Explains the key drivers for a Freemium software offering with measured examples of companies that have accomplished it. Such as Dropbox, EverNote, Freshbooks, and others.
Explains the key drivers for a Freemium software offering with measured examples of companies that have accomplished it. Such as Dropbox, EverNote, Freshbooks, and others.
Saas State of the Industry Presentation At Small Business Summit 2014 by Bjoe...Bjoern Lasse Herrmann
In the 10-15 years since the birth of SaaS as an industry, it’s now been planted firmly in the mainstream of conversation, but it’s disruptive wave is still getting started.
When we look into Compass data we see that nearly half of SaaS startups have received funding, which indicates a significant amount of investment capital being channeled into the category. There’s a clear reason why. Gartner forecasts the SaaS market will grow at 20% through at least 2020, almost 3 times as fast as software overall, and there remains ample opportunity for greater global penetration over time. Salesforce represents the shining star of possibility, consistently growing at more than 30%.
At the same time, at just 17 billion dollars, the SaaS pool is still relatively small and the field is very crowded. While Compass data indicates that half of SaaS companies are profitable, the statistic also measures a push for profitability over growth, often limiting size. Of all SaaS companies in Compass, only 7% achieve even 10,000 users.
The biggest challenge is distribution. Our data shows SaaS companies rely heavily on direct sales — at nearly twice the rates of every other channel, but can afford only modest sales teams of 1 or 2. The vast majority pay nothing for marketing or advertising.
This means many salespeople out there fighting, one by one, client by client, for the same turf. These crowded market challenges are also driving a push away from SMB audiences and into more lucrative enterprise markets. But it is primarily the packaged software industry titans that dominate SaaS revenue — Intuit, Oracle, Adobe, Microsoft, Google, SAP.
One can think of this as a David versus Goliath scenario, except that the David’s are fighting each other. The Goliath’s may not be as nimble, in many cases their products are inferior, but they have the support of an entire distribution ecosystem — from resellers to channel partners to consultants and trainers — who are dependent on the horse they bet on winning.
Enterprises, then, aren’t just larger small businesses. Their needs run far deeper. Any software solution must integrate effectively with multiple legacy systems. Security is a tremendous concern. Training programs must be rolled out. A small business may make decisions for the moment, but enterprises must have confidence in the long-term viability of the vendor.
All of this goes to reinforce the fact that history tells us, sometimes painfully, that the best product does not always win. The best distribution method does.
So returning to the David side of the equation, what can SaaS businesses do to beat the Goliaths?
Learn more in the presentation and at blog.startupcompass.co
A guide to in-depth investor pitches by Elevate VenturesKelly Schwedland
I've sat through hundreds of investment presentations and listen to comments during and afterwards. We at Elevate also sat alongside Angel groups and had feedback from VC groups that have met with our companies. I'm not sure there can ever be a perfect pitch as different groups have a specific thesis. But we decided to take the learnings from those meetings and make sure that companies can articulate all of the key items that investors are looking for especially in an in-person presentation. (A little more in depth that the traditional pitch used to get investors interested in large group/ public formats)
The India SaaS Survey is all about getting the pulse of the burgeoning SaaS ecosystem in our country. A survey of this kind is indispensable in drawing an insightful analysis and in getting credible benchmarking data about how the industry is shaping out. Though nascent, the SaaS industry has a lot of potential. The data from the survey is useful not only to help entrepreneurs and investors but also showcases the prospect of the industry to technically sound aspirants looking to step into the industry.
Building the Billion Dollar SaaS Unicorn: CEO GuideKelly Schwedland
In a Venture Capital world that is obsessed with growth, recurring revenue and software as a service, after you validate that you have a solution that people are willing to pay for, there is an entire new world ahead of you in scaling that venture. For many, this involves an entirely new language and set of metrics to manage the business. For the startup that wants to make the leap to scale up and fast growth this should serve as a starting point for key insights and metrics for that journey.
This presentation is from my talk at the 2017 SaaStr Annual Conference in San Francisco. It offers an overview of a simple model to understand a SaaS business and the key levers a CEO can pull to get the most impact. The presentation covers:
Optimizing the SaaS Funnel:
- Get inside your customer’s head
- Break down the funnel into microsteps
- Identify bottlenecks
- Use funnel math to make improvements
12 key levers within the funnel:
1) Product/Market fit
2) Top of the funnel flow
3) Conversion rate
4) CAC (customer acquisition cost)
5) Number of sales people
6) PPR (productivity per rep)
7) Getting enough leads
8) Pricing
9) Customer retention rate
10) Dollar retention rate
11) Months to recover CAC
12) Recruiting, onboarding & management
A detailed look at why SaaS business are so different from traditional software companies, and why traditional ways of looking at their finances fail to understand the business. Provides an alternative set of metrics that show the right way to look at a SaaS business.
