6 ms·

What I Learned About SaaS at Buildium

192 points by geoffroberts 7y ago

g82918 7y ago
The article is mostly from the prospective of a B-school grad seeing SaaS's and the particular one was based on property managers which is more concrete as a topic. I didn't get much transfer of the experience to software SaaS's.
- geoffroberts 7y ago
  What do you mean by "software SaaS's?" Software products sold to other software companies?
hartator 7y ago
> if I should take a course to learn HTML and CSS—her answer surprised me: Absolutely not. Well, that’s a mistake. You don’t have to be good at it but if you have to understand 101. In any executive role in a web SaaS.
- geoffroberts 7y ago
  Disagree. Not everyone is a SaaS company needs to have technical skills. Would you expect everyone to have sales skills? Or marketing skills?
  - lowercased 7y ago
    Yes, I would. At least basic skills. Depending on the size of the course referenced above... I'd say sure - take it. Be familiar with it, and the potential problem space it addresses - have a rough idea of what's possible, what the state of the art is, etc. Likewise, I would also expect people to have basic knowledge of sales and marketing. If you're in a meeting and people are talking about ROI and CPM and specific strategy, I would expect the other people in the meeting to have a basic understanding of what those terms mean, how they impact the business and peoples' ability to meet their goals, etc. People don't need to be experts, or even journeymen, but ... the opposite, where people think they shouldn't have to have even a basic grasp of the fundamentals of the technology their tech company is built on... that's a bit odd. Where that line is drawn may be up for debate, but some understanding can't hurt. In a car company, if a marketing person started making wild technologically impossible things about what the car could actually do... alarm bells would be ringing. I don't think there should be that large a divide in any company, really.
    - bdcravens 7y ago
      I would definitely recommend understanding fundamentals, but I've found a lot of "us" want the see the C-suite taking an actual coding class, which I feel is only marginally more beneficial.
      - lowercased 7y ago
        oh agreed - there are still some limits to this - a CEO doesn't need to understand the differences between an interface and an abstract class, know hex color codes off the top of their head, etc.
        bdcravens 7y ago
        I will say one of my favorite memories is when our founder who (not an engineer, but intelligent as he has a law degree) corrected some of my SQL early on when we were working up some ad hoc reports.
    - geoffroberts 7y ago
      I'm definitely in agreement that having some fundamental understanding of other areas of the business is a good thing, for everyone. The point I'm making is you need to be congnizant of where you spend your time and what new skills you invest time developing. I understand HTML and CSS at a fundamental level—I know what they're for and what's possible. But would taking a class in these skills have been the best used of my time as opposed to say, sharpening my skills around positioning or conversion optimization? Probably not. Knowing when to say no and rely on the expertise of others is an important skill to develop.
  - pjmlp 7y ago
    Actually at least superficial level yes. Most developers end up having to give an opinion on answers for RFPs, show to customers that they actually understand their business domain, and support the marketing teams with their market research results.
cm2012 7y ago
I specialize in vertical specific SaaS marketing (Zenefits, brightwheel, etc), and this is a really solid article - just emailed it to a bunch of SaaS folks I know.
- geoffroberts 7y ago
  Thank you! Happy to hear you liked it.
kristianc 7y ago
This is a really strong piece, with some great insights on culture, marketing and business. One thing I’d add is that it’s really important, critical even, that marketing is operating across the business - supporting customer success, sales and even product and engineering. Very often marketing sits in a silo as a kind of production house and actually loses track of what is happening in the rest of the business. They end up producing stuff that sales cannot use, they’re not connected to actual customer pain points and they lack detailed knowledge of the product. For marketing to operate at its best and to be really useful, it needs to act as a support function to other areas of the business, as well as delivering world-class campaign and brand execution. This isn’t ‘knowing HTML and CSS’ but it’s definitely getting involved in other areas of the business.
- geoffroberts 7y ago
  Great points—I 100% agree. While at Buildium I actually built our three marketing teams—acquisition marketing, product marketing, and corporate marketing to support many of the different functions you mentioned.
prawn 7y ago
"A huge percentage of Buildium’s revenues come not from subscriptions, but instead from pay-per-use payment processing revenues when tenants pay their rent online." Aren't rent payments typically recurring though?
- markdown 7y ago
  Rent is a recurring payment, but it sounds like Buildium only made a cut when these payments occurred online. I assume renters sometimes pay the property manager directly in cash.
  - geoffroberts 7y ago
    Correct.
- sambroner 7y ago
  I believe Buildium's subscribers are the landlords, but, for a fee, they have a portal that renters can use. There is no subscription, but as the author acknowledges, these rent payments were considered as regular and recurring by some investors.
  - geoffroberts 7y ago
    You got it!
- geoffroberts 7y ago
  So Buildium makes money off of normal subscription payments like any SaaS business does by charging a monthly fee to property management companies for access to their software. They also make money by taking a small percentage of rent payments that are processed online via the platform. These are rent payments that tenants pay to their property management company, not Buildium itself. Said another way, the tenant has no obligation to pay Buildium whatsoever—but with rent payment being regular and recurring, Buildium captured predictable revenue by capturing these payment processing fees.
LilBytes 7y ago
"What they did effectively early on is bring other hugely talented people onto the team before they could afford to pay them their market worth. They did this by paying several of their early employees in sweat equity that they accrued at the same rate as the founders for time spent working on the business. " But Buildium is quite a few decades in the making, does this attitude exist among the new startups of today? I doubt that. Thank you for the article Geoff. Fantastic insight. And one that's very well written, I enjoy how much focus you put into the article around culture, especially one of your finishing paragraphs. "If you have a high-functioning and aligned team that can respectfully disagree with each other yet still make decisions and execute, you can overcome just about any challenge in business. On the flip side you can have every market advantage in the world, but if your organization isn’t healthy it’s only a matter of time until you reach your demise. I believe this to be true." I'll make sure I read 'The Advantage' at my earliest opportunity. Thanks again!
- geoffroberts 7y ago
  Thank you so much for the kind words! Buildium found a good market opportunity and built solid technology, but culture and how the business was run was definitely part of its special sauce and a major contributing factor to this sort of outcome. The Advantage is a great read! -Geoff
j_z_reeves 7y ago
The MIT Entrepreneur course on EdX also mentioned dominating a beachhead market. Their definition is, "A beachhead market is the place where, once you gain a dominant market share, you will have the strength to attack adjacent markets with different opportunities, building a larger company with each new following" [1]. Nice to see an example of that in real life. Did Buildium eventually target adjacent or new markets? [1] https://executive.mit.edu/blog/launching-a-successful-start-up-3-the-beachhead-market https://executive.mit.edu/blog/launching-a-successful-start-...
- geoffroberts 7y ago
  Buildium stayed pretty true to their original market, focusing mostly on serving that market with a greater level of depth through additional products and services. RealPage, the acquirer, sells to a number of adjacent markets and is moving into the market for small, residential property managers via the acquisition.
all-out-of-hope 7y ago
SaaS: Software with a subscription model, that’s it. All these “market experts” and PR people extolling the virtues of the radical idea of paying people for a service remind me of all these dumb cryptocurrency bitcoin shills.
- jiveturkey 7y ago
  That's not it. Adobe CC is an example of simply software with a subscription model. Or lots of other perpetual software that is complex and requires a support subscription. SaaS is a lot different than that. SaaS runs on someone else's computer, with all the plusses and minuses that brings.
ablekh 7y ago
Excellent write-up and interesting story - thank you for sharing. I'm wondering about whether Buildium had to restructure itself from LLC to C Corporation prior to the first VC round (or subsequent rounds). VCs very rarely invest in LLCs ...

