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

Rod Drury wrote an interesting post over on his blog about what he would do if in charge of Microsoft. Have a read of the post - here’s the link:

http://www.drury.net.nz/2008/05/24/if-i-was-in-charge-2/

But as much as I agree with nearly all his points, I wanted to expand on point number 15 about assigning a design dictator. Here’s the comment (or essay) I posted. Thought I’d repost it here as it ties in with some other topics I’m covering. Here’s my thoughts on the ‘Design Dictator’ comment…

Re: Number 15. The comments about the design dictator and rebranding. Whilst I think it’s a great idea, it’s not quite that simple in reality. if you really wanted to rebrand Microsoft here’s what I’d do.

1. RENAME ‘MICROSOFT’ TO ???

Lets face it - it’s a lame name these days. And the name carries too much baggage - period! No amount of design will erase the memories of the past. It may take a decade or two of turmoil, but new generations coming through will appreciate and accept the new brand. And this is a multigenerational corporation so rebranding needs to be though out as such.

2. CHOOSE THE DESIGN DICTATOR WISELY! Trust them and step back!

Microsoft shouldn’t ’seek’ the designer. This would amount to ‘old thinkers’ choosing who to represent them - not a good idea. A third party should be appointed to find the designer. A hard task, and it could take some time, even years, but if this step is rushed, all could be lost - there would be one shot at this, so for the future of the company it would need to be the right person. Someone prepared to die for the company in order for it to live. Redesigning MS would be a few decades work so that’s a fair chunk of life to commit!

It can’t be a ‘Multiyear Contract Job’ for the designer. Look at Steve Jobs - it has their passion, nothing else - just that job and a pile of love!

3. DESIGN IS AS MUCH ABOUT CULTURE AS IMAGERY.

Let’s face it - Apple has great design, but also great culture. If Microsoft just rebranded, did a few screens and box shots (a few thousand…) all it would be is a facade. Cool people buy Apple Products. Nerds and geeks buy Microsoft products. Yes it’s a generalization - but 90% of the world’s population would probably agree. See the problem?

You can make cool products and branding for Microsoft but you’ll find it near impossible to shift entrenched Apple users from their stunning gear - this is because they love the gear, culture and Steve (God). So that means Microsoft would need to compete with Apple by not grabbing Apple’s customers, but rather taking their current users and trying to sell them ‘Cool Microsoft Rebranded Stuff’.

Hmmm.. Ever tried to make the nerd at school look good for the nightclub? He’s bright, he’s intelligent, he ‘does the job’ but despite putting him in baggy lowriders and a hoodie, he’s still a nerd. You can make a duck wear a tie, but he’s still a duck.

Or simply put, You can rebrand Microsoft, but you can’t reculture Microsoft users ;-)

4. VIRAL SPREAD

To be effective with a rebrand you need to impact the ‘design culture’ of Microsoft. Apple does so well partly because it releases a ‘cool toy’, their fans love it, buy it and most importantly ‘talk about it’ to other people. Great design spreads virally, but ONLY when the customers CARE about the design. Here’s the problem that reinforces my ‘Design Culture’ comments. Ready? Here it comes…

“Apple users CARE” - “Microsoft users USE”.

For example; Rod loves his Apple gear so he blog about it, Twitters about it, Allows people in the street to touch it etc. This is Great marketing for apple - It’s free!.

Microsoft could rebrand but would they have the same viral spread? I’d bet anything that they’d have a lot less viral spread than Apple if the rebrand was good. But if it was bad they’d have a HUGE viral outlash, and worse - it’d be ammo for Apple who, as history tell us like to get the boot into Microsoft at any chance - good on them too! if MS had some balls they’d take a few decent shots at Apple!

IN SUMMARY…

These are some initial thoughts on the issue. I’ll sum up though by saying that I believe rebranding Microsoft has to happen at two levels. Firstly, start to change the company culture from within for a few years - shake up the business by taking shots online at Apple, then secondly (and ONLY when the culture starts to shift) CHANGE THE NAME AND BRAND - RELAUNCH THE BUSINESS! Not just the design!

if done right, a relaunch of a company of this size could be the biggest thing to ever happen online! Once and for all it would lay the Microsoft baggage and history to rest.

Question is… Who’s got big enough kahunas to make this happen?

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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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Ben Kepes just posted his thoughts on the XERO end of year results on his Diversity blog. Go have a read as it’s an interesting business venture that many are following with interest:

http://diversity.net.nz/xero-year-end-results/2008/05/14/

Here’s my comment on the blog post.

What it amounts to I believe is that XERO is like no other business in the sense that, remarkable product or otherwise, to build a sustainable SaaS business just takes time and hard work (and watching the balance sheet).

