Product-led SaaS enterprises offer clear benefits

The most successful software as a service (SaaS) organisations are product-driven and offer obvious advantages.

The best SaaS businesses are led by their products. They have become very good at making, maintaining, and improving products that customers love to use. In the process, they have made a lot of value. But even though it's clear that being a product-led SaaS company has its perks, can Web3 organisations do the same? Before answering this question, we must know what it takes to make a great product in any field.

How Good Things Are Made

Marty Cagen, who is probably the most well-known expert on SaaS product-led growth, talks about four main areas that need to be made less risky before businesses can make great products:

Value: How well the new product solves a customer problem that other goods or methods don't.

Usability: It is easy for the customer to use the tool to solve their problem.

Feasibility: How likely will the engineering team be able to build the answer?

Viability is a measure of how likely the company will be able to build a business model around selling the answer and keeping its growth going.

Based on these factors, it's easy to see why product-led SaaS companies and other businesses that depend on centralised network infrastructure do well. But the rise of decentralised technology and Web3 organisations may mean that the status quo needs to be rethought.

The Best Way to Run Centralised Businesses

Modern technology and knowledge of building and scaling centralised solutions have helped SaaS-based platforms grow over the past few decades. The number of tools and ways to use them has also grown exponentially. Because of this, companies have learned how to build general solutions on private, customised systems.

But new technologies may be pushing the limits of the processes and tools that are already in place. People have discussed how Web3 technology has changed money, business systems, and even micro token economies. But more needs to be said about how it will affect product finding, development, marketing, and support.

De-Risking Dimensions for Web3 Companies

When Web3 is in its purest form, it flips the four ways of reducing the risk stated above. Let's think about each one in turn.

Value

A business that is based on its products makes money in two ways. First, by making a completely new and innovative product. Or, second, by making small changes based on how the company understands what customers say. At its core, centralised product development is based on the idea that customers must learn how to solve their problems best. Two of the most famous people who make products said the same thing. Henry Ford once said, "If I ask the customer what they want, they'll say a faster horse." Steve Jobs once said, "Customers don't know what they want until we've shown them." In a Web2 world, the product company sets the vision for what a new product should be, then asks customers for comments and figures out what it means to improve the product.

On the other hand, in a Web3 world, the customer, not the company, takes on the risk of the product's worth. On an open-source platform, every group member can decide which problems to solve and how to solve them. This method suits each community member, but it's also good for the whole community since any discoveries are added to the open-source infrastructure. The benefit of this method is that many people, not just a few, work on the same problem. The answer is then good for everyone involved; creativity and creation grow by a factor of ten.

Usability

In the SaaS world, product-led companies decide usability by asking customers to find out what they need or want and then building a solution to meet those needs. Iterative testing and validation ensure the company gets it right and that the customer can use the product, this is how progress is made. Like the value risk, the usability risk is pushed straight to the "customer" in a Web3 setting. People can build solutions on an open-source platform that they or their organisation can use however they want. The Web3 model eliminates the "middleman" role of the product-led business.

Feasibility

In a truly decentralised community, the company or organisation running the Web3 platform doesn't even have to consider whether something is possible. It is up to the people in the community who are building the solution to solve their problems to decide whether something can be made.

Viability

Lastly, in a Web3 environment, viability risk changes from how a business can make money with a product to how a company or organisation can raise the value of a token. So, an organisation's financial viability is based on something other than subscription income but on how well it uses tokenomics to increase the value of its token.

A Hybrid Approach to Moving from a Web2 to a Web3 Product-Led Company

At this point in the conversation, it's clear that there is no clear line between Web2 and Web3 product management. Most organisations will use a mixed model. For example, members of the Web3 community could hire someone else to do all of their product development work, and this would make it so that some companies own the solutions they build on open-source platforms. These companies could provide and support the same options for other businesses. But even in this case, the focus is on custom solutions that could be shared on top of general, open-source platforms; this is the opposite of the SaaS environment.

Companies like Red Hat have used this method for years, starting with a centralised strategy and moving towards a decentralised one. And the more these businesses move away from specific solutions and towards general, open-source ones, the more they will depend on tokenomics to make money. The opposite is also true: the more proprietary products a company has, the more its revenue will rely on a subscription plan.

The good thing about this change is that Web2 methods for managing products are being thrown out and redone for a Web3 world. As a result, when businesses start using Web3 technologies and organisational structures, a lot is likely to change shortly, especially when it comes to making, delivering, and maintaining products.