Software Platform Consulting

SaaS Metrics for Enterprise-Driven B2B Networks (Buyer-Supplier Revenue Mix)

Software Platform Consulting

There are many great articles about SaaS metrics on the web (e.g., see here , here and here.) There are also great resources for metrics specific to marketplaces (see here ). But much of my work is with a special kind of network, where one side of the platform is an enterprise buyer (or supplier) and on the other side is their supply base (or customers). Typically one side’s enterprises tend to be much larger than the other side’s. That’s why I call them enterprise-driven.

Change Healthcare’s Intelligent Healthcare Network

Software Platform Consulting

Change Healthcare is going public (again). The IPO provides another opportunity to examine a massive B2B inter-enterprise network, Change Healthcare’s Intelligent Healthcare Network. I previously wrote about this network when it was called Emdeon ( see here ). It’s a story of how a small EDI player became an impressive company through acquisition and organic growth. Every network entrepreneur should know this great story.

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How well do Governments Buy Catalog Items?

Software Platform Consulting

As taxpayers, we should want to know how well our dollars are spent. At the Federal level, most of these dollars are spent on social security, healthcare, and defense (see below). Articles about spending in these areas are easy to find, but the price of F-35s or my dad’s medicare is too complex for this blog. Instead, let’s focus on the prices paid for common commercial catalog items that we can all relate to. Government Catalog Spend.

SaaS Metrics for Enterprise-Driven B2B Networks (Bookings)

Software Platform Consulting

Source: [link]. This is the third in my series on SaaS Metrics for Enterprise-Driven B2B Networks. I spend very little time on issues of compensation on this blog. But it turns out, this is a really important issue for Enterprise-Driven B2B Networks. As discussed in the prior post , many networks of this type, subsidize one side of the network, to make money from the other side.

"I Love Filling Out 12-Page Applications and Waiting Weeks For a Response,” Said No Merchant Ever

Learn how becoming a payment facilitator can improve a merchant’s experience and your revenue.

Fleetcor Acquisition of Nvoicepay Yields Insights on B2B Payments

Software Platform Consulting

Fleetcor (FLT) closed on its acquisition of privately-held nvoicepay on April 1, 2019. Fleetcor’s first quarterly earnings report since the acquisition provides insight into the economics of the B2B payments space. Nvoicepay. Nvoicepay is interesting, in part, because it is a pure-play payments provider. The company takes a payment file from a buyer. It then disburses the funds to the buyer’s suppliers in a manner nvoicepay has determined in negotiation with the supplier.

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Gartner 2019 Magic Quadrant for Procure-to-Pay Suites (with Valuations)

Software Platform Consulting

Gartner recently published its 2019 Magic Quadrant for Procure-to-Pay Suites. Once again , I have superimposed valuation information onto the Magic Quadrant. (I I still don’t understand why Gartner has not varied the size of the “dots” to add more information to the charts. For instance, each vendor’s dot could be sized in proportion to their NPS scores, revenue, or valuation. See Spend Matters’ Solution Maps.).

The Phreesia Triple Threat

Software Platform Consulting

My last post was partly about healthcare payments in the form of Change Healthcare’s Intelligent Healthcare Network. I did not set out to write another post about healthcare payments, but reading Phreesia’s S-1 compels me to. Phreesia has three “businesses” in one: SaaS applications, payments, and life sciences advertising. Phreesia Threat #1: SaaS Applications. If you have been to a doctor you have some idea of what Phreesia’s SaaS applications do!

SaaS Metrics for Enterprise-Driven B2B Networks (Buyers per Supplier)

Software Platform Consulting

Welcome to the last, and most important, in my series of posts on metrics unique to Enterprise-Driven B2B Networks. The last metric, buyers per supplier, is easy to calculate if your platform is architected as a network. (If If you did not architect your platform so suppliers have one account for all buyers, shame on you.). Suppliers Per Buyer. Every enterprise-driven B2B network proudly tells you they are great at enabling your enterprise’s suppliers.

Upwork Versus Fiverr: Battle of the Freelance Marketplaces?

Software Platform Consulting

Fiverr, a marketplace for freelancers just joined the parade of software companies going public. The Fiverr filing sets up a comparison of Fiverr versus Upwork, the grand-daddy of freelancer marketplaces. Upwork went public last year.) (See See here and here ). Upwork Versus Fiverr: A Different Approach to Services. The most basic difference between Upwork versus Fiverr is fascinating. On the Upwork platform, buyers issue RFQs for projects and invite freelancers to bid on those projects.

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How to Measure DevSecOps Progress and Ensure Success

Speaker: Shannon Lietz, Director of DevSecOps Team, Intuit

You've finally done it: You've won over C-Suite and your DevSecOps team is up and running. But how do you monitor your new program? Join Shannon Lietz, Leader and Director of DevsecOps at Intuit, and learn to lead your DevSecOps team to the top.