SaaS businesses in the early years always looks ‘on the surface’ like they’re finding sales hard as the revenue always appears less than people expect. This is because the very nature of SaaS is many, small payments, monthly. It takes time to build the revenue, and for quite a while it seems like not a lot is happening - but then the revenue picks up. And SaaS revenue is like gold!

When you have thousands of committed customers paying monthly, it takes a major event to dent the revenue stream. SaaS becomes a solid revenue model, compared to traditional software service companies that may have only a few high paying customers. ie: When they lose a customer - there goes 250k and some jobs.

I do wish XERO all the best, and New Zealand’s tech community is watching with great interest, but what we all want to see is XERO get to the positive cash flow - covering overheads, before the cash in bank runs out. A XERO success is good for everyone…

So yes, looks like they need to ramp up fast, and they’ll know that and be working towards it… But my comment for the day (We’re in SaaS too) is don’t judge a SaaS businesses potential by it’s first years results. it’s the nature of this type of revenue stream to be low initially, then (if they have a winner product/model) it grow exponentially.

What we don’t want to see is linear growth. These business models should grow exponentially.

As a side note. It takes some balls to run a company with public financials. I wonder what comments we’d all make if we could publicly scrutinize each others business accounts?

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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 just read an interesting article over at http://diversity.net.nz/ about Telcos and SaaS business that caught my attention. It’s an area of interest globally currently; finding ways for SaaS business (powerful software) to partner with Telcos (powerful infrastructure). But it does pose some questions…

Here’s the article:
http://diversity.net.nz/telcos-and-saas-a-happy-fit/2008/05/05/

and my thoughts on it are below…

I’ll be interesting to see how the Telcos approach the SaaS model. Contrary to popular belief, SaaS is hard work and many players don’t have large margins - especially early stage SaaS players as they’re spending heavy in Marketing/Dev to get established. Even SalesForce is still working on improving margins…

So how can a Telco partner with a tight margined SaaS player? It’ll be interesting to watch these Telco/SaaS M&A&P’s over time.

Google/Salesforce is a good example of two different models coming together (Sales model vs Free model) - but would a similar deal be struck with a Telco?

Unsure… They could be a technology partner sure, but could they be a software partner? if sales or support (or custom dev) were moved from the SaaS business to the Telco, would the service to customers be lessened? I don’t know if the Telco would have the same product knowledge/passion/experience to deliver equivalent service to a SaaS’s current service?

I mean, you can’t have a Telco support or sales worker working on Internet plans, or dial up packages, then switching to CRM product support…

The Telco would need a specialist team for a ’service’ partnership to be feasible. and then if they have a specialist team, what becomes of the SaaS company’s role? Does it revert to a simple R&D focus? If so, then there’s an issue that R&D & dev teams are removed from customer front end, so the product development angle suffers…

Telco and SaaS business in partnership. Whilst I like the idea of marketing a solution down the Telco’s channel, there are some questions:

1. What’s in it for the Telco (Because the revenue won’t cover the cost for them)
2. What’s in it for the SaaS (Because service and Product dev may suffer)

Just my thoughts. I’m open to ideas on this.

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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 blogged a week or two ago about an article talking about the size of the SaaS market in New Zealand. My blog was questioning the research as it didn’t sound accurate to my knowledge. By the way, a SWAG is a “Silly Wild Ass Guess”. The research company replied with their comments about their research.

Here’s the original post to read:

SWAGS - Interesting, but can you trust the research?
Click here for the article!

And here’s the comment emailed through from the research company:

Julian,
 
Thanks for the comments and the feedback it is appreciated. Congratulations on the success of your company to date.
 
To clarify the forecast, we are looking at the demand in the market within New Zealand. This only include vendors selling solutions within NZ. If you have international revenue to Australia, the US, or any other market, in this instance we do not count it.
 
I take heart that at least we are in your opinion being conservative, having been around the analyst market for many years, including during the ASP mega hype days, I believe a more conservative view on market potential is appreciated more firmly than an over the top one. Like a few people I am still waiting for the XSP market to hit US$1 Trillion by 2004 or so which was forecast in about 2000.
 
To highlight the methodology, there was a combination of both end user perspectives and discussions with vendors. The SaaS market is very fragmented as you know, so we cannot always get to every vendor.
Finally on the NZ market, it is a very innovative and clever market, and by proportion puts Australia to shame in many ways. As a 50-50 Australian/Kiwi, I guess I can take the best of both markets.
 
Regards and Thanks
Phil Hassey
VP Services/Country Manager ANZ
Springboard Research

Technorati Tags: New Zealand,Project Management Software,ProWorkflow,SaaS,Software as a Service

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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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Original Post: Being 37signals for free
http://wisdump.com/business/being-37signals-for-free

After reading this post I felt I should speak my mind a bit in the comments section. They’s discussing how easy it would be to copy BaseCamp’s project Management Software product and offer a free version. I thought I should point out a few things in defence of them, www.ProWorkflow.com and other software providers who are trying to offer value-based solutions in a market flooded with price-driven customers. Here’s my comment:

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“Our solution is called www.ProWorkflow.com - project management software and we have many thousands of users in the 1-100 user level. I can tell you from experience that copying the code and building a similar tool is only a small part of it. Think about 37s’s overheads, back end management systems, networks, marketing commitments (paid and social), security, support, sales, backups, billing, 24/7 requirements, load balancing, monitoring etc. All this comes at a cost to 37s (or in our case, to us).

