Software as a service Business Model

Software-as-a-service is one of the most commonly used business models in the Silicon Valley. It reduces the upfront cost for the user, but it has a serious effect on cash flow.

Well-known examples are:

  • Salesforce
  • Magento
  • Surveymonkey
  • Teamleader

Before you start

  • Check if software responds to real needs
    • Competition analysis (crowded market).

How to start?

  • Create an MVP that is free in order to test the product’s appeal and find ways to improve it.

What are the key success factors?

  • Convert free users to paying ones
  • Attract enough clients

How to cope with the threats?

  • Cheaper one time payment solutions
    • Add extra services/features with subscription
  • The user no longer finds the sofware relevant
    • Connect with the user in order to make the product relevant again

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