The Ultimate Sales Hiring Guide For B2B Startup Founders! The Price Is Right: For Early-Stage SaaS Companies, It Needs To Be. Steven Sinofsky is a board partner at Andreessen Horowitz, an adviser at Box Inc. and an executive in residence at Harvard Business School.
Follow him @stevesi. Nothing is more critical to a software-as-a-service (SaaS) business than pricing strategy. Pricing is the moment of truth for a new product … and doubly so when it is a company’s first product. But far more often than not, I’ve observed new startups leaving “money on the table” when it comes to pricing enterprise products. I’ve seen founders say their product saves hundreds of thousands of dollars — yet their product is priced as if it’s only saving thousands of dollars. SaaS Economics - Part 1: The SaaS Cash Flow Trough. This post provides SaaS entrepreneurs with an Excel spreadsheet model and graphs that show the cash flow trough that happens to SaaS, or other subscription/recurring revenue businesses that use a sales organization.
These kinds of SaaS businesses face a cash flow problem in the early days, because they have to invest up front in sales and marketing expenses to acquire customers, and only get payments from those customers over a delayed period of time. I refer to this phenomenon as the the SaaS Cash Flow Trough. The model also compares the cash flows of businesses that charge monthly to those that are able to charge their customers for a year’s payment in advance. The greatest value from this post will come from downloading the model and inputting your own variables. The Excel Spreadsheet and associated PowerPoint file can be downloaded by clicking here. The Trend that is Changing Sales - Steve W. Martin. By Steve W.
Martin | 1:00 PM November 4, 2013 Over the past several decades the structure of sales organizations has remained largely the same. They have been primarily based on outside field salespeople who make face-to-face sales calls with prospective customers and current clients. In turn, the field salespeople have been supported by inside sales representatives who helped them complete their daily tasks. Today, the traditional sales organization structure is undergoing a significant change. The key finding: Over the past two years, 46% percent of study participants reported a shift from a field sales model to an inside sales model, while 21% reported a shift from inside sales to a field sales model.
Www.khoslaventures.com/wp-content/uploads/2012/02/Sales_Learning_Cycle.pdf. Media/saas-sales-models.pdf. Peter Levine. It may sound a bit ungrateful, especially coming from someone who invests in these things, but many early SaaS companies in many ways have been successful in spite of themselves.
SaaS customers have had their pick of great software products, all available from the cloud, and without the long, tortured installation efforts of previous generations of software. On the back of these frictionless software deals, SaaS companies have been growing like mad, and often without any formal sales effort. But if they haven’t already, these up-and-to-the-right companies are about to hit a wall. The reason is that early deployments and usage do not necessarily translate into sustainable revenue growth. In order for SaaS businesses to really scale and reach their full potential as industry leaders, they need a real and robust sales effort. It won’t be easy. Strategies for Maximizing SaaS RevenueCloud Strategies - Making SaaS Businesses Work. The primary financial goal of SaaS companies is Profitable Growth.
That requires retaining existing customers and adding new sources of their SaaS revenue while keeping costs down. The focus of revenue generation is often placed on new customer acquisition, but to maximize revenue, the focus should be much broader. Selling Face to Face Is Almost Obsolete. Traditionally, business-to-business selling involves face-to-face conversations.
However, the road warrior is becoming increasingly rare in the business world, according to a study by Dr. James Oldroyd, the world's top researcher in the mathematics of selling. His research recently revealed that corporate hiring for "outside" sales positions had leveled off at a measly 0.5 percent annual growth. By contrast, corporate hiring for "inside" sales positions was growing 15 times faster! Even salespeople who DO meet with customers face to face are doing so much less frequently than in the past. The shift away from face-to-face selling is driving many top companies to hire and cultivate people who can become subject-matter experts and communicate with customers with a combination of email, phone, texting, social media, and Web conferencing. The SaaS Manifesto: Rethinking the Business of Enterprise Computing. It doesn’t happen often, every 10 to 15 years or so, but we are in the throes of the reordering of the $4 trillion corporate IT market.
And depending on which side of that transformation you sit, this is either the best time to be an enterprise technology company (see: renaissance in enterprise computing), or reason to start looking for a new line of work. I certainly sit among the group that sees this as a huge opportunity, and it’s far from finished. If the first phase was to build replacement technologies for every part of the IT stack, the next phase—and the next golden opportunity—is to re-imagine the business side of the equation and change how buyers and vendors come together. Strategies for Maximizing SaaS RevenueCloud Strategies - Making SaaS Businesses Work.
Startups: 5 Ways to Know if Your Sales Model Will Scale. You’ve launched your product and are now getting early customer traction.
You might even be seeking capital to ramp up the sales team or invest heavily in customer acquisition. But how do you know it’s the right time to scale? By their nature, entrepreneurs move quickly and there’s always a temptation to hire an army of salespeople or pour money into acquisition at the first sign of revenue. But stepping on the gas before nailing your business model can burn through cash and potentially lead to failure. Here are five ways that successful startups know when it’s the right time to invest in sales and acquisition: 1. 2. In fact, the most successful startups have an LTV that is significantly higher than CAC.