post

The Cat is Out of the Bag (Again): The Not-So-Hidden Business Model in SaaS

Posted on June 1, 2009 ·

Forget software: it’s all about (your) data.

Hyper-growing Financial Management system  provider and Quicken / MS Money challenger Mint recently raised eyebrows announcing their plan to sell anonymized aggregate customer data.  Some reviewers were screaming, we saw bombastic titles like Personal Finance Startup Mint Wants To Sell Your Money Trail – but in reality the news wasn’t earth shattering. You don’t really believe your spending patterns are not dissected – aggregated – analyzed in every possible way and sold by your bank and credit card company, do you? 

So nothing new – but a good opportunity to discuss the role of user data in SaaS business models – and there is more than outright sale of data.

Read more …

Filed Under: Business, SaaS · Tagged: , , , , , , , , ,
post

Amazon’s PaaS with a Twist

Posted on May 27, 2009 ·

If you think this is yet-another post on Platform as a Service, you’re wrong.   I’ll be talking about much simpler things here:

  • PaaS – Pasta as a Service
  • TaaS – Tea as a Service
  • GaaS – Groceries as a Service

No kidding.  Well, maybe a bit, but this is about real business – also the focus of a recent article by Fortune: Amazon’s next revolution, discussing the early days as Earth’s Biggest Bookstore, then moving on to other businesses, and now Kindle-izing our reading habits while revolutionizing the publishing industry.

So let’s talk about retail, from the consumers’ point of view, examining how Amazon changed our shopping habits and is on the way to becoming the default vendor for just about everything we buy.

Read on …

Filed Under: Business · Tagged: , , , , , , , , , ,
post

The $199 Palm Pre that’s Really $299

Posted on May 19, 2009 ·

…And I am not even talking about TCO, calculating life-time cost with subscription.  No, just plain simply purchase price, with a dirty industry trick: rebates.

The long expected Palm Pre will be available from Spring on Jun 6th, at $199 with qualifying data plan, and after a $100 rebate.   And therein lies the rub – it will cost $299 for many.

Fellow Enterprise Irregular Winnie Mirchandani has a long-going series on business processes that badly need “angioplasty“.  Processing rebates is certainly a most convoluted process – unfortunately often by design.  Why?  It’s simple, 40% of rebates never get redeemed, says Business Week:

The industry’s open secret is that fully 40% of all rebates never get redeemed because consumers fail to apply for them or their applications are rejected, estimates Peter S. Kastner, a director of consulting firm Vericours Inc. That translates into more than $2 billion of extra revenue for retailers and their suppliers each year. What rebates do is get consumers to focus on the discounted price of a product, then buy it at full price. "The game is obviously that anything less than 100% redemption is free money," says Paula Rosenblum, director of retail research at consulting firm Aberdeen Group Inc.

What this old article fails to point out is that it’s often not the consumer’s fault who forget to send in rebates.  Sure, we’re sometimes lazy to do the paperwork for a $5 discount, but you would dot it for $100, wouldn’t you?  Yet it’s often the ugliness of the rebate process with built-in traps (did you cut out the UPC code from the right corner on the box, did you circle the right amount..etc), or just the ignorance of the rebate processing company (yes, that is a thriving business  in itself) that robs you of your rebate check.  And don’t for a minute think it’s only from Tiger Direct and other retailers who thrive on the rebate-scam.  Brand-name trusted vendors aren’t any better.  Since we’re discussing the Palm here, here’s my rebate experience from Handspring (the former Pal-spinoff that later reunited with the parent) from a few years ago:

Sent in not only paperwork, but an actual, working older Palm III as trade-in unit (This condition was so ridiculous, later Handspring changed it to providing serial no’s of the trade-ins.)  The $100 rebate never arrived, not even after numerous phone-calls and emails.  They demanded copies of everything, which I sent – but how do you copy the trade-in unit?  My loss:  $100 rebate, $50 trade-in value for the old Palm (that’s what it sold on eBay at the time), postage and about a full day of my time fighting the bureaucracy.

