O slideshow foi denunciado.
Utilizamos seu perfil e dados de atividades no LinkedIn para personalizar e exibir anúncios mais relevantes. Altere suas preferências de anúncios quando desejar.
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
1 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
2 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
3 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
4 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
5 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
6 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
7 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
8 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
9 
@innovationlab 
@mjskok #startupsecrets sta...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
10 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
11 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
12 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
13 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
14 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
15 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
16 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
17 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
18 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
19 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
20 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
21 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
Up-sell Extended 
Extended 
Lifecycle Re-Trial...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
Up-sell Extended 
Extended 
Lifecycle Re-Trial...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
24 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
25 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
26 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
27 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
28 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
29 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
30 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
31 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
32 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
33 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
34 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
35 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
36 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
37 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
38 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
39 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
40 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
41 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
42 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
Customer 
Expansion 
Base 
Subscription 
43 
@...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
44 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
45 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
46 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
“Addiction before Adoption & Expansion” 
47 
@...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
48 
@innovationlab 
@mjskok #startupsecrets st...
@North_Bridge @mjskok 
@futureofcloud 
#futureofcloud 
THE FUTURE OF 
CLOUD COMPUTING 
4TH ANNUAL SURVEY 2014 
http://bit....
THE FIRST 
CLOUD FRONT 
50 
@futureofcloud 
#futureofcloud
TRANSITIONING 
51 
LEGACY APPLICATIONS: 
ecommerce 
CRM ERP 
@futureofcloud 
#futureofcloud 
@SALESFORCE @WORKDAY @DEMANDW...
THE SECOND 
CLOUD FRONT 
52 
@futureofcloud 
#futureofcloud
GROWTH IN WEB APIs 
SINCE 2005 
1 
186 299 438 593 
865 
1263 
1546 
2026 
2418 
3422 
5018 
7182 
9011 
11,493 
10302 
Ju...
REIMAGINING 
APPLICATIONS 
IN THE CLOUD 
54 
@futureofcloud 
#futureofcloud
THE SECOND CLOUD FRONT: 
MANY CLOUD SERVICES => 
RE-IMAGINED APP 
UBER 
55 
@futureofcloud 
#futureofcloud
From: 
AMAZING BECAUSE CLOUD 
56 
@futureofcloud 
#futureofcloud
To: 
IMPOSSIBLE WITHOUT CLOUD 
57 
@futureofcloud 
#futureofcloud
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
58 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
59 
@innovationlab 
@mjskok #startupsecrets st...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
… fundamentally more Repeatable, Sustainable, ...
Harvard innovation lab Michael J Skok Startup Secrets Business of Software 
61 
@innovationlab 
@mjskok #startupsecrets st...
Próximos SlideShares
Carregando em…5
×

Redefining the Business of Software

24.005 visualizações

Publicada em

Presentation given at the Business of Software Conference, Boston, MA September 2014. Michael Skok discussed what it takes to go from zero to IPO with Demandware as a case example. Co-presenting with Scott Dussault, former CFO of Demandware, they discuss getting DWRE Repeatable, Sustainable, Valuable and Predictable ready for IPO. The presentation also covers introduction to many Startup Secrets such as how to build Friction Free, SLIPPERY products, linked form this presentation.

  • DOWNLOAD FULL BOOKS, INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Responder 
    Tem certeza que deseja  Sim  Não
    Insira sua mensagem aqui
  • DOWNLOAD FULL BOOKS, INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Responder 
    Tem certeza que deseja  Sim  Não
    Insira sua mensagem aqui
  • DOWNLOAD FULL BOOKS, INTO AVAILABLE FORMAT ......................................................................................................................... ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. PDF EBOOK here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. EPUB Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... 1.DOWNLOAD FULL. doc Ebook here { https://tinyurl.com/y3nhqquc } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Responder 
    Tem certeza que deseja  Sim  Não
    Insira sua mensagem aqui
  • Hello! Get Your Professional Job-Winning Resume Here - Check our website! https://vk.cc/818RFv
       Responder 
    Tem certeza que deseja  Sim  Não
    Insira sua mensagem aqui
  • Great slides, thanks for sharing. Please post the link to the presentation when goes online.
