SaaS Strategists,

You may have noticed that a few times in the previous newsletters I mentioned the word ecosystemizing.

I gave out some hints on what that could mean, but never went into full detail.

So today, I want to dive deep into a strategy all big players utilize — ecosystemizing their audience.

Let’s waste no time 👇

Today’s issue of SaaS Strats is brought to you by Nortik Software Solutions

Are you looking to onboard pre-interviewed senior software engineers into your team or build your SaaS startup from scratch?

Nortik has a proven track record of helping their clients build SaaS startups that have raised over $150m+ combined.

4 of them ended up being featured in Tech Crunch.

If you’re looking to expand your software development team with high-performing engineers in less than 4 weeks, book a FREE discovery call here:

Ecosystems, Integrations & Marketplaces

Ok here’s the deal.

I’m a big fan of Apple products.

And I’m not saying this just for the heck of it.

I’ve been on both sides (Android & iOS) and will always opt for iOS.

Why?

Stuff simply works, is well-connected, and adapts to your devices.

That’s why.

Let me show you the full breakdown:

What is an ecosystem?

Imagine the same concept but in the world of software.

In the realm of SaaS, an ecosystem is like a digital universe where your main software product becomes the center of attention.

It's like building a hub where other software tools and services revolve around it, all working together like a well-choreographed dance.

Just like how Apple's devices effortlessly sync and share information, in a SaaS ecosystem, various apps and tools integrate with the main software, making users' lives easier by offering extra features without needing to leave the core application.

So, in a nutshell, a SaaS ecosystem is about bringing different software pieces under one roof, where they collaborate to provide users with a comprehensive and streamlined experience.

Why do they work?

Ecosystems are built on 1 simple strategy:

Don’t make me move away from my main platform until I have to.

In the world of software, we can all get pretty frustrated having to use 10 different tools to connect everything together.

And it’s easy to forget to check your email, CRM, follow up on a conversation, etc.

Here are 2 examples of well-executed ecosystem strategies:

The “Always Alert” Strategy

As presented in the picture above, Slack is a great example where you can see this strategy in action.

The goal is simple:

I don’t want to check new leads manually so I need a fast way to get notified that I should switch my focus to something important.

Email gets too clogged up so I may miss opportunities.

So the flow is the following:

1) Find the integration to your CRM tool

2) Integrate the CRM tool into Slack

3) Any time a new lead performs a certain action on the website (signup, click, form fill out) - add him to the CRM

4) Send notification through CRM that a new lead has performed a specific action

The Data Integration Strategy

Imagine you're using a project management SaaS tool that's integrated with a data analytics platform.

You create tasks, assign team members, and track progress all within the project management tool.

Now, here's the magic:

As these tasks progress, data is automatically funneled into the analytics platform, giving you insights into productivity, bottlenecks, and efficiency.

You don't have to manually input data or switch between apps to gain valuable insights.

The ecosystem empowers you to make informed decisions based on real-time data without leaving your familiar workspace.

Examples of greatly executed ecosystems

Slack’s App Directory

Slack has a huge App Directory.

You can implement almost any Analytics, Project Management, or CRM tool on the market, thus closing the loop.

Integrations with CRM and project management tools keep teams productive within Slack, minimizing context switching.

Pipedrive’s Marketplace

Great examples are integrations with email and marketing tools that help streamline sales processes by centralizing communications.

Notion

I already went through great examples of Notion’s product-led growth strategy and their Templates marketplace.

You can check how Notion leverages this in-depth here:

Github

A great way for developers to collaborate & integrate 3rd party tools in their development process using Github Extend.

Why you should consider ecosystemizing your SaaS?

SaaS ecosystems are great.

But they don’t work for everybody.

For example, if you run a small SaaS startup that just solves 1 problem really well & has 100-200 paying users,

You don’t need a marketplace.

At this stage, you should focus on the product core & evolving your current features.

You should start thinking about ecosystems, integrations, and marketplaces once you reach somewhere around the 5k paid users mark.

Your product has been adopted by multiple users by then, and you have proven to yourself that you can slowly start to bring more users in and keep your current ones as well.

Benefits of Ecosystemizing your SaaS

Enhanced User Experience: Ecosystems offer seamless integration with other tools, allowing users to stay within the same environment for various tasks.

Increased Stickiness: By becoming the central hub for multiple tasks, your SaaS product becomes more essential to users, reducing the likelihood of them switching to alternatives.

