subscription services
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Upscribe, raising $4M, wants to drive subscription-first DTC brand growth
Upscribe founder and CEO Dileepan Siva watched the retail industry make a massive shift to subscription e-commerce for physical products over the past decade, and decided to get in it himself in 2019.
The Los Angeles-based company, developing subscription software for direct-to-consumer e-commerce merchants, is Siva’s fourth startup experience and first time as founder. He closed a $4 million seed round to go after two macro trends he is seeing: buying physical products, like consumer-packaged goods, on a recurring basis, and new industries offering subscriptions, like car and fashion companies.
Merchants use Upscribe’s technology to drive subscriber growth, reduce churn and enable their customers to personalize a subscription experience, like skipping shipments, swapping out products and changing the order frequency. Brands can also feature products for upsell purposes throughout the subscriber lifecycle, from checkout to post-purchase.
Upscribe also offers APIs for merchants to integrate tools like Klaviyo, Segment and Shopify — a new subscription offering for checkouts.
Uncork Capital led the seed round and was joined by Leaders Fund, The House Fund, Roach Capitals’ Fahd Ananta and Shippo CEO Laura Behrens Wu.
“As the market for D2C subscriptions booms, there is a need for subscription-first brands to grow and scale their businesses,” said Jeff Clavier, founder and managing partner of Uncork Capital, in a written statement. “We have spent a long time in the e-commerce space, working with D2C brands and companies who are solving common industry pain points, and Upscribe’s merchant-centric approach raised the bar for subscription services, addressing the friction in customer experiences and enabling merchants to engage subscribers and scale recurring revenue growth.”
Siva bootstrapped the company, but decided to go after venture capital dollars when Upscribe wanted to create a more merchant-centric approach, which required scaling with a bigger team. The “real gems are in the data layer and how to make the experience exceptional,” he added.
The company is growing 43% quarter over quarter and is close to profitable, with much of its business stemming from referrals, Siva said. It is already working with customers like Athletic Greens, Four Sigmatic and True Botanicals and across multiple verticals, including food and beverage, health and wellness, beauty and cosmetics and home care.
The new funding will be used to “capture the next wave of brands that are going to grow,” he added. Siva cites the growth will come as the DTC subscription market is forecasted to reach $478 billion by 2025, and 75% of those brands are expected to offer subscriptions in the next two years. As such, the majority of the funding will be used to bring on more employees, especially in the product, customer success and go-to-market functions.
Though there is competition in the space, many of those are focused on processing transactions, while Siva said Upscribe’s approach is customer relationships. The cost of acquiring new customers is going up, and subscription services will be the key to converting one-time buyers into loyal customers.
“It is really about customer relationships and the ongoing engagement between merchants and subscribers,” he added. “We are in a different world now. The first wave could play the Facebook game, advertising on social media with super low acquisition and scale. That is no longer the case anymore.”
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Bottomless closes $4.5M Series A to scale its subscription coffee business
As a devoted coffee drinker I was enthused by the idea of Bottomless. The Y Combinator-backed startup sends its users coffee as they run low so that they never run out of the Magic Juice of Life. What could be better?
Because life is somewhat funny, after signing up for its service the company reached out to share that it had raised a Series A. So I got on the phone with Liana Herrera, the company’s co-founder, to chat about the startup, which is part coffee-sourcing engine, part subscription/e-commerce play and part hardware effort.
So before we talk about its Series A, let’s work better to understand what Bottomless is building, and how it works.
What’s Bottomless?
Born from its founders’ issues ordering the right amount of Soylent when they actually needed it, and wondering why there wasn’t a better way to subscribe to goods consumed on a regular basis, Herrera uncovered the idea for Bottomless.
Today the product works by letting users pick the type of coffee they are interested in, be it caffeine level, price and the like. The company then provides customers with a small digital scale that they connect to their home internet. And then as users consume coffee that Bottomless sends them, placing the bag on the hardware in between uses, the scale notes how much is left and orders more before they run out.
