5 rules for guaranteed failure at SaaS, without even trying

Three recent examples of cloud services gone bad include snafus by MobileMe, Jott and Cuil. Are all online software services destined to repeat these same five mistakes?

How to fail at SaaS Rule 3: Extended betas do not a ready product make

We've all led ourselves to believe that one of the things you do to get your online SaaS service ready for prime time is to have a long, extended, free beta-test period. Google taught us that (expect its stuff rarely ever comes out of beta). During that time, we gradually build up a user community (sometimes even a quite large one), roll out new product features and software updates, resolve bugs commonly experienced in new software, work out the kinks delivering an online service, and help scale the systems to handle large and possibly unexpected user demand. It's all good, right?

Jott, an online voice-to-text to-do-list service and BlackBerry app that I've used for quite some time, was in beta for more than 2.5 years. Over that time they'd built up thousands and thousands of beta users. Come 1.0 launch day, what happened? Their service couldn't handle it, and they were down for nearly two business days. Like Apple, Jott suffered from "big launch fever" (see Rule 2) by trying to launch the 1.0 product version, a new Outlook plug-in, Express desktop software and premium paid-for services. As a Jott user, that's all great and I'm really happy for Jott that they have this really cool stuff coming out, except for the fact that I couldn't even get to the site for a day and a half to access all the tasks I've been tracking in Jott.

Jott's founder and CEO hit the nail on the head in his apology letter to "early adoptors," a euphemism for "you get our stuff for free so you don't have much right to complain" (which is wrong as well -- see Rule 4):

"While the outage could not have happened at a worse time for us, we're more upset at any effect it may have had on your customer experience."

So, just because you've had a long, extended beta doesn't mean you're ready to launch your product or overload the launch with "big launch fever."

How to fail at SaaS Rule 4: Users will put up with it -- it's free, after all

Like any euphemism, there's probably some truth (or at least there has been up until now) in the belief that users who get something for free will put up with a lot more than would someone paying to use an online service or software. If you were the only free service and the next alternative is a very cost-prohibitive option, that's one thing. But in a world of increasing SaaS alternatives -- and of course the option of returning to what you were doing before (when that exists) -- free doesn't hold users nearly as captive as it once did. The other added factor is that SaaS usually makes it easier for users to switch between services. Suffering from poor software or service quality? C'ya, don't want to be ya. If MySpace tanked today, they'd all be on Facebook by tonight.

But no matter how low the cost, how high the pain threshold to change, or even user loyalty to a brand (like Apple), users will only put up with so much and then they'll switch, oftentimes never to return. Today, my primary e-mail client is Outlook, not an online service like Gmail or some other online service. Even given ALL the frustrations I have with Outlook, and believe me there are many, I can't and won't tolerate the downtime problems that Gmail and MobileMe users have experienced.

What product people and those in the decision-making chair forget is that user frustration isn't a blemish, it's a callus that builds from experience after experience. Each experience, no matter what the source of frustration, thickens that callus, desensitizing the users from why they like (or liked, rather) using your product. At some point, users can and will move on, applying the "life's too short" principle. Every day the fact that something is free diminishes as a compensating factor.

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