TechCrunch+ Roundup: Holiday Marketing, NFTs & SaaS Sprawl

The Rise of Usage-Based Pricing in SaaS

A recent annual pricing survey conducted by OpenView, a venture capital firm located in Boston, reveals a significant trend: the increasing adoption of usage-based pricing (USP) within the SaaS industry.

The survey encompassed nearly 600 SaaS companies, providing a comprehensive overview of current pricing strategies.

Growing Popularity of Flexible Pricing

Last year, 34% of the companies surveyed reported utilizing a flexible pricing model. This year, however, that percentage has increased substantially to 45%, demonstrating a clear shift in the market.

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According to Kyle Poyar, an operating partner at OpenView, traditional seat-based pricing is becoming obsolete.

He explained that seat-based models fail to accurately reflect the value delivered and hinder investment in features that could enhance that value.

Furthermore, Poyar noted a potential inverse relationship between automation and seat counts: “As AI automates more tasks, the success of a solution may lead to fewer user logins.”

Benefits of USP and Product-Led Growth

The report highlighted several key findings, but one stood out prominently.

Startups implementing usage-based pricing in conjunction with product-led growth strategies experience quicker returns on customer acquisition costs and achieve higher net-dollar retention rates.

This suggests a strong correlation between these approaches and overall business success.

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Preparing for the Holiday Shopping Rush: Insights from Growth Marketers

The peak holiday shopping period is rapidly approaching, with just three weeks remaining. Miranda Halpern consulted with a number of growth marketing professionals to determine their recommendations for clients facing potential supply chain challenges.

Significant congestion is currently impacting ports, with numerous cargo vessels waiting for berth. A shortage of both shipping containers and available truck drivers is exacerbating the situation. Conventional business practices are insufficient given these circumstances.

The following experts contributed their advice and perspectives:

• Julio Lopez, Director of Client Strategy and Retail Practice Lead at Movable Ink
• Chris Toy, CEO and Co-founder of Marketer Hire
• Kristin Dick, Head of Operations and Growth Marketer at Tuff
• Dipti Parmar, Founder of Dipti Parmar Consulting

Their collective insights offer valuable guidance for navigating the complexities of this year’s holiday season.

Navigating Supply Chain Disruptions

Supply chain issues are a primary concern for many retailers this year. Marketers are being urged to proactively address potential disruptions and manage customer expectations.

The experts emphasized the importance of transparency with consumers. Clearly communicating potential delays can help mitigate frustration and build trust.

Strategies for Growth Marketers

Several key strategies were highlighted during the interviews. These focus on maximizing existing resources and adapting to the current environment.

Personalization is more crucial than ever. Tailoring messaging to individual customer preferences can increase engagement and conversion rates.

Focusing on customer retention is also vital. Loyal customers are more likely to be understanding of delays and more willing to explore alternative options.

Leveraging Low-Cost Marketing Tactics

With budgets often constrained, marketers are seeking cost-effective ways to reach their target audiences.

Exploring opportunities with low-cost NFTs was suggested as a potential avenue for engagement. These can offer unique experiences and build brand loyalty.

Optimizing existing marketing channels and focusing on organic reach are also important considerations.

Addressing SaaS Sprawl

The increasing number of SaaS tools can create inefficiencies and complexity. Streamlining the tech stack is essential for maximizing marketing effectiveness.

A careful evaluation of existing tools and a focus on integration can help reduce costs and improve productivity.

Affordable NFTs are Gaining Traction

For many, the NFT marketplace remains complex, particularly for individuals with limited discretionary funds.

However, recent data released by DappRadar sheds light on the preferences of a broader audience.

According to reporting by Alex Wilhelm, significant engagement centers around play-to-earn games such as Axie Infinity.

Within these games, players acquire and compete with NFTs resembling Pokémon, typically valued around $250.

Understanding the Emerging NFT Landscape

This trend offers valuable insight into the evolving non-fungible token ecosystem.

It highlights a demand for NFTs that are both accessible and capable of generating value.

Specifically, consumers are seeking NFTs that provide access to activities, rather than being limited by artificial scarcity.

The focus is shifting towards utility and engagement, rather than purely speculative value.

• Key takeaway: Affordability is a crucial factor for wider NFT adoption.
• Another point: Value generation through gameplay or other activities is highly desirable.
• Important consideration: Avoiding artificial supply constraints is essential for sustainable growth.

