1.
Software as a Service:
The Business Model
Kyle Cordes
St. Louis Innovation Camp 2010

2.
About Kyle Cordes
• Blah, Blah, Blah.
• You know where to find
me.

3.
SaaS Experience
• Mobile Workforce Management LLC
• Vertical Market: Utility Locating Industry
• SaaS firm I co-founded in 2004
• Sold in 2009
• Lessons from that experience, in this talk

4.
Start with an Idea
http://www.flickr.com/photos/cayusa/

5.
Fire up your IDE
(from the Eclipse web site)

6.
This is Power
http://www.flickr.com/photos/vattenfall/

7.
Software Business
Deliver More than
Software

8.
1) Delivery of the Bits
http://www.flickr.com/photos/giorgos-androulidakis/

9.
2) License to Use
http://www.flickr.com/photos/nobmouse/

10.
3) Hosting
Perhaps with tidier
racks than I have
pictured here.
http://www.flickr.com/photos/mpancha/

11.
4) Operations
http://www.flickr.com/photos/jemimus/

12.
5) Support
http://www.whatheck.com/uploaded_images/headset-hottie-759827-759993.jpg
I present this stereotype as a commentary on advertising.

13.
Model: Consulting
• Sell Labor, by the Hour or Project
• Provide the 5 pieces in whatever way a
customer asks for them

14.
Model: License Sale
• Sell #1 (Delivery) and #2 (License) up front
• Sell a service contract for support

15.
Model: SaaS
• Bundle the whole thing, #1 #2 #3 #4 #5
• Sell it per-something / per-time:
• Per user
• Per hour
• Per transaction
• Percent of transaction amount

16.
Recurring Revenues
http://www.northwestmuseum.org/

17.
Sporadic vs Recurring

18.
Customer Like SaaS
• Little Money Up Front: Less Risk
• No hosting effort, pain,
management
• Easy Scaling Up
• Easy Scaling Down
http://www.flickr.com/photos/geoff_mv/

19.
Except When They Don’t
• Less Control
• Less Leverage
• Less Customization
• No Unique Asset
http://www.flickr.com/photos/realestateclientreferrals/

20.
Customizations
• “No”
• Per-Hour: can of worms
• Expedite Fee
• Increase Per-Unit /
User / Month Charge
http://www.flickr.com/photos/benmcleod/

21.
Sounds great, how do I
get started?

22.
Starting a SaaS Business
Here is a • Pick a market
bootstrap • Have some money on
approach. hand
There are
• Write v 1.0
other ways, • Sell customers 1..n
of course. • Reach Break Even
•

23.
SaaS Business Model
1) Write Software
2) Sell it per-something
3) Profit
http://www.flickr.com/photos/bullionvault/

24.
kylecordes.com
http://www.flickr.com/photos/thetruthabout/