8 Up-and-Coming Businesses Capitalizing on a Forward-Thinking Business Model SaaS is growing into an increasingly attractive and lucrative way to do business. Here are some of the startups leading the charge.
By Thomas Smale Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
"Software as a service" describes the delivery of a product to the end user, be it a business or an individual, through a software platform, for which the user typically pays on a recurring basis. And, not so long ago, this term and its more common abbreviation, SaaS, was largely unknown outside those intimately familiar with the software industry.
But, as the SaaS business model has skyrocketed in popularity -- even Microsoft Office and Adobe Creative Cloud have adopted it -- interest in SaaS from investors, entrepreneurs and media consumers curious about the intersection of business and technology has exploded.
Related: 3 Steps to Take to Start Transitioning Your Business to SaaS
Websites popping up across the internet, like the SaaStr website and podcast, are now considered some of the best informational resources for tech entrepreneurs out there. Nathan Latka's profiles of up-and-coming SaaS companies and revealing interviews with founders are a treasure trove for anyone keenly interested in startup culture.
As SaaS grows into an increasingly attractive and lucrative business model, I wanted to take stock of the current climate of SaaS startups. Here are eight up-and-coming U.S. SaaS businesses to watch this year.
Hypr
Founder: Gil Eyal / Base: New York / Founded: 2013
It's fair to say that Gil Eyal was an influencer in the world of influencer marketing before the term even existed. In his role as COO with the now-defunct photo-sharing app Mobli, Eyal worked with celebrities like Leonardo DiCaprio and Serena Williams at a time when influencer marketing was still referred to as "celebrity endorsements." It was during this time that the concept for Hypr was born.
Hypr provides clients with a detailed analysis of influencers' audience behavior on a variety of social media platforms. It helps pair brands with the influencers that best meet their marketing goals. Hypr also allows brands to automate effective influencer marketing campaigns and measure their results.
LaunchDarkly
Founder: Edith Harbaugh / Base: Oakland, Calif. / Founded: 2014
Edith Harbaugh has been in software development for well over 15 years. In that time, she's borne witness to what she's called "some epically bad releases." Many of these were the result of companies trying go live with features that weren't quite ready for prime time.
Related: Considering 'SaaS'? What You Need to Know
LaunchDarkly gives online businesses the opportunity to audition new features to selected subsets of users, limiting their risk when they roll out new code. Perhaps just as crucially,the company makes rollbacks to earlier iterations of the code painless -- just in case things go awry.
Originally built with developers in mind, LaunchDarkly has evolved into a tool that can be used across organizations for auditioning and testing new features.
InfoScout
Founder: Jared Schreiber / Base: San Francisco / Founded: 2011
InfoScout turns the gathering of detailed, real-world consumer data into a win-win situation. InfoScout's mobile apps Shoparoo and Receipt Hog incentivize consumers to scan and upload the receipts they receive from every shopping trip they make, rewarding them either by raising funds for a school of their choice or by giving them cold, hard cash. As of today, InfoScout has over 300,000 users uploading 300,000 sales receipts each day. This and the survey data collected through its apps give InfoScout and its clients deep insight into consumer behavior.
Founder Jared Schreiber, a graduate of MIT, was a founding member of the Pat Tillman Foundation which supports active-duty military service members, veterans and their spouses with academic scholarships and professional development opportunities.
Front
Founder: Mathilde Collin / Base: San Francisco / Founded 2013
Front facilitates collaboration on email and other messaging platforms by providing a "shared inbox." For example, if you're part of a customer service team that relies on a shared email address to communicate with customers, Front gives you the ability to create an inbox shared by all members of your team. Once an email comes in, responsibility for a reply can be assigned to the appropriate team member. and Front makes it easy to have internal communications regarding email queries inside the app. No more forwarding customer emails to colleagues to get the answers you need.
Front also integrates SMS, Facebook and Twitter messages so you can keep all of your customer communications in one place, regardless of the platform they were sent on.
Like most founders, Mathilde Collins wears many hats at Front. Initially, her roles and responsibilities were so varied that at times it could be unclear exactly what her job was She created a presentation to illustrate this phenomenon many entrepreneurs face, and even shared it publicly.
ShipHawk
Founder: Jeremy Bodenhamer / Base: Santa Barbara, Calif. / Founded: 2012
ShipHawk is a SaaS that integrates shipping services from multiple carriers and helps automate the fulfillment process, greatly alleviating the burdens logistics puts on many businesses. ShipHawk helps its customers to obtain the best possible rates from carriers and streamlines customer service.
Founder Jeremy Bodenhamer has written extensively about being both a founder and a father -- and the challenges of both.
BirdEye
Founder: Naveen Gupta / Base: Palo Alto, Calif. / Founded: 2012
BirdEye is an online reputation-management SaaS. Birdeye encourages the customers of its clients to review those clients' products and services. This helps brands build authentic social proof.
BirdEye also sends real-time notifications if a client's business receives a negative review on any supported platform, enabling the client to take steps to turn a bad customer experience into a positive one.
A Harvard MBA graduate, founder Naveen Gupta was part of the C-suite that guided RingCentral to a successful $887 million IPO in 2013.
Classy
Founder: Scot Chisholm / Base: San Diego / Founded: 2011
Classy, a fundraising platform for nonprofits, came from humble beginnings. In 2006, founder Scot Chisholm and a few friends held a benefit to raise money for the fight against cancer. Over the years, as he organized more charity events, Chisholm realized that "modern philanthropists" were not being given sufficient opportunity to contribute to the causes they believed in. Thus Classy was born.
Classy has helped over 4,000 nonprofits raise hundreds of millions of dollars through the platform since its launch in 2011.
Hireology
Founder: Adam Robinson / Base: Chicago, Ill. / Founded: 2010
Hireology is a human resources SaaS aimed at enabling entrepreneurs and small businesses build and manage their teams from "hire to retire." Hireology offers an integrated suite of tools to help clients find the best candidates for the job and to retain them.
Founder Adam Robinson is passionate about recruiting; not only does he have over 20 years experience in the industry, he has written a book about the power of predictive hiring.
Related: How to Market Your SaaS Business
Final Thoughts
The growth of the SaaS business model has allowed many software startups to create a viable business plan from their expertise in software. Of course, each startup comes with its own challenges, and entrepreneurs will always find creative ways to fit founding a business into their lifestyle. Whether you choose to support the military through a foundation like Jared Schreiber, or write a book about your experiences like Adam Robinson, the SaaS business model has proven conducive to creativity in business plans and in the bigger picture of the founder's lifestyle.
