Introduction

This month, we’re diving into critical aspects every founder should consider in order to future proof their saas business. We’ll be covering topics such as technical due diligence, remote team building, adapting to AI, delegating leadership responsibilities, and giving founders the guide they need when it comes to tech, teams, and transitions.

Technical Due Diligence: Preparing Your SaaS for Acquisition

When it comes to selling your SaaS or attracting investors, technical due diligence plays a vital role in ensuring a smooth and successful transaction. We’ve been getting a lot of requests from clients who are worried about an upcoming acquisition or merger, and they’d love to get some insight into what buyers look for in terms of tech due diligence.

In this video, Victor Purolnik, founder of Trustshoring, shares valuable insights on what buyers and investors pay attention to during the technical due diligence process.

Here are the main things that every founder needs to make sure that they have in order to have a smooth exit!

Asset Ownership

In this category, its important that you ensure that you have clear ownership of all the assets related to your SaaS is crucial. This includes your codebase, infrastructure, accounts, and perhaps most importantly, your intellectual property rights (IP).

When it comes to your codebase, it’s essential to document and demonstrate that you have full ownership of the code. This is super crucial if you’ve worked with contractors or external development teams. Make sure that you have proper agreements in place that transfer the intellectual property rights to your company.

The same principle applies to your infrastructure and accounts. You should have complete control and access to all the tools, services, and platforms that your SaaS relies on. This includes hosting services, domain registrars, and any third-party integrations.

We’ve talked all about the most common Intellectual Property (IP) mistakes in SaaS and how its derialing SaaS exits and acquisitions so this is a huge issue in SaaS.

If you can’t prove that the IP rights have been properly transferred from contractors or other parties, it can raise red flags for potential buyers or investors. Work with a SaaS lawyer to establish clear contracts and agreements that protect your IP rights.

Code Quality

The quality of your codebase is another key factor that buyers and investors will take a look at. They’ll look at aspects such as technical debt, coding standards, and the overall architecture of your software.

Technical debt refers to the accumulation of shortcuts, workarounds, or suboptimal coding practices that can make your software harder to maintain and scale over time. While some technical debt is inevitable, it’s important to keep it under control. Regularly refactoring your code, following best practices, and investing in code reviews can help minimize technical debt.

Coding standards ensure that your codebase is consistent, readable, and maintainable. Having well-defined coding conventions and style guides can make it easier for new developers to understand and work with your codebase. It also demonstrates a level of professionalism and attention to detail that buyers and investors appreciate.

Finally, buyers will want to understand how well your SaaS can scale and handle increased usage. They’ll look at factors such as modularity, separation of concerns, and the use of appropriate design patterns. A well-architected system is more maintainable, extensible, and scalable, which can increase the value of your SaaS.

Dependencies

Dependencies can come in various forms, such as human dependencies, reliance on third-party services, or being tied to specific ecosystems. Understanding and managing the dependencies of your SaaS is crucial for ensuring its long-term viability.

Human dependencies refer to the reliance on specific individuals or roles within your team. Now, If your SaaS heavily depends on the knowledge or skills of a single person, such as the founder or a key developer, it can be a risk factor for buyers.

What does this mean for you right now? It’s important to document and share knowledge within your team, establish clear processes, and ensure that critical information is not siloed with any one individual.

Third-party services and integrations are another type of dependency to consider. While leveraging external services can be a great way to add functionality to your SaaS, it’s important to assess the potential risks. What happens if a third-party service you rely on changes its pricing, terms of service, or goes out of business? Having contingency plans and the ability to switch providers if needed can help mitigate these risks.

Being tied to specific ecosystems or platforms can also impact the long-term viability of your SaaS. For example, if your software is heavily dependent on a particular cloud provider or operating system, it can limit your flexibility and potential customer base. While it’s often necessary to make some platform choices, it’s important to consider the long-term implications and have strategies in place to adapt if needed.

By addressing these key aspects of technical due diligence – asset ownership, code quality, and dependencies – you can increase the value and attractiveness of your SaaS to potential buyers or investors. It demonstrates that you have a well-managed, scalable, and future-proof software business.

At Trustshoring, we are helping founders prepare for a potential sale and exit by helping them conduct a mock audit, see what they are lacking and help them prepare and get the best valuation as possible for their business.

Get in touch with us today! 

Building a High-Performing Remote Team

Remote work has been with us for a while now but companies are still struggling to get it right from the hiring stages and being able to vet and find out if a candidate will be a good fit to onboarding and having the right processes in place to ensure a smooth collaborations.

Trustshoring has been helping founders build and run productive development teams and we decided to share our go-to checklist that you can use to ensure that you have everything in place to succeed at remote hiring.

