At the end of 2019, I had published Cloud Stocks: Top 20 for 2020 with a summary of which SaaS companies are succeeding on the basis of a strong PaaS strategy, AI, and robust developer ecosystems. I now want to focus on how the PaaS landscape is evolving: who are the established giants, the top mature players, the promising players, and the potentials.
Cloud Stocks are doing exceptionally well through the pandemic. If you’re wondering which ones are likely to go further, please pay attention to their PaaS strategies. PaaS creates exit barriers, deep moats, excellent pipelines for new products, acquisition prospects, and overall multipliers that strong SaaS companies should all consider. Over time, I expect hundreds of PaaS eco-systems to develop, each spawning a thousand smaller companies.>>>
Two principles apply to all ideation processes:
1. You need to find a gap in the market. It’s extremely crowded.
2. You need to have an unfair advantage in that domain. That depends on your expertise and domain knowledge.
I strongly recommend that you build on top of an existing platform. It would be much cheaper. However, you can only do so in a domain where there’s a gap, and where you have expertise. If you want to build on top of the Shopify platform, you need an e-commerce idea that addresses a white space.
Sramana Mitra: I work with formation-stage companies all the time. Two guys or one person and an outsourced team of developers build these formation stage companies where they would want to spend their resources. The best place to spend your resources is what is differentiated.
Going in and competing against AWS is not a differentiated strategy if you are trying to build a B2B SaaS company in a mixed domain of, let’s say, supply chain logistics. It’s better to have to strike out the other layers and focus your attention on building the logic that is going to give you the differentiated advantage on that layer.>>>
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Today’s 506th FREE online 1Mby1M Roundtable For Entrepreneurs is starting in 30 minutes, on Thursday, October 22 at 8 a.m. PDT/11 a.m. EDT/5 p.m. CEST/8:30 p.m. India IST. Click here to join. PASSWORD: startup All are welcome!
The global pandemic has been a boon to EdTech companies focusing on expanding learning capabilities through an online platform. According to recent reports, the global market for higher education is valued at $2 trillion. Even before the COVID crisis, education was moving online, but the crisis has accelerated that move significantly.>>>
Sramana Mitra: The methodology that we follow is, bootstrap first to raise money later. Get to validation and then raise money, partly because this option of raising money remains only if you can raise friends and family money somehow.
For the numbers that we work with, most people don’t have those options. That’s why, pragmatically, it’s not very doable for most people. We are in 2013. How much money did you raise from your Yammer bosses?>>>
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Sramana Mitra: Let me address the points that you have made. The first point is that one of the most successful ecosystems where 30% of the apps revenue has gone to the company and has immensely added to the company’s success is Apple. It’s a platform ecosystem.
David Barrett: I completely agree with you if you can monopolize a platform. That’s a very different world where you are a monopoly of a closed ecosystem.>>>