Software as a Service (SaaS) is changing the way businesses operate. It’s not just a trend: it’s a proven way for small business owners to save time and money. We owe it all to the cloud for ushering SaaS into the business world.
When examining the basics of running a business, a single subscription to a SaaS app could take the place of an entire department. Small businesses and start ups can have email, file storage, expenses, purchasing, human resources, collaboration and task management at a lower cost for IT and software. With access to services and software that was once only available to huge companies because of the high cost of infrastructures and maintenance, software services allow a business to cut costs and focus on their product and services instead of setting up elaborate software or delegating between departments.
As a startup in the SaaS space, it is a long and perilous journey just to survive, let alone be notably successful. As the marketplaces have become quickly crowded, just finding a niche deems very difficult, let alone actively dominating one. The big players easily establish themselves, offering freemium cloud storage and software build upon already successfully proven programs. Microsoft now offers its Office suite in the cloud and Google has its slew of online business tools, all as various and competitively priced monthly subscriptions. Other startups moved in quickly at the outset, snatching up software real estate and thriving: Basecamp for project management, Freshbooks for accounting, Salesforce for customer relationship management, Pinterest for project and interest discovery, Snapchat for innovative mobile conversation, the list goes on (Vidra, 2014).
So what exactly does it take to survive as a SaaS startup in today’s information age?
Technological innovation, design, strong business models and customer attraction and retention all seem to be at the forefront of SaaS culture, although the difference between short and long-term success may be more elusive than any particular set of recipes for permanence.
At a glance
- Grade: 1.6 (1.0 is the best grade)
- Compares Evernote and Springpad as rival productivity apps
- Applies the AARRR startup metrics model to SaaS companies
- Compares Dropbox and LinkedIn freemium offerings
- 32 sources in the bibliography
Contents
SECTION 1: INTRODUCTION
SECTION 2: RESEARCH QUESTION
SECTION 3: LITERATURE REVIEW
3.1 Evernote VS Springpad
3.2 Acquisition
3.3 Activation
3.4 Retention
3.5 Referral
3.6 Revenue
SECTION 4: RESEARCH METHOD
SECTION 5: ANALYSIS
5.1 Information; markets and technologies
5.2 Networks/competition
5.3 Reputation
5.4 Intellectual property
5.5 Funding
SECTION 6: SYNTHESIS
SECTION 7: RESEARCH RESULTS
7.1 Information/Intellectual Property
7.2 Acquisition/Reputation
7.3 Activation
7.4 Referral/Networks
7.5 Retention
7.6 Funding/Revenue
SECTION 8: CONCLUSION
Objectives and Topics
This work asks what enables a software-as-a-service startup to survive over the long term. It examines expert perspectives and business examples, particularly Evernote and Springpad, to explore how innovation, customer relationships, competition and monetisation shape startup durability.
- Evernote and Springpad as competing productivity services
- Acquisition, activation, retention, referral and revenue
- Freemium offerings and paths to monetisation
- Product design, reputation and organisational networks
- Funding, market timing and technological change
Excerpt from the Book
Evernote VS Springpad
With the ever-growing noise and mess of content on the Web and on social networks, people are increasingly looking for better ways to curate their digital experiences and channel that white noise into signal.
Springpad has long been considered a rival of the popular productivity app, Evernote, as both fundamentally seek to act as a memory aid for busy people, allowing users to capture anything and everything within apps or on the Web, and easily search content by keyword and tags. Yet, while Evernote has blown up in the past two years, soaring past 20 million users, Springpad has quietly been plugging along — adding features and building a viable competitor.
(Empson, 2012)
In a video from the Creative Industries Innovation Centre (see Appendix A), Digital Media Manager for Film Victoria, Brad Giblin, says: ‘It’s very, very crowded in these marketplaces today... [I]t’s a lot more innovative in terms of the business models, the distribution platforms and also the audiences. So you can afford to look at mechanisms to raise financing off pledges, off Facebook drives, off your friends and family, off pre-sales... sell portions... packages... sell limited editions or special versions that enable you to have some kind of revenue in the production phase and hopefully then further revenue when you come to sell it down the track’ (Creative Innovation, 2010).
Is this kind of impermanence commonplace? Do most startups begin with the intention to flip?
Evernote CEO, Phil Libin, gives a candid contradiction: ‘It never starts out with how much money can we make. It never starts out with how many of these can we sell? It starts out with what's the point of it; why is the world better off because this product has existed in it? If the world isn't better off because the product existed in it then it's just not interesting to make’ (Baer, 2013).
Libin isn’t interested in flipping his cloud note-taking company. In fact, he says it has ‘no exit strategy, despite the fact that it has amassed 80 million users and raised $US250 million’ (Shontell, 2013). Instead, they want to create what they call a “100-year startup”, consisting of two parts:
1. It should be a company that’s around in 100 years, which means Evernote’s product needs to be durable.
2. It should still be a startup in 100 years, which means it should still be an innovative company that people love (Shontell, 2013).
Chapter Summaries
SECTION 1: INTRODUCTION: Introduces SaaS as a business model and outlines the competitive pressures facing new providers.
SECTION 2: RESEARCH QUESTION: Sets out questions about startup longevity, business purpose, adaptation, customer acquisition and revenue.
SECTION 3: LITERATURE REVIEW: Draws on published commentary and examples to discuss Evernote, Springpad and the AARRR startup metrics.
SECTION 4: RESEARCH METHOD: Discusses technological change and the use of current industry reporting to follow fast-moving startup markets.
SECTION 5: ANALYSIS: Examines markets, networks, reputation, intellectual property and funding through SaaS examples.
SECTION 6: SYNTHESIS: Brings together perspectives on Springpad’s business and Evernote’s emphasis on product quality.
SECTION 7: RESEARCH RESULTS: Organises the discussion around design, acquisition, activation, networks, retention and revenue.
SECTION 8: CONCLUSION: Reflects on market change, freemium business models and the challenge of building a lasting startup.
Keywords
software as a service, SaaS startups, business models, Evernote, Springpad, AARRR, freemium, customer acquisition, activation, retention, referral, monetisation, innovation, funding
Frequently Asked Questions
What is this work about?
It examines the challenges of surviving and building a durable business as a SaaS startup.
What are its central themes?
The main themes include innovation, competition, product design, customer acquisition and retention, funding and monetisation.
What is the primary research question?
The work asks what it takes for a SaaS startup to survive and which factors may contribute to its long-term durability.
What research method does the author use?
The author draws on published expert commentary and industry reporting, using company examples and a comparison of Evernote and Springpad to explore the research question.
What does the main analysis cover?
It considers information about markets and technologies, organisational networks, reputation, intellectual property and funding.
Which keywords characterise the work?
Key terms include SaaS, startups, freemium, AARRR, acquisition, activation, retention, revenue and innovation.
Why are Evernote and Springpad discussed together?
Both offered productivity tools that helped users capture and organise information, making them useful examples for examining different business approaches.
How does the work use the AARRR model?
It uses acquisition, activation, retention, referral and revenue as categories for discussing startup performance and customer relationships.
What role does freemium play in the discussion?
The work considers how free features can attract users and how businesses seek to convert some of those users into paying customers.
- Citation du texte
- Nick Birch (Auteur), 2015, Surviving as a "Software as a Service" (SaaS) Startup, Munich, GRIN Verlag, https://www.grin.com/document/287995