So, what are the key points to consider when hiring remotely:

Working Hours and Time Zones

When building your remote team you must define the expectations when it comes to time zones overlaps, when everyone is required to be online, and if there are any flexible working hours.

This is very important, especially if you have distributed teams in diverse time zones. For good synergy aim for at least a 2-4 hour synergy where you have all your teams working within that time difference.

Consider the nature of the work and the level of collaboration required. For roles that involve frequent communication and coordination with other team members or customers, having some overlap in working hours can be beneficial. This allows for real-time discussions, problem-solving, and relationship-building.

On the other hand, for roles that are more independent or asynchronous in nature, you may have more flexibility in terms of working hours. In these cases, it’s still important to establish clear guidelines around response times, deadlines, and communication channels to ensure smooth collaboration.

Be upfront about your expectations regarding working hours and time zones during the hiring process. This helps candidates understand what will be required of them and ensures that they can commit to the necessary schedule.

Geography and Cultural Compatibility

When hiring remotely, it’s important to consider the geographic location and cultural background of your team members. While remote work enables you to access a global talent pool, there are still some practical and cultural factors to keep in mind.

From a legal perspective, it’s important to understand the employment laws and regulations in the countries where your remote team members reside. This can impact things like contracts, taxes, and benefits. Working with an experienced HR professional or legal advisor can help you navigate these complexities.

Cultural compatibility is another important consideration. While diversity can bring valuable perspectives and ideas to your team, it’s important to ensure that everyone shares a common set of values and can work together effectively. Consider factors such as communication styles, work ethic, and problem-solving approaches when evaluating candidates.

At Trustshoring, we always advice our clients to read up and learn more about how people from different cultures behave in the workplace. A great start will be Erin Meyer’s The Culture Map. Erin does a great job looking at different cultures and how they work.

Building a remote team with cultural awareness and sensitivity can help foster a positive and inclusive work environment. Encourage open communication, provide cultural training and resources, and create opportunities for team members to connect and learn from each other.

Employment Type and Contracts

Next, you must determine the appropriate employment structure and contractual arrangements. The most common options are hiring employees, engaging contractors, or working with an agency or employer of record.

Hiring employees provides the most control and stability, but it also comes with additional legal and administrative responsibilities. You must comply with employment laws, provide benefits, and handle payroll and taxes. This option is best suited for long-term, core team members.

Engaging contractors offers more flexibility and can be a good option for short-term projects or specialized skills. However, it’s important to ensure that you have clear contracts in place that define the scope of work, deliverables, and intellectual property ownership. Be aware of the legal requirements for classifying workers as contractors in different countries.

Working with an agency or employer of record can be a good middle ground. These organizations can handle employment’s legal and administrative aspects while you maintain the team’s day-to-day management. This can be particularly useful when hiring in countries where you don’t have a legal entity.

Regardless of the employment type, it’s crucial to have clear and comprehensive contracts in place. These contracts should cover aspects such as roles and responsibilities, compensation, termination conditions, confidentiality, and intellectual property rights. Working with a legal professional specializing in remote employment can help ensure that your contracts are legally sound and protect your business interests.

Self-management and Autonomy

One of the key characteristics of successful remote team members is the ability to work independently and manage their own time and tasks effectively. When hiring remote talent, look for candidates who demonstrate strong self-management skills and can thrive in an autonomous work environment.

Ask candidates about their experience working remotely and how they approach self-management during the hiring process. Look for examples of how they prioritize tasks, communicate progress, and overcome challenges independently.

Provide clear goals, expectations, and performance metrics to support self-management and autonomy within your remote team. Use project management tools and regular check-ins to ensure everyone is aligned and progressing toward their objectives.

Encourage a culture of ownership and accountability, where team members feel empowered to make decisions and take initiative within their areas of responsibility. Provide continuous learning and development opportunities so team members can expand their skills and take on new challenges.

At the same time, it’s important to provide support and resources when needed. Make sure that team members know how to seek help or guidance when they encounter obstacles or need additional support.

Ensuring that you’ve completed these key points will help you build a remote team that is aligned with your SaaS goals and culture.

How AI Could Potentially Kill Your SAAS Business

Artificial intelligence (AI) is revolutionizing the way we interact with software, build businesses, and consume services. As a SaaS founder, it’s crucial to understand how AI may impact your business model and adapt accordingly.

In one of our videos, Victor explores the potential implications of AI on SaaS and how it could potentially kill your business.

Shifting User Interactions and Interfaces

One of the most significant ways that AI is impacting SaaS is by changing how users interact with software and services. AI-powered interfaces, such as conversational agents like ChatGPT, are introducing new paradigms for user engagement and service delivery.

These AI-driven interfaces can provide more natural, intuitive, and personalized interactions compared to traditional web or mobile interfaces. They can understand user intent, provide contextual responses, and guide users through complex processes or tasks.

