By Rachit Khator in Productivity — Oct 23, 2018

2018 Internet Trends Report — What it means for SaaS

Future of work is changing, so should you.

Link here to the Internet Trends Report 2018

Every year, KPCB, one of the foremost VC in the world releases a super informative report titled “Internet Trends 2018”. Must read for every tech entrepreneur who's building a SaaS business.

I would like to summarize and give a perspective on what I learned in this year’s report and what it means for SaaS product companies or startups going into the future —

Economic Trends

Human potential is growing as centuries pass by — We were hunters, gatherers and then became cultivators before 1800s, turned to become manufacturers, farmers in the 1900s & to now becoming technologists & tech consumers in the 2000s. What lies next? Computing holds the key, internet is now penetrated into more than 50% of the global population.
The way people are learning is changing — Education is no longer just accessible from schools, universities, it’s everywhere. People are consuming digital educational content more than ever. You should know where to look, what to learn. Learning overdose is going to be rampant soon; good one or bad only time will tell.
Data is the new oil — We all generate it, consume it and exploit it. Our behaviors, choices, actions and thoughts are populated all over the internet. Data is driving economies, running nations and expanding boundaries. Across all sectors. He, who has access, can become. We on earth are on a path to consume 163 Zettabytes of data every year by 2025, where 1 zettabyte = 10¹² gigabytes.

Work Trends

Future of workforce is remote, it demands flexibility— Gig economy is real. There are more freelancers than ever; 16 million just on Upwork & over 200 million globally. People don’t want to be confined to office space anymore. I have seen a remote well-funded startup where only the founder is operating from California and his teams distributed in different cities in Europe, India and so on. I believe this is just going to grow. Tools like Stackby will help power the next generation of workforce.

Product Trends

Usability + Strong UI/UX — Alan Kay predicted the future in 1984. We at Relytree strongly believe in his philosophy. Software programs of the 21st century are now defined by intuitive user flow, easy developer integration, minimal design and strong product roadmaps. Who would have thought API wrappers could become sustainable businesses — Stripe with Payment API, Intercom with Customer Support API & Zapier with App connector API. Ease of use for developers and consumers is the key for any tech product company.
Cloud moving to commodity — Cloud computing costs is declining 10% YOY; now at $0.1/instance. AWS, who had one service in 2008 now has over 140+ cloud services in its kitty and it’s growing! Cloud revenues are increasing 25% YOY on average; and the beneficiaries are Amazon, Microsoft and Google.

Customer Trends

‘Messaging threads’ & ‘Personalization’ is driving SaaS engagement — Slack to manage internal team communication, and Intercom to manage customer communication — Messaging threads is becoming a new norm in communication whether internal or external. Collaboration with messaging is the new productivity mantra, customizing it to your use-case and platform will do efficiency wonders. And when you are engaging with customers, ensure your content is personal. If you tell them how your software is going to affect and change their lives personally, they are more likely to churn less.
Product is driving customer acquisition model, not sales — No, it’s not about having big sales team or customer support teams. Easy on-boarding, less learning curve and straightforward knowledge base will drive organic customer acquisition and keep the CAC less for your startup.
Digital marketing skills? You need it! — Product discovery, subscription purchases are increasingly driven by social media. Along with inbound/outbound sales teams, digital marketing spend for companies is growing. Having those skills in-house is key for any SaaS company, where smartly managing your product and content across channels drives organic conversion.
Enterprise is the new startup — Enterprise teams are becoming lean, they do not rely on their internal IT teams to solve their productivity, collaboration or workflow issues. Talk about Slack or Trello or Asana, they all started with catering to small teams are now on-boarding large teams to grow their revenues. The mantra is to make a consumer looking product with enterprise level platform, leverage virality across individual users, personalize to their use-case, strong inside sales and boom, you have an enterprise go-to market model.

Check out which SaaS metrics matters at different stages of a startup - SaaS metrics vs Stage of Startup

Security Trends

Data Sharing → Data Privacy — With the recent enforcement of GDPR — European ‘General Data Protection Regulation’ from May 25th, 2018 with respect to the background consumer data privacy on Facebook, consumers now have more control of when and how their data can be shared. Make sure your SaaS platform implements data security & user privacy best practices, this in itself drive more enterprise sales and less churn. Try to make your platform SOC I, SOC II compliant, which may be time and money consuming in the short term but in the long term will drive your product.