A Bottomless scale, via the company as my kitchen lighting is bad.
You can set the sensitivity of the scale, asking it to either be ambitious in keeping you from running out of beans or ground coffee, or more relaxed. As I write to you today, I think that my third bag of decaf has arrived. It’s a neat system.
And from a business perspective, the Bottomless model has plusses. I honestly do not recall the price range of coffee that I picked, and do not know how much I am actually paying Bottomless at the moment. But I do know that having different types of coffee arrive at the house as I run low is pretty damn cool.
To make that happen, however, is not easy. The startup’s business is a little complex. Before and even after Bottomless went through Y Combinator back in 2019, the company hand-built its coffee-weighing scales. Herrera told TechCrunch that the old Silicon Valley saw that hardware is hard is in fact an understatement. After all the soldering she described during an interview, I believe her.
Still, after finishing the accelerator program the company managed to grow in 2019 by what Herrera said was around 10x. That customer expansion allowed the company to order bulk hardware from China in early 2020. After its first production run finished — a few thousand units — COVID-19 shut down that country’s supply chain. Happily for the startup, by the time COVID-19 had taken over America, the Chinese economy opened up and production could begin again.
Per the company, Bottomless scaled another 5-7x in 2020. An October 2020 CNN piece notes that the company had around 750 customers in late 2019, and some 6,000 by the time of publication. Herrera wants to massively expand that number, telling TechCrunch that she’d like to grow by 10x again this year, and that 5x expansion was the lower-end of her expectations.
Powering that growth are a host of coffee companies that Bottomless works with. Those companies handle roasting the beans and sending them to different Bottomless customers. So that no one reaches a zero-coffee state. And dies. Or whatever happens when one actually runs out of coffee.
The startup told TechCrunch that there are some 500 roasters on their wait list, implying that it will have the capacity to take on more customers this year.
Despite all the growth, the company still has some edges to refine. Setting up Wi-Fi on my scale wasn’t super-simple, for example. Herrera did note that her firm has a new scale coming out in the next three months. That could lower the difficulty barrier for new customers. Still, with 6,000 customers last October ordering three to four bags of coffee monthly, per Herrera’s estimate, the company had reached a comfortable seven-figure GMV run-rate before 2021 began.
For coffee roasters who may have seen their customer base slow during the pandemic, and consumers increasingly willing to dive into e-commerce, the company’s model could have long-term legs. Which brings us to the investors making that bet.
The round
Bottomless raised a $4.5 million Series A in January of 2021. It’s a smaller A than we tend to see in recent years, but Herrera said that her company has always been scrappy, which we take to mean that it has a history of being frugal. Patrick OShaughnessy led the round.
TechCrunch asked if the $4.5 million was a lot of money for the startup, as we didn’t have a clear picture at the time of its fundraising history. Herrera said that Bottomless has gotten to where it is today on just $2 million. So, the Series A is more than double all the money that the company as raised to date. It’s a lot of money, in other words.
Besides the new scale design, when asked about what the company intends to do with its funds, Herrera detailed the type of person she’s looking to hire — namely intellectually flexible folks who are informal, scrappy and very hack-y. More staff, in other words.
Let’s see how far Bottomless can get with its new check. Apparently I will be helping its KPIs for the foreseeable future as a customer.
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Lifestyle benefits startup Fringe gets a pandemic boost, raises seed round
Employers today often use perks to attract new talent in the form of discounts and deals, commuter funds, gym memberships, child care, free lunches and more. But the pandemic has impacted what sort of in-office or other in-person perks employees can access. That’s led to booming growth — and now, a fundraise — for a startup called Fringe, which offers companies a personalized marketplace of perks that people really want, like Netflix, Uber, Airbnb, DoorDash, Headspace, Talkspace and over 100 other apps.
The idea for Fringe came about from the co-founders’ work as financial advisors where they regularly found themselves consulting people who were weighing new job options and their associated benefits.
