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6/25/2008
10:16 PM
Paige Finkelman
Paige Finkelman
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'Let Us Be Your Benchmark'

I heard this bold statement from Mark Trang as he spoke to the Santa Clara Tour de Force audience about the seven crucial ingredients an up-and-coming SaaS company must deploy. Citing his White Paper entitled 'The 7 Secrets of SaaS Startup Success', Mark walked us through how Salesforce.com has utilized these steps to create a benchmark for achievement.The Tour de Force road show celebrates Force.com and their platform-as-a-service, making stops in major cities around the world. The one day event kicked off on Monday with a keynote from Marc Benioff, and also coincided with a major announcement. Force.com has partnered with Google to create the Toolkit for Google Data APIs. This Toolkit enables developers to leverage Force.com applications and Google Data APIs to create new web applications that connect directly to Force.coms database.

Along with Visualforce, the platform provides an attractive foundation on which to build custom applications. Jeremy Roche, the CEO of CODA, gave a compelling demo of how his company utilized Force.com to 'do for accounting what Salesforce.com did for CRM.' CODA's goal was to go to market with a product quickly, as opposed to spending years creating an infrastructure. The application is currently running natively on Force.com's platform, utilizing the same language, and the same look and feel. The CRM-centric platform looked and performed like the accounting application that CODA had originally envisioned, in a fraction of the time it would have taken had they built it from the ground up.The Tour de Force event not only provided the audience with some great case studies of what developers can build upon the PaaS that Force.com provides, but also drilled down into how startups can emulate Salesforce.com's strategy for success.Mark Trang is Salesforce.com's Director of ISV Marketing, and his breakout session provided a framework for SaaS companies to build upon. The premise of his session was encapsulated in the session title: 'Secrets to SaaS Startup Success: Building Your Company to be the Next Salesforce.com.' Mark's 7 steps highlighted how the on-demand SaaS model has created a new business model - one that requires a new approach. Here's a brief overview of the White Paper's helpful guidelines:1) Make Leaders AccountableA SaaS company requires a new type of leader; one with a clear vision that realizes on-demand is not a backup strategy. This type of management must be 100% metric-drive2) Deliver Apps Your Users Will LoveA user should have a visceral reaction to your application, and never require training to use the app.3) Create a 24/7 Demand Generation MachineOne's strategy should be firmly in place to capitalize on lead acquisition, pipeline generation and loyalty. User communities drive purchasing decisions, so it's best to exploit this community. A good way to take advantage of this community is to provide a free trial or 'test drive' - you can leverage the web with accessible trial or 'soft offers'.4) Sell a Service, Not a ProductThe business model should center around efficiency.5) Make Customer Sales a ReligionAdoption should become an addiction. Salesforce.com utilizes a customer success team - which is different than customer service. Companies should also be thinking about how to turn their customers into a sales army by rewarding them with referral programs. In a world of social media, it's best to harness these viral elements.6) Develop Highly Disciplined Financial ProcessesThe revenue model of a SaaS company is different from a software company, as revenue is collected over the course of a contract. To manage this financial model successfully, processes must be in place to closely monitor renewals and payment terms.7) Take Your Place in the CloudImportant to consider what one's API strategy will be, and then build API-centric development tools and exploit API-driven channels. A successful SaaS company should live at cloud intersections and build developer programs.Standing up and declaring that one's company should be the benchmark for achievement could be perceived as arrogant, but if you work for Salesforce.com, it's not such an audacious statement. With their Q2 revenue exceeding $176 million, an almost 50% increase year-over-year, Salesforce.com's benchmark declaration can be backed up by looking at their record fiscal second quarter results in 2008. Keeping these figures in mind, Mark Trang has earned the right to stand up on a soapbox and preach.

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