How much do you value your business? Some people on this list obviously don’t think their own businesses are worth a few cents a day! Sheesh! ;-)”

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Julian Stone, CEO – Project Management Software visionary for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com

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I read a good article in the NZ Herald online the other day called “NZ Entrepreneurs going to town on web” about some New Zealand internet software start-ups taking some promising steps towards international success. In the article, Wellington entrepreneur and Xero founder Rod Drury quotes “There are a number of next-generation entrepreneurs kicking it on the international stage”.

Good on all these guys! Keep up the 20hr days! I’ve met Rod from XERO, and had a few good chats with Grant Ryan from Eurekster and they’re both passionate, and focused. XERO seems to be fleshing out it’s powerful offering nicely and Eurekster looks to be picking up some good momentum. I think in the next few years we will see even more great Internet successes come from New Zealand as more kiwis learn to use the Internet as a massively powerful and leveragable marketing and distribution platform for their ideas. Rod also has some tips on starting a business on his website that may be of interest.

Definitely some great talent being displayed there, however I wanted to add a couple of other promising Internet companies to the list (ours included). Keep an eye on these companies as they’re both growing nicely. They both are keeping a strategic low profile whilst refining their low inertia scalable business models but are set to scale and should make some good ground this year.

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This is an interesting forum thread from www.softwareceo.com that I replied to. Read the question and scroll down for my response. Though it may be of interest…

———————– FORUM QUESTION ———————–

Why are people not buying our software?

We sell an international software suite, geared towards small/medium sized businesses worldwide.
We offer a FREE Demo version that users can install and try out.
If they like the software they simply purchase a licence key.

Based on the number of downloads each day, we seem to be getting around 5-7% who actually purchase the software.

What we would like to do is to conduct an exercise and establish exactly why most people are NOT purchasing the software.
Could it be the price, could it be there is something missing or needs improving, or simply something else?

We originally thought of contacting all these people and offering them a huge discount or even a FREE licence. My thinking behind this idea was that it might work for the people who thought the price was too expensive, would these people spend a few minutes answering questions on something they didn’t want anyway?

My question is, what is the best method of contacting all these people worldwide and finding out why they didn’t buy? We have telephone numbers for many of these people but we prefer to use email if possible.

I very much look forward to your ideas, particular from people who have already done a similar exercise.

Regards, Davel

———————– MY ANSWER ———————–

Hi Dave,

Firstly, answer some basic questions. Be honest, and check your thoughts with industry peers. I don’t want to sound negative but a lot of software developers are blind to these questions.

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This is a comment I made on a blog post about XERO and revenue.

I’m talking about the need to stay focused on the business model in the first year. I think they’re doing really good so far…  Just thought it was worth a mention on J101 as the principles below apply to ALL software co’s. Feel welcome to comment.

Source Blog Post: http://www.fastchicken.co.nz/blog/2007/11/14/XeroAndRevenue.aspx

My Comment:

Re: “I imagine that, in it’s first year, AfterMail made a loss, like most businesses getting off the ground do”

- Ultimately, none of us know if they made a loss in the first year and it’s the result that matters, not the means. Good on AfterMail.

However, from experience, our company ProActive Software - ProWorkflow.com and a few others I know of have built globally trading software businesses without incurring losses or any debt. Just bootstrapping forward, so it’s definitely possible.

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About the author:
Julian Stone, CEO - Project, Task & Time Management specialist for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com

Published on Zdnet: http://blogs.zdnet.com/SAAS/?p=113

With traditional software selling, you make the sale, turn your back on the customer and move on to the next - “Accountability=none”. The on-demand model is great. If the customer fails, we fail, and vice versa. There is great reason to ensure the service works, not just for the customer, but for the future of the SAAS business too..
We’ve had customers try to talk us down on price. We say, “Sure, we could discount price, but that lost revenue at our end is affecting the level of infrastructure we can afford to have in place to support your business.” They always pay after hearing that - they understand.

With traditional software, it’s inherently a selfish model. The software co takes money for the product, and shifts the risk of the software to the customer’s end, often with no accountability if any issues occur. It’s “Tough, thanks for the sale, cya later!”

With on-demand software it’s a symbiotic relationship once in place. If the customer leaves, the SAAS provider suffers. If the SAAS provider leaves, the customer suffers. They need each other, which means, like it or not, you are in a forced ‘relationship building’ business model. It’s a great way to do business…

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