sahil parikh’s work+life stream

insights on life, technology & SaaS while nurturing a web business 
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CEO interview: an insider's look at SaaS vs. on-premise software

The first key metric that’s important to a company like Carbonite is “cost of acquisition.” Since the average customer only pays about $50 per year, we must contain costs associated with acquiring new customers. Even small changes in this metric can dramatically change the company’s profitability.

“Retention,” or how many customers renew their subscription from one year to the next, is the other key metric. Managing retention requires a sophisticated stream of communications with the customer to ensure he or she is happy throughout the lifecycle.

Two of the most important metrics in a SaaS company. You keep cost of acquisition low (sell online = self-service) and your customers/users happy.

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Self-service & SaaS

Running a SaaS business that is 100% self-service has the following benefits:

eliminate meetings = huge time-saver

sucking up to people to buy your service, taking them out for drinks just because you want them to buy your service and then making false promises about features etc. to close the deal - this happens so often that is amazes me!

Having an automated, self-service channel for sales and consumption of software is like bliss. We are able to concentrate on what we do best i.e. build a usable and relevant work tracking app for small business and nothing more.

Go Play!

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My article in - Management Systems Asia, The Magazine for Managers (ms-asia.org)

Project management has entered a new era in the last few years. It is less about planning and organizing and more about collaborating and communicating. At the heart of this is using sophisticated online tools that will give disparate teams the power to organize, manage, and track their projects from anywhere. Project management tools will behave just like your social network where you communicate, plan events, and collaborate with friends and family through your Web browser. Your project team members are now just a click away!

This is an article on project management and DeskAway I wrote for a magazine in Philippines.

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Filed under  //   author   deskaway   featured   project management   saas  

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Common SaaS Myths

Pluggd.in is a blog about startups, entrepreneurship and tech in the Indian sector. I recently contributed a guest post on common SaaS myths and ways to overcome them.
Using online software to increase productivity and grow your business is a no brainer. I can’t imagine why any small business would not readily adopt SaaS. What’s holding them back (besides poor bandwidth penetration in some areas) when they can pay a monthly subscription, not have to worry about installation, upgrades and have access to the same tools that their competitors have? This is close to having ’software utopia’ for the small business! Lets go back in time…. - People might not have been prepared to put their money with other people’s money when banking was established. Banking and online banking is mainstream now. - People were probably afraid to get on an aircraft which weighed a few tones and promised to soar like a bird. Today, air travel is a given. Back to the present. Currently, we are witnessing one of the biggest shifts in enterprise software (software used for business) and as everything else, it comes with it’s own set of myths, mindsets and confusion. Here are a few I have experienced over the last few years from people who are still not ready to adopt online software for their business.

"My data is more secure with me than putting it on someone else’s server"

Your data is more secure at your vendor’s data center than your own internal network. Security is more than just about taking daily backups, maintaining uptime and setting up a firewall. It’s about password policies, encryption, intrusion detection, offsite backups, secure transmission, software updates, patching etc. If hosting or maintaining servers is not your core business then you are better off renting out software from a reputed vendor who understands all these things. This will ensure peace of mind in the long run. Read More.

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True SaaS Applications

A brialliant article on recognizing true SaaS applications.

1. Multitenancy

2. Self-service

3. Community

4. Maintenance & Enhancements

5. Talk to Customers

I will add one more point:

6. Does the company Live, breathe, act and sell like a web company?

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Interop 2009 Mumbai Presentation

Just gave a presentation on top 10 SaaS myths at the Interop event at the Bombay Exhibition Center in Mumbai yesterday. I was on the Panel with Abhinav Jawadekar, Founder, Sound Paradigm Software Engineering Services and Nilesh Patkar, CTO, ANTechnologies which was moderated by Satish M Joshi, Executive Vice-President and Global Head of Horizontal Solutions and Delivery at Patni.

Top 10 SaaS Myths - Interop Mumbai 2009

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SaaS's remarkable growth is because...

it lowers costs you can outsource the non-core and retain the core faster to adopt easy to use hassle-free trial and then commit ..... and it is how everything is going to be working from now onwards. Business is going to happen in the cloud. If you are going to be running your business on bloated, shelf-ware software then think again! Taking advantage of SaaS and cloud computing in your business is going to be a norm and not an option!