B2B Payments Economics Courtesy of Bottomline Technologies (Paymode-X)

Software Platform Consulting

Last week I wrote a post about Fleetcor’s acquisition of Nvoicepay. The acquisition represented an opportunity to learn more about the economics of B2B payments. The acquisition also prompted me to review Bottomline’s financial reports. Bottomline owns Paymode-X, the largest B2B payment network in the US. Paymode-X boasts payments of more than $200 billion annually and over 400,000 payees. Nvoicepay, by contrast, processed payments of approximately $20 billion annually.).

Two-Sided Markets and a Two-Sided Supreme Court: The Amex Case

Software Platform Consulting

Yesterday, the Supreme Court of the United States ruled in favor of American Express (Amex) in an antitrust case 11 states had brought against Amex (see here ). If you are interested in two-sided markets, platforms, and pricing you will want to read the Supreme Court’s decision written by Justice Thomas and the dissent written by Justice Breyer (see here ). Full disclosure: There’s a fair bit of legalese, so I skimmed it. But, it sounds cool to say I read a Supreme Court opinion.)

When Business Models Collide: HomeAdvisor and Angie’s List

Software Platform Consulting

Established in 1995, Angie’s List was the pioneer in the home services marketplace. Home Advisor (IAC) announced last week it is acquiring Angie’s List (ANGI) for more than $500 million. This price represents a 44% premium over Angie’s List’s depleted closing stock price (see below)). I am sad to see Angie’s List go. Triumph of the One-Sided Pricing Plan. Angie’s business model was a prominent differentiator from its competition in the home services market.

As Software Platforms Grow, So Do the Oligopolies

Software Platform Consulting

I love the word “oligoply” It’s a fancy word for a market structure in which a few companies have the large majority of market share. The recent news reminds me just how many markets are becoming oligopolistic–especially those dominated by platform software. Before We Get to Software… Warren Buffett recently announced that he was buying airline stocks. This is a man whose greatest quotes include many disparaging remarks about the airline industry (see here ).

The Complete Guide to SaaS Revenue Modeling

In today’s climate, it’s more important than ever for SaaS companies to build rock-solid financial models on which they can operate and make key business decisions. The teams at SaaSOptics and Burkland have teamed up to create a comprehensive guide to the most difficult aspect of financial modeling: revenue forecasting.

Taulia Discloses A Few SaaS Metrics Relevant to Networks

Software Platform Consulting

Early (and Fuzzy) Saas Metrics From B2B Networks. Until a B2B Network catches on, the metrics can be gloomy. (The The first few years of the Ariba Network were pretty dismal, for instance.) The result is that for the first few years of a B2B network’s life you tend to see silly press releases from these networks touting their growth in all manner of odd metrics: percentage growth versus growth in absolute numbers (always huge when you start from zero). new partnerships. awards.

Uber for Truckers: Cargomatic and the Perils of B2B SaaS Marketplaces

Software Platform Consulting

Sunday’s Business Insider had a great article on, Cargomatic, a company promising (as do many others) to be the “Uber for Truckers” By that, Cargomatic means it will match shippers with goods to ship with truckers with excess capacity. On paper it is a great idea in a huge market: less than truckload (LTL) shipping.

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Ferreting out Suppliers’ “Dirty Little Secrets”

Software Platform Consulting

Three separate events last week reminded me that every spend category has its “dirty little secrets” Suppliers can exploit these “dirty little secrets” to squeeze a little more from buyers than buyers bargained for. Not all of these secrets are nefarious, but all reflect the inherently deeper category knowledge suppliers have and the limited resources buyers have to “sweat the details” in every category.

Angie’s List and Two-Sided Market Pricing

Software Platform Consulting

For those of us who follow pricing strategy in two-sided markets, last week was a milestone. Angie’s List, which invented the home services marketplace (in 1995) announced it would drop its “paywall” The paywall charged buyers to search its directory and reviews before communicating with contractors. Angie’s List will now offer a freemium model for homeowners (buyers) and will continue to offer a freemium model to contractors/service providers.

Are Your Embedded Analytics DevOps-Friendly?

Does your analytics solution work with your current tech stack and DevOps practices? If not, any update to the analytics could increase deployment complexity and become difficult to maintain. Learn the 5 elements of a DevOps-friendly embedded analytics solution.

Take Rates for B2B Marketplaces

Software Platform Consulting

The two questions I’m most often asked are: 1. How do you keep your hair looking so lush and luxurious? How much can a B2B Marketplace or Multi-Sided Platform charge for its services? Some folks call this the platform’s “take rate” ). The answer to the former question will need to remain a mystery, but the answer to the latter follows. B2B Marketplace Services.

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10 B2B Blogs Every Software Nerd Should Read

Software Platform Consulting

The vast majority of tech press is about B2C software companies or software for IT department (e.g., databases, security, performance monitoring and other stuff) that does not excite me. But, there are a few good b2b blogs and newsletters those of you interested in enterprise cloud business applications should follow for inspiration. My nominations, in no particular order, are as follows: Price intelligently.

