Julian101.comThoughts, Lessons, Business Tips from ProWorkflow.com’s Serial Entrepreneur - Project Management Software

I came across this website today www.735pm.com through Diversity.net.nz today and couldn’t believe what I was seeing - I thought that as an industry, these types of abysmal web business attempts were a thing of the past. Not just the bad design, but the fundamental concept as a whole and the dollars behind it all. If you think I’m just being negative, then read the comments on Ben’s post and you’ll see this is a general consensus.

Here’s the article on the New Zealand Herald if you want to read the PR guff… There are plenty of hard working genuine businesses out there needing a push - shame on NZ Herald for printing this…

“Nelson businessman Alan Trent says he is committing more than $1 million to the development and launch of a shopping website, 735pm.com, aimed at New Zealand retailers and consumers.

One of the site’s features is it gets redesigned every day at 7.35pm. While retailing websites including Telecom’s Ferrit have struggled to win significant numbers of customers, Trent said 735pm.com would provide a unique shopping experience and offer significant opportunities for companies to market nationwide.”

I’m fairly black and white with my opinions, but I also like to explain. I’m going to point out some areas that need consideration or work. Also just some random thoughts. The main issues I have with the concept are these:

Be Careful What You Say!

Be sure that if you make claims through PR that you can back them up. Bloggers are sitting there ready to pounce on every opportunity to prove people wrong (if they are)

1 Million Dollars! - Holy crap! Development is Cheap These days!

“Alan Trent says he is committing more than $1 million to the development and launch of a shopping website,”
You have to be kidding me! EVERYTHING on the website/sites shown could be developed by a single basic developer for 5-15k max. Any web person reading this will agree. Unless we’re missing something here, basic configurable shopping cart software to build a website like this can be purchased for next to nothing offline.

Just look at these Google Searches:
http://www.google.com/search?q=free+shopping+cart+software
http://www.google.com/search?hl=en&q=cheap+shopping+cart+software

And even most hosting providers throw in e-commerce and shopping cart software as standard these days. It’s so cheap they can hardly give it away!
http://www.google.com/search?hl=en&q=cheap+web+hosting+with+shopping+cart
http://www.google.com/search?hl=en&q=free+web+hosting+with+shopping+cart

And as for CMS (Content Management Software) to actually build the structure of the website - that’s dirt cheap these days as well…
http://www.google.com/search?hl=en&q=free+cms
Note: There are some great, more powerful tools in this space that cost a bit more, but for this website, it could have been done easily on the cheap in a few weeks.

Development Note:
This is a business model that ABSOLUTELY should be market tested before throwing ANY money at it. The reality is that the entire concept could have been tested using a custom Wordpress blog for the website, and link daily blog posts of products to a simple PayPal account. It would have taken 1x day to setup, and I actually think would have been more successful, not to mention actually able to be found in Google, unlike many of the pages on the current site (Don’t use flash - Google hates it).

“Unique shopping experience” - The Concept isn’t Unique!

I’ve seen it done heaps before. Here’s just a few:
- http://firstin.co.nz/splash/index.php
- http://1-day.co.nz/

Think About Conversion!

Ok, here’s the crux of e-commerce - it’s all about conversion rate and conversion cost. Let’s say you had 1000 people visit the website. How many people are interested in purchasing a $399 jacket right now? (note: coming into spring). 1% maybe? so you have 10 people wanting to buy a jacket. Great! oops! We only have one style? Ok, so how many of the 10 people (out of 1000)wanting to buy a $399 jacket want that exact style - perhaps 5%? 

So we’re getting somewhere now - we know that 5% of 1% of 1000 visitors want to buys this exact jacket (coming out of winter). So the conversion rate is 0.05% of site traffic.

But! Wait! How many of them, actually not only want the winter jacket coming into spring, and that exact style, want to purchase now, but ALSO have a credit card (most kids have eftpos - buy in malls), and how many want to buy sight unseen without trying it on for size/feel???

