What the data reveals about how to make SaaS secret sauce
June 15, 2013
Grazed from PandoDaily. Author: Ben Sesser.
Life would be much easier if a great product was the only requirement for a great business. Of course, talk to any vineyard owner or long-time New York Times shareholder and they can attest that this is not the case. Software as a service companies are no different. As challenging as it is to build great software someone is willing to buy, other pieces must fall into place for success.
In SaaS, three critical pieces that must fall in place to create long-term value are price, customer acquisition cost, and churn. You need a sustainable mix of what customers will pay for your product, how much it costs to acquire customers, and how long you can keep them…
That these factors are important and should be tended to is not headline news for an experienced enterprise entrepreneur. However, two things complicate this task: a) These factors do not operate in isolation, rather, they pull and drag on one another, and b) it’s almost impossible to know these inputs for your business with a high degree of certainty in the early going…
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