Wednesday, February 27, 2008

Top 10 Laws for Being “SaaS-y”

One of my board members, Raman Khanna of Onset Ventures, sent me a terrific article on how to run a SaaS business - Bessemer’s Top 10 Laws for Being “SaaS-y”

It's a really good list - and one where we've learned over the last 3 years to follow almost all these rules - in my words they are as follows - and the article gives some depth on each one:

1. It's the 1 year committed annual value of your contracts that matters - anything else and you're fooling yourself

2. Your sales people need to be booking $100k/month in annual contracts

3. Separate the hunters from the farmers - hand accounts off quickly

4. You need to sell direct, mostly

5. Stay in North America - there's enough market

6. Stick to one datacenter

7. Stick to one version of the code (a great advantage of the SaaS model)

8. Be savvy and use online marketing

9. Constantly manage cash vs. growth

10. No I mean it, really manage your cash carefully

Bonus: You can ignore only one of these rules

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