Demandware is presented as an example of a company that leveraged it’s SaaS technology disruption with a fundamentally different business model to it’s competitors, creating innovation on demand for it’s customer and making partners out them with a shared success model.
This is part of the workshop on Game Changing Business Models - itself part of the series on Startup Secrets, by Michael J Skok on how to get competitive advantage as a startup.
Michael's slides are the framework for the workshop, and are NOT self contained. For fuller coverage of the slides, visit Michael's website www.mjskok.com
Tata AIG General Insurance Company - Insurer Innovation Award 2024
Game Changing Business Models - Case - Demandware - leveraging SaaS to create a model for innovation and shared success with customers
1. Harvard innovation lab : Michael J Skok : Startup Secrets : Business Model
Hi
Hi Harvard innovation lab
#innovationlab @mjskok #startupsecrets www.mjskok.com
START UP
Case in point: Demandware
SECRETS
An insider‟s guide to unfair competitive advantage
SaaS enabled CORE, Levers & Multipliers
Disruptive Business Models to build Value
MICHAEL J SKOK
North Bridge Venture Partners
twitter: @mjskok mjskok.com
1
2. Harvard innovation lab : Michael J Skok : Startup Secrets : Business Model
Hi www.mjskok.com
#innovationlab @mjskok #startupsecrets
For context and more information:
and as part of the overall Business Model session
http://www.mjskok.com/resources/business-model
Demandware is presented as an example of a company
that leveraged it‟s SaaS technology disruption with a
fundamentally different business model to it‟s
competitors, creating partners out of it‟s customers with
a shared success model.
2
3. Harvard innovation lab : Michael J Skok : Startup Secrets : Business Model
Hi www.mjskok.com
#innovationlab @mjskok #startupsecrets
Disrupting Software…
1990+ 2010+
• Installed by IT Web based
• Customized Self service
• Infrequent upgrades On demand, SaaS
• Proprietary Open Source
• License Subscription
Subscription
SaaS
On demand
Self service Extende Extende
d Up-sell d Re-Trial
Up-sell
…a fundamentally disruptive & more valuable
Open
source
Lifecycl
e
Lifecycl
e
Web business model short, low cost (CAC), quick payback, EXTENDED lifetime value (LTV)
3
5. Forward-Looking Statements
This presentation includes forward-looking statements. Demandware, Inc. (“Demandware” or the “Company”) has based these forward-looking statements largely on its current
expectations and projections about future events and financial trends affecting its business. Forward-looking statements should not be read as guarantees of future
performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements
are based on information available at the date of this presentation and management‟s good faith belief as of such date with respect to future events, and are subject to risks
and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors
that could cause such differences include, but are not limited to:
• the Company‟s ability to attract new clients to enter into subscriptions for its solution;
• the Company‟s ability to service those clients effectively and induce them to renew and upgrade their deployments of the Company‟s solution;
• the Company‟s ability to expand its sales organization to address effectively the new industries, geographies and types of organizations the Company intends to target;
• the Company‟s ability to accurately forecast revenue and appropriately plan its expenses;
• continued acceptance of SaaS as an effective method for delivering software solutions;
• the Company‟s ability to protect and defend its intellectual property;
• costs associated with defending intellectual property infringement and other claims;
• events in the markets for the Company‟s solution and alternatives to the Company‟s solution, as well as in the United States and global markets generally;
• changes in the competitive environment in the Company‟s industry and the markets in which the Company operates; and
• other factors discussed under “Risk Factors ” and “Management‟s Discussion and Analysis of Financial Condition and Results of Operations” in periodic filings with the
Securities and Exchange Commission (the “SEC”).
In addition, in this presentation, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “predict,” “potential” and similar expressions, as they
relate to the Company, business and management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the future events and
circumstances discussed in this presentation may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements.
Forward-looking statements speak only as of the date of this presentation. You should not put undue reliance on any forward-looking statement. The Company assumes no
obligation to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting future performance or results, except
to the extent required by applicable laws. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates
with respect to those or other forward-looking statements.
