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Saturday, January 25, 2014
Quick Catavolt Introduction
• Started in 2008 • Bootstrapped by founders • Series A in 2012, Series B in 2013 • 10,000+ Users in 30 Countries, Fortune 500 clients, rapid growth acceleration • Patented Dual Model Architecture and industry recognition
• • • • Selecting a model The ripple effects of your selection Tailoring you Go To Market Funding and executing My perspective is heavily B2B software oriented
Step 1: Revenue Model
Selecting a revenue model sets the tone for the entire business. Your selection will be influenced heavily by the market, customer expectations and competitive forces.
Focus on customer expectation
Step 2: Pricing Strategy
Pricing is one of the most complex aspects of any business. Often times the strategy has to be tweaked based on market feedback and changes in climate.
Optimize based on market
Step 3: Cash and funding
The revenue and pricing will determine how cash flows in and out of your business and thus will dictate the funding needs.
Cash flow drives funding
Model XaaS, Subscription, Freemium One time license (per app download, single license) ILF/ALF What’s appealing? Great long term returns Receive cash value of product up front The “Traditional” model. Produces immediate cash. What’s challenging? The cash trough Making the next quarter Not applicable for consumers. Looked at as legacy. Forces an “Enterprise” sale. Seasonal highs and lows. Long ramp up time
Low risk for customers. Customer’s success is your success.
Input to your decision
Who are your customers? How customer are buying? How others are selling? How do people use your product? Where does the money come from?
Do you tag along with other products? What does it take to deliver?
How do you reach customers? Can you shake up the market?
What is the sales cycle?
Finding the balance of forces
The Perfect Model
Funding, valuations, exit strategy
The Market Trend
HOW IMPORTANT IS THIS DECISION?
Case Study: Leading Business Services Exchange
• Web portal launched to facilitate B2B business transactions • Choices: Pay per transaction vs subscription. They chose subscription. • Billons flow through service every year. • Currently earning 1/100th of potential. • Almost impossible to switch.
Case Study: Catavolt
• MEAP’s dominated landscape.
– ILF/ALF – Installed software – Lot’s of professional services
• Catavolt built product around the idea of a SaaS mobile platform. • Today MEAPs are dying and platforms like Catavolt are growing
As it relates to a direct sales approach.
A QUICK SAAS DEEP DIVE
David is a five time serial entrepreneur turned VC, at Matrix Partners
DAVID SKOK’S SAAS ECONOMICS
The Cash Trough
CLTV/CAC Ratio determines months to positive cash flow. Trough is proportional to speed of scale, i.e. the faster you grow the more cash you need.
Hitting the gas pedal
And the cash it needs
How we dealt with it
At first we funded with Series A and Series B. Success gave us the ability to get to CLTV/CAC > 3 Now we can command annual prepays on % of deals.
2300 Lakeview Parkway Suite 700 Alpharetta, GA 30009 1-800-939-6812 www.catavolt.com