Software as a service (SaaS) has been one of the largest and fastest-growing market segments since 2019. Businesses are now investing in SaaS companies, spending nearly 50% more on these cloud technologies than in previous years. For entrepreneurs, few industries are as exciting and lucrative. But it’s not enough to just dive in and go for it. The software as a service business model is a unique model that requires a specific, but reliable strategy.
What Is SaaS?
SaaS is a delivery model of centrally hosted software that is licensed to customers via a subscription plan. If a company leases its software through a central, cloud-based system is technically a SaaS company.
These companies maintain responsibility and oversight of servers, databases, and any relevant software that allows people to access and use their products. Some of the most popular SaaS companies are Adobe, Google, Salesforce, Slack, and more.
The way that SaaS companies lease their product is through subscription plans. These plans can vary greatly from company to company. SaaS business models offer different services and different applications within their systems. Different subscription plans give different access to different services. Many offer a regular plan with one or two other plans that offer more access and increased services.
What Is The Software As A Service Business Model?
The software as a service business model includes a number of factors that are unique to it. There are three in particular that are important to take note of.
In SaaS, clients do not buy hardware. The software as a service business model involves providing a subscription service for software. Recurring payments usually take the form of monthly recurring revenue (MRR). This makes accounting for revenue potentially difficult because SaaS offers a service, not a product per se.
When your customer signs up and subscribes, you will get some money upfront. It is imperative that this initial cash not be counted as revenue until it’s been properly earned. It is a liability until the terms of service have been completed. A customer can ask for that money back at any point if the service isn’t delivered.
Revenue recognition is one of the most fundamental aspects of running a successful SaaS company.
Heightened Customer Retention
All businesses care about customer retention. In SaaS business models, however, it is ten times more important. Customer retention is what keeps SaaS companies afloat. Because you cannot lay claim to all of your customers’ subscription money until a term of service has been completed.
If you sign a customer for one year or twelve months and they leave after two, then you’re without ten months of recurring revenue. As a result, it is critical to put a significant value on cultivating customer relationships and upselling.
An existing SaaS customer spends more money on average than a new one. It is in a SaaS company’s best interest to upkeep and maintain higher-quality customer service. If you don’t, or if the quality of customer service is poor, your customer is very likely to jump to a competitor.
No matter how great the product, poor customer service can break a company.
In order to maintain and increase customer retention, SaaS companies need to consistently provide small and frequent updates to their services. Plenty of companies provide “next-gen” product versions, but SaaS has to continuously update and patch to stay above water.
This is the nature of being in the software industry. Software vulnerabilities can put customer information at risk from hackers. Nobody wants that. That’s why continuously assessing and updating security fixes is a top priority in the software as a service business model.
Since SaaS companies host their own products, they can push updates as needed. They can release new features or enhance prior versions whenever they want. Between consistent updates and quality customer service, SaaS companies have the potential to be highly responsive to customer base feedback.
This is a real-time luxury that most other industries do not have.
How Are SaaS Companies Built?
Generally speaking, there are three critical stages as to how to build and develop a SaaS company: Setup, Growth, Stabilization.
This is the early stage where the foundation of the company is established. These are fairly typical processes. Founders discover the need for the products they intend to develop, identify their target market, and create the product.
This is also the opportunity to create an effective marketing campaign and sales strategy, consider various customer support plans, and organize finances.
Once the product has hit the market, it’s time to expand. This is arguably the fun part. Because there is seemingly no limit to how far a SaaS company can expand in its market, it’s possible for a SaaS to expect new customers. This creates a sudden demand for marketing, sales, and customer service teams.
This is when a company has to act quickly in order to capitalize and secure a loyal customer base. Ideally, this growth will be accompanied by additional revenue. Companies then reinvest the capital back into their products and services. That way they have the resources necessary to meet their customers’ needs.
