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The Business of SaaS

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Re: The Business of SaaS

#221

Post by lustig »

jcadam wrote: post #218
lustig wrote: post #216

Earlier quoted context omitted.

How are you marketing the product?

So far: - Get listed in any/every saas (esp b2b) directory I can find (haven't done producthunt yet, though). - Send out cold emails (not a lot so far). I'd start making cold phone calls if I wasn't sitting at a day job during business hours every weekday. I could try postcards..? - Post to online formus - kind of like I'm doing here :) I'm really trying to avoid resorting to PPC ads, but it might be time to do that.…

Thanks! I think 30-70 visits per day without paying for them is quite a lot after six weeks. I'm in a similar situation, working a day job while trying to get something off the ground. Right now I'm just experimenting with ideas and trying to learn as much as possible.

I think paid ads is a pretty good approach to validate the product and copy, even if it's not a viable strategy in the long run.

Making it free for academic use makes sense in more than that sense. If you're lucky you might get a .edu backlink from it, which is valuable for seo.

Re: The Business of SaaS

#223

Post by janlukacs »

PerfectElement wrote: post #45
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…

> The jury is not in yet, but it feels that the voluntary churn is a lot less for the customers paying more, compared to the lower price point. I noticed the same. Our $29.90 plan churn is 3x higher than our more expensive plans.

Since they pay more, they value the service more, so they tend to stick around more :)

Re: The Business of SaaS

#224

Post by arethuza »

jcadam wrote: post #219
arethuza wrote: post #214

Earlier quoted context omitted.

I find your pricing page a bit confusing (could well be me though) - I'm used to SaaS pricing being per-user while you are advertising 'packages' that actually look quite high but aren't really when you calculate the per-user price. e.g. Maybe replace $29.99 for 10 users with $2.99 per user (with a minimum sign up of 10 users)?

Hmm... you might be right there. I thought packages would be simpler (and I know basecamp charges a flat $99 - I'd be afraid of large enterprises coming along and placing more than $99 worth of infrastructure costs on me). I know Jira, for example, has a low rate package for the first 10 users (basically like a paid trial), and then the pricing switches to per-user and it ramps up quickly.

Maybe A/B test it or something - I guess I take a very simplistic approach where I see the numbers on the page, assume they are per user and the run away before reading the small print.

Good luck with the service!

Re: The Business of SaaS

#225

Post by jcadam »

arethuza wrote: post #224
jcadam wrote: post #219

Earlier quoted context omitted.

Hmm... you might be right there. I thought packages would be simpler (and I know basecamp charges a flat $99 - I'd be afraid of large enterprises coming along and placing more than $99 worth of infrastructure costs on me). I know Jira, for example, has a low rate package for the first 10 users (basically like a paid trial), and then the pricing switches to per-user and it ramps up quickly.

Maybe A/B test it or something - I guess I take a very simplistic approach where I see the numbers on the page, assume they are per user and the run away before reading the small print. Good luck with the service!

> assume they are per user and the run away before reading the small print.

LOL, that could be a problem. I could at least draw attention to the fact that these are packages and NOT per user pricing in a more obvious way.

Re: The Business of SaaS

#226

Post by antaviana »

acct1771 wrote: post #204
pjc50 wrote: post #118

Earlier quoted context omitted.

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?

We also use this model (software subscription). One thing that is very important is that never, under no circumstance be tempted to sell perpetual licenses even if there is demand for them. If you do subscriptions you should do only subscriptions.

Re: The Business of SaaS

#227

Post by jcadam »

ciguy wrote: post #194
jcadam wrote: post #112

Earlier quoted context omitted.

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…

A quick glance at your site, and I left with the impression that you're a more corporate version of Trello. Right now Trello serves our needs perfectly for free, so what's the value add in signing up?

Gah, I get that. It serves a different purpose and I wouldn't think it's really in competition with Trello.

Perhaps a screencast/animation showing the product in action could demonstrate its not-a-Trello-clone-ness better than still screenshots.

Re: The Business of SaaS

#228

Post by bpicolo »

raiyu wrote: post #159
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…

True which is why one of the more mature (timeline) SaaS companies, Dropbox, decided to in-house their infrastructure to bring costs down. While this was a massive undertaking that took many years, they were able to achieve it and are reporting various levels of profitability (free cash flow). Also if you dig in further to most SaaS companies P&L you'll see that infrastructure by and large isn't the biggest driver of…

The amount of cash Snapchat is throwing at GCloud/AWS according to their recent IPO filings is just insane.

Re: The Business of SaaS

#229

Post by jakobegger »

jcadam wrote: post #112
a13n wrote: post #74

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…

I’m currently looking for a team wiki solution (team of 3), but I wasn’t sold by your landing page.

Here are some things that went through my head:

- I don’t like the graphic design

- evaluating if this is good will take us more than a month

- I’m worried about lock-in. If, after a few months I discover this isn’t for us, do I need to keep paying not to lose my data?

Re: The Business of SaaS

#230

Post by tryitnow »

raiyu wrote: post #159
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…

True which is why one of the more mature (timeline) SaaS companies, Dropbox, decided to in-house their infrastructure to bring costs down. While this was a massive undertaking that took many years, they were able to achieve it and are reporting various levels of profitability (free cash flow). Also if you dig in further to most SaaS companies P&L you'll see that infrastructure by and large isn't the biggest driver of…

I've worked in finance for several SaaS companies and you're 100% right. Infrastructure is never the biggest cost, it's sales and marketing and most of that spend is a mystery in terms of attribution, so blended CAC is not terribly useful.
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