If you are an entrepreneur looking to take your business online, website packages many agencies offer might seem like a great deal. You get just what you need for a reasonable price – no tedious discussions and multiple iterations required. But is it really as good as it sounds? Let’s have a closer look at the pros and cons of website development packages and see if it’s a good idea to choose this approach instead of custom development.
Website package: How does it work?
When shopping around for a website, it is as to come across the so-called “packages” – predefined service offerings provided by web agencies. Typically providing a fixed list of features or level of complexity, they are often positioned as all-inclusive service packages. Moreover, they can even let you pick the features you need or choose specific requirements, building up your package just like a constructor.
Such offerings might range from simple corporate website packages for small businesses to complex eCommerce website packages or enterprise solutions. They can specify the number of pages, a number of possible design revisions, or website capabilities in general, for example, blog, contact/subscription form, social media integration, shopping cart, payments.
In addition to letting you choose the features you need, such packages can have some specifications about design (for example, WordPress website packages based on a template or custom design) or additional services, such as hosting, SEO, marketing, support, integrations. Based on the scope of work and the number of services the package offers, the price can range accordingly.
The described approach works well in a number of business domains, including travel packages and SaaS pricing plans. However, other business domains prove to be less suitable for bundled service offerings.
In terms of web development, this type of offering might seem attractive and convenient, especially for a business owner with no tech background. However, this might also turn out to be a crafty way to hook the customers with a cheap offer and upsell all the important features that were not included in the initial offering. So, what are the benefits and drawbacks of the website packages?
The Pros and Cons of Website Development Packages
⦁ Fixed cost – As simple as that, most of us feel more comfortable engaging in cooperation with a definite budget and deadline. This is what makes website packages so attractive in our eyes.
⦁ Relatively low pricing – Website packages pricing is typically lower than any estimate a web development company can offer. However, this might be due to the fact that many features are not included in the package and will be upsold later.
⦁ Better transparency – With a specified list of features and services within a website package, you know what you will get upfront. In some cases, you can even tailor the packages to fit your needs (and budget!).
⦁ Faster time to market – Website packages typically don’t include long planning and business analysis, which might speed up the development process.
Yet, despite the listed benefits, there are many downsides to choosing “bundled” website development services.
⦁ Limited growth opportunities – Being tied to the initial specifications, such websites are typically difficult to scale or customize in the long run. For example, WordPress website packages cannot be further expanded to include eCommerce features.
⦁ Poor customization – If you go for a package offering, all that you will get in the end is another off-the-shelf, generic website. Thus, you won’t be able to stand out among thousands of other small business websites and will lose your brand identity. Plus, you won’t be able to add custom integrations or features due to the initial package limitations.
⦁ Prove to be costly in long-term – Website packages for small business are typically suited for a fast launch, yet they don’t take into account the further development and maintenance. If the agency doesn’t provide any support, the website might turn into a throwaway project, as no other agency will want (or be able to) deal with legacy code.
⦁ You can’t be too picky – With a website package, you won’t be involved in the development process, so you won’t be able to influence anything. Once you choose a package, all you can do is sit and wait for the results. So if the reality doesn’t meet your expectations, there is not much you can do post factum.
⦁ No business outlook – While the absence of analysis and consulting might speed up the project duration, the business outcomes of such a project might turn out to be very poor. Due to the generic character and limited functionality of your website, you will lose a number of competitive benefits.
Making a Decision: Do You Need to Buy a Website Package?
While the website package price is considered to be the main advantage of the described approach, the listed drawbacks clearly outweigh this benefit. A custom approach to web development proves to be more beneficial in terms of business outlook and efficiency. After all, eBay and Amazon didn’t start as generic eCommerce website packages.
Simply put, website packages cannot be tailored to your specific business needs and scale accordingly as your business evolves. We at Eastern Peak always recommend a custom website development approach. By conducting a thorough business analysis and consulting, we get to know your specific requirements. Thus, we can tailor our offering to meet your needs and build a great website for your business.
Source: Alexy Chalimov. Alexey is also a founder and technology evangelist at several technology companies. Previously, as a CEO of the Gett (GetTaxi) technology company, Alexey was in charge of developing the revolutionary Gett service from the ground up and deploying the operation across the globe from London to Moscow and Tel Aviv. Currently, Alexy is the CEO of EasternPeak.
