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SaaS Foundations

Scott Sehlhorst of Tyner Blain has a really great post up on SaaS fundamentals. If you’re evaluating SaaS as a sales/delivery model, you owe it to yourself to read and understand these issues first. I especially like how he positions everything from the Point of View of the customer (which is how we should all think).

In addition to his article, there are some psychological aspects at play with SaaS that you need to evaluate for your market, I’ll list a few and let you (the reader) expand on them in comments:

  • People generally dislike pay-as-you-go pricing, and will actually pay more in a flat fee
  • Customers are worried about data lock-in and what happens to their data when they stop paying (you can disarm this by providing industry standard data export tools [CSV, Excel, etc])
  • The customer gets more leverage in a deal in SaaS than in a “standard” licensing sale, especially as an existing customer. As Scott pointed out, the economics of SaaS mean that keeping your existing customers is important since they are annuity revenue streams, and much less expensive to attain than new deals. Customers know this and use it to leverage better terms at renewal time; and since they are getting all of the upgraded functionality as it comes in the SaaS model, it is to their advantage to stretch out the negotiation process as long as possible. If you are a smaller company using SaaS selling into a large company, they will be able to figure out what rough % of your revenue stream they represent, and even if your contracts have good uplifts on the fees once a contract goes month-to-month, they may make the calculation and refuse to pay the uplift knowing that it is unthinkable that you’re going to cut them off, which is your best leverage. If you’re a startup – are you preparred to cut of access to the SaaS you are selling Ford? Morgan Stanley? Bank of America? Good luck with that!

Changing Jobs in Product Management: Interviewing and Offer Evaluation (Part II of III)

This post is part of a three-part series about changing jobs in Product Management. Part one was about doing a self-evaluation and farming your network.

Feeling naked in the negotiation process?After you’ve done your evaluation and reached far and deep into your network (which you are doing anyway – right?), at some point someone will find you.

The point of any your search is for you to find, but also for you to be found, because hiring managers and companies will make a much more lucrative offer to someone they feel like they’ve vetted. I highly encourage raising your online profile through creative PR. It’s not about putting yourself out there to find a job, it’s about being recognized as a “go-to” Product Management expert in your field/geography/niche. Face-to-face events like ProductCamp are great for showing your depth of expertise, which you can leverage into fun online conversations down the road (aside: every city should have a ProductCamp. Email me if you want help setting it up).

No one gets a formal request to interview right off the bat anymore. You’ll get an email, probably from the HR or recruiter, saying that they saw your profile on LinkedIn and you’re a match for some talent that they are looking for. This is where you critically need to have done your self assessment so that you already know if this company is one of your targets, and why. If you’re interested, ask to have an informal meeting with the hiring manager, which may be face-to-face or a phone screen.

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