Can you feel the conversion rate dropping here? I would guess it could be down to 0.01% by now! And that’s no problem as it’s a numbers game, so all you do is lift the website traffic. So with a 0.01% conversion rate, how much traffic do you need to sell a jacket?  Answer: 10,000 genuine visitors (if you’re lucky)

So to sell two jackets? Another 10,000 visitors? These numbers are very difficult to achieve and sustain naturally as to drive a free ’social’ marketing campaign, as anybody in the know will tell you, it takes a HUGE about of work. The work would cost more in time and effort than you’d ever make in profit from the margin on a cheap traffic. I mean would you stay up day and night for months building social traffic just for a few dollars?

So that won’t work. It’s a one sided affair for the business, but it’s not the sort of model that’ll virally spread - it’ll take effort.

So that leave paid marketing. And simply put, the ongoing cost in banner ads, CPC’s, Adwords etc to drive 10,000 unique’s a day to the website will be WAY higher than the profit from the margins on the products shown after expenses and wages come out.

This is why people build stores with VARIETY: http://dse.co.nz, http://www.blizzard.com/store/, http://ascent.co.nz, http://www.gpstore.co.nz, http://www.amazon.com, http://www.trademe.co.nz etc…

In this day and age of people and businesses competing for eyeballs, you HAVE TO convert AS MANY of your traffic leads as possible, so any model that limits product selection is doomed to failure in the long term. Simply put, the maths won’t work.

Some Other Observations

 
On this page, there’s no way to get back to the homepage. Stick a link on the logo or at least a text link.

 
“Please Wait…” - aaaahhh, nup - Off to TradeMe. There is no excuse for a black loading page like this.

Here I can sign up to be notified 4 days before the Official Launch Date set for 24th of August, 2008.
They should sell an ebook on how they invented time travel as it’s the 28th today. Come on guys! Remove old links like this! You say you’re in ‘Daily Update’ mode. The least you can do is update your own blog’s main post!

I got to this page, which said “We will have products…” (haven’t you launched?) and it also had a typo “Click a catagories…”   sheesh!
So I clicked the categories and nothing was in there? No prob, I’ll click the 735pm logo to go back to the 735pm website. Nup! Took me to the blog! Aaargh!

 
Saw this ad on their blog! (Note: Image was scaled and this made the ad text rough) Can you believe it? They are wanting to tell people this is the ‘Ultimate Website’. Maybe tell ya nana, but hold off on the intelligent web community for now mate.

 
I had a hunch… Checked the bad ad image and found it is code scaled from an un-optimised 800px wide JPG.

I think this is the current website. nice lady. Not sure who she is or why she’s there… Maybe they just like her? It’s a huge image though, 600×1200px so they should keep in mind download time… Heaps of people will want to download her - she’s Russian (russianchick.jpg) ;-)

 
Also, can’t click products to purchase off the homepage.

Anyway, back to the main launch website…

 
Personally, this brings back memories from 1995 (December). It’s all Flash, and badly designed. I thought that they’d have at least put some good SEO bits in the source code…

I like the Meta bits…

<meta http-equiv=”content-type” content=”text/html; charset=iso-8859-1″ />
<meta http-equiv=”content-type” content=”no-cache” />
<meta http-equiv=”expires” content=”-1″ />
<meta http-equiv=”pragma” content=”no-cache” />
<meta id=”metadescription” name=”description” content=”735pm” />
(What, no description to give to your friend Google?)
<meta id=”metakeywords” name=”keywords” content=”b & b, boats, cheap, coffee, concrete, cool products, deals, food, furniture, garden, gifts, holiday, houses, landscaping, luxury, quality, restaurant, shopping, specials, stocks, sweet as, travel, wine” />
(Seriously, who searches for the keyword: “Sweet As”, and are you planning to sell “Boats” and “Concrete” on one day sales via the web? If so, will you still honour the $7 shipping fee?
<meta id=”metacopyright” name=”copyright” content=”copyright © 735pm” />
<meta id=”metaauthor” name=”author” content=”735pm” />
<meta name=”resource-type” content=”document” />
<meta name=”distrbution” content=”global” />
<meta name=”robots” content=”index, follow” />
<meta name=”revisit-after” content=”1 days” />
<meta name=”rating” content=”general” />