192 points by geoffroberts 7y ago

The article is mostly from the prospective of a B-school grad seeing SaaS's and the particular one was based on property managers which is more concrete as a topic. I didn't get much transfer of the experience to software SaaS's.

geoffroberts 7y ago
What do you mean by "software SaaS's?" Software products sold to other software companies?

hartator 7y ago

> if I should take a course to learn HTML and CSS—her answer surprised me: Absolutely not. Well, that’s a mistake. You don’t have to be good at it but if you have to understand 101. In any executive role in a web SaaS.

geoffroberts 7y ago
Disagree. Not everyone is a SaaS company needs to have technical skills. Would you expect everyone to have sales skills? Or marketing skills?
- lowercased 7y ago
  Yes, I would. At least basic skills. Depending on the size of the course referenced above... I'd say sure - take it. Be familiar with it, and the potential problem space it addresses - have a rough idea of what's possible, what the state of the art is, etc. Likewise, I would also expect people to have basic knowledge of sales and marketing. If you're in a meeting and people are talking about ROI and CPM and specific strategy, I would expect the other people in the meeting to have a basic understanding of what those terms mean, how they impact the business and peoples' ability to meet their goals, etc. People don't need to be experts, or even journeymen, but ... the opposite, where people think they shouldn't have to have even a basic grasp of the fundamentals of the technology their tech company is built on... that's a bit odd. Where that line is drawn may be up for debate, but some understanding can't hurt. In a car company, if a marketing person started making wild technologically impossible things about what the car could actually do... alarm bells would be ringing. I don't think there should be that large a divide in any company, really.
  - bdcravens 7y ago
    I would definitely recommend understanding fundamentals, but I've found a lot of "us" want the see the C-suite taking an actual coding class, which I feel is only marginally more beneficial.
    - lowercased 7y ago
      oh agreed - there are still some limits to this - a CEO doesn't need to understand the differences between an interface and an abstract class, know hex color codes off the top of their head, etc.
      - bdcravens 7y ago
        I will say one of my favorite memories is when our founder who (not an engineer, but intelligent as he has a law degree) corrected some of my SQL early on when we were working up some ad hoc reports.
  - geoffroberts 7y ago
    I'm definitely in agreement that having some fundamental understanding of other areas of the business is a good thing, for everyone. The point I'm making is you need to be congnizant of where you spend your time and what new skills you invest time developing. I understand HTML and CSS at a fundamental level—I know what they're for and what's possible. But would taking a class in these skills have been the best used of my time as opposed to say, sharpening my skills around positioning or conversion optimization? Probably not. Knowing when to say no and rely on the expertise of others is an important skill to develop.
- pjmlp 7y ago
  Actually at least superficial level yes. Most developers end up having to give an opinion on answers for RFPs, show to customers that they actually understand their business domain, and support the marketing teams with their market research results.