       Responder 
    Tem certeza que deseja  Sim  Não
    Insira sua mensagem aqui

Redefining the Business of Software

  1. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 1 @innovationlab @mjskok #startupsecrets startupsecrets.com Redefining the Business of Software STARTUP An insider’s guide to unfair competitive advantage SECRETS #startupsecrets MICHAEL J SKOK Hi Harvard innovation lab startupsecrets.com @mjskok Tweet questions to:
  2. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 2 @innovationlab @mjskok #startupsecrets startupsecrets.com Why are we here? • A story… – Zero to a couple of billion dollars… – but NOT back again!
  3. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 3 @innovationlab @mjskok #startupsecrets startupsecrets.com If you want to build a billion dollar business… Start with a MULTI billion dollar problem
  4. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 4 @innovationlab @mjskok #startupsecrets startupsecrets.com E.G. eCommerce… Market: eCommerce: • $4.7 trillion • ~7% penetrated • Growing in mid teens Problem: “Under siege”, Disruptions • Offline -> Online • Physical -> Digital • Mobile -> Omni Channel
  5. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 5 @innovationlab @mjskok #startupsecrets startupsecrets.com And if you want to build a business around it… … you’ve got to make it RSVP • Repeatable, • Sustainable, • Valuable, • Predictable
  6. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 6 @innovationlab @mjskok #startupsecrets startupsecrets.com Startup Secrets - Tasters… Our agenda today includes some small samples from the Startup Secrets series:- • Value prop - fundamentals • Business model - basics • Product – friction free, “slippery” products • Metrics – that matter For the full details of these and other workshops see www.startupsecrets.com
  7. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 7 @innovationlab @mjskok #startupsecrets startupsecrets.com Value Proposition - excerpt … customer view
  8. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 8 @innovationlab @mjskok #startupsecrets startupsecrets.com Customer view = Gain/Pain • Revenue • Cost savings • Time • People • Competitive advantage • Reputation • Etc.. • Inertia • Switching costs? • Default = do nothing • Alternatives? • Good enough = good enough! • RISK on a startup • Find (See) • Try • Buy • Implement • Deploy • Own – eg.TCO Inertia, Gain RISK Pain
  9. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 9 @innovationlab @mjskok #startupsecrets startupsecrets.com Customer view = Gain/Pain • Revenue • Cost savings • Time • People • Competitive advantage • Reputation • Etc. • Inertia • Switching costs? • Default = do nothing • Alternatives? • Good enough = good enough! • RISK on a startup • Find (See) • Try • Buy • Implement • Deploy • Own – eg TCO Inertia, RISK Gain Pain >10 “An order of magnitude”
  10. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 10 @innovationlab @mjskok #startupsecrets startupsecrets.com Demandware • Commerce, NOT infrastructure
  11. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 11 @innovationlab @mjskok #startupsecrets startupsecrets.com Business Model - excerpt … your view
  12. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 12 @innovationlab @mjskok #startupsecrets startupsecrets.com Basic Startup Model • Lifetime Value of Customer (LTV) • Cost of Acquiring Customer (CAC) LTV ~3x > CORE Levers Multipliers CAC
  13. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 13 @innovationlab @mjskok #startupsecrets startupsecrets.com A typical product lifecycle See, Try, Buy, Fly, Die… See Try Buy Fly Die
  14. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 14 @innovationlab @mjskok #startupsecrets startupsecrets.com A typical product lifecycle • How do we avoid: – Pain, time and cost of adoption? – Premature decline? Long, costly (CAC), slow payback, EXTENDED lifetime value (LTV) See Try Buy Fly Die
  15. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 15 @innovationlab @mjskok #startupsecrets startupsecrets.com Adding Retention and Upsell Extended Lifecycle Up-sell Re-Trial See Try Buy Fly Die
  16. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 16 @innovationlab @mjskok #startupsecrets startupsecrets.com Retention
  17. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 17 @innovationlab @mjskok #startupsecrets startupsecrets.com Upsell 14 x leverage!
