Loading...
Answers
MenuIs a semi-open source model for enterprise software viable?
Answers
Free 'basic' versions and paid 'pro' versions of software are very common, so it's definately _possible_ that it could be viable. If you want to get investment you'll have to make as convincing an argument as possible that 1) in your hands, 2) with your product, and 3) with your market, it _will_ be viable. The more convincing the argument, the more likely you'll be able to get investment.
That means getting some preliminary data (which can take many forms) which makes a convincing argument. See the examples below:
Not a convincing argument:
"This other company did this and made 10 billion dollars".
More Convincing Argument:
"In our pilot program, X% of our free users with company size Y ended up converting to paid advanced options, and here's a graph of the increasing rate at which we're able to recruit companies of size Y to the free program."
If you'd like more tailored advice for your specific product, send me a link to more background info and I'll look it over,
best,
Lee
There's no such thing as "semi-open source" It either is open source, or it isn't. The nature of open source makes it so that everything built upon it must be open source according to most of the open source licenses.
The idea you're proposing is very popular and used all the time by big successful companies. See Redhat, Atlassian, vTiger, SugarCRM, WordPress (Automattic). The key is offering value on top of the open source free/community package. The value for an enterprise would be your service and expertise in maximizing the software, professional support, or customizations for them, or even hosting it for them.
The upsides of doing it via open source is that the small companies that won't pay to license or service fees will customize some of it and hopefully contribute back to the software which will make it stronger for everybody. And as they grow they might eventually need your services or paid offerings.
Yes!!! Very possible. I was Head of Growth for an open source company that offered a strict enterprise solution and those were our main revenue numbers.
It's important to have a sales team for this to close and upgrade your current customers.
Related Questions
-
How do you build a MVP for an innovative tech b2b product? We would need good amount of funding to build a decent MVP and show businesses.
The idea of an MVP is 'minimum, viable' ... If you feel you need a "good amount" of funding, I would challenge if you are minimum enough. Obviously, without knowing the details of your product, your ideal customer, or what need you will solve, it is hard to help expose what is necessary in an MVP and what is a Phase II or Phase III feature. I am happy to help you work through this, or answer specific questions, to get you rolling. Just book a call with some times that will work for you. Regardless, I would love to know more about it and how it goes after launch. To your success, -ShaunSN
-
Why do so many SaaS B2B firms make you go through a demo, and hide the product instead of letting you start using it right away?
Because the startup costs to get a lot of their customers actually set up on their platform are too high, so free trials for say, 14 days, are out of the question. For example, take a look at http://www.curalate.com/ which uses some really amazing technology to track a customer's brand imagery across (almost) the entire web. Naturally, most of these types of services are usually $300++/month, so again, it's all just about mitigating setup costs for the provider. Hope this helps :)LL
-
Is it possible to pre-sell and enterprise grade saas product without building it? Ie with design only?
Yes, I did exactly that a few years back. A friend of mien and I launched a site with minimal functionality that was really just a landing page. We offered the opportunity to pre-buy a year's subscription to the service by allowing users to set their own pricing. Within the first 24 hours of the site going live, we had enough paying customers to validate the business and inform our iterative development cycle. Ultimately, we decided it wasn't a big enough business for either of us to get really excited about but it proves that it can be done. I also did that in my current business with a landing page that generated literally thousands of leads and hundreds of very qualified customers, which resulted in paid pilot contracts before the software was fully built. Build something that people actually *need* and you'd be surprised at what they're willing to do to get early access to it. Happy to talk about it in a call in more detailTW
-
What are the SaaS B2B expectations when paying annually - annual paid annually or annual paid monthly? Is a discount necessary (i.e. 20%)?
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.TW
-
What is the average pre-money valuation of a enterprise/SaaS stat-up that is pre-revenue?
There is no valuation until you sell something. An idea or a company is only worth what its sales are. Once you have your initials sales, sales strategy and forecasting length (ie 9 months from first customer lead to close) then you have a formula for valuation. Valuation for start-ups is generally 3.5 x last years sales model should be the growth factor. When you are looking for investors, you will want to have atleast 9-18 months of SALES, not just pipeline and they will be looking at 5x revenue for a 3-5 year payback.TP
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.