Did that stop my from buying Handspring / Palm products?  Not when they were the only game in time, so I bought two more Treo’s.  But guess what: Palms are not the only choice if you want a smart phone, and obviously I am still not a Palm-fan…

Back to the angioplasty, one way to streamline rebate processing is to make it an all-online process, removing the intentional hurdles.  I can’t see why in the 21st century this is such a big deal. Costco sets a positive example, with simple online rebate entry, prompt payment, and online audit available for years.

But the real angioplasty would be to kill the the whole process.  Forget rebates, it’s time for true transparency: call it what it is, $299 or $199, if you want to promote your product, provide a temporary discount, but forget rebates, which are just a Big Fat Lie.

(Cross-posted from CloudAve. To stay abreast of news, analysis and just plain opinion on Cloud Computing, SaaS, Business grab the CloudAve Feed here.)

 

Related articles by Zemanta

Filed Under: Customer Service, Misc · Tagged: , , , , , , , , , , , , ,
post

Startups, Present @ Launch: Silicon Valley 2009. Few Days to Deadline.

Posted on May 4, 2009 ·

Startup Entrepreneurs who did not make it to the recent  Under the Radar event, here’s your second chance: join us at Launch: Silicon Valley 2009, co-presented by SVASE, Garage Technology Ventures and Microsoft.

In fact it will be more than a second chance: while the UtR event focused specifically on Cloud Computing, Launch 2009 is designed to uncover and showcase products and services from the most exciting of the newest startups in information technology, mobility, security, digital media next generation internet, life sciences and clean energy. The inaugural Launch event was in 2006, combined with Guy Kawasaki’s Art of the Start conference.

Are these events worth attending? It’s your call … all I can say is since 2006 presenting startups received a combined $80+ million in venture funding.

So if you are building the Next Great Business in the areas mentioned above, are (almost) ready for launch, meaning that by June 9th, 2009 you will have a product or service available, but have not been out in the marketplace for more than a few months, then by all means send an Executive Summary of no more than 2 pages to Launchsv@svase.org. Submission deadline: May 8th, 2009 – yes, just a few days left. (Garage Technology offers a useful Writing a Compelling Executive Summary guide.)

Last year over 300 companies from all around the country and even overseas applied, so clearly the presentation spots are in high demand. Based on the submissions up to 30 companies will be invited to present at the Launch: Silicon Valley 2009 event on June 9th at the Microsoft Campus in Mountain View, California. Presentations slots are 10 minutes, running in 6 sessions of 5 companies each. Each presenting team will also be assigned a cocktail table in the Networking Room where they can meet with interested audience members one-on-one to answer questions and explore possibilities.

The evening before, on June 8th the presenting companies, registered audience and selected bloggers and media will be invited to a Pre-Event Party at a prestigious location in Palo Alto, providing a further opportunity for networking with Silicon Valley’s movers and shakers.

So if you are a qualifying startup Founder, remember the deadline: May 8th.  For additional details and later for updates check http://www.launchsiliconvalley.org/ and you may also want to follow the event (actually the President of SVASE) on Twitter.

Guy Kawasaki called Launch: Silicon Valley “the poor man’s Demo”. SVASE proudly wears that badge, since this is an event with a price tag that won’t keep any startups away. It’s your turn now: send in the Executive Summary and launch with SVASE in June.

(Cross-posted from CloudAve. To stay abreast of news, analysis and just plain opinion on Cloud Computing, SaaS, Business grab the CloudAve Feed here.)

Filed Under: Bay Area, Marketing / PR, Social Networking, Startups · Tagged: , , , , , , , , , , , , , , , , , , ,
post

SVASE VC Breakfast with Hummer Winblad in San Francisco – Focus on Software as a Service

Posted on April 28, 2009 ·

We’re in a deep recession, VC investments dried up, startups are shutting down and the World is coming to an end…  or not?

I’m just back from a very lively Under the Radar conference where 32 startups presented and the audience was full of VCs looking for the next investment opportunity.  Those who missed the UtR deadline, or just did not fit this event’s profile (Cloud Computing) will soon get another change at Launch Silicon Valley, co-presented by SVASE, Garage Technology Ventures and Microsoft.

