In a recent Talkin’ Cloud column, our VP Cres Ferrell shared the top five things he recommends SaaS companies keep in mind as they work to grow their business:
I recently read an article by Tomasz Tunguz, a venture capitalist at Redpoint. Tunguz does a great job explaining the SaaS/Excel phenomenon. Essentially, Excel is such a common and accessible software that many professionals use it for an array of job needs, from calculations to simple CRM. But as companies and teams grow, their job needs become more complex and users no longer know how to make Excel work for them. Instead, they need a new solution. Enter any of hundreds of SaaS companies, who step in ready to solve a pain point with a crisply packaged service and a compelling demo.
Tunguz’s article got me thinking about how low the barriers to entry really are for starting a SaaS company these days: identify a problem, hire a developer, and boom. Over the past 10 years, AWS and Microsoft and Google have made it so easy to develop and deploy cloud-based applications and instantly create something massively scalable. So, the question arises: If everyone can scale, why don’t they? As an investor, I see a lot of SaaS ideas come and go, and I’ve even invested in some failures myself. Through that journey, I’ve identified several qualities of successful SaaS companies and entrepreneurs. If you’re running a SaaS company, keep these five things in mind as you work to grow your business. If you’re an investor, examine the SaaS companies in your portfolio through this lens to assess whether they’re headed for success, or whether it’s time to make some adjustments.
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