Technology start-ups have the potential to thrive thanks to the continuous emergence of new technologies. However, transitioning from being a market newcomer to becoming a market leader is no easy feat. In fact, the percentage of start-ups that manage to establish themselves as frontrunners is extremely small.
The rule of thumb, according to Andreessen Horowitz, is that out of every 15 start-ups, ten flounder, four prosper and with great luck perhaps one becomes a billion dollar unicorn.
In particular, start-ups with software or apps at the core of what they do run the risk of failing if they do not constantly innovate and develop their business model, offering clients evolving packaging and usage models.
So what are the keys to success in today’s fast-paced, ever-changing market?
The following tips can help you fully monetise your product offerings, ensuring you do not miss out on revenues that are crucial to your success.
ONE: Be proactive
Start-ups need to work hard on several different fronts if they wish to grow as a business. You need to track when, how and by whom your software is being used, as well as update your packaging, pricing, and licensing strategies on-the-fly anytime.
If not planned appropriately, juggling these tasks can be daunting. This is why taking a proactive approach – planning activities, such as programmed product releases, and foreseeing the effects of unplanned occurrences – enables you to focus on increasing the popularity of your products as well as on growing your revenue.
TWO: Connect with your users
Different customers have different preferences when it comes to how they purchase goods and services. Your product could be exactly what they are looking for, but if you do not offer a licensing model that aligns exactly with how they do business, they may choose a less attractive competitor out of necessity.
Thanks to cloud, mobility and virtualisation, software monetisation tools give you the ability to connect with your users, tracking their usage and communicating with them in order to determine what product packages, features and prices are optimal for each one.
THREE: Be flexible
Flexibility is the cornerstone of any effective software monetisation strategy, as it will help end users budget for and consume your offering in the way that works best for them.
In order to quickly and cost-effectively deliver the right offering for every customer you need to establish a value for each feature within your catalogue and bundle those individual features into multiple service packages with a variety of pricing options.
After you go to market you must remain flexible in your ability to package and license in order to satisfy your users’ ever changing needs.
A software monetisation solution implemented early on in your development stage will provide the ability to separate the development decisions from the business decisions.
Once protection and licensing are implemented the delivery, usage tracking and re-packaging can continuously evolve with your customer needs without returning to the development table and without losing valuable time to market.
FOUR: Cover your security bases
The moment software is out in the open for others to use, it is susceptible to theft and piracy. While legal teams can protect your patents and trademarks, filing the right paperwork will not protect your software from the threat of tampering, reverse engineering and licensing infringement.
Similarly, developing your own protection tools does not guarantee your product’s safety. New threats appear on a daily basis, making threat prevention a full-time job. Certified solutions developed by third party specialists can prevent unauthorised use and distribution of products and services, as well as effortlessly updating your product’s protection mechanisms.
What’s more, not having to develop a “home-grown” solution will allow you to focus on your main goal – developing your product and growing your business – instead of worrying about malicious and accidental threats.
FIVE: Keep up with the times
Product versatility and flexible licensing models are only the first steps towards achieving customer satisfaction. What is right for users today may not be so tomorrow. As their needs change, they will want to stop paying for features they don’t use and will want to add features that they overlooked in their initial purchase or have been added to your offering. They will want software they can share with their team, that works on every device, and that is updated regularly.
If you do not have the ability to quickly update your product catalogue and easily add features to existing packages, you will be adding a lot of engineering work to your go-to-market process, making monetising new research and development (R&D) work through existing customers much more difficult. Ultimately, this means you will be unable to respond rapidly to evolving market and customer demands.
By using third party software monetisation solutions, you can establish a clear separation between engineering and packaging/delivery. This enables you to adapt your services in real time, without additional coding, while at the same time reducing your engineering costs and time to market.
Becoming a market leader
Sooner or later every start-up needs to transform and adapt in order to stay ahead, capture new markets and keep new and existing customers happy.
By providing users with a great customer experience, ensuring licensing compliance, and improving your offering’s packaging and pricing, you can take advantage of new ways of doing business in order to get ahead of your competition – and become a market leader.
About the author:
Jamie Longmuir, director of software monetisation at Gemalto.