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 5
6. Demandware Is at the Confluence of
Three Significant Markets
Global eCommerce Global SaaS
16% 18%
CAGR CAGR
(‘10 – ’15) (‘10 – ’15)
$317 Billion $10 Billion
$12 Trillion
Data Reflects 2010
Global Retail
Source: Gartner (Global SaaS Market) and Euromonitor (Global Retail and Global eCommerce)
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 6
7. Global Retail Market Shifting from Offline to Online
eCommerce
An Essential Requirement for
Retailers / Brands Today
Consumers Buying Selling Retailers / Brands
Connected, In Control Across Deliver Exceptional
Always On, Multiple Touchpoints Online Experience
Always Consuming
2004
Laptop/Desktop
Need for
Easy Design,
Current Implementation
QR Enabled and Management of
Print Ads Kiosk Mobile Tablet Call Center Social Media
eCommerce Sites
NFC Geolocation
Future Services
Clienteling
Ad Digital
Content mPOS
Networks TV
Web Sites Customer-Enabled Check
Out on Smart Phone
Embedded in Content Experience Embedded in Store Commerce
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 7
8. Demandware Delivers The Best of Both Worlds
Build and Run Internally Outsource / ASP
The Pros: The Pros:
Control Less Hassle
Customization The Best of No Infrastructure
✗The Cons: ✗The Cons:
Both Worlds
Costly Inflexible
IT-Constrained No Merchant Control of
Performance/Security Merchandising
Responsibility Limited Customization
Slow Pace of Innovation
A Unique and Better Approach to eCommerce
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 8
9. Demandware – Business Model Elements
CORE value ?
Multipliers ? Multipliers:
• Increase revenue
• Increase reach
Levers ? Levers:
• Increase
coverage • Reduce time
• Reduce costs
• Reduce
resources
Multipliers
Levers
CORE
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 9
10. The Demandware CORE:
SaaS enabled Commerce Innovation
Initial “Table Stakes” Today‟s Differentiators
Merchant
Reliable and Proven Empowerment
Provides Full Control
99.98%
Platform Availability
Ease of Open Development Environment;
+
Fully
Development
Cutting Edge
Flexible, Extensible
Access to Steady Stream of New,
Innovative Functionality as Soon as it
Becomes Available
Customizable
Simplifies Complex eCommerce
Easy Functionality
Fast Time-to-Market Only 6 Months
No Infrastructure SaaS Solution
Significant Barriers to Entry
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 10
11. Demandware business model
– simplified summary of value creation & capture…
Create: Development plus LINK partnerships
– Traditional R&D with leverage from LINK partners for whole
product
Deliver: SaaS
– On Demand Commerce Innovation NOT Infrastructure
Harness: % of GMV payment Highly
– Shared success
Disruptive
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 11
12. Demandware LINK - Multiplier AND Lever
LINK Technology
Partners
• Extensive library of pre-
built integrations between
leading third-party
®
technologies and
LINK Technology Partners
Demandware Commerce
Benefits to
Retailers / Brands
• Accelerated Revenue Growth
• Rapid Access to Applications
• Reduced Implementation
Costs
• Early Visibility into Emerging
Technologies
12 Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 12
13. Demandware: LINK program
MULTIPLIER
– Creates whole product – fulfilling value proposition
– Extends whole product to broader solution
LEVER
– Reduces cost of integration
– Reduces time to deploy
13
Copyright 2012 Demandware, Inc. – CONFIDENTIAL | 13
14. Harvard innovation lab : Michael J Skok : Startup Secrets : Business Model
Hi www.mjskok.com
#innovationlab @mjskok #startupsecrets
Demandware LINK impact:
• Win / Win for customer and vendor
– Improves Gain/Pain with integration and whole product
– Improves = LCV/CARC with higher value and longer lifecycle
Multipliers
Levers
Up-sell CORE Re-Trial
14
19. Harvard innovation lab : Michael J Skok : Startup Secrets : Business Model
Hi www.mjskok.com
#innovationlab @mjskok #startupsecrets
For more information:
See the full resource on Business Models at
http://www.mjskok.com/resources/business-model
19
20. Harvard innovation lab : Michael J Skok : Startup Secrets : Business Model
Hi
Hi Harvard innovation lab
#innovationlab @mjskok #startupsecrets www.mjskok.com
START UP
Case in point: Demandware
SECRETS
An insider‟s guide to unfair competitive advantage
SaaS enabled CORE, Levers & Multipliers
Disruptive Business Models to build Value
MICHAEL J SKOK
North Bridge Venture Partners
twitter: @mjskok mjskok.com
20