In between these conferences there re are several smaller, more intimate events, like the SVASE VC Breakfast Club series.  After a long time I’ll be back moderating the next breakfast meeting this Thursday, April 30st  in San Francisco.  As usual, this will be an informal round-table where up to 10 entrepreneurs get to deliver a pitch, then answer questions and get critiqued by a VC Partner. We’ve had VC’s from Draper Fisher,  Kleiner Perkins, Mayfield, Mohr Davidow, Emergence Capital …etc.  This Thursday’s VC is Lars Leckie, representing the first exclusively software-focused venture firm, Hummer Winblad Venture Partners.

These breakfast meetings are a valuable opportunity for Entrepreneurs, some of whom would likely have a hard time getting through the door to VC Partners. Since I’ve been through quite a few of these sessions, both as Entrepreneur and Moderator, let me share a few thoughts:

  • It’s a pressure-free environment, with no PowerPoint presentations, live demos, Business Plans…etc, just casual conversation; but it does not mean you should come unprepared!
  • Follow a structure, don’t just roam about what you would like to do, or even worse, spend all your time describing a problem, without addressing what your solution is.
  • Don’t forget “small things” like the Team, Product, Market..etc.
  • It would not hurt to mention how much you are looking for, and how you would use the funds…
  • Write down and practice your pitch, and prepare to deliver a compelling story in 2-3 minutes. You will have about 8-10 minutes, the first half of which is your pitch,  but believe me, whatever your practice time was, when you are on the spot, you will likely take twice as long to deliver your story. The second half of your time-slot is Q&A with the VC.
  • Bring an Executive Summary; some VC’s like it, others don’t.
  • Last, but not least, please be on time! I am not kidding… some of you know why I even have to bring this up. Arriving an hour late to a one-and-a-half-hour meeting is NOT acceptable, but we’ve had too many such incidents, so here’s a new rule:  if you’re late by more than 20 minutes, you will not be allowed to join the session.

Here’s the event info page, and remember to register – the previous event with Hummer Winblad sold out in advance.

Filed Under: Bay Area, Startups · Tagged: , , , , , , , , , ,
post

Atlassian $timulus Package Inching Towards Finish Line

Posted on April 24, 2009 ·

Quick update on the Atlassian $timulus drive I previously reported about:  at 2pm on the last day of the promotion, they are at $93K – the $100K donation is realistic… but they may need a little push.

So I decided to put my money (well, a little) where my mouth is and have just purchased 10 5-person  licences of Confluence, the market leading enterprise wiki.  Not that I can use them all – so I will find a way to give them away in the future.

If you want to help them donate $100K to Room to Read, you can do your part easily … and just as a reminder, you’re buying a $1,200 licence for $5.   What a bargain to close out the week. 🙂

Update: With 3 hours to go Atlassian is just $2.5K short of reaching the target.  See coverage map at Mike’s blog.

Update #2: Ah, the drama of the last minutes:

$640 short of $100k… with 20 minutes to go, my maths says we’re just going to miss! 🙂
$590 short. Need $30/minute now… at least we did $35 last minute! 🙂
Just tipped $99,510… I wonder if we should just leave it up for 10 minutes extra, or does that seem dodgy?
Well… computer says it’s…over $100k!!
Woo! Woo!!! Dancin’ around the room. Atlassian Stimulus Package 400% of $25k goal. What a week. Simply staggering. THANK YOU EVERYBODY!
Atlassian Stimulus Package (preliminary) final total – $100,350 for Room To Read in 120 hours from 7284 _awesome_ startups and teams!!

Filed Under: Collaboration, Marketing / PR, Startups · Tagged: , , , , , , , , , ,
post

Atlassian $timulus Package Supports Charity. Two Days Left To Get Your (Almost) Free Confluence or Jira Licence.

Posted on April 23, 2009 ·

This must be do-good-week.  Amongst all the talk about Ashton Kutcher’s challenge to CNN, how the follow-on Oprah show pushed Twitter to never-seen height, little attention was paid to the small fact that this initiative generated over $1 Million donations to Malaria No More.  Ashton started with his $100,000 check and was soon joined by Demi Moore, Ted Turner, Oprah and I don’t even know who else .. I lost count at $1M.   Hype aside, this is a major contribution to a good cause.