How Much Is Your SaaS Startup Worth?
How much is your SaaS startup worth? While the only accurate answer we can provide is “whatever a buyer is willing to pay.” There are many useful methods you can use to come up with a rough valuation which we outline below. To help narrow things down further, we’ve focused on those that VCs look at and find crucial. Knowing these factors will help you stay laser-focused on the right metrics and set yourself up for success down the road.
MRR, Metrics, Multiples
One common method for determining the value of your SaaS is to use a standard business valuation calculation. This uses a specific number to multiply the business’s average net profit to determine the listing price. Multiples are a bit difficult to determine and can range from 20x to 80x, depending on the business and industry.
Metrics to consider when determining your multiple should include the level of the owner’s involvement, growth trends, business age, churn, CAC, LTV, and MRR vs. ARR.
What Is MRR?
This Is the monthly recurring revenue. ARR would be the annual recurring revenue. As a business owner, it can be tempting to promote your yearly plans to inflate your ARR and increase the overall income of your SaaS.
However, many investors prefer to see a steady and robust MRR. This is considered safer and more predictable. To increase the value of your SaaS, focus on growing your MRR and keeping your churn low.
What Are Multiples?
There are two main types of multiples to use for valuation, equity, and enterprise value. There are also two methods for performing an analysis using multiples. There’s the comparable company analysis (Comps) and the precedent transaction analysis (precedents).
When using multiples correctly, it helps investors to determine the potential future value of a SaaS startup.
Caution should be used with this method. It doesn’t accurately portray a company’s growth performance. It also simplified several complex factors into a single value, which can be inaccurate or misleading. Multiples are best used for determining short term data rather than the long term.
SaaS Valuation Multiples 2020
The onset of COVID brought an interesting change to the valuation multiples for SaaS firms. As with all industries, there was an initial drop, which was seen through all industries. This is to be expected when faced with the uncertainty of a global pandemic.
However, in the following months of 2020, the world changed, and with it, so did the dependency of SaaS. Businesses that never considered investing in software a priority are now re-evaluating that decision. This has led to an ultimate high in SaaS valuations. The median multiple rose almost 20% from what pre-COVID levels were.
Some of the most in-demand software are video communications, data management, digital content and service delivery, messaging, and digital storefronts. As businesses continue to depend on these software solutions, the SaaS companies benefit from having very low churn rates.
As companies look to the future, the software will become invaluable. The new normal has businesses valuing and investing in software as an integral part of their current operations and growth.
Valuation of Comparable Companies
Because there are so many methods of valuation, sometimes it can be helpful to make a comparison. If another similar company already has an established value, then you can build on this data to determine the value of your SaaS.
One easy way to begin this method of valuation is to look at publicly traded companies. The data is easily accessible, updated in real-time, and readily accepted by business professionals.
To justify the valuation of your business, show how and why it’s comparable to the chosen one currently publicly traded. This could be through current positioning or with a look at historical track records.
There’s one caveat to this method, and that’s the public to private discount. Because public companies are traded on the stock market, there is a greater demand. They also tend to be larger companies that are less likely to fail, which encourages investors to spend more.
To use this method, find the current revenue multiple of a public SaaS company that has a similar growth rate to your company. Subtract two from that multiple. Now use this new multiple to multiply your company’s twelve-month revenue.
Proprietary Technology (IP) Developed By The Company
You may find that using traditional valuation techniques can give inaccurate results when applied to proprietary software. Even if you try to use methods that are commonly applied to similar intellectual property, the results can be misleading.
This can be a problem when there are multiple departments looking at the software valuation to make their business decisions. While the software is its own industry, it also influences countless other industries. For many, 10% of the investment goes into the software. This percentage increases for the healthcare, education, and banking industries.
For some buyers, the purchase of a SaaS company is to acquire a complete package to improve business processes or to integrate into their platform. For others, the investment in a SaaS is about determining the entire value of the company. This also includes the value of the actual business, the software product, and IP ownership.
If a company owns valuable intellectual property, this gives them a competitive advantage and improves the chances that they could be acquired by a larger company seeking their solution.
However, if a company does not have any proprietary technology, they run the risk of being copied by a competitor or a future player in the market, which could negatively impact its valuation in the eyes of investors.
