May 15, 2007

Four ways to move more software

by Gordon Graham, Editor, SoftwareCEO

Last issue, we told you about a new escrow service designed especially for software-as-a-service (SaaS) firms.

This time, we have a new financing company designed especially for SaaS vendors, that will advance money based on signed contracts.... and at the same time, reassure SaaS prospects that their screens will never go dark.

Selling something intangible like "security?" For an amusing marketing challenge, check out this classic technology promo with John Cleese.

We've also found an intriguing new service that can boost a website's stickiness by adding a video of yourself or a polished actor making your pitch.

And finally, we've dug up a new toolkit to help create better names for any startup or software product.

Selling something intangible? Try a mockumentary and gag website.
And now for something completely different...

You may get a kick out of this promotional video, with British comedian John Cleese as the director of the tongue-in-check "Institute for Backup Trauma."

This is a great example of how technology marketing doesn't have to be as dull as dishwater.

Want more? There's a whole site devoted to the Institute, with lots more gags.

When you're selling something as intangible as "data security" maybe a mockumentary and associated website can be a great way to make your offering more real, more lively, and more memorable.

Hmmmm... could your software firm use any similar creative approach to highlight the breakthrough advantages of your technology?

Add a live pitch to your website.
Speaking of videos on the web, there's an intriguing new service that can add a live pitch to your website. And it's surprisingly quick and inexpensive.

Golden Coast produces live-action videos of little walking, talking people from your script, and host them on your site for a monthly fee.

Who would want to do that?

Just check out the demos on their site, especially Beverly Hills Mercedes. Try to tear your eyes off the little guy, or stop listening to him.

And feel the disappointment when you click to a page where he doesn't appear.

"This combines the compelling nature of television — because it's hard to walk by a TV and not look — with the interactivity of a website," says Golden Coast CEO George Butters, a former TV journalist on Canada's east coast.

"When you look at a website that doesn't have this, you wait for the people to step out and start talking to you!"

For your spokesperson, you can choose one of a stable of actors, speaking English, Spanish, French, German, Portuguese, Japanese, or Russian.

Or you can get a video of yourself — or your company's very best presenter — taped in HD digital broadcast-quality in one of Golden Coast's accredited studios across the country.

Either way, when the image of a person walks on-screen and starts their pitch, it's really compelling.

These actors can provide a quick corporate overview, point visitors to various sections of a site, call them to action, or say anything appropriate to any particular web page.

You can have different videos running on different pages, and in different positions on the screen.

Sounds good, how much would this set you back?

The site's Cost Estimator shows roughly how much it would cost to have, say, Jennifer give a 30-second, 400-pixel introduction to 100,000 visitors a month... That would be less than $1,000 to produce the video, plus about $1,285 a month for the hosting fees.

"We do the hosting, the management, and the video conversion. And we send you a single line of code that looks like a regular JavaScript call for your web page," says Butters.

Sure, sure, your web guys could post some videos to your website. And your cousin has a videocam and a Mac and a blanket he uses for a green screen. And he will come up with exactly what, in exactly how long, for exactly how much?

Here's why Golden Coast CEO George Butters calls his service "YouTube for pros."

"If someone calls us up today and says we want a male actor, 40ish, who looks professional but slightly hip, and we want him to say this... well, I could probably have it shot by the end of the week, and have it on their site by Monday or Tuesday, if it's important to them."

Compare that to working with well-intentioned amateurs, or going like a lamb to the slaughter to your local video production house. That's just bound to be slower, and take some months to recover your costs over working with Golden Coast.

Don't forget to click "Try your site" at the bottom of the home page, and see what your site could look like with a little speaking character on it.

If your software firm's website could use a new attention-grabber, this could be the ticket.

New specialty finance company serves SaaS firms only.
Sure software-as-a-service (SaaS) is where it's at — but try taking a fistful of your signed contracts to the bank.

They won't be worth much to a traditional financier, who will fret about what happens if your company isn't there in a year or two.

