Selling SaaS in Germany(embedworkflow.com)
embedworkflow.com
Selling SaaS in Germany
https://embedworkflow.com/blog/selling-saas-in-germany-austria-and-switzerland-dach/
31 comments
If you invested in the S&P 500 in 1968, you'd be waiting until 1992 before you saw any return on that investment after accounting for inflation, and the inflation adjusted S&P 500 was on a net-losing streak for the whole period from 1968 to 1982 before it started going up again.
People believe the line will always go up, and maybe it will, but it's still at least possible for it to be on a quite painfully downward trend for over 12 years at a time.
I'd argue it's also not at all irrational to worry that we may be on the precipice of a similar situation right now, or perhaps even on the precipice of the situation at the end of the 1920s, where it would have taken more than 35 years for the S&P 500 to recover from its previous highs.
Your colleague is probably more risk-adverse than is rational (and I would say more risk-averse than most Austrians or Germans), but I would also argue that a lot of people blindly throwing all their retirement money at the S&P 500 might not realize just how much risk they are exposing themselves to.
https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
People believe the line will always go up, and maybe it will, but it's still at least possible for it to be on a quite painfully downward trend for over 12 years at a time.
I'd argue it's also not at all irrational to worry that we may be on the precipice of a similar situation right now, or perhaps even on the precipice of the situation at the end of the 1920s, where it would have taken more than 35 years for the S&P 500 to recover from its previous highs.
Your colleague is probably more risk-adverse than is rational (and I would say more risk-averse than most Austrians or Germans), but I would also argue that a lot of people blindly throwing all their retirement money at the S&P 500 might not realize just how much risk they are exposing themselves to.
https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
Very interesting trend is S&P 500 to Gold Ratio.
https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
Real estate, gold, crypto, in that order. That's where people from DACH invest, also valid for rest of the Europe. Mediterranean people additionally invest in lottery tickets. I wouldn't exaggerate saying people are keeping their gold bars in their otherwise empty investment apartments.
European banks play very negative role because they aggressively upsell their investment funds and schemes so for many people stock exchange means investment fund with management fee which oftentimes losses yet the growth, if happens, never catches up with the market growth.
European banks play very negative role because they aggressively upsell their investment funds and schemes so for many people stock exchange means investment fund with management fee which oftentimes losses yet the growth, if happens, never catches up with the market growth.
I'm glad this one interaction helped you understand an entire people. That's efficient.
And that's why real estate market is so bad in DE/AT. Folks are terrified of investing in stock market, even through ETFs.
So it's either put everything in a Sparkonto, where it gets eaten by inflation or buy housing.
So it's either put everything in a Sparkonto, where it gets eaten by inflation or buy housing.
ISO 27001 and 27017 force you to deal with potential exit scenarios early on.
In DACH you often need both to get public contracts.
I also noticed that costumers are weary of American cloud solutions and SaaS solutions.
Most are aware that they already are one White-House-decision away from being non operational and do not want to make things worse.
In DACH you often need both to get public contracts.
I also noticed that costumers are weary of American cloud solutions and SaaS solutions.
Most are aware that they already are one White-House-decision away from being non operational and do not want to make things worse.
On premise solutions (or at least fully in country) are definitely preferred in most of the world.
They might not pay a 10x premium, but a 2x premium definitely. Even written guarantees from established American firms are nowadays seen as a bit lacking in credibility.
They might not pay a 10x premium, but a 2x premium definitely. Even written guarantees from established American firms are nowadays seen as a bit lacking in credibility.
For those (like the author) who wonder why such a weird mishmash of different conventions was used to come up with the DACH abbreviation, it's because the word "dach" means "roof" in German, so there's a lot of wordplay that's done to talk about all these different regions which are 'under one roof'.
"Dachsprache" (roof-language) is actually a term used by some linguists (sometimes translated to umbrella-language) to refer to a dialect that becomes the standard language of a large region with a varied dialect continuum. E.g. the dialect of Florence became the "dachsprache" of all of Italy.