Expanded Functionality: Integrations from third-party apps can add features and functionalities that your SaaS might lack, attracting a wider user base.

Diversified Revenue Streams: Through partnerships and revenue-sharing models with integrated apps, you can generate additional income beyond your core subscription model.

Reduced Friction: Ecosystems eliminate the need for manual data transfers between apps, reducing errors and saving users time and effort.

Network Effects: As more apps join your ecosystem, the value of your platform increases, attracting more users and developers, and creating a continuous cycle.

Attracting Developers: By providing an open platform for third-party developers, you can tap into their creativity and expertise to enhance your product.

Market Dominance: A well-established ecosystem can create barriers to entry for competitors due to the difficulty of replicating the network effects.

Customer Retention and Loyalty: Users invested in your ecosystem are less likely to churn, as the cost and effort to switch to an alternative are higher.

Think about these 9 benefits once you reach 5k users for the first time.

If at least 5 are aligned with your OKRs for further development:

Start implementing ecosystems & a marketplace.

Potential downsides of ecosystemizing your SaaS

Obviously, there are some downsides & bottlenecks to implementing this strategy in your SaaS.

Here are some I think could be a roadblock:

Quality Control: Poorly designed or incompatible integrations can lead to subpar user experiences and technical issues - this is why you should always develop the first big integrations with your team.

Lack of Demand: If your SaaS already offers a large set of functionality, users might not see the value or need for third-party integrations.

Getting ahead of yourself: Don’t create a marketplace or an integration when you’re still too small to support it. You’ll just pour resources in the wrong place.

Security Concerns: Integrating external apps might raise security risks, especially if the third-party apps are not well-vetted. Make sure you have a strong development policy.

Resource Intensity: Developing and maintaining an ecosystem requires significant resources and ongoing effort. That’s why I mentioned you should engage in building this only when you reach sustainable & explosive growth.

Lack of Developer Interest: Developers might not see enough incentive to create integrations for a niche SaaS product. Try and reward developers for creating an integration on your marketplace - give them something & they’ll return the favor.

Competitive Landscape: If strong competitors already dominate the ecosystem space, breaking in might be challenging, but if you think you can take a share of the cake - go for it.

💡 PRO TIP:

If you’re a smaller SaaS owner and see the value of your app being integrated into another marketplace, create your own integration on the big player’s integration marketplace.

Get more eyes on you.

Some SaaS-es are just literally extensions or bots that generate big numbers.

🔝 Top Tweets LinkedIn posts

Switching things up from now on & will include some LinkedIn posts as well.

Here are the 2 top posts from this week:

🔥 SaaS Fire

SaaS products so good they'll light up your week:

Testimonial.to is a tool that lets you collect & embed your customer’s testimonials with ease.

Designstripe lets you create beautiful animations for your next presentation or social media post.

💡Idea of the Week

Here’s the SaaS idea of the week:

A SaaS platform designed to reshape B2B collaborations and streamline partnerships. Leveraging AI and real-time data analytics, it offers a centralized hub for businesses to discover, connect, and collaborate with potential partners, suppliers, and distributors. By automating the partner discovery process and providing valuable insights into market trends, the platform accelerates growth, fosters strategic alliances, and enhances supply chain efficiency.

Pros

• Efficient Partner Discovery: The platform employs AI algorithms to match businesses based on complementary offerings and mutual goals. This accelerates the partner discovery process, saving time and resources for companies seeking to expand their network.

• Market Insights: The platform's real-time data analytics provide actionable insights into market trends, demand shifts, and competitive intelligence. This empowers businesses to make informed decisions, adapt strategies, and capitalize on emerging opportunities.

Cons

• Initial User Engagement: Convincing businesses to adopt a new platform for B2B partnerships may require overcoming resistance to change. Effective onboarding, intuitive user experience, and demonstrating tangible benefits will be crucial.

• Data Privacy Concerns: Sharing sensitive business information within a platform raises concerns about data security and privacy. Implementing robust encryption and compliance measures is essential to gain trust and ensure data protection.

Will you be thinking about leveraging an ecosystem or a marketplace for your SaaS?

Reply to this email and let me know if you need help with further brainstorming.

I’ll see you next week.

Ognjen Gatalo

Chief SaaS Strategist ☁️ 

P.S. If you would like to get your product in front of 110+ SaaS founders, reply to this email.