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The Business of SaaS

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Re: The Business of SaaS

#241

Post by raiyu »

bpicolo wrote: post #228
raiyu wrote: post #159

Earlier quoted context omitted.

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.

They are the exception for sure, but their platform also supports a tremendous amount of video and that's the real killer for them. This is the same problem that youtube had, video just consumes many times more bandwidth than doing a similar service in text (twitter), or images (instagram). So that's not surprising.

But one exception doesn't make a rule.

Re: The Business of SaaS

#242

Post by charizardd »

raiyu wrote: post #240
newbuser wrote: post #174

Earlier quoted context omitted.

How would you avoid blending the cost to acquire paying, non-paying, etc.?

For starters I would separate them out. Paid I would consider traditional forms of advertising and marketing such as TV, FB, Google, ads, etc. Organic or community driven advertising has it's costs as well but I would separate that out to a different section. This would include budgets like meetups, some conferences (though many I would actually lump into traditional ad spend), t-shirts, stickers, credits to customer…

Most of the public SaaS companies around today spend a significant part of their S&M expenses on sales reps, and their associated selling commissions, not advertising and marketing. There are exceptions like Atlassian however, where they have managed to make the economics work at scale without a sales rep or any implementation assistance.

Re: The Business of SaaS

#243

Post by sah2ed »

jacquesm wrote: post #234
woolvalley wrote: post #181

Earlier quoted context omitted.

For some SaaS businesses although, such as dropbox & google drive, their most of their business is storage. It would be hard to blame those kinds of services to keep on billing you even if you don't look at the data most of the time.

That's different. Storage is 'in use' when you're using it, period. But when you have a dropbox subscription and you don't use your storage then that should not be charged imo.

I think it's much more subtle.

It might be better to separate the two use cases as: "data at rest" and "data in use" like Amazon does with S3 where they charge separately for storage and transfer costs. If you do not access your data stored on S3 throughout a billing period, your invoice will only reflect those costs -- your usage costs will be stated as $0 for that month.

Re: The Business of SaaS

#244

Post by acct1771 »

HeyLaughingBoy wrote: post #238
acct1771 wrote: post #204

Earlier quoted context omitted.

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?

No, they just won't care. I was on a non-software forum last week where a dev was gathering pain-point information because he intended to produce software for that niche. The main feedback I remember was "just let me buy it. No f'ing subscriptions."

Any chance you can share what niche this was?

Re: The Business of SaaS

#245

Post by acct1771 »

ci5er wrote: post #207
acct1771 wrote: post #205

Earlier quoted context omitted.

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

Does that exist for tech books?

Unless you're a best-seller, swinging a deal like that's hard - in any genre =]

Re: The Business of SaaS

#246

Post by HeyLaughingBoy »

acct1771 wrote: post #244
HeyLaughingBoy wrote: post #238

Earlier quoted context omitted.

No, they just won't care. I was on a non-software forum last week where a dev was gathering pain-point information because he intended to produce software for that niche. The main feedback I remember was "just let me buy it. No f'ing subscriptions."

Any chance you can share what niche this was?

Machined-object Contract Manufacturing. e.g., https://www.milacron.com/services/contract-manufacturing/

Re: The Business of SaaS

#248

Post by nomel »

graeme wrote: post #57
nomel wrote: post #51

Earlier quoted context omitted.

2-3 days probably means your'e a sales company, and it will continue to be a hostile relationship. I much prefer buying from product companies, trying to show me why I need their software. It's just downright ridiculous/shady. Ridiculous since there's no way I'll be able to make an informed decision in 2-3 days, especially since there's no chance I'll dedicate 100% of my time to those 2-3 days. When I'm done looking…

Please actually read comments before replying. I sell 5-24 hour long online courses. A two week trial would let someone see everything , and would leave the user with no reason to purchase. This is why I haven't done full free trial yet. Because 2-3 days seems short. But I'm wondering if it counterintuively might be optimal, by removing friction to trying the course.

My mistake! I misread your second to last sentence.

Re: The Business of SaaS

#249

Post by intrasight »

laverick wrote: post #180
intrasight wrote: post #175

I've been plugging away at my SaaS app for many years. Have bounced around on the "low-touch" vs "high-touch" spectrum as well as on pricing. I am in agreement with most of the article. If I could do it over again, I'd focus on finding a good niche of "low-touch,high-price". Sure you say "that's obvious", but if so, why are there so many people trying SaaS companies that are not? If you are considering Stripe, you ar…

I'd expect $10+k/quarter to require high touch sales & account management in most cases.

Hasn't been my experience. Sales cycle can be long, but doesn't demand a lot of cycles.

Re: The Business of SaaS

#250

Post by devocracy »

jcadam wrote: post #227
ciguy wrote: post #194

Earlier quoted context omitted.

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.

Are you more in-line with Confluence, as a place to build a database of knowledge in the organization?

This is purely my opinion, so please take it with a large grain of salt. I'm not a fan of videos and won't last long enough on a site to sit through them unless I've arrived there from a referral (there is too much software out there that does the same thing, so time is at a premium). I'm more of a fan of descriptive workflow/image showing what the software does and keeps the value prop simple.

As an example, this marketing site impressed me greatly and I actually took the time to read through the different features as it was easy to follow and I didn't feel flustered by each of the feature explanations: https://www.contactually.com/how-it-works

My only gripe, there is no cohesive single blurb explaining how all these features fit together in a complete package. Their tagline at the top is weak, but visually they've nailed it.

Also, having to sign up for a demo kind of sucks and slows down the process of me getting to try out your product to evaluate if it meets my needs. I'd love for our industry to move towards a "here is a sandbox, have fun for a few minutes" model which would be completely painless for folks evaluating the tool. After a couple of minutes it could nudge you to sign up for a full trial account.

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