State of SaaS - SaaSFest 2016

State of SaaS - SaaSFest 2016
The State of SaaS SaaSFest 2016 #SAASFEST16 Brought to you by your friends at@PriceIntel
Today is all about change. #SAASFEST16 Brought to you by your friends at@PriceIntel
Today is all about change, and how you’re going to evolve. #SAASFEST16 Brought to you by your friends at@PriceIntel
SaaS 1.0 #SAASFEST16 Brought to you by your friends at@PriceIntel
SaaS 1.0: Function, Connection, and Infrastructure #SAASFEST16 Brought to you by your friends at@PriceIntel
SaaS 2.0: Customer, Market, and Product #SAASFEST16 Brought to you by your friends at@PriceIntel
Who in the world are you? #SAASFEST16 Brought to you by your friends at@PriceIntel
ProﬁtWell SaaS pricing software and tech enabled services Free ﬁnancial metrics for subscription businesses Price Intelligently Happy customers big and small #SAASFEST16 Brought to you by your friends at@PriceIntel
We’ve seen inside more software companies than anyone else on the planet. #SAASFEST16 Brought to you by your friends at@PriceIntel
We live in a world where acquisition, as we know it, is dead. #SAASFEST16 Brought to you by your friends at@PriceIntel
The market is saturated, and unit economics just aren’t what they used to be… #SAASFEST16 Brought to you by your friends at@PriceIntel
Competition is now rampant. #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: How many competitors did you have in your first year of business? A: Companies started more than a year ago had far fewer competitors in their space than companies started today. N = 1432 software founders and executives Average#ofCompetitorsintheirfirst yearofbusiness 0 3 5 8 10 5 years old 3 years old 1 year old 9.7 4.8 2.6 #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: How many competitors do you have now? A: Older companies increased competition over time, likely due to attracting new entrants, as well as decreased barrier to entry N = 1432 software founders and executives CurrentAverageNumberofCompetitors 0 3 7 10 13 5 years old 3 years old 1 year old 10.25 11.7512.15 #SAASFEST16 Brought to you by your friends at@PriceIntel
The relative value of features is declining. All software is going to $0. #SAASFEST16 Brought to you by your friends at@PriceIntel
N = Varies by line, but minimum of 10,000 customer respondents per line WTPas%ofWTP4YearsAgo 0% 30% 60% 90% 120% 4 Years Ago 3 Years Ago 2 Years Ago 1 Year Ago Today Core Features Single Sign On Integrations Analytics Q: How has software willingness to pay (WTP) evolved over time? A: Software willingness to pay has declined significantly over the past few years due to increased options and higher demands. #SAASFEST16 Brought to you by your friends at@PriceIntel
CAC is steadily increasing over time. #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: How has customer acquisition cost (CAC) evolved over time? A: Customer acquisition cost has increased significantly over the years due to market saturation of marketing vying for consumer attention. BlendedCACas%ofblendedCAC4 YearsAgo -15% 0% 15% 30% 45% 60% 4 Years Ago 3 Years Ago 2 Years Ago 1 Year Ago Today B2B B2C N = 437 companies per line #SAASFEST16 Brought to you by your friends at@PriceIntel
We make matters worse by focusing on the wrong fundamentals. #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: Which pillar of your business is the most important to your growth? A: Founders and software executives overwhelmingly put their support behind acquisition based growth. N = 1432 software founders and executives %oftotalrespondents 0% 25% 50% 75% 100% More logos Making more money per customer Keeping customers around longer #SAASFEST16 Brought to you by your friends at@PriceIntel
There are clear winners and losers in this environment. #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: What was the growth focus of companies that died in the past couple of years? A: Of 90 companies that died in the past 3 years, the majority of them were focused on acquisition based growth. N = 90 companies that went out of business or were fire sold in the past 36 months %ofCompanies 0% 25% 50% 75% 100% Less than $10M ARR $10.01M to $25M ARR $25.01M+ ARR Primarily Acquisition Growth Balanced Growth #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: How does growth compare between acquisition based companies and their balanced counterparts? A: Acquisition based growth companies grow at a smaller rate than those with a balanced growth approach (growth from all three pillars of growth). N = Minimum of 512 companies per segment pulled from the middle 2/3 of companies in terms of growth rate. This, along with a dampening model was used to control for outlier spikes in growth rate. %ofCompanies 0% 14% 28% 41% 55% 2012 2013 2014 2015 Primarily Acquisition Growth Balanced Growth #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: How does growth compare between perpetual and subscription software companies? A: Subscription software company growth is outpacing that of perpetual based software companies. N = Minimum of 512 companies per segment pulled from the middle 2/3 of companies in terms of growth rate. This, along with a dampening model was used to control for outlier spikes