The event was conceived and conducted completely by Lief Larson, CEO and founder of Workface Inc., with assistance from a couple of his team members. Workface is a growing startup in Minneapolis that itself developed a SaaS offering it now markets widely, which it calls a “customer engagement platform.” I was extremely impressed with the breadth and depth of the content Lief pulled together for this event. It included a extensive look at market data for SaaS in the U.S. and globally, monetization strategies and practices, selling to the enterprise, negotiating contracts, increasing adoption and retention of your app, marketing your app, creating a channel to sell your app, financing and funding a SaaS business, training your SaaS customer, and ongoing monitoring of your SaaS business. On top of all this, Lief related some really excellent stories throughout the workshop about his journey in funding and building Workface.

I had a chance to follow up with Lief afterwards to get some further perspective on the story behind SaaSCamp… 

Q: Lief, why did you decide to do the event? 

Lief:  I’ve had a great group of mentors who have helped me during my entrepreneurial journey and I try to pay it forward by helping other young businesses and entrepreneurs to find success.  A few of my “mentees” are building applications that are software-as-a-service (SaaS) offerings and asked that I consider putting on an event.  That’s why I created SaaSCamp 2012 — to bring together like-minded people working on SaaS.  I think the event is already bigger than me, and I’m hoping the community will take it and run with it. 

Q: In saying you’d like to turn SaaSCamp into a regular event, how often do you mean? 

Lief:  I think meeting up once a quarter or some greater level of frequency is important to stay current with new ideas and best practices in SaaS, but a larger annual event is a must.

Q: Why did you do it as a small, paid event, rather than use the barcamp or unconference model (sponsor-supported, with free attendance), like CloudCamp and so many others? 

Lief:  Whether you’re doing a sponsor-supported or attendee-supported model, the reality is that there are costs for hosting an event.  CoCo Minneapolis gave us a great deal, but they too needed to bring in people and security.  When you do a day-long event, people need to eat and drink.  Having a sponsored model takes some of the objectivity away, plus we don’t have a big list of providers who are focused on sponsoring the SaaS community (yet).  I think this will change over time. In any case, we analyzed the anticipated costs of the event, and used that to be the guide for what to charge for tickets.  Plus, having a cost/value relationship, in my humble opinion, ensures that you keep the event focused on the right type of attendees and preserve a focused and more intimate experience.  We’ve all been to those conferences that are a free-for-all and you often get a heavier mix of vendors that are simply coming to spend a day trying to sell to the attendees.  We had zero selling going on at our event, but rather a 100% focus on how to grow and improve your SaaS business.  SaaSCamp had a 100% money-back guarantee to ensure that the $200 ticket price was a non-consideration in the value received.  If/when the event has more attendees, I anticipate the ticket price will drop through economies of scale.

Q: You mentioned to me that you believe “we have the best place in the world to build a SaaS company here in Minnesota.”  Can’t it be done anywhere?

Lief:  Technically, a SaaS business can be built from anywhere. But I think for highly successful SaaS businesses to get off the ground, it is better positioned in a market where the cost of doing business is relatively low, and the technical talent base to execute against the opportunity is high.  Silicon Valley is well-positioned in terms of financing, but it’s also a very expensive place to build a business and the most competitive technology talent market in the world.  There’s no place in the world I’d rather be building my SaaS company than right here in Minneapolis.  We’ve found highly qualified engineers and programmers, incredible business support, affordable living and reasonable business overhead costs, and we’re well situated for travel to the east or west coasts.  Plus, we have more Fortune 500 companies per capita here than anywhere else in the U.S.  We’re well represented in terms of small, medium, and large companies to sell into. 

Q: What’s the latest with Workface, and what can you tell us about your upcoming plans?

Lief:  Like many SaaS companies, we’ve found a way to scale the business without dramatic headcount additions to the company.  That’s why SaaS businesses can become highly profitable when they scale.  Workface has only 7 full-time employees, 2 part-time, and the rest of our business is accomplished through our contingent force, which includes 16 contractors.  We currently service more than 110,000 users and count companies like Intuit and AAA as customers.  Though our revenues are scaling and we’ve seen double-digit month over month growth, we’re continuing to bring private and institutional capital into Workface for growing our market penetration.  The visibility to ROI with SaaS is usually spread out over a longer time horizon (incremental monthly recurring revenue vs. selling on premise all in one big chunk).  As such, we anticipate taking on outside capital for some time to come.

