Lincoln Murphy

Reactions to the Freemium paper

2010-02-02T01:02:00.004-06:00

I never expected a 23-page paper to "go viral" but the "Reality of Freemium in SaaS" paper has done just that. Thousands of downloads of the PDF, thousands more views on the various document-sharing sites, blogs and articles by industry analysts using it as a jumping-off point... wild. And then, I got invited to speak at the Freemium Summit in San Francisco on Feb 26, 2010. This is exactly what I wrote about in the paper, by the way... true viralality can rarely be engineered.

If I had written this paper with the express purpose of having it spread throughout the industry, it most likely would have seemed contrived and would not have spread. Instead, I wrote it to get something off my chest, the "voice" I used was real and it resonated with the readers and they passed it on. I couldn't have expected this breadth of distribution nor the reactions, but I'm certainly happy for it. Check out some of the great reactions to the paper on the Sixteen Ventures blog.

You should follow me on Twitter!

New Paper: The Reality of Freemium in SaaS

2010-01-13T17:45:00.005-06:00

I spent a lot of my spare time over the last couple of weeks writing a 23 page paper titled "The Reality of Freemium in SaaS" (Download PDF) for Sixteen Ventures and I encourage you to check it out. This paper comes from my experience of working with SaaS companies of all sizes and stages while at Sixteen Ventures, from my time with my own SaaS and PaaS startups, etc. I had a lot of help from some great people on Twitter (all listed in the paper) that took the time to help me shape the paper into what it is today.

I encourage you to check it out if you are considering the "Freemium model" for your startup or if you are using it and wondering why it isn't working!

Also, you should follow me on Twitter @lincolnmurphy

What makes sense for SaaS in 2010

2009-12-31T19:10:00.003-06:00

I said no predictions, and I stand by that... but here are some things that would make sense in 2010:

Streamlined Revenue Cycle Management for Recurring Revenue businesses (like SaaS) - There are some lightweight Subscription Management and Billing options that started in 2009 (I'm watching Recurly), how will they fare against legacy SaaS and on-prem metering/billing solutions? Too many SaaS vendors face scalability issues due to backoffice bottlenecks long before their technology fails to scale so I'm interested to see how this all pans out.
SSO, Provisioning, and Contract management convergence - SSO and Provisioning have been treated as simply technology problems to solve. But there is a missing element... contract or simple payment management. With the proliferation of SaaS apps in the enterprise, it makes sense that if you could not only manage users in one place, but also contracts or payments a major pain for Enterprises would be solved and the opportunities to monetize in a situation like for the vendor offering this service could be significant. I'm keeping my eye on Cazoomi to see if they make any moves in this direction.
Niche business problems being solved via SaaS - Probably pretty obvious, but I think it only makes sense that more domain experts or service providers will seek to solve the business problems in specific verticals. Likely large legacy companies or those from large Legacy companies, will seek to move into horizontal markets. The real opportunities with SaaS lie in the vertical and niche plays, IMHO. These markets can be a challenge to penetrate, however, so it will be really interesting to see (and be a part of) vendors moving in these markets. Of particular interest is Conductr.us a location-based scheduling & compliance management application.
Bonus... I think it makes sense for SaaS vendors in 2010 to look at ways to monetize vs. ways to spread virally through Freemium. As Hiten Shah (@hnshah) said on Twitter: "Monetization is the new Black"

Happy New Year 2010!

Merry Christmas & Happy New Year!

2009-12-23T16:42:00.003-06:00

No predictions this year... if 2009 was any indication, 2010 will be interesting.

Merry Christmas and Happy New Year!

Latest SaaS Posts from Sixteen Ventures blog

2009-12-23T16:31:00.006-06:00

I've been so busy working with clients at Sixteen Ventures, I've had limited time to blog about SaaS, and when I do its on the Sixteen Ventures SaaS Blog. Here are some of the latest posts from the Sixteen Ventures blog:

To stay up to date on what I'm doing at Sixteen Ventures and to get the latest stories on SaaS, Venture Capital, Startups, etc. you should follow me on Twitter @lincolnmurphy.

