A Smart Bear: Startups and Marketing for Geeks

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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. The mindset works like this: It costs a lot of money to land an enterprise customer. And: how many times do you run through that process and still lose the customer? 30% cost to serve the customer. (Can

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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. And you could ask for a few things in return: They complete a survey (your customer/market research). What are other advantages or pitfalls of marketplace-style businesses? Maybe it's the "go big or go home" mentality?

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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% and 5%” or “cost to acquire a customer between $50 and $500″ or “average monthly revenue per customer between $20 and $200.”

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Pricing determines your business

A Smart Bear: Startups and Marketing for Geeks

It’s often said that you shouldn’t talk about price during customer development interviews. 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). Even bootstrapped businesses can make this work (e.g.

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“Fantastic” beats “efficient”

A Smart Bear: Startups and Marketing for Geeks

What if you decided to provide something tremendously fantastic for your customers, even though it meant great expense and hardship? Customers gleefully avoid the Blockbuster none-of-these-look-good-just-pick-one-already-zombie-walk — and NetFlix just put Blockbuster out of business — but is this a workable business model?

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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. A big, profitable company seems like the hardest thing for a small company to compete against.

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Darwinian company growth doesn’t always select the best companies

A Smart Bear: Startups and Marketing for Geeks

Presumably, some will and some won’t ever figure out a business model, but the point is that their position as “winners of the market” is due to being an excellent virus in a Darwinian sense, not due to possessing an excellent business model. This is growth and profit driven by values.