Tuesday, December 21, 2010

Key take-away's from Breakfast Seminar: SaaS Business Model Update -- Creating and Managing Revenues

The session focused on the elements of a SaaS business model that create success and avoiding the elements that can do you in, exploring real life examples that impact at the bottom line. SaaS executives and venture capitalists shared their experiences with SaaS and shared tactics around specific areas such as retention, pricing and acquisition, where they have had the greatest success.

Key take-away's from MassTLC's Breakfast Seminar: SaaS Business Model Update -- Creating and Managing Revenues include:

David Skok, General Partner, Matrix Partners
David keynoted the event and provided a detailed framework for analyzing profitability, cashflow, and sales strategy in a SaaS business. One of the metrics that David presented was LTV -- (Customer) Lifetime Time Value -- an indicator of how well a SaaS business is performing. In plain speak, LTV relates to how much an average customer will return in value to the business over its predicted lifetime (aka monetization). He then compares LTV with CAC, which stands for customer acquisition cost (aka cost). He stressed that every SaaS company should target a CAC/LTV balance of: LTV > 3*CAC (and good SaaS business are in the 5+ range).

David also talked about the growth of a SaaS company. It's all about timing, don't invest too early and burn cash as growing a company spends a lot of money during growth phase. Don't attempt to grow when the company isn't ready. To get spending right, the company needs to understand these key phases of the company:

- Search for product/market fit
- Search for repeatable and scalable sales model
- Scaling the business

View David's presentation.

William Daly, Manager of Professional Services, Iron Mountain
William gave an introduction of Iron Mountain and talked about their first customer, a leading financial company they acquired. He highlighted how addressing the needs of their first customer changed their product/service offerings and business model. He ended the presentation emphasizing personal touch and connection goes a long way for any cloud providers.

View Bill's presentation.

Jim Kizielewicz, Chief Marketing Officer, Kronos
Jim started his presentation with an overview of Kronos product offerings. It has been challenging for Kronos transitioning from a license-driven business model to one that provides both SaaS and perpetual-licensing. Kronos came up with a creative strategy of first letting the customers select a product and then allowing them to pick a bundle for that product. Kronos bundles are designed with varying degree of ownership and management. Under a perpetual licensing scheme, the customer has full ownership of the software but must host and manage the system. On the other end (under SaaS), Kronos will host and manage the system for the company.

View Jim's presentation.

Drew Fortin, Sr. Manager, Internet Marketing, Compete
Gave a recount on one of Compete's past marketing campaigns on promoting new sales. A few years ago, the company started speaking their brand through a more streamlined online presence. The result created Compete Pulse, a series of white papers (to get white papers, users have to ask questions which turned out to be great), and expert educational content where partners in other domains are involved (Compete don't claim to be an expert in everything, refer to other partners who know their domains better).

Conversion jumped from 0.85% to 1.25% while number of free accounts increase. No change in product, just marketing alone increased sales in 30%.

View Drew's presentation.

Cory von Wallenstein, VP of Product Management, Dyn Inc.
Cory talked about his experience in combating churn rate (reducing attrition and improve retention) at Dyn. They changed their renewal policy by not asking people to renew on Friday, Saturday, and Sunday and deferring notifying the customers to the following week. This tactic raised customer renewal rate from 62% to 85%.

View Cory's presentation.

Thanks for all those who attended, stay tuned for our next event. Thanks to Sam Chow, co-founder of MobyFab for help with the notes!

Thursday, December 16, 2010

Mohamad Ali Named Chairman of MassTLC -- Shares Vision for the Future

I'm writing to share with you my vision for MassTLC, a vision built on the excellent work of Tom Hopcroft, Steve O'Leary, Steve Krom, and the Board of Trustees over the years.

As you know, MassTLC is by far the most significant member forum in Massachusetts' technology business community. We have an unmatched set of programs in our clusters, unconference, and other events, delivering significant value to over 400 member companies in terms of connections, dialogue, education, professional development, and mentoring -- elements key to sparking innovation and growth in our community.

Programs are one of three points on the triangle of services we provide to our members. The others are research and policy. Our 400 member companies have real business needs that we must better understand through research beyond what we do today. With a deeper analytical view of our members' business needs, we can craft policy initiatives and adapt programs to better serve our members.

I see a MassTLC with members at its center, a triangle of services around this center -- programs, policy and research -- a strong, multi-channel communications capability, all powered by what we do best here in Massachusetts: innovation.