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Ok, so I want to buy a snowboard bag…

 
Wow! That is a punchy layout! I’ll check the terms and conditions. I’m sure they’ll be thorough as I’m trusting this business with my credit card…

 
Excellent, I like doing business with simple terms and conditions… Where’s the privacy info though? This is credit card stuff we’re talking about? Maybe in the spirit of all things Web2.0, they decided it was just ‘to cluttered’. So anyway, I signed up and activated my account… Then go linked to my friend again…

 
But I like the last line underneath the lady (A mouthful):
“Your account has been activated, click the link below to be transferred to 735pm.com. 735pm.com Welcome to 735pm.com!

So let’s buy it…

 
“More Shipping Options Coming Soon” - eh? What’s the current shipping option? I have no idea if it’s even going to arrive on a Camel?

Country? You mean they’ll ship to my PO Box in Russia for only $10 (by Camel?)
Wait! What’s this ad in the corner….

 
Ahhh!!!! I get it now! It took me a little time, and I’m a bit slow. It’s a short term venture. According to this website, the business must be planning to go under on the 10th September 2008.

Let this be a warning to all. If you plan to launch a new web business, make sure you’ve run it by some people in the tech industry first. Otherwise you could launch into a storm. Sack the developer of this project now - today.

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About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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I found an old email the other day with some thoughts on bootstrapping our project management software company that I’d written to a mate. I thought it was interesting reading over what I’d written, so decided to repost the thoughts here… Here goes!

Regarding bootstrapping, It’s a hard balance. We put lots of time into systems and development, but sales suffer… or we focus on sales and then development suffers… Bootstrapping is fun to a point, then if the intention is to bootstrap through to profitability, the issue is 100% correct allocation of resources between development, sales, systems and marketing.

We don’t have a lot of wasted resource, only a tight team, no flash offices and a few contractors but we do A LOT with what we have. We have a good number of dedicated servers in California and one in NZ, are in profit and have no debt. So the years of hard work are paying off. Not an industry legend yet, but we’ll get there.

LOW INERTIA
The biggest problem I see in our local market is the high number of software/SaaS co’s trying to scale, but using (old school) high inertia sales and marketing.
Ie: people having to sell, or visit companies to sell. Or going to trade shows and exhibitions, travelling etc…

All this is fine, but the underlying business model HAS to be low inertia, otherwise, it’ll scale, but so will the costs and expense… and profit will never come. This is just good sense!

MARGINS
To be in NZ and compete in SaaS globally, there needs to be minimum expense per sale, and as the revenue grows, the margins need to expand as well. If your business’s margins shrink with scale, you’ll hit a lid and have no profitability long term… Expanding margins mean you can scale faster as you grow.

SUSTAINABILITY
Some companies I know of think that ‘Speed to market’ is the key. You must grow fast! – Not necessarily true… Long term sustainability is the key. We’d rather be smaller and healthy rather than rush things with the wrong model only to find out that we’ve scaled up too fast on a bad model and the only path to profitability is to take round two funding (and lose more control).

COMPETITORS
We track our competitors (as it’s a competitive market) and probably 20-30% of the ones I track have disappeared in the past 12 months. Gone! We don’t want that to happen to us…

INVESTMENT
In my personal opinion, Founders should also take a company to profit BEFORE taking investment to scale – otherwise you simply give away too much of the company and the investment goes into R&D (Investment should go to Sales/marketing). Not only that, but it’s those bootstrap years that help you truly discover the ‘profit recipe’ of your business. You can’t spend needlessly – every dollar out must return. This thinking can be lost or clouded if too much investment comes in too early.

THE SUCCESS FORMULA
Ultimately there is one formula we ALL must adhere to to succeed long term.

Cost to Aquire Sale < Must be Less than Average Revenue from Sale

Where most companies get it wrong is on the ‘Cost to Aquire a Sale’ part. They make plenty of sales, but when you look at their model and costs, with trade shows, print ads, high sales costs etc they can blow 30x or more the monthly revenue they’ll gain.

