

What are the next steps after developing an MVP?

After releasing an MVP and collecting early adopters’ feedback, you should be able to answer one big question: “Is my product viable?” You will know if a wider audience will purchase your product and if continuing its development should be your next step.

If you discover that customers would not purchase your product due to a lack of interest or having too many flaws, this is not a failure. In fact, your MVP has done its job by avoiding you from spending further time and resources developing your product. You can either go back to the drawing board to develop a different product altogether or keep with the same product but make significant changes.

What is a Minimum Marketable Product (MMP)?

If early adopters of your MVP demonstrate that a larger audience would purchase your product, you can continue product development to create a Minimum Marketable Product (MMP).

A Minimum Marketable Product (sometimes referred to as a Minimum Marketable Release MMR) is a progressed version of your MVP that is ready to be sold to a much larger audience. An MMR is still not the final version of your product and has minimal features, but it is more advanced than an MVP so more people are attracted to buy it.

What is the difference between an MVP and MMP?

A textbook MMP is a solution to a customer problem they are willing to pay for, as opposed to an MVP which may not quite yet hit the mark.

When releasing an MVP, it is early adopters who purchase the product who have a passion for testing out the latest products. When launching an MMP however, you are trying to appeal to a much wider customer base who will have much higher expectations than early adopters.

How will having an MVP benefit my business?

Developing a minimum viable product is beneficial for the long-term success of your business. It sets you up to become a scalable startup, a quality that most startup investors look for when deciding to invest in a business.

As an entrepreneur, it can be exciting to keep developing your product until it reaches your full vision, but starting with an MVP will save you from making large business errors, wasting time on unwanted features, and spending large quantities of money that does not lead to any revenue.

Money Startup Fundamentals

2022.10.25

How to Find Angel Investors

A startup’s success is attributed to several factors including the company’s dedication, entrepreneurial skills, the consumer’s need for the products or services offered, effective marketing, business viability, and more. But as passionate, business savvy, and innovative as a startup may be, sometimes it all comes down to money. To launch, grow, and build a scalable startup, you need adequate funding, and a great option is to learn how to find angel investors and gain their support.

What is an angel investor?

Angel investors are usually wealthy individuals who invest their money into early-stage companies in exchange for equity in the business. Typically angel investors are looking for long-term investments and are able to provide startup mentorship and business expertise in addition to their financial investment.

Is it difficult to find angel investors?

Generally, it’s not hard to find angel investors when you’re looking in the right places, but what can be tricky is learning how to get them to invest in your business which we will cover further down in this article.

Let’s first look at ways to find angel investors.

4 Ways to Find Angel Investors

1. Start with your local community

Angel groups and networks exist all over the world, but many angel investors take a greater interest in locally-based startups. Research groups that exist in your community.

2. Use online databases

Many angel groups and networks are listed on online databases. Websites like Angel Investors Ontario list all Ontario-registered angel investor groups, making it easy for Ontario-based startups to find angel investors within the province.

Other websites such as AngelList, Angel Capital Association, and Angel Investment Network give you access to thousands of investors.

3. Search social media platforms

If your startup is active on social media, particularly on Twitter and LinkedIn, it can lead to connecting with angel investors. Your startup’s social media channels should follow and engage with relevant businesses and influential people.

In general, having an effective digital marketing plan can help you connect with influential people and angel investors.

4. Attend business networking events

Registering for local conferences, industry events, and business socials will bring you closer to connecting with angel investors.

Local networking events are often attended by angel investors, and it’s a great way to make introductions and plant seeds for building long-term relationships.

How to Secure an Angel Investment

Finding angel investors is one thing, securing investments is quite another. Landing funding from an angel investor is all about being prepared, polished, and passionate.

PREPARE a detailed yet concise business plan

Angel investors want to assess your startup’s viability and growth potential. Write a detailed and well-organized business plan that includes elements such as an estimate of how much funding you need, your business strategy, a competitor analysis, and financial objectives.

POLISH your elevator pitch

Whether you connect with angel investors online or in-person, having a well-executed elevator pitch is essential to capture their attention and interest. Aim to keep your pitch concise and simple, and include why your startup is a solid investment.

