Red Ocean vs Blue Ocean in SaaS

2 min read

The challenge to cross the chasm of SaaS products depends on whether you're operating in the red ocean or blue ocean.

Red ocean

Your product is a slightly better version of me-too product.

Your challenge is not about conveying how much your product is incrementally better than your lookalikes.

It's about setting the budget.

Understand the amount of budget set aside for the product by the decision-makers.

It's also about switching cost.

How do you make it cheap, fast, and easy for your customers to switch from your competitors to your product.

Notion's price is comparable to Evernote, and they also made it easy to steal Evernote's users by allowing new Notion users to import all of their notes within a few clicks.

Blue ocean

Your SaaS creates a new market category.

Your challenge is not about pricing or comparing with alternatives.

It's about educating the market.

Develop content to nurture your users and decision-makers on how your product helps them solve their problems and arrives to the future state 10x cheaper, faster and easier.

It's also about creating budget.

Operating in a blue ocean market means you're likely to be the first mover. Which means no competitors are around. Which means you create set any price you want.