Podcast note: 2. SaaS too popular, what is that
This blog is the note and review about the podcast for SaaS 太热闹，教你看尽门道 in 疯投圈.
to C business: feature design, know the demand of people, user experience. Focus on Free, traffic.
to B business: More than the statement of to C business, it is clear to compute whether it can be profitable and when will we start to break even. Selling problem -> actively selling the product since the business can buy product.
The critical keys to succeed of to B business:
selling team (directly sell, channeling), CSM ( custom succeed management) (improve customer surviving, provide up-sell, cross-sell to the customer) -> Both are occupied 50% in the whole company.
The most difference of the selling between 2C business, 2B business
toC: targeting on population based, age, gender…. (Graininess big)
toB: (Graininess small) -> more specific -> easy to compute because the market is more specific. -> fixed cost is large, but if it succeed, the reputation is expanding and more stable.
small toB business usually change the whole product in every 3 years and hard to survive.
How is the valuation? Is it smaller than toC? Not really!
In the United State, toB cloud computing business is very big.
the growth rate :
toB business requires longer time to the market.
IT: Buying computers, hardware, software from other companies and do operation. (EARLY)
SAAS: buying the service from cloud -> transfer capital expenditure to expense.
Key factors between small business and big business
making money >> saving cost > efficiency
management (1 more) and making money ~ saving cost
trade off between management and efficiency
Even SASS can turn fixed cost to variable cost, but if the variable cost is too high for small business, it is not good.
How to sell to business?
big business: operation cost high, but price is not sensitive and maintenance cost is more higher
small business: do not charge too high cost try to get money from traffic
Once selling to the big company and figure out the other software to keep selling. Because the fixed cost is already high and big company is not price sensitive.
key demand difference between small business and big business
small business: core service, product must be top -> can be standardize
big business: more bigger the business is, the more customized
SaaS -> the customer need more demands -> need much more flexible
SAP has much more flexible configurations
Salesforce: PaaS platform -> generalized components -> open source -> more plugins -> satisfying customized requirements
How to run SaaS ? Key Point
SaaS -> first standardize items -> it is better not to do much more customized items -> better to reject 1 super big company bill (all resources depends on it -> no efforts to do other things)
In China, among all successful SaaS companies, at most 10% revenue coming from only 1 biggest company . Most of them are 3% at most. That means it is better to not rely on only 1 big bill.
The trend of SaaS?
non-core services -> out souring (recruiting, customer service, accounting)
technical more on toB -> tech driven and combining tech and transaction scenario, ex: applying tech (big data) in making money (credit, Ads) because the total revenue is fixed
tool coordination -> first strong and best tool -> add 1 additional feature to generate more users — -> do recruiting, ecosystem
key success of SaaS?
new customer -> requiring customer cost
survive of customer -> how many customer loss? (< 2% ****)
making money from the customer -> long term cycle value of the customer
SaaS Fixed cost turns from customer to the business
At early stage, getting too many customers leads too much fixed cost would loss for many years. But after breaking even, it will be much profitable.
survive of customer is most important -> because we have to get much more new customers, even get them in but fixed cost will be much higher.
monthly revenue = new customer money + old customer money — money from losing customer
CSM (customer success manager): up-sell cross selling for current customer to make sure old customer money — money from losing customer > 0 (PM + test, selling, marketing)
(20% — 25% in the whole company)
PM + testing -> trouble shooting, debug and come back to engineer to fix it
selling -> sell the new feature
marketing -> told them how does other company do better with our product
The opportunity of SaaS
marketing + selling: help company marketing and selling
HR: the demand of small business and big business are different -> sourcing + recruiting
IT: Docker (PaaS, IaaS) -> improve efficiency of operation
security: data is the asset ( Finance ( affordable))
vertical industry: few customers (precisely marketing -> requiring customer cost low), potential market is not big (it is easy to dominate), domain knowledge (once getting domain knowledge, it is much easier to cross-selling)
in medical CRM: Enquire > Salesforce
overall: Salesforce >> Enquire
What kind of cofounders is good at toB business
if vertical industry -> must expert in the vertical industry
personality -> more persistent, not require too smart (toB needs slow, hard)
CEO -> good at selling product
This podcast is very amazing!
They have the deep insight and experiences about SaaS and the toB business that is what I want to know.
Even as a software engineer, I feel like understand the difference between toB and toC is good to choose career path.
As a normal people even do not work in startup or VC, understanding toB business is always great to do investment.