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The Business of SaaS

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Re: The Business of SaaS

#201

Post by Joeri »

gfodor wrote: post #28

patio11 refers to subscription based software as a "financialization" of it, but I'd argue it runs deeper: it turns software from a single, large "opt-in" transaction, to a small "opt-in" transaction followed by a series of "opt-out" decision points for customers, putting more of the burden on the customer to disengage vs the business to sell the customer on the latest version every couple of months. This runs into s…

As a customer of a few B2C SaaS products I would say to not try to keep users on board too hard. From my personal experience, unsubscribing from a service I am not using may only be temporary, but the surest way for a company to make it permanent is to be clingy and make it hard for me to get out. The nicest exits are the ones where I leave on a high note, like how amazon prime refunded my last month because I hadn’t been using the service that month; makes me way more likely to sign up again.

Re: The Business of SaaS

#202

Post by tinymollusk »

jcadam wrote: post #168
tinymollusk wrote: post #147

Earlier quoted context omitted.

I can help you increase your visit-to-signup conversion rate for free, if you're interested. Just soft launched my own service (www.leadnexus.co), where I will split test your signup forms to find more effective options. Your volume might make it a little tougher to optimize, but I bet I can improve on that ~0.3% conversion rate for you. (That goes for anyone reading this -- happy to see if I can help, to test out my…

Nice site :) Might want to fix this passage: > We use an emphasis on optionality, machine learning, and a dedicate to results to get you more users and leads. We don't want you to pay us for unless we improve your results.

Good catch, thank you! I've got to update the copy tomorrow, will make a pass through this as well.

Re: The Business of SaaS

#203

Post by jwr »

dankohn1 wrote: post #127
jwr wrote: post #83

Earlier quoted context omitted.

Those are very pragmatic choices. I don't think I could a) tackle the complexity and b) achieve the performance I wanted without Clojure and ClojureScript. RethinkDB is used for two reasons: 1. It's the only database that provides changefeeds that I need to implement real-time updates for users. Complete changefeeds, as in: get an initial state and then updates. 2. I wanted to easily solve replication, fault-toleranc…

As someone involved in re-licensing RethinkDB and finding a new home for it at the Linux Foundation, I'm thrilled to hear your use case. https://www.cncf.io/blog/2017/02/06/cncf-purchases-rethinkdb...

Thank you for your work! I think RethinkDB is underappreciated and undervalued, mostly because people tend to act based on hype and seasonal fads. RethinkDB brings down the cost of developing apps with real-time push updates to manageable levels. Similarly, there is no other distributed database out there that can be deployed so easily.

Re: The Business of SaaS

#204

Post by acct1771 »

pjc50 wrote: post #118
old-gregg wrote: post #102

> 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…

Selling recurring subscriptions for software requires continual updates, and lots of customers are still put off by that model. Yes, there are a few megaliths with untouchably huge products that are sold as regular software; but how many of them is there room for in this world?

As someone building a company with the model you speak of: do you think communicating to potential purchasers via website copy that others in my industry have essentially abandoned their platforms because of lack of incentive to continue updating post-purchase would perhaps soothe some of that?

Re: The Business of SaaS

#205

Post by acct1771 »

ci5er wrote: post #165
Denzel wrote: post #160

Earlier quoted context omitted.

Can you provide any links or books that'd provide guidance on speaking "their language"? Seems like a wonderful opportunity to educate. I'd love to learn more as someone that tried to raise money, albeit from a smaller sample (~50 engagements), and failed miserably.

That's a great question. Let me go through my collection and see if I can find any that might provide guidance. I found that it was like a fraternity, though. I only learned it by hanging out with them. Kind of like how doctors call bruises 'hematoma's. They all know what it means, but it wouldn't occur to us normies to call it that. If that book doesn't exist, maybe somebody should write it!

Assuming you believe you aren't able to secure commitments >$1M in publisher cash for that book, then?

Re: The Business of SaaS

#206

Post by janlukacs »

seizethecheese wrote: post #193

How do people "flatten" churn to a single number? In my experience churn is very high in the first month, then falls as time goes on. My current (consumer) startup has a churn of around 25% the first month, then dropping to almost nothing after a few months. Using a single churn number doesn't even come close to approximating real behavior.

This is a sign that there might be something wrong with your positioning/marketing/messaging. The initial high churn means your customers think they will get X but they get Y - so they abandon the product. The ones that "get it" stick around. For now i would just remove the 1st month from the stats and look at it independently and then try to tweak the perception. Talking to the people who drop out will give you a better picture (it's hard but very much worth pursuing).

ps: we sell project management at https://www.paymoapp.com - every time someone cancels or deletes an account we show them a form where we collect data.

Re: The Business of SaaS

#207

Post by ci5er »

acct1771 wrote: post #205
ci5er wrote: post #165

Earlier quoted context omitted.

That's a great question. Let me go through my collection and see if I can find any that might provide guidance. I found that it was like a fraternity, though. I only learned it by hanging out with them. Kind of like how doctors call bruises 'hematoma's. They all know what it means, but it wouldn't occur to us normies to call it that. If that book doesn't exist, maybe somebody should write it!

Assuming you believe you aren't able to secure commitments >$1M in publisher cash for that book, then?

Does that exist for tech books?

Re: The Business of SaaS

#208

Post by janlukacs »

erikrothoff wrote: post #4

Great read! The "Churn rates" section was super interesting. Our SaaS has hovered around 4-5% churn rate. Glad to see that's doing pretty OK! Interestingly enough in December we increased our prices by quite a lot (percentage wise, $2/month to $6/month). That month we saw an 8% churn rate, and January 6%, and this month looking like a bit less. It's going to be really interesting to see what happens in the future. Th…

Are you talking about monthly churn or yearly?

Re: The Business of SaaS

#209

Post by janlukacs »

hackme1234 wrote: post #26
danschumann wrote: post #16

Do software products like adobe photoshop for $20/month count as SaaS, or merely a subscription based software product?

It's a subscription based software. For something to be SaaS, the software has to be in the cloud.

I think that we're at a point where customers no longer care, it's just a technicality
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