"Dachsprache" (roof-language) is actually a term used by some linguists (sometimes translated to umbrella-language) to refer to a dialect that becomes the standard language of a large region with a varied dialect continuum. E.g. the dialect of Florence became the "dachsprache" of all of Italy.
I always thought it was because of the stickers we had to put on our cars if we went abroad.
Germany had “D” Austria “A” Switzerland “CH”
Germany had “D” Austria “A” Switzerland “CH”
Sure, that might be where that choice of abbreviation started, but I think that one outcompeted the other possible ways to abbreviate it because of the connection to the word for "roof" was evocative, and made for good wordplay.
Sidenote, I always thought Dachli was an especially great extension. 'Li' for Liechtenstein here plays the double-role of also being the diminutive form in Swiss German and some south German dialects that you can stick on the end of a word to make it sound small and cute. Hund -> Hündli, Sack -> Sackli, Nest -> Nestli (yes this is the origin of the Nestlé's name)
Sidenote, I always thought Dachli was an especially great extension. 'Li' for Liechtenstein here plays the double-role of also being the diminutive form in Swiss German and some south German dialects that you can stick on the end of a word to make it sound small and cute. Hund -> Hündli, Sack -> Sackli, Nest -> Nestli (yes this is the origin of the Nestlé's name)
Interesting, though in Swiss German I think it would be Dächli over Dachli in any dialect, kind of making it not work. Nestli works, Sackli also doesn't. Would have to be Säckli.
Maybe this is confusing due to the Brotli compression algorithm. In that case, it should also be Brötli but was probably a pragmatic choice to change the ö to an o.
Maybe this is confusing due to the Brotli compression algorithm. In that case, it should also be Brötli but was probably a pragmatic choice to change the ö to an o.
Ah true, too bad!
I think you might be looking too much into an abbreviation which is simply the easiest to pronounce of country codes.
Such a missed opportunity to not have named the acronym CHAD.
In the UK as a startup we found buying Silicon Valley SaaS tools to be a bit different sometimes in similar ways.
Europe, even the UK, prices tech startup significantly lower than the US (a colleague once said that in the US you get funding to turn an idea into execution, in Europe you get funding to turn your execution into money), plus we were tech/retail, so our valuation was just never the same as a pure-tech (or SaaS) business.
Because of this, we had numerous SaaS pricing discussions where the sales rep didn't seem to understand that their pricing was just a non-starter for us. "Why wouldn't you pay $15k a month to save half an engineer's worth of work?"... because our engineers don't cost that much, and we don't have that money.
So much of SaaS pricing is predicated on customers being B2B, pure-tech, VC-funded, plenty of funding, with exceptionally high engineering costs. Essentially: cost is not a concern. Most of the world is not going to pay another $30/m subscription for every employee.
Europe, even the UK, prices tech startup significantly lower than the US (a colleague once said that in the US you get funding to turn an idea into execution, in Europe you get funding to turn your execution into money), plus we were tech/retail, so our valuation was just never the same as a pure-tech (or SaaS) business.
Because of this, we had numerous SaaS pricing discussions where the sales rep didn't seem to understand that their pricing was just a non-starter for us. "Why wouldn't you pay $15k a month to save half an engineer's worth of work?"... because our engineers don't cost that much, and we don't have that money.
So much of SaaS pricing is predicated on customers being B2B, pure-tech, VC-funded, plenty of funding, with exceptionally high engineering costs. Essentially: cost is not a concern. Most of the world is not going to pay another $30/m subscription for every employee.
I am at a pretty good (for european standards) startup, entirely bootstrapped with no investor money. We use virtually 0 SaaS ourselves with the exception of tailscale. The pay $40/user/month pricing seems insane for what most of these things do and they are almost always trivial to selfhost. Of course if you have millions of investor money to waste, it’s a drop in the bucket.
Same. And even for Tailscale we use a European alternative (Xplicittrust), because this aggressive growth of VC backed American tech is a real turn-off. We have seen where that leads often enough by now.
Funny, I've recently (and repeatedly) had the exact opposite experience while negotiating SaaS contracts for my largely London-based startup.