Ie: A software company may spend (if analysed) $2000-4000 in time and company resource to land an average $100 per month sale. This means they’re not in profit until that customer has been with them 30 months. On this note, every company has a different ‘Average Customer Retention’ time. This may be 3 months or 2 years, but simple maths will tell you that if it takes 30 months to get to profit and the ‘Average Customer Retention’ time is 12 months… Guess what… you have a problem… and you’ll be chasing 2nd round funding sooner or later to stay afloat.

Understanding the key metrics around ‘Cost to Aquire a Sale & Average Revenue from a Sale’ is a key issue we all need to focus on – every day…

That’s my 2 cents for the morning… Time for a coffee!

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About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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Our development team have been working on an integration module between our ProWorkflow application  (www.proworkflow.com) and XERO (www.xero.com). ProWorkflow is web based project management software and XERO is web based accounting software. Both operate under a SaaS (Software As A Service) model. The aim is to transfer invoices from ProWorkflow to XERO and update the invoice status from XERO back into ProWorkflow.

We’ve recently been working on a QuickBooks (http://quickbooks.intuit.com) integration to do virtually the same function. Whilst QuickBooks is a great application and has high adoption, I have to be honest and say the integration wasn’t that easy. It’s taken about 2 months and we’re nearly there but keep encountering small, odd complexities. It should be ready very soon though.

Going back to XERO though, this is a whole different game. I personally signed up and have been going thorough the solution. It’s looking very promising and QuickBooks should be watching their backs - XERO are doing a nice job of reinventing accounting. There are pro’s and cons to a web based approach, just like there are to a client side app, but personally I prefer web based and portable.

On the API front though, it took weeks to suss out QuickBooks, but our developer had integration with XERO sorted within a few hours with data moving back and forth. He told us it was a piece of cake. So I wanted to say a big thumbs up to the dev team at XERO for the really easy API - It’s much appreciated!  Here’s a comment from our developer:

“Working with the XERO Network API was a great experience because of its simplicity in the integration compared to some other Accounting packages around.

I am very impressed with the guys at XERO on how they have created their Network API that allows partners to integrate smoothly without any problems. It basically requires a simple line of code to transfer to and from XERO. Out of all my experience in integration with outside applications, XERO is one of my favourites!

Great Stuff!!” - Vishal (Senior Developer)

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About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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I found this over on the website www.startup.co.nz. It was very inspirational! The HP garage has long been recognised as the birthplace of Silicon Valley. The guys at Bleeding Edge TV were lucky enough to get a guided tour of the garage recently along with the “Shed” the Hewlett used to live in.  For all you Start-UP entrepreneurs currently working out of your spare bedroom or garage this video should provide you with all the encouragement you need.

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Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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We’ve been curious to try some print advertising for www.proworkflow.com - our web based project management software, just to see the effect from a marketing perspective. We recently purchased a full page ad in July 2008’s Startup Mag - A spin off from the guys at www.start-up.co.nz/. Make sure you check out their website - they’re doing a great job promoting local businesses.

I’ve copied the full-page graphic of the ad and placed it below, I’ve also noted the increase in account stats from the time we got the data for the magazine ad to now. It’s kind of an odd thing to put ever changing stats in a print ad - but we thought it was an interesting piece of content to ad to lend further product credibility.

Managed Through ProWorkflow

Note: Current numbers as at 23rd July 2008

Interesting to see the gain? It’s great validation for the team that people are definitely using the ProWorkflow tool for their project management. Oh well! Back to work, just thought this worth sharing…

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About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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There’s so much talk about recessions, downturns etc that I thought we should all just take a step back, chill, read below and have a laugh. Also, it’s a great way to understand the worlds economic models. This came across my desk today, and it’s pretty much spot on! Economic models using cows! We need one of these to describe different startup business models - maybe I’ll do that…

SOCIALISM
You have 2 cows
You give one to your neighbour.

COMMUNISM
You have 2 cows.
The State takes both and gives you some milk.

FASCISM
You have 2 cows.
The State takes both and sells you some milk.

NAZISM
You have 2 cows.
The State takes both and shoots you.

BUREAUCRATISM
You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the
milk away…

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons.

AN AMERICAN CORPORATION
You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyse why the cow has dropped dead.

