Ken Ross recently wrote on the Expert CEO blog about the future of Software as a Service in today’s economy. Although he discusses software in particular, I think his arguments apply to any company that needs to grow without using significant amount of capital.

Historically, SaaS companies needed a significant amount of funding to get to cash flow breakeven. This was because it takes time for the recurring revenues to build up enough to cover the fixed and semi-fixed costs of development, marketing and sales. For example, Ken points out that both salesforce.com and Netsuite took over $100M in venture capital before going public.

Today, however, those types of valuations and funding levels are not available, and companies need to find ways to grow their business without using up as much capital. Ken gives a few suggestions for accomplishing this goal, including building up services revenue and getting payments up front where possible.

Perhaps mostly important, Ken writes that capital-efficient growth can only come from streamlined customer acquisition processes that takes advantage of the latest internet-era tools, such as salesforce.com; WebEx, GoToMeeting, or ReadyTalk; and Marketo. Together, tools like these create an ecosystem for capital-efficient growth: CRM to manage accounts, contacts, and opportunities; online meetings to improve productivity and reduce travel cost; and lead management to create a steady stream of qualified sales leads and to help the sales team prioritize their time onto the best leads and opportunities. The result of this infrastructure is a streamlined revenue cycle that can drive 40% better sales effectiveness (or more), allowing each sales rep to carry higher quota and to drive more revenue at the same fixed cost.

Manage your complexity

At Marketo, we use these tools to drive our own high-volume revenue cycle, so I know it works.

However, one trap that companies run into is investing in marketing automation that is not as fast, nimble or flexible as tools like salesforce.com or WebEx. Even if delivered over the web, these older marketing automation tools are still from the old era of expensive and rigid enterprise software. As a result, they tend to force you to do things “The Hard Way”.

To truly accomplish streamlined customer acquisition, your marketing automation tool needs to let you work “The Easy Way”, e.g.:

• Up and running fast, without significant costs for integration to CRM
• Easy to learn and use without needing to hire specialists or to pay for training courses
• Flexibile to let you adapt marketing programs to changing market conditions

At Marketo, we’ve recently published The Big Easy Guidebook to Marketing Automation to help our prospects understand some of the differences between “The Hard Way” and “The Easy Way”. Enjoy!