PASSIONATE entrepreneurs are an angel’s best friend

When angel investors invest their money, time, and expertise, they are not only investing in a business but in the person or people behind it. If you are not passionate and driven, angel investors may question if you have what it takes to go the distance.

How much money can you ask for from angel investors?

As a general rule, startups need to calculate two things before determining how much money they should ask for: Business valuation and funding requirements.

Determining your business valuation will help you come up with an asking amount that is proportionate to how much your startup is worth and also determine if this amount alone will cover your startup’s needs.

Most angel investors will not look at requests that exceed $1 million and will be looking to take a percentage of your company that equals the percentage of funding in relation to your business. For example, if your business is valued at $1 million, and your startup requires $250K in funding, the angel investor will most likely want approximately 25 percent of your company.

How do I get help landing angel investors?

Startup incubators mentor entrepreneurs to launch, grow, and scale their businesses. Startup incubators place a large emphasis on acquiring funding as this is a large component of any new business.

Innovation Cluster Peterborough and the Kawarthas teaches clients how to secure investments, connects them with local angel investors through the Peterborough Region Angel Network, and prepares them by teaching them how to build a solid business plan, give an effective pitch, and ultimately get the funding they require.

Strategy

2022.10.18

IaaS, PaaS & SaaS: Choosing the Right Cloud Solution for your Business

Nowadays, the term “cloud” is widely known as an online solution for managing files and storing data. Businesses big and small utilize cloud services, but many are unaware of the extensive capabilities the cloud can offer. As a startup, becoming familiar with your cloud options such as Iaas, PaaS, and SaaS, and knowing the differences, benefits, and drawbacks of each one will help you choose the solution(s) that will help your company be more efficient, cutting-edge, and cost-effective.

What is IaaS, PaaS, and SaaS?

Before diving into the various cloud solutions, it is important to have an understanding of what “the cloud” is.

What is the cloud?

Rather than acquiring physical servers and equipment that store, manage, and operate data and software, “the cloud” is composed of several servers that are located in large data centres throughout the world, accessed by customers remotely over the internet. By using cloud computing, users don’t have to manage physical servers or run software on their own machines.

IaaS, PaaS, and SaaS

Cloud computing can be broken down into three main categories: IaaS, PaaS, and SaaS. All three types offer enormous benefits to businesses, but understanding their differences will help you determine which solution(s) is the best fit for your company’s needs.

Infrastructure as a Service (IaaS)

Allows customers to manage their company’s resources — network, servers, data storage, etc. — on the cloud. IaaS is made of scalable and automated computer resources that businesses can access themselves via a virtual data centre in the cloud, and can purchase resources on an as-needed basis rather than having to buy the hardware outright.

IaaS uses virtualization technology and is usually provided to the customer through a dashboard or an API. When using IaaS, you are responsible for managing things such as applications, runtime, OSes, and the IaaS provider manages the servers, hard drives, networking, virtualization, and storage.

IaaS Advantages:

Easy to automate deployment
Allows complete control over infrastructure
Purchase resources as-needed
High scalability
Allows for multiple users

IaaS Concerns:

Security threats to the hosting provider
Staff training may be required so your team knows how to properly manage the infrastructure

Platform as a Service (PaaS)

Used by developers allowing them to host, build, and deploy consumer-facing apps through a web-based platform. Using PaaS, developers are given the freedom to concentrate on building software without worrying about operating systems, software updates, storage, or infrastructure.

PaaS Advantages:

Easy to use
Cost-effective app development and deployment
Scalable
Customize apps without having to maintain software

PaaS Concerns:

Ability to integrate with other existing apps
PaaS may not be a “plug-and-play” solution for existing apps limiting its effectiveness

Software as a Service (SaaS)

SaaS is the most common cloud service with applications designed for everyday use for both individual consumers and businesses. The majority of SaaS programs run directly through your web browser, and rarely require downloads or installation on individual devices — a massive benefit for teams working remotely or working across international borders.

By using SaaS applications, your business does not need to manage technical issues, servers, or storage which can often be a huge burden on time and costs if you do not have a dedicated I.T. person or department in place.