Contact UK sales team? They don't believe we could even use their product because we're not a BigCo with thousands of employees. After weeks of back and forth calls, they ask us to pay $100k to get "certified" for API access, with further details on pricing available afterwards. Endless warnings about multiple customers purchasing the API product but lacking the technical ability to implement it.
Contact US sales team? Contract signed and account set up within 2 days, $3k a month. Same company, same product.
Contact UK sales team? They don't believe we could even use their product because we're not a BigCo with thousands of employees. After weeks of back and forth calls, they ask us to pay $100k to get "certified" for API access, with further details on pricing available afterwards. Endless warnings about multiple customers purchasing the API product but lacking the technical ability to implement it.
Contact US sales team? Contract signed and account set up within 2 days, $3k a month. Same company, same product.
> customers purchasing the API product but lacking the technical ability to implement it
Oh, wow, salesdrone. Sell me harder on what a good interface you’re selling.
What else, do we have occasional non-reproducible behaviour? Frequent stability and scaling issues? … … non-standard error codes, dare I hope?
Don’t tell me, the excitement is in finding out the hard way, just take our credit cards.
Oh, wow, salesdrone. Sell me harder on what a good interface you’re selling.
What else, do we have occasional non-reproducible behaviour? Frequent stability and scaling issues? … … non-standard error codes, dare I hope?
Don’t tell me, the excitement is in finding out the hard way, just take our credit cards.
That particular API is actually perfectly fine, stable and relatively pleasant to work with. I have absolutely no idea what the UK sales team was trying to do. Some kind of negging? Perhaps they trained at Tate university.
I very much agree with the fact that IT departments have a massive influence during the sale process. Though, based on my experience, things are slightly softening. We entered the DACH market in 2023 with a cloud based CRM for the care sector. Before that, it was pretty much inconceivable in the care sector to use anything that wasn’t installed on-promises and fully isolated from the internet. Nevertheless, companies are quickly realizing that this is not scalable anymore. There is an urgency for modernizing work tools which is simply not possible with the limitations of the on-promises software era. Additionally, things like C5 seem to give a lot of confidence to IT departments for speeding up the sales process.
Limitations? Such as suppliers who are pushing for SaaS because it's more profitable?
I refer to the technical constraints of the on-promises model which affects the modernization of the healthcare sector in the DACH regions. There is a need for integrating with SaaS products for several use cases or having AI features. Both things are not easily possible will a fully isolated setup. Therefore, I have experienced that IT departments are becoming more open to adopting Saas solutions compared to a few years ago, where it was not rare for a solution to be immediately rejected because it was using a hyperscaler.
> Yet many SaaS companies still struggle to sell effectively there, even after translating their website or pitching German businesses.
I chuckled on this one. I mean arent these the, like, "the bare minimum" rather then "even extra mile" thing. Using local language and pitched to local business you want to sell to kind of sounds like a basic?
Overall article is fine, really. but that sentence was funny.
I chuckled on this one. I mean arent these the, like, "the bare minimum" rather then "even extra mile" thing. Using local language and pitched to local business you want to sell to kind of sounds like a basic?
Overall article is fine, really. but that sentence was funny.
How about the payments, what is the easiest way from corporate customer perspective in DACH? Let's say for smaller subscriptions, <1000€/month?
You missed the point of the article, which is that DACH places more importance on Compliance, Security and Stability. Those are the first questions first and foremost, and because they are expensive questions, you have to charge more than <€1000/month.
the article is on point. I work in germany for an American company, and the /american/_experts_ always contract the most expensive, feature-less alternative because they get baited by SSO, logging and tracking, that then fail to leverage to anything useful. in some instances, we pay per http request.
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I was a bit shocked when I talked to an Austrian colleague once and they told me they wanted to get into investing, but losing any money at any time was completely unacceptable. They had looked at investing in S&P 500 ETFs etc., but felt they must have misunderstood something, as they didn't understand why anyone would invest in anything that might go down, even temporarily.
So the thesis of the article definitely feels plausible to me.