Presentation at Freemium Summit East 2010 on Business Freemium being the revolutionary new model for business applications this decade. Highlights differences from SaaS in the framework of Clayton Christensen\'s discruptive innovation model and provides specific suggestions for entrepreneurs.

1. October, 25th 2010
Another Decade,
Another Business Apps Revolution

2. Every 10 Years in Business Apps….
2
Client Server (90s) SaaS (00s) Freemium (10s)
“Technology is always becoming lower in cost and easier to use. It’s
a continuum. Let’s ride it.”
Marc Benioff
November 1998
Behind the Cloud, Play #6 Page 10

3. Disruptive Business Model (Really)
Clayton Christensen Disruptive Innovation
 Simpler, easier, less
profitable (?)
 New or hard to serve
markets
 New business model
 New financial model
 New leaders
3

4. Business Apps Markets by Model
4
Client Server
SaaS (20-500 EE)
Freemium (<10 EE) & QuickbooksWas Hard to Serve
Company Size
Freemium companies are servicing new global markets from the start

5. Freemium vs SaaS Business Models
5
Marketing Churn &
Satisfaction
Sales
Product &
Pricing
• Different functional and cross functional work
• New operating metrics
Trial
Experience

6. Freemium vs SaaS Financial Model
6
Linearity
Capital
Requirements MetricsHeadcount Core Assets
Paying Subs
Brand
Salespeople
Active Free Users
Data to Mine
Paying Subs
Autoconversion
CAC
CLV
• Non-linear financial model
• Investors should focus on CLV

7. Accelerating Growth and Capital
 Growth Opportunities
 Virality
 Engagement
 Conversion
 Customer satisfaction
 Use the data
 International
 New editions (groups)
 Marketing and “Sales”
 Marketplaces
 Mobile
 Venture Capital
 Religion?
 Market leadership
7

8. Emergence Capital = Business Apps
 SaaS
 salesforce.com
 Successfactors
 Lithium
 Freemium
 Yammer
 yousendit
 echosign
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9. Lead The Revolution
9
SaaS
• Evangelize the new model
• Accelerate to lead your market
• @mattholleran and Linkedin