What is the point of having multi-year contracts in SAAS if the customer does not pay upfront for the 2nd year?

I started a large SaaS Company for B2B where perfection in code is as importante as it gets. So here is my advice, DON'T CODE until you know what the Saas Really is. First start understanding what the problem REALLY is. Interview people and actually spend 100% of your time doing Customer Discovery. (This sounds easy but it is a skill you'll have to develop far more important than coding). Once you understand what the problem is, come up with a value proposition. Still no code. Then make a sell. If you can actually find things already existing that you can Hack and put it together then use that. Then make another sell. If you can sell it to at least 50 people if you are B2C, or if you are B2B you should have at least 1 customer. Once you do that then start automating some parts of the solution that you have hacked and so on. But THE most important thing is to be in constant conversations with your customers and hot leads. Remember you are a customer making machine not a coding machine, the first one is where the money is. Hope this helped you, if you want to talk more about customer discovery and customer development, just give me a call.

Here is a link to a basic model - http://monetizepros.com/tools/template-library/subscription-revenue-model-spreadsheet/ Depending on the purpose of the model you could get much much more elaborate or simpler. This base model will help you to understand size of the prize. But if you want to develop an end to end profitability model (Revenue, Gross Margin, Selling & General Administrative Costs, Taxes) I would suggest working with financial analyst. You biggest drivers (inputs) on a SaaS model will be CAC (Customer Acquisition Cost, Average Selling Price / Monthly Plan Cost, Customer Churn(How many people cancel their plans month to month), & Cost to serve If you can nail down them with solid backup data on your assumption that will make thing a lot simpler. Let me know if you need any help. I spent 7 years at a Fortune 100 company as a Sr. Financial Analyst.

Most Software as a service vendors generally don't book annual deals except in highly specialized cases. Most customers prefer to be able to cancel/change anytime they choose. Also, deals done "offline" end up actually often being more trouble than they are worth to administrate especially for a $2988 ticket. Generally, companies don't view prepaying for SaaS products a year in advance as a "convenience" (to them) so if the debate is internal (not customer driven), I'd set this debate aside until it's requested by the customer. Most customers will request a discount to pre-pay annual service. Happy to talk this through with you in a call, to work through the specifics of your situation in more detail.

This is not my specialty, however, I have been in your position many many times -- maybe this will help. If the product is in-tangible, then look for JV partners on the Internet. Try to find an expert that deals with these JV opportunities (like me). If the product is physical, then look for sales organizations that have networks of sales people across the country. You do the deal with the organization and the independent network of sales people sells your product. It's a sweet setup if you can negotiate a margin that works for everyone. Hope that helps - Cheers - Nick

I was involved with a SaaS product that launched a landing page and made clear that the product was still in development, but that we would give earliest access to people who pre-paid for the product. We also allowed people to choose what they paid, and promised them that payment would stay in-effect for several months. We generated revenue the first day of posting the landing-page publicly and increased revenue month-over-month. However, we discontinued the product as it was simply not big enough of a market for us to justify continued time and energy. But I would encourage you to pursue a similar model in that it's a great way to test and validate the pain others experience for the problem and a great way to ensure you're building the product to satisfy real customers. Happy to talk this through in more detail in a call