peter flynn
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Silver Sponsors
SaaSNet Prophet 2009
By Peter Flynn
Cofounder and MD of White Wall Web Entrepreneur (various businesses) Author of http://saaspert.com [email protected] @pete_flynn
About MeAbout Me
Services for businesses An opinionated (researched) view Strongly prefer models that don’t rely solely on Ad revenue Evangelist for SaaS
About My BiasAbout My Bias
Software as a ServiceSoftware as a Service
Source: salesforce.com
Why am I talking about this?Why am I talking about this?
Clients: Why is SaaS better?Clients: Why is SaaS better?
Minimizes the cost of complexityMinimizes the cost of complexity
On Premises SaaS License Hardware Network Consultants Maintenance Dedicated staff Upgrades Many points of failure
No onsite servers (software/hardware) Try before you buy Fast & easy to implement Painless upgrades Lower TCO Predictable Faster issue resolution
Single versus Multi-tenancySingle versus Multi-tenancy
On Premises SaaS
Upfront Investment & Time to DeliveryUpfront Investment & Time to Delivery
Budget AllocationBudget Allocation
On Premises SaaS
Capital Expenditure (CAPEX) or “large expenditure” budget
Operating Expenditure (OPEX) or “smaller/recurring expenditure” budget
Release FrequencyRelease Frequency
On Premises SaaS
Infrequent (annual?) releases
Frequent releases
Level of Lock InLevel of Lock In
Clients: Enables a Mobile WorkforceClients: Enables a Mobile Workforce
2007 - 20% of workers in leading South African companies were mobile enabled
Thanks to Suzanne Du Toit from Nashua WC for supplying me with this research
Mobile WorkersMobile Workers
2015 • 15-million mobile Internet users in
South Africa.• Unique cellular users in South
Africa: 42-million
Thanks to Suzanne Du Toit from Nashua WC for supplying me with this research
Mobile WorkersMobile Workers
Investors: “Convince me”Investors: “Convince me”
Great Sales PitchGreat Sales Pitch
Favorable SaaS Environment Favorable SaaS Environment
Bandwidth proliferation
Favorable SaaS Environment Favorable SaaS Environment
Internet as a platform
Conventions widely understood Security trusted
Favorable SaaS Environment Favorable SaaS Environment
Tech advances
Cloud computing H(ardware)aaS P(latform)aaS Virtualization
Favorable SaaS Environment Favorable SaaS Environment
Downturn
Drive to save costs SaaS shares have been hurt less
Service Cash Generation Service Cash Generation
Technology Adoption LifecycleTechnology Adoption Lifecycle
Success StoriesSuccess Stories
Founded: 1999 Type: Public Current Size: 3,300 employees Revenue: $ 1.077 billion 2008 Commitment: 55,440 customers http://www.nyse.com/about/listed/crm.html
Success StoriesSuccess Stories
Founded: 1999 Type: Private Current Size: 12 employees Revenue: $ 8 million 2008? Profits: $ 6 million in 2008? http://blog.jedchristiansen.com/2008/02/25/37signals-is-one-hell-of-a-profitable-business/
Success StoriesSuccess Stories
Founded: 2004 Type: Private Current Size: 120 employees Funding: $ 104 million Revenue: $ 9.5 million 2008? Bookings: 200,000 active (1 million)? http://www.businessinsider.com/ning-blowing-the-doors-off-2009-4
Success StoriesSuccess Stories
Founded: 2007 Type: Private Current Size: 48 employees Funding: $ 25 million Revenue: N/A Users: nearly 2 million
Think About…Think About…
Investors: What to focus onInvestors: What to focus on
CMRR – committed monthly recurring revenue CAC – customer acquisition cost CC – customer churn CLTV – customer lifetime value CG – cash generation
Source: www.bvp.com
5 C’s of Successful SaaS5 C’s of Successful SaaS
“Folks love freebies!”
““Freemium” Revenue ModelsFreemium” Revenue Models
Time Limited SalesForce.com; 37Signals
Feature Limited WordPress.com
Seat Limited Intuit Quickbooks
Customer Type Limited Microsoft BizSpark
Source: http://www.longtail.com/the_long_tail/2008/11/finding-a-freem.html
““Freemium” Revenue ModelsFreemium” Revenue Models
Do you even need to know how you are going to monetize your product when you set out?
Freemium with NervesFreemium with Nerves
Investors: What does a good SaaS Investors: What does a good SaaS business look like?business look like?
SaaS = a volumes businessSaaS = a volumes business
Freemium conversions: 2%-10% of your signups will
eventually pay Average is 4%
You need lots of signups…
Source: http://dondodge.typepad.com/the_next_big_thing/2007/05/freemium_free_t.html
Compelling Need MetCompelling Need Met
Save money. Make money.
Affordability & Value for MoneyAffordability & Value for Money
“Save or make me more money than I am paying you.
Prove it.”
Self EVERYTHING!Self EVERYTHING!
Self marketing Automated sign up and payment Self provisioning Self training Self supporting Self administering (invoicing etc.) Self terminating
Users who don’t need supportUsers who don’t need support
Target regular web users If not, be aware of exponentially more support and false alarms
Cost this in!
Already a well serviced need?Already a well serviced need?
CRM ERP SaaS for agencies (web, design, ad)
Why Now? Why South Africa?Why Now? Why South Africa? For Development
Skills English Time-zone Culture
For Sales Bandwidth Cost Sensitivity Culture
NetProphecy | NetProverbsNetProphecy | NetProverbs
All software will ultimately be web-based
NetProphecy | NetProverbsNetProphecy | NetProverbs
SaaS in Africa has to include the mobile web
NetProphecy | NetProverbsNetProphecy | NetProverbs
Remember cultural nuances when internationalizing
NetProphecy | NetProverbsNetProphecy | NetProverbs
Leverage the programmable web
NetProphecy | NetProverbsNetProphecy | NetProverbs
Have one version of the code and data structure.
Say “no” to on-premise deployments
Say “no” to customer specific customizations – unless through an API
NetProphecy | NetProverbsNetProphecy | NetProverbs
Having a good service is just a health factor – commercialization is the real challenge.
NetProphecy | NetProverbsNetProphecy | NetProverbs
Sell directly for a long time before using channels. Have a dedicated, incentivized sales staff.
NetProphecy | NetProverbsNetProphecy | NetProverbs
Your clients are online. Use online advertising and marketing channels.
NetProphecy | NetProverbsNetProphecy | NetProverbs
Succeed in South Africa first. We are a microcosm of the world.
NetProphecy | NetProverbsNetProphecy | NetProverbs
Have enough capital for the long haul. Be thrifty.
NetProphecy | NetProverbsNetProphecy | NetProverbs
Get a working product out as early as possible. Get users. Get user feedback.
NetProphecy | NetProverbsNetProphecy | NetProverbs
Think bigger. Think all English geographies. Then think Mandarin.
Thanks.
Questions?
http://saaspert.com
@pete_flynn