Tell me more ×
Answers OnStartups is a question and answer site for entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
up vote 1 down vote favorite

SaaS startup took way longer time, money and effort to create than my old online store which sells 1 very small php script and desktop software that is in the same market niche as the Saas.

I spent more on advertising, marketing than my old php script & desktop software, which i spend perhaps none except advertising on related forums. costs 10% of what i spent currently on my SaaS.

php script & desktop software each sell for $60~$100 each while my SaaS startup charges like $10 / month.

with subscription model people are cautious and willing to fork out 10 for the first time. however, if they are not satisfied, they will drop the subscription.

a php script & desktop software that sells for $60~$100 each is a one time sunk payment from the user.

if you compare the two, clearly for each visitor, more money is to be made with selling the php script or desktop software.

So now I'm rethinking about SaaS. it's not a money churner i thought it would be. in fact, the monthly subscript makes the buyer more cautious about the product as they think they will need to pay regularly for the SaaS, where as buyer would rather pay a chunk sum to use a software or php script to unlimited needs.

With SaaS, it's not possible to allow unlimited usage (or is it? some algorithm to average out usage consumption) without spending more on infrastructure.

I ask to others if they witness same things....I am having serious doubts about launching my next product as SaaS....rather i might translate it to Qt and write desktop app instead of making it an SaaS....

traffic is higher to SaaS than my old download shop.

conversion is about the same.

share|improve this question
A link to your websites would help give an accurate response. What is the traffic like on your SaaS website vs php/desktop website? What is the conversion rate for both? – Olivier Lalonde Jan 20 '10 at 20:29
traffic is higher for SaaS . SaaS and the download shop have about the same conversions. – gggggaaaaaaa Jan 20 '10 at 21:24

3 Answers

up vote 1 down vote

Which makes more sense to your customer- SaaS or a desktop solution? Without more information about your product we can only guess at an answer. Customers don't really want to buy SaaS, PHP Scripts, or Desktop Software. Your customers want to buy a solution to their problem. This solution involves both solving their problem and the cost of that solution.

Your customers aren't stupid. When they see SaaS they quickly multiply the monthly fee times 12 to see what your product costs per year. Then they think about how many years they will be using the product/service. Does SaaS make economic sense to them, or is a desktop solution a better idea? If your SaaS service is $10 / month, and a desktop solution is less than $100, why would I ever choose SaaS? Does your SaaS web site inspire the confidence need to assure them you will be around in 1 year, 3 years or 5 years? If not- they will stick with a desktop solution.

share|improve this answer
up vote 1 down vote

I would recommend asking your customers these questions. What is the core value you are providing? Are those downloading active, i.e., do they seek support or do you think they are abandoning your product, too? Perhaps you haven't nailed your product-market fit. Maybe there are small changes to be made that will increase SaaS user retention. I think your customers - both those that are satisfied and those that are not - will provide the best insight.

share|improve this answer
up vote 0 down vote

It would really benefit if you could say more about your business - what type of market you are going after, what niche(s) you are servicing with your SaaS product, etc. Different types of customers have different attitudes about subscription pricing. The average consumer has a very different outlook to your average enterprise buyer (if there are such things in either space).

A couple of things that might help. Firstly, offer a no restrictions money back guarantee - that way you remove the risk from the buyer. Secondly, allow the customer to cancel at any time, again reducing the risk for the buyer if they are not satisfied. For this to work for you, you need to have an outstanding product and outstanding service - that way customers by and large will continue with their subscriptions. Putting choice in the hands of the customer is a powerful thing.

I'm a keen believer in focus - selecting the key set of things you are going to put all your energies into and not being deflected by unrelated activities just because they bring a bit of money in. By necessity, this set tends to be small in a start-up, but if you have the bandwidth there is no reason not to run them both in parallel for a bit longer and see which one sticks. (If there is any danger of you shutting down the SaaS product, make sure your contracts with your customers allow you to do that with some reasonably short notice period).

Hope this helps.

PS Although there should be no compunction to do so, putting a little more information in your profile would allow people to help you more effectively.

share|improve this answer

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.