ENRON VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a  debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more.
You sell one cow to buy a new president of the United States, leaving you with nine cows.
No balance sheet provided with the release.
The public then buys your bull.

A FRENCH CORPORATION
You have two cows.
You go on strike, organise a riot, and block the roads, because you want three cows.

A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
You then create a clever cow cartoon image called ‘Cowkimon’ and market it worldwide.

A GERMAN CORPORATION
You have two cows.
You re-engineer them so they live for 100 years, eat once a month, and
milk themselves.

AN ITALIAN CORPORATION
You have two cows, but you don’t know where they are.
You decide to have lunch.

A RUSSIAN CORPORATION
You have two cows.
You count them and learn you have five cows.
You count them again and learn you have 42 cows.
You count them again and learn you have 2 cows.
You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION
You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.

AN INDIAN CORPORATION
You have two cows.
You worship them.

A BRITISH CORPORATION
You have two cows.
Both are mad.

AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb the **** out of you and invade your country.
You still have no cows, but at least now you are part of a Democracy….

AN AUSTRALIAN CORPORATION
You have two cows.
The one on the left looks very attractive.

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Republishing Note:
Anyone is welcome to republish this article as free online content, provided that the paragraph below is included in the full form as shown.
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About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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I noticed yesterday that Rod Drury - CEO of http://www.XERO.com has decided to quit blogging. Here’s a link to the post: http://www.drury.net.nz/2008/07/15/don/

Personally I think it’s a shame for any entrepreneur or tech savvy blogger to stop as we can all learn so much from each other. The more we blog, the more we learn. The more we learn, the more we grow. The  more we grow, the greater our footprint on the global stage.

I wish him all the best and know that he’ll still be hard at work, but as a software CEO myself, I can also appreciate that there is little time in the day to blog, tweet, msn, txt or chat online - there’s simply too much to do. So good on Rod for his decision.

I also saw in the comments that people were wanting to know of any other New Zealand technology or entrepreneur blogs. There are heaps, but here’s a list to get people started. (Send me any others and I’ll keep expanding the list)

NZ Blogs I Read & Recommend!

Julian101 - CEO, ProWorkflow - Entrepreneur tips, business advice from a CEO and web2.0 tech talk
Diversity - Business, Stategy, Web2.0, collaboration and more
Aardvark - Daily technology commentary and rants
ReadWriteWeb - General tech news
Make it Happen - Tim Norton, PlanHQ - Building a sustainable business and living the dream

Other Good New Zealand Tech Blogs!

GeekZone Blogs - http://www.geekzone.co.nz/blogindex.asp
Brendan Jarvis
Stuart Maxwell
Simon Young
Michael Koziarski
Miramar Mike
Bgeek
Devour
Bluespark
Rowan Simpson

I’ll keep adding blogs as I have time or as they are sent to me…

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Republishing Note:
Anyone is welcome to republish this article as free online content, provided that the paragraph below is included in the full form as shown.
————-
About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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Recently we had a company voice their objections to the pricing structure of ProWorkflow. Although we have many companies quite happy with the pricing, occasionally someone objects. It’s not the objection to price that is the issue here. It was more that customers often have a lack of education about the basis for the pricing - they simply think it’s a number, and don’t understand the justification.

I’ve asked permission from this company to republish the email conversation as it sheds some light on talking to ‘price driven’ customers. Here’s the email… (Read from Top down)

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CUSTOMER: Hi ProWorkflow team!

Just checking to see how much a 2 user license would cost running ProWorkflow on my own server.
Thank you.

- CUSTOMER

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Hi CUSTOMER,

Thanks for the enquiry…

We have a standard price of $20 per staff login per month, with code customers we change it so instead of paying per month, you can pay 3 monthly, 6 monthly or yearly. You can always get in touch with us to increase/decrease this number.

So it would be $40 per month x the recurring period you would like, so if you want to pay 6 monthly then it is $240 per 6 months.

- PROWORKFLOW

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CUSTOMER: Hi ProWorkflow team!