Seven SaaS Revenue Streams - Introductory slides

2009-09-28T18:09:00.003-05:00

This is an overview of the Seven Revenue Streams available to SaaS vendors. The monetization opportunities available to a SaaS vendor are far beyond just "subscriptions." This is a teaser... if you want the full, in-depth version that goes into each of the revenue streams in detail and all it'll cost you an email address or a tweet.

7 SaaS Revenue Streams

View more documents from Lincoln Murphy.

You should follow me on Twitter!

SaaS Business Architecture - Updated Definition slides

2009-09-28T17:41:00.003-05:00

I've updated the SaaS Business Architecture slide deck to focus on network-centricity as the core element. Here is the latest one-liner:

The SaaS Business Architecture is a Network-Centric commingling of Marketing, Intellectual Property, Technology, and Business Model.

SaaS Business Architecture - Definition Update
View more documents from Lincoln Murphy.

You should follow me on Twitter!

New Posts on Sixteen Ventures SaaS Blog

2009-09-22T14:02:00.003-05:00

I've been busy writing thought-provoking posts for the Sixteen Ventures SaaS blog:

Check those out and let me know in the comments (on that blog) what you think.

You should follow me on Twitter!

Webinar Thursday 7/16: Business Implications of Multi-Tenancy in SaaS

2009-07-15T16:23:00.002-05:00

As a follow-on to my SaaS University presentation "Multi-Tenancy in SaaS: The Business Case" we have put together a webinar with some industry insiders. In addition to me representing Sixteen Ventures, Mike Dunham from Scio Consulting, and Rick Chapman of Softletter will be on the panel. Jeremy Beck of Scio will be the moderator.

The idea behind this webinar is to dig a little deeper than I did in Chicago to get to the implementation level of Multi-Tenancy and its various incarnations. I will be speaking on the business implications of each level of tenancy

Check out the post on the Sixteen Ventures blog for more details or just sign-up now!

You should follow me on Twitter!

@16v Blog: SaaS University Slides, Answers, and Thoughts

2009-07-07T00:24:00.003-05:00

I presented to a very receptive crowd at SaaS University last week in Chicago. My topic was "Multi-Tenancy in SaaS: The Business Case" and I posted the slide deck, my thoughts on the event, and the answer to a question on the topic over at the Sixteen Ventures blog. Be sure to check it out.

@16V Blog: SaaS Vendors Should Learn from Netflix

2009-05-21T01:47:00.002-05:00

I posted an article titled SaaS Vendors Should Learn from Netflix on the Sixteen Ventures blog after reading a story about the great, proactive Customer Service at Netflix. It made for a great analogy for SaaS Vendors (though Netflix itself is SaaS by definition), and by extrapolation Blockbuster (or an analog) is like a Legacy Software vendor. Be sure to check it out, but make sure you read the comments... already a great discussion going on there.

Follow me on Twitter @lincolnmurphy or @16v

@16V Blog: Maximize Revenue with Strategic Product Development Webinar - Recording, Slides, and Q&A

2009-05-12T16:44:00.004-05:00

The Recorded Maximize Revenues with Strategic SaaS Product Development Webinar, Slides from the webinar, and answers to the Q&A questions that we didn't have time for are now available on the Sixteen Ventures blog. That was a great webinar and working with OpSource on that was a fantastic experience. I hope to do it again soon.

Traction

2009-04-30T03:05:00.004-05:00

How often do you hear the word "traction" when talking about growth in market share? "All we need is to get some traction." Does it matter what kind of "traction" you get?

I was speaking to a colleague about this and the notion of those 4x4 Rock Crawlers came up as the most common kind of traction in early-stage companies. Its not ideal, its hard to get, and you might fall over. This type of traction is often seen by companies whose growth is due to the fact that their product solves a pain, but their growth is ultimately stymied by inability to accurately convey that message to their clients. In other words, their clients have figured out their value prop, even if they haven't!

