#3 Twitter subscriptions. Nike SaaSing up and going omnichannel. The Adobe case, a lesson for all industries.
July 15, 2020
Interesting news about Adobe, Nike, Twitter and others in the middle of SaaSification.
Why is the explosion of Adobe valuation and market share a lesson for all industries?
Why is Nike investing in a new format of digital store in a moment when everyone is shutting down stores?
Why is Twitter is considering a subscription service for its power users?
And more …
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Manually curated by @luigimallardo. Please reach out it if you have a SaaSification news you think it should appear in this newsletter.
My things 🧠
7 Mantras for building Recurring Revenue. There are two types of companies in the new reality: the ones knowing that they are a SaaS business and the ones that don’t know yet. Video and text.Link
News on SaaSed-up companies 🗞
All industries should learn from the transformation of Adobe in 2015-2018.
In the last newsletter of Tien Tzuo, there is an interesting interview with Mark Garrett, the legendary ex-CFO of Adobe.
The 2008 recession really hit us hard. It shed light on a few challenges with our existing perpetual revenue model: slow growth in creative professionals around the world, expensive entry price to our offering, customers skipping versions, two-year product upgrade cycles, piracy, and no recurring revenue. As you know, in a software company when revenue drops in a recession, it just flows right down through the P&L, and as a result we had to do layoffs.
So I started to look around at SaaS companies, and keep in mind in 2008 there was not a lot to look at. But I definitely noticed that Salesforce managed to sustain their revenues fairly well, all things considering. Theirs held up, while our revenue was down 20% to 25% overnight. It was brutal. Link.
News on SaaSing-up companies 📈
Twitter Is Considering a Subscription Service; Shares Rise 12%.
“What are you doing with your power users?”
The idea of a Twitter subscription product has been discussed for years as an alternative to the company’s current advertising and data-driven businesses. More than 84% of Twitter revenue comes from advertising, a business that was growing before the coronavirus pandemic swept the globe. Adding a subscription service could help it diversify. In the first quarter, Twitter’s sales rose just 3%, the smallest increase in more than two years.
Chief Executive Officer Jack Dorsey is also under pressure from activist investors to accelerate the company’s business, and it’s possible a subscription service that includes special features for the most frequent users could provide more revenue at a time when advertising budgets are pulling back.
It’s about 10 million customers. Imagine an average of 10 euro per month each, it means 100 million € Monthly Recurring Revenue), 1.2 billion per year. An increase of valuation of several billion. Link.
Nike is SaaSing up and goes omnichannel.
“Everything is Omnichannel and the winning formats today are a mix of content and digital merged with the physical world”.
While some retailers are closing their shops and shuttering locations, Nike decided to invest in its most successful stores with digital elements like allowing members in the app to access workshops and workouts that will take place in the store and around the city.
The store also will feature Nike Fit, which allows store associates to scan customers’ feet to determine their shoe size. That data is stored in the shopper’s Nike member profile so they have access to it whether they’re shopping in-store or online. Nike developed the technology in-house using machine learning and artificial intelligence that gets smarter as Nike adds more products and scans more consumers’ feet. Link.
“How are you enabling digital and building physical experiences with your customers at the same time?”
Lulemon follows Peloton. The manufacturer of technical athletic clothes for yoga, running and working out is buying Mirror, which sells a screen that gives video home fitness lessons on subscription, for 500 million $. The strategic point here is not the subscription, it’s how to turn a physical brand into an ongoing customer relationship. The purchase fits with Lululemon’s ambitions to become an experiential brand that helps customers live a “healthy and mindful lifestyle across multiple experiences. What a WHY! Simon Sinek would probably agree with this. Link.
Printer vendors are transforming into home office solution providers through consumer subscription and Internet of Things. You’re not buying the ink, you’re buying the outcome. Link.
Interesting reads 📖
As shoppers spend more time at home and continue to avoid stores, they are looking to beauty subscription boxes as a means to acquire new products. Link.
Manifacturing, Construction and Mining are SaaSing up. I liked this Forbes article making the point why your future growth may rely on how you take advantage of “as-a-service” models today. The shift from CAPEX to OPEX and Equipment-as-a-Service models are not an option anymore. Even traditional verticals like manufacturing, construction and mining are SaaSing up. Link
Podcasts and Webinars 🎬
The Life Time Value of a Starbuck client is 5 digits! The new Mantra is “I’m not spending money to sell an item, I’m spending money to acquire and monetize a customer.” Listen how Starbucks is doing it. Link.
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