[Founder’s Real Talk #1] The philosophical challenge of an enterprise services startup but not SaaS

This is the starting post of a new series I’m starting, to document and organize some thoughts and challenges I had during the past week in the startup life journey.

The purpose is primarily for myself to reflect and think. But if other entrepreneurs find it useful — whether to find some helpful ideas or even just reading it as a founder-to-founder therapy, I’d feel very rewarding.

This is my personal view only and doesn’t reflect my company’s or my co-founders’.

Our startup is a professional services business targeting enterprises (and larger startups), which means that in the current startup/VC world, we roughly fall into the category of enterprise services.

Most other startups in this category are SaaS, meaning they are product-driven. Their value propositions often originate from pain points or inefficiencies in some business processes, and they build software products first and then go out and sell the products (while constantly iterating) — either primarily with traditional sales teams, channel partners, or more recently product-led growth.

But we are different. We are not product-first, and this is often a tricky point when communicating with investors. On a high level, we are mission-first, because the primary motivation for founding this startup is a long-term social impact. But for our go-to-market, we are demand-first — our services are in quite well-defined areas, but we differentiate from traditional professional services companies because of our uniquely distributed talent pool and tech-enabled business model.

Still, investors would question why we are different — why now? And essentially they are asking how tech/product is making us different. I believe it’s more of a philosophical question: why was WeWork or Compass different? They struggled to tell the story of their differentiating tech & product (if any), and the impact just doesn’t matter — their scalability doesn’t come from their tech & product, and their valuations certainly don’t reflect that either.

The philosophical challenge is to get out of the product-first framework, but a business-first framework. Tech/product might not be our differentiation in this early stage. However, as we grow, it will definitely be the key to making our internal operations and services more efficient, scalable, and resilient.