Sixteen Ventures - Latest Comments

Re: Two Critical Sales Funnel Questions You MUST Answer | Sixteen Ventures

LSL713 — Thu, 17 Feb 2011 09:55:45 -0000

Thanks Lincoln, for a great post. The importance of the pricing page is so often overlooked, and it often is the key turning point of converting visitors into paying customers!

I've found David Skok's "For Entrepreneurs" blog to be another great resource for tips on improving your sales and marketing process including optimizing your sales funnel, balancing complexity in pricing plans, etc. http://www.forentrepreneurs.co...

Re: Will You Win the Race to the Bottom? | Sixteen Ventures

Healy Jones — Fri, 04 Feb 2011 15:37:34 -0000

Good point Lincoln. The idea is to find the stuff you do DIFFERENTLY than the competition and that your customers find value in, and highlight that.

Re: SaaS Pricing Page Workshop: Complete Archive ONLY $50 | Sixteen Ventures

Lincoln Murphy — Fri, 14 Jan 2011 03:50:45 -0000

I replied directly to Krishna on Twitter, but I wanted to make sure to respond on here, too. Here is what I wrote: Pricing Page Workshop vidoes are downloadable immediately. Three files; 2 .movs 200 & 25MB and 1 PDF ~20MB.

Re: SaaS Pricing Page Workshop: Complete Archive ONLY $50 | Sixteen Ventures

krishna kishore (KK) — Wed, 12 Jan 2011 11:45:36 -0000

This looks exciting indeed! Would this content be downloadable upon payment? Can you indicate the size of content - so that I can plan WHEN and WHERE I can proceed?
cheers,
kk
www.twitter.com/kkbava

Re: In SaaS, Technology Will Fail, Service Must Never | Sixteen Ventures

Derek Schwartz — Tue, 21 Dec 2010 17:25:09 -0000

I wanted to just let you know that I'm GLAD Citrix failed you! I couldn't afford the live workshop, but the $50 that I spent on the videos and slides was a bargain! Thanks for making this information available. It was very good information that made me feel like I was back in school again. The cooking vs. recipe analogy was awesome, and I hope you make future video available this way, possibly on DVD?!?

Thanks,
-Derek

Re: In SaaS, Technology Will Fail, Service Must Never | Sixteen Ventures

Lincoln Murphy — Tue, 21 Dec 2010 14:37:15 -0000

Thanks for very kind words Jana! I really appreciate it.

I honestly wasn't sure if I wanted to publish this after having sent it to the mailing list - harping on the same thing yet again. I thought I should just let it go - put it to rest. But I couldn't. It is so important that SaaS & Web App vendors learn from the mistakes of others.

- Lincoln

Re: In SaaS, Technology Will Fail, Service Must Never | Sixteen Ventures

Jana Wiggins — Tue, 21 Dec 2010 14:15:35 -0000

Lincoln, I know the frustration you were feeling (full disclosure-I was on the webinar) and I was feeling the same frustration for you and this is a great post reminding us about the "service" part of SaaS.

I think at times we may forget or ignore the infrastructure and/or processes that need to be created, documented and executed to provide each critical piece of "service". Of course, if you know me, you know that I am process driven and can typically tie anything back to a process or lack of...but I find that as companies get bigger, grow, change resources etc. that processes are the first to go or continue to be pushed down the priority list. What they don't understand is that processes can determine speed and success i.e customer acquisition, customer retention, fulfillment etc.

Lincoln, kudos to your customer service. If anyone is interested the workshops are worth every penny. The information made me step back, look at the page that was currently in design and make the decision to scrap it. Back to the creative process but this time we will approach it from a different perspective.

Re: In SaaS, Technology Will Fail, Service Must Never | Sixteen Ventures

Lincoln Murphy — Tue, 21 Dec 2010 13:59:36 -0000

Andy - Thanks for the question. I would have absolutely forgiven Citrix if they were proactive in their support. Would I have been happy to cancel the workshop? No, of course not. But I would have been happy to avoid the embarrassment & inconveniencing of my customers though, which was more important to me.

- Lincoln

Re: In SaaS, Technology Will Fail, Service Must Never | Sixteen Ventures

andykiteman — Tue, 21 Dec 2010 13:51:19 -0000

Thanks for another great post! What Citrix probably don't realise is that everybody reading this blog will be avoiding their service and/or considering one of their competitors.

Is there anything they could have done that would have made you forgive them and continue using their service?

