This startup wants to turn the cloud software business on its head with a new site that encourages customers to share how much they're paying
- This week, the startup company, Capiche (pronounced kuh-peesh), launched in the hopes of bringing more transparency to the enterprise software industry and changing how businesses get their information about SaaS pricing.
- "The more information we can share [about pricing], I think it will help nudge the industry towards fairer and more transparent policies," Austin Smith, Capiche founder and CEO, told Business Insider in a recent interview.
- Smith likens his vision for Capiche to what the job review site, Glassdoor, created for job seekers -shedding light on company culture and average wages.
- Smith said that so far, in-depth, stories have proven to be more useful than trying to aggregate pricing data into charts and graphs since normalizing the data for SaaS products can be extremely difficult.
- Within eight hours of its website going live on Tuesday, Smith said, already 300 people had submitted pricing stories.
- Capiche raised a $450,000 angel round, which closed this June, with participation from the likes of Inside.com CEO and serial angel investor Jason Calacanis and HubSpot cofounder and CTO Dharmesh Shah.
- "I think there's clearly a flywheel that can happen here," Smith said. "People like to share this stuff."
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Pricing for enterprise software is notoriously opaque.
Instead of listing their prices online, most software-as-a-service (or, SaaS) companies will simply say, "Call us." And unfortunately, that approach - which on the outset, may seem more personal - has created some major problems.
This week, the startup company, Capiche (pronounced kah-peesh), launched in the hopes of bringing more transparency to the enterprise software industry and changing how businesses get their information about SaaS pricing.
"The pricing for most SaaS products that's done over sales calls comes down to, 'How much can we get out of this customer?' It's not just, 'Here's what we charge,'" Austin Smith, Capiche founder and CEO, told Business Insider in a recent interview. "The more information we can share [about pricing], I think it will help nudge the industry towards fairer and more transparent policies."
To start, Capiche will focus on collecting reviews, or what Smith calls "pricing stories," from its users about their sales experiences with particular SaaS companies, especially regarding information about costs. Smith likens his vision for Capiche to what the job review site, Glassdoor, created for job seekers.
"Before Glassdoor was around, it was really, really hard to know, "Is this offer I have in front of me good?" Smith said. "Now anyone across pretty much any company can see - Am I getting paid the right amount and how does that compare with other people in my industry?"
Smith said that so far, in-depth, stories have proven to be more useful than trying to aggregate pricing data into charts and graphs since normalizing the data for SaaS products can be extremely difficult. Two companies that are using Salesforce, for example, will rarely have the exact same add-on features enabled, and so comparing what each is paying would be like comparing "apples to oranges," Smith said.
Instead, pricing stories give businesses a sense for what others are paying, while offering helpful insights. Already, one user shared that by simply calling and speaking to a sales rep at the email marketing company Sendgrid, they were offered $250 off per month compared to the self-serve price available online. Also, they said, by "holding out" until the end of the month to sign a contract, their Sendgrid sales rep offered them an additional $250 off per month to help close the deal. In the end, the user said they were able to get their Sendgrid pricing down from $2,000 to $1,500 per month for a company that sends five million emails per month.
Popular software review sites - like G2 and Capterra - exist today, though Smith said those sites often charge companies to make their landing pages look snazzier and rank higher. As a result, it's not always the best or most popular products that users will see, but those who paid review sites the most money. Smith said he hasn't decided on a definite monetization strategy for Capiche, but it will likely not include SaaS companies paying for placement.
Also, Smith said, reviewers for sites today are often incentivized by things like Visa or Amazon gift cards in exchange for writing about a product. With Capiche, Smith hopes he can create more of a "community" of experts who leave reviews on their own accord. In fact, to access the information on Capiche today, users need to submit their own reviews for at least three products they currently use. Within eight hours of its website going live on Tuesday, Smith said, 300 people had submitted pricing stories.
"I think there's clearly a flywheel that can happen here," Smith said. "People like to share this stuff."
"Obviously there's a pricing problem"
For the longtime entrepreneur - who was previously the president of Inside.com, an email newsletter company - trying to figure out the best pricing for enterprise software has been a major pain point for him over the years. It's also an issue he's seen first hand for other startup founders.
"I see it all the time on VC listserves where someone will send a question to the other founders in a portfolio and say, 'What's everyone else paying for Salesforce?'" Smith said. "And then, people are really happy to share it."
To help finance his early endeavors with Capiche, Smith raised a $450,000 angel round, which closed this June, with participation from the likes of Inside.com CEO and serial angel investor Jason Calacanis, HubSpot cofounder and CTO Dharmesh Shah, and Half Court Ventures partner Rob May.
"When consumers have to make a considered purchase they do a lot of research online," Calacanis told Business Insider, regarding the reasons he decided to invest in Capiche. "If you're going to travel or buy a car or pick a college, anything that's super considered, where you're investing a lot of time or money, you're going to want to make a good decision."
Calacanis said there are other review sites out there, like Capterra, but none are taking Capiche's approach of in-depth reviews, focused on price. And pricing, he says, is one of the leading considerations when companies are considering a new SaaS product.
"You need only look at the Google searches," Calacanis said, in reference to typing in popular SaaS products like Slack or Salesforce or Zendesk into Google. Pricing, he said, is typically at the top of the list of suggested searches.
"People want to understand the pricing," Calacanis said. "Obviously there's a pricing problem."