Business Freemium in 2010s

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Presentation at Freemium Summit East 2010 on Business Freemium being the revolutionary new model for business applications this decade. Highlights differences from SaaS in the framework of Clayton Christensen\'s discruptive innovation model and provides specific suggestions for entrepreneurs.

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Business Freemium in 2010s

  1. 1. October, 25th 2010 Another Decade, Another Business Apps Revolution
  2. 2. Every 10 Years in Business Apps…. 2 Client Server (90s) SaaS (00s) Freemium (10s) “Technology is always becoming lower in cost and easier to use. It’s a continuum. Let’s ride it.” Marc Benioff November 1998 Behind the Cloud, Play #6 Page 10
  3. 3. Disruptive Business Model (Really) Clayton Christensen Disruptive Innovation  Simpler, easier, less profitable (?)  New or hard to serve markets  New business model  New financial model  New leaders 3
  4. 4. Business Apps Markets by Model 4 Client Server SaaS (20-500 EE) Freemium (<10 EE) & QuickbooksWas Hard to Serve Company Size Freemium companies are servicing new global markets from the start
  5. 5. Freemium vs SaaS Business Models 5 Marketing Churn & Satisfaction Sales Product & Pricing • Different functional and cross functional work • New operating metrics Trial Experience
  6. 6. Freemium vs SaaS Financial Model 6 Linearity Capital Requirements MetricsHeadcount Core Assets Paying Subs Brand Salespeople Active Free Users Data to Mine Paying Subs Autoconversion CAC CLV • Non-linear financial model • Investors should focus on CLV
  7. 7. Accelerating Growth and Capital  Growth Opportunities  Virality  Engagement  Conversion  Customer satisfaction  Use the data  International  New editions (groups)  Marketing and “Sales”  Marketplaces  Mobile  Venture Capital  Religion?  Market leadership 7
  8. 8. Emergence Capital = Business Apps  SaaS  salesforce.com  Successfactors  Lithium  Freemium  Yammer  yousendit  echosign 8
  9. 9. Lead The Revolution 9 SaaS • Evangelize the new model • Accelerate to lead your market • @mattholleran and Linkedin

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