in growth rate. %ofCompanies 0% 14% 28% 41% 55% 2012 2013 2014 2015 Perpetual Subscription #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: If we improve each area of a software business equally, what’s the relative impact on revenue? A: Monetization and retention based growth far outpaces acquisition based growth. %impactonrevenue 0% 2% 5% 7% 9% 12% 14% Acquisition Monetization Retention 3.32% N = Data from 734 software companies #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: If we improve each area of a software business equally, what’s the relative impact on revenue? A: Monetization and retention based growth far outpaces acquisition based growth. %impactonrevenue 0% 2% 5% 7% 9% 12% 14% Acquisition Monetization Retention 6.71% 3.32% N = Data from 734 software companies #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: If we improve each area of a software business equally, what’s the relative impact on revenue? A: Monetization and retention based growth far outpaces acquisition based growth. %impactonrevenue 0% 2% 5% 7% 9% 12% 14% Acquisition Monetization Retention 6.71% 12.7% 3.32% N = Data from 734 software companies #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: If we improve each area of a software business equally, what’s the relative impact on revenue? A: Monetization and retention based growth far outpaces acquisition based growth. %impactonrevenue 0% 3% 6% 9% 12% 15% 18% Acquisition Monetization Retention 9.32% 15.89% 2.35% 6.71% 12.7% 3.32% 2008 - 2012 2013 - 2016 N = Data from 734 software companies #SAASFEST16 Brought to you by your friends at@PriceIntel
The root cause is we don’t know our buyers. #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: Which single category describes your buyer personas internally? A: When asked, SaaS founders and executives indicated that their company’s buyer personas weren’t well defined or centralized. %ofrespondents 0% 20% 40% 60% 80% 100% Thought about them Central document Quantified buyer personas 6.6% 36.6% 56.8% N = 1,647 SaaS Founders and Executives #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: How many customer development conversations (non-sales) are you having per month? A: SaaS founders and executives indicated that their companies are primarily only talking to less than 10 customers in a cust dev capacity per month. %ofrespondents 0% 20% 40% 60% 80% 100% 10 or less 11 to 25 26 to 50 51+ 3.9%10.1%17.7% 68.3% N = 1,647 SaaS Founders and Executives #SAASFEST16 Brought to you by your friends at@PriceIntel
Q: How many experiments are you running per month (including marketing experiments)? A: SaaS founders and executives indicated that their companies are overwhelmingly running less than 10 experiments per month. %ofrespondents 0% 20% 40% 60% 80% 100% 0 1 to 3 4 to 10 11+ 2.7%12.1% 37.8% 47.8% N = 1,647 SaaS Founders and Executives #SAASFEST16 Brought to you by your friends at@PriceIntel
The is should be scary. #SAASFEST16 Brought to you by your friends at@PriceIntel
Point of Conversion Offer Product #1 Justify price #1 Offer Product #1 Justify price #1 Offer Product #1 Justify price #1 Drive Customer #1 Drive Customer #2 Drive Customer #3 Buyers are the central tenet of your business #SAASFEST16 Brought to you by your friends at@PriceIntel
Recognizing the problem is step 1. #SAASFEST16 Brought to you by your friends at@PriceIntel
Step 2 is learning how to solve the problem. #SAASFEST16 Brought to you by your friends at@PriceIntel
#SAASFEST16 Brought to you by your friends at@PriceIntel 7:30 AM 8:30 AM 9:00 AM 9:30 AM 10:00 AM 10:30 AM 11:00 AM 11:30 AM 12:00 PM 12:30 PM 1:00 PM Registration And Breakfast Welcome And State Of SaaS Patrick Campbell You’re Too Focused On Product/Market Fit Brian Balfour Why Half Of You Will Go Out Of Business: The Move From Cloud First To Customer First David Cancel Embracing Humility: 5 Ways You’re Probably Failing Your Customers And What You Can Do About It Tara Robertson Consciously Cultivating Raving Fans Heidi Jannenga Break Retention Throughout The Entire Funnel Rob Walling Building A SaaS Company Isn’t What It Used To Be: Your Competition Now Matters Hiten Shah How Video Is The Future Of Marketing Naike Romain Lunch 2:00 PM 2:30 PM 3:15 PM 3:45 PM 4:15 PM 4:45 PM 5:15 PM 5:45 PM 7:15 PM An Actual, Practical Conversation Around Growth Suneet Bhatt Turning Around A Company With Growth In 90 Days Drew Sanocki The Hidden Talents Of Email (Yes, Email): Creating Customer-Centric Messages Justine Jordan Modeling Freemium: Lessons Learned Along Insightly’s Journey Karl Laughton Break From Startup To IPO: Unconventional Lessons From The Pricing Trenches Brad Coffey Pivoting To A New Market: A Real-World Lesson In Pricing and Personas John Marcus III Forget Your Feelings: Here’s How To Quantify Your Buyer Personas Patrick Campbell After Party Mija Cantina & Tequila Bar Faneuil Hall Marketplace 1 S Market St Boston, MA 02109
Two ground rules. #SAASFEST16 Brought to you by your friends at@PriceIntel
Pitching. #SAASFEST16 Brought to you by your friends at@PriceIntel
Follow the golden rule. #SAASFEST16 Brought to you by your friends at@PriceIntel

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State of SaaS - SaaSFest 2016