  18. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 18 @innovationlab @mjskok #startupsecrets startupsecrets.com The Model Refined – Enabling Retention & Upsell • Cost of Acquiring & Retaining Customer (CARC) • Lifecycle Value of Customer (LCV) = incl. Repurchase, Upsell CORE Levers Multipliers Up-sell Re-Trial
  19. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 19 @innovationlab @mjskok #startupsecrets startupsecrets.com Retention Costs • Must be included in CARC as you drive down Churn – Examples: • Support • Customer Service • Professional Services • Also include any Re-engagement costs associated with any Upsell as you drive up ARPU – Sales, Marketing etc
  20. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 20 @innovationlab @mjskok #startupsecrets startupsecrets.com Value Prop & Business Model TOGETHER customer view & your view TOGETHER!
  21. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 21 @innovationlab @mjskok #startupsecrets startupsecrets.com Value Prop & Business Model • They are two views of the same principle: – Customer view = Gain/Pain – Vendor view = LCV/CARC CORE Levers Multipliers Up-sell Re-Trial
  22. Harvard innovation lab Michael J Skok Startup Secrets Business of Software Up-sell Extended Extended Lifecycle Re-Trial 22 @innovationlab @mjskok #startupsecrets startupsecrets.com An extended & valuable lifecycle: “Land & Expand” Self service Web / Mobile On demand SaaS Subscription Open source Up-sell Re-Trial Lifecycle short, low cost (CARC), quick payback, extended lifecycle value (LCV) See Try Buy Fly Die
  23. Harvard innovation lab Michael J Skok Startup Secrets Business of Software Up-sell Extended Extended Lifecycle Re-Trial 23 @innovationlab @mjskok #startupsecrets startupsecrets.com An extended & valuable lifecycle: “Land & Expand” without friction Self service Web / Mobile On demand SaaS Subscription Open source Up-sell Re-Trial Lifecycle short, low cost (CARC), quick payback, extended lifecycle value (LCV) See Try Buy Fly Die Frictionless, SLIPPERY
  24. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 24 @innovationlab @mjskok #startupsecrets startupsecrets.com Demandware • Software is free, it’s a shared success model (business model can be more important than product in reducing friction)
  25. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 25 @innovationlab @mjskok #startupsecrets startupsecrets.com How do you take away the pain, and reduce friction? … make it SLIPPERY (Reduce the Pain in the Gain/Pain Ratio)
  26. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 26 @innovationlab @mjskok #startupsecrets startupsecrets.com Friction Free, SLIPPERY products • Simple • Low to no initial cost • Installs and integrates • Proves value quickly • Package for progress • Experience is compelling • ROI is obvious • Your customers can’t live without it – it’s stickY
  27. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 27 @innovationlab @mjskok #startupsecrets startupsecrets.com Simple
  28. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 28 @innovationlab @mjskok #startupsecrets startupsecrets.com Which is better? Microsoft Sony
  29. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 29 @innovationlab @mjskok #startupsecrets startupsecrets.com Neither! = Less is More! Microsoft, Sony Apple
  30. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 30 @innovationlab @mjskok #startupsecrets startupsecrets.com Simple ≠ Easy to do • Simple ≠ Easy ! • Simple often means complex technology that makes your product “magic” • Simplification Innovation (search algorithms in the cloud) With thanks to Will Koffel @wkoffel www.clearlytech.com
  31. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 31 @innovationlab @mjskok #startupsecrets startupsecrets.com Example Knowledge Management vs. Capture Lotus Notes Evernote
  32. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 32 @innovationlab @mjskok #startupsecrets startupsecrets.com Less is More… features are the enemy of function functionality can overwhelm users applicability is all that ultimately matters
  33. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 33 @innovationlab @mjskok #startupsecrets startupsecrets.com Demandware • Retail practice group – best practice for merchants
  34. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 34 @innovationlab @mjskok #startupsecrets startupsecrets.com Why are we here? • A story… – Zero to a couple of billion dollars… – but NOT back again!