Accurately Value Your SaaS
Sometimes, it can be helpful to have an outside neutral third party to determine your SaaS value. Without the influence of emotions, they can give a more accurate determination.
It’s also helpful to work with an outside party that has experience working with investors. This can give you additional insight into what a venture capital firm considers valuable.
Our firm can provide the guidance and support you need to further protect and develop your SaaS business. Schedule a free consultation today and speak with one of our experienced and knowledgeable attorneys.
Messaging Software Startup Aampe Raises Rs 13 Crore From Sequoia India Surge
- Aampe is a Singapore-based startup that embeds experiments within routine messaging to turn consumer communication into a business growth engine.
- The startup will use the funding for product development to serve global customers.
Singapore-based personalized messaging software startup Aampe has raised $1.8 million (or about Rs 13.2 crore) in funding led by Sequoia India scale-up program Sequoia India Surge.
The startup with fresh funding plans to accelerate its growth momentum and product development to serve the customers globally.
Last week, US-based venture capital firm Sequoia Capital had announced the names of 17 startups, including Aampe, Kyt, Pagarbook, Plum, among others.
The selected startups received a total of $45 million in their financing rounds from Sequoia Surge and other investors.
From the last few months, Sequoia scale-up program is actively investing in startups from industries, including edtech, fintech, consumer tech, health tech, developer tools, B2B marketplaces, and tech for small and medium-sized enterprises.
Commenting on the development, Paul Meinshausen, Co-founder, Aampe, said, “As a data scientist, I’ve struggled repeatedly across multiple companies with the quality of tools for user messaging. Naive automation has been prioritized over reliable inference and quality data generation. We’re building Aampe to make first-class data science serve one of the most important responsibilities of any business: speaking and listening to customers,”
“While this is true to some extent, the usefulness of data also degrades quickly — and many companies underestimate the importance of continuously generating new and high-quality data. Aampe’s APIs do this and feed that data back into product development at both strategic and tactical levels,” he added.
Founded in July 2020, by Sami Abboud, Schaun Wheeler, and Paul Meinshausen. Aampe uses machine learning to personalize messages and communication for customers, helping businesses drive better customer retention and growth.
Since its inception, Aampe has acquired customers across Asia, including India, Singapore, Myanmar, and Indonesia.
The startup helps product managers to unlock the power of data and continuous experimentation to deliver the business value.
Aiming for seamless integration, Aampe’s APIs, and reinforcement learning pipelines and models can be easily plugged into messaging and communication providers that companies already use. This allows product managers, data scientists, and growth marketers to avoid expensive and time-intensive engineering projects.
Aampe also has its offices in Antwerp (Belgium) and Raleigh (USA).
with inputs from PTI (Press Trust Of India)
Tata inches closer to make foray into Online Grocery Biz
Unless something really goes bad, Tata Group should be making an official foray into the online grocery biz by as early as next week. Sources privy to the matter claim that salt-to-steel conglomerate has almost closed on buying nearly 80% stake in BigBasket for $1.3 Bn. The deal reportedly values India’s largest online grocery store at almost $1.6 Bn.
According to several news reports, the Tata Group will acquire existing investors’ stake, which comes to around 50-60%. Additionally, the Mumbai based corporate giant will buy 20-30% new shares of BigBasket. This will take Tata’s stake in the company to 80%.
How BigBasket Benefits from Tata Acquisition deal
With Tata likely to become a majority stakeholder in BigBasket once the deal is officially signed, the latter will be in a much more commanding position to take on JioMart. What the Tata Group eventually brings for BigBasket is the funding muscle as well as the reputation of a large conglomerate and deep experience in scaling the business.
Probably no one could have matched Reliance’s funding prowess than the Tatas.
BigBasket in Numbers:
- Revenue & Losses in Fy20: Revenue = Rs 5,200 Cr & Losses = Rs 902 Cr
- Revenue & Losses in Fy19: Revenue = Rs 3,200 Cr & Losses = Rs 348 Cr
- Daily Orders: 3,00,000
- GMV: $1 Bn
How Tatas will benefit from BigBasket Acquisition Deal
With BigBasket acquisition deal, Tatas will get a massive market share in India’s online grocery Biz in one shot. The deal is also likely to become a launch pad for Tatas to foray into the e commerce biz in a big way. This foray is likely to happen through a super app, which is likely to be launched once the company seals the BigBasket.