This suggests a future where NFTs are less about exclusive collectibles and more about enabling participation and rewarding engagement.

The Ramifications of Uncontrolled SaaS Adoption: An Empirical Investigation

The proliferation of Software-as-a-Service (SaaS) applications is virtually inevitable. As employees gain the autonomy to choose software tailored to their individual requirements, organizations invariably encounter the challenges associated with SaaS sprawl.

Tomer Y. Avni and Mark Settle, frequent researchers on this topic, recently completed a comprehensive study. Their findings illuminate the diverse consequences of operating with a significant portion of IT existing outside of formal oversight – often referred to as shadow IT.

Beyond the logistical complexities of administration, unchecked SaaS growth introduces substantial security vulnerabilities. This is particularly concerning for organizations handling sensitive intellectual property and personally identifiable information.

Understanding the Core Issues

The study highlights how decentralized software procurement leads to a fragmented IT landscape. This fragmentation complicates tasks like data governance and compliance.

A lack of centralized control also means that security protocols are often inconsistent across different applications. This inconsistency creates potential entry points for malicious actors.

Key Findings from the Research

• Increased Security Risk: Shadow IT applications frequently lack the robust security features found in enterprise-approved software.
• Compliance Challenges: Maintaining regulatory compliance becomes significantly more difficult when data resides in unmanaged applications.
• Wasted Expenditure: Redundant subscriptions and underutilized licenses contribute to unnecessary costs.
• Administrative Overhead: Managing a multitude of disparate applications increases the burden on IT staff.

The research emphasizes that addressing SaaS sprawl isn't simply about restricting employee access. It requires a proactive strategy that balances user needs with organizational security and efficiency.

Effective solutions involve implementing clear SaaS procurement policies, utilizing discovery tools to identify shadow IT, and establishing a centralized platform for managing SaaS subscriptions.

Mitigating the Risks

Organizations should prioritize establishing a comprehensive understanding of their current SaaS environment. This involves identifying all applications in use, regardless of whether they have been officially sanctioned.

Furthermore, implementing a robust security framework that extends to all SaaS applications is crucial. This framework should include measures such as multi-factor authentication and data encryption.

The Cloud's Potential is Far From Fully Realized

The market for cloud storage and related services has not yet reached its peak, as indicated by Battery Ventures’ 2021 State of the OpenCloud report.

The firm projects that the total value of this market could ultimately reach $1 trillion.

This substantial figure is based on the expectation that the majority of future work, software development, and computational tasks will be performed within cloud environments.

As Ron Miller and Alex Wilhelm explain, having analyzed the report and interviewed Battery General Partner Dharmesh Thakker, this projection may even underestimate the market’s true potential.

The transition to cloud-based operations is still in its early stages, suggesting significant growth opportunities remain.

The Implications of Zillow's Departure from the iBuying Market

Insights are consistently gained during the editorial process of articles penned by TechCrunch journalists. Ryan Lawler, our proptech correspondent, was consulted to clarify the importance of Zillow’s choice to exit the iBuying sector.

The narrative surrounding this event has received extensive coverage. However, a concise explanation of its core meaning has been notably absent from other analyses.

Understanding the Significance

Zillow’s withdrawal from iBuying isn’t simply a company-specific event. It serves as a crucial indicator regarding the overall condition and viability of the instant home buying market.

The challenges encountered by Zillow, a major player, highlight the inherent difficulties in accurately predicting housing market fluctuations. These fluctuations directly impact the profitability of iBuying models.

The Core Problem: Prediction Accuracy

Accurate home valuation is the cornerstone of any successful iBuying operation. Zillow’s algorithm proved unable to consistently and reliably predict future home prices.

This inability led to substantial financial losses for the company, as they were frequently purchasing homes at prices exceeding their eventual resale value. The algorithm’s shortcomings were a primary driver of their decision.

Broader Market Implications

Zillow’s exit doesn’t necessarily signal the complete demise of iBuying. However, it does suggest a need for significant recalibration within the industry.

Companies remaining in the iBuying space will likely need to adopt more conservative purchasing strategies. A greater emphasis on risk management and more realistic pricing expectations will be essential.

Future Outlook for iBuying

The iBuying market is expected to evolve, potentially becoming more focused on specific geographic areas or property types. A more selective approach may prove more sustainable.

