Law #5 of Bessemer’s Top 10 Cloud Computing Laws and the Business Model Canvas –Build Employee Software

I am now in the fifth law in Bessemer’s Top 10 Computing Laws and this has to with  how the SaaS company DNA needs to look at its employees as users of the solution and not just as “developers” developing for somebody else. I have so far addressed in my blog entry that a SaaS vendor needs to really live the life of a SaaS company, be part of the SaaS DNA, I have looked into the financials of a SaaS company, and sales operations/sales curve for a SaaS vendor and how SaaS and software channels work in SaaS ecosystems.

Law #5: Build Employee Software.

Many of us have been in the software world for a long time, and many of us still remember vividly the times when we built solutions to end users that we felt that “just did not get it”. If you have been around a while, there is no reason for you to not admit that. Some of our clients have been the victims of complexity, horrendous user interfaces and clunky functionality but we still thought the solution was technically the best in the world; it was the users that did not get it.  Let’s think about this for a while. Would you accept clunky software today? Would you spend your valuable time trying to figure out what the SaaS solution that you are trying to utilize was all about? No, I don’t think so. Consumers and businesses have so many options today that it is not worth while spending time on solutions that are obviously not going to cut it.

Let me give you an example of a solution that has really made my life a joy when it comes to my research and book-keeping of my books, both eBooks for my Kindle and physical books that I own. I used to have a desktops solution Collectorz for Books where I cataloged by books whenever I bought them. I loved the solution, but every time I had to change laptop/desktop, it was a pain to move files and keep things updated. Also, I was not able to access my book catalog from other places than this one specific laptop and this would not cut for me in the long run.

Then, by chance, I run to a new SaaS solution recommended by my friend in Chicago and she said she had started using it and loved it. It was Librarything.com and I decided to jump onboard by first trying the Freemium version for 200 books, but as I have thousands, after a trial period, I jumped into lifetime version which is $25. Today, you can find my profile DrSalonen and all of the books that I have bought/listed in the SaaS application. It is not just the application; it is also about social networking with the Librarything.com application. I can see how many other people own the book, I can join different interest groups and I can become friends with likeminded people that read and enjoy similar books. This is an example of an application that is really nice to use and you get passionate of it.

How does this relate back to the Bessemer Cloud Law #5? It is about emphasizing that SaaS employees have to really eat their own dog food, and to make sure that they would be using the solution every day with passion and dedication as otherwise the solution will never be deployed in large scale. Also, SaaS vendors need to create the buying process as easy as possible, by using a credit card as this is the only way to get masses of users testing out your solution. If you wait for the IT department to push for your solution, you might have to wait for a long time. It is the users that rule the world in today’s SaaS world, we have seen it, been part of it, and this trend will become stronger and stronger each day. According to Bessemer, some SaaS companies have had success in selling administrative dashboards for CIOs in companies as many of them have not been able to control the use of SaaS solutions due to low monthly costs and the ability to use a credit card to pay.

Summary of our findings in respect to Business Model Canvas

Like in my previous blog entries, the objective of this series of Bessemer Laws was to relate the Laws to the Business Model Canvas from Dr. Alexander Osterwalder et al. This Bessemer #5 Law has to do with many Business Model Canvas building blocks. The reason I am saying this is that it starts from the Value Proposition (VA) and the usability of the solution to Revenue Streams (RS) as if the solution is not acceptable, customer will not renew the contract after a year of use and it will impact the Customer Relationship (CR) as the bad experiences of the solution will sour the relationship with the SaaS vendor itself.

Based on my personal experiences running a software company, the key to success is hardly ever technology, but the people that you work with. The developers that are talented will create solutions that are compelling and usable. The very famous statement that one good developer can replace 10 bad ones is according to my experiences pretty much what I have experienced. You do not need to have a huge team to create something that is compelling. If this is the case, the most important in the Business Model Canvas is the Key Resources building block that includes your best people and talent that will not only create your solution, but will also sell and market it to customers.

As you can see, it is very difficult to pinpoint any specific building block in the Business Model Canvas as they all relate to each other and this is also the point in business modeling/planning. You iterate continuously until you find a good balance between the building blocks and eventually you might find a balance. What is also important to realize that each change might cause a new “instance” of the business model, as a change in Customer Segment (CS) could create a new Revenue Stream (RS), new Channel (C) etc. I am sure you get the point and just envision multiple layers of business models on top of each other.

I have now concluded five of Bessemer’s Top 10 Cloud Laws and 5 more to go. Stay tuned for more!