Ten Laws of Building a SaaS Company
Software as a Service (SaaS) market leader and service provider Salesforce.com recently hosted a presentation by Bessemer Venture Partners, which has funded many of my favorite SaaS enterprises, including LinkedIn, Postini, Keynote, Eloqua, Skype, Force.com, and PTC.
Since this presentation is locked up in a hard-to-search format, I’m republishing its insights for your enjoyment here, along with links to watch it or download a PDF version.
- Know your key metrics: Committed Monthly Recurring Revenue, Churn, and Cash flow – “Bookings” is for suckers.
- Measure Long Term Value (CLTV – CAC).
- Tune before you scale.
- Separate “hunters” and “farmers”.
- Traditional IT channels don’t work in SaaS.
- Your sales prospects are online; online marketing is core.
- Stay local – know when to go global.
- One version of code, in just one instance.
- The most important part of Software-as-a-Service isn’t “Software” it’s “Service”!
- Bring funding. Enough to fund 4+ years of runway. Conserve cashflow.
Bonus Law: You can ignore one of these, but not more than two. Great companies innovate, but they also pick their battles.
The future of digital experiences will be built by strategists who grasp the full array of emerging business, social, and technical models. Specialties in user experience, branding, application design, and data science are laying the foundation for richer user experiences and business models breakthrough products and revenue based marketing.
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