Software-as-a-Service (SaaS) Business Model (Part 3): Sales & Marketing elements

In our last article we have looked at the business model elements of Software-as-a-Service (SaaS). in relation to Research & Development (R&D) activities.

This is part 3 of our series on business model innovation tactics for SaaS.

And it focusses on sales and marketing (S&M) from a business model perspective, yes!

S&M expenses are often the biggest ticket item in the early years after product launch. See below the Slack’s cost structure as an example.

This is a truth that not everybody may like because many SaaS co-founders are technically minded. They are likely programmers-in-chief rather than chief marketing officer.

It’s important for innovators to learn about the areas that we are less comfortable with.

And interestingly, sales & marketing playbook elements reach all the way back to the design, hence R&D, of our solution.

Sample SaaS cost structure: Slack

It is not unusual for early SaaS companies that sales & marketing expenses are the biggest cost item after product launch.

Slack launched in August 2013 and had their IPO in April 2019.