I got this picture from Off-Road.com

This type of traction is often the result of failed marketing (or lack thereof) within the organization, but the fact that there is any traction at all is enough to encourage the team to keep moving forward as they have been. Ultimately, this type of traction is not sustainable and should be avoided.

The other type of traction would be that of a dragster... you smoke your tires at first to make them sticky, but from then on its a straight shot down the track. It is not without its risks of course... if you veer off course, even a little, you might quickly run into a wall. Or, if you take your mind off of what you are doing for just a second, you could run out of track and crash at the end.

I got this picture from here... its not in English so I don't know what it says

In other words, don't be fooled by this type of traction... it might not be as great as it seems. Ensure that the traction you are gaining is profitable or you could run out of track before you know it.

Finally, while I was searching for pictures to accompany this post I was reminded of yet another kind of traction... the kind that you endure in recovery from a neck injury! If you are unaware of the dangers of the other two types of traction, you might just end up here!

I got this picture here

Rick Bayless, Mexican Food, and Building a Business

2009-04-29T01:04:00.005-05:00

Rick Bayless of Frontera Grill, Topolobampo, Frontera Foods, and Mexico: One Plate at a Time was featured on the latest episode of CNBC's original series "The Entrepreneurs." I eat at Frontera Grill whenever I'm in Chicago (I will be up there in June and I can't wait!), I love his show on PBS, and after watching the latest episode of "The Entrepreneurs" on CNBC, well... I just like him and his story even more.

It is Rick's show on PBS that introduced me to him and I've been a fan ever since. The cool part is that his show was basically a marketing gimmick that he and his business partner Manuel Valdes, now CEO of Frontera Foods, came up with to further their brand. I didn't realize that. They saw how the Food Network was really growing and Celebrity Chefs such as Emeril Lagasse and Bobby Flay were using their new found fame as leverage to expand their restaraunt and product empires. Rick and Manuel decided that they didn't want to wait for the Food Network to come calling so they funded and produced the show for PBS themselves.

Now here is the very interesting part. The first season of Mexico: One Plate at a Time cost them $1.4M to produce. One season (26 episodes) of a cooking show broadcast on Public Television cost $1.4M, which they raised in the form of sponsorships. And it most likely took countless staff to pull it off, from on-location logistics, to post-production, the amount of hands in that pot were likely in the hundreds. This is not unusual... look at the credits at the end of a TV show or even more mind-blowing a Movie. Look at all of the people involved in creating and executing on the creation of that show or movie.

Amazing isn't it? Amazing that so much money, time, effort, manpower, etc. can go into the creation of even the simplest of TV show, and yet many entrepreneurs feel that they can build a Software Company by themselves and with little to no money. I mean, best of luck to you, but at the end of the day, if you want to create something that is an on-going concern, that generates profitable revenue in a sustainable and scalable way, you might want to ask yourself this fundamental question: Given what I have now and what I've put into this venture, is it enough to produce even one episode of a TV show? If not, then how do you plan to actually succeed in building a real business?

Fun fact: The last time I was in Frontera Grill, Lanie, Rick's daughter who is often on his show, was working. Okay, so perhaps I'm too big of a fan.

Check out the episode of The Entrepreneurs below:

Webinar: Maximize Revenue with Strategic SaaS Product Development

2009-04-28T01:23:00.004-05:00

I just posted to the Sixteen Ventures blog that I will be doing a Webinar with Opsource on 5/6 at 9:00AM Pacific/Noon Eastern. The title is Maximize Revenue with Strategic SaaS Product Development. I'm really looking forward to this as I intend to bring up some topics that many SaaS Vendors have never even considered and yet only SaaS Vendors are in a position to benefit from them.

Oh, and this won't be just a big ad for Sixteen Ventures or Opsource. Both companies feel it is important to just provide great educational content that promotes thought within the SaaS community rather than have a 45 minute commercial for our services.

Be sure to check it out if you can make it. Also Follow @opsource @16v and @lincolnmurphy on Twitter.

