PaaS: Bootstrapping by Piggybacking

We’ve discussed all kinds of creative bootstrapping mechanisms in this series. My #BigIdeas2020 contribution is yet another technique that I believe would be particularly relevant and powerful going forward.

One of the most exciting trends in the technology industry currently is Platform-as-a-Service (PaaS) and Developer Eco-systems.

The company that has knocked the ball out of the park with their PaaS strategy is Salesforce.com. They launched their platform over a decade back, and many substantial companies, and numerous sustainable small businesses, have been built on it. Veeva, for example, was built this way with a small amount of capital, and today, boasts over $1B in revenue and over $20 billion in market cap. 

My hypothesis is that of the 200+ SaaS companies that have achieved scale, we would see a set that would break out and become significant PaaS players. 

This means, the industry would have 20-50 PaaS platforms with serious developer eco-systems and app marketplaces. The PaaS vendors would want to sell the apps developed on their platforms to their customer bases, take 30% in platform commission, and help support robust businesses while scaling themselves exponentially.

Entrepreneurs looking for a capital efficient strategy should seriously consider bootstrapping by piggybacking on these PaaS players.

[Related Reading: The year 2019 is coming to an end and here we do a review of the best performing cloud stocks of 2019 and the most promising for 2020. The criteria for making this list are a strong strategy or performance in Platform-as-a-Service (PaaS), Artificial Intelligence (AI), and robust Developer Ecosystems. Read: Top 20 Cloud Stocks for 2020]

And entrepreneurs looking at Bootstrapping to an Exit, it is a lot easier to get acquired by a platform player if you’ve built something credible on their platform. For recent acquisitions on top of PaaS platforms, see Atlassian Acquires Again From App Marketplace.

Photo by Mohamed Nohassi on Unsplash

This segment is a part in the series : PaaS