Is your B2B software doing everything it can for your customers? Think about it: every business platform aims to solve problems. When you fix a pain point, you help businesses succeed. And when they win, you win, too.
If you’re reading this, I’ve probably been in your shoes before: prior to founding Salsa, I built a large B2B vertical SaaS platform that probably has a lot in common with yours. When we were in the early building phases of HoneyBook our goal was simple: find all the challenges our businesses face and take those things off their plate. That mission provided years of roadmap to build and as we launched new products to solve old pain points for our customers we not only became essential to the businesses we served, but we built a massive, unicorn-sized platform in the process. In this article I’ll share the formula that all vertical platforms must pursue to win and talk about why embedded payroll is an easy shortcut to getting there.
Becoming the essential “operating system” for your customers
Let’s start with the basics: what can you do to make your software platform really valuable to businesses? It's simple—become the one place they go to get everything done. There’s a name for that: a vertical operating system, and Andreessen Horowitz has a great article on the topic.
To be this go-to tool, and get lock-in with customers, your platform needs to handle all the critical tasks your customers rely on, and handling money is a massive part of that. [.c-highlighted]You must aspire to become the platform that touches every dollar coming in and every dollar going out - that’s how you become essential.[.c-highlighted] As a modern platform you’re almost certainly touching payments already, but for most platforms touching expenses is a longer journey. There’s a shortcut: payroll is literally the largest bill your customers pay each month.
That’s an opportunity: you can easily replace their payroll pain with a modern solution integrated into your own platform. That helps your businesses run their operations more smoothly - and makes your software a lot more valuable. When customers can't live without your platform, they stick around, and you grow.
Payroll: The core of your “operating system”
Embedding payroll into your platform gets you a lot closer to becoming the operating system your businesses rely on.
- Become the complete system of record: Combine customer, payment, and employee information in one system - yours.
- Complete other fintech offerings: Payroll is the natural link to many other fintech opportunities: embedded accounting works better when linked to the largest monthly expense each month - payroll - and embedded banking, insurance and benefits make more sense when linked to payroll, too.
- Touch every dollar: payroll is not only a very significant business process to own, but it gives platforms a big step toward having a complete view of a business’s expenses. When combined with a payments offering, platforms put themselves in the coveted position of touching every dollar in and out of a business, which makes your software indispensable to customers.
By including payroll, your platform becomes the main source of business information. This helps you keep more revenue and grow your market share. In the past, creating a custom payroll system could cost over $40 million. Salsa makes it affordable and quick to add payroll to your platform without a big lift, or expense. In fact, we built Salsa from the ground up to take less time and resources to launch - and that’s often the difference between getting payroll on the roadmap this year - or not at all.
Your customers’ current payroll provider wants a piece of your business
Swim lanes in B2B software are disappearing. Now traditional payroll providers are trying to up their game, and unfortunately it’s not by improving their own payroll products - - it’s by encroaching into your space. They're adding time tracking, HR tools, invoicing, and accounting. They're trying to become the go-to systems themselves, and take your revenue in the process. In this scenario the best defense is to play offense.
That's where Salsa comes in. We help you add payroll so your platform gets one step closer to becoming the operating system for your businesses - and the payroll tool we’ll help you launch is a lot more modern and tailored than what your businesses are currently using.
Payroll plays a big role for your platform - and your customers’ businesses
Adding payroll to your platform isn’t just about your goals, it’s also about solving one of the most painful recurring processes your businesses still have. Your customers today are struggling with payroll because legacy tools aren’t great. The common complaints about legacy payroll are the same things your product will uniquely solve - which drives adoption.
- Legacy payroll is time consuming: Today, business owners are spending hours each week on payroll. A better product can eliminate this work, and free up time to focus on growing the business.
- Legacy payroll is error-prone: that’s because each week businesses are taking earnings data from your platform, another system - and, yes, even notebooks - and plugging them into legacy payroll tools. Mistakes are often made and they can be costly.
- Old tools aren’t tailored to the needs of any one business. Most payroll products are horizontal in nature which means added complexity because it’s not specifically designed for the needs or workflows of any one vertical. That means it’s clunky, there are fewer people who can operate the payroll tool, and it’s an overall frustrating experience.
Embedded payroll in your platform solves all of these problems at once. In fact, almost all of our customers are surprised by how low the bar is to launch a great product that customers flock to.
“Wait and see” can be costly
There’s a cost to waiting because the market is moving and your customers are looking for complete solutions that solve their pains. For our customers who made the leap and built a product, here were the main motivations they considered to take action now rather than add payroll to the long-term roadmap.
- Attract a new segment of customer: Payroll provides a way for platforms to become “feature complete”, often for larger or more sophisticated customers. We’ve helped many vertical SaaS platforms in their journey to “go upmarket” with a payroll product offering that attracts a new customer segment.
- Competitive pressures: Initially payroll is an interesting differentiator, but it quickly becomes an expected, required feature. Platforms who were late to embed payments got clobbered by the LTV differential that allowed other platforms to spend vastly more on CAC - so they want to be an early adopter of embedded payroll.
- Future opportunities: Payroll is a great launching point for new products: banking, benefits, insurance, features that benefits workers (earned wage access, banking, etc).
One thing to keep in mind: the early adopters who were first to launch payroll had a much, much harder time getting the product live compared to the paved road our customers today follow. Before Salsa, the first embedded payroll customers spent years building a product or ironing out gaps - a stark contrast to our “one engineer, one month” commitment today. Despite this, most platforms with payroll today will tell you the investment was worth it and they wish they’d started even earlier.
How Salsa helps B2B platforms
Salsa gives B2B platforms the tools to build their own payroll solutions. Our technology allows you to:
- Launch quickly: Get your payroll product up and running faster than other alternatives.
- Tailor: Create a payroll solution that fits your users' specific needs.
- Integrate seamlessly: Add payroll directly into your existing platform.
Using Salsa's tools can save you a lot of money, not just when you're building your payroll system, but also in the long run. You won't need to hire a big team of payroll experts or spend as much on maintenance. This means you can use your resources for other ways to grow your business.
Transform your platform with Salsa
You can turn your platform into a complete business management system by partnering with Salsa. Adding our payroll solutions can make your platform more efficient, more satisfying for users, and more competitive in the market.
Connect with Salsa today to start building a payroll solution that sets your platform apart.
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