BESSEMER CLOUD COMPUTING LAW #2: Build for the Doer, Build Employee Software

September 2012
Authors: Jeremy Levine
Related Companies: Apperian, Inc. and Twilio, Inc.
Related Strategies: Cloud Computing

Employees are now powerful customers themselves, and not just through their managers.  We’re witnessing the “Consumerization of Software” so focus on ease of use for SaaS, and “developer citizenry” for PaaS and IaaS.  

Jeff Lawson
CEO Twilio

“We now enjoy an active community of over 100,000 developers behind a pretty straightforward philosophy: Make a Hero out of your Doers. Empower them to get stuff done by building great products leveraging our communication platform.  Make it easy to use, transparently priced, and above all, no shenanigans!”
The gig is up.  Pandora’s box is open.  Your customers all now know that software doesn’t have to suck anymore.  They use rich internet applications including Facebook and Skype to communicate with their friends; they use LinkedIn to manage their business networks, Google or Wikipedia to find accurate online content, Yelp to find restaurants, and Travelocity to book flights.  Your potential customers are now looking for similar “cheap and cheerful” products in an open revolt against the years of oppression by the likes of SAP and Oracle.  You should therefore beg, borrow, and follow:  take inspiration from the best online products you can find and leverage the fact that you’re naturally smaller and more nimble than the incumbents to provide the best user experience imaginable.
Whether it’s a “Freemium” model, a hybrid sales model with a heavy inside corporate sales element, or even an
enterprise sales focus with products that delight the user, building for the end user in SaaS will drive adoption and thus monetization.  Products will now see rapid adoption by virtue of being intuitive and dynamic as opposed to being confusing and complex.  Customers no longer require you to capture every use case or business need in your product, and they’re willing to forgo considerable flexibility in return for rapid on-boarding, progressive discovery, and context-sensitive help.  
 
David Patrick
CEO, Apperian

“Our goal is to provide a platform for enterprise mobile teams to be successful.  We try to hide all of the complexity around issues such as security, role based provisioning, and scalability, and just let them provide great mobile applications to their end users.”
Individual employees and mid-level managers can now take out their corporate credit card and expense products, and are becoming direct consumers in the process.  The best possible way to land a large enterprise customer is to call up the CIO and say “we’re excited by how much you like our product and we’re happy to note that we now have several hundred users of our product within your corporation.  We wondered if you were interested in rolling these into an enterprise license with the administrative dashboard, integration to your other systems, coordinated billing, provisioning and security?”  Many Cloud companies are doing this with great success.
 
Although this is finally becoming more widely accepted as a best practice, we must still emphasize the importance of building a single instance, multi-tenant product, with a single version of code in production.  “Just say no!” to on-premises deployments. Multi-instance, single tenant offerings should only apply to legacy software companies moving to a dedicated hosting model because they don’t have the luxury of an architectural re-design.  Of course it is possible to use virtualization to provide multiple instances, but this hybrid strategy will make your engineering team much more expensive and much less nimble. You also want to leverage your core infrastructure as much as possible, even when expanding internationally  This generally means investing early in backup and disaster recovery, but if you’re managing your own datacenter, avoid a second production facility as long as possible (at least past $2M CMRR).
 
We’ve also started to see unprecedented levels of developer empowerment within organizations, meaning that PaaS and IaaS vendors that focus on killer offerings for the end developer are being discovered and embraced at fantastic rates.  Let the developers make your decisions, and understand that they will be making the decisions in your customers.  Build and use clean APIs, and promote your offerings through user conferences, hackathons and developer evangelists to spread the message.  
 
For a PDF of Bessemer's Top 10 Laws of Cloud Computing and SaaS please click here.