Yola is known as a “Software-as-a-Service” business – which basically means that it’s software inside a web browser. This is a fast growing space and we’re constantly looking to innovate and pioneer an industry. We quietly released the first phase of a large part of our long term business model earlier this week, with the launch of our Premium Styles store. The really tricky part of building a SaaS business is that essentially what you’re offering is a software product that people can access from their web browser – no shipping or cd’s or installations. It’s available on demand. Combined with the traditional SaaS model, we also added another aspect to that – our product is largely free for the majority of our audience (also known as Freemium).
Virtual goods are essentially digital items – which I’m sure everyone is familiar with, like the “gifts” on Facebook or buying “weapons” on World of Warcraft. We’re extending this idea to the website building world – and now looking at styles as a virtual good that can be created and sold. The demand for people trying to create a website has risen massively in the past few year and it’s trend that is not slowing down.
For those who may not know, Yola.com is a free platform, focused on enabling SME’s to create their own websites and establish a presence for themselves on the Internet. Our goal is to become the largest destination for enabling small and medium enterprises worldwide to participate and transact on the web. In pursuit of this goal, we decided from the very beginning that we wanted to create a business where the basic services are all free (website hosting, free site building software, free bandwidth, and no advertisements) and we charge our customers for add-ons and other value added services (domain names, premium styles, subscription packages for extra features – coming next month).
The way we think about our business is that the basics of having a website is really commoditized these days (there are a million hosting companies out there, for example). What differentiates us from them? Well, for starters – hosting is absolutely free – why charge for something that doesn’t really cost us much – and I’m not going to delve into the virtues of the free model here, I’ll leave that to Chris Anderson, author of Free!
Where we feel that we can absolutely differentiate our services is by allowing users to customize their websites and instill a sense of individuality and uniqueness. The cost of creating great looking themes and styles for a website built on any CMS (Content Management System) platform often costs hundreds, if not thousands of dollars. Traditional companies that provide CMS, blogging or website building tools have a limited selection – for good reason, the costs are prohibitive – and therefore this is an area with a problem looking for a solution. One of the challenges faced is that there is a point of saturation – some companies with a million users only have 50 styles/themes for their users (20,000 users/style). Everyone’s website starts to look the same – and that’s a big problem. So, how do you then scale the business profitably when you have 10m or 20m users? You cannot possibly building all those styles for free and Yola now has nearly 2.5m users and we’re growing so quickly, that we simply cannot afford to keep creating free styles for our users.
Our virtual goods business model is to launch a premium styles store – filled with expensive designs – but instead of paying hundreds of dollars – users can spend as little as $29.95 (once off) to get access to a better looking style for their website. Right now we have about 18 premium styles and will be adding many, many more in the months to come.
We think that this is a very innovative way of creating a sustainable revenue model for a SaaS business. Jeremy Liew from Lightspeed Ventures wrote a good post for the Wall Street Journal on Virtual Goods recently, and Susan Wu from Charles River Ventures also contributed a good post in Techcrunch, calling Virtual Goods – “The next big business model“. We agree.
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Comments On This Post
September 8, 2009 at 6:07 am
Very useful info, Saas is looking like a highly profitable income source, I must research this more! and this is the second site I’ve been referred to Google trends – I best take a look.
September 8, 2009 at 6:16 am
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September 8, 2009 at 8:36 am
As a Yola user for almost a year now I would like to say that I have been very happy with the ease of use of the Yola site builder…I knew almost nothing about building a site or what the heck SEO was when I started out.I would like to add that as far as styles go Yola has made it very simple to have your own unique style.For those with some imagination that pretty much means what ever you can think of.
I have read a number of articles talking about the future of software applications all moving to a web based on demand format…As a small business owner (my site is my business)this does instill confidence knowing that Yola is already applying practical applications to what is considered a cutting edge concept.
On a somewhat personal note…Vinny, you and your staff have also made something unique in the way your customer service works….It isn’t the forum,it is your staff and the way they do not just answer tech issues.I have often referred to your customer service forum as Yola University and a community of friends.A great product with a personal touch….Well done Sir!