Guerilla Marketing for a Good Cause

2009-04-28T01:13:00.003-05:00

This is a brilliant strategy for getting an incredible amount of publicity for a relatively small amount of money (or none, read on). This is especially good if your business is something that resonates with people who listen to Public Radio. The idea is simple:

Offer a Challenge Grant on Public Radio

The process is simple:

Pick an amount: $500 or $1000
Pick a long time-frame, say 5 - 9AM (Morning Drive-time)
Pick a reachable, yet not-to-small of a goal (like 100 new members, or 100 renewing members, or 100 people from your profession)
Sit back and listen to your company name repeated over and over and over during key times of the day to a very targeted, loyal audience.

Here are the cool parts:

If your challenge is not met, you received several hours worth of free advertising since you were not required to pay out on the challenge. My suggestion is to let it ride... do that all day long until the challenge is met. Ideally you will actually end up donating the money; you want the challenge to be met, its just that if it isn't the first time around, that is just more publicity for you the second, or third times around.
When the challenge is finally met, your "advertising dollars" are tax deductible (see your tax professional of course!)
and you help a great cause
oh, and you build your brand with a very faithful audience

I spent a great deal of time in the car one day during KERA's (DFW Public Radio) last fund-raising drive and I listened to a yoga studio's name all day long (their challenge was not met while I was listening, but they kept letting it ride...)

Go do it tomorrow! Help end the fund raising drive faster (always a good thing) and get some inexpensive, yet very valuable marketing at the same time!

As always, don't forget to follow @keratx and @lincolnmurphy

New Post @16V: Announcing New Partners and Events

2009-04-24T00:47:00.003-05:00

I posted a new entry on the Sixteen Ventures blog Announcing New Partners and Events. We've got some really amazing Webinars, Seminars, and Articles coming up over the next couple of months and I am really excited about it. The Webinar has not been officially announced yet so I can't say anything... next week, though! Stay tuned, for sure.

We also landed two new partners... Keychain Logic and OpSource. Very, very excited about that. If you don't know, those are two Major Players in the Software-as-a-Service industry.

Check out the blog post and don't forget to follow me on Twitter @lincolnmurphy.

The SaaS Single-Tenancy vs. Multi-Tenancy Debate

2009-04-14T21:35:00.002-05:00

I just posted an article on The SaaS Single-Tenancy vs. Multi-Tenancy Debate over on the Sixteen Ventures blog. Check it out and please tell me what your take is on this subject!

New Post on 16v: SaaS Multi Tennancy: The Business Case

2009-04-13T12:04:00.003-05:00

I just posted a new entry over the Sixteen Ventures blog announcing that I will be speaking at Softletter's SaaS Unversity in Chicago 6/30-7/2, 2009. The topic is "SaaS Multi Tennancy: The Business Case" and I will be writing a two-part article for the Softletter publication leading up to the event. Be sure to check it out.

Shortened URLs Revisited (and a Twitter Revenue Model)

2009-03-10T08:10:00.004-05:00

I've been spending more time on Twitter lately and have been using the is.gd URL shortening service a lot. It is one of hundreds of URL shortening services and I have no idea why I chose that one in particular. But this reminded me that back in January 2008 I wrote a post asking why Google doesn't have their own URL shortening service. Here, I revisit that idea, as well as what a Twitter version might look like. Along the way, I found a revenue model for Twitter. You are most welcome.

The way it works today, one URL could have millions of variants from various URL shortening services. Twitter should expand and contract all shortened URLs sent through their system. Upon expansion, they could see if the URL already has a shortened version and use that same shortened URL. By doing this, they end up building much better metrics around one URL. URLs sent via Twitter that are not shortened could get shortened in the same way.

Now, the monetization scheme for Twitter. For free users, all URLs they send would be framed with a contextual banner ad like owl.ly does. Additionally, in a somewhat controversial move, they could also not do a proper redirect plus add a "nofollow" on links sent by free users. This would potentially eliminate Twitter as a way to spam search engines with link bait.