I'd like to share an example of MassTLC at work. Earlier this year, our previous chairman Steve O'Leary announced the "MassTLC 2020 Challenge" to create 100,000 jobs in ten years. It's not an unreasonable goal. From a base of 168,000 IT jobs today, a 5% compounded annual growth gets us an additional 100,000 jobs in ten years. Yet Rich Miner of Google Android could tell you that mobile apps is growing at 38%, Alistair Rennie of IBM could tell you cloud based business analytics is growing at 22% and Carl Stjernfeldt (investor in VGo) could tell you video is growing at 17%. We can not only meet but exceed this job creation goal.

So, what should we do as the largest member forum in Massachusetts' technology business community to catalyze this growth? The MassTLC Policy Committee has been wrestling with this question for the last six months. It has developed a Framework of Action for the MassTLC 2020 Challenge. This framework has three key components -- people, capital and infrastructure -- which collectively contain eleven key elements. One such element is access to capital for early-stage companies. We have at least two trustees who are developing radically innovative approaches in this field. Other elements such as regulatory infrastructure affect all of our members. This Framework of Action will be formally launched at MassTLC's annual meeting in March, 2011.

At the end of the day, the incremental 100,000 jobs envisioned by the MassTLC 2020 Challenge will be driven by many of our member companies -- current and future members. Research, policy, and programs, powered by innovation, will get us there. I'm excited to be part of this amazing team that has fostered, and will continue to foster, innovation and growth here is Massachusetts.

Regards,
Mohamad Ali
Chairman, MassTLC

Friday, December 10, 2010

Context is King of the Hill in Mobile

"Context has replaced content as King of the Hill" in mobile... or so stated the participants at MassTLC's Mobile Summit. Gathering the mobile ecosystem for jam-packed Friday morning panels included the chance to learn the carrier's strategies on 4G, business models that are, and aren't making money, and how quickly will the mobile third screen become the first. For the capstone to this interactive morning, nine emerging mobile companies highlighted their technologies in a rapid fire presentation and then demoed them during the reception.

Kicking off the event was a keynote panel on the promise and reality of 4G. AT&T, Sprint and Verizon all see promise in 4G, especially as it relates to machine-to-machine communications. Tom Robertson of Sprint emphasized this point with an example of how the LAPD is using cameras around town to see crime as it is happening and respond within minutes. Within the few weeks of use they made 100 arrests.

All agreed that moving from a 'can you hear me now' mentality to a 'what can I do now' will require the ecosystem creating applications that take advantage of infrastructure available. And business models that will capitalize on this opportunity.

The $$ of Mobile panel discussed how mobile is a horizontal play and there will be a number of business models that make money – not just advertising and some will combine with prior models to succeed. Predictions are that in the next 10 years, 50% of the workforce will spend 50% of their time away from the office thanks to solutions enabled in mobile and contrary to prior times, CIOs won't be able to say no the their users requests. This opens up lots of opportunity in the enterprise for mobile – besides just applications on the iPad.

In the third screen becoming the first screen panel Joe Ferra, Chief Wireless Officer for Fidelity, shared that given the prevalence of mobile, they design their systems to get people what they want in the amount of time they have 'before the light turns green.' Users are also expecting more context to their experience because they know content providers know where they are, what device they are using and the time of day. When providers do take advantage of this information with targeted ads, it pays off. Click through rates on mobile ads average about .8%...where as on the internet just .2%.

2011 will be a building year for 4G, and all agree there is significant promise and multiple opportunities for entrepreneurs with this evolving technology - particularly those focused on creative solutions for increased 'battery power'. Todd Adams of Verizon highlighted this point and emphasized the importance of the entire industry focusing on this issue.

Thanks to AT&T, Cisco and pwc for their sponsorship of the event.

Click to view pwc's 2009 North America wireless industry report.

Wednesday, December 8, 2010

Using Technology to Improve Care while Right-sizing Costs

A crowd of approximately 75 healthcare executives gathered this morning at Blue Cross Blue Shield in Boston to discuss how technology can be used to improve care while right-sizing costs via better analytics. Micky Tripathi, President and CEO of the MA eHealth Collaborative kicked off the morning with a background of the current system and the implementation of EHR systems throughout the state. Next, presentations and discussion followed from the payor's, provider's and 3rd party vendor's perspective. The group is at the forefront of analyzing and applying healthcare data to help improve patient health and quality of care while "right-sizing" costs. Dana Safran, Sr. VP of Performance Measurement and Improvement at BCBSMA, presented an overview of BCBS's Alternative Quality Contract program. Her presentation can be found here http://slidesha.re/fDAZDP. Todd Lowthers, Manager of Physician Services, Northeast PHO, presented on market drivers for change, the data environment and the desired state. Todd's presentation can be found here http://slidesha.re/hAvgY7. The group also heard from Dr. Jonathan Niloff, Founder and CEO of Medventive.

As we plan programs and roundtable discussions for the healthcare cluster in 2011, we welcome your suggestions. Please send your ideas to christine@masstlc.org.