Furthermore, technological advancements in valuation models could eventually address the prediction accuracy issues that plagued Zillow. Continued innovation is vital for the long-term health of the sector.

Key Takeaways

• Zillow’s departure underscores the difficulties of accurate home valuation.
• The iBuying market requires a reassessment of risk and pricing strategies.
• Future success hinges on improved valuation technology and potentially a more focused approach.

Tiffany Chu of Via Discusses the Critical Role of Govtech in Mobility Planning

While automated systems capable of preparing food like salads and burgers capture public attention, technologies designed to enhance governmental efficiency often receive less coverage.

However, govtech and civic tech solutions deliver a more substantial societal benefit than robotic food preparation. Tiffany Chu, SVP at mobility company Via and previously CEO of Remix, emphasizes that startups operating at the intersection of the public and private sectors are capable of establishing enduring businesses with significant financial gains.

Chu highlights a key advantage of this sector: a consistently available customer base.

“The stability of governmental entities ensures a dependable and well-defined target market,” she explains. “This clarity directly informs product development and ensures it effectively addresses the needs of its users.”

The Enduring Nature of the Govtech Customer

Unlike consumer-facing businesses susceptible to market fluctuations, govtech companies benefit from the inherent longevity of their clientele.

Governments are remarkably stable institutions, providing a consistent demand for innovative solutions. This stability translates into a predictable revenue stream for companies operating within the govtech space.

Building Sustainable Businesses Through Public-Private Partnerships

Via, and previously Remix under Chu’s leadership, exemplifies the potential for building robust businesses by addressing the needs of the public sector.

These companies demonstrate that impactful solutions can be both financially viable and socially responsible.

The Importance of Focused Product Development

Knowing precisely who the product serves is paramount to success in the govtech arena.

This focused approach allows developers to tailor their offerings to the specific challenges and requirements of governmental operations, maximizing impact and adoption.

A Resurgence in Venture Funding for Female Founders

While complete equality in startup funding remains elusive, the disparity between genders is demonstrably decreasing, as evidenced by recent PitchBook analysis.

The financial support directed toward U.S.-based startups with female founders has almost doubled within the past year. To date in 2021, these companies have successfully finalized 2,661 funding rounds, totaling $40.4 billion.

Natasha Mascarenhas and Alex Wilhelm observe that the previous trend of declining investment in women-led ventures has not only halted but reversed its course. They state, “The regression seen previously has been more than corrected.”

Key Statistics on Funding Trends

The data indicates a significant shift in investment patterns. A substantial increase in both the number of deals and the total capital raised highlights this positive development.

This surge in funding suggests a growing recognition of the potential and value of businesses led by women. It represents a step toward a more inclusive venture capital landscape.

Implications for the Startup Ecosystem

• Increased opportunities for female entrepreneurs.
• Greater innovation and diversity within the startup community.
• A more equitable distribution of capital.

The observed trend is encouraging, but continued efforts are necessary to achieve full parity in startup funding. Ongoing monitoring and advocacy will be crucial.

The Sustained Growth of Latin American Fintech: Beyond Investment Hype

Global venture capital is currently being deployed at levels never before seen. However, the growth experienced by fintech startups in Latin America is demonstrably significant, representing a peak period for the sector.

A confluence of favorable conditions, abundant possibilities, and robust rivalry are collectively accelerating the pace of innovation within the region’s fintech companies, as detailed by Anna Heim and Alex Wilhelm.

Despite the highly competitive landscape, investors are actively seeking further involvement, identifying numerous potential avenues for investment.

The Nubank Effect on Investor Strategy

One investor noted that “Nubank has established a benchmark for potential scale, particularly regarding successful initial public offerings (IPOs).”

This success is prompting venture capitalists to more carefully evaluate the potential for substantial growth if all conditions are optimal for a given business.

The example of Nubank is influencing how VCs assess the upper limits of growth for fintech ventures in Latin America.

• Increased Scrutiny: VCs are now conducting more thorough due diligence.
• Growth Potential: They are focusing on identifying businesses with the highest scalability.
• IPO Readiness: The possibility of a successful IPO is a key consideration.

The current environment suggests that the Latin American fintech boom is not merely a result of abundant funding, but a reflection of genuine innovation and market opportunity.