Customer-centric Growth by Lincoln Murphy

SaaS Business Model is About Rules, Not Exceptions

SaaS Apps should be flexible, but never customized.

For the vendor, the SaaS business model is about rules, not exceptions. Exceptions aren’t scalable.

For business scalability, you must shift focus to automated, repeatable processes. For pure-play SaaS startups, this isn’t as big of deal since they are likely starting with a clean slate. For those “switching” from the legacy software model or branching out from a non-software company by exposing internal processes, products, or expertise to the market via SaaS, this can be a big challenge.

Whereas much of your current revenue might come from professional services, other one-off services, customizations, etc., if you draw the line in the sand and say “we are a SaaS vendor”, then you need to do whatever it takes to derive most of your revenue from the rules, and not the exceptions.

The rules in the SaaS business model are the scalable revenue streams, and the exceptions are not. To do this requires you to identify and clearly delineate the revenue streams available to you (there are 7 total) and to architect your business, including the underlying software, to drive toward the scalable revenue streams.

This could also require you to completely change your business and operating environment (the technology is the easy part); are you ready?

– Lincoln

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