Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010

10,036
-1

Published on

Jeff's talk on monetizing your SaaS application, extended remix version for Cloudstock!

Published in: Technology
5 Comments
33 Likes
Statistics
Notes
No Downloads
Views
Total Views
10,036
On Slideshare
0
From Embeds
0
Number of Embeds
8
Actions
Shares
0
Downloads
421
Comments
5
Likes
33
Embeds 0
No embeds

No notes for slide

Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010

  1. you’ve decided toSo,make a living with SaaS Je Lawson je @twilio.com @je el
  2. simple, universal pricing formula value created- some discount = your price
  3. measuring value created
  4. Consumer OR Business
  5. ConsumersAreNotRational
  6. BusinessesarePrettyRationalEvery decision driventwo factors...
  7. Reduce CostsMeasurable Value ORIncreaseRevenue
  8. No measurable value? Stick ad s on it! XWhiten your teeth with Colgate Dental Pro learn more advertisement
  9. sobusiness customers Neat! have a framework for measurable value
  10. be proudand put a price on your junk bits & pieces value generation
  11. Start No Does my service Yes generate value?Back to the drawing How Much Value? board
  12. Cost Based Pricing
  13. ProfitMargin = PriceProfit = Price - CostPrice = Cost / (1-m )
  14. Target Margin: 50% (0.5) Costs: $10 Price = $10 / (1-0.5) = $20Price = Cost / (1-m )
  15. What if your unit costs are basically zero? Web Server Web Server MySQL $150 / mo
  16. Value Based Pricing
  17. Are they... ...saving moneyby replacing a more expensive solution? HOW MUCH? ...saving money on e ciency because of you? HOW MUCH? ...generating more revenue because of you? HOW MUCH?
  18. Are they... ...saving money IC Eby replacing a more expensive solution? HOW MUCH? PR U R = O ...saving money Y of you? t nHOW MUCH? on e ciency because u i sc o- d ...generating more revenue because of you? HOW MUCH?
  19. Competitive PricingRed Herring, see previous slide.
  20. Cost Based Value Based sanity $$$ check: do they Competition converge?
  21. IsIt?
  22. Customer Feedback Loops
  23. Split Testing
  24. $1,000 / Mo + 0.001 / Msg
  25. $1,000 Mo + + 0.001 / Msg $0 / / Mo 0.10 / Msg
  26. $1,000 Mo + + 0.001 / Msg $0 / / Mo 0.10 / Msg
  27. Talk to potentialcustomers,learn the value propduring private beta(which can be free)
  28. Raise prices if merited, but don’t fool people :)Start conservative,drop prices if needed
  29. IsIt?
  30. If you’re unsure, just make more pricing options.
  31. Maybe I needmustard instead
  32. Audience Segmentation
  33. Quantities
  34. Quantities
  35. Features
  36. Features
  37. Support
  38. Support
  39. Industry Segmentation
  40. Industry Segmentation
  41. O er less attractive options (that clearly, only suckers would buy)
  42. Price Anchoring
  43. CHEAP! Price AnchoringCHEAP!
  44. Figure out value generated Test with Potential Customers Free Private Beta Go Public with a Price Tag Adjust as necessary, ideally downUse price levers & anchoring to Segment
  45. Je Lawsonje @twilio.com @je el

×