SaaS Tattler Issue 42

January 18, 2015 Paul Philp

Top SaaS Insights:

Five Ways Evernote Rocks the SaaS Freemium Model

Five Ways Evernote Sets the SaaS Bar High
Evernote has at least five lessons to teach other businesses, starting with the design of their product:
  1. Evernote Taps Into a Universal Need – And Does It Well.  Basically, human beings need reminding, and for most of us this comes in the form of notes.  Not only does Evernote give users a way to save, organize, and share information and to-do lists, it does it well.  By building an excellent free product, they easily attract new users.
  2. The Focus Is on the Top of the Funnel. Rather than concentrating on converting new free users into paid users right away, the folks at Evernote set their sights on acquiring brand-new users.
  3. Conversion Goals Are Kept Low. Many companies in the Freemium space build their business plans around a free-to-paid customer conversion rate of 3 or 4 percent.  Evernote was structured to be profitable with a 1 percent conversion rate.  Not just operational; profitable.
  4. People Get Hooked on the Service. Interestingly, many lapsed users return to the Evernote platform, once again testifying to the quality of the product.  As users become more and more dependent on the service conversion rates increase, rising to about 5% at the 2 to 5 year point.  And with the number of current paid subscriptions estimated at or above 7 percent, this approach is obviously working for the company.
  5. And Costs Are Kept Low, Too.  By monitoring costs and comparing revenue per active user with variable expenses, Evernote can continue to provide an excellent product to both paid and free users.

SaaS Marketing

Jason Lemkin points out that B2B SaaS products do have a viral co-efficient, it’s just much lower than consumer products.

Let me explained how it worked for us at EchoSign.  EchoSign is a somewhat collaborative app, in that when I send you a contract to sign, it goes from one org to another.  One company to another.  That creates a viral exposure and opportunity for the signer to potential register, try the app, play with it, use a Free version or Free Trial and … eventually .. convert to paid.  You can see our early user growth in the chart above.

And we could track the viral conversions quite easily.  From date of first contract send to New Signer, to how long it took for that new account to convert to paid.

The answer was: 8 months.

SaaS Strategy

Christoph Janz notices that the bar is rising for SaaS companies.  What was new and innovative 5 years ago is just table stakes today.

Today, an incredible amount of knowledge on how to build a SaaS company is available online. Jason M. Lemkin alone has answered more than 1100 (!) mostly SaaS-related questions on Quora, drawing from his experience in founding EchoSign and scaling it to $100M in ARR. Between his website and the blogs of David Skok, Tomasz Tunguz, Joel York and others you’ll find great answers to almost every SaaS question that you can think of. In addition, there’s a large number of excellent blogs and resources to learn about more specialized topics such as inbound marketing, landing page optimization, customer success,marketinggrowth hacking, more growth hacking, product strategy and every other imaginable topic. Processing all of that information and prioritizing and applying the learnings is of course difficult, but at least the information is there.

Super SaaS Fundings:

Sense360 -$2.8 M Seed round on January 15, 2015.

RateGain – $50 Million Venture on January 14, 2015.

MoovIt – $50 Million Series C on January 14, 2015.

Vidyard – $18 Million Series B on January 14, 2015.

Newest SaaS Services: – WalkMe™ enables your business to simplify the online experience and eliminate user confusion.

Mixmax – Email tracking, instant scheduling, surveys, and more.

Baremetrics Forecast – Get free lessons on how to grow revenue and build your startup!

Google Translate – New with real-time translation.

An Infographic of Interest:


Other Great Weekend Reads:

A great looking resource for every SaaS entrepreneur and executive.  The ultimate SaaS metrics cheat sheet.

The use of SaaS and cloud technology in merchandising is widespread, beneficial, and growing exponentially. Embracing SaaS in Merchandising.

It’s a good time to be a SaaS company!  All These Enterprise IPOs: Why It’s Just Getting Good. Why These are The Best of Times for SaaS.

In case you missed the latest from the Amity Blog: Key Metrics from Subscription Billing

Planning for 2015 underway? The Guide to Developing a Business Case for Customer Success will help you achieve your customer success mandate in the coming year.

Want something added to the SaaS 2.0 Tattler – let us know! And let us know your take on the SaaS 2.0 Tattler in general – we’d love your feedback.

Curated by the team at Amity using the outstanding tools provided by Product Hunt, BetaList and CrunchBase. We encourage sharing and subscribing!

#SaaS Tattler Issue 42 - Top SaaS Insights w/ articles by @Absolutdata, @jasonlk, @chrija and more!
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