By Geoff Roberts 7 min read
You may have noticed that while we’ve kept a steady drumbeat of SaaS related content flowing, it’s been four months since we published our last Outseta company update. Long story short, we’ve been head down working on some of the most challenging aspects of building our product. We didn’t have enough to say that we felt was worthy of your inbox, but we’re back - here’s what we’ve been working on…
For the very first time, our product is publicly available - you can create a free account on our website and check out the product for yourself. Yes, we have some apprehension about this but as Reid Hoffman, the Founder of Linkedin famously said, “If you’re not embarrassed by first version of your product, you’ve launched too late.” The onboarding experience is still pretty rough, but the product functionality is there.
Outseta & Techstars
We’re excited to announce that we’re the newest member of Techstars' Perks Program. Techstars is one of the biggest accelerator programs in the world, currently operating accelerators in over 17 cities worldwide. Techstars has accepted over 1000 companies into its programs to date, with those companies currently having a market cap of over $8.1B.
Any Techstars company can now find Outseta in Techstars Connect, a private resource which portfolio companies are given access to. We're offering a free year of Outseta to any Techstars company that signs up by the end of June 2018.
Subscription management widget
A huge part of our value prop hinges on reducing the amount of time SaaS start-ups spend managing the technology infrastructure that their businesses depend on. This is important because it gives start-ups more time to focus on building their product and business, while extending their runway.
With that in mind, we built a feature we’re calling our subscription management widget. While this may not sound sexy at first blush, we believe this will come to be a real differentiating feature for Outseta because it’s not functionality we’ve seen built in competitive products.
So what is it?
This is useful because if a SaaS business has a subscription model that Outseta supports, companies can simply “drop-in” this functionality in minutes without needing to build this “scaffolding” logic that all SaaS companies need, yet is logic that doesn’t differentiate them in any way. This work represents busy work, not get-your-product-to-market work.
An additional advantage worth mentioning is that because this information syncs with Outseta’s CRM records, we can easily add a simple engagement index based on login activity to each person or account record in Outseta. This is a simple but effective proxy/indicator for product usage and engagement which we’ll make available to our customers in a subsequent release.
There are other services that will handle authentication for you (Auth0, Okta), and there are services that handle subscription management. However, we came up empty when searching for a service that offers a drop-in solution to automatically give your website this functionality in a matter of minutes.
We’re building our billing system
In order for us to charge our own customers - but more importantly, to enable our customers to charge their customers - we’ve been hard at work building our subscription billing system. We’ve made a couple of important decisions here:
- We’ve partnered with Forte payment systems to process credit card and ACH payments. We have a pre-existing relationship with Forte, as they are also the payment processing partner of Buildium. Working with Forte allows us to offer the lowest possible payment processing fees (cheaper than Stripe!). The application process Forte offers our customers is also very straightforward, and will allow our customers to go live with their payment processing system in as little as a day or two. Here’s what the application looks like.
- At some point in the future, we will also offer our customers the ability to process payments via Stripe. We’ll be offering this option primarily to support international customers.
Our billing system will be complete and we expect to start charging our own customers beginning January 1, 2018.
We changed our pricing model
The last company update that we published was focused 100% on the process we used to develop our initial pricing strategy. While we put a lot of thought into our initial pricing, as we thought further about our pricing model over the summer we came to the conclusion that we didn’t quite get things right the first time around.
Initially we proposed a blended pricing model, with our pricing tied to both number of contacts (as most e-mail marketing tools are) and number of users (as is the norm for most CRM and help desk tools). We liked the idea of tying our pricing to the number of users of our software because it seemed fair - as a start-up grew and needed to give more people access to our software, what they would pay us would scale in conjunction with their own company’s growth.
We did voice a mild concern with this - we know that we’re going to be selling into a target market (start-ups) where the majority of our customers will fail and in turn, churn. As a result, we need to plan for this churn and figure out how to make our product as “sticky” as possible so that we do retain our successful customers and extend their lifetime value to our business as much as possible.
By charging on a per user basis, we would be actively discouraging companies from getting as many of their employees as possible into our software. The more people who are accessing and using our software, the “stickier” the product ultimately becomes. Said another way, getting as many users as possible into our software benefits us more at this stage than monetizing each and every user.
We think our initial pricing was too focused on capturing revenue as our customers grew or from larger customers, when in reality for the first couple of years we’re primarily going to be successful working with companies with only a handful of employees.
As a result, we’ve made the following updates to our pricing.
- We’re still offering a free plan, but it’s limited to your first 250 contacts. This is not a time bound trial, and it’s not a limited feature set offering. You can access and use all aspects of the product for as long as you like, but once you’re really ready to go and need to service 250+ contacts you’ll need to pay.
- Once you move to a paid plan, you’ll pay us $99 per month or $999 annually. This hugely simplifies our pricing and makes it so start-ups will know exactly what their bill will be. No surprises at all, and we think $99/month is a fantastic deal for your CRM, email marketing, customer service, billing, and reporting software.
- We’re offering all customers unlimited users, unlimited contacts, and unlimited emails. This is hugely disruptive as we think about winning business away from other companies in existing categories like email marketing, CRM, and help desk software where pricing is typically tied to number of users or contacts.
We think this pricing is aggressive and will allow us to compete and win deals. We are more interested in growing our user base than maximizing revenue potential. Shout out to Randy Parker, Founder of Constant Contact and Brevi, for sending us a note sharing this concern and giving us a gentle nudge in this direction. We appreciate ya.