UPDATE: Turns out Twitter already applies "nofollow" to its links. So I was late to the game on that controversy (happened about 1 year ago). But, it seems that people would like to have that turned off, and they might be willing to pay for it.

If you want to tweet short URLs that are SEO friendly, do not have an ad frame, include a proper redirect and have the nofollow removed, you could pay Twitter. Spammers might still use Twitter, but at least they'd be paying for it and keeping it free for the regular users.

This is better than trying to charge based on number of followers or even the followers/following ratio. Although I think that people on Twitter with a skewed f/f ratio don't use the service right, that becomes a slippery slope as you start to limit the usage of the platform. Instead of limiting usage by differentiating subscription tiers on usage metrics, find something that encourages use and a better experience and charge for that. In fact, I just wrote a quick post on the Sixteen Ventures blog about SaaS Revenue Models and Tiered Pricing Strategy that talks about this.

Frankly by leveraging more control over the URLs, Twitter gets a lot of power back and has a way of making money without charging the average user. Spammers aren't the only users that might pay for these features. Legit business users that like the link love and want a cleaner look than the ad frame overlay would gladly pay for this.

Now, those are my thoughts for Twitter, but when it comes to URL shortening, I believe that Google should just create a shortened URL for every page and kill the shortening services. They could create an API for developers and could integrate it with toolbar, WebMaster toolkit, Blogger, etc.

Twitter could even use Google's URL Shortening service. Upon expansion of a pre-shortened URL, or if they get one that isn't shortened, Twitter could just hit the Google API for the given URL and grab the Google URL (gurl?). This way Google does the heavy lifting and continues to own the internet. Twitter remains a communications channel... I think this might mess with the monetization strategy for Twitter from above though. Oh well... its a start. Now discuss...

Sixteen Ventures takes all my time!

2009-03-03T01:03:00.004-06:00

I have been spending all of my time working on the Sixteen Ventures site, blog (feed), @16v on Twitter, presentations, etc. Basically all of my time is spent building content for the new company, oh... and also working with some killer clients.

Because of that, I've let this blog collect dust. I am going to attempt to keep this site fresh(ish) by posting random thoughts here (business ideas, rants, etc.) and post any relevant stuff, good content, thought-leadership articles, etc. to the Sixteen Ventures blog.

I will continue to tweet @lincolnmurphy on Twitter if you want to follow me. That will be the same as this blog... anything not relevant to Sixteen Ventures will go there.

Thank you for your patience!

Hey Tech Entrepreneur! Its the Execution that matters...

2008-11-14T11:10:00.004-06:00

Hey technology entrepreneur... stop what you are doing and go listen to this podcast from the Entrepreneurial Thought Leader lecture series at Stanford. It is Steve Blank, the serial entrepreneur behind companies such as ZiLog, MIPS, and SuperMac, among others. At the 13 minute(ish) mark on the MP3, he says something that I've been saying for a long time... its not the technology, stupid, its the execution.

He's a bit more eloquent than I, and states it this way (paraphrased):

"Of all the businesses that fail, only 10% do so because their technology was inadequate"

What is he saying? 90% of the companies that fail have technology that meets or exceeds customers expectations. So, just because you can build a great product doesn't mean you can build a great business around that product. Ultimately, it is the business that matters, not the technology. Let me know if you need some help.

Here is a great presentation by Steve Blank that aligns with the content of the podcast I linked to.

Customer Development Methodology

View SlideShare presentation or Upload your own. (tags: market customer development)

Finally, if you haven't seen this, after you listened to Steve Blank, watch this... its Steve Jobs describing the market for NeXT workstations.

There... I've done my community service for the week. Now go build something with actual market value!

third ping.fm test

2008-11-03T18:11:00.001-06:00

did this work with a title and body?

2008-11-03T18:10:00.001-06:00

ping.fm test>try this again... cool stuff

2008-11-03T18:07:00.001-06:00

Testing ping.fm status update tool