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To Really Scale, You Need $1M on Your Balance Sheet for Every $2M in ARR

SaaStr

“My CEO Told Me To Stop Selling So Much” Recently, I met with a sales leader I’ve known for years, and he told me The Most Curious Story. His SaaS CEO asked him to stop selling so much. Slow down. You are doing too good of a job, the CEO said. We can’t afford it.

Why Lead Velocity Rate (LVR) Is The Most Important Metric in SaaS

SaaStr

One thing that is great in SaaS, from a 20,000 foot perspective at least, is You Can See The Future. It’s the benefit of a recurring revenue stream in a B2B model.

The Five-Finger Approach to Onboarding

As a group who provides the software tools necessary to manage the contracts to cash process, Aysling onboards users and projects daily, and has learned some important tips if you want to be successful when onboarding new clients and/or projects.

The #1 Reason SaaS Companies Stall Out at $15m-$20m ARR

SaaStr

In theory, many things can kill a SaaS startup after $4m-$5m ARR. In practice, quitting is the only thing. In theory, many things can stop a SaaS startup after $4m-$5m ARR from getting to $100m. In practice, high churn is the only thing. — Jason BeKind Lemkin (@jasonlk) January 17, 2021.

A Simple Commitment Test For You And Your Co-Founders

SaaStr

Don't pick a cofounder that. – has something better to do – wants to see how it goes – has a clear backup plan – sees it as risky – argues over who should be CEO – doesn't 100% believe. You'll see. — Jason BeKind Lemkin (@jasonlk) July 18, 2020.

Gartner: SaaS Will Be Even Bigger Than We Thought in 2022+

SaaStr

Early in my career, I was a bit skeptical of big analyst firms like Gartner. Was it all sort of some sort of game in enterprise software? But like many things, time goes on and I learned. Yes, sometimes a vendor recommendation from Gartner can seem a bit circular.

10 Tips to Avoid SaaS Burnout

SaaStr

Burnout is a real risk in SaaS. Not usually in the early days. But as time marches on — It’s a huge risk. . One piece of “evidence” — a lot of fairly successful SaaS startups all sell at about the same point in time … about 5 years in.

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Digital Trends Report 2020

As part of our goal to continue helping our community during these times, we wanted to share with you this critical data on the state of digital products across industries and provide context on how businesses are responding to the changing winds.

Doing 5, 6 or 7 Figure Deals? Don’t Forget the Services Revenue

SaaStr

25% of revenue from professional services may sound high, but it’s a fairly standard ratio in true enterprise software. Importantly, Qualtrics’ margins remain high so it’s not losing money on its services. Gross margins on services are about 35%.

Why VCs Need Unicorns Just to Survive

SaaStr

One of the most tiring things for founders can be always being compared to Unicorns and now Decacorns. Certainly sometimes it’s inspirational.

5 Interesting Learnings from Cloudflare at $500,000,000 in ARR

SaaStr

Cloudflare is one of those iconic Cloud companies most of us use, and know about as a product and vendor … but perhaps we don’t think as much about as a public company. And quite an epic one it is, at ~$500m in ARR and a $25B+ market cap!!

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5 Interesting Learnings from Datadog at $700,000,000+ ARR

SaaStr

$30B+ Datadog became the great darling of developers and devops years ago, and never stopped pushing on the accelerator. It’s expanded its product portfolio to build an incredible observabillity engine approaching $1B ARR.

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5 Things a Data Scientist Can Do to Stay Current

DataRobot together with Snowflake – a leading cloud data platform provider — is helping data scientists stay current with the latest technology and data science best practices so that they can excel in an increasingly AI-driven workplace. Five Things a Data Scientist Can Do to Stay Current offers data scientists guidance for thriving in AI-driven enterprises.

Knowing — and Sharing — Your Zero Cash Date

SaaStr

One of the most important operating metrics in your SaaS start-up, if you aren’t predictably cash-flow positive, is your Zero Cash Date (“ZCD”). You hear a lot about SaaS metrics, but this one doesn’t often come up.

Why Now Is the Biggest Change in SaaS Sales in 15+ Years

SaaStr

2021 will be the year SaaS sales evolves the most since the Appexchange ecosystem started to take off ~15 years ago, which spawned the entire notion of a true sales app stack. What’s the change? The permanent move to distributed sales teams.

If You Leave the Low End of the Market … You Probably Can’t Go Back

SaaStr

As we begin strategic planning season for next year, there one topic a lot that comes up a lot: Should We Just Let Our Smallest Customers Go?

5 Interesting Learnings from Atlassian at $2B in ARR

SaaStr

We’ve done so much great content with Atlassian over the years, with CEO Michael-Cannon Brooks to Trello Founder and CEO Michael Pryor to ex-President Jay Simons, and the learnings are always amazing.

Testing at Every Stage of Development

Up to 80% of new products fail. The reality is harsh and the reasons why are endless. Perhaps the new product couldn’t oust a customer favorite. Maybe it looked great but was too hard to use. Or, despite being a superior product, the go-to-market strategy failed. There’s always a risk when building a new product, but you can hedge your bets by understanding exactly what your customers' expectations truly are at every step of the development process.