Heroku Add-on Marketplace May Be the Best Untapped Growth Hack for Enterprise SaaS
Enterprise sales is difficult, expensive and time-consuming for early-stage startups. Unless your founding team includes a VP Sales/Marketing with an existing rolodex and experience selling to enterprises similar to your primary target, it is likely your early-stage startup will struggle to (time & cost)-effectively identify your target customer segments, establish lead qualification criteria, and create a lead generation funnel with sufficient volume to sustain your sales effort. Experienced technology sales professionals command well above $100K in annual base+commission and have expectations to make much more than that based on past history. However, it is imperative that you identify a significant number of real customers to validate product-market fit and begin ramping revenue.
For early-stage SaaS businesses where customer adoption requires buy-in and integration by developers, reaching and educating the developer community cost-effectively at significant scale is essential.
Heroku, now owned by SalesForce, is the largest PaaS hosting platform in the world. Over 4MM applications are currently running on Heroku. In addition to the web and database hosting provided natively on the platform, Heroku has a dynamic add-on ecosystem where third-party SaaS business can list their offerings. More than just a directory, the Heroku Add-on Marketplace makes provisioning (ie purchasing access) to new SaaS services one-click easy. As Heroku handles all billing, early-stage companies can defer building some of the necessary billing infrastructure to deal with recurring accounts, overages, expired credit cards, etc. The Heroku marketing team aggressively promotes well-built applications in the marketplace— providing significant leverage on your own marketing efforts.
How much impact can getting your app into the Heroku Add-on Marketplace have? This article from 2012 suggests that Heroku had 85 add-ons and 4MM add-on-installs. This comes out to almost 50K installs per vendor. As of July 2015, the Heroku homepage claims 4MM applications and over 150 add-ons on the platform. Assuming the average app installs 5 add-ons, that’s 20MM add-on installs, or 130K installs per app vendor.
How many companies and developers can you reach? Assuming (conservatively) that the average business/Heroku customer has 10 applications, that’s 400K prospective businesses, and likely over 1MM developers who will have access to your app.
New Relic, Papertrail, and SendGrid are just a few of the companies that have seen strong adoption through the marketplace. You can check out the Top 10 Add-ons here.
Does your startup have a more cost effective way to get your service in front of 1MM developers and 400K businesses? If so, let me know.
Recap:
- Heroku Add-on Marketplace is the most cost effective way for many SaaS startups to go-to-market to the developer community
- Heroku will handle all of your billing, letting you focus on optimizing product strategy, perfecting your developer documentation, and establishing requirements for more demanding large-enterprise customers
- Heroku may even be a sufficient driver to let you take your company all the way to IPO
- Getting your app onto the platform is easy and can take as little as a couple of weeks
PS: If you have more accurate/updated stats on actual number of Heroku users, customer accounts and number of free vs paid add-on installs, please connect with me.
