Should Startups Focus on Profitability or Not?
There are certain topics that even some of the best journalists can’t fully grok. One of them is profitability. I find it amusing when a journalist writes an article about a prominent startup (either privately held or preparing for an IPO) and decries that, “They’re not even profitable!” I mention journalists here because they perpetuate [...]
AMZN ‘Other’ Revenue in 2011+
I had meant to put more content together around these numbers, but due to time constraints I won’t be able to. Regardless, the picture speaks for itself. Here’s my AMZN ‘Other’ revenue numbers with the blue bar representing my estimates of AWS revenue with the green bar representing the rest of AMZN’s ‘Other’ line. The [...]
SaaS Benchmarks | Acquisition Cost and Churn Challenges
What is a typical churn rate for SaaS? What is a good time frame to recover CAC? As SaaS companies mature, high quality SaaS benchmark studies are appearing.
Ask not what your company can do for you, …?
John F Kennedy to me was one of the finest presidents of the US. Shot and killed before I was even born, but still. During his inaugural address on January 20th 1961, one of his now famous quotes was: “Ask not what your country can do for you – ask what you can do for [...]
Did We Get The Cloud Infrastructure Business Wrong?
The conventional wisdom among the pundits covering Infrastructure services is that cloud infrastructure business is a high volume low margin business. Some pundits even dismissed Amazon Web Services because they are not going up the stack to differentiate themselves unlike, say, Salesforce.com. Amazon probably isn’t going all that far in it [cloud]. It’s got great [...]
Only in California: Electronic License Plates May Turn Your Car Into a Billboard
Here’s proof that Governments’ creativity in finding new revenue sources is unlimited, reports The Merc: The California Legislature is considering a bill that would allow the state to begin researching the use of electronic license plates for vehicles. The move is intended as a moneymaker for a state facing a $19 billion deficit. The device [...]
The Cloud Top 3’s
Rackspace’s earnings report prompted a Twitter exchange between myself and Michael DeSilver (of LTech) that seemed interesting enough to report here. Rackspace reported year over year growth in their cloud business of 77%, and sequential growth of 13% — all on $19 million in revenue (for the cloud biz). This prompted Mike and I to [...]
Revenue, Burn Rate, Growth and ARPU for SaaS Businesses
There has been much discussion of late around the relative profitability of SaaS versus on-premises software companies. Most of the high-level analysis of SaaS companies is based on (relatively) mature companies – there being very few companies that are both young AND by necessity or choice report their number extensively. SaaS accounting company Xero (disclosure [...]
SaaS Model Proven? Time to Focus on Revenue?
We’ve seen some fantastic figures in the last month or so that would seem to announce once and for all the validation of the SaaS model and by extension Cloud Computing. To quickly recap; Xero achieved 33% increase in aid customer numbers in 50 days FreshBooks crossed the 700,000 user mark Mint adds 3000 users [...]
It’s All About Conversion…. Well Conversion and Retention
Sometimes in such a young industry such as SaaS it’s frustrating not having a long historical benchmark with which to compare performance. Given that I was pleased read a post from Oprius (review here) CEO Alan Smith the other day detailing those two important metrics. The following is a chart detailing the Oprius 2008 conversion [...]
Marketing Costs for SaaS Companies
A few weeks ago I posted comparing two start up strategies for SaaS businesses; one being the slow, organic growth and bootstrapped route, the other being the well funded route. I summarised my posting saying that it was very much a case of horses for courses saying that; There’s no black and white answers I’m [...]
