
What I Learned About SaaS at Buildium - geoffroberts
https://www.outseta.com/posts/what-i-learned-at-buildium
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j_z_reeves
The MIT Entrepreneur course on EdX also mentioned dominating a beachhead
market. Their definition is, "A beachhead market is the place where, once you
gain a dominant market share, you will have the strength to attack adjacent
markets with different opportunities, building a larger company with each new
following" [1].

Nice to see an example of that in real life. Did Buildium eventually target
adjacent or new markets?

[1] [https://executive.mit.edu/blog/launching-a-successful-
start-...](https://executive.mit.edu/blog/launching-a-successful-start-
up-3-the-beachhead-market)

~~~
geoffroberts
Buildium stayed pretty true to their original market, focusing mostly on
serving that market with a greater level of depth through additional products
and services. RealPage, the acquirer, sells to a number of adjacent markets
and is moving into the market for small, residential property managers via the
acquisition.

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kristianc
This is a really strong piece, with some great insights on culture, marketing
and business.

One thing I’d add is that it’s really important, critical even, that marketing
is operating across the business - supporting customer success, sales and even
product and engineering.

Very often marketing sits in a silo as a kind of production house and actually
loses track of what is happening in the rest of the business. They end up
producing stuff that sales cannot use, they’re not connected to actual
customer pain points and they lack detailed knowledge of the product.

For marketing to operate at its best and to be really useful, it needs to act
as a support function to other areas of the business, as well as delivering
world-class campaign and brand execution. This isn’t ‘knowing HTML and CSS’
but it’s definitely getting involved in other areas of the business.

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geoffroberts
Great points—I 100% agree. While at Buildium I actually built our three
marketing teams—acquisition marketing, product marketing, and corporate
marketing to support many of the different functions you mentioned.

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cm2012
I specialize in vertical specific SaaS marketing (Zenefits, brightwheel, etc),
and this is a really solid article - just emailed it to a bunch of SaaS folks
I know.

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geoffroberts
Thank you! Happy to hear you liked it.

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LilBytes
"What they did effectively early on is bring other hugely talented people onto
the team before they could afford to pay them their market worth. They did
this by paying several of their early employees in sweat equity that they
accrued at the same rate as the founders for time spent working on the
business. "

But Buildium is quite a few decades in the making, does this attitude exist
among the new startups of today? I doubt that.

Thank you for the article Geoff. Fantastic insight. And one that's very well
written, I enjoy how much focus you put into the article around culture,
especially one of your finishing paragraphs.

"If you have a high-functioning and aligned team that can respectfully
disagree with each other yet still make decisions and execute, you can
overcome just about any challenge in business. On the flip side you can have
every market advantage in the world, but if your organization isn’t healthy
it’s only a matter of time until you reach your demise. I believe this to be
true."

I'll make sure I read 'The Advantage' at my earliest opportunity. Thanks
again!

~~~
geoffroberts
Thank you so much for the kind words! Buildium found a good market opportunity
and built solid technology, but culture and how the business was run was
definitely part of its special sauce and a major contributing factor to this
sort of outcome. The Advantage is a great read! -Geoff

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hartator
> if I should take a course to learn HTML and CSS—her answer surprised me:
> Absolutely not.

Well, that’s a mistake. You don’t have to be good at it but if you have to
understand 101. In any executive role in a web SaaS.

~~~
geoffroberts
Disagree. Not everyone is a SaaS company needs to have technical skills. Would
you expect everyone to have sales skills? Or marketing skills?

~~~
lowercased
Yes, I would. At least basic skills. Depending on the size of the course
referenced above... I'd say sure - take it. Be _familiar_ with it, and the
potential problem space it addresses - have a rough idea of what's possible,
what the state of the art is, etc.

Likewise, I would also expect people to have basic knowledge of sales and
marketing. If you're in a meeting and people are talking about ROI and CPM and
specific strategy, I would expect the other people in the meeting to have a
_basic_ understanding of what those terms mean, how they impact the business
and peoples' ability to meet their goals, etc. People don't need to be
experts, or even journeymen, but ... the opposite, where people think they
shouldn't have to have even a basic grasp of the fundamentals of the
technology their tech company is built on... that's a bit odd. Where that line
is drawn may be up for debate, but some understanding can't hurt.

In a car company, if a marketing person started making wild technologically
impossible things about what the car could actually do... alarm bells would be
ringing. I don't think there should be that large a divide in any company,
really.

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bdcravens
I would definitely recommend understanding fundamentals, but I've found a lot
of "us" want the see the C-suite taking an actual coding class, which I feel
is only marginally more beneficial.

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lowercased
oh agreed - there are still some limits to this - a CEO doesn't need to
understand the differences between an interface and an abstract class, know
hex color codes off the top of their head, etc.

~~~
bdcravens
I will say one of my favorite memories is when our founder who (not an
engineer, but intelligent as he has a law degree) corrected some of my SQL
early on when we were working up some ad hoc reports.

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ablekh
Excellent write-up and interesting story - thank you for sharing. I'm
wondering about whether Buildium had to restructure itself from LLC to C
Corporation prior to the first VC round (or subsequent rounds). VCs very
rarely invest in LLCs ...

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prawn
_" A huge percentage of Buildium’s revenues come not from subscriptions, but
instead from pay-per-use payment processing revenues when tenants pay their
rent online."_

Aren't rent payments typically recurring though?

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geoffroberts
So Buildium makes money off of normal subscription payments like any SaaS
business does by charging a monthly fee to property management companies for
access to their software. They also make money by taking a small percentage of
rent payments that are processed online via the platform. These are rent
payments that tenants pay to their property management company, not Buildium
itself. Said another way, the tenant has no obligation to pay Buildium
whatsoever—but with rent payment being regular and recurring, Buildium
captured predictable revenue by capturing these payment processing fees.

~~~
conductr
I think that’s the point. Recurring but not subscription. It’s a minor
difference in this scenario since you probably know with great confidence a %
will recur.

It’s just a weird wording distinction that made it a weak counter example of
subscription revenue. Like if you pointed out that no American consumer has
any obligation to shop at Walmart next month. But we know most will.

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all-out-of-hope
SaaS: Software with a subscription model, that’s it.

All these “market experts” and PR people extolling the virtues of the radical
idea of paying people for a service remind me of all these dumb cryptocurrency
bitcoin shills.

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jiveturkey
That's not it. Adobe CC is an example of simply software with a subscription
model. Or lots of other perpetual software that is complex and requires a
support subscription.

SaaS is a lot different than that. SaaS runs on someone _else 's_ computer,
with all the plusses and minuses that brings.

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g82918
The article is mostly from the prospective of a B-school grad seeing SaaS's
and the particular one was based on property managers which is more concrete
as a topic. I didn't get much transfer of the experience to software SaaS's.

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geoffroberts
What do you mean by "software SaaS's?" Software products sold to other
software companies?

