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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