cm2012 7y ago

I specialize in vertical specific SaaS marketing (Zenefits, brightwheel, etc), and this is a really solid article - just emailed it to a bunch of SaaS folks I know.

geoffroberts 7y ago
Thank you! Happy to hear you liked it.

kristianc 7y ago

This is a really strong piece, with some great insights on culture, marketing and business. One thing I’d add is that it’s really important, critical even, that marketing is operating across the business - supporting customer success, sales and even product and engineering. Very often marketing sits in a silo as a kind of production house and actually loses track of what is happening in the rest of the business. They end up producing stuff that sales cannot use, they’re not connected to actual customer pain points and they lack detailed knowledge of the product. For marketing to operate at its best and to be really useful, it needs to act as a support function to other areas of the business, as well as delivering world-class campaign and brand execution. This isn’t ‘knowing HTML and CSS’ but it’s definitely getting involved in other areas of the business.

geoffroberts 7y ago
Great points—I 100% agree. While at Buildium I actually built our three marketing teams—acquisition marketing, product marketing, and corporate marketing to support many of the different functions you mentioned.

prawn 7y ago

"A huge percentage of Buildium’s revenues come not from subscriptions, but instead from pay-per-use payment processing revenues when tenants pay their rent online." Aren't rent payments typically recurring though?

markdown 7y ago
Rent is a recurring payment, but it sounds like Buildium only made a cut when these payments occurred online. I assume renters sometimes pay the property manager directly in cash.
- geoffroberts 7y ago
  Correct.
sambroner 7y ago
I believe Buildium's subscribers are the landlords, but, for a fee, they have a portal that renters can use. There is no subscription, but as the author acknowledges, these rent payments were considered as regular and recurring by some investors.
- geoffroberts 7y ago
  You got it!
geoffroberts 7y ago
So Buildium makes money off of normal subscription payments like any SaaS business does by charging a monthly fee to property management companies for access to their software. They also make money by taking a small percentage of rent payments that are processed online via the platform. These are rent payments that tenants pay to their property management company, not Buildium itself. Said another way, the tenant has no obligation to pay Buildium whatsoever—but with rent payment being regular and recurring, Buildium captured predictable revenue by capturing these payment processing fees.

LilBytes 7y ago

"What they did effectively early on is bring other hugely talented people onto the team before they could afford to pay them their market worth. They did this by paying several of their early employees in sweat equity that they accrued at the same rate as the founders for time spent working on the business. " But Buildium is quite a few decades in the making, does this attitude exist among the new startups of today? I doubt that. Thank you for the article Geoff. Fantastic insight. And one that's very well written, I enjoy how much focus you put into the article around culture, especially one of your finishing paragraphs. "If you have a high-functioning and aligned team that can respectfully disagree with each other yet still make decisions and execute, you can overcome just about any challenge in business. On the flip side you can have every market advantage in the world, but if your organization isn’t healthy it’s only a matter of time until you reach your demise. I believe this to be true." I'll make sure I read 'The Advantage' at my earliest opportunity. Thanks again!

geoffroberts 7y ago
Thank you so much for the kind words! Buildium found a good market opportunity and built solid technology, but culture and how the business was run was definitely part of its special sauce and a major contributing factor to this sort of outcome. The Advantage is a great read! -Geoff

j_z_reeves 7y ago

The MIT Entrepreneur course on EdX also mentioned dominating a beachhead market. Their definition is, "A beachhead market is the place where, once you gain a dominant market share, you will have the strength to attack adjacent markets with different opportunities, building a larger company with each new following" [1]. Nice to see an example of that in real life. Did Buildium eventually target adjacent or new markets? [1] https://executive.mit.edu/blog/launching-a-successful-start-up-3-the-beachhead-market https://executive.mit.edu/blog/launching-a-successful-start-...

geoffroberts 7y ago
Buildium stayed pretty true to their original market, focusing mostly on serving that market with a greater level of depth through additional products and services. RealPage, the acquirer, sells to a number of adjacent markets and is moving into the market for small, residential property managers via the acquisition.

all-out-of-hope 7y ago

SaaS: Software with a subscription model, that’s it. All these “market experts” and PR people extolling the virtues of the radical idea of paying people for a service remind me of all these dumb cryptocurrency bitcoin shills.

jiveturkey 7y ago
That's not it. Adobe CC is an example of simply software with a subscription model. Or lots of other perpetual software that is complex and requires a support subscription. SaaS is a lot different than that. SaaS runs on someone else's computer, with all the plusses and minuses that brings.

ablekh 7y ago

Excellent write-up and interesting story - thank you for sharing. I'm wondering about whether Buildium had to restructure itself from LLC to C Corporation prior to the first VC round (or subsequent rounds). VCs very rarely invest in LLCs ...