This week we’re also seeing a for-profit company, Atlassian drive to raise $100,000K for the benefit of Room to Read, an organization that builds schools, libraries in rural communities in Nepal, Cambodia, Vietnam, Bangladesh, Laos, Zambia …etc.  Doing good is in Atlassian’s DNA, likely coming from the co-Founder, who is a major Kiva Supporter.  His company had set up the Atlassian Foundation which donates basically 1% of everything:

  • 1% of company and employee time to Foundation projects
  • 1% of company equity to the Foundation
  • 1% of our products to non-profit groups

But wait!  This isn’t a post about charity only.  There’s a Deal in it for you!

The Atlassian $timulus package is a 5-day drive, during which you can get either Confluence, the excellent Enterprise Wiki, or Jira, the issue tracker – Atlassian’s first product that’s still an IT favourite  for $5 for 5 users.

Now I hear you ask: is that $5 per person per month?  That would by typical (actually low) pricing for most SaaS offerings.   NO!  It is:

  • A five-user licence (ie. $1 per person)
  • For a full year
  • For the full-featured entrerprise strenght products

My only regret is that it does not involve the hosted versions of these products.   But if it’s the downloadable, installable version, what’s this per year licence?  Most enterprise software is sold with a perpetual licence: you can use it forever.  But then the vendor pushes the (almost) mandatory maintenance fees to the tune of 20-25%, and major new releases every 4-5 years.

Atlassian does not play such games, their philosophy is transparency and simplicity. Software should be easy to learn, easy to use and easy to buy.  Hence the annual licence whish involves support. (Update: I misunderstood this part: the licence is a perpetual one, the additioal annual fees are for maintenance / support, and the are optional.)  And for comparison, the minimum annual licence for both Confluence and Jira is $1,200.

So Atlassian is essentially giving away $1,200 licences for free – but it’s actually a lot more.  This isn’t just your introductory price.  Customers who purchase during the $timulus week (only two days left) are locked in to their $1 per user price for the lifetime of the product, and those fees will be donated as well.   That goes way beyond giving up revenue – they can’t possibly provide support for $1 a year, so Atlassian is reaching into their pockets big time for years to come.

The initiative appears to be more wildly popular than they expected. The initial goal was to raise $25,000 for Room to Read, and they exceeded that target on the first day – hence the new objective of $100,000K.

Early this morning they were at 66% of the increased target:

Now, before someone thinks I am doing a paid commercial here: I am not receiving any form of compensation or incentive from Atlassian.  I simply like what they are doing.  A lot.

But I’m not naive.  This isn’t just charity.  It’s damned good marketing – in more ways then one.  First, as you may suspect is Brand recognition.

The second is perhaps less obvious: Atlassian’s initial product, Jira took several years to take off – the second, Confluence had much faster growth.  Part of their secret sauce has always been relying on a very loyal, very satisfied customer base, mostly IT-types who buy additional products from their trusted vendor.

So yes, Atlassian is seeding their market with thousands of free customers this week.  Which is fine, I’ve said before: you don’t have to be purely altruistic to do good.

Update: The Atlassian $timulus Package is now listed in Consumerist’s Morning Deals, along with Blu-Ray Discs and Casio Cameras 🙂

(Cross-posted from CloudAve. To stay abreast of news, analysis and just plain opinion on Cloud Computing, SaaS, Business grab the CloudAve Feed here.)

Filed Under: Collaboration, Enterprise Software, Marketing / PR, Startups · Tagged: , , , , , , , , , , , , , , , , ,
post

Two Days Left for Under the Radar Online Registration – Get Your Discount Here

Posted on April 21, 2009 ·

We’re at the final countdown stage for the Under the Radar: Clarity in the Cloud conference – it’s coming up this Friday, April 24th, 8:00AM – 6:00PM @ the Microsoft Campus, in Mountain View, CA.  

If it’s named a conference, it has to have a keynote or a panel, and that’s what you get at 9am: the Buyers’ Wish-list Panel:

  • What are technology buyers are hunting for?
  • What cloud technologies have they adopted?
  • How you can get on their wish list?

But that’s where all similarity to a conference ends.  The rest of UtR is actually a giant Startup Launchpad – the American Idol of startups.  Except UtR won’t take months to declare the winners.  The finalists present in a rapid-fire format  – they are grouped in categories of 4 each, in two parallel tracks  and each presenter has about 15 minutes. They get grilled by the judges and audience, then all attendees get to vote  ( I wonder if they upgraded from paper ballots to SMS yet..) and at the end of the conference the winners of each category are announced.