“Companies are spending a lot money on traditional benefits … $800, $1,000 a month per person. But the perceived value for most employees is relatively small, given the cost,” explains Fringe CEO Jordan Peace. “I started thinking about what could [companies] offer employees that would be a pretty low actual cost, but a really high perceived value?”
He landed on the idea of subscription services — things people use all the time in their daily lives, but sometimes feel just out of reach from a budgetary standpoint.
That’s where Fringe comes in.
Employers sign up for access to Fringe’s platform at a starting cost of $5 per employee per month. (The rate may decrease for larger organizations.) They then place the dollars they would normally spend on lifestyle benefits into the Fringe accounts of their employees, where they’re converted to “points” that can be spent on any of the apps and services.
Fringe Platform Walkthrough from Fringe on Vimeo.
Today, the marketplace offers a range of benefits, including streaming services like Netflix, Spotify, Disney+ and Audible, as well as virtual fitness, virtual coaching and wellness, online therapy like Talkspace, food and grocery delivery, like Grubhub, Uber Eats, Instacart, and Shipt, prepackaged meals, child care like UrbanSitter, and more.
In the U.S., there are 135 services partners to choose from, with another couple hundred that are available overseas.
The startup’s business model involves negotiating a discount of anywhere from 10% to up to 60% off these services, which it passes along to the employees through its points back (rebate) system. Initially, it only allowed employees to spend their employer-provided lifestyle benefits dollars on Fringe. But due to user demand, it later opened up to allow employees to spend their own money, too — a feature they wanted specifically because of the points back.
Fringe first launched in 2019 — well ahead of the pandemic — and saw some slow but steady growth. It ended the year with 15 clients, representing a couple hundred employees in total.
But then the COVID-19 pandemic hit, which sent a number of employees to work from home in a radical change to business culture that appears to have lasting impacts.
“After the dust settled from the first few months of COVID, we started getting 10 … 20 times more inbound interest,” Peace says, as companies realized Fringe could be a way to support their employees working from home.
“We were just in the right place at the right time to begin to profit from this changed workplace. And it’s not just a ‘pandemic perk.’ We’re going to get past COVID, and we’re still going to have two-thirds of people working from home. The workplace has changed,” he adds.
Image Credits: Fringe CEO Jordan Peace
By the end of 2020, Fringe had grown its client base to over 70 employers, representing now over 12,000 users on its platform. Today, its pipeline includes companies with between 200 and 2,000 employees — a sweet spot that allows them to move relatively quickly. This client base often includes tech companies, like car-sharing startup Turo or talent management system Cornerstone OnDemand, for example.
This year, Fringe expects to grow to well over 100,000 users on its platform, and increase its own team’s headcount, which is today around 20. It also plans to update its marketplace website to include things like automatic point gifting, charitable giving, new Slack integrations, improved navigation, and more.
As a result of the recent growth, Fringe has raised $2.2 million in new funding, in a round led by Sovereign’s Capital, with participation from Felton Group, Manchester Story, the Center for Innovative Technology and angel investors, including Jaffray Woodriff. As part of this investment, the company also added longtime advisor William Boland, senior director of Corporate Development and Strategy at Mission Lane, to its board of directors.
With the addition of the new funds, the startup’s total raise to date is $4 million.
Fringe believes the advantage of its marketplace is that it can be personalized to the user. Typically, employers determine what benefits to offer by running employee surveys, where the majority wins. That’s why many companies today provide perks like backup child care or discounted gym access. But this system discounts the minority’s needs — people who may not have kids or don’t want to work out. People who wish they could use their benefits dollars in a different way.
In addition to employee perks, Fringe believes that having so many subscriptions under one roof could present other opportunities farther down the line.
Woodriff, for example, sees Fringe’s potential as a big data play, in terms of who is signing up for what subscriptions and why.
“But if you think about the fact that you’ve got a subscription service marketplace … there’s more applications to that than just employee benefits,” Peace explains. “I’d like our Series A to be predicated upon the much greater total addressable market. And so I think we’re going to spend the next year to 18 months laying down concrete plans and building the tech to be ready to roll out a couple of different use cases,” he says.