For SaaS founders, this shift presents both opportunities and challenges. On one hand, AI-powered interfaces can enhance the user experience, improve customer satisfaction, and differentiate your SaaS from competitors. On the other hand, the rise of AI-powered interfaces also raises questions about the role and value of traditional SaaS applications.

If users can access and interact with your service primarily through an AI-driven interface, such as a chatbot or voice assistant, what happens to your carefully crafted user interface and user experience?

In some cases, AI-powered interfaces may even bypass the need for users to interact directly with your SaaS application altogether. For example, if a user can access your service’s functionality through a general-purpose AI assistant like ChatGPT, they may not need to visit your website or use your app directly.

To adapt to this shift, SaaS founders need to rethink their user engagement strategies and consider how AI can be integrated into their products and services. This may involve developing AI-powered features and interfaces within your SaaS application or exploring partnerships and integrations with existing AI platforms and assistants.

It’s important to focus on the unique value that your SaaS provides and how AI can enhance and complement that value rather than replace it entirely. Consider how AI can streamline user interactions, personalize experiences, and provide intelligent recommendations or insights based on user data and behavior.

The Impact on Different Types of SaaS Applications

The impact of AI on SaaS may vary depending on the type of application and the target audience. Consumer-facing applications may be among the first to feel the disruptive effects of AI-powered interfaces and interactions.

Consumer-facing SaaS, such as productivity tools, entertainment platforms, or personal finance apps, often rely on engaging user experiences and frequent interactions to retain users and drive growth. These applications may be more susceptible to the shift towards AI-powered interfaces, as consumers are increasingly expecting more natural, conversational, and personalized experiences.

We already saw this with Skyscanner, which now has a ChatGPT plugin. Sometimes, what might seem like a new acquisition model at the start can result in you losing your entire brand and being reduced to a simple API.

Regardless of the type of SaaS application, it’s important for founders to stay attuned to the evolving expectations and needs of their target users. Regularly engage with your customers, gather feedback, and monitor industry trends to understand how AI is shaping user preferences and behaviors in your specific market.

Evolving Business Models and Delivery Models

Just as mobile apps disrupted desktop applications, AI-driven interfaces and services may disrupt traditional SaaS delivery models.

Historically, SaaS has been delivered through web-based applications that users access and interact with directly. The SaaS provider hosts the application, manages the infrastructure, and provides ongoing maintenance and updates. Users typically pay a recurring subscription fee for access to the software and its features.

However, with the emergence of AI-powered interfaces and platforms, the traditional SaaS delivery model may evolve. Instead of users directly interacting with a standalone SaaS application, they may access the functionality and value of the service through AI-driven interfaces or platforms.

This shift could lead to new business models and revenue streams for SaaS providers. For example, instead of charging users a direct subscription fee, SaaS providers may need to explore partnerships, revenue-sharing agreements, or API-based pricing models with AI platform providers.

In some cases, SaaS functionality may be unbundled and offered as individual features or services that can be accessed and integrated into various AI-powered applications or workflows. This could require SaaS providers to rethink their product strategy and architecture to enable more modular and flexible consumption of their services.

To navigate these evolving business models and delivery mechanisms, SaaS founders need to be proactive and adaptable. Consider how your SaaS can be positioned and delivered in an AI-driven ecosystem. Explore opportunities for partnerships, integrations, and API-based access to your services.

At the same time, it’s important to maintain a strong focus on the core value proposition and differentiation of your SaaS. Even as delivery models evolve, the fundamental need for your service and the unique benefits it provides to users should remain central to your strategy.

Delegating Leadership: Empowering Your Team for Growth

As your SaaS grows, it becomes increasingly important to delegate leadership responsibilities and empower your team to take ownership of key areas. In this video, we take a look at the strategies for giving away the responsibility of managing your development team.

Identifying the Key Skills Needed to Run a Development Team

One of the first steps in delegating leadership responsibilities is to identify the key skills and roles needed to effectively run a development team.

These may include scrum mastery, business analysis, product management, and prioritization frameworks.

Scrum mastery is all about how you can balance agile development processes and ensuring that the team is working effectively and efficiently.

Business analysis involves understanding the needs of the business and translating those needs into actionable requirements for the development team.

Product management is all about defining the vision and strategy for the product, and ensuring that development efforts are aligned with business goals and customer needs.

Finally, prioritization, which can tie into what makes a good product manager,  is all about knowing what to focus on and balancing the needs of the users with those of the stakeholders and what your development team is able to handle.

By understanding these key roles and skills, you can start to identify areas where you may need to bring in additional expertise or talent or where you can empower existing team members to take on new responsibilities.

