SAAS revenue models and slow ramp

Good read: 8 tips from Dave Cancel


If an investor tells you that you can’t build a real business on $20/month, direct them to Constant Contact.

Their average selling price is $37/month, they have 375k customers, they are on target to do $170 million+ in revenue this year, and they are a publicly traded company (AKA liquidity event).

SAAS (Software as a Service) startups need to focus on getting on past what Gail calls the slow ramp of death. When selling low-priced subscriptions you make your money in subsequent years — not up front.

The slow ramp of death is even harder to get past at an average selling price of $37/month; 1000 customers at that price brings in enough revenue to pay a small handful of employees.

FOAP is a new way to get paid for your photos

Friend and colleague Bob Manley let me know about FOAP, a web service that is building a market for photographers to sell their local, real-live photos to companies looking for stock photography.



The idea seems interesting; take a photo, achieve a minimum score of community votes, then its eligible for sale in the marketplace. You get $5 out of the $10 selling price.

Their website also has a good summary of Commercial vs Editorial license rules concerning people’s faces.’s Bezos is buying The Washington Post

Amazon founder Jeff P. Bezos is buying The Washington Post.

Six years ago, Mr. Holovaty held the title “editor for editorial innovation” at The Post, but left in 2007. The co-creator of the popular Web framework Django, he thinks Mr. Bezos will bring “fresh, baggage-less thinking.”

No baggage — and deep pockets — means room to try new things. Might Mr. Bezos apply tech industry concepts like frictionless payments, e-commerce integration, recommendation engines, data analytics or improved concepts for mobile reading?

Building your big idea

Great essay from Paul Graham…

Empirically, the way to do really big things seems to be to start with deceptively small things. Want to dominate microcomputer software? Start by writing a Basic interpreter for a machine with a few thousand users. Want to make the universal web site? Start by building a site for Harvard undergrads to stalk one another.

Empirically, it’s not just for other people that you need to start small. You need to for your own sake. Neither Bill Gates nor Mark Zuckerberg knew at first how big their companies were going to get. All they knew was that they were onto something. Maybe it’s a bad idea to have really big ambitions initially, because the bigger your ambition, the longer it’s going to take, and the further you project into the future, the more likely you’ll get it wrong.

I think the way to use these big ideas is not to try to identify a precise point in the future and then ask yourself how to get from here to there, like the popular image of a visionary. You’ll be better off if you operate like Columbus and just head in a general westerly direction. Don’t try to construct the future like a building, because your current blueprint is almost certainly mistaken. Start with something you know works, and when you expand, expand westward.

The popular image of the visionary is someone with a clear view of the future, but empirically it may be better to have a blurry one.

(Emphasis mine.)


You need a shopping cart; here’s what to do

Here is a quick summary of the options available to you, and the decisions you need to make before a development cost can be established:

There are dozens of good solutions, and which to choose depends on a multitude of factors… do you have a site already with a CMS ? do you mind offloading visitors to a 3rd party “hosted storefront” like Shopify, which is a great service…  or do you prefer to keep them on your site throughout the checkout flow?

Is your site running as a self-hosted WP blog, and thus could use an on-site ecomm plugin instead? There are a few popular plugin options for this scenario.

Further, if you already use PayPal, do you want to simply add a Paypal checkout button?

See a site that does this:
You can do this method on both a website or a blogging system.

If yes to Paypal, do you want to continue using PayPal but need a true cart, and want a seamless, integrated checkout flow where the user never leaves your site? Then, we use the PayPal Pro api to make any type of cart system. See my site and go to the online store.

Or, you might want a full-featured shopping cart using a different payment processor, like, and you want it hosted on your own site… ?
or  even

And lastly, how do you handle the backend accounting and inventory management, if at all? Do you need QB integration? (troublesome!)  They need a store like bigcommerce that can send all sales data to QB on a synced basic. But setting up this scenario requires a true QB expert on hand.

The options go on!

In some cases, you may not want to use Paypal, and already have a 3rd-party gateway and merchant service. Therefore, you need a very simple “cart” that does only what you want, that talks to the API (interface) of the gateway.  A common gateway is It has APIs with which you talk to their systems.

Or, you may not have a merchant account yet. In that case, you could use an all-in-one procider like:

And now, we get to the technologies with which your site is coded… php? asp? jsp? python? ruby? We here at PDG&Associates use only php and sometimes python.

For php, there are lots of choices.

For a simple and free one, here’s:
You could modify it as needed to make it work, and a programmer could use it as the basis for a custom solution. And there are probably 100 more carts like it this.

Or with custom programming, we could simply build a tailored solution. Give us a call to make sense of the options!

Yahoo – asking the wrong questions about its future

From a comment by the new CEO of Yahoo, Marissa Mayer:

Ms. Mayer may have the hardest time taking Yahoo into the mobile advertising arena, a market dominated by her former employer. Unlike Yahoo, Google and Apple dominate the mobile advertising space with hardware and software options.

And that’s where it runs headlong into its identity problem. “Yahoo is still mainly a media company. It doesn’t have an operating system. It doesn’t have the devices,” Mr. Hallerman, of eMarketer, said. “I don’t know if there’s room in the market for a fourth mobile platform.”

Asked whether she plans to run Yahoo as a media company or a technology company, Ms. Mayer said, “It’s not the right question. The most important thing is to give end users something valuable, inspiring and delightful that makes them want to come to Yahoo every day.”

Marissa Mayer is just 37 years old and has uncommon wisdom among the tech analysts and elite. Best of success to her!

Vizio – an American success story

A Vizio tv wall
Photo by Kyle Chayka.

From an article at The Verge: Vizio has 414 US employees who oversee a vast army of suppliers making their products at the manufacturing level. The founder says that 50 percent of their job is orchestrating.

And why are the TVs so low-cost?

“We’re here to make innovative technology a commodity,” Wang told Inc magazine at the time.“ We’re not here to build cheap product, we’re here to make the product affordable.”

You know Vizio for its affordable LED TVs sold at Costco and Walmart… and maybe for its tablets or monitors. But they also are making PCs.

“PCs aren’t going away,“ says McRae. “They’re still extremely important devices in people’s lives and they’re really becoming an entertainment product as much as a productivity product. And if it’s an entertainment device, it’s in our wheelhouse. We do entertainment devices pretty well.” Vizio first tried to expand beyond TVs into smart devices with the Vizio Phone and Tablet, which launched at CES 2011, but McRae killed the phone after dealing with carriers proved frustrating and expensive. PCs and tablets can be sold directly to consumers — something Vizio is pretty good at.

They have innovative ideas about the direction of PCs:

“The tablet has forced the PC industry out of its slumber. There wasn’t much going on. But the next three to five years in PCs will actually be very interesting. You’re going to see new form factors, you’re going to see touch embedded over time.


Accept Credit Cards on the Go

Square Inc.

EBay offers PayPal Here

Intuit offers GoPayment

Eventbrite offers At The Door Card Reader

A credit card swiper that plugs into an iPad’s charging slot and can be used to sell tickets and merchandise at event sites.



Human Costs of an iPad

From a NYTimes article titled “In China, Human Costs Are Built Into an iPad”

“You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards,” said a current Apple executive.

“And right now, customers care more about a new iPhone than working conditions in China.”

Important exposé.

Photograph by Ryan Pyle for The New York Times

Aluminum dust from polishing iPads caused the blast at Foxconn’s plant in Chengdu.