For more on the SaaS business model and Metrics, see this blog post:
www.forentrepreneurs.com/saas-metrics-2/
Saas State of the Industry Presentation At Small Business Summit 2014 by Bjoe...Bjoern Lasse Herrmann
In the 10-15 years since the birth of SaaS as an industry, it’s now been planted firmly in the mainstream of conversation, but it’s disruptive wave is still getting started.
When we look into Compass data we see that nearly half of SaaS startups have received funding, which indicates a significant amount of investment capital being channeled into the category. There’s a clear reason why. Gartner forecasts the SaaS market will grow at 20% through at least 2020, almost 3 times as fast as software overall, and there remains ample opportunity for greater global penetration over time. Salesforce represents the shining star of possibility, consistently growing at more than 30%.
At the same time, at just 17 billion dollars, the SaaS pool is still relatively small and the field is very crowded. While Compass data indicates that half of SaaS companies are profitable, the statistic also measures a push for profitability over growth, often limiting size. Of all SaaS companies in Compass, only 7% achieve even 10,000 users.
The biggest challenge is distribution. Our data shows SaaS companies rely heavily on direct sales — at nearly twice the rates of every other channel, but can afford only modest sales teams of 1 or 2. The vast majority pay nothing for marketing or advertising.
This means many salespeople out there fighting, one by one, client by client, for the same turf. These crowded market challenges are also driving a push away from SMB audiences and into more lucrative enterprise markets. But it is primarily the packaged software industry titans that dominate SaaS revenue — Intuit, Oracle, Adobe, Microsoft, Google, SAP.
One can think of this as a David versus Goliath scenario, except that the David’s are fighting each other. The Goliath’s may not be as nimble, in many cases their products are inferior, but they have the support of an entire distribution ecosystem — from resellers to channel partners to consultants and trainers — who are dependent on the horse they bet on winning.
Enterprises, then, aren’t just larger small businesses. Their needs run far deeper. Any software solution must integrate effectively with multiple legacy systems. Security is a tremendous concern. Training programs must be rolled out. A small business may make decisions for the moment, but enterprises must have confidence in the long-term viability of the vendor.
All of this goes to reinforce the fact that history tells us, sometimes painfully, that the best product does not always win. The best distribution method does.
So returning to the David side of the equation, what can SaaS businesses do to beat the Goliaths?
Learn more in the presentation and at blog.startupcompass.co
A guide to in-depth investor pitches by Elevate VenturesKelly Schwedland
I've sat through hundreds of investment presentations and listen to comments during and afterwards. We at Elevate also sat alongside Angel groups and had feedback from VC groups that have met with our companies. I'm not sure there can ever be a perfect pitch as different groups have a specific thesis. But we decided to take the learnings from those meetings and make sure that companies can articulate all of the key items that investors are looking for especially in an in-person presentation. (A little more in depth that the traditional pitch used to get investors interested in large group/ public formats)
The India SaaS Survey is all about getting the pulse of the burgeoning SaaS ecosystem in our country. A survey of this kind is indispensable in drawing an insightful analysis and in getting credible benchmarking data about how the industry is shaping out. Though nascent, the SaaS industry has a lot of potential. The data from the survey is useful not only to help entrepreneurs and investors but also showcases the prospect of the industry to technically sound aspirants looking to step into the industry.
Building the Billion Dollar SaaS Unicorn: CEO GuideKelly Schwedland
In a Venture Capital world that is obsessed with growth, recurring revenue and software as a service, after you validate that you have a solution that people are willing to pay for, there is an entire new world ahead of you in scaling that venture. For many, this involves an entirely new language and set of metrics to manage the business. For the startup that wants to make the leap to scale up and fast growth this should serve as a starting point for key insights and metrics for that journey.
This presentation is from my talk at the 2017 SaaStr Annual Conference in San Francisco. It offers an overview of a simple model to understand a SaaS business and the key levers a CEO can pull to get the most impact. The presentation covers:
Optimizing the SaaS Funnel:
- Get inside your customer’s head
- Break down the funnel into microsteps
- Identify bottlenecks
- Use funnel math to make improvements
12 key levers within the funnel:
1) Product/Market fit
2) Top of the funnel flow
3) Conversion rate
4) CAC (customer acquisition cost)
5) Number of sales people
6) PPR (productivity per rep)
7) Getting enough leads
8) Pricing
9) Customer retention rate
10) Dollar retention rate
11) Months to recover CAC
12) Recruiting, onboarding & management
A detailed look at why SaaS business are so different from traditional software companies, and why traditional ways of looking at their finances fail to understand the business. Provides an alternative set of metrics that show the right way to look at a SaaS business.
For more on the SaaS business model and Metrics, see this blog post:
www.forentrepreneurs.com/saas-metrics-2/