Bessemer 10 Laws Of Being SaaSy Fall 2008

The 10 Laws of Building a Successful SaaS Company Byron Deeter Partner Bessemer Venture Partners Philippe Botteri Senior Associate Bessemer Venture Partners Mark Trang Director, ISV Marketing salesforce.com

Software-as-a-Service (SaaS) is the Next Major Growth Driver of the Software Industry 2008 1960 2000 Market Size $250+ billion The Mainframe Era The Client-Server Era ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The cloud computing Era: Software-as-a-Service

Bessemer Venture Partners Snapshot ,[object Object],[object Object],[object Object],[object Object],[object Object]

Who We Are ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why did we create (and update) the 10 Laws? The emergence of Software-as-a-Service is the most important trend in the software industry of the decade, and that these tectonic shifts in the global software ecosystem are just beginning. Periods of tremendous transformation create tremendous opportunity, but the next giants of the software industry will need to abandon many of the long-held tenets of software best practices and adhere to a new set of principles .

Bessemer’s Top 10 Laws for Being “SaaS-y”

Bessemer SaaS Law #1 ,[object Object],From bookings and opacity… EXPENSES BOOKINGS ,[object Object],[object Object],[object Object],[object Object],… to CMRR and transparency! ,[object Object],[object Object],[object Object],[object Object],[object Object],CMRR New Accounts Upsell & Expansion less churn Existing Contracts Renewals EXPENSES Cash burn rate

Bessemer SaaS Law # 2 ,[object Object],CAC ratio: defining your S&M spend CLTV: defining your profitability ,[object Object],[object Object],CLTV > 0 = Profit! Example : 1 customer generating $1 of ARR

Bessemer SaaS Law # 3 ,[object Object],Target quota 2X fully loaded cost of a Sales Rep. ($100k MRR quota) Fully loaded cost of a Sales Rep. Sales Rep. performance SaaS company MRR run rate <$300k Staff to learn Staff to scale

Bessemer SaaS Law # 4 ,[object Object],CMRR Growth New Sales Upsells & Renewals Hunters! Farmers! ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Bessemer SaaS Law # 5 ,[object Object],From IT Channels… … to Business Channels ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Bessemer SaaS Law # 6 ,[object Object],Profile, Track and Segment Analyze, Adapt, Act! Automate PR Drive to Web CRM/SFA

Bessemer SaaS Law # 7 ,[object Object],SaaS companies don’t need significant international sales to go public Key challenges of International expansion ,[object Object],[object Object],[object Object],[object Object],<15% 13% <5% International revenues at IPO Percent

Bessemer SaaS Law # 8 ,[object Object],[object Object],[object Object],[object Object],No Hybrid model! Keep one data center ,[object Object],[object Object],[object Object],[object Object]

Bessemer SaaS Law # 9 ,[object Object],Monitor Service = Customer data = key asset! Gather feedback Benchmark ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Bessemer SaaS Law # 10 ,[object Object],Capital raised pre-IPO for selected public SaaS companies USD, million ,[object Object],[object Object],[object Object],[object Object],[object Object]

Bessemer’s Top 10 Laws for Being “SaaS-y” ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Thank You! More Info: www.bvp.com/saas Contacts: Byron Deeter Philippe Botteri [email_address] [email_address] Come meet us at Nov 2-5, 2008 www.dreamforce.com

Bessemer 10 Laws Of Being SaaSy Fall 2008

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Bessemer 10 Laws Of Being SaaSy Fall 2008