SaaS companies have finally woken up to the importance of pricing. Nearly two-in-three SaaS businesses we surveyed changed their pricing in 2017, according to OpenView’s upcoming Expansion SaaS Benchmarks survey (sign up here to be notified when the report launches next week). And it wasn’t only small companies that changed their pricing. Even among companies with $20M+ in ARR, more than 60% changed their pricing at some point in the last year. For companies that changed their pricing, these changes had a substantial positive impact on revenue growth – but the impact was far from consistent. The average pricing change resulted in a 20-25% improvement in ARR. But one-in-four companies reported a 50% or greater improvement just from pricing! On the flip side, one-in-six saw less than a 10% increase. After personally leading or supporting 40+ pricing engagements over the past 9 years, one thing has become abundantly clear:
Continue reading "How to Actually Implement a Pricing Change"
Editor’s Note: The following article is based on a recent episode of OpenView’s BUILD podcast. You can listen to the full episode featuring Kate Glazebrook, co-founder and CEO of Applied here. Building a team that embraces diversity and inclusion can be challenging for any company, and some might say particularly challenging for tech companies. It is difficult to eliminate the hidden biases that exist in the traditional hiring process, but I recently had the chance to talk with someone who is a pioneer working to solve this exact problem. Kate Glazebrook is the co-founder and CEO of Applied, a technology platform that uses behavioral and data science to remove bias from hiring decisions. In layman’s terms, it’s a hiring platform that helps you find the best person for the job, regardless of their background. Kate started her career as an economist in the Australian government. While the connection between
Continue reading "Unbiased Hiring: Tactical Tips to Help Your Build Stronger, More Diverse Teams"
Special thanks to Laura Rosca who helped compile this research. Freemium in SaaS is old news. The much-discussed pricing strategy took over the SaaS world and helped fuel the phenomenal success of SaaS pioneers like Dropbox, Evernote, SurveyMonkey and Hootsuite. These successes then spawned a number of copycats, that bet big on freemium only to see free offerings become a resource-draining distraction. I actually wrote about the phenomenon, which I called ‘The Slow Death of Freemium’, back in 2016. Freemium appeared to be declining in popularity and, when it was in place, drove next to zero new ACV for most SaaS companies. Flash forward to 2018 and freemium again feels cutting edge. SaaS companies have gotten much smarter about when to apply a freemium model to their products – and how to do it. They also better understand how to measure the success of freemium and strategies to
Continue reading "Everything You Need to Know About Freemium Pricing"
Editor’s Note: The following article is based on a recent episode of OpenView’s BUILD podcast. You can listen to the full episode featuring Christoph Janz, Managing Partner at Point Nine Capital here. As an early stage-investor, Christoph Janz from Point Nine Capital has an excellent track record of investing in high-growth technology companies – think FreeAgent, Geckoboard and Typeform. Perhaps one of the best-known companies in his portfolio, however, is also the first.
“It really all started with Zendesk. I knew nothing about SaaS, but I fell in love with the idea of the consumerization of enterprise software.”Christoph got involved with the company when it was about a year old and the product had only been in the market a few weeks. At that time, the fledgling company boasted a whopping fifty or so customers, each paying $100 per month. Today, Zendesk is aiming to hit a billion
Continue reading "VC Investor Christoph Janz on How to Scale to $100MM ARR"
Editor’s Note: The following article is based on a recent episode of OpenView’s BUILD podcast. You can listen to the full episode featuring Dave Grow, President and COO of Lucidchart here. Lucidchart may be the poster child for doing (way) more with less. This visual productivity platform has not only scaled to 10 million users (an impressive achievement in itself), they have bootstrapped their growth all the way. In fact, even after their rampant success helped them raise a hefty round of funding, they didn’t need to spend it. How’s that for efficient? I recently had the opportunity to sit down with Dave Grow, Lucidchart’s President and COO. He walked me through his team’s approach to delivering stellar sales and marketing results while keeping spend low. The team’s multi-level strategy adapted to the company’s growth and evolving objectives, allowing them to take advantage of whatever strengths and leverage
Continue reading "Scaling while Bootstrapping: How Lucidchart Reached 10 Million Users on a Shoestring Budget"
If you’ve ever been frustrated by the limitations of email, you’re not alone. In fact, startup Mixmax was founded to fix your frustrations. Rather than building an email replacement, Mixmax aims to wholly improve your email experience with a host of features including one-click scheduling, templates and rich automation with your CRM. Mixmax’s decision to build on top of one of the world’s most ubiquitous platforms was intentional from day one. With an estimated 2.6 billion email users, Mixmax co-founder and CEO Olof Mathé wanted to go after users where they already were. “It’s much easier for people to adopt a product that enriches something they already use than to try to relearn a new flow,” Mathé said. While Mixmax’s potential user base is vast (anyone who uses email), its marketing budget is not. Like other startups, Mixmax has limited resources – monetary and otherwise. But a bit
Continue reading "Mixmax’s CEO on How to Achieve Near-Zero CAC through Viral Growth"
The word is out: private equity has solidly emerged as the year’s best exit opportunity in SaaS. When I wrote about the trend last November, the top private equity firms had rapidly ramped up the pace of deals, raised record funds, and become much more comfortable with growth rather than just EBITDA. PE firms haven’t shown any signs of slowing down. Over the course of 2017, private equity buyers officially spent as much as large strategic acquirers on buying SaaS companies. What’s more is that they’ve been paying attractive prices (9.1x and 7.1x revenue for SolarWinds and Cvent, respectively) while continuing to offer best-in-class deal dynamics like a faster and more predictable closing. This inevitably begs the question, how should SaaS companies position themselves to be attractive to private equity buyers? To find out, I sat down with two experts. The first was Darren Abrahamson, Managing Director
Continue reading "How to Position Your Startup to Private Equity"
As Season 2 of BUILD comes to a close, it’s only natural to examine the exit landscape. OpenView’s VP of Corporate Development, John McCullough, discusses the current exit landscape and the importance of creating relationships with strategic buyers well before a deal is done. Then Darren Abrahamson, Managing Director at Bain Capital, talks through the merits of private equity as an exit option and how a CEO can choose between several buyout offers. Prefer to listen on iTunes? Access the episode here. The post Exits: Bain Capital on the Right Time to Exit [Podcast] appeared first on OpenView Labs.
SaaS pricing, every business thinks about it, but the majority rarely act. In this episode of BUILD, hear from Patrick Campbell, Co-founder & CEO of ProfitWell, on the importance of pricing, the impact of freemium, and the metric you should use to drive value for your customers. Plus, Deputy COO, Craig Harris, weighs in on his business’ go-to-market model and how it impacted the company’s big pricing initiative. Prefer to listen in iTunes? Click here. The post Pricing: ProfitWell’s Patrick Campbell on Monetizing Your Customer Base [Podcast] appeared first on OpenView Labs.