Venture Capitalist at Theory

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1 minute read / Sep 18, 2012 /

The Secret to SMB SaaS Distribution

SMB SaaS companies cannot afford to pay for distribution. At 2 to 4% conversion to paid rates and $5 to $10 monthly subscription fees, the breakeven CPC for these products on search is $0.40. The average Google click costs three times this and the iOS average cost-per-install is more than twice as expensive.

The most successful SMB SaaS companies (Zendesk, Expensify, Square) build communities to drive distribution. Those communities reinforce and build a brand. And the brand drives subsequent organic distribution.

Expensify and ZenDesk are two great examples. Expensify focuses on users suffering with the greatest relevant pain: salespeople filing expenses. Salespeople are a great target community because they try new products quickly, are very vocal with their support or displeasure and are tremendous networkers. Winning their support means thousands of tweets/brand impressions like these monthly:


ZenDesk markets their support suite to the tightly knit group of customer support agents. They leverage the community’s pre-existing strong ties to spread the word about the product. And word of mouth distribution blossomed.

The product of these efforts are plain to see in search query volume: ![image](

Communities hold the power to large scale, inexpensive distribution. Find the right one and harness it to grow your business organically.

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