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How Not To Sell Software in 2012
Super analysis by Alex. Everything he mentions is extremely true when selling software this year onwards. I meet so many entrepreneurs who have a problem with ramping up sales because they DON’T have a friction-less signing up and sales process. If you are one of them then this article is a must read.
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Software companies & outside capital
Yesterday I read a very interesting and bold article on Sara Blakely: Youngest Self-made Woman To Join the Billionaires Club. One paragraph struck me immediately…
Today Spanx is to slimming undergarments what Kleenex is to tissues: A brand that stands for the category. It nets an estimated 20 percent on revenue just south of $250 million. In recent months four Wall Street investment banks separately valued Spanx at an average $1 billion, a sum Forbes corroborated with the help of industry analysts. Blakely owns 100 percent of the private company, has zero debt, has never taken outside investment and hasn’t spent a nickel on advertising. At 41, she’s the youngest woman to join this year’s Forbes’ World’s Billionaires list without help from a husband or an inheritance. She is part of a tiny, elite club of American women worth ten figures on their own, including Oprah Winfrey and Meg Whitman.
If this company (that manufactures products) didn’t need outside capital then b2b software companies can easily grow organically without any external capital. With software companies:
- you develop the product once
- you can sell it n number of times (since it is intangible)
- you don’t need a warehouse or any overheads of a brick and mortar business
- you can host it inexpensively
- you can sell it online without having a sales team
- you can keep your team under 5 people per product (this might be a high number)
- you can use other SaaS tools to keep your costs low
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Protect your sanity. Switch off push notifications for email.
I was amused by people complaining about not using Sparrow for iPhone because it does not support push notifications. BTW, Sparrow for iPhone is a fantastic app and its been about 10 days since I have fully converted to it. A class apart from the default mail app. Apple should buy Sparrow.
Back to push notifications…
- it tells you when to check mail
- it is distracting
- it interrupts your work
- it controls you (you should control yourself)
- all in all, it is detrimental to productivity cause you keep obsessing over email than getting any work done…
I switched off push notifications around last April and I have never felt better. The reason for the change was simple - I noticed that I was highly distracted with push notifications. Whenever I would log in to my iPhone to do something I would invariably find myself in the inbox. And then, I would forget why I logged into the phone in the first place. I was become reactive, unproductive and checking mail more than 20 times a day. Phew, technology is supposed to simplify out lives. Lets not become zombies.
I believe if something is urgent you WILL get a call or a message. Stop obsessing over email.
Here is a good writeup in HackerNews, Notifications are evil , that inspired me to write this post.
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List of tools to run a SaaS company
The web is flooded with a gazillion apps that promise to make your company more agile and efficient. It’s true. Yeah, seriously. Why create something (unless you are in the business of cloning software) when someone else is providing you with the tools to help you run your business smoother. Every company in this world needs to use SaaS tools to get real.
If you are a SaaS company you better walk the talk and practice what you preach. I love using SaaS tools to automate my business.
- I can concentrate on running my business rather than worrying about installing and taking care of software that we haven’t rewritten. Imagine if Apple made every component in the iPhone. You gotta use the best of all the worlds.
- The low monthly cost of a SaaS app. The productivity gain from using all the apps is much more than what I pay for it monthly. Today, we spend less than a few hundred dollars to power up our business. Back in 2008, it was probably around $50. As your business grows you can up the usage of your SaaS apps.
Someone on Twitter reccomeneded I write a blog post on the tools to run a SaaS company. So, here it is…this is what the fantastic team at DeskAway uses…
Email
A no-brainer. I would reccomend every business to get on Google Apps. I know for a fact that most startups these days are on Google Apps. Plus, Google Docs is a great alternative for Microsoft Office. Unless you are an investment banker you can really do without Microsoft Excel.
Helpdesk/ Support
You want to have an efficient way to track incoming requests (problems, bugs, feature requests, praise) from customers. We use Zendesk to track each email and assign it a ticket #. This way anyone from the team can pick up that ticket and reply to the customer.
We also use GetSatisfaction as our open forum to get feature requests and have people vote on ideas. This way an idea that has got a lot of votes gets our attention (and possibly get included in the app if it aligns with our vision of the product).
Email Marketing
We used to use iContact (since it was built by my friends from Carolina and I have seen them grow from their tiny office on Franklin St. to this huge multi-million dollar company) but have recently moved to MailChimp because of their snappier user-interface.
Project Management
Can you guess what we use to organize, manage and track our work? ’Nuff said.
Website Monitoring
Pingdom is a good and inexpensive tool to monitor your website uptime. They even have an iPhone app and Twitter integration but we rarely use those. Our servers have internal tools that we also use. We plan on giving NewRelic a shot in the near future. I have heard it is super good.
