Why as a manufacturing company (like many a SaaS company) you should spend more than 50% of your budget on marketing and sales

4 min read
Apr 29, 2024 1:53:23 PM
In collaboration with MT/Sprout - The SaaS market is growing fast and hard, actually similar to the manufacturing industry at the beginning of the industrial revolution. Here's what the manufacturing industry can learn from this, says Emiel Kanters of Webs.


Whereas software was traditionally purchased as a product, today it is increasingly done through a subscription model. The software is delivered via the cloud as a service - or Software as a Service (SaaS). The number of acquisitions of IT companies with a SaaS business model is increasing rapidly. Vendors and investors are jumping on the trend, throwing additional oil on the fire, which is also causing valuations to rise rapidly. The SaaS market is therefore very similar to that of the manufacturing industry at the beginning of the industrial revolution when a host of new technologies appeared.


When Daimler developed the internal combustion engine in 1885, a foundation was laid for the success we still know today as one of the strongest brands; Mercedes. Austrian Emil Jellinek was a key driver in this. He had an eye for the market and commissioned Daimler to build 36 cars after winning a prestigious race in Nice with a Daimler. He ran that race under the team name Mercedes (after his daughter) and so Mercedes gained name and more importantly, fame.

These 36 cars he managed to sell through good marketing (the fame) and sales (the name) even before they were produced. After that, things moved quickly and the foundation was laid for the Mercedes as we know it today. At its core, it has been a mix of technology (the car), capital, marketing and sales. And we still see this mix in SaaS companies today. And in contrast to the capital-intensive manufacturing industry, a lot of capital in the software industry actually goes to marketing and sales. This is where the manufacturing industry lags heavily behind. While the opportunities in the market are actually no different.


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