Now that the business is beginning to acclimate with a steady incoming stream of customers, that means the company does not have to invest in more overhead. If the SaaS company has wisely invested in customer service software, marketing automation, and consistent product updates, they are on the right track to stabilization.
Why This Business Model Works
The software as a service business model is new but reliable. The evidence of this can be found in the amount of money that other industries have begun to invest in SaaS. How many office spaces use Slack to communicate? How many designers use Adobe? As our technology advances, so does the SaaS industry.
It’s never been a more exciting time to enter the SaaS industry. Entrepreneurs, take note.
How a Startup Incubator Can Accelerate Your Business
In today’s fast-paced and competitive business landscape, startups often find themselves navigating a maze of challenges that can hinder their growth and potential.
This is where the concept of a startup incubator comes into play as a guiding light for emerging ventures. A startup incubator is more than just a physical space; it’s a dynamic ecosystem designed to nurture and propel early-stage ventures toward success.
In this article, we’ll tackle some of the most common questions surrounding incubators. For instance – what is the role of a startup incubator? How does it differ from an accelerator?
And most importantly, how can it optimize your business?
What is an incubator in a startup ecosystem?
In a startup ecosystem, an incubator refers to a supportive environment or program designed to help early-stage startups grow and develop.
Incubators provide a range of resources and services to entrepreneurs, typically for a fixed period of time, with the goal of nurturing and accelerating the growth of their businesses.
Here’s the usual process of how an incubator supports a startup:
Startups who applied and were accepted are welcomed into the incubator with an orientation session. During this phase, startups get an overview of the program’s structure, expectations, and available resources. They also meet their mentors, advisors, and fellow cohort members.
Mentorship and Guidance
Startups are paired with mentors who have relevant industry experience or expertise.
Regular mentorship sessions provide guidance, feedback, and insights to help startups navigate challenges and refine their strategies.
Workshops and Training
Incubators organize workshops, seminars, and training sessions on various aspects of entrepreneurship. Topics covered during the startup incubator program may include:
- Business planning
- Marketing strategies
- Product development
- Legal and regulatory matters
Access to Resources
Aside from training sessions, startups can also gain access to resources such as:
- Office space
- Co-working environments
- Internet connectivity
- Meeting rooms
Some incubators provide access to shared equipment, startup software, and other tools needed for product development.
Networking and Events
Incubators often facilitate networking events, pitch sessions, and demo days where startups can showcase their progress to potential investors, partners, and the broader community.
Startups work on refining their business models, products, and market strategies. They receive support in identifying their target audience, creating a value proposition, and developing a sustainable revenue model.
Funding and Investment
Incubators may provide introductions to potential investors, venture capitalists, and angel investors Startups also learn about different funding options and how to pitch their ideas to secure investment.
Successful completion of the incubator program results in a “graduation” for startups.
Graduated startups may continue to receive support through alumni networks, ongoing mentorship, or access to incubator resources.
Startup Incubator vs. Accelerator
A startup incubator and a startup accelerator are both support programs designed to assist early-stage startups, but they have distinct characteristics and objectives. Here’s a comparison between the two:
- Focus. Incubators typically have a broader focus and cater to startups in various stages of development. They often work with startups that are in the ideation or early development phase. Accelerators, on the other hand, are more specialized and typically work with startups that have a viable product or service and are ready to scale rapidly. They focus on accelerating growth and reaching key milestones quickly.
- Stage. Incubators are well-suited for startups that are still refining their business models, conducting market research, and building their initial product or service. Accelerators, meanwhile, are best suited for startups that have a minimum viable product (MVP) and are seeking to refine their business model, gain traction, and secure funding to scale.
- Mentorship. A startup incubator provides mentorship and guidance, often with a focus on helping founders refine their business ideas, develop prototypes, and validate their concepts. On the other hand, an accelerator’s mentorship is often geared towards specific aspects of growth, such as scaling operations, marketing, fundraising, and product-market fit.
