Have You Seen This Before?

As posted on the FreshBooks Blog:

I’m about to coin a phrase, or make a fool of myself by describing a concept that has been around for ages. Hold on to your hats, here come my thoughts on “transitional services”.

Transitional Services are services that help facilitate a user’s transition from one platform to the next – or at the least, ease their pain.

Whenever there is a platform shift, there is transition, and straddling. For example, for the past ten years the photography industry has been shifting from celluloid to digital. The industry and its consumers are undergoing a transition from one platform to another. This transition has consequences. Many users are reluctant to transition because they are invested in the first platform (i.e. “I have cameras and film, slide projectors and photo albums”). Once the decision to transition has been made, users may want to bring their old platform content (think printed photos) with them to the new platform format (think scanning photos) and they find themselves at a point where they are straddling the new platform and the old. Both the transition and the straddling phases create pain and opportunity in the marketplace.

With me so far?

I wrote Paul Kedrosky a note saying I think there is a huge and growing market for transitional services in the Web 2.0. I pointed out how helping people get from offline processes to online processes – while helping to ease the pain of the straddling phase – will be a strategy that start-ups and established players can leverage and that I foresee an increasing number doing so in the coming years.

This whole conversation was sparked by FreshBooks recent release of its transitional ground mail service. The solution FreshBooks is selling is to help business transition their invoicing/receivables process online where significant benefits can be realized (streamlined processes, reduce costs, and improved customer relations). Businesses want to get online, but there is a world of pain awaiting them in the transition phase (“How do we build the service we need?”) and straddling phases (“How do we manage our cash flow when half our clients pay us online and half pay us offline?”)

That ability to gradually transition customers from ground mail invoices to online invoices and recurring billing is what FreshBooks offers, but there are other examples of businesses that help facilitate traditional office activities. You can create and send photo albums as gifts via Flickr. This is an example of a reverse transitional service where Flickr is facilitating a transition from the new platform (digital images) to the old (printing and mailing images).

What’s magical about all of this, and a hallmark of a transitional service in the Web 2.0, is how the line between the online world and the offline world blurs. The slicker the service, the more seamless the delivery, the more the offline world gets pulled online.

In terms of opportunities, I foresee more and more services leveraging transitional strategies and delivering transitional services as backend services and incremental revenue generators.

So, while none of these concepts is new, and the act of delivering such services has been around for some time, I have seen no attempts to define the phenomenon, so I have done it here. If this has already been done elsewhere, please let me know. As I have not had the time to consider the implications of transitional strategies as much as I would like, I encourage you to sound off with your own thoughts. Can you think or other examples? Better yet, can you think of industries in need of transitional services, where ripe opportunities exist? Please comment below.

4 thoughts on “Have You Seen This Before?

  1. I’ve got one for you — the real estate industry, both residential and commercial. They’re in dire need of transitional services.

    Much of their work has always been done virtually, via phone or fax, and increasingly over email, but physical presence is an inevitability for almost any transaction.

    Of course there is some irony in that as information brokers, much of the value they bring to the table is diminished as the industry moves online. The more savvy of the bunch will increasingly find ways to make themselves relevant, but in order to do so, transitional services will be required as a bridge between old and new business models and practices.

  2. True and true Dean.

    As someone who has long had real estate clients from my consulting business, I am acutely aware of how the web is disrupting their industry…I think agents and brokerages are going to have to think long and hard about where and how they can add value. My cousin for example has already decided for himself that you don’t need an agent to buy residential property – only to sell it. He has bought and sold a number of homes like this. If his model holds, the market for agents just got halved.

  3. […] I just came across this blog entry from Freshbooks founder Michael McDerment (if you do any billing or client management and want something a little cleaner and lighter than QuickBooks, check it out). The push of the piece was how there’s a potentially lucrative business model in providing a bridge between traditional physicalized services and newer virtualized ones. The example from the post being Freshbooks’ serving up invoices in both the email and snailmail varieties. […]

  4. “Hello!

    Our company develop the synchronization between FreshBooks and MS Outlook. GrabSync FreshBooks plugin makes it easy to import and invoice your clients and customers from MS Outlook without having to re-enter their data into FreshBooks.

    I hope that it would be useful for you.
    To learn more, please follow the link: http://www.grabsync.com/freshbooks/
    or you can Email me personally: venera@grabsync.com

    Thank you

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