  35. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 35 @innovationlab @mjskok #startupsecrets startupsecrets.com Welcome Scott Dussault former CFO
  36. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 36 @innovationlab @mjskok #startupsecrets startupsecrets.com Metrics that Matter • Annualized Revenue per Customer (“ARPU”) • Renewal Rate/Churn • Revenue per Employee • Cost of Acquiring and Retaining a Customer (“CARC”)
  37. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 37 @innovationlab @mjskok #startupsecrets startupsecrets.com TRAK VOCS 0.0x CRM SPSC RP BCOV BV IL SQI TNGO FLTX MRIN CTCT N CVT ECOM ULTI CNQR DWRE LPSN MKTG JIVE SREV 20.0 x 18.0 x 16.0x 14.0x 12.0x CSOD R² = 0.6577 TXTR 10.0 x 8.0 x 6.0 x 4.0 x 2.0 x 0.0 % 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% CY14E EV / Sales Source: FactSet, Stifel estimates WKDY Now MKTO Estimated CY14 Organic Growth Rate
  38. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 38 @innovationlab @mjskok #startupsecrets startupsecrets.com Dec. 31, 2008 Dec. 31, 2013 $103.7M 204 820 $515,000 82% 100% Cloud $7.5M 23 50 $250,000* 37% *Excluding Neckermann GmbH
  39. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 39 @innovationlab @mjskok #startupsecrets startupsecrets.com ARPU • Higher ARPU indicates value delivered – “SLIPPERY” products will drive sequential and year over year ARPU growth • Increasing ARPU driven by upsell – Chance to demonstrate how well your customers re-engage (which is demonstrably better than re-sell) • Investors view ARPU as THE driver of CLV and, most importantly, revenue growth…
  40. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 40 @innovationlab @mjskok #startupsecrets startupsecrets.com Renewal Rate/Churn • Renewal rate/churn is unique for every business – Need is to demonstrate stickiness – Dollar value renewals, churn count, long-term contracts • Rule of thumb is “needs to be better than 90%” – So figure out a metric that magically results in 90% or better…(MJS: but don’t lie to yourself!) • Investors view renewal rate/churn as THE metric for visibility and long-term revenue growth
  41. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 41 @innovationlab @mjskok #startupsecrets startupsecrets.com Revenue per Employee • Cloud software is a technology delivery model that provides significant operating leverage – Most if not all have subscription revenue models that enable predictable revenue streams • Subscription revenue models on their own may not provide significant operating leverage • Legacy software models are inherently profitable, but not predictable • Revenue per employee greater than $250,000 is a benchmark for inherently profitable models
  42. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 42 @innovationlab @mjskok #startupsecrets startupsecrets.com CARC • Cost of acquiring a customer – Unique metric for each business – what is the sales model? How does marketing play in? • Cost of re-engaging a customer – What are the costs for operating a customer? How do customers renew? • High gross margin businesses with less touch on re-engagement will have the best CARC metrics
  43. Harvard innovation lab Michael J Skok Startup Secrets Business of Software Customer Expansion Base Subscription 43 @innovationlab @mjskok #startupsecrets startupsecrets.com Frictionless Land and Expand, Drives ALL of these Metrics Q1 Q2 Q3 Q4 Year 2 Q1 Q2 Q3 Q4 Year 3 Q1 Q2 Q3 Q4 Year 1 Quarterly Revenue $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Cohort analysis includes a family of third-party solution partner customers who share a minimum level of subscription revenue and 56 customers all of which have been operating on Demandware’s platform for a minimum of three years through December 31, 2013. Analysis excludes two customers operating on the platform for three years – one invoiced through a third party and Neckermann GmbH.
  44. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 44 @innovationlab @mjskok #startupsecrets startupsecrets.com Frictionless, SLIPPERY+ Land & Expand = ?
