Grow Your Startup by White Labeling New Solutions

Starting Startups is Hard

It’s a challenge to get a startup off the ground. 95% of startups fail, only 50% make it to the five-year mark, and only 40% become profitable. Still, approximately 71,000 startups are founded annually in the United States.

Startups fail for a variety of reasons—a CBS study found 42% of startups fail because there’s not a big enough market for the product or service they created, 19% of startups cite struggling to differentiate themselves from competitors, and money is a significant factor—58% of startups have less than $25,000 at their disposal during the startup phase. 

SaaS startups, in particular, are on the rise—99% of businesses use at least one SaaS solution. White labeling additional SaaS solutions can help SaaS startups expand the products or services they offer, set themselves apart from competitors, and is a cost-effective way to go to market quickly with new offerings.

White labeling additional solutions is an effective way to help fledgling SaaS startups grow their solutions, customer bases, and grow towards profitability.

What is White Labeling?

Image source: Farooq Rizwan Alvi 

Data shows that 59% of businesses outsource in some capacity to cut costs. You can think of white labeling as a form of outsourcing, but instead of taking a chance on someone whose experience and effectiveness may not be tested, you’re letting an expert team manage and support one of your new solutions, while presenting this as a proprietary solution. 

White label software is purchased by a company from a SaaS provider and customized with the branding and in some cases, customizations the purchaser requires. White label purchasers work with white label providers as a mutually beneficial partnership versus the traditional buyer/client relationship. 

Private Labeling is a Customizable White Label Modality 

Private labeling is a type of white labeling. Though often used interchangeably, there’s an important difference between the two. White-labeled platforms are produced by a SaaS developer and rebranded by other companies. Private labeling takes this to a whole new level by customizing the platform to fit an organization's specific needs and working closely with them throughout their partnership’s tenure. 

Ten Ways White Labeling SaaS Solutions Can Help Startups Grow

White labeling SaaS solutions can help SaaS startups get up to speed faster and enter the marketplace hitting the ground running. There’s no need to invent all your processes and solutions from scratch (check out this list of SaaS giants who outsourced their products and solutions when they were in the startup stage). White labeling a product or solution into a startup’s platform opens up new opportunities for the company’s customers, new revenue streams, better-satisfied customers, and streamlined processes. 

White labeling is cheaper, simpler, and less work than attempting to implement a bespoke solution for startups that are traditionally low on money, employees, and time.

• Go to Market Faster
• Expand Your Team
• Focus on Core Competencies
• Stand Out From the Competition
• Expand Your Market Share
• Showcase Yourself as an Innovator
• Acquire Customers
• Engage Customers
• Delight Customers
• Generate Revenue 
  

Go to Market Faster

According to DevSquad, building a minimum viable product takes 2 to 10 months but can take much longer. Partnering with a white label developer ensures you have an additional viable product without the time, resources, or hassle of developing your own.

White labeling is a valuable asset to startups looking to add a secondary solution or a startup with an innovative idea for cornering a particular market but not the bandwidth or engineering prowess to do so. Some white label partnerships can be ready to go to market in a matter of days. Since good white and private label partnerships help market and sell their product, your startup will have the advantage of additional resources in terms of delivery. 

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Expand Your Team

The average startup has just four employees. Resources are spread thin and small business owners spend up to 40% of their time on non-revenue generating tasks. When you private label a new SaaS solution, you’re also gaining the knowledge, experience, and help of the private label’s team, essentially expanding the bandwidth of your own and giving your core team more time to perfect and sell your core product.

Supplement Turnover

Faced with budget constraints, startups often rely on young, passionate, but inexperienced staff, which results in unusually high turnover rates. Startups have a 25% turnover rate, roughly double the overall average of 13%. Established white label developers should have an established team and brand you can rely on as a constant while you’re in your high-turnover phase. 

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Focus on Core Competencies

Remember that almost half of startups (42%) fail because there’s not enough of a market for their core product. If you’re white labeling solutions, you can expand your customer base with additional solutions while providing your original team more time and energy to build and perfect your core competencies!

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Stand Out From the Competition

There are 71,000 startups founded annually in the United States and approximately 1 million worldwide. While some industries are jam-packed, and others are more niche and thus easier to market in. There’s a lot of noise in the startup space (the SaaS space is just as competitive: there are currently approximately 15,000 SaaS organizations in the United States). Organizations need to work to stand out.

Forward-thinking startups will research and white label SaaS solutions their competitors don’t have, allowing them to stand out. Additionally, most white label developers already have established professional networks and customer bases they can leverage for additional brand awareness. Since white label developers are deeply invested in their partners’ success, they’ll also help the white label purchaser market and sell their new solution.

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Expand Your Market Share

We already covered how 42% of startups fail because there’s not a big enough market for the product or service they created. Savvy startups will offer several solutions in the hopes of being stickier, which can also help with retention. Studies show that SaaS companies selling more than one solution increased retention by nearly 20%, while SaaS providers with at least four solutions show an 80% retention rate. Adding more relevant solutions expands your market share and, thus, your customer base. 

Startups can even build an entire business around being a reseller or partner of a single white label solution!

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Showcase Yourself as an Innovator

Startups need buzz, and a great way to generate buzz is to showcase yourself as an innovator (there’s a reason startup disruptors are the ones whose names you end up knowing). Set yourself apart by offering a wider or unexpected range of services than your competitors. White labeling is an easy way to do this, especially if you’re looking to expand by offering a SaaS product or solution completely different from your core competencies.

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Acquire Customers

Customers gravitate towards SaaS solutions with broad functionality (Google, Slack, HubSpot, etc.). Offering customers a more complete solution means they need to shop around less and learn fewer new products, and reduce duplicate data entries across unconnected platforms, which today’s SaaS users want.

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Engage Customers

80% of app users are likely to churn within their first three months because they don’t know enough about the product. SaaS companies, especially startups, must engage their customers from the get-go if they want to keep them. When you partner with a white label developer, they can help your startup with onboarding, educational webinars, continuing marketing efforts, and they should already have a robust knowledge base. Startups are infamously spread thin, and any help with customer engagement is a plus. 

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Delight Customers

Private labeling solutions means you can be more responsive to your customers. Rather than spending time and resources building solutions they need (or ask for), you can instead deploy white labeled solutions quickly and efficiently, delighting your customers and adding value to your brand. 

Kickstart Your Word-of-Mouth Marketing

The relationship between a startup and its first few clients is crucial. Imagine if a prominent client requests a service or solution you don’t provide, but you partner with a white label developer that specializes in a client’s specific request. You’ll make them happy, get more revenue, and establish your brand as the kind of customer-centric organization clients seek. 

Hopefully, they’ll also spread the word about how you went above and beyond to help solve their problems—64% of marketers agree word-of-mouth marketing is the most effective marketing. It annually drives $6 trillion in global spending.

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Generate Revenue

According to Forrester, 56% of B2B customers say they would pay more for a better experience. Customers spend money when they feel a solution is valuable. Adding additional SaaS solutions to your startup through white labeling means your customers are not only spending more money but are more likely to stick around and continue spending money because of all the value you provide, the elusive “stickiness” all SaaS solutions strive towards. 

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