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After an interesting panel with the title "Why are there not more European unicorns" which was also much about BlaBlaCar at Web Summit 2015 there was an opportunity a week later to have a chat with Philippe Botteri about the state of the ecosystem, the European software as a service space and exiting SaaS companies.

All about Philippe Botteri and how he became a leading SaaS investor

Arnbjörn Eggerz: Mr. Botteri, it is a pleasure to welcome you to this interview about SaaS. You hardly need any introduction, but it is very interesting for entrepreneurs and readers to understand the bio and background of great investors. Thus, can you describe how you became a venture capitalist?

Philippe Botteri: I was born and raised in France and did an engineering degree. Then I joined McKinsey in 1998. That was the time of the first dot com boom and I had the chance to work for start-ups as the firm was working with start-ups at that time.

Arnbjörn Eggerz: And how did you come from McKinsey to the Valley and to SaaS?

Philippe Botteri: I did a few projects for start-ups in London and when the bubble burst I shifted a bit my focus to work more on software and SaaS companies. I actual wrote one of the first McKinsey white paper on SaaS - the word SaaS did not exist in Europe at the time, we were using the term ASP "Application Service Provider".
In 2003 I moved to the Silicon Valley office of McKinsey, continued to work on software and on SaaS companies and stayed there for a few years. Then I joined Bessemer Venture Partners in 2006 to help them build their SaaS practice.

Arnbjörn Eggerz: These were the pioneer times of SaaS. As it is a rare occasion to have someone who was part of it, can you share some anecdotes?

Philippe Botteri: Yes sure. It was at the time when, you know, people were still wondering if SaaS would last and whether it had a future or not. And that was when I started my blog "Cracking-the-code" to write on SaaS and issues early stage SaaS companies were facing...

More and more software applications move to the cloud transforming on premise solutions to Software as the Service (SaaS).

Thus it was a great opportunity to talk to Ari Helgason from Dawn Capital about his entrepreneurial experience and his way into venture capital @WebSummit in Dublin.
After a short look on the European #ecosystem, there was plenty of time to talk about the state of European SaaS startups.

What are the problems they are facing?
Where are we with respect to SaaS adoption?
What about SaaS metrics and current CAC levels?

Last but not least it was great to talk about startups in Iceland.

A full transcript of the interview will follow

for more information about Dawn Capital go to
http://dawncapital.com/

If you want to know more about the SaaS business model check out Iceventure's SaaS training or read our articels on saas here on the blog.

Yesterday evening I had the chance to take a first look on data the Web Summit databases provides for participants. I took some time to dive in deeper into one of our sectors - software as a service in (SaaS). Of course, one has to keep in mind that the data from the Web Summit is not fully representative as there is the conference participant bias. But I think it still provides a good general snapshot about the state of SaaS in Europe and Germany. This article will walk you through to some numbers and important insights you can derive from that.

A snapshot of the European SaaS space (participating in Web Summit)

First a general description of the data: There are 72 SaaS companies out of 2083 startups that included the term SaaS or software as a service in their description. This is a rate of only 3.5%.
It might come as a big surprise for many used to the slogan "SaaS is everywhere and the future", and given it is an exclusively web conference. I think it fairly reflects the fact that - albeit SaaS is a very interesting business model - it is also a very demanding place for startups to be. And I am not even talking about the king's class, which is enterprise SaaS.

About two years, there was a very interesting post by Robert Desisto, the head of Gartner's SaaS practice about the saas business model.
He formulated a hefty critique of the current sales policies of mostly big SaaS vendors for the business and enterprise customer segment. He ended with the question if these vendors could indeed already be "dinosaurs".
A recent pricing strategy discussion with clients, reminded me that it is still a current topic. Thus, I post the comments on this SaaS sales question with a European view (slightly updated and this time in English).

His critique of the SaaS vendors

The reason for his statement is the practice to close long-term contracts with a fixed usage/license volume. This of course kills the main advantage and argument for SaaS in contrast to the classical on premise license sales "pay only for your real usage in a given timeframe". He also mentions that the typical quarter sales thinking has not changed. Therefore, Desito concludes "SaaS sales agents act like their on-premise colleagues."
As expected, the article drew a wide response. Thus, one could think that this should translate into an untapped potential for new SaaS startups or disruptors, meaning that the current vendors - themselves just grown-up to the new stars of software corporates - would be obsolete soon. And not much changed since.

An untapped opportunity for startups or business model innovation?

You have to take the statement with a grain of salt.

Firstly, it is a fully valid strategy for SaaS vendors and for SaaS startups to close long-term contracts. This is for the fact that this business model is cash intensive and such sales practices stabilize the much-needed cash flows, especially when you think of the necessary VC financing. This happens often by discounts, which you trade off for flexibility. This is the problem of all SaaS companies. Therefore, each new market entrant that wants to gain market share via playing the "only pay-as-you-go variable" has to face the same cash problem and needs a solution to it.