Well, now there's a new specialty finance company called SaaS Capital that is ready to advance money to any solid SaaS firm.

"We understand the business model, and we realize that a signed contract is essentially an unrecognized asset of the company," says SaaS Capital president Todd Gardner, himself a 20-year veteran of the software biz.

"Most of the folks we're interacting with have a backlog related to unbilled revenue and a certain time horizon associated with that, and provided the company meets our underwriting guidelines, we will lend them money against the size of the backlog."

How much money?

Gardner says that all depends on the company size, track record, and renewal rate of its SaaS clients. His firm will do their due diligence to check out each vendor's code, hosting environment, history of uptime, security, backups, and so on.

The better the reports, the higher the rate.

"We've seen advance rates from 33 percent to 85 percent," he says, "and the 85 percent would be maybe a $20-million company with a couple of large enterprise SaaS contracts."

They would set up a lien on those contracts and a lockbox arrangement to collect the payments.

But here's the really intriguing thing. To protect their investment, SaaS Capital would be willing to step in and keep a SaaS application running if the original vendor got in trouble.

"The buyers of SaaS have realized that vendor viability is more important than it used to be," says Gardner.

"When I was running a perpetual license in my data center, if that vendor went out of business, nothing bad would happen the next day. I could still run that app, and access all my data, and maybe the vendor's help desk wouldn't answer, but that was an acceptable business risk."

With SaaS, it's a different story.

"Now they realize if these guys go out of business, and I log into my apps — and that could be my financials, or my ERP — and that screen is blank, I am in deep trouble."

So there's a marketing angle here too.

Some SaaS vendors will likely find it worthwhile to bring in SaaS Capital — or its inevitable competitors — to certify their fitness, and help reassure prospects that their apps will never go away.

SaaS Capital can sign a three-way agreement with the vendor and the hosting service to specify that if the original SaaS firm can no longer pay the bills, the finance company will.

Of course, that's not their dream scenario, just a way to protect their investment in those longer-term contracts.

If that case ever happened, Gardner doesn't expect they would go after new business. But they would continue to serve the app and man the help desk until their contracts were all collected — and, let's face it, probably as long as there were any significant number of users.

There are other interesting twists to this arrangement. Borrowing against signed contracts means no dilution of equity, and an ongoing source of cash to help propel a SaaS business through the choke points that could otherwise stifle its growth

SaaS Capital has a range of offerings described here. Our take on these services? They look like an idea whose time has come.

An inexpensive naming toolkit for do-it-yourselfers.
Naming a company, a software product, or a website gets harder every year.

With so many names and domains already used up, people resort to desperate measures.

There are the composite names intended to sound solid and reassuring, like Accenture, Aliant, and Entellium. But don't they all sound just like someone is trying just a bit too hard?

Loads of new companies were named in the past few years using this formula:

[color] + [animal]

That gave us company names like Black Duck, BlueCat, and Purple Skunk... two of which have been featured in SoftwareCEO.

But really, this colorful trend peaked years ago with Greyhound and Red Lobster, OK? Those names may be memorable. So is a wine called Cat's Pee on a Gooseberry Bush — but would you really trust it?

It's time for fresh thinking. But how many startups can afford to hire some fancy-schmancy name-consulting firm in New York?

Here's an alternative. Our friends at Go-To-Market Strategies have created a new Brand Naming Toolkit that's the best bargain in town for do-it-yourselfers.

The toolkit provides a treasure trove of time-tested templates, tips, and tactics to help develop a good name for any new company or product.

The toolkit includes:

• 59 tips in a PDF called "The Art & Science of Naming Brands"
• interactive templates for Word to help brainstorm names for a new company or product
• an Excel spreadsheet to measure each name against the key attributes you want it to communicate.

The whole toolkit is $49.95 and you can order it here.

With these tools, you have to be prepared to do all the work yourself. But that price is about what you'd pay for bread and water alone at a lunch out with your New York City name-consultant types.