  45. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 45 @innovationlab @mjskok #startupsecrets startupsecrets.com Frictionless, SLIPPERY+ Land & Expand = fastest growing software companies
  46. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 46 @innovationlab @mjskok #startupsecrets startupsecrets.com Frictionless, SLIPPERY+ Land & Expand = fastest growing software companies “Addiction before Adoption & Expansion”
  47. Harvard innovation lab Michael J Skok Startup Secrets Business of Software “Addiction before Adoption & Expansion” 47 @innovationlab @mjskok #startupsecrets startupsecrets.com Frictionless, SLIPPERY+ Land & Expand = fastest growing software companies Delight, ADOPTION ADDICTION (Free, Open Source) Upsell EXPANSION $400 $350 $300 $250 $200 $150 $100 $50 $0 LCV
  48. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 48 @innovationlab @mjskok #startupsecrets startupsecrets.com Why are we here? • A story… – Zero to a couple of billion dollars… – but NOT back again!
  49. @North_Bridge @mjskok @futureofcloud #futureofcloud THE FUTURE OF CLOUD COMPUTING 4TH ANNUAL SURVEY 2014 http://bit.ly/2014FutureCloud NORTH BRIDGE FUTURE OF CLOUD COMPUTING SURVEY IN PARTNERSHIP WITH GIGAOM RESEARCH
  50. THE FIRST CLOUD FRONT 50 @futureofcloud #futureofcloud
  51. TRANSITIONING 51 LEGACY APPLICATIONS: ecommerce CRM ERP @futureofcloud #futureofcloud @SALESFORCE @WORKDAY @DEMANDWARE
  52. THE SECOND CLOUD FRONT 52 @futureofcloud #futureofcloud
  53. GROWTH IN WEB APIs SINCE 2005 1 186 299 438 593 865 1263 1546 2026 2418 3422 5018 7182 9011 11,493 10302 Jun-05 Mar-06 Oct-06 May-07 Dec-07 Jul-08 Feb-09 Sep-09 Apr-10 Nov-10 Jun-11 Jan-12 Aug-12 Mar-13 Oct-13 Jun-14 Source Programmable Web @futureofcloud #futureofcloud
  54. REIMAGINING APPLICATIONS IN THE CLOUD 54 @futureofcloud #futureofcloud
  55. THE SECOND CLOUD FRONT: MANY CLOUD SERVICES => RE-IMAGINED APP UBER 55 @futureofcloud #futureofcloud
  56. From: AMAZING BECAUSE CLOUD 56 @futureofcloud #futureofcloud
  57. To: IMPOSSIBLE WITHOUT CLOUD 57 @futureofcloud #futureofcloud
  58. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 58 @innovationlab @mjskok #startupsecrets startupsecrets.com Why are we here? • A story… – Zero to a couple of billion dollars… – but NOT back again!
  59. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 59 @innovationlab @mjskok #startupsecrets startupsecrets.com Tasters… • Value prop - fundamentals • Business model - basics • Product – friction free, “slippery” products • Metrics – that matter • Cloud – the second front
  60. Harvard innovation lab Michael J Skok Startup Secrets Business of Software … fundamentally more Repeatable, Sustainable, Valuable & Predictable… 60 @innovationlab @mjskok #startupsecrets startupsecrets.com Redefining the (Business of) Software 1990+ Now + • Installed by IT • Customized • Infrequent upgrades • Proprietary • License  Web / Mobile / Self  SReersvtficuel APIs, Extensibility  On demand, SaaS, Cloud  Open Source, Open Data  Subscription, Recurring Web On demand Self service SaaS Subscription Open source Up-sell Extende d Lifecycl e Up-sell Extende d Lifecycl e Re-Trial RSVP = YES! short, low cost (CAC), quick payback, EXTENDED lifetime value (LTV)
  61. Harvard innovation lab Michael J Skok Startup Secrets Business of Software 61 @innovationlab @mjskok #startupsecrets startupsecrets.com Thank You BoS! RESOURCES at mjskok.com/bos2014 STARTUP SECRETS #startupsecrets MICHAEL J SKOK Hi Harvard innovation lab startupsecrets.com @mjskok

×