Technology startups 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 startups that manage to establish themselves as frontrunners is extremely small. The rule of thumb, according to Andreessen Horowitz, is that out of every 15 startups, ten flounder, four prosper and with great luck perhaps one becomes a billion dollar unicorn.
In particular, startups with software or apps at the core of what they do run the risk of failing if they don’t 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 startups fully monetise their product offerings, ensuring they don’t miss out on revenues that are crucial to their success.
1. Be proactive
Startups need to work hard on several different fronts if they wish to grow as a business. They need to track when, how and by whom their software is being used, as well as update their 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 startups to focus on increasing the popularity of their products as well as on growing their revenue.
2. Connect with your users
Different customers have different preferences when it comes to how they purchase goods and services. A startup’s product could be exactly what they are looking for, but if it doesn’t offer a licensing model that aligns exactly with how they do business, customers may choose a less attractive competitor out of necessity.
Thanks to cloud, mobility and virtualisation, software monetisation tools give startups the ability to connect with users, tracking their usage and communicating with them in order to determine what product packages, features and prices are optimal for each one.
3. Be flexible
Flexibility is the cornerstone of any effective software monetisation strategy, as it will help end users budget for and consume a startup’s offering in the way that works best for them.
In order to quickly and cost-effectively deliver the right offering for every customer developers need to establish a value for each feature within their catalogue and bundle those individual features into multiple service packages with a variety of pricing options.
After startups go to market they must remain flexible in their ability to package and license in order to satisfy users’ ever changing needs. A software monetisation solution implemented early on in the 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 customer needs, without returning to the development table and without losing valuable time to market.
4. 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 a startup’s patents and trademarks, filing the right paperwork will not protect their software from the threat of tampering, reverse engineering and licensing infringement.
Similarly, developing their own protection tools does not guarantee their 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 startups to focus on their main goal - developing their product and growing their business- instead of worrying about malicious and accidental threats.
5. 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 a startup’s offering. They will want software they can share with their team, that works on every device, and that is updated regularly.
If developers don’t have the ability to quickly update their product catalogue and easily add features to existing packages, they will be adding a lot of engineering work to their go-to-market process, making monetising new R&D work through existing customers much more difficult. Ultimately, this means they will be unable to respond rapidly to evolving market and customer demands.
By using third party software monetisation solutions, they 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 their engineering costs and time to market.
Becoming a market leader
Sooner or later every startup 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 their offering’s packaging and pricing, they can take advantage of new ways of doing business in order to get ahead of their competition - and become a market leader.
Jamie Longmuir, Regional Director, Software Monetisation, Gemalto
Image Credit: Shutterstock/Bakhtiar Zein