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Putting on my sales hat - Selling SaaS to a large company

On a rainy afternoon I drove down for a sales presentation to a plush office of a large multi-million dollar private company.

Since we moved our marketing online, we have been getting a steady stream of leads from various online sources  (search, adwords, twitter, facebook, word of mouth, blogs etc.) so going for a personal sales visit has become rare. Larger companies are comfortable doing business the traditional way - meeting face to face and knowing who they are doing business with.  That's absolutely fine and I respect the way they do business. Most interesting, I always learn a few new things while leaving the conference room.

[I take a seat in a conference room]

"Well, I have compared your SaaS product with a few others in the market and I have pretty much narrowed down that we will be using your service" the IT Guy said.

At this moment, I was thinking - wow, this is easy. The first sales meeting and these guys are telling me that they have already picked my solution. Can't get better than this. The product had passed the feature and simplicity test and what was left to close the deal was them seeing me and knowing who they are going to be trusting with their data.

The IT guy continued "So, I assume you have adequate backup and retrieval measures for our data, right"?

"Yes, ofcourse. All your data is backed up daily and DeskAway also provides an export/backup mechanism through which you (as the account owner) can download all your project data to your personal computer", I replied.

The IT guy seemed content with my answer. "And what about security? How secure are your servers?" he asked. At this point I told him everything about our security (which is also mentioned on our site) and how we make sure everyting runs smoothly.

Most people here try to negotiate on price (even though its so inexpensive!), but suprisingly it never happened that day. The CEO was looking intently as we completed our conversation. The IT guy was comfortable with what we were offering him. Though he was losing control of the application (since he was outsourcing something to a SaaS provider) he was reducing the cost & not to mention the headache to implement the same solution in-house and then worry about upgrades, uptime etc.

"So, what happens if you sell your company tomorrow. What happens to the service that we have committed to?" asked the CEO.

This question actually threw me off-guard. Obviously, if we do get acquired, the first thing we would take into account would be our customers and make sure they are taken care of with the same level of service and response times. I told him that we would make sure that they would always be in good hands and commitement to client satisfaction is something we take really seriously.

"But, who will train our staff if we implement your solution? he asked. My answer to that was simple. Our solution was built with simplicity in mind and it does not require exhaustive training. Most of our larger customers use DeskAway in a small team first and then expand the team as more and more people get used to it. It's a self-learning, easy to use tool. It's not complex, old-school software. For us, adoption is the key and hence we have tried to mix the right combination of simplicity and feature-richness.

After a few minutes the CEO leaves in a hurry and I am again left with the IT Guy. I knew that if I had more time with the CEO I could explain him a little bit more about SaaS and how things are different compared to on-premise software and what he has experienced so far.

While I was in the car, I gathered my thoughts and here are some points that I jotted down. Even if they decide not to signup as a paying customer, I had learnt a few good things (some points were re-enforced again) about SaaS:

- IT guys are not the always the bottleneck in selling a SaaS solution.

- Larger companies would need a new pricing & sales strategy to get them on board a SaaS solution.

-  Security, backup and business continuity is of utmost importance.

- If you price your app correctly and demonstrate value, you save a lot of headache and time with price negotiations.

- Larger companies could want to pay for your solution by cheque (instead of an online credit card payment).

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How do you increase paid conversions on a freemium plan?

We are always trying to increase the conversion rate from Visitors to Free Signup and from Free Signup to Paid customer. This does not happen overnight. You need to play around with the design, user interface elements, analytics, price points, marketing messages etc. Here is an interesting slideshow that sums up a lot of what most web companies do to increase paid customer conversions.

Converting Free Users to Paid Users - Fowa Miami 2009
View more documents from Carsonified Team.

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Just Read - Hiring Sales People For Your Startup

Just read a great article on hiring sales people for your startup by Dharmesh Shah - Building Startup Sales Teams Though, we have never hired a sales person yet (only marketing so far) I am hoping we hire our first sales person in the coming months. I will be challenging what I posted yesterday, but it would be worth a try.

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