SaaS Advantages:

Creates better efficiencies
Reduces time and money spent on installing, managing, and upgrading software.
Frees up physical space (no need for on-site servers)
Easy to find and use applications as needed

SaaS Concerns:

Limitation of app integrations
Data security
Ability to customize app features to the needs of your business

CCaaS and CPaaS: What are They?

Contact Center as a Service (CCaaS) is a form of SaaS that is specific to contact centres. These cloud-based contact centres are ideal for small and medium-sized businesses that want an easily deployable and easy-to-use solution. CCaaS products offer rapid deployment, however, they can have limited customizability and scalability.

Communications Platform as a Service (CPaaS) is a cloud-based product that allows businesses to have real-time communications capabilities (i.e. voice, video, instant messaging) to business applications by deploying APIs.

Rather than building your own communications infrastructure from scratch, you can use CPaaS products in existing applications by only adding a few lines of code.

Examples of IaaS, PaaS, and SaaS

IaaS: Amazon Web Services (AWS), Google Cloud, Microsoft Azure

PaaS: Google App Engine, Heroku, Apprenda

SaaS: HubSpot, Dropbox, DocuSign

Which is Best: IaaS, PaaS, or SaaS?

Determining which cloud solution is best is completely dependent upon the needs of your business. Below are ideal scenarios in which IaaS, PaaS, and SaaS could be used to help decide which type of cloud service you need.

IaaS:

Startups with minimal cash flow that cannot afford their own hardware or software.
Only particular resources are needed.
Experiencing rapid growth with infrastructure needs quickly changing within short periods of time.

PaaS:

Multiple developers need to work on the same project.
Vendors are involved in the development process and need access to the application.
Creating a customized application.

SaaS:

Startups that need to launch their e-commerce quickly.
Short-term projects.
Applications that are only needed periodically and not regularly.

Working with cloud solutions can add tremendous value to your business, but it can be difficult to decide which technologies to invest in when your startup’s needs are changing.

Working with a startup mentor or joining a startup incubator guides you through your startup’s journey, helping you make decisions that are smart and strategic for your business.

Startup Fundamentals Strategy

2022.10.11

How to Build a Scalable Startup

The word ‘scalable’ is used frequently and as an entrepreneur, it is a term you need to become familiar with. Scalability is what investors want to see and what will lead to quicker success. But what exactly does it mean to be a scalable startup? How do you become scalable?

We have broken down the basics.

What is a scalable startup?

A scalable startup is a business that has the potential to easily grow and significantly increase its revenue with minimal additional cost.

When a startup is deemed ready to scale, it means it has already proven the success of its product and business model and is prepared to expand to new markets, regions, or demographics.

Example of a Scalable Startup

Many scalable startups operate within the technology industry. This is mainly because once a tech product has been initially designed, created, tested, and finalized, the cost to replicate it is minimal in comparison to the development process.

An easy example is a software startup. The initial development of the software can cost a lot of time and money, but to clone or mass produce it for distribution costs a nominal amount.

How do you make your startup scalable?

Understanding scalable startups is pretty straightforward, however, what leaves the majority of entrepreneurs puzzled is how to become scalable.

We have compiled a list of tips that can help you secure investor funding and experience exponential business growth.

1. Retrieve research to back up your business

Your product or business may be innovative, but you need market research and facts to support how your innovative idea will be the next big industry or money maker. This provides investors with context which will make them more likely to jump on the bandwagon.

2. Prove your product works

You’ve heard the saying “talk the talk”; becoming scalable tests if you can “walk the walk”. As awesome as your investor pitches may be, it does not hold a candle to showing your product work in real time. It gives you far more credibility.

Develop a Minimum Viable Product (MVP) and make adjustments to it based on customer feedback. Consider following the Lean Startup Methodology when developing your product to ensure it is a product consumers want. This can ultimately save you a considerable amount of time and money.

3. Have an attractive business plan

As cool and unique as your product may be, scalability to investors comes down to dollars and cents. Your business plan needs to show high profit margins, which can more easily be achieved by keeping your overhead costs as low as possible while still having enough momentum to grow. You should be able to show real sales of your product and that customers are willing to pay full price.