Startup Incubator Examples
If you’re looking for the best startup incubators in the world, here are a few you of the most popular ones to consider.
1. Y Combinator
Situated in the USA, Y Combinator is considered one of the best startup incubators which has played an instrumental role in fostering the growth trajectories of some of the most renowned startups globally. The Y Combinator program spans a duration of three months, during which startups receive a funding injection of $500,000, albeit subject to certain conditions.
Subsequently, founders are immersed in a sequence of mentoring and refinement initiatives that culminate in the prestigious Demo Day. Here, founders showcase their concepts to an audience comprising investors and handpicked media representatives.
Mentees: Airbnb, Dropbox, Coinbase, Gitlab
Techstars directs its energy toward nurturing startups rooted in technology. Since its inception in 2006, Techstars has been a driving force behind the growth of numerous startups. Annually, they select more than 500 fledgling companies, providing them with up to $120,000 in investment and the invaluable chance to partake in mentorship programs.
Backed by an impressive funding sum of $21.3 billion, Techstars stands out as a reliable choice for technology-oriented startups. Within its portfolio of activities, Techstars hosts several high-profile events and initiatives, including Startup Week and Startup Weekend.
Mentees: Uber, DigitalOcean, SendGrid
3. 500 Startups
500 Startups operates as a dual-purpose platform, functioning as both an accelerator program and a seed fund dedicated to startups. Positioned primarily as a venture capital entity, they proudly proclaim a management portfolio worth $2.7 billion. Their primary interests converge on sectors where technology, innovation, and capital growth converge harmoniously.
Their extensive investment history spans more than 2,600 startups worldwide, underscoring the maturity and comprehensiveness of their accelerator program across diverse markets.
Mentees: Grab, Canva, Credit Karma
Frequently Asked Questions (FAQs)
Do I need an incubator for my startup?
If you’re in the early stages, lack experience, and could benefit from structured guidance, resources, and mentorship, an incubator might be valuable. However, if you’re aiming for rapid growth and have a clear roadmap, an accelerator could be more appropriate.
Do startup incubators provide funding?
Yes, many startup incubators provide funding as part of their support package. However, the funding offered by incubators can vary widely depending on the specific program, location, and the terms of the agreement. Some incubators offer direct funding to startups, while others may connect startups with potential investors or provide resources to help them secure funding elsewhere.
Preparing the Shift to Mobile eCommerce: Tips + Tools
We Are Social reported that around 50% of the 16 to 64 demographic use their mobile to purchase something online weekly. With those in mind, your eCommerce business shouldn’t be confined to one place. It’s essential that you have a website and social media sites. Plus, don’t be afraid to list your products other than those platforms. Here’s how to make a successful shift towards mobile eCommerce.
1. Use Website Builders
Most website builders nowadays can optimize your eCommerce site on the desktop or mobile. These tools help you design and layout your website and make tweaks before publishing it. Moreover, you can add pages, such as blogs, products, and contact pages, to make your eCommerce site operational.
You don’t need to hire a web designer or developer immediately when creating your site on these builders. It’s ideal for new eCommerce site owners, considering you want the business up and running from Day 1 without any hassle.
2. Set Up Secure Payment Methods
One way to enhance your customer’s experience in your eCommerce site is setting up payment gateways. Although you install payment gateway plug-ins on your desktop, it’s crucial that it’s working on your mobile site, too. This way, your customers won’t experience any mishaps or issues when paying via mobile.
3. Widen Reach with Social Commerce
Mobile eCommerce isn’t only about a mobile eCommerce app. After all, it’s a catch-all term to describe all eCommerce-related strategies done on mobile. Facebook, Instagram, and TikTok have opened avenues for eCommerce sites to integrate their store into these platforms. Plus, social media sites are easily accessible on phones, allowing customers to browse anywhere.
You can promote your best-sellers and new products on these platforms. Then, ensure that you link to your website. This way, your customers can view other products, regardless of where they’re browsing them.
