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If your company is built around a software product, you need to find a way to monetize it. Monetizing your software means finding a way to generate revenue from it which sounds much more straightforward than it actually is.

Most entrepreneurs and product managers struggle to find exactly the right way to monetize their software product. Even if the product is amazing, a poor monetization strategy can render it practically useless for the sustenance of your business.

So what do companies get wrong about software monetization? And what steps can you take to avoid these pitfalls?

Related: How to Determine How Much to Charge for Your Software

Monetization comes in many forms. You could monetize your software by charging a flat rate for access or by charging a subscription fee to use it on a monthly basis. You could subsidize the business by featuring advertising in your software. You could offer the software for free but charge for extras, like upgrades or premium features. You could even offer the product for free but harvest data from your users and sell that data to other buyers.

One of the biggest mistakes entrepreneurs make is limiting themselves to only one form of monetization. They see this as a binary and permanent choice and that the choice they make is going to establish the destiny of the product.

But this isn't necessarily the case. In fact, some of the most successful software products on the market rose to where they are because they were willing to monetize their product in multiple ways.

Obviously, you'll need to consider what your target user can tolerate and what they're willing to pay, so you're not going to get away with strictly charging more. Still, you also shouldn't limit yourself to only one potential income stream.

Related: Why a SaaS Business Model Could be Your Ticket to Massive Success

Even in today's world of data availability (and, some might say, data oversaturation), some business owners choose to make decisions based on their gut feelings rather than the available information. They assume they know what their users prefer rather than conducting experiments to prove what they prefer.

For example, you may have the mentality that because you and most of the people you know hate advertisements, advertising would be an unacceptable method of monetization. But how do you know for sure unless you're conducting a real experiment with real users? Do your market research, hold focus groups and conduct surveys to get better answers.

You don't have to make monetization decisions entirely on your own. In fact, it's often better if you make these decisions with the help of outside experts, who can offer you different datasets and new perspectives.

For example, if you hire the right software development company, they may have suggestions for how to monetize this product. After all, they've probably built products like this in the past. You may also choose to hire a marketing firm or a sales consultant to help you determine effective pricing and messaging related to your monetization strategy.

Related: How to Develop Software That Sells Itself

Monetization strategies are sometimes rendered less effective because the solution itself is overengineered. There's nothing wrong with wanting to offer your customers more features and higher quality services, but if you spend too much time and money on products or features that your customers don't actively use, your profitability equation is going to suffer. Effective monetization isn't just about generating more money total It's about generating more money relative to your ongoing costs.

Many software companies, especially in the earliest stages of development, see effective monetization and growth as adversarial or incompatible concepts. In the extreme form, some software companies forgo monetization altogether in the early stages, focusing entirely on building a more robust user base. Only once their desired growth has been achieved do they introduce monetization strategies.

This isn't necessarily a bad approach and could work for many different types of businesses. But it's important that you don't see growth and monetization as adversarial. In fact, most businesses benefit from pursuing better monetization and ongoing growth simultaneously.

Related: The Reason Software Companies Are Better Companies

Acquiring a new customer costs far more money than keeping an existing customer. Whatever monetization strategies you have in place, you're going to be much better off focusing on retention as your top priority.

Software monetization is a complex concept and not a challenge that can be overcome simply by reading one article at the right time. But hopefully, the descriptions of common mistakes listed in this article can help you see your software monetization from a new perspective. Remain open-minded and flexible as you explore various monetization options, and don't be afraid to take risks.

Originally posted here:
6 Mistakes Most Companies Make When Monetizing Their Software - Entrepreneur

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on a lighter note, a good company can see its share price rise well over 100%. For example, the Coupa Software Incorporated (NASDAQ:COUP) share price has soared 124% in the last half decade. Most would be very happy with that. It's also good to see the share price up 28% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Though if you're not interested in researching what drove COUP's performance, we have a free list of interesting investing ideas to potentially inspire your next investment!

