Successful SMB SaaS Companies Have a 2 Step Value Proposition


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




On first glance, SMB SaaS companies, those who sell Software-as-a-Service to small to medium businesses, may seem like any other software company. But they are quite a different breed. It’s not just the sales process that differs from traditional software. The entire business has be built differently. So must the product. And typically these products have a 2 step value proposition. SMB SaaS companies sell to a radically different market than enterprise software companies.

Successful SMB SaaS Companies Have a 2 Step Value Proposition


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




On first glance, SMB SaaS companies, those who sell Software-as-a-Service to small to medium businesses, may seem like any other software company. But they are quite a different breed. It’s not just the sales process that differs from traditional software. The entire business has be built differently. So must the product. And typically these products have a 2 step value proposition. SMB SaaS companies sell to a radically different market than enterprise software companies. See the table below. The average traditional enterprise software company sells to firms with 3300 employees whose average payroll is $160M annually. In the US, there are only 17,500 of these firms. On the other hand, SMB SaaS companies sell to firms with 10 employees and $400k in annual payroll. There are about 5.8M of these firms in the US. Encouragingly, the market size for enterprise software is roughly equal to the market size for Continue reading "Successful SMB SaaS Companies Have a 2 Step Value Proposition"