Beware the “Do Everything” SaaS Application: Lessons Your Business Can Learn From HubSpot
There’s been (yet another) pivot in the SaaS-based applications:
The decline of the ‘Do Everything’ SaaS application.
We seem to be in the midst of another paradigm shift. How digital and omnichannel businesses look at key solutions and solution providers, and how those solution providers are structuring their own businesses has quietly changed over the past few years, and is finally coming to a head (at least in VL’s observations).
Moving away from the desire to be monolithic ‘do everything’ applications, SaaS applications are instead re-evaluating key functionalities and specializing in that one thing they do really, really well. And businesses are learning through experience (and yes, sometimes through costly mistakes) that perhaps picking the SaaS applications out there that does that one thing done really well are the better bet over the ones proclaiming to do it all.
Keep reading for VL’s full analysis of this shift, including an analysis of the rise and slow decline of HubSpot, a once marketing automation-specialist application gone ‘we do everything‘.
The Need to ‘Own’ the Customer
The overwhelming idea that sole customer control and a unified solution went hand-in-hand has started to feel a little… dated. While I still personally hear the motto of this mentality thrown around occasionally — one throat to choke — it’s being used less and less frequently, and the idea that a single solution provider can supply everything a customer needs is fading into history with the phrase. With one throat to choke, it’s implied that if/when things go wrong, the customer would have a single point of contact. On the flip side, this insinuated that having multiple partners or suppliers meant that a) there would be more work for the customer in times of need or troubleshooting, and b) these partners were somewhat incompetent and would blame each other.
But what this mentality really stood for at its heart was total client control. For the businesses throwing around the one throat to choke metaphor and it’s permutations, having the customer rely on you and solely you as the point of contact for all needs meant that the customer had to go through this single point for anything and everything. This means influence, power, and ultimately more money in the pocket of the lone supplier. For the customer, it means that they have little visibility into anything beyond that single point of contact, and were in actuality handing over a considerable amount of control and important decision-making power for their business.
For a time, the single point of contact was an appealing option, especially in the SaaS-based application world. After all, why go to the trouble of hand-selecting each individual supplier and service to suit your business’ exact needs when there’s a single application out there touting that it can do everything?
The Rise of the Monolithic SaaS Application
It’s hard to pinpoint exactly when the innate need to control the client spilled into the SaaS-based application world, but I would hedge my bets on around 2010-2013. SaaS was really starting to take off at this point, and more and more business in the ecommerce and omnichannel world, in particular, were abandoning expensive and kludgy on-premise applications in favor of the cloud.
And the cloud was amazing! Key services and functions all of a sudden became cheaper, spreading the once lump-sum amount for physical software across the year via small monthly payments. Many formerly satellite services like marketing could also be replaced by the SaaS model. But over time, these applications sought to keep their user base returning day after day, and their strategy was not deepening their core specialty: instead, many applications decided they wanted more of the customer’s time, attention, and yes — money. And their approach was to diversify their service set while unintentionally watering-down their core offering.
This is what I assume happened with HubSpot.
I have been a HubSpot user since 2012 in a few different capacities and across a couple of companies (VL included!). And I was a huge fan! HubSpot’s core Inbound Marketing tools. They were fantastic, easy to use, and delivered on the promise of delivering consistent leads to our databases. But over time, my daily user experience started to deteriorate — it started off with HubSpot’s incessant need to move key areas I used around on their interface. And it ended with HubSpot being a bloated version of itself with no clear specialization in the service it delivered.
By the time I parted ways with HubSpot, they had morphed from their landing page/lead collection core service set into a marketing tool, a sales tool, a CRM, a website creator, a content management system, and many more sub-services that I frankly did not use or even cared to explore. They duplicated services being supplied by specialist SaaS applications we were already using, and frankly, HubSpot did not provide the same level of service in their off-shoots as they had once upon a time in their core service offering.
In HubSpot’s attempt to own more of us, the customer, they ended up losing us as a customer completely.
The Resurgence of the Expert SaaS Application Supplier
Although HubSpot still supplies their software to approximately 10% of websites globally, there are signs of trouble. While their user count isn’t plummeting (yet), their growth – once exponential – has stagnated at a flat-lined plateau for most of 2017. Moreover, it seems that HubSpot is losing more customers to competitor platforms than they are gaining from those same competitors. HubSpot is clearly not the powerhouse it once used to be, and the competitors happy to help former HubSpotters move on are overwhelmingly applications that specialize in a single core functionality — what HubSpot used to be.
We’re in the midst of a renaissance: the surge in SaaS-based applications that specialize in one core service set, product, or function has boomed back on to the scene. Businesses are migrating away from the applications and service providers who are still claiming that they can “do it all” because the reality is you can’t be an expert in everything. Just like a retailer who sells across multiple channels, you have to have a niche that you excel in to create a competitive differentiator. Pick that one thing you’re good at, and then refine, refine, refine until you have it down to a science.
At VL, we’ve witnessed this change first-hand in how end users approach the problem of automating and integrating their data strategically. Not too long ago, many applications and agencies serving the omnichannel industry professed to be able to do it all, including data integration. Solutions were put in place, connections between applications were outsourced for DIY coding, or undersized plug-and-play products were slapped on for immediate results. And things worked — for a while.
But the problem with these solutions were many: the providers implementing them were not experts in data integration like VL is, which made these solutions static, fragile, and expensive. While immediate costs savings in going with the ‘do everything’ solution provider with these integrations were had, the ramifications and costs down the road were detrimental, often impeding the growth and agility of the business. Many had to scrap entire solution sets and start over at ground zero.
But these days, our partners and customers see the value in having an expert data integration company like VL OMNI on their team. After all, EDI and omnichannel data integration is all that we do — if we weren’t good at it, we simply wouldn’t be around! With agility, scalability, and strategy at the heart of every integration we implement, our customers and partners also deeply appreciate our unique approach to integration: we don’t force your business to change to fit the solution, but our solution is made to fit your business today, tomorrow, and 10 years from now.
So the moral of this story?
Do One Thing Really, Really Well — And Find Others With The Same Mentality