I am afraid that I will not be able to justify $480 per year recurring. You have written a fine piece of software but there are other much less expensive options, one being ??????? which is free for up to 10 users (they also offer a QB link for extra $). Others would include ???????, ????????? and ????????  (PWF Note: Whatever you do, someone always does it cheaper!)

I know that you used to have a perpetual licensing model. I could justify the $480 as a one-time purchase and would be happy to pay for upgrades periodically. (PWF Note: Maybe, but on that model R&D is unsustainable)

I don’t expect you to change your pricing for me  just wanted to provide some feedback.

Thanks much.

- CUSTOMER

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CUSTOMER: Hi ProWorkflow team!

Thanks for the feedback… Just some background though so you see where were coming from.

We have been developing the ProWorkflow solution for a long time. We listen to our customers and it has become clear over time that different customers have quite different needs. Our customers differ significantly in how they manage their projects, staff and processes. There Is no standardized way to manage projects and staff, each business tends to evolve a process that works for them using a mix of different systems and tools. Our aim is to continually develop a flexible solution that meets most needs, but the fine balance between ease of use (usability) and having every feature is ever present. So is the trade off between cost, features and service.

Different customers also look for differing levels of product support. Some are happy with a ‘next working day’ response, others want it now. Some want a one off fee, others want recurring - these differences are largely driven by the variation in the different business models used by our customers.
So the service and features required differ from customer to customer, and often what a customer needs today changes tomorrow.

A ’single solution’ simply did not deliver what our customers are asking for. So we have moved to introduce Standard, Professional and Advanced product offerings that bundle features and services to better match customer needs as they have been expressed to us.

Customers can choose whichever option suits them best, switching as their needs change.  So they can use the $30 Advanced version, then switch down to the $10 Standard version for a few months. This flexibility is the reason behind the 3x packages.

Regarding recurring VS perpetual licensing though…

Customers have asked for more  features, service and support.
- This costs ProActive, not only up front in infrastructure, but also ongoing per account. Ie: A perpetual license is fine, but if you ever need support, it needs to be in place, as does the R&D team so that there are upgrades being developed to offer. This all has a cost ongoing to ProActive that scales, regardless of whether a customer has perpetual licensing. So the one time fee doesn’t work as a sustainable model.

Product delivers value ongoing.
ProWorkflow delivers ROI not just once, but ongoing, for many years. Our licensing reflects this.

Underlying quality, reliable technology has increased in cost
All our technology partners have increased in cost. A free model would not allow us to recoup this.

I really cant speak for the other companies, only ours, but I can tell you that we’ve done a great deal of research into the cost of R&D, infrastructure  and support resource as well as the ROI the solution delivers. Were happy with our pricing now as we can build a sustainable company. Many of these other cos are eating into VC funds to win customers, or using free accounts as a marketing tool, hoping to get new customers to Spread the word. That’s not sustainable long term so we avoid that.

I hope that’s shed some light on our scenario  ;-)

Kind regards,
- PROWORKFLOW

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CUSTOMER: Hi ProWorkflow team!

Thanks for such a detailed response. I totally understand where you are coming from. It is logical. (PWF Note: Awesome! They understand!)

My complements again on a great product. I have evaluated something like 35 alternatives. (PWF Note: This is normal - the amount of solutions people try prior to PWF) Not-withstanding your comments I think you have hit the nail on the head. It amazes me that some folks can spend so much time and energy and still get it wrong. (PWF Note: Agreed!)

Best wishes for continued success.

- CUSTOMER

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SO that is the conversation! Always remember that when talking to price sensitive customers, the issue is seldom about price, rather they often just think it’s a random figure, not based on anything and easy to change. Also focus on explaining the reasons behind the pricing.

A SaaS customer is a relationship. So keeping honest and open and educating the customer is the best way to get them on board.

About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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Republishing Note:
Anyone is welcome to republish this article as free online content, provided that the paragraph below is included in the full form as shown.
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Every software or SaaS company has a certain level of customer churn. This can be for many reasons, ie: cost, features, service. Normally it’s simply because the solution isn’t a good ‘fit’ for the customer needs. This is normal and not a negative. It’s better to have fewer, loyal, long term customers than large numbers of ‘high churn’ customers if you want to build a sustainable business. 

