1Mby1M Virtual Accelerator Investor Forum: With Brian Jacobs of Emergence Capital (Part 5)

Sramana Mitra: The other thing that I’ve seen in my career in various instances is, people get software and they don’t usually use it or they don’t have the staff who can take advantage of the capabilities of the software. You deliver the Ferrari and are driving it like a Toyota. In a lot of those cases, the SaaS-enabled BPO often can deliver a lot more value because the people who are driving the software are driving like it should be driven.

Brian Jacobs: I should say that the shelf-ware phenomenon is going away in the cloud world. You can stop the subscription if you’re not getting value. The SaaS companies are all very attuned to the understanding that if their customers are not getting value, they will leave. Every company we know has this customer success function which is, all around, making sure that the customer is really using the product. Your main point is an excellent one.

With this SaaS-enabled BPO model, there are some shortcuts you can take. First of all, you don’t need to support the software in remote environment. You can control how it’s being used, who’s using it, and you can design features that probably wouldn’t survive in the open market but can be shortcuts for your own employees to deliver the service. I think that’s a great leverage point in that business model.

Sramana Mitra: That becomes interesting when you look at some of these new industries that have developed and scaled. There are small merchants that have shops on Shopify and they have a set of specific needs. They are small businesses. It’s difficult for these small businesses to run all those different business processes internally. To be able to outsource some of these processes to these SaaS-enabled BPO shops is an advantage. Having to hire capable people who can perform that function versus outsourcing it is very useful.

Brian Jacobs: We’re starting to see the modularization of businesses where entrepreneurs in almost any country can build a fairly scalable business on their own merely by choosing the components of the business they need and writing a few lines of code to stitch them together. Before you know it, they can be serving web pages, shipping products, collecting across borders, and paying taxes. All of these are available as a service. It’s an example of cloud really changing everything. That begets more innovation.

Sramana Mitra: This whole zero logistics e-commerce trend is entirely built on top of modular cloud services. It’s incredible how category-leading companies are built on these every ultra-light organization structures.

Brian Jacobs: We don’t see an end to the innovation anytime soon. There’re lots of nooks and crannies that could benefit from the cloud architecture. The international opportunity is massive. All of these things lower the cost of computing which just makes it more and more available to smaller and smaller companies. We are now seeing companies that are targeting Salesforce with a next generation of SaaS offering.

Even the big companies that have taken advantage of the first wave of the cloud are not safe from this innovation. They will have to struggle with companies that have leaner business models, better technology, and better integration of things like social and mobile from the get go. These are true innovations that will keep driving the industry forward.

Sramana Mitra: Thank you for being with us.

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Brian Jacobs of Emergence Capital
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