A Smart Bear: Startups and Marketing for Geeks

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Deep dive: Cancellation rate in SaaS business models

A Smart Bear: Startups and Marketing for Geeks

” For a simple subscription business model the formula is easy to write but hard to compute : [LTV] = [monthly revenue] × [number of months in lifetime]. The other useful thing we do with cancellation rate is to compute LTV (customer L ife T ime V alue), but I don’t use the simplistic technique espoused by many others.

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The unprofitable SaaS business model trap

A Smart Bear: Startups and Marketing for Geeks

So no, this upside-down business model isn’t what a SaaS business should construct. I wish the modern startup community would understand the mindset that gets a company to this point, and resist it. The mindset works like this: It costs a lot of money to land an enterprise customer.

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Solving the "marketplace" business model

A Smart Bear: Startups and Marketing for Geeks

In fact, 3 of the 10 selected companies from the past two years has followed this business model. What are other advantages or pitfalls of marketplace-style businesses? Tags: How-To business-model marketing planning sales strategy. Maybe it's the "go big or go home" mentality?

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COC: A new metric for thinking about cancellations in SaaS business models

A Smart Bear: Startups and Marketing for Geeks

This is the second article in a series on novel ideas for SaaS metrics, which started with The unprofitable SaaS business model trap. You’ve probably know that cancellations kill growth in scaling SaaS companies. ” That’s why I picked the variable p – as in “payback period.”

Metrics 270
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Fermi estimation for startup business models

A Smart Bear: Startups and Marketing for Geeks

Often your best estimate of any metric or market behavior or business model component is at best accurate within a power of ten, for example “expected conversion rate between 0.5% Early in a company’s life, you don’t know anything. ” Estimating with these extremely wide ranges can be surprisingly useful.

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Why it’s nice to compete against a large, profitable company

A Smart Bear: Startups and Marketing for Geeks

They have everything: money, brand, momentum, existing customers, press, product teams, distribution channels, expertise, market insight, analysts, sales offices, product features, and, by definition, a working business model. All a little startup has is a decent idea and extremely greasy elbows. Not anymore.

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Pricing determines your business

A Smart Bear: Startups and Marketing for Geeks

Your product is designed with natural tripwires to trigger other pricing ( Freemium model ), or not (business model left as an exercise to your future self). Requires venture funding because you have no income, and if you’re successful you’ll need lots of people and tech to run the business.