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How Basic SaaS Economics Can Propel Your Business

03

Mar, 15

justin-moore-founder-and-ceo-axcient_cropped

How Basic SaaS Economics Can Propel Your Business

By Justin Moore, CEO and Founder, Axcient
Justin Moore, Founder and CEO, Axcient

Justin Moore, Founder and CEO, Axcient

Billion-dollar SaaS companies have a thing or two to teach, whether you are a cloud vendor, technology reseller or solution provider. The first generation SaaS companies (Salesforce, WebEx, NetSuite, etc.) paved the way for the next generation of SaaS companies and showed what works and what doesn’t.  Learning from the successes and failures of the titans that pioneered SaaS, it’s not surprising that second-generation cloud companies have been going public and achieving billion-dollar valuations much faster than their predecessors.

I know this first hand. At Axcient, we’ve had our share of trials and errors and we’ve learned along the way how to rethink our approach, whether it’s to the channel, our product, or our customers. Only by focusing on the key metrics that matter were we able to regain traction and leapfrog the competition.

Successful SaaS companies pay attention to the following key metrics (which we will discuss live):

  • Customer success: measured in terms of churn and lifetime value, customer success is a foundational element you have to measure and understand to scale your business.
  • Lead generation: customer acquisition cost, qualified sales opportunities, and velocity are key indicators of a healthy business.
  • Talent: the right people on your team will make it easier for you to learn and grow quickly.

And there’s one more critical ingredient: focus on the long-term. In SaaS this is particularly important because revenue is generated monthly. In lieu of a big payment up front, customers pay a small amount every month, quarter or sometimes year, which means the average public SaaS vendor doesn’t break-even on a sale for 12 to 18 months.

In my upcoming presentation at Ingram Cloud Summit, Cloud Economics 101, I will dive into the metrics above and help you understand the key lessons you can apply to your own business, whether it’s a managed services model or a reseller model. We will explore how the same economics that propelled companies like Salesforce, Workday, NetSuite and others can help you grow your own business.

About the Author
Justin Moore is an entrepreneur and recognized authority on cloud computing, SMB market strategy and entrepreneurship. As the CEO and Founder of Axcient, Justin leads the transformation of the data backup and business continuity industry to eliminate data loss and application downtime for businesses. Justin will be speaking at Cloud Summit 2015 on the topic of “Cloud Economics 101.”

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