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Cloud-gaming platforms were 2020’s most overhyped trend
It was an unprecedented year for [insert anything under the sun], and while plenty of tech verticals saw shifts that warped business models and shifted user habits, the gaming industry experienced plenty of new ideas in 2020. However, the loudest trends don’t always take hold as predicted.
This year, Google, Microsoft, Facebook and Amazon each leaned hard into new cloud-streaming tech that shifts game processing and computing to cloud-based servers, allowing users to play graphics-intensive content on low-powered systems or play titles without dealing with lengthy downloads.
It was heralded by executives as a tectonic shift for gaming, one that would democratize access to the next generation of titles. But in taking a closer look at the products built around this tech, it’s hard to see a future where any of these subscription services succeed.
Massive year-over-year changes in gaming are rare because even if a historically unique platform launches or is unveiled, it takes time for a critical mass of developers to congregate and adopt something new — and longer for users to coalesce. As a result, even in a year where major console makers launch historically powerful hardware, massive tech giants pump cash into new cloud-streaming tech and gamers log more hours collectively than ever before, it can feel like not much has shifted.
That said, the gaming industry did push boundaries in 2020, though it’s unclear where meaningful ground was gained. The most ambitious drives were toward redesigning marketplaces in the image of video streaming networks, aiming to make a more coordinated move toward driving subscription growth and moving farther away from an industry defined for decades by one-time purchases structured around single-player storylines, one dramatically shaped by internet networking and instantaneous payments infrastructure software.
Today’s products are far from dead ends for what the broader industry does with the technology.
But shifting gamers farther away from one-off purchases wasn’t even the gaming industry’s most fundamental reconsideration of the year, a space reserved for a coordinated move by the world’s richest companies to upend the console wars with an invisible competitor. It’s perhaps unsurprising that the most full-featured plays in this arena are coming from the cloud services triumvirate, with Google, Microsoft and Amazon each making significant strides in recent months.
The driving force for this change is both the maturation of virtual desktop streaming and continued developer movement toward online cross-play between gaming platforms, a trend long resisted by legacy platform owners intent on maintaining siloed network effects that pushed gamers toward buying the same consoles that their friends owned.
The cross-play trend reached a fever pitch in recent years as entities like Epic Games’ Fortnite developed massive user bases that gave developers exceptional influence over the deals they struck with platform owners.
While a trend toward deeper cross-play planted the seeds for new corporate players in the gaming world, it has been the tech companies with the deepest pockets that have pioneered the most concerted plays to side-load a third-party candidate into the console wars.
It’s already clear to plenty of gamers that even in their nascent stages, cloud-gaming platforms aren’t meeting up to their hype and standalone efforts aren’t technologically stunning enough to make up for the apparent lack of selection in the content libraries.
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Eco-conscious car subscription platform finn.auto raises $24.2M, with White Star and Zalando founders
Finn.auto — which allows people to subscribe to their car instead of owning it, and offsetting their CO₂ emissions — has raised a $24.2 million / €20 million Series A funding round. White Star Capital (which has also invested in Tier Mobility), and the Zalando co-CEOs Rubin Ritter, David Schneider and Robert Gentz, are new investors in this round. All previous investors participated.
The funding comes just under a year since the company launched, after selling just 1,000 car subscriptions. It’s also partnered with Deutsche Post AG and Deutsche Telekom AG.
A number of car manufacturers have launched similar subscription services powered by various providers, such as Drover, LeasePlan and Wagonex.
U.K.-based startup Drover has raised a total of $40 million in funding over five rounds. Their latest Series B funding round was with Shell Ventures and Cherry Ventures . Plus, there are branded services which include Audi on Demand, BMW, Citroën, DS, Jaguar Carpe, Land Rover Carpe, Mini, Volkswagen and Care by Volvo.