UtR has a good track record of the participants getting funded – about half of them got funded or acquired in the past. (See more stats here.)  If we can believe InformationWeek’s Top 50 Startup list, this year’s roster will also be worth paying attention to:

           
          

          

                      

 

Then there are the Graduate Circle Companies – fomer UtR presenters, who are no longer truly “under the radar”, having proven themselves:

       

       

 

So if you want to be part of 2009 startup history, network with entrepreneurs, VC’s, media, corporate decisionmakers, join us on Friday.   CloudAve is a media partner for this event, several of us (Krish, Graeme, Raju and myself) will be there, and most importantly, we have a deal for you.  Use our VIP registration site for $100 off the non-member price.

If you can’t commit full day, drop by just for the afternoon (it’s Friday).  For the first time in the history of these events, you can now get an after-lunch pass for $275.

See you there!

(Note to PR types: thanks for all your interest, but I am not making advance appointments.  UtR is too vibrant, dynamic, there are too many interesting people to bump into to make such commitments – better go with the flow.  But it’s a small place, and several of us from CloudAve will be there, so I’m sure we’ll meet your startup clients anyway.)

(Cross-posted from CloudAve. To stay abreast of news, analysis and just plain opinion on Cloud Computing, SaaS, Business grab the CloudAve Feed here.)

Filed Under: Marketing / PR, SaaS, Social Networking, Startups · Tagged: , , , , , , , , , , , , , ,
post

Creative Retailer: Price Follows DOW

Posted on March 29, 2009 ·

This will be an unusual post in more than one way.

First, it’s about a decidedly low-tech retail business, that does not really fit this blog’s profile.

Second, it’s about a business I don’t personally care for: designer t-shirts. Tees are in the conference schwag category for me, I barely ever spend on them, and $110 (even $55 after discount) is an outrageous price, if you ask me.

Third, I really don’t like tattoo’s – and this line is all about reprinting tattoos. Yuck.  (But that’s just me.)

Fourth, I am reprinting an email sent to me in it’s entirety.  Rest assured, I’m doing it with the sender’s permission. I’m lazy, don’t wan to write a post and this makes a perfect story.  Ok, joke apart, keep on reading, there is something about creative business models here.  Here’s the letter (emphasis mine):

Hello! My name is Jeremy Parker and I am a 23 year old entrepreneur.  I am the CEO of Tees and Tats, a high-end, limited edition t-shirt line designed by world renown tattoo artist Marco Serio. We launched the line last July, with much success, selling to many high-end boutiques all over the US and Canada. 

But starting last November, are sales starting to slow dramatically as with the rest of the economy.  A large percentage of the stores we were selling to closed, and the stores that have survived are not placing re-orders. I did not want to concede to failure- because if the entrepreneurial spirit dies, America will be in a much worse place.  I knew the store issue would still be a problem, because high-end retailers are not buying goods anymore, but I came up with an idea that I thought might help our online sales.

I first lowered our prices from $110 to $55.  This helped a little bit, but people where still not buying like we saw earlier.  So I came up with a concept that at the time seemed bizarre, but now has proven to be a savior for us.

Now when a customer buys a shirt on our website (www.teesandtats.com), they are told the price of the DOW.  For every 100 points that the DOW drops within two months after the time of purchase they receive $5 dollars off of their purchase.  For example if a customer buys a shirt for $55 dollars and the DOW is 8200 and two months later the DOW is 8000 – the customer gets a check in the mail for $10 dollars.  The reason why people aren’t  buying high-end fashion- is that they are nervous about affording food, rent and other necessary living expenses.  Obviously very understandable.  So by assuring them that if the economy deteriorates even more they would get some money back – it made it very enticing for many customers.  Our sales have been up significantly since we started this.

One important additional element to the Tees and Tats philosophy is our desire to give back. For every T-shirt sold in the initial collection, we are going donate a percentage of proceeds to the non-profit ArtWorks Foundation. Based in Englewood, N.J., ArtWorks provides children and young adults suffering from chronic and life-threatening illnesses, and their siblings, access to creative and performing arts programming which encourages the use of the creative process as a vehicle for healing, communication, self-expression, and personal development. (I actually chose this charity to give to because of your piece on them a few years back.)