Re: 37Signals Caught Treating Pricing Page like a Marketing Page | Sixteen Ventures

Lincoln Murphy — Tue, 02 Nov 2010 03:20:20 -0000

You're right Kevin... how dare we advertise our services on our blog. Thanks for your input, and I'm sorry you had a hard time navigating the article. It seemed to flow pretty well when I wrote it and contained what I thought to be some valuable insight for free. In exchange for that free valuable insight - oh, and the rest of the content generally regarded as at least "pretty good" on this blog - we ask that you read around a link or two pointing to the services we offer. Seems odd to think that is too much to ask.

Re: 37Signals Caught Treating Pricing Page like a Marketing Page | Sixteen Ventures

Kevin Holesh — Mon, 01 Nov 2010 20:00:53 -0000

I see that 16 Ventures also uses its blog posts as marketing pages. I had a hard time getting through the article with 5 plugs for your workshop in the way.

Re: 37Signals Caught Treating Pricing Page like a Marketing Page | Sixteen Ventures

krishnan — Mon, 01 Nov 2010 19:29:08 -0000

Even though I mentioned about 37 Signals issue here, my point of the post was ONLY to highlight how easy it is for customers to move to a competitor (a fact which is the basis of some of the offerings from competitors). In short, I was highlighting that the cost of shifting to a new vendor is negligible and SaaS startups (not the established ones) should take this into account while building their strategy. I was just using the 37 Signals news as an entry point for my argument. Today's customers are smart and the cost the shifting is negligible. These two points should be in the conscience of SaaS vendors. Thatz the focal point of my post.

Re: 37Signals Caught Treating Pricing Page like a Marketing Page | Sixteen Ventures

Jaime Pinzon — Mon, 01 Nov 2010 19:02:11 -0000

Not trying to be condescending, but if your business can't afford 50 bucks for project management software you really aren't their target market and I would argue that you really don't need the software yet anyways.

Re: 37Signals Caught Treating Pricing Page like a Marketing Page | Sixteen Ventures

Jon Thomas — Mon, 01 Nov 2010 17:33:00 -0000

Agree with the article, but there's no way I would pay $49.99/month for their product at my level of business. Ouch! Thank goodness I got in before they did that, or I would never know what I'm missing. Maybe they're fine with that. Who knows.

Re: 37Signals Caught Treating Pricing Page like a Marketing Page | Sixteen Ventures

Lincoln Murphy — Mon, 01 Nov 2010 14:14:05 -0000

@krishnan I'm pretty sure I understand your point, I just think you gravitated toward a position that seemed out of alignment with what 37Signals actually did. There is one thing about open communication and transparency with existing customers - especially when it comes to pricing changes that will affect them - and there is an entirely different expectation around marketing to new customers.

Again, 37Signals was testing the marketing of their prices - their price transparency. They weren't even testing their prices. As Fried said, the prices didn't change and haven't changed for some time. I do get what you are saying, and yes, SaaS vendors - especially startups who don't have the luxury of a huge customer base yet - need to fully understand the ramifications of their actions because the ability to switch is there.

I'm not sure exactly how "easy" it is to switch vendors across the board, some functional segments - like CRM - are easier than others I suppose, but the *idea* that you aren't locked-in via a contract is certainly there.

But this is why we tell all of our clients to get out of the commodity game and sell *service* - provide exceptional value and lock clients in with success and investment in the product. Do whatever you can to hold onto them, giving them no reason to leave. And it all comes back to Revenue and Profit - ultimately the Customer Lifetime Value (CLV) metric.

So I am not disagreeing with your post - if anything, I just think it was out of context given what 37Signals actually did. But that is just my take.

- Lincoln

Re: 37Signals Caught Treating Pricing Page like a Marketing Page | Sixteen Ventures

krishnan — Mon, 01 Nov 2010 14:02:40 -0000

I think you didn't get the point I was making in my post. It was not about 37Signals per se but about how easy it is to shift to a competitor in this SaaS era if the customers are not taken into confidence in this Cluetrain world. It is something which SaaS startups should keep in mind. A very important issue IMHO.

Re: What Percent of Customers Will Pre-pay for SaaS? | Sixteen Ventures

Lincoln Murphy — Thu, 21 Oct 2010 19:56:44 -0000

@Duane - Thanks for the insight.

@Jonathan - Great point! I agree that it is a big boost for cashflow - which is why many boostrapped companies like to do it. So why does SFDC do it? I don't know, you'd have to ask them. They seem to have a very legacy-oriented sales process with lots of human interaction and maybe they want to cover their relatively high CAC as quickly as possible? Perhaps in their market they've found that churn is high and they want to lock-in customers and have found that they can't really lock people in by simply having a great product that people will become highly invested in quickly (the key here) and continue to stick around simply because it is great. Maybe they've also found that on the low-end having contracts is too much of a nightmare. Maybe they found that getting paid up front does indeed solve both of those problems - and maybe it is even better if people churn out after they've paid up front. Those are the ideal customers, right?

