Interested in building your own SaaS company? Follow the journey of Transistor.fm as they bootstrap a podcast hosting startup.
Counting beans and getting hit by a bus
This week, Jon and Justin are wrestling with some heavy startup founder topics:
What should your SaaS company's gross margins be?
How much is bandwidth going to cost us? How does it affect our margins?
Example: [Account A] does 495,000 downloads in a month, average file size is 8 MB, that’s 3960 GB of bandwidth in a month. If bandwidth is $0.01 per GB, that’s $39.60 just for bandwidth for that one account. And that’s if we can get it that cheap. Otherwise, we’d pay $198 on AWS, or Azure. If we used Google Cloud it’d be $316.
The burden of keeping our service up rests on Jon's shoulders. How can we reduce the risk?
How can we increase platform resiliency, automation, and improve our internal customer service tools?
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LeadEdge Capital: “Gross margins for SaaS typically range from 60% to more than 80%."