4. Recruit a solid team

To scale a business, you as a startup owner cannot be tied up with day-to-day business operations; your attention needs to be focused on big-picture strategy. To do this, you need to have a solid hiring process so you can acquire a team of driven and skilled people who you can depend on to keep the business running smoothly.

5. Implement an effective marketing strategy

Your startup needs to invest in marketing in order to scale. If people do not know your company or product, they will not buy it. Every company and product is different, and so is the audience they are targeting. Therefore, there isn’t one “tried and true” strategy to follow.

Develop an effective digital marketing plan or consider if following an account-based marketing strategy will be beneficial for your startup. We recommend recruiting a marketing person or working with a marketing agency that has the expertise you need.

6. Increase your startup’s efficiency

Eliminate or adjust any manual and time-heavy processes that hinder your startup’s efficiency which may include staff processes, administrative tasks, manufacturing, or others.

7. Be able to pivot and adapt

The global pandemic taught us that businesses must be able to pivot. Remaining open to better ideas, new products, and constructive feedback will show investors that you have the leadership skills to recognize what is best for your business and its growth.

To learn more and receive mentorship throughout your journey, inquire about joining a startup incubator that can provide you with the knowledge and guidance you need to scale.

Strategy

2022.10.04

Lean Startup Methodology: What it is and why it has changed everything

For many years, startups have been built by taking a business idea, discretely developing a product or service, launching it, then marketing it to consumers. This process can result in business success, but it can also leave many startups vulnerable to failure. When startups spend a lot of time and money on product development without including customer needs and perspectives in the process, the number of sales that will be achieved becomes a guessing game — a high-risk gamble when early revenue is imperative to keep the business alive.

When approximately 50 percent of small businesses in Canada won’t survive longer than five years, more and more startups are following the Lean Startup Methodology to lessen risk and create a higher probability of success.

What is Lean Startup Methodology?

A great way to think of Lean Startup Methodology is that it aims to discover if a product should be developed, not if it can be.

First introduced in 2011 by Eric Ries in his book, “The Lean Startup”, Lean Startup Methodology designs and builds businesses and products based on consumer needs and demonstrated desires rather than first developing a product and hoping there will be a demand.

Too many startups make assumptions about what consumers want and spend years perfecting a product only to discover that consumers have little interest or are unhappy with its features. If your product is super innovative but people don’t want to buy it, a business will not exist.

5 Key Principles of Lean Startup Methodology

1. Entrepreneurs are Everywhere

There are many types of entrepreneurs and therefore startups don’t need to fit a particular mold to apply lean startup principles.

2. Entrepreneurship is Management

Lean startups look a bit different than traditional startups. It is less about processes and protocols and more about being learning-driven, flexible, and making changes as you go.

3. Validated Learning

Through experiments and retrieving results, lean startups make decisions by learning and adapting to the needs of consumers.

4. Innovation Accounting

Keeping detailed records of experiments and analyses is important to determine how to proceed. Lean startups must monitor processes objectively and come up with next steps.

5. Build-Measure-Learn

Lean startups build a Minimum Viable Product (MVP), then put it through extensive testing and evaluation with customer feedback. By building a product and then measuring its effectiveness, lean startups learn and improve their product before finalizing it.

How has Lean Startup Methodology changed everything?

a) Detailed planning used to be one of the most crucial elements for a startup. Lean startups now consider experimentation more valuable, and consider five-year business plans an ineffective use of time.

b) Lean startups already have an established customer base by the time their product is ready for wide distribution because they have been involved since the beginning stages of the product.

c) The hiring process has pivoted giving preference to applicants who can learn and adapt easily and placing less emphasis on experience and technical ability.

d) Financial reporting focuses on customer acquisition costs and lifetime customer value among other things rather than traditional income statements and balance sheets.

How to Apply Lean Startup Methodology

Learning why Lean Startup Methodology can benefit your startup is much different than knowing how to apply it. We recommend turning to an experienced startup mentor to help guide you through the process of becoming a lean startup.