Assessing Your Current Team’s Strengths and Growth Potential

Once you’ve got a key grasp on the key skills and roles needed to run a development team, the next step is to assess your current team’s strengths and growth potential.

Who can you start to nudge towards that product management role and start giving away responsibility to?

It may also involve having conversations with team members about their career goals and aspirations and identifying opportunities for growth and development within the company.

Making Strategic Hiring Decisions to Fill Key Roles

In some cases, delegating leadership responsibilities may require making strategic hiring decisions to fill key roles.

Depending on your current team’s strengths and growth potential, you may need to bring in additional expertise in areas like UI/UX design, business analysis, or scrum mastery.

Remember, product management is still a fairly new trade, and they often come from other fields. So there are those who come from UI/UX design and others who are former software engineers.

If you’ve got a UI/UX engineer then could be the perfect candidate for this, especially if they are good UX people, not just good at UI.

Why? Because these guys are already good at understanding how the customer journey works, the persona, the competition, and the positioning they just need to now learn about prioritization frameworks, formal customer interviews and how to manage and maintain a roadmap.

Providing Coaching and Support for Leadership Development

Finally, you can then start providing coaching and support for leadership development as you delegate responsibilities and empower your team to take on new challenges.

At Trustshoring, we normally suggest working with a fractional advisor, in this case, a Fractional CPO who can come in and help coach your UI/UX designer on things like managing a product roadmap.

This is a great option, especially if you don’t want to hire a full-time CPO which can be very expensive. On the flipside, a Fractional CPO will only be working with your time a couple of hours every week and you still get to leverage that C-suite experience.

This may involve providing formal training and development opportunities, such as workshops or courses on topics like agile development, product management, or people leadership.

It may also involve providing ongoing mentorship and guidance to help team members navigate new responsibilities and challenges.

As a founder, it’s important to recognize that delegating leadership responsibilities is not a one-time event but an ongoing process that requires ongoing support and investment.

Delegating leadership responsibilities and empowering your team for growth is a critical step in scaling your SaaS business and achieving long-term success.

Conclusion

Building a future-proof SaaS requires a proactive approach to technical due diligence, remote team building, AI adaptation, and leadership delegation. By following the strategies and insights shared in this guide, you can position your SaaS for long-term success and navigate the ever-changing technology landscape with confidence. Remember, the key to future-proofing your SaaS is staying informed, adaptable, and focused on empowering your team to grow and succeed alongside your business.

FAQ Section

How can SaaS founders prepare for technical due diligence when selling their business?

When preparing for technical due diligence, SaaS founders should focus on three key areas: asset ownership, code quality, and dependencies. Ensure that you have clear documentation and contracts demonstrating ownership of your codebase, infrastructure, accounts, and intellectual property rights. Prioritize code quality by addressing technical debt, adhering to coding standards, and ensuring scalability. Assess and mitigate risks associated with human dependencies and reliance on third-party services or ecosystems.

What are the key considerations for establishing clear working hours and expectations when hiring remote teams?

To effectively manage a remote team, establish clear expectations regarding working hours, time zone overlap, and communication channels. Determine the level of availability and synchronous communication required for each role and ensure that team members have sufficient overlap for collaboration. Provide tools and resources that facilitate asynchronous communication and project management. Clearly communicate response time expectations and establish guidelines for maintaining a healthy work-life balance.

How can SaaS founders navigate legal and cultural implications when building a global remote team?

When hiring remote talent from different countries, consider the legal requirements and restrictions that may impact your ability to employ them, such as data privacy regulations, intellectual property laws, and employment regulations. Work with experienced legal and HR professionals to ensure compliance and mitigate risks. Be aware of cultural differences in communication styles, work habits, and expectations. Foster a global mindset and provide cross-cultural training to promote understanding and inclusivity within your diverse remote team.

What steps can SaaS founders take to prepare their businesses for the impact of artificial intelligence (AI)?

As AI continues to advance, SaaS founders must stay informed about its potential impact on their business models. Be prepared for shifts in user interactions, such as the rise of AI-powered interfaces and the potential commoditization of certain SaaS offerings. Consider how AI can be integrated into your product to provide new opportunities for innovation and growth. Stay attuned to emerging trends and be ready to adapt your strategies to remain competitive in an AI-driven landscape.

How can SaaS founders effectively delegate leadership responsibilities as their business grows?

To successfully delegate leadership responsibilities, start by identifying the key skills and roles needed to run your development team, such as scrum mastery, business analysis, and product management. Assess your current team’s strengths and growth potential and provide opportunities for them to take on new challenges. Make strategic hiring decisions to fill skill gaps, considering both the immediate needs of the role and the long-term growth potential of the candidate. Provide ongoing coaching, mentorship, and resources to support your team’s leadership development.