Digitally led subscription services have the potential to disrupt the traditional car sales model, and new startups are entering the market all the time.
The finn.auto model is proving to appeal to environment-conscious millennials. For each car subscription, the company is offsetting the CO₂ emissions of its vehicles, meaning subscribers can drive their cars in a climate-neutral manner. It’s now expanding its range of fully electric vehicles and, in cooperation with ClimatePartner, is supporting selected regional climate protection and development projects.
Key to the Munich-based startups’ play is the automation of fleet management processes and customer interactions, meaning it’s much easier and cheaper to run this kind of subscription operation.
Max-Josef Meier, CEO and founder of finn.auto, said: “We are delighted to have been able to bring such high-caliber investors on board and that our existing investors are cementing their confidence with the current round. Mobility with your own car becomes as easy as buying shoes on the internet. We already offer a large selection of different car brands, whose cars can be ordered online on our platform in just five minutes and at flexible runtimes. The delivery is then conveniently made to the front door.”
Nicholas Stocks, general partner at White Star Capital added: “There is a huge opportunity globally to streamline outdated customer experiences in the automotive retail space and become the Amazon of the automotive industry. This is something finn.auto is excellently placed to capitalize on with its offering of convenience, flexibility, value and sustainability.”
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Are subscription services the future of fintech?
Subscription services are on the rise. During the pandemic, Americans have been spending more time at home and more money on the digital products that make navigating our new normal easier.
More than ever, Americans’ lives are aided by companies like Netflix, Instacart and, of course, Amazon, which reported record-setting earnings from its 2020 Prime Day savings event.
A recent survey even found that spending on subscription services had more than tripled since March, with one in three respondents saying they’d purchased a new online subscription while quarantining.
Now, a new concern lingers: Is the market getting oversaturated? The question doesn’t just apply to streaming services and food delivery companies — it’s an issue financial technology businesses can’t afford to ignore.
As subscriptions become an increasingly alluring business model, fintechs will be forced to consider whether this proven strategy is worth the risk.
Fintechs should take note of subscription services
In the CompareCards survey, two-thirds of respondents said they purchased a new streaming service mainly for entertainment. Still, that doesn’t mean there isn’t room for fintechs to carve out their own space.
Bradley Leimer, co-founder of the financial consulting firm Unconventional Ventures, said he’s certainly seen more fintechs exploring subscription models. As Leimer explained, the financial services industry may have not fully embraced the idea, but it’s “starting to take notice.” Leimer, who has more than 25 years of experience in the industry, believes fintechs can learn a lot from subscription services — provided they’re willing to look in the right place.
One major lesson? Transparency. Subscription services give companies an opportunity to be upfront about their fees, as well as their benefits.
“When we talk about subscriptions, the more clear and more transparent we are, the better,” Leimer said.
Acorns is an easy case study. The microinvesting app offers three subscription levels — lite, personal and family — each with a clearly explained list of features. For what it’s worth, the company added more than 2 million users between March 2019 and March 2020, according to Forbes.
Leimer said fintechs should also take note of the way subscription services collaborate. For example, he pointed out how Amazon users can add an HBO subscription to their Prime Video account, essentially “bundling” two subscriptions into one. Fintechs, Leimer said, could stand to take a page out of that playbook.
“There are a lot of ways to sort of skin that cat — for a fintech company to generate income and for a customer to get value on top of that,” Leimer said.
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Fabletics’ Adam Goldenberg and Kevin Hart on what’s next for the activewear empire
Like plenty of other modern direct-to-consumer companies, influencer marketing has been an essential part of Fabletics’ journey. Actress Kate Hudson co-founded the company and co-CEO Adam Goldenberg believes that its network of spokespeople has been key to the company’s growth.
We were joined on our virtual TechCrunch Disrupt 2020 stage by Goldenberg and comedian Kevin Hart, who has been working as a brand partner for Fabletics.
