2. Every 10 Years in Business Apps….
2
Client Server (90s) SaaS (00s) Freemium (10s)
“Technology is always becoming lower in cost and easier to use. It’s
a continuum. Let’s ride it.”
Marc Benioff
November 1998
Behind the Cloud, Play #6 Page 10
3. Disruptive Business Model (Really)
Clayton Christensen Disruptive Innovation
Simpler, easier, less
profitable (?)
New or hard to serve
markets
New business model
New financial model
New leaders
3
4. Business Apps Markets by Model
4
Client Server
SaaS (20-500 EE)
Freemium (<10 EE) & QuickbooksWas Hard to Serve
Company Size
Freemium companies are servicing new global markets from the start
5. Freemium vs SaaS Business Models
5
Marketing Churn &
Satisfaction
Sales
Product &
Pricing
• Different functional and cross functional work
• New operating metrics
Trial
Experience
6. Freemium vs SaaS Financial Model
6
Linearity
Capital
Requirements MetricsHeadcount Core Assets
Paying Subs
Brand
Salespeople
Active Free Users
Data to Mine
Paying Subs
Autoconversion
CAC
CLV
• Non-linear financial model
• Investors should focus on CLV
7. Accelerating Growth and Capital
Growth Opportunities
Virality
Engagement
Conversion
Customer satisfaction
Use the data
International
New editions (groups)
Marketing and “Sales”
Marketplaces
Mobile
Venture Capital
Religion?
Market leadership
7