Or maybe not. There is zero transparency there and we can only assume that what they're doing works for their company in their market. I think it is critical to understand that most companies started doing subscriptions for SaaS because they can't get (or don't want to ask for) money up front. There are no rules and if you can get money up front, go ahead. It never hurts to ask!

Now, I happen to like the idea of having multiple revenue touchpoints - that is, I get ask for money from my customers 36 times over a 3 year period if I bill monthly. Why? It keeps me honest - I better have a great product - and it gives me a chance to upsell, push upgrades, or cross-sell around something they are already going to pay for.

All of that ultimately leads - or at least it should - to growing the overall lifetime value of a customer. If you get their money up front for a year, it is harder - but certainly not impossible - to get more money from them along the way.

The bigger problem I have with up-front payments - outside of the scenarios I listed in the article - is that it almost always involves a discount. I'm not sure if SFDC gets payment up front without discounts, but I suspect they try. Giving 12 months for the price of 10 is discounting and actually takes the overall CLV down. You could make it up in the second year, but I like to avoid too many discounts unless they are done in a controlled manner and are very strategic. But that is me.

Re: What Percent of Customers Will Pre-pay for SaaS? | Sixteen Ventures

Jonathan Boutelle — Thu, 21 Oct 2010 19:21:37 -0000

Hmmm... a counter-example. Salesforce works super-hard to get paid for a year up-front. Why?

Business is about cashflow, and getting paid in advance is hugely good for cashflow, while basically eliminating the possibility of churn during the first 12 months.

I would even say there's a standard of offering "12 months for the price of 10" with a lot of SAAS vendors ... I've seen that on many pricing pages.

Re: The Freemium Hype Machine - Full Steam Ahead! | Sixteen Ventures

Jonathan Boutelle — Thu, 21 Oct 2010 19:09:10 -0000

Can't wait for the update! I really enjoyed your paper. Look forward to reading the update (hopefully on slideshare? You could generate a lot of leads with it if you turned on lead capture ;->).

Re: What Percent of Customers Will Pre-pay for SaaS? | Sixteen Ventures

Duane Jackson — Wed, 20 Oct 2010 06:44:34 -0000

When we started out we let customers pay for a whole year up front in return for a discount of about 15%. Why? We needed the money. We were a bootstrapped startup.

We've long since withdrawn that option because we'd rather receive the higher amount albeit spread out over a year.

I think 15-20% sounds about right for the percentage of customers willing to pay for a year upfront, especially if its an app they know they are going to continue using for atleast a year.

Re: The Freemium Hype Machine - Full Steam Ahead! | Sixteen Ventures

Rags Srinivasan — Mon, 18 Oct 2010 09:11:12 -0000

When you bring in a small subset of successful businesses, add in their homogenous process and a willing audience there will be nothing more than further reinforcement of the fad. You are correct in calling out the need for contrarians, but even with that the audience is most likely to past that exception and listen only to those who mirror their own beliefs.
On the bright side,
1. we all will get more free apps (some of them will really be useful)
2. it creates opportunities (and excellent advantage) for those who believe that marketing is strategic segmentation and targeting the segment with a version they are willing to pay

-rags

Re: Please Learn From the Zendesk Pricing Fiasco| Sixteen Ventures

leonyeh — Mon, 11 Oct 2010 16:09:11 -0000

Chargify did exactly what Zendesk do. The only major differences is that one is help desk system, the other is your financial transaction system.

SaaS do not work well on critical system.

Re: Are "Test Sales" in SaaS a Perception Issue? | Sixteen Ventures

Omer Gotlieb — Tue, 05 Oct 2010 03:50:02 -0000

I absolutely agree. I think monitoring users first experience (whether in trial or once they actually buy) is crucial to understand the value they think they get from the system. Getting this information in real time enables you to fix problems immediately

Re: Only 1 Week Until Pricing Page Tune-Up Workshop | Sixteen Ventures

Reedge - Personalization Tools — Thu, 23 Sep 2010 17:53:27 -0000

Hi Lincoln, I just did some research on pricing of cloud service we checked 605 companies and used 317 for analyzing there data (the others had no pricing plans). Check out the results http://blog.reedge.com/best-pr...

Re: SaaS Development Roadmap & Pricing Alignment | Sixteen Ventures

Healy Jones — Wed, 22 Sep 2010 15:49:46 -0000

You must have been reading my mind when you wrote this post... been thinking about this a lot recently.