“You can have the best product, which we believe we have, but if you can’t get it out there then you’re not going to be the leader that you want to be,” Goldenberg told us. “By having a very broad and diverse ambassador and influencer network, it allows us to become a very inclusive brand.”
Hart joined the company as an official brand partner earlier this year just as the pandemic took hold stateside and the company launched a menswear line. For Hart, the partnership is one of many relationships with brands and startups, but fits into his own lifestyle and thus made a lot of sense for him to work with, he says.
“[A company I invest in] has to coincide with myself and my lifestyle. If I’m going to talk about it, I have to be true to it,” Hart told TechCrunch. “There’s a plethora of things that I’m involved with that people would be shocked to know I was a part of, but it’s because I have the eyesight for it and a love for it.”
The Fabletics menswear line that Hart has advertised, and served as a brand spokesman for, has seen major growth amid a broader spike in athleisure wear sales. Goldenberg is bullish on just how much growth Fabletics will see from its men’s line so early in its life cycle.
“It’s a big goal, but I think we could do $75-100 million in sales next year with Fabletics Men, which is our first full year with this line, which would be very, very fast growth,” Goldenberg says.
As the company firms up its offering in activewear, they’re also keeping an eye on what trends will help them grow. Fabletics has already been building out technology trying to connect online and offline user habits in its stores. On the heels of Lululemon’s major acquisition of Mirror, which it announced in late June, moderator Jordan Crook inquired whether Fabletics had its own interests in expanding its footprint beyond activewear.
“We really believe in the importance of living an active lifestyle, so we’re not ready to share it yet, but we’re going to be doing something very large incorporating fitness into Fabletics,” Goldenberg said.
Check out the interview with Hart and Goldenberg below.
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Microsoft brings transcriptions to Word
Microsoft today launched Transcribe in Word, its new transcription service for Microsoft 365 subscribers, into general availability. It’s now available in the online version of Word, with other platforms launching later. In addition, Word is also getting new dictation features, which now allow you to use your voice to format and edit your text, for example.
As the name implies, this new feature lets you transcribe conversations, both live and pre-recorded, and then edit those transcripts right inside of Word. With this, the company goes head-to-head with startups like Otter and Google’s Recorder app, though they all have their own pros and cons.
Image Credits: Microsoft
To get started with Transcribe in Word, you simply head for the Dictate button in the menu bar and click on “Transcribe.” From there, you can record a conversation as it happens — by recording it directly through a speakerphone and your laptop’s microphone, for example — or by recording it in some other way and then uploading that file. The service accepts .mp3, .wav, .m4a and .mp4 files.
As Dan Parish, Microsoft principal group PM manager for Natural User Interface & Incubation, noted in a press briefing ahead of today’s announcement, when you record a call live, the transcription actually runs in the background while you conduct your interview, for example. The team purposely decided not to show you the live transcript, though, because its user research showed that it was distracting. I admit that I like to see the live transcript in Otter and Recorder, but maybe I’m alone in that.
Like with other services, Transcribe in Word lets you click on individual paragraphs in the transcript and then listen to that at a variety of speeds. Because the automated transcript will inevitably have errors in it, that’s a must-have feature. Sadly, though, Transcribe doesn’t let you click on individual words.
One major limitation of the service right now is that if you like to record offline and then upload your files, you’ll be limited to 300 minutes, without the ability to extend this for an extra fee, for example. I know I often transcribe far more than five hours of interviews in any given month, so that limit seems low, especially given that Otter provides me with 6,000 minutes on its cheapest paid plan. The max length for a transcript on Otter is four hours while Microsoft’s only limit for is a 200MB file upload limit, with no limits on live recordings.
Another issue I noticed here is that if you mistakenly exit the tab with Word in it, the transcription process will stop and there doesn’t seem to be a way to restart it.
It also takes quite a while for the uploaded files to be transcribed. It takes roughly as long as the conversations I’ve tried to transcribe, but the results are very good — and often better than those of competing services. Transcribe for Word also does a nice job separating out the different speakers in a conversation. For privacy reasons, you must assign your own names to those — even when you regularly record the same people.