Having a startup mentor or joining a startup incubator provides you with invaluable knowledge, expertise, and support so you have more confidence and success in applying the Lean Startup Methodology.

Marketing

2022.09.28

What is account-based marketing?

In a short span of time, strategies to attract and engage customers have enormously changed. Consumers now have a multitude of technologies and digital platforms to research brands, products, and customer reviews before making big-ticket purchasing decisions. However, when dealing with high-priced and complex sales, only relying on digital marketing to engage with customers is ineffective, and it’s why account-based marketing has in recent years become one of the most popular strategies for business and revenue growth.

What does account-based marketing mean?

Account-based marketing (ABM) is a marketing and growth strategy where marketing and sales work together to create personalized buying experiences for your most high-valued customers.

Rather than trying to extend your reach to as many people as possible, account-based marketing focuses its efforts on a select group of people that represent significant growth opportunities and have a greater likelihood of converting into high-value paying customers.

Account-based Marketing vs. Inbound Marketing

Often when ABM is discussed, it is compared and contrasted to inbound marketing with an inevitable debate on which strategy is most effective. The truth is, you do not need to choose one or the other. In fact, account-based marketing can largely complement the efforts of a well-executed inbound marketing strategy.

Inbound marketing attracts customers by creating valuable content that is tailored to a semi-fictional buyer persona that represents your ideal customer including age, gender, income, beliefs, interests, family status, and more. The specialized content you create drives your persona to engage with your brand on your website, social media, or on other channels, and then hopefully, purchase your products.

An ABM strategy can be implemented at this stage, taking this identified group of engaged people and beginning research and analysis to determine if these interested consumers are considered higher value customers or personas.

Account-based marketing also uses buyer personas but unlike inbound marketing, ABM personas are based on data rather than assumptions. Companies using ABM strategies do not engage with people because they feel they’re an ideal or more probable customer, they focus on a specific demographic that possesses a set of behaviours that have proven to be most profitable.

Why is account-based marketing important for startups?

Survey data collected by Gartner in 2020 showed that businesses that launched ABM strategies showed increases in marketing and sales. The marketing data shows improved conversion rates, increased web traffic, and better advertising and email performance, and sales data showed increased wins, faster sales cycles, and larger deals.

As a startup business, account-based marketing may seem time-consuming when you have a million things on your plate, but ultimately it makes your marketing efforts and dollars more targeted. It also makes your highest value customers feel important and more catered to, setting your business up for a reputation of exceptional customer experience – an invaluable thing when trying to achieve startup business growth.

Most importantly, research shows that 97 percent of businesses using an ABM approach see higher ROIs than with other marketing strategies.

How to create an ABM strategy for your startup

1. Get everyone on the same page

If your startup has been following a particular marketing strategy, the best way to get your team and investors to support a switch to ABM is to present data to show how switching strategies will increase revenue and make better use of your resources.

2. Align sales and marketing

Historically, sales and marketing teams have had an ongoing feud where both teams blame the other when revenue is not increasing. ABM bridges the gap between the two teams and has everyone working together. As a collective, have sales and marketing agree on a shared set of metrics and goals for your ABM campaign.

3. Identify your high-value accounts

Analyze your sales history by talking to your sales team. Which type of interested consumer is the easiest to convert into a paying customer? Check your CRM to identify traits that all of your hot leads have in common. This will provide insight into the type of person you should focus on.

4. Create content and select channels

Once your target accounts have been identified, you need to create tailored content and decide which channels will be most successful in reaching them. Your content should speak to specific pain points that they have.

5. Launch your ABM campaign

Publish your content to convert prospective buyers into leads. By your sales team engaging with these leads in a strategic way, there is a high chance of them closing deals.

6. Review, evaluate, and adjust

This last step is ongoing and is crucial for all marketing strategies. Once you have launched your account-based marketing campaign, review how it is performing, evaluate your sales, and make adjustments to your strategy as needed.

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In conclusion, account-based marketing is about placing greater importance on quality over quantity; focusing on a much smaller group of people who will accelerate your startup’s growth.