Analytics
We have built our own analytics dashboard over the last few years. In addition, we use Google Analytics to track website visitors and MixPanel to see what features people are using the most.
We will probably give KissMetrics a shot in the near future. I wish Google Analytics would come up with event tracking so we don’t have to use so many differnet tools.
Version Control
Last year we moved to GIT (from SVN) and started using Beanstalk to host our code. Freaking fantastic software and Wildbit (the makers of Beanstalk) is one company that I admire!
Transactional Email
Another super awesome piece of software from the Wildbit team is Postmark. We have been using this service since the last few months for several parts of the DeskAway app.
Blogging
We used to host our own WordPress blog. Then moved to Posterous last year (bad move). This month I will be working on getting the DeskAway blog back on WordPress hosted site. I debated about hosting our blog vs using a SaaS service and in the end we decided to allow WordPress to manage our blog - heck, what was I even thinking!
Other services that power our business are Adobe BrowserLabs, Wufoo, Dropbox, Youtube and Slideshare.
Today, there is no excuse NOT be productive and data-driven. Every tool that we need to start, run and grow our companies is available. Our generation of startups are in a unique advantage to concentrate 100% on our core ideas and leave the monotony of non-core work to the gazillion apps out there.
All the best!
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You win some, you lose some. Common reasons for churn in a SaaS business.
You work rigorously at getting your product shipped and aquiring customers. Then, after a month, all of a sudden you start seeing cancellations. This is one of the most frustrating parts of running a SaaS business. To add to the wound you don’t know why people cancel; UNLESS you ask them.We recently did a compilation of all the reasons why customers cancel their subscription for our app DeskAway. It is heartbreaking to see them go but that’s how life is - you win some, you lose some.
(in random order)
Lack of featuresOne of the biggest drawbacks is that there is no task dependency. Our projects are complex and we are used to this.
This is one of the most common reason why people cancel. People want stuff that you don’t have. They subscribed thinking you may develop the feature but quit if they don’t see it happen. I have learnt that you can’t please everyone when running a SaaS business. I do believe in a feature-rich app (less is always less, more is great) but adding features (just to please customers) that don’t gel with the vision of your app is a strict no-no.
“I don’t know the key to success, but the key to failure is trying to please everybody.” - Bill Cosby
Lack of adoptionIt did not seem prudent to continue to spend money on something that was not being used. There was a very slow adoption rate on our side and we should have pushed more. We may revisit your product in the future.
This is common with collaborative apps - when you need a commitment to use from everyone in the team. I feel this has been the biggest challenge. Teams that use project management tools (as opposed to the ones that are satisfied with collaborating over email) have a different attitude and understanding towards using a system-driven approach to getting work done. They care about being on top of their work and having a transparent and smooth workflow.
I want a swiss-army knifeIt’s great for project management; but I also need customer management. If it was more widget/gadget based, it may have met our needs.
This somewhat ties in with the lack of features point above. People pay for the app but realize that they want CRM, Email Marketing and a gazzilion other things. There is nothing you can do here but to wish them good luck cause they are definitely not your target audience (unless if you plan to bloat your app).
Closing down the companyWe cancelled because we are moving towards closing down the company and I was very happy with your product. We used it all the time.
Absolutely nothing that you can do here. Hope that everyone using your tool starts their own venture (or join other companies) and yours is the solution they choose to use.
Using a competitor’s productWe are now using INSERT COMPETITOR that is free. It offers very little support in providing multiple project / team management, but my it fits very well into my teams ideas of what an individual task management app should do. So through diplomatic process, we’ve been using it and I’ve been supplementing it with other apps. I researched A LOT of project management apps out there and was happy with my choice to initially choose DeskAway.
Most people jump ship if they see something that is free. That is ok and we are completly fine with that. In this world you get what you pay for.
What we were working on is ‘frozen’It has nothing to do with your service, the project is frozen so currently I do not use it.
Perfectly fine. We have seen people restart their subscriptions once their projects get a go-ahead.
Budget CutsI liked your product/service. It’s just really tight right now and I had to make cuts.
We started out thinking that with such a low price-point there is no way companies will find us expensive. However, when you are talking about tiny teams of 2–5 people even $25 a month is an accountable monthly expense. Allow these teams to downgrade to a free plan and still use the app.
The app evangelist left the company“It was simply that as a group we were not using it. This was not due to the lack of the deskaway project but more changes in our operational procedures.”
There are some companies that have one designated person that acts as a project manager and drives the adoption of the app within the teams. When he is gone things come falling apart.
I am paying for trying itYes, we have had people who would pay for the app even though we have a free 30-day trial. They would discontinue if it did not fit their needs for the above reasons.
Are there other reasons why people discontinue from your service? Would love to hear your thoughts in the comments below.
