Craft Beers and SaaS Have More in Common Than You Might Think

Craft Beer and SaaS Capital

There’s always a bit of fear when it comes to starting a new business. We should know—we started two of them in the last two years!

The first was Sibling Revelry Brewery, a craft-brewing operation that began as a family passion project and has grown into a 3,600 barrel per year operation. The second was River SaaS Capital, a debt-financing operation that combines and builds upon our family’s decades of experience in the technology and financing businesses.

They seem like two very different businesses—and they are. Then again, how different are they really?

When we started Sibling Revelry, we knew that we needed to learn a lot about craft beer, but we were also entering a market where craft breweries in the United States have increased by more than 16% from 2015 to 2016.

A month later, we launched River SaaS Capital to meet the growing need for financing in the SaaS industry. Again, the business was new, but the market was solid—at the time, cloud based businesses were growing at a rate of 36% compound annual growth rate.

Aside from being industries that have taken the country by storm in the past decade, craft brewing and SaaS share a multitude of other traits, starting with the fact that both industries are capital intensive and need a good amount of money to get off the ground and stay competitive.

To get started, Sibling Revelry needed to invest lots of up-front money in fermentation tanks and all the other equipment and ingredients needed to produce beer. At River SaaS Capital, we see similar upfront expenses with our SaaS lending clients, who not only need capital to hire a team of talented developers, but also need capital for sales and marketing. In both industries, these early investments are among the most important business decisions you will ever make, since they set the tone for the quality of everything that comes after.

Of course, whether it’s a brewery or a SaaS business, spending a great deal of money upfront ultimately means nothing unless there is growth. And in both industries, a great indicator of growth is the ability to gain and retain customers. That means you need to know how to market the product.

Sibling Revelry’s brewmasters and beer ambassadors are the biggest advocates for our original brews, and their enthusiasm draws curious beer aficionados in and keeps them coming back. In the world of SaaS, team members also need to know their product thoroughly and be passionate about what they’re promoting.

Once a consumer is interested, keeping them engaged is the next step. In markets such as craft brewing and SaaS, consumers may be hesitant to fully commit to a product because of its uniqueness. To curb any hesitation, both industries have adopted practices that let consumers “try before they buy.”

At Sibling Revelry, we occasionally hold tasting promotions that give our customers a “free trial” of our beers. In the SaaS world, popular platforms such as Spotify also offer consumers a freemium model of their services to get initial customers and then convert them to paying once they realize the benefits. But even after a customer has committed to a product, they may see areas for improvement. That’s why listening to suggestions and feedback from paying customers is key to retaining business and avoiding churn in both industries.

Obviously, we’ve come across a lot of similarities in these two markets since launching Sibling Revelry Brewery and River SaaS Capital. However, there are also a few things they could still learn from one another.

SaaS companies could learn much from the craft brewing circle’s collaborative tendencies. In this industry, even direct competitors share information and help one another, understanding that when a market is growing as fast as craft brewing, a high tide raises all boats. SaaS companies can also take inspiration from craft brewing’s obsession with quality—putting emphasis on creating a smaller number of great products as opposed to a wide variety of mediocre options.

On the flip side, craft breweries can gather inspiration from the SaaS industry’s tendency to push the envelope and steer clear of the status quo, while still making their products accessible. And speaking of accessibility, successful SaaS companies understand that no matter how fancy or impressive the product is, it means very little if it doesn’t feel easy or intuitive for the end-user. That’s something craft brewers should always keep in mind, especially if their customers don’t seem to be as excited about their new recipes as they are.

So, in the end these two very different industries aren’t so different at all. Maybe the similarities are only obvious to someone with one foot in both worlds, but in many ways we’ve found the old adage to be very much true—business is business.

To learn more about how River SaaS Capital can help you access the capital you need to grow, visit www.riversaascapital.com/apply.

To learn more about Sibling Revelry Brewery, visit www.siblingrevelrybrewing.com.

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