I just want to thank you for listening to my story, and I want to say that as things are looking bad and seems to be getting even worse – It is going to be the American people who are going to fix this problem.

Best Wishes,
Jeremy Parker

Wow.  Talk about creative business models.smile_wink  The discount is quite deep, 100 points on the DOW is nothing percentage-wise, yet it earns a 10% discount on your tee-price.  The company maximized the “DOW-insurance” program at 700 points, which would equate $35.  Is this a funny way of declaring the true bottom price of $20? 

There are a lot of open questions I have not verified around whether customers actually received refund checks, how market rallies may interfere with the calculation ( is there a specific “date of record” or duration  the DOW has to stay low), etc.

Still, I wanted to share this story as an example of thinking outside the box: a virtue a lot of startups (and established businesses) need nowadays to survive in the face of recession.  I don’t know if Jeremy will be running Tees and Tats a few years for now – but I am quite sure he’ll be running something.  He’s an Entrepreneur.

Filed Under: Startups · Tagged: , , , , , , , ,
post

Startups: Present at Under the Radar

Posted on March 18, 2009 ·

Under the Radar is Silicon Valley’s most established startup debut platform: a conference series organized by Dealmaker Media (for those with a longer memory, they used to be IBDNetwork) , covering business applications, social media, entertainment, mobility..etc.

The 11th Under the Radar conference in Mountain View, CA on April 24, 2009 will focus on Cloud Computing and Business Applications and as such it’s an obvious fit for CloudAve – media partners for the event.

While a conference in name, it’s actually a giant Startup Launchpad – the American Idol of startups.  Typically 32 finalists are selected, who will present in a rapid-fire format  – they are grouped in categories of 4 each, in two parallel tracks  and each presenter has about 15 minutes. They get grilled by the judges and audience, and at the end of the conference the winners of each category are announced. 

But why bother in the middle of the worst recession most of us have seen?  After all, no startups get funded now – you may think.   Well, if you think VC investment all dried up, just look at these two UtR companies picking up $27M in funding.   In fact Dealmaker Media claims that in the past 3 years alone, presenting companies have gone on to raise over $1.36 Billion. Some additional stats on Under the Radar “graduates”:

49% have gone on to raise funding or be acquired
14% have been acquired by companies such as Google, eBay, Microsoft, Yahoo and Cisco
$14 Million average has been raised by presenting companies

I guess the Dealmaker name is justified, after all smile_regular.  Other than the presentations, these events are also an excellent networking opportunity amongst the 400 or so attendees, so let’s look at the previous years’ attendance statistics by provided by Dealmaker Media:

http://sheet.zoho.com

It certainly looks like the right crowd to mingle with for investment-hungry startups.  Currently about half the slots are filled by these finalists:

Ctera, Eucalyptus, Heroku, New Relic, Sauce Labs, Symplified, Tap In Systems, Twillio, uTest, Virsto Software, Zephyr, Zetta, Zimory, Zuora.

Obviously that means there is still room for more.  So if your startups fits one of these categories: 

Cloud Infrastructure | Platforms | Virtualization | Saas | Mashups | Collaboration | Communication | Business Apps | Development Tools (Utilities, OS, etc…) | Mobile Office | Semantics | Commerce | Social software/ networks | Sync (online/offline)

and meets the general criteria:

  • Unique value proposition
  • Ability to monetize product/business
  • Large market opportunity
  • Must still be considered "under the radar" – launched in 2009
  • Company must be an actual startup – not a new product from a large company

then what are you waiting for?   Apply now to present at Under the Radar.  Non-presenting attendees can register here.

We will talk about UtR more over @ CloudAve – it will no doubt be an exciting competition.

(Cross-posted from CloudAve.  To stay abreast of news, analysis and just plain opinion on Cloud Computing, SaaS, Business grab the CloudAve Feed here.)

Filed Under: SaaS, Social Networking, Startups · Tagged: , , , , , , , , , , , , , ,
« Previous Page
Next Page »