SaaS Startups for Beginners

Startups and SaaS

The most easiest Startup integration for getting Funding

Vardhane Harsh

www.vardhaneharsh.com

email- [email protected]

This book is a compilation of what I’ve learned about managing SaaS Startups - particularly about how dealing with subscription metrics can mean the difference between the success and failure for your business.

Smashwords edition

© 2016 Vardhane Harsh

This book has been published under the Creative Commons Attribution 3.0 License. That means you are free to use it’s content verbatim or edited, but you must release new versions under the same license and you also have to give appropriate credit to Vardhane Harsh

Index

Chapter 1 Introduction

Chapter 2 Data Driven

Chapter 3 SaaS Metrics

Chapter 4 Terms and Conditions

Introduction

Day and Night you guys work on your innovative ideas to give them a shape of a successful Startup. Of Course the main hurdle you would be facing is funding.SaaS integration can help you a lot for getting that seed you think you deserve.Let me enlighten you on SaaS.

There’s an interesting fact behind business metrics: the more you use them, the more data-driven you become. I’m not saying you shouldn’t listen to your heart and distrust your intuitions as an entrepreneur or manager, but one thing is true – once you truly tame your numbers you’ll never want to play without them again.

Entrepreneurs have no trouble on building awesome products, many however don’t know how to take their business to the next level. Clearly one of the ways of doing that is to have the skills and the discipline necessary to collect and analyze the relevant business data.

Running a subscription business radically changes your focus to monetizing long-term customer relationships. Businesses need to recognize that pricing, order management, metrics, financials and revenue all need to be handled differently in this new business model.

If you're just looking at today's revenues, you're in for some nasty surprises. Churn, lifetime value, monthly recurring revenue (MRR), and Customer Acquisition Cost are leading indicators of later revenues and core metrics at the subscription economy.

Welcome to the subscription economy

The term subscription economy refers to the business of offering subscriptions to consumers. For some startups, their entire business relies on a subscription business model. Examples of these include Netflix, Spotify, Zipcar, and all SaaS startups such as Salesforce and HubSpot.

It’s actually not that new: the subscription business model has been around since our great-grandparents had their milk delivered to their door, but over the last two decades it has been increasingly adopted by technology and media startups. Businesses have been selling monthly subscriptions for all sorts of goods and services, offering anything from online software to food for a flat monthly fee.

Subscription is rapidly becoming the default business model for any company looking to accelerate growth, maximize cash, and increase its value. Currently, there is an increase in subscription startups as part of a larger shift from the product economy to the subscription economy. Businesses need to handle customer loyalty, pricing, and selling differently.

Why subscription business is different?

Running a subscription company means there is a continuing relationship with the customer. No longer does the business-customer relationship end with the swipe of a credit card

Once you acquire a new customer you have recurring revenue,

which means you don’t have to worry about one-off sales every month. Different from traditional sales, it gives you new challenges such as retention and churn.

Complexity

On a subscription business there are more moving parts to every transaction. You’re looking for long-term contracts and commitments. You can’t just persuade a customer to buy something, knowing that we’ll get upset or feel betrayed and leave you the next day. Complexity perpetuates and builds.

Visibility

Internally, you can see far into the future – and external readers can’t see as much as they’d like. P&L is also more indicative of fundamental structure than of quarterly performance.

Speed

Business builds slowly – and sometimes expensively – over time.

Subscription business demands patience, no fix is quick. Actions you take today will have effect months or years later.

Measurement

Subscription business brings additional stress on finance teams and financial systems to