September 8, 2009 at 11:06 pm
Nice going Vin, glad to see the monetisation model kicking in and starting to snowball with new releases all the time!
September 9, 2009 at 5:03 am
I’ve been also using Yola, and I think it is a great opportunity to get more online participants. Thanks for the article!
September 9, 2009 at 8:29 am
The “fastest easiest way to build and manage a website” is a business-winning value prop Vinny. You may own this space today. At Zude, we cracked the code on drag and drop backgrounds for hosted sites. You may want to look into it. Most came from Google Images. Peace!
September 10, 2009 at 12:18 am
You have drawn a smart distinction between what is comoditised and your value added in this model. The hard part, of course, is to persuade people to behave rationally and to choose the premium product in some cases. I guess this will be as much about convenience and bundling as it will be about how good the site looks.
September 21, 2009 at 12:01 am
I’ve been also using Yola, and I think it is a great opportunity to get more online participants. Thanks for the article!
September 21, 2009 at 5:36 am
Great info. I seem to hear alot about Yola at the momment, and your post has pushed me to finally check it out
September 21, 2009 at 5:37 am
Sorry for double commenting. made an error at the website..stupid huge fingers
Great info. I seem to hear alot about Yola at the momment, and your post has pushed me to finally check it out
September 21, 2009 at 5:41 am
I seem to hear alot about Yola at the momment. Your article has pushed me to finally take a closer look
September 21, 2009 at 8:23 am
Thats right Steve
September 21, 2009 at 8:47 am
This all seems very attractive but I hate CMS systems- styles when you cannot edit the php or html code. Is there anyone that offers similar CMS with that feature? (like wordpress but not as a blog)
September 22, 2009 at 11:28 am
Indeed a great approach! Yola is definitely going to reach out to millions and millions of organizations willing to start up a website or modify. The interesting fact to notice is the fate of other hosting companies, as the hosting in Yola is free. Good work Vinny and I will be choosing Yola for sure for my next website
September 23, 2009 at 4:50 am
I´m still nor sure, if the business with virtual goods can really bring success. Too much depends from cultural differences.
September 24, 2009 at 9:16 am
I haven’t used Yola but I know of some similar platforms. I prefer Wordpress as an open source platform because I don’t have to pay for pricy hosting. I also have more control over CSS and SEO with this platform. Network Solutions has a platform called Image Cafe and it is similar. It was a total POS when it was released and from what I’ve seen, it hasn’t improved a whole lot…
September 24, 2009 at 10:19 pm
Hi Vinny,
wish you good luck with the YOLA-project. I checked some other phares with the google insights-tool and must say, that the chart look a bit different (i.e. go downwards) for keys such as “free website” or “website”. “Blog” or “free Blog” on the other hand are outperforming!
October 5, 2009 at 5:32 am
Wow this seems like a new revolution in internet. But you should have to work a bit different as there are many coming up with this idea. Although there aren’t big players in this game so I guess YOLA has chance to become that champion. I see a lot of potential in your project and I will surely check it out.
October 11, 2009 at 6:33 am
Thats right Steve
October 15, 2009 at 3:57 am
I bet this Freemium is keeping you real busy right now, sounds great though.
October 18, 2009 at 10:06 am
I personally like your post. It is very good to know that you don’t know. Fantastic post! Keep posting your good work.
October 20, 2009 at 12:59 am
As a Yola user for almost a year now I would like to say that I have been very happy with the ease of use of the Yola site builder…I knew almost nothing about building a site or what the heck SEO was when I started out.I would like to add that as far as styles go Yola has made it very simple to have your own unique style.For those with some imagination that pretty much means what ever you can think of.
I have read a number of articles talking about the future of software applications all moving to a web based on demand format…As a small business owner (my site is my business)this does instill confidence knowing that Yola is already applying practical applications to what is considered a cutting edge concept.
November 3, 2009 at 12:26 am
I have read a number of articles talking about the future of software applications all moving to a web based on demand format…As a small business owner (my site is my business)this does instill confidence knowing that Yola is already applying practical applications to what is considered a cutting edge concept.