4. List Products on Other Relevant eCommerce Marketplaces
Even though you have a website, you can reach more people when posting items on other eCommerce stores. This allows you to get more exposure. It’s possible that your competitors are in the same marketplace. However, if you have the correct copy and high-quality images, your customers are likely to buy your products.
5. Develop an App or Hire an App Designer and Developer
Not all eCommerce sites have an app for their eCommerce products. But you can change the game by having one for easier browsing and a smoother experience. However, app development is challenging for non-developers. There are no-code app makers to use for your new app.
Or, if creating an app is too tedious, hiring an app developer and designer is a much better alternative. They have the know-how to create an optimized app for your eCommerce site. You can find them on freelance sites like Fiverr or Upwork.
Mobile eCommerce Tools
Shopify is one of the top eCommerce tools for all businesses. You can build a site, sell online, market your products, and manage your business. You don’t need experience developing or designing a website on Shopify. The eCommerce platform has a no-code website builder, letting users create sites in minutes. Additionally, Shopify allows you to integrate apps into your online store, including payment gateways.
Another contender in website building is Wix. Like Shopify, it’s fast, easy, and simple to create and design a website. Their web design feature, “Editor X,” allows you to customize your site. Also, you can use their Wix Payments feature. It’s their solution for all payments, allowing customers to pay via Apple Pay, credit card, and other payment methods.
If you need a payment method solution, Stripe is one of the best eCommerce payment tools! You can accept payments globally. Plus, Apple Pay and Google Pay are two payment methods to integrate into your Stripe account. Stripe is also advanced because it can detect fraud and block it. Plus, you can increase conversions and launch subscriptions.
An alternative to Stripe payments is PayPal. As one of the oldest payment methods, you can trust this tool for easy payments. You can install PayPal for your checkout needs. Plus, you can even request payments! Additionally, PayPal accepts credit and debit card payments worldwide!
Don’t have time to post all the time? Consider Sked as your social media management tool. You don’t need to publish and tag your posts manually. Sked helps you tag posts directly on their dashboard. You don’t have to worry about losing your product tags. Plus, Sked will add your shoppable posts in one gallery!
Post your products on these sites:
Another social media management platform to consider for your mobile eCommerce needs is Planoly. Like Sked, Planoly enables users to tag shoppable posts without leaving the social media management platform. You can post your products with Planoly:
Content creation tools are necessary to make your mobile eCommerce strategies successful. Canva is one of these tools to promote your eCommerce site and products. You can use the abovementioned social media schedulers or other options. It’s easy to create designs for your social media platforms. Or you can create custom designs for your website and post them on other eCommerce marketplaces.
If you want a simple yet functional app, you can create one with Jotform! They use a drag-and-drop model when you build and design your app. Plus, you can use their templates to build your app in minutes. Finally, you can share your app with a QR, which will download the app to your customers’ devices.
Glide is another no-code option to consider when building your app. Like Jotform, you can create using templates and customize your app design. Additionally, you can integrate productivity tools into creating your app and automate workflows!
Our final mobile eCommerce tool is Buildfire! They have a dedicated eCommerce solution that allows you to sync your products and organize your inventory. You can even add a notification so users are informed when their products are in stock or when they need to complete checkout.
How to Grow a Business on TikTok: 8 Branding Strategies
With over 1 billion average monthly active users, TikTok provides new opportunities for businesses to engage with audiences. TikTok for Business has emerged as a dynamic social media marketing channel that helps small businesses grow. Have you ever wondered how to grow a business on TikTok in a highly competitive social media marketing world? Explore the best TikTok branding strategies that could help your business reach a massive audience.
1. Choose Your Niche Topic
Like most social media platforms, you must create and share-worthy content to be popular. You must create consistent branding if you’ve chosen TikTok to promote your brand. The possibilities to produce excellent content are endless. Pick a more familiar topic and share your knowledge and experience about it.