——–

Disclosure:  Lief Larson is a former client and, I fully admit, one of my favorite serial tech entrepreneurs in this town.

Funny story:  Lief and I traveled to Palo Alto a couple years ago for a conference where Lief was pitching to the Silicon Valley VC community, along with a bunch of other hot startups, and sharing the stage with speakers like the founders of Salesforce and SuccessFactors. We stayed in a funky old, ’60s-vintage Travelodge motel — about as low-priced as we could find in Palo Alto. After we checked in to our respective rooms, we both went online to work. First thing I see is an email from Lief with a photo attached of this gorgeous, expansive hotel room, saying, “Wow, I hope your room is as nice as mine.” I never laughed so hard, because I could hardly turn around in my dinky little room.

Minnesota: A Great Place to Be for SaaS Companies is a post from: Minnov8 and published under a Creative Commons license.

Morgan joins a former colleague at Emeryville, CA-based Godengo: Peter Stilson, CEO.  Stilson served for several years as COO and Chief Revenue Officer at Internet Broadcasting during it strongest period of growth.  He moved from the Twin Cities to the Bay Area in September 2008 to take the reins at Godengo. Andy tells me he starts his new position July 16.

Godengo provides print and web publishers a strong online presence and networked advertising inventory, enabling them to more effectively compete online.  Godengo’s Rivista™ content management system (CMS) is designed from the ground up for multiplying traffic volume, enhancing search engine optimization, and increasing profits at magazine publisher’s web sites. The Godengo™ Online Ad Network harnesses an affluent, upscale consumer audience that reads the premier city & regional and lifestyle publications, providing advertisers national reach with deep expertise in local markets. One of Godengo’s investors also has a Minnesota connection. Chairman George Lawson was VP of Corporate Development for Dayton Hudson Corporation earlier in his career, and also held senior operating and corporate positions with Levi Strauss & Co. and General Mills.

Andy Morgan Leaving Internet Broadcasting to Join Godengo as CTO is a post from: Minnov8 and published under a Creative Commons license.

George Reese, a local software developer and tech company founder, knows a lot about the topic — so much so that he was recently commissioned to write a book on cloud computing by O’Reilly Media, based in Northern California, one of the most prominent names in computer publishing.  Reese is the founder of two Minneapolis-based companies: a new one called enStratus Networks LLC, a maker of high-end cloud infrastructure management tools, and an established business called Valtira LLC, the maker of an online “marketing platform” of the same name. Over the past 15 years, George has authored several technology books — with such names as MySQL Pocket Reference, Database Programming with JDBC and Java, and Java Database Best Practices. But his upcoming title, Web Architecture and Programming in the Cloud: Transactional Systems for EC2 and Beyond, may become his most popular yet.

A longtime designer of enterprise tools for software developers, as well as software solutions for the marketing domain, Reese has more recently been heavily involved in the development of systems to support the deployment of transactional web applications in the cloud. Interestingly, his background includes a BA in Philosophy from Bates College and an MBA from the Kellogg School of Management at Northwestern University.

Some Definitions
Recently, I had the opportunity to speak with Reese about his new book, and get an early look at the first chapter, which he says is aimed more at decision-makers than the rest of the book (which is primarily intended for developers). He also said this first chapter “has some claims some people might not like or agree with, especially if they’re competing with the cloud.”

According to Reese, cloud computing “is the evolution of a variety of technologies that have come together to alter an organization’s approach to building out an IT infrastructure.” He goes on to compare it to the development of the Web, more than a decade ago: “There is nothing fundamentally new in any of the technologies that make up cloud computing. Most of the technologies that made up the Web existed for decades before Netscape came along and simply made it all accessible; similarly, most of the technologies that make up cloud computing have been around for ages. It just took Amazon to make them all accessible to the masses.”

Yes, that same Amazon you know as an online retailer has also become a huge player in cloud computing with their “EC2″ infrastructure, which is changing the very way software businesses build their products and bring them to market — and saving them a ton of money at the same time.

Reese states in his first chapter: “The purpose of this book is to empower developers of transactional web applications to leverage cloud infrastructure in the deployment of their applications.”

