The headline figures suggest it has never been a better time to be a software entrepreneur. According to GlobalData projections, the worldwide robotic process automation software and services market will be worth $20.1 billion in 2030, meaning it will have more than quadrupled in value since 2021. Over the same period, GlobalData also predicts that the Metaverse market will witness a compound annual growth rate of 39.8%, bringing its value to $996 billion.
These two examples reflect how the business world is turning upside down. The COVID-19 pandemic caused decision makers to entirely rethink their workforces, putting automation at the top of their agendas. Technological advancement is redefining how and where humans interact. Underpinning both of these developments – and their massive financial potential – is the constant churn of the software sector.
The churn is spurring unprecedented economic and societal change – and it is ruthless. This can be dislocating for firms on the frontline. Listening to veterans who have gone before them may hold the key for software companies who hope to turn their dreams of scaling up into a reality.
Tips from the top
Business decision makers at software firms face a conundrum. On one hand, standing out from the crowd is essential. But, in saturated markets, doing so is more difficult than ever. Mark Ferris is CEO of Panalitix, providing technology, advisory and content solutions to accounting and finance firms. His conversations with clients have taken on a new complexion: “They say I used to make this much money, I now make a third of that and I’m working doubly hard.” Ferris says it points to the size of the task ahead for ambitious young businesses. “When we talk about fundamental change in approach, then there can be resistance; it’s not tweaking your existing model and making it a little bit more astute for your market. In fact, this is a major transformation we’re asking you to go through.”[1]
A smooth customer journey must be at the heart of this transformation, enabling software businesses to distinguish themselves from competitors. According to Simon Edwards, head of marketing at payment technology firm Pay360: “the buying experience needs to be clear, transparent, simple – in the payments world if you interject anything that’s odd or not understandable, you’ll lose the business. You have to inform the customer that for security purposes we do need to do these checks, we do need to add a little bit of friction. But any more than what is absolutely necessary friction, you’ll lose business.” He cites Uber as an exemplar. Rather than having to take out a card, plug in details and go through security checks, customers pay for a ride simply by stepping out of a car.
With a smooth customer journey established, a marketing strategy is essential. John Findlay, CEO of LemonadeLXP – a company delivering game-based learning experiences in the finance sector – has witnessed rapid evolution in his business over recent years, from one offering engines for use in short-term campaigns to platforms that clients can update and deploy repeatedly. “I give credit to the CTO and his team, they transitioned very nicely to that,” he says. “But in terms of the business function and marketing aspect, we’ve done a lot of learning on how to be a good software company.”[2]
Findlay’s experience is a common one for software companies: working out a marketing message for a constantly changing brand is difficult during the drive to scale up. According to Ferris, adopting a “very agile” strategy can help. “We’ve had to say: that approach to marketing is not working, or the software we launched over here is not working so well. So, let’s not do it anymore.”[3] Only with an uncompromising approach to marketing, branding and products can firms beat the industry churn.
With growth established, it needs to be maintained. Third Space Learning is now the UK’s largest provider of online teaching. But founder and CEO Tom Hooper admits this nearly never happened; the firm’s early focus was on scaling up at the expense of putting sustainable structures in place. “When you’re building a business and you’re backed by venture capital, it’s great if things are going well. But you’re highly geared into success. The second that starts to turn, you often have an investor base and a cost base that is not set up for you flatlining.” Businesses cannot rely on a steady stream of capital in a rapidly changing industry. Hooper says planning ahead is crucial: “we were too short-term in our thinking. We didn’t put in place some of the foundations that were in hindsight quite clearly needed to maintain and accelerate that growth.”[4]
Always scale responsibly
The world of software is ever-growing and ever-changing. There is no one-size-fits-all solution for accelerating growth. But taking the advice of those who have successfully traversed the potential pitfalls reveals some tried and tested tactics.
First, building a successful software as a service product necessitates standing out from an increasingly packed crowd. Decision makers need to turn well-meaning tweaks into genuine transformation. This means creating seamless customer journeys with swift, deeply integrated payment propositions to help businesses stand out and grow. While doing so, however, they need to keep their marketing messages up to date and meticulously targeted. And, tempting though it is to dash for growth, businesses must do so in a sustainable way that prioritises scaling up via loyal customers rather than capital flows that can dry up as market conditions change.
Implementing the infrastructure for a seamless, scalable customer journey is easier said than done. Picking the right partner can take out the stress. Download the Pay360 whitepaper on this page to find out more.
[1] https://www.pay360.com/resource-hub/video/Chasing-GreatEp3?wchannelid=crwll3t1ok&wmediaid=vqjybnwyeq
[2] https://www.pay360.com/resource-hub/video/Chasing-GreatEp3?wchannelid=crwll3t1ok&wmediaid=epq6421yac
[3] https://www.pay360.com/resource-hub/video/Chasing-GreatEp3?wchannelid=crwll3t1ok&wmediaid=trsuprx40l
[4] https://www.pay360.com/resource-hub/video/Chasing-GreatEp3?wchannelid=crwll3t1ok&wmediaid=0tjbqh4igl