On a somewhat personal note…Vinny, you and your staff have also made something unique in the way your customer service works….It isn’t the forum,it is your staff and the way they do not just answer tech issues.I have often referred to your customer service forum as Yola University and a community of friends.A great product with a personal touch….Well done Sir!
Nice Places to Visit and Computer Tutorials and Nice Places to Visit
November 3, 2009 at 2:03 am
Nice work Vinny, SaaS is starting to look very profitable.
November 5, 2009 at 11:39 am
All very interesting and definitely worthy of some time to look in to this free platform for websites. Maybe even tie it into my website!Interesting post – thanks!
November 8, 2009 at 7:54 pm
google trends and google insights are two google aps that a marketer cannot live without
Thanks Vinny for your great healp
November 11, 2009 at 2:27 am
Nice work,Thanks Vinny for your great healp
November 12, 2009 at 1:34 am
I haven’t used Yola but I know of some similar platforms. I prefer Wordpress as an open source platform because I don’t have to pay for pricy hosting. I also have more control over CSS and SEO with this platform. Network Solutions has a platform called Image Cafe and it is similar. It was a total POS when it was released and from what I’ve seen
November 13, 2009 at 6:26 am
Keep it up Vinny!
November 16, 2009 at 12:18 am
Thats right Steve
November 17, 2009 at 10:57 am
Hi Vinny – How are Yola sites performing on the search engines; any Number 1 pages or positions? Are the Yola meta tag and input tools sufficient to gain top Google positions with select key words? Thanks. Yola looks promising.
November 20, 2009 at 11:28 am
Yola is new for me.But i guess its well enough to ponder upon.
November 22, 2009 at 6:40 pm
As to the question of Yola and SEO….I have many keyword phrases on Google/Yahoo and Bing first pages…..Your SEO will be as good as YOU are but Yola does provide the tools you need for greatness.
November 24, 2009 at 7:35 pm
I completely agree especially in situations with higher seo competition.
November 24, 2009 at 7:36 pm
Nice trendgraph, it’s actually getting hot in the end!
November 28, 2009 at 12:29 am
I have been using Yola for about 6 months and I am very impressed. It is good to see the addition of premium themes.
December 5, 2009 at 10:50 am
Hi Vinny, SaaS is looking more and more like an exceptionally lucrative investment, good job.
December 5, 2009 at 3:51 pm
I agree with what most people are saying. Having the tools to create a site, and having them be very simple for the people using it is a great idea. Quite a few people (myself) are not good at building sites and so on, but want an online presence, so, this is where a site like yours would come in handy.
It would put me online at no time, expanding whatever it is that I am doing.
Great job. I appreciate this kind of service being offered to the masses
December 10, 2009 at 8:34 pm
Platforms like Yola and Whypark are very very useful. It’s great to be able to design and build your own site and host it for free, even better if they allow you to add your own monetization tools.
December 12, 2009 at 2:11 pm
I have been using Yola for about 6 months and I am very impressed. It is good to see the addition of premium themes.
December 14, 2009 at 12:12 pm
Wow, im gonna use Yola for my website for sure
December 16, 2009 at 7:33 am
Seems more and more people are interested in creating a website now. Good for me I guess
seo your blog
December 18, 2009 at 2:59 pm
This is great! I’ve always been the Joomla type, but I’ll check it out for sure!
January 5, 2010 at 6:34 am
in my opinion, software is always a service.
January 6, 2010 at 1:55 pm
or maybe we should try something new.
January 8, 2010 at 6:19 am
looking forward to more great news from you.
January 8, 2010 at 3:55 pm
Seems more and more people are interested in creating a website now. Good for me I guess
January 15, 2010 at 8:57 am
This is a great idea to host sites for free without ads and popups. I just recently lost my geocities/yahoo site. This sounds like a great alternative.
January 16, 2010 at 4:30 pm
I’m going to go sign up for a Yola account now. I could use a new web host.
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