With this super app, Tatas are aiming to dabble into the burgeoning e-commerce sector.
Sources claim that Tatas are sniffing a serious growth in the e-commerce in the post-Covid scenario.
Genesis Therapeutics raises $52M A round for its AI-focused drug discovery mission
Sifting through the trillions of molecules out there that might have powerful medicinal effects is a daunting task, but the solution biotech has found is to work smarter, not harder. Genesis Therapeutics has a new simulation approach and cross-disciplinary team that has clearly made an impression: the company just raised a $52 million A round.
Genesis competed in the Startup Battlefield at Disrupt last year, impressing judges with its potential, and obviously others saw it as well — in particular Rock Springs Capital, which led the round.
Over the last few years many companies have been formed in the drug discovery space, powered by increased computing and simulation power that lets them determine the potential of molecules in treating certain diseases. At least that’s the theory. The reality is a bit messier, and while these companies can narrow the search, they can’t just say “here, a cure for Parkinson’s.”
Founder Evan Feinberg got into the field when an illness he inherited made traditional lab work, as an intern at a big pharma company, difficult for him. The computational side of the field, however, was more accessible and ended up absorbing him entirely.
He had dabbled in the area before and arrived at what he feels is a breakthrough in how molecules are represented digitally. Machine learning has, of course, accelerated work in many fields, biochemistry among them, but he felt that the potential of the technology had not been tapped.
“I think initially the attempts were to kind of cut and paste deep learning techniques, and represent molecules a lot like images, and classify them — like you’d say, this is a cat picture or this is not a cat picture,” he explained in an interview. “We represent the molecules more naturally: as graphs. A set of nodes or vertices, those are atoms, and things that connect them, those are bonds. But we’re representing them not just as bond or no bond, but with multiple contact types between atoms, spatial distances, more complex features.”
The resulting representation is richer and more complex, a more complete picture of a molecule than you’d get from its chemical formula or a stick diagram showing the different structures and bonds. Because in the world of biochemistry, nothing is as simple as a diagram. Every molecule exists as a complicated, shifting 3D shape or conformation where important aspects like the distance between two carbon formations or bonding sites is subject to many factors. Genesis attempts to model as many of those factors as it can.
“Step one is the representation,” he said, “but the logical next step is, how does one leverage that representation to learn a function that takes an input and outputs a number, like binding affinity or solubility, or a vector that predicts multiple properties at once?”
That’s the work they’ve focused on as a company — not just creating a better model molecule, but being able to put a theoretical molecule into simulation and say, it will do this, it won’t do this, it has this quality but not that one.
Some of this work may be done in partnerships, such as the one Genesis has struck up with Genentech, but the teams could very well find drug candidates independent of those, and for that reason the company is also establishing an internal development process.
The $52M infusion ought to do a lot to push that forward, Feinberg wrote in an email:
“These funds allow us to execute on a number of critical objectives, most importantly further pioneering AI technologies for drug development and advancing our therapeutics pipeline. We will be hiring more top notch AI researchers, software engineers, medicinal chemists and biotech talent, as well as building our own research labs.”
Other companies are doing simulations as well and barking up the same tree, but Feinberg says Genesis has at least two legs up on them, despite the competition raising hundreds of millions and existing for years.
“We’re the only company in the space that’s working at the intersection of modern deep neural network approaches and biophysical simulation — conformational change of ligands and proteins,” he said. “And we’re bringing this super technical platform to experts who have taken FDA-approved drugs to market. We’ve seen tremendous value creation just from that — the chemists inform the AI too.”
The recent breakthrough of AlphaFold, which is performing the complex task of simulation protein folding far faster than any previous system, is as exciting to Feinberg as to everyone else in the field.
“As scientists, we are incredibly excited by recent progress in protein structure prediction. It is an important basic science advance that will ultimately have important downstream benefits to the development of novel therapeutics,” he wrote. “Since our Dynamic PotentialNet technology is unique in how it leverages 3D structural information of proteins, computational protein folding — similar to recent progress in cryo-EM — is a nice complementary tailwind for the Genesis AI Platform. We applaud all efforts to make protein structure more accessible such that therapeutics can be more easily developed for patients of all conditions.”
Also participating in the funding round were T. Rowe Price Associates, Andreessen Horowitz (who led the seed round), Menlo Ventures, and Radical Ventures.
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