First, research your competitors to see the types of content they post on the platform. Then, try your best to produce better content to outrank them. Likewise, monitoring and analyzing user feedback will let you understand whether or not you are moving in the right direction.
2. Create Engaging Content
Working with TikTok influencers and putting hashtags is crucial for promoting your brand to a large audience, but let’s face the truth: these strategies will only work if the content you share is balanced.
Remember that on TikTok, you only have 15-60 seconds to convince the users to follow you. So, pay more attention to the quality of content rather than posting irrelevant things just to be active.
Be sure to create a pleasant, understandable video, as this is the first thing that catches a visitor’s attention. As a creator, you must ensure the correct design is used for all posts. Think about the captions of your videos. If you need more insights, read our blog about what to consider in creating a TikTok content strategy.
3. Work with Influencers
TikTok influencers may be known for their small audiences compared to Instagram influencers. But, reaching out to target users will help you promote your brand or company.
Develop professional partnerships with influencers whose audience might be interested in your brand and will likely buy. This is similar to the principles of Instagram advertising works.
Tapping influencers into the TikTok platform is one way of producing high-quality content. It also enables you to get more sponsored publications. So, if your budget allows partnering with the influencer to promote your product, go for it!
4. Join a Hashtag Challenge
The TikTok hashtag challenge is a dynamic marketing strategy that encourages users to participate in creating and sharing content about a specific theme. The goal is to generate user-generated content that aligns with your brand’s message, values, or products. It also aims to drive user engagement and increase brand visibility.
TikTok content creators might have a limited following compared with Instagram influencers. Nevertheless, the key lies in connecting with your desired audience to market your business effectively. Collaborating with influencers whose followers align with your brand’s appeal can attract potential customers inclined to purchase. This process is similar to the principles of advertising on Instagram.
5. Collaborate with Other Creators Via TikTok Marketing Campaigns
Sometimes, you want your brand to reach a large audience, but your budget is limited. In such situations, a partnership with content creators or other brands may work for you.
For instance, if you work in the fashion industry and want to promote your company, you may find other people from this field with a solid following for potential collaboration. Reach out and tell them you’re interested in a partnership project. The mutual potential benefits of collaborative projects are noticeable, so there is a high chance someone will take up your suggestion.
6. Invest in Advertising
TikTok introduced a specialized advertising system, benefiting brands from a large user base. TikTok offers three types of digital advertising:
- Native In-Feed Ads
- Hashtag Challenge Ads
- Brand Ads.
Brand ads are the most efficient way to drive traffic to your landing page. And when it comes to targeting TikTok ads, there are two options:
- Interest Targeting. Like Facebook ads, this option lets you pick an interest relevant to your target audience. The platform shows ads to a particular group.
- Behavioral Targeting. This ad targeting type allows you to advertise to people based on their behavior within the last week or two.
7. Keep Up with Trends and Make Them Work for Your Business
As you’ve already noticed, TikTok is full of trends. This is a social network where trends change over time. It ranges from popular songs, video effects, challenges, and hashtags. But how do we identify a trend among millions of videos on TikTok? Keep up to date by tracking hashtags and themes. You must follow these trends and analyze how your business can benefit.
8. Monitor and Assess the Results of your Campaigns
Hashtags and creativity are all good, but remember that a fundamental element of any marketing strategy is evaluating the results of a campaign. Using an analytics tool, you can get valuable insights from your promotional efforts and how to improve them. If you need more engagement, consider what mistakes could have caused such an effect and how to fix them. Your clips may be underperforming because they’re not funny enough. Updating yourself with analytics is a powerful way to enlarge your audience and generate more sales.
TikTok stands as a significant milestone in the evolution of contemporary social media. Centered around interaction, it has attracted millions of Gen-Z users and become the most active advertising channel. With these eight branding strategies at your disposal, you’ll be able to understand how to grow a business on TikTok. Once you’ve learned the basics, showcasing your product or brand to a large TikTok community will be easier.