Coupa Software isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

For the last half decade, Coupa Software can boast revenue growth at a rate of 31% per year. That's well above most pre-profit companies. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 17% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. Coupa Software seems like a high growth stock - so growth investors might want to add it to their watchlist.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Coupa Software is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

We regret to report that Coupa Software shareholders are down 71% for the year. Unfortunately, that's worse than the broader market decline of 16%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 17%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Coupa Software better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Coupa Software (of which 1 is significant!) you should know about.

Of course Coupa Software may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Find out whether Coupa Software is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

Read this article:
Investors bid Coupa Software (NASDAQ:COUP) up US$1.1b despite increasing losses YoY, taking five-year CAGR to 17% - Simply Wall St

The program adjusts to your child's learning level. A laptop, internet access, and tutor are also provided for free.

MEMPHIS, Tenn. A free hands-on literacy program is helping kids who will start kindergarten next year by providing free learning services to those who sign up in selected areas in Tennessee.

The program provides kids with the basics of literacy.

I wanted the best for myself, so of course, Im going to want 20 times more than my son. Im going to make all types of sacrifices that I can make to make sure he receives just as best of one the education that my parents provided for me and Ill pass it along to him, Kimberly Haynes said.

She explained that she cannot afford to not be involved in her 4-year-old sons Jamison Millers learning, especially since he will be starting kindergarten next school year.

We have this software to where he can be able to utilize to where it can engage him and keep him focused and interacting and also learning as well, Haynes explained.

The Waterford Upstart literacy program is hands-on, and it is designed to prep kids with the basics like reading, using letter sounds to write their names, and more, all before they start kindergarten.

Haynes said she first learned about this interactive program from Jamisons daycare, which recommended that she sign him up.

It only requires 15 minutes of you and your childs time, five days a week. Haynes said it is helped her son get ahead of his age range.

My son is a visual learner, so by them using cartoonish fishers grasps the attention of my son. It helps him identify sight words that he already previously have learned, Haynes stated. So to add on to what hes already learning with the software that they utilize.

The Waterford software will actually meet your child right where he or she is in their academic journey by adjusting to their learning level. A laptop, internet access, and a tutor are also provided at no cost.

Haynes said this has helped her as a parent know what areas to focus on with her son beyond the program.

Its very inspirational for me and him because hes actually sitting there, going through the mode with the activities and actually learning, Haynes said.

And to take it a step further, there is also an option to get help with math and science. Spokesperson John McCann said this program gives kids a boost in their journey.

By the time they enter kindergarten by 2023, on average, Waterford Upstart will enter kindergarten reading at nearly a first-grade level, so you think about that third-grade reading being that benchmark and they want kids to be on grade level by third grade, McCann said. Well our program positions kids to be able to reach that.

The organization that created the literacy program is called Waterford.org, which is a national non-profit that is dedicated to providing high-quality educational resources for children and their families. To sign up and find out if you live in a county that qualifies, click here.

Link:
Literacy program teaches kids how to read and write for free - WATN - Local 24

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Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Enea AB (publ) (STO:ENEA) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 63%. We note that it has not been easy for shareholders over three years, either; the share price is down 41% in that time. The falls have accelerated recently, with the share price down 28% in the last three months.

With the stock having lost 13% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Though if you're not interested in researching what drove ENEA's performance, we have a free list of interesting investing ideas to potentially inspire your next investment!

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unhappily, Enea had to report a 12% decline in EPS over the last year. This reduction in EPS is not as bad as the 63% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock. The P/E ratio of 11.96 also points to the negative market sentiment.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Enea's key metrics by checking this interactive graph of Enea's earnings, revenue and cash flow.

While the broader market lost about 25% in the twelve months, Enea shareholders did even worse, losing 63%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 1.3%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Find out whether Enea is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

Read the original post:
The one-year shareholder returns and company earnings persist lower as Enea (STO:ENEA) stock falls a further 13% in past week - Simply Wall St