SaaS Business Model Innovation

The Race to $100M ARR

SaaS and cloud providers have enjoyed epic levels of venture capital investment over the past few years. Almost every business plan imaginable has been funded resulting in tens of thousands of new startups entering the market. Some aim to disrupt existing markets while others hope to create new billion dollar categories out of thin air. Some are using traditional sales-led growth strategies while others are letting the product sell itself with PLG.

In the race to reach $100M ARR, go-to-market, monetization, and business model design will decide the winners from the losers.

Some offer subscription pricing with fixed monthly fees while others are monetizing consumption to scale revenue faster.  Some are focused on building great software, while others have expanded their business model to include advertising, financial services, and supply chain capabilities.

SaaS Business Model Design – Key Considerations

SaaS and cloud providers aren’t just disrupting traditional industries they are reinventing their own business models.  To remain competitive, both startups and established companies, need more challenge themselves more than ever to answer the big picture strategy questions related to:

Go-to-Market Model

  • Product-Led
  • Sales-Led
  • Channel-Led

New Category Creation

  • Target market
  • Value proposition
  • Launch strategy

Monetization Models

  • Pricing strategy
  • Revenue streams
  • Value metrics

Strategic Planning

  • International expansion
  • Platforms & product suites
  • Mergers & acquisitions


New Category Creation

New category creators need a fundamentally different strategy than SaaS and cloud providers disrupting an existing market. Category leaders need to get their customers to do things like reimagine how they do business and how they measure success. The effort to build a new market from scratch is substantial, but the payback is huge as many category creators are able to establish a dominant market position.

Category Creation

Category Leaders Redefine How their Customers View Success

Category leaders disrupt their target industries by redefining the metrics and KPIs used…
Category Creation

Category Leaders Re-Invent the Technology Platform in their Markets

Most new software vendors have a vision for how they can make better…
Category Creation

Category Leaders Get Customers to Redesign their Org Charts

Category leaders know that technology alone does not change the world. It starts…
Category Creation

Category Leaders Force Customers to Re-imagine their Business Processes

Every B2B software company defines a value proposition for its products. But most…
woman in white lab coat mixing chemicals on blue background

Business Model Innovation

Every Product as-a-Service

In the next ten years every major product will become available in a subscription or “as-a-service” model. Innovators in every category of product are shifting away from the traditional transactional product sale of the 20th century towards service-centric models.

These new “as-a-service” paradigms are designed to provide higher levels of value to the customer with a goal of building longer-term relationships.

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Pricing and Monetization

More and more SaaS companies are beginning to challenging the “per user per month” subscription pricing strategy that has been dominant throughout the first two decades of SaaS.  Go-to-market teams are increasingly using variable pricing linked to the customer’s consumption or a percentage of the dollar value processed.  These alternative monetization strategies create the potential for faster revenue growth and shorter time to reaching centaur status with $100M in ARR.

Pricing & Monetization

The Best Cloud and SaaS Pricing Models Have Multiple Dimensions

Cloud and SaaS pricing is typically multi-dimensional, meaning that there are two (or…

What is the Most Complex Usage-Based Pricing Model

Alibaba's MaxCompute service is a cloud data warehouse. Fees are charged for each…