twilio - monetizing saas - jeff lawson cloudstock december 2010
DESCRIPTION
Jeff's talk on monetizing your SaaS application, extended remix version for Cloudstock!TRANSCRIPT
![Page 2: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/2.jpg)
value created - some discount
= your price
simple, universal pricing formula
![Page 3: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/3.jpg)
value created
mea
surin
g
![Page 4: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/4.jpg)
Businesses: mostly rationalMake Money
orSave Money
BOTTOM LINE
Consumer
OR
Business
![Page 5: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/5.jpg)
ConsumersAreNotRational
![Page 6: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/6.jpg)
Businessesare PrettyRationalEvery decision driven two factors...
![Page 7: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/7.jpg)
IncreaseRevenue
ReduceCosts
ORMeasurable Value
![Page 8: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/8.jpg)
Whiten your teeth with Colgate Dental Proadvertisement
Xlearn more
No measurable value?Stick ads on it!
![Page 9: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/9.jpg)
measurable value
business customersNeat!
have a framework for
so
![Page 10: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/10.jpg)
be proudand put a price on
your junkbits & pieces
value generation
![Page 11: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/11.jpg)
Start
Does my service generate value?
Back to the drawing board How Much Value?
YesNo
![Page 12: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/12.jpg)
Cost Based Pricing
![Page 13: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/13.jpg)
Margin =ProfitPrice
Profit = Price - Cost
Price = Cost / (1-m )
![Page 14: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/14.jpg)
Price = Cost / (1-m )
Price = $10 / (1-0.5)
Target Margin: 50% (0.5)Costs: $10
= $20
![Page 15: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/15.jpg)
What if your unit costs are basically zero?
Web Server Web Server
MySQL
$150 / mo
![Page 16: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/16.jpg)
Value Based Pricing
![Page 17: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/17.jpg)
Are they......saving money
by replacing a more expensive solution? #
...saving money on e"ciency because of you? #
...generating more revenue because of you?
HOW MUCH?
HOW MUCH?
HOW MUCH?
![Page 18: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/18.jpg)
Are they......saving money
by replacing a more expensive solution? #
...saving money on e"ciency because of you? #
...generating more revenue because of you?
HOW MUCH?
HOW MUCH?
HOW MUCH?
- discount = YOUR PRICE
![Page 19: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/19.jpg)
Competitive Pricing
Red Herring, see previous slide.
![Page 20: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/20.jpg)
$$$
Cost Based Value Based
Competition
sanity check:
do they converge?
![Page 21: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/21.jpg)
IsIt?
![Page 22: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/22.jpg)
Customer Feedback Loops
![Page 23: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/23.jpg)
![Page 24: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/24.jpg)
Split Testing
![Page 25: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/25.jpg)
![Page 26: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/26.jpg)
![Page 27: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/27.jpg)
$1,000 / Mo + 0.001 / Msg
![Page 28: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/28.jpg)
$1,000 / Mo + 0.001 / Msg$0 / Mo + 0.10 / Msg
![Page 29: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/29.jpg)
$1,000 / Mo + 0.001 / Msg$0 / Mo + 0.10 / Msg
![Page 30: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/30.jpg)
Talk to potential customers, learn the value prop during private beta
(which can be free)
![Page 31: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/31.jpg)
![Page 32: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/32.jpg)
![Page 33: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/33.jpg)
![Page 34: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/34.jpg)
Start conservative, drop prices if needed
Raise prices if merited, but
don’t fool people :)
![Page 35: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/35.jpg)
IsIt?
![Page 36: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/36.jpg)
If you’re unsure, just make more pricing
options.
![Page 37: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/37.jpg)
![Page 38: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/38.jpg)
![Page 39: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/39.jpg)
Maybe I need mustard instead
![Page 40: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/40.jpg)
Audience Segmentation
![Page 41: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/41.jpg)
Quantities
![Page 42: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/42.jpg)
Quantities
![Page 43: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/43.jpg)
Features
![Page 44: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/44.jpg)
Features
![Page 45: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/45.jpg)
Support
![Page 46: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/46.jpg)
Support
![Page 47: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/47.jpg)
Industry Segmentation
![Page 48: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/48.jpg)
Industry Segmentation
![Page 49: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/49.jpg)
O!er less attractive options
(that clearly, only suckers would buy)
![Page 50: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/50.jpg)
Price Anchoring
![Page 51: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/51.jpg)
Price AnchoringCHEAP!
CHEAP!
![Page 52: Twilio - Monetizing SaaS - Jeff Lawson Cloudstock December 2010](https://reader034.vdocuments.mx/reader034/viewer/2022051609/547bed485906b590798b4687/html5/thumbnails/52.jpg)
Figure out value generated
Test with Potential Customers
Free Private Beta
Go Public with a Price Tag
Adjust as necessary, ideally down
Use price levers & anchoring to Segment