In the emerging sector of Software as a Service, one of the biggest challenges for many of the top CEOs is the lack of successful role-model businesses. There are still only a handful of public pure-play SaaS businesses, and thus the body of “best practices” is very limited. Ironically, on top of this, one of the hardest things veteran software CEOs have to do when they start to run a SaaS company is to forget much of what they know about running a software company.

As we worked with our SaaS portfolio companies, it became apparent that savvy SaaS companies were following a new set of rules – most of which didn’t apply in the traditional software world, and many of which they were making up in real-time. We then set out to capture the new “best practices” of the on-demand model.

To pull these insights together, Bessemer studied over a hundred SaaS companies – both pure-plays and hybrids – and recently hosted an invitation- only SaaS CEO Summit to compare perspectives and discuss the findings. Many of the insights gained during this research and these discussions are condensed into the following list of ten new “laws” which help to govern the success of SaaS companies.

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