Here at ProWorkflow, our churn is fairly low, and many remain as long term customers. I’ve seen quite a few companies move between businesses and employment and recommend ProWorkflow as they go. I can think of many instances where customers have used ProWorkflow at 3 or more businesses or places of employment.

But keeping on the topic of churn, there is one common similarity between those few customers who cancel that has me intrigued. Nearly all of them leave ProWorkflow in a really positive manor and rave about us and the product as they ‘leave the building’. It’s perhaps not the right ‘fit’ for them now, but they love us, love the product and tell us to keep up the good work!

We always take the comments onboard and continually seek to improve the solution. Here’s an example of a really polite, encouraging cancellation (Thanks Zak!):

Hi Julian,

ProWorkflow was fantastic!. It is well laid out, has all the features needed and is easy to use. I really enjoyed using it. I have trialled more than 12 other online project management Web2.0 apps in the past couple of years, but yours was definitely the best.

My challenge was to encourage our clients to use it, but that provided difficult. Most of our clients, senior professionals, are GenX’rs who still struggle with Web2.0 apps and online portals. So we decided to cancel the service rather than keep paying the fee monthly as it sat idle.

However, in saying that, the next opportunity I have to sign up with you guys in the future, I will. But for now we have to cancel. Again, thanks for the great service. Keep up the great work and innovation and I will be recommending ProWorkflow to all of our B2B partnerships and government agencies wherever I can.

Many kind regards

Zak

Realising that your product doesn’t fit everyone - all the time - is a key to building relationships and not burning bridges. As corny as it sounds, I’m sincere when I say that we like to make friends with customers coming onboard, and keep them as friends if they leave.

 
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About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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I’ve been talking to someone today about what the software industry and SaaS game is like to work in. Just saying it’s “fast-paced” or “ever changing” didn’t quite cut it. Those of us in the industry will appreciate my description as they’ll be aware of the ever deepening layers of complexity when you consider software trends, business models, competition, social networking and all the factors that software co’s are based on - are changing rapidly - and often.

So here goes! My attempt to describe the industry:

“Being in the software industry these days is like trying to build a house on top of a train travelling at 200kph heading towards a tunnel – and the train tracks are still being built with no indication as to where they’ll lead to!

And all the time you’re trying to get people to rent a room in the house you’re building on top of the train!

And did I mention there were 50 other trains all heading toward the same tunnel?”

How’s that for an adventurous ride! I’d be keen to hear other people’s thoughts on the industry and how they’d sum it up in an ‘elevator pitch’.

I keep thinking though, how are the young kids coming through ever going to be trained sufficiently at any college to understand, be a part of, or excel in this new world? What they learn at school/tech is outdated when they leave, and you can’t guess the future trends enough to teach them.

It’s definitely going to breed some new thinkers in the coming generation. The new blood is going to have to ‘hit the ground running’ in highly competitive markets with little credibility or resources - only ideas and limited skills.

It’ll mean some really creative ideas will come through - possibly new business models, but my concern is that (in very general terms) we’re going to end up with a few ‘fad mega-successes’ or ‘mega-mergers and acquisitions’ and a huge number of struggling niche ideas with good revenue. Sustainability will become a rarity.  This is a “very general idea” of what could happen based on my knowledge, talking to hundreds of software co’s and some guesswork.

Year: 2000
20% - Struggling Software co’s
75% - Average Software co’s
5% - Successful Software co’s

Year: 2004
40% - Struggling Software co’s
56% - Average Software co’s
4% - Successful Software co’s

Year: 2008
60% - Struggling Software co’s
27% - Average Software co’s
3% - Successful Software co’s

Year: 2012
75% - Struggling Software co’s
23% - Average Software co’s
2% - Mega Successful Software co’s

Year: 2016
85% - Struggling Software co’s
14% - Average Software co’s
1% - Mega Mega Successful Software co’s

With the increase in competition, speed of new players (coming and going) and more M&A’s by Google and others… This is how I see it going. I hope I’m wrong, but time will tell…

Republishing Note:
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About the author:
Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
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