May Your Road Be Merry

Big news flash in the Canadian tech scene. Mark Evans – one of Canada’s best read bloggers and one of my mesh conference co-founders – has crossed over from journalism to running a start-up.

Earlier this week b5 Media received $2 Million in venture financing from J.L. Albright and Brightspark. Getting Mark to join the team will only enhance their credibility. Having worked closely with Mark in building mesh, I can tell you that Mark brings some intangibles to the table that would benefit any start-up. He’s energetic, and totally enthusiastic about what he does. He is also forthright and honest – important qualities I’d want in any team I would build. Mark also brings experience to the team as he’s left journalism to run a start-up before.

Good luck Mark – I’ll be rooting for you.

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.

Pricing Web Services: Step 2 – No Annual Plans

A while ago I wrote a piece about pricing web services and getting them into buckets. I mentioned I’d write more so here goes.

Pricing is an incredibly hard thing to do. As I mentioned in the last post, getting things into three buckets is really important, so I want to talk today about yearly packages.

At first blush offering your customers a yearly option may seem like a great idea. For one, you lock them in for a year – this is good. For two, you have more cash right now – this is also good. There are two major problems with yearly packages though.

The first problem is too much choice. When you talk about getting your pricing into three buckets to make your pricing simple, adding yearly packages (assuming you are doing monthly packages in the first place) will double the number of packages you offer. So right out of the blocks you have 6 packages which is three too many. [Note: if you question this, read the pricing buckets post].

The second problem is the smoothness of your cash flow. Reporting, monitoring and improving monthly cash flow is much more manageable and consistent with monthly packages than when you try to manage yearly subscriptions. As a start-up cash flow is king. Demonstrating steady growth is key when you are talking with stakeholders. Monthly packages can derail your revenue reporting if you have a relatively high or low number of annual sign-ups in any given month. With monthly packages, these fluctuations and their effects are moderated.

I’m going to post more on pricing again in the future. By the way, Levi and I are presenting at DemoCamp 8 tonight. If you are there, please say hello.

Green Thinking

As posted here, if you can lend a hand, please do.

Currently I have a research project on the go. I am looking for useful resources (books, websites, podcasts, experts) that help small businesses become more “GREEN” in their operations.

You see, I cut my entrepreneurial teeth organizing a sports event.  The event is/was  an ultimate Frisbee tournament.  I was responsible for providing food, shelter and entertainment for roughly 600 people and I looked at the design of the event as a way to express and promote some things I believed in. 

As someone who has spent well over 200 days of his life on enjoying and guiding canoe trips in places like Quetico Park, Temagami and Algonquin Park, it turns out the environment is something I believe in and want to see preserved. 

So I gave the overage of my sports tournament to the Sierra Legal Defence fund – they do legal work and take on big companies and governments on behalf of the environment…it’s a GREAT organization.  I also told all the players (all 600) that to cut down on waste they were to bring their own plates and cutlery.

All the players went with it.  In over eight years we prepared dinner for about 5000  people… in about 16 bags of garbage.   Think about your home and how much garbage  5000 meals (about 5 years of eating) generates…scary no?

I’m sharing this with you because I want to do more to help small businesses understand how they can cut down on waste in their business processes and generally operate in a more “GREEN” way.  FreshBooks cuts down on the paper used to do business by facilitating paperless invoicing.  We have been proud of this fact for years.

Over the coming weeks, months and years I want to share with you hundreds of useful tips that will help you and other small businesses operate with less impact on the environment.  So again, if you can help me with my research, I’d appreciate it.  Send me a note.  Thanks.

Stowe on Small Business Survival

The crew and I at FreshBooks are lucky to count Stowe Boyd amongst our seasoned and talented advisors.  Stowe dropped by the FreshBooks blog today and crafted a post about small business survival.  Here is an excerpt:

This existential aspect of business execution is perhaps the key reason that few individuals survive as soloists. It is difficult to determine what is the most important thing to do next and then to execute on that, even if the task is outside your comfort zone.

Here is the whole post.

Use Your Application, Eat Your Cookie

As posted on the FreshBooks blog:

One of the things I like to see when I subscribe to someone’s service is that THEY use their own service.  I call this “eating your own cookie”.

We are in the process of redesigning our timesheet.  It’s a great design project to sink my teeth into.  How to we start something like this?  We USE THE TIMESHEET.

Starting this morning everyone around here is responsible for tracking their time in 10 minute  intervals – this is going to force us to use the timesheet regularly and get in touch with the painful activity of accurately tracking your time down to the minute.

If you are building web applications, using your own product is KEY.  We built FreshBooks to help us manage our web design company and we still use it to manage the billing of a handful of clients we have not let go of…. And after three years, the cookie still tastes good, but with our upgraded timesheet, it’s about to get sweeter.

Small Companies Do it Better

As posted on the FreshBooks Blog:

It’s ironic…when you are small you control your own destiny – but most people would not agree with you.  They think success in the market place is determined by bigger players who have deeper pockets and wield a bigger club.  There is truth to that.  But when it comes to projects, I’d say little guys have more control.  

Right now we are running a little behind with the delivery of our upcoming ground mail invoicing service at FreshBooks.  In software it is common that things arrive late.  At FreshBooks it is UNcommon.  Why?  We are in 100% control of our development process.  I get calls to off-shore our software development all the time.  No thanks.  I like being on time, and I like great design (the downfall of off shore development in my humble opinion, but that is another story), so I’ll pass on the “cheaper” labour that WILL COST ME more time and energy.

Anyhow, ground mail is late.  I admit it.  Without going into the details, our partner (read “larger company”) has recently experienced some turnover.  No problem, these things happen, but from my vantage point it is a bummer when the lead developer on your project checks out when your project is 98% complete.  As a fairly seasoned project manager I know that one of the best ways to make a project FAIL is to change the team leaders part way.  I also know you have to roll with the punches and that’s exactly what our partner is doing.

Things are under control and their staff is competent…At this point it is really only a drag that we’ll deliver late – tough pill to swallow when not 10 days ago we were tightening the final screws and looking forward to kicking ground mail out the door last Monday.  C’est la vie. 

If you are following at home I’d say ground mail is now about two weeks away which will be three weeks late.  The good news is we have been adding more goodies to the upcoming release.  Thanks for your patience – it will be worth the wait.