An excerpt from the chapter that also helps define cloud computing:

The cloud is where you go to use technology when you need it, for as long as you need it, and not a minute more. You do not install anything on your desktop and you do not pay for the technology when you are not using it. The cloud can be both software and infrastructure. It can be an application you access through the web or a server that you provision exactly when you need it. Whether a service is software or hardware, here’s a simple test to check if that service is a cloud service:

If you can walk into any library or Internet cafe and sit down at any computer without preference for operating system or browser and access a service, that service is cloud based.

Reese speaks of “cloud services” (the type available via vendors such as Amazon), and points out that these include both software services and infrastructure services. “In terms of maturity, software in the cloud is much more evolved than hardware in the cloud” (meaning infrastructure), he says. “Software as a Service (SaaS) is a term that refers to software in the cloud. Though not all SaaS systems are cloud systems, most of them are.” He also provides a definition here that is helpful to those trying to understand this new paradigm: “SaaS is a web-based software deployment model that makes the software available entirely through a web browser. As a user of SaaS software, you don’t care where the software is hosted, or what kind of operating system it uses, whether it is PHP, Java, or .NET. And, above all else, you don’t have to install a single piece of software anywhere.”

Reese says SaaS systems have four defining characteristics: (1) availability via a web browser, (2) on-demand availability, (3) payment terms based on usage, and (4) minimal IT demands.

The Hardware Side of the Equation
“In general,” says Reese, “hardware in the cloud is conceptually harder for people to accept than software in the cloud. Hardware is something you can touch. You own it, you don’t license it. If you server catches on fire, that disaster matters to you. It’s hard for many people to imagine giving up the ability to touch and own their own hardware.”

Another excerpt from the book:

With hardware in the cloud, you request a new “server” when you need it. It is ready within 10 minutes. When you are done with it, you release it and it disappears back into the cloud. You have no idea what physical server your cloud-based server is running, and you probably don’t even know where it is physically located geographically.

Reese points out the advantages of a cloud infrastructure. “Think about all of the things you have to worry about when you own and operate your own servers: (1) What if I am running out of capacity? (2) What happens when there is a problem? (3) What happens when there is a disaster? (4) I don’t need that server anymore — what do I do with it?  (5) What about real estate and electricity, for infrastructure that goes unused?”  His summation: “None of these issues is a concern with a proper cloud infrastructure.”

The Value of Cloud Computing
In his book’s first chapter, Reese says the impact of the cloud is significant. “For some organizations — in particular, small businesses, medium-sized businesses, and SaaS vendors — it makes it possible for an organization never again to purchase a server or own any software licenses.” In other words, he adds, all these worries disappear:

• Am I current on all my software licenses?
• When do I schedule my next software upgrade?
• What do I do when a piece of hardware fails at 3am?
• What do I do with my old hardware?
• How do I manage the depreciation of my IT assets?
• When can I afford to add capacity to my infrastructure?

It All Comes Down to Economics
“Perhaps the biggest benefit of cloud computing over building out your own IT infrastructure has nothing to do with technology — it’s financial,” Reese says. “The ‘pay for what you use’ model of cloud computing is significantly more financially advantageous to a company than the ‘pay for everything up front’ model of internal IT.”

It’s here where Reese reduces everything to the bottom line: “The right managed services option and cloud computing are always financially more attractive than managing your own IT. Across all financial metrics — capital requirements, total cost of ownership, complexity of costs — internal IT is always the odd man out.”

The new book is scheduled for publication in April 2009.

Upcoming Book on Hottest I.T. Trend: ‘Cloud Computing’ is a post from: Minnov8 and published under a Creative Commons license.

These shows, usually between 45-60 minutes in length, seem to just fly by without being able to get too in depth with any given topic. As such, we hope you find the show notes handy as you explore on your own. 

Mentioned in this weeks show are:

+ Lawson’s Harry Debes: SaaS Industry Will Collapse in Two Years

+ Ellison: No Money In SaaS – Google Is The Risk

+ Go2Web20.net: a site directory for viewing Web 2.0 offerings

+ Mostly Trivial with Johnee Bee (and our recent post)

+ Next Minnedemo being planned…stay tuned

+ Next Twin Cities Social Media Breakfast about to be announced

+ What do YOU want to see Minnov8 turn in to as a community site better able to serve your needs? Let us know by sending us a note here.

Minnov8 Gang Podcast – Episode 4 is a post from: Minnov8 and published under a Creative Commons license.