What is SaaS? And all the terminology I never knew
09/07/2022
WELCOME WELCOME. Super important topic in the SaaS world that I can talk about for hours. So speaking of SaaS, let's get into it.
What is SaaS?
SaaS stands for, "Software as a Service" to simplify it. It's a service, but its a software. Kind of self-explanatory but I'll go into it. According to Salesforce, "Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service." For example, Google Drive or Zoom. Both of those are Saas products because they are services in software format. Google Drive is a SaaS company because it's service is saving documents as a storage space with easy compatibility along with access to Google Docs, Google Slides, and all their sub-programs. Zoom is a service, because it's a way to connect and its an internet software available to all users. There's just a brefing on Saas.
I'll give you a short definition on terms that I literally didn't know until I wrote this, but I've heard a thousand times:
B2B
B2B stands for Business to Business. It's a model where companies make services and products for other companies. For example my dad's agency, BPK Tech, makes products for DSO's (Dental Support Organizations). The process goes like this: Meeting, Contract, Product Development, Payback, Close Contract. Of course this is just a simplified version but this is what the general view looks like.
Bootstrapping/Raising
This is a concept that's really interesting to me. Bootstrapping is when a company funds itself from the very beginning to start and grow. Raising, on the other hand, is when a company funds your start-up and gives you a jumpstart. This is usually done by investors, loans, or grants. I'll give you an example of each. The company I used to work at, WePlay (that's not actually it's name), bootstrapped from the very beginning. They didn't raise any money, starting only from the founders personal savings and growing from their clients. Another example, SpendFlo (that is actually it's name), recently raised some money for their company. These are two very important aspects when creating a start-up.
ROI
ROI means "Return on Investment". Like if you invest $4 million into a company and because of your investment it does $12 million in that year, the ROI would be $3 million. It is calculated by dividing the profit earned by the cost of the investment. It has a lot to do with the topic of "Raising" that I talked about earlier.
VC
To summarize, VC stands for venture capital, and its basically when a private equity firm provides investments to a start-up firm. This is raising money and is related to ROI as well. It usually comes from banks or high-income investors.
Growing X
So when I went to my first conference, they would talk about "Oh yeah, I grew 3X in 2 years" and the crowd would be like "OOOOOOOOHHHH" so I was super confused like what the heck. Because the only time I've seen that is when my dad had a planner that said "10X" by Grant Cardone but I didn't really know what that meant. So after googling it, I found out that growing 3x would be growing 300% and now it makes sense why the whole crowd was just shocked. Here's an article which can help you understand it a little bit more and how to reach that level. 300% is a big ol' number.
Private Equity
Okay so I'm a pledge for a Fraternity called Delta Sigma Pi right now, and they had two speakers come from the same Private Equity firm, Propreitors Capital. So I went, sat down, got out my notebook and the first question one of the speakers asked was, "Who knows what private equity is?" and it was dead silent in that room. Good to know I wasn't the only one who had no idea. A private equity is a type of investmend fund. These firms buy majority stakes in small businesses to help them grow, and then own some of the profits to that business (I hope i'm right because it's written in my notebook).
Start-Up
So I've mentioned start-ups a few times in this blog and other blogs, so let me explain it. Every single company in the world, literally anything you can think of, began as a start-up. It's basically a newly established business. I want to create a start-up, and I have some ideas too. I guess what's holding me back is I don't have a developer, which is why I'm learning C++ right now (which I'll talk about in another blog).
So What Do I Do?
As you may have seen in this blog I wrote about the companies I worked at, All of those companies were SaaS companies. The conference that I mentioned in this blog was a SaaS conference, where I met tons of people in the SaaS world. I still work at one of the companies where I'm working on sales. I'd be happy to answer any questions you guys may have.
These were just kind of the basics of some terms that might be helpful to know, but thank you for reading. I hope you enjoyed this blog, Ciao!