It’d be nice to get the same feature in something like OneNote, for example, and my guess is Microsoft may expand this to its note-taking app over time. To me, that’s the more natural place for it.
Image Credits: Microsoft
The new dictation features in Word now let you give commands like “bold the last sentence,” for example, and say “percentage sign” or “ampersand” if you need to add those symbols to a text (or “smiley face,” if those are the kinds of texts you write in Word).
Even if you don’t often need to transcribe text, this new feature shows how Microsoft is now using its subscription service to launch new premium features to convert free users to paying ones. I’d be surprised if tools like the Microsoft Editor (which offers more features for paying users), this transcription service, as well as some of the new AI features in the likes of Excel and PowerPoint, didn’t help to convert some users into paying ones, especially now that the company has combined into a single bundle Office 365 and Microsoft 365 for consumers. After all, just a subscription to something like Grammarly and Otter would be significantly more expensive than a Microsoft 365 subscription.
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VCs and startups consider HaaS model for consumer devices
I’ve been following consumer audio electronics company Nura with great interest for a few years now — the Melbourne-based startup was one of the first companies I met with after starting with TechCrunch. At the time, its first prototype was a big mess of circuits and wires — the sort of thing you could never imagine shrunk down into a reasonably sized consumer device.
Nura managed, of course. And the final product looked and sounded great; hell, even the box was nice. If I’m lucky, I see a consumer hardware product once or twice a year that seems reasonably capable of disrupting an industry, and Nura’s custom sound profiles fit that bill. But the company was unique for another reason. A graduate of the HAX accelerator, the startup announced NuraNow roughly this time last year.
Hardware as a service (HaaS) has been a popular concept in the IT/enterprise space for some time, but it’s still fairly uncommon in the consumer category. For one thing: A hardware subscription presents a new paradigm for thinking about purchases. That is a big lift in a country like the U.S., which spent years weaning consumers off contract-based smartphones.
That Nura jumped at the chance shouldn’t be a big surprise. Backers HAX/SOSV have been proponents of the model for some time now. I’ve visited their Shenzhen offices a few times, and the topic of HaaS always seems to come up.
In a recent email exchange, General Partner Duncan Turner described HaaS as “a great way to keep in contact with your customers and up-sell them on new features. Most importantly, for startups, recurring revenue is critical for scaling a business with venture capital (and will help appeal to a broad set of investors). HaaS often has a low churn (as easier to put onto long-term contracts).”
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How startups can leverage elastic services for cost optimization
Joey Lei is director of service management at Synoptek, a global systems integrator and managed services provider. Prior to joining Synoptek, he was a lead product manager for Dell EMC’s Data Protection Division and was a founding product manager for Dell EMC PowerProtect Data Manager, Dell EMC’s newest generation data protection and data management solution.
Due to COVID-19, business continuity has been put to the test for many companies in the manufacturing, agriculture, transport, hospitality, energy and retail sectors. Cost reduction is the primary focus of companies in these sectors due to massive losses in revenue caused by this pandemic. The other side of the crisis is, however, significantly different.
Companies in industries such as medical, government and financial services, as well as cloud-native tech startups that are providing essential services, have experienced a considerable increase in their operational demands — leading to rising operational costs. Irrespective of the industry your company belongs to, and whether your company is experiencing reduced or increased operations, cost optimization is a reality for all companies to ensure a sustained existence.
One of the most reliable measures for cost optimization at this stage is to leverage elastic services designed to grow or shrink according to demand, such as cloud and managed services. A modern product with a cloud-native architecture can auto-scale cloud consumption to mitigate lost operational demand. What may not have been obvious to startup leaders is a strategy often employed by incumbent, mature enterprises — achieving cost optimization by leveraging managed services providers (MSPs). MSPs enable organizations to repurpose full-time staff members from impacted operations to more strategic product lines or initiatives.
Why companies need cost optimization in the long run
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