With a hat tip to Matt, check out this excellent article giving some lessons learnt and thoughts from the authors experience running SaaS businesses. It is in answer to Byron’s Top 10 Laws for Being “SaaS-y”. To summarise, the thoughts/tips are;

  • Make the revenue – if it means offering 12 months for the price of 10 in order to get the lock in, then do it
  • Customer service is everything. In a SaaS business, churn is a killer. The way to minimise that churn is to ensure that the customer service you give is exemplary
  • Analyse the churn – why do customers leave? Is it because they’ve outgrown your offering, or because you didn’t provide what you promised? Don’t change just because a customer asks for it, but be mighty sure you’re delivering what you promise
  • Use viral – SaaS apps need numbers, the best (and cheapest) way to get numbers for web apps is to market virally
  • Ensure adoption – given that users can opt out at any time, the sales process isn’t finished once customers sign up – part of the sales process needs to involve ensuring that the customer is really adopting the app – track usage to check this
  • Stay local – if the vision is global growth, then ensure that sales and support is localised in other markets. Stuff “under the hood” can reside anywhere, but let customers feel like they’re dealing with a local player
  • Track customer retention – know why a customer adopts your product and ensure that you know why they leave it if and when they do
  • Think about customisation – it’s tempting to customise your product for one individual customer but SaaS is all about single instances supporting multi tenants. There needs to be a very sound reason to customise your code base out of it’s existing instance

Great advice for SaaS vendors and developers.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • I disagree with the idea that customization is ill advised, although I suppose it depends on which application specifically you are referring to. The PHASE 2 (www.phase2int.com) model is heavily reliant on our ability to customize. Otherwise, there is little value for the SaaS provider.
    This entire argument is different for ISV’s though.

    – Ken

  • >Make the revenue – if it means offering 12 months for the price of 10 in order to get the lock in, then do it

    Depending on the nature of the, er, “lock-in” (I prefer inertia to overcome churn), I’d say the faster you wish to grow the more you need to discount the initial period.

    For example, I think Xero should offer a 50% discount for the first year if the year is paid-for up-front. Instead, they’re offering a measley three or so weeks. Oh well – I guess they figure that they have plenty of time and it’s slowly slowly catchee monkey.

  • John Younger |

    Ken / Ben

    I think I have a solution to the “think about customisation” issue – a technical solution that meets both sides.

    Basically, in my software, the user can heavily customise their own Web pages ( and create new ones ) on the fly, using software defining data stored in SQL Server. There is no absolutely no source code alteration, no recompilation of libraries, nothing at all. I would argue therefore that the solution they are using ( my native Web objects and pages ) are indeed “standard” and identical for all customers / users – one set of code only. The Web pages just pick up and interpret individual customer requirements, and build the necessary objects on the Web page for that customer at run time. Follow ?

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