“All successful SaaS Companies taste like chicken - Because 80% of what they do is the same”
- Robert F. Smith, Founder, and CEO of Vista Equity Partners
People of SaaS… …we all have this feeling. When we interpret metrics, when we hire an SDR, when we argue about what an MQL is. When we calculate CLV, when we discuss equity, when we estimate valuations. When we talk to investors, when we talk to other startups, when we talk to each other. It’s the feeling of a missing piece in our world. The SaaS world. Where is the Standard that unites our tongues and minds? Where is the Standard that takes our thoughts beyond the technical fluff and toward the creative horizon? Where is the Standard that empowers us to invent a new car instead of a new wheel? We are here to build this Standard. We are here to unite the SaaS community. We are here for a change and the elimination of chance.
- The Initiators, December 2022
The Chicken Manifesto - 8 Theses for a standardized SaaS Industry
_1 Standards are good
The reason why you can travel around the world, eat food without fear of getting sick, use your bank card at any ATM or fill up your car at any gas station is Standardization. Standards make our world easier, better, and safer.
_2 Standards give us a common language
Ambiguity and vagueness lead to misalignment and lack of clarity. There are currently at least four different widely adopted ways to calculate Churn Rates. The Churn Rate is used to calculate Customer Lifetime Value, and the Customer Lifetime Value makes or breaks a SaaS Business. Real money, real people, real lives are at stake.
_3 Standards allow innovation on a higher level
We can’t invent a new car when everyone is busy reinventing the wheel. Once the basic elements of our industry are defined, we can focus our creative minds on solving problems on higher levels. Standardization drives innovation.
_4 Standards reduce waste, variation, and risk
Fast food franchises have a success rate of 92% - SaaS businesses have a failure rate of 92%. The main difference is that the former is highly standardized, and the latter is not. We need people in SaaS to know what to do, how to do it, and in which order. Standards reduce waste, cut costs and ensure consistency of our processes, services, and products. This leads to more predictable outcomes, which we can reach faster.
_5 Standards catalyze process efficiency
When scaling your SaaS operation, you want to be able to trust efficient processes and not create ‘process debt’ through improvisation, which leads to painful rebuilds (also on the technology side). By applying standards, simplicity and scalability ensue by having a laser sharp focus on standardized operational execution driving clear outcomes, paired with genuine empathy for the people aspect. SaaS people should not have to re-learn their vocabulary, skills, processes, and procedures across the industry. Employers should be able to hire more efficiently by trusting skill levels. Training and job descriptions should become more consistent across the industry. Open standards drive process efficiency, enable empathy and lead to great places to work.
_6 Standards must be open, consensual, and fair
No one can do this alone. No one has all the answers. The Standards for SaaS ought to be built out in the open, together, inclusive for anyone to see, contribute and participate. It’s a process of sharing best practices, defining terms, discussing solutions, and distributing common understanding.
_7 Standards drive efficient growth
Standardization, together with Simplification and Scalability, builds the “3S Imperative” of SaaS Success. SaaS Success is increasingly scrutinized by focusing on metric level efficiency. Achieving scalable, efficient growth without a clear standard on metrics will not be possible. Metric standardization drives efficient growth.
_8 It’s on us - No one else will save us
Standards are created through market battles (e.g., VHS vs. Betamax), through Government intervention (e.g., laws and regulations), or through voluntarily created committees. No market leader and no government will come and save us. We, the people of SaaS, have to come together and define our own standards. No one else will save us.