151–160 of 252 posts
Slack kind of found the holy Grail of SaaS sales where they get a foot in the door like a low-touch SaaS product where employees just start using it. But then they convert this into a high-touch business with low churn after the employees convince their boss to start paying. They basically have outsourced enterprise sales to their customers.
> [SAAS..] spend less than 5~10% of their marginal revenue per customer on delivering
This is really, really not realistic. Just billing through Stripe will cost you 2-3% commission.
I was involved with a financial SaaS and I couldn't believe how many sub-services they needed just to keep the product alive
Yikes, that was the best article on SaaS that I've read all year. So much great information. A few things jumped out to me as off: > Conversion rates of low-touch SaaS trials with credit card not required: > 2%+: extremely good Really? 2% seems awful. If a company signs up for your trial, they must have a problem they're trying to solve. If you don't solve 98% of peoples' problems, it seems like you have a problem ge…
Also think about how many of those signups are for "products" that never get delivered. Some side project that is thinking about charging and the dev never bothers implementing, some startup is thinking of switching from per-client contracts to a self-service model and either doesn't make the switch or dies/gets acquired before they manage it. None of those situations are Stripe not meeting someone's needs, and a single developer can create an arbitrary number of those trials throughout a year.
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1. App Server (all my Clojure services... and the one transient service written in golang) 2. Postgres (Master) 3. Postgres (Standby) 4. Elasticsearch server (yea, only one right now, you know, few users) 5. One linode running RabbitMQ 6. The linode running NGINX that sits in front of the app server and does all of the reverse proxying Also, 7. The linode running the marketing site (wordpress). I know, I know, I'm a…
Don't need the standby server, just use automated backups. You also don't need the linode running nginx, with so few users put it on one server. Finally wordpress should be $5/month or less. Right there you could drop at least $15 / month.
Kind of not even worth thinking about when you're a developer and should be internally billing yourself for $100/hour+.
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1. App Server (all my Clojure services... and the one transient service written in golang) 2. Postgres (Master) 3. Postgres (Standby) 4. Elasticsearch server (yea, only one right now, you know, few users) 5. One linode running RabbitMQ 6. The linode running NGINX that sits in front of the app server and does all of the reverse proxying Also, 7. The linode running the marketing site (wordpress). I know, I know, I'm a…
You could containerize all of these services and run them on the same machine.
If you're going to dockerize, at least spread things over a two node swarm so you find these issues early.
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Isn't this more a problem of billing than of SaaS in general? But yes, I recently read that games make more money in general than even movies, books and music and most of them don't have subscriptions but one time payments.
It has nothing to do with billing. I was just pointing out that the second 'S' in 'SaaS' means "service" and once you get into services your margins often go down, that's why I (and other folks I know who've done SaaS at scale) disagree with Patrick on "economics of SaaS are impossibly attractive" . I am willing to bet that Splunk's margins are way better than Loggly's. Moreover, if you're smart & lucky and you manag…
Mr. Kisses sounds even more ominous!
Yikes, that was the best article on SaaS that I've read all year. So much great information. A few things jumped out to me as off: > Conversion rates of low-touch SaaS trials with credit card not required: > 2%+: extremely good Really? 2% seems awful. If a company signs up for your trial, they must have a problem they're trying to solve. If you don't solve 98% of peoples' problems, it seems like you have a problem ge…
Well, I've had my little SaaS up and running for about 6 weeks. - The landing page gets about 30-70 hits per day (excepting the occasional spike) -- how many of those are bots and crawlers, I wonder? - I've had a grand total of FIVE (5) trial sign ups. - No buyers yet - My linode bill is currently about ~$120/month. - Still within the free tier on S3 and Mailgun. - You know, when I'm the only one using the app, I don…
Maybe "Stop employee brain drain"? That would at least be relatable to people who have heard the phrase brain drain before.
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> There are a lot of SaaS markets where the customer needs high touch but can only pay low touch prices. That's not a fun place to live, though it can be a good place to start and then move upmarket. This just seems like a really bad place to start. Do you have an example where it worked?
Hmmm. Maybe mind body? QuickBooks? Any saas product that is a crucial part of a business will necessarily be high touch. The reason why it might be a good place to start is because you can find enthusiastic customers that are ill served.
ONE example that I think applies and is Interesting: domain name registration. The entire business model at GoDaddy around domains is the hope that they would be registered and left unused. At such a low price point ($1/month billed annually) the cost of cancelling was often not worth it. But if even a fraction of those domain registers decided to need a website or email...Jenny bar the door. The support required to walk clients through DNS updates and MX records would flip the business on its head. GD has invested a ton to making these processes more seamless but it wasn't long ago that if you didn't know how to use FTP or cPanel (as example) you had to get help from an actual person.
> Businesses and investors love SaaS because the economics > of SaaS are impossibly attractive relative to selling > software licenses. I would be careful and not over-generalize. The statement above is opposite of what many late stage investors think of SaaS companies. Their gross margins tend to be horrible. Some are basically in the business of being an intermediary mailbox for transferring money from their custom…
Personally I think companies still continue to overspend in sales in marketing and with SaaS they use a blended average of CAC which includes their organically acquired customers so that the blended CAC looks extremely low. But the reality is you are paying 10x more for "paid" customers than organic and adding an only incremental amount of growth (5-10%). I think that's where the real profitability of SaaS companies lies.
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At the moment I'm leaving myself open to any good oportuity that comes along. I have a feeling B2B would be easier however this is only based on my assumptions. I'll not be in the position of getting anywhere near those figures you shoot for and considering this will be my first, I'm keeping my feet firmly on the ground. I've just spent all my career to date (15 years +) building products for other people that I feel…
I hear you. I had a pretty amazing job at Motorola (remember them? :-) ) when I moved back to the US from Japan. They wanted me to run around the world (on their credit card) to figure out what business they needed to be next. I found one. They didn't get it. I ended up quitting: "Fine - I will do it myself". I remember the first meetings I had a 6.30am or 7.00am at breakfast places with VCs... They would listen and…