Exploring the SaaS Business Model

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SHOW: 391
DESCRIPTION: Brian talks with Aneel Lakhani (@aneel, Go To Market Consultant and Advisor) about the difference between traditional Enterprise software and B2B SaaS offerings, how the sales and marketing models work, and how development and operations is significantly changed with SaaS.

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Aneel’s Background: From engineering and product roles at IBM to marketing and go to market roles at Cisco and a number of SaaS startups, with a brief stint as a Research Director at Gartner. Has been a frequent speaker at events like Velocity and been on many podcasts, including this one, Andreessen Horowitz’s, and Microsoft’s Open Source Show.

SHOW NOTES:

Topic 1 - Welcome to the show. We’ve known each other for quite a while, but tell our audience about your last 10 years in gaining a ton of experience around startups and SaaS-based businesses.

Topic 2 - A few weeks ago, in the middle of a Twitter conversation, you said “SaaS changes everything”. Let’s start with the most basic things. How is a SaaS-delivered business different than a traditional software business? (development, go-to-market, marketing, profitability (or loss) models)

Topic 3 - Digging into the sales and marketing funnel, walk us through what typically happens from awareness to sign-up to early/free trial to actual customer engagement, and how a SaaS company is measuring along the way.

Topic 4 - Help us understand the economics of product development in a SaaS business. Not only do you have the normal costs/challenges of building the software, but you have the ongoing costs of running the SaaS operations.

Topic 5 - What are some of the critical metrics and measurements that the SaaS company and their VCs are typically looking at?

Topic 6 - What is the thought process of SaaS companies about their service eventually becoming an AWS service at the next re:Invent?

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