How To Bootstrap a SaaS Ecommerce Startup
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Presentation by Charles Brun for the CCE at the HEC Business School in Montreal. The presentation gives 5 important rules to bootstrap a SaaS startup.
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How To Bootstrap a SaaS Ecommerce Startup
- 1. Bootstrapping a SaaS ecommerce startup Presentation by Charles Brun for the CCE @_charlesbrun
- 2. @_charlesbrun Personalized paper an online catalogs.
- 5. Social Media Email Offline @_charlesbrun Now In Store enables ecommerce by driving traffic to online stores
- 6. SaaS = Software as a Service @_charlesbrun
- 7. Traditional software model Perpetual license upfront Annual maintenance fee Upgrades C @_charlesbrun
- 9. Traditional SaaS required deep pockets to stay alive • Almost all costs are incurred at the beginning. • High cost because custom-built solutions and large clients • Profits are far into the future @_charlesbrun
- 10. The consumerization of IT changed everything @_charlesbrun The propensity for users’ experiences with technology as consumers to impact their expectations regarding their technology experiences at work.
- 11. • Business Apps that are built like consumer apps • Single purpose apps (unbundling) • No customization (one size fits all) • SMB oriented A new wave of SaaS • Lower setup cost • Lower maintenance cost (single version) • Easier to bootstrap!
- 12. 5 rules to bootstrap a SaaS ecommerce Startup
- 13. • Keep costs as low as possible • Team should be able to do everything • Don’t overbuild: eliminate waste by talking to your customers • 80-20 rule: 80% of your customers use 20% of a product’s features Rule #1: Stay Lean YOU MEAN TO TELL ME THAT I NEED TO TALK TO MY CUSTOMERS? @_charlesbrun
- 14. Rule #2: Iterate Fast • Build MVP • Ship frequently and learn fast (time = $$$) • Measure your results to get to product-market fit @_charlesbrun
- 16. Rule #3: Assess value prop You need 2 million customers to build $100 Million business charging $5/month • Put a price on it as early as possible! • SaaS SMB is hard because you have a lower ARPU • Make sure ARPU is above $20 / month • Be weary if your revenue ceiling is $100 / month • You need tremendous volume to become a rockstar @_charlesbrun
- 17. Rule #4: Focus on churn • Churn Rate = The percentage of subscribers to a service that discontinue their subscription to that service in a given time period • In SaaS, churn rate needs to be at 5% or lower (in SMB world) • Churn is the single biggest determinant of a business' capital efficiency and how quickly it can grow @_charlesbrun
- 18. 5% churn rate 2.5% churn rate $76,505 MRR $139,045 MRR Comparing churn rates @_charlesbrun
- 19. Rule #5: CAC < 1/3 LTV • You can only be profitable with scale • Once you control churn and the unit economics make sense expand sales • Make sure CAC < 1/3 LTV @_charlesbrun
- 20. @_charlesbrun A startup is not a rocket-ship, it’s a hot-air balloon
- 21. Bootstrapping a SaaS ecommerce startup Thanks! @_charlesbrun Presentation by Charles Brun for the CCE