Your ABM strategy can be woven into other marketing strategies such as inbound marketing as previously mentioned, or a digital marketing plan. If your startup is not yet ready to hire a designated marketing professional, consider finding a startup mentor who has marketing expertise and can help put you on the right track to implementing an ABM strategy that yields attractive results.

Marketing

2022.09.13

How do you begin creating a digital marketing plan for startups?

It is no secret that marketing is essential for a company’s success. But what remains a mystery for many startup businesses is how to start. Creating a digital marketing plan is an important first step, and you do not need a fat budget to achieve optimal results. What it does require is dedication, time, and creative thinking. Learning how to create a digital marketing plan for a startup is one of the most valuable things you can do to ensure that your business will attract customers, generate revenue, and continue to grow in its earliest stages.

What is a digital marketing plan and why is it important for startups?

A digital marketing plan outlines a company’s digital marketing goals with the associated strategies, timelines, tactics, channels, and budgets they will use to achieve them.

Taking the time to build a digital marketing plan will keep you on track and focused as you juggle an array of other important functions that are necessary for your business.

Having a digital marketing plan will make better use of your time and resources, and align your team to work toward the same objectives.

What are the components of a digital marketing plan?

Every company’s marketing goals and strategies will look different, but there are some standard elements that every digital marketing plan should include:

Content marketing
Email marketing
Advertising
Social media marketing
Video marketing
Search engine optimization (SEO)
Web analytics

What are the 5 steps to follow to have an effective digital marketing plan?

Creating a digital marketing plan is not just a matter of brainstorming ideas for social media or emails. There are steps that your startup business should take to ensure all of your plan’s components are strategic, align with your company’s goals, and ultimately yield the best results.

1. Conduct Research

Reliable and credible research can reveal a lot about the marketing direction your startup should take. Learning about historical market trends, current industry practices, competitor analyses, and what consumers want can be the most invaluable tool you have to create a phenomenal digital marketing plan.

Research can include primary research (conducting surveys, interviews, polls, etc.) or secondary research such as published reports.

2. Develop a Deep Understanding of your Brand

Understanding your own brand will set the foundation for everything else that follows. Start by thinking about popular brands that you would to be comparable to. Is your brand like Apple or is it like Microsoft? Is your brand a Tesla or is it Ford? This is a great way to start shaping what your brand is, how consumers will perceive you, and discovering your brand archetype which are all crucial to know before defining your target audience or style of communication.

3. Define Your Target Audience

Knowing exactly the type of consumers you will be targeting will make it much easier to define your messaging, what digital channels you should use, and the type of content you need to develop to establish a connection with your audience.

What is your target’s demographic, lifestyle, worries, wants, and needs? Your marketing efforts need to be tailored to your target audience because marketing to everyone is marketing to no one. Spending time developing buyer personas – semi-fictional representations of your ideal customers – will help you tremendously with all marketing efforts moving forward.

4. Create Clear Messaging

Consumers want clear messaging on what your product is and how it will benefit them. If people are left questioning what you do, chances are they will not become a paying customer. You also need to define a messaging style or brand voice, which leads back to having a deep understanding of your brand. What does your brand sound like? Is it laid back and relaxed? Is it professional and sophisticated? Determining your style of communication will also help you reach your target audience much more effectively.

5. Define Your Digital Marketing Goals, Timelines, and Budget

If you do not set tangible goals, timelines, and budgets it is much harder to track and measure your progress. The goals you set should be realistic and obtainable, yet provide enough of a challenge so you feel a sense of accomplishment when you reach them.

Setting a detailed, itemized budget for your digital marketing plan will keep you organized, and allow you to easily see if you are spending too much or too little on particular initiatives. It will also keep you on track with your overall startup budget for the company.

Following these five steps are critical before you can dive deeper into specifics such as what channels you will use (i.e. Facebook, YouTube, Instagram) or what type of strategy you will follow for paid advertising. You need to lay a foundation for your digital marketing plan to thrive.

Working with a startup incubator is a great way to receive high-quality mentorship on digital marketing plans, low-cost marketing strategies, and a long list of other entrepreneurial needs.