Archive for the ‘Technology’ Category

An entertaining video that was brought to my attention by 10Yetis. You get the gist after the first couple of minutes, but it’s worth watching the whole thing.

For more cloud humour, see this cynical explanation of the cloud using an analogy of the Cloud Cafe. I’m still not sure what the sweeties man was all about.

When I started KashFlow I thought a SaaS business would be a relatively simple affair in terms of what the costs would be and where the income would come from. Things never pan out exactly as you expect.

So here I’m going to share some numbers with your from our performance for 2009 and some of our strategy.

If you’re starting or growing a SaaS business then it might be useful for you. If you’re a customer or partner then it’ll hopefully give you an insight into what we’ve been up to and what our plans are.

The 2008 numbers for comparison

In 2008 we turned over around £250k and made a very small profit. We were based in a cheap office in Essex and there were only around 4-5 staff. A quick look at my blog from the beginning of 2009 shows we started the year with 2,500 customers.

The 2009 headline numbers

We ended 2009 with well over 5,000 customers and turned over around £500k. So essentially the business doubled in size.

Despite the extra income, we didn’t make much more of a profit. There are now nearly 17 of us in the company and we’ve ditched the office in Essex and have a lovely place in central London.

Revenue split

Only 60% of our income in 2009 came direct from end-users that pay us monthly subscriptions for using the main accounting software.

The remaining 40% came from the partners that we work with via our Partner Programme. These are mainly accountants of which we now have over 220.

A few percentage points of the revenue is from our add-on automated PayPal accounting service.

Where’s the money gone?

Of the £500k we brought in throughout 2009, close to 60% went on salaries and sales commission, about 7% on rent and the remainder is made up of lots of little expenses like hardware, desks, staff training, utility bills and coffee – lots of coffee.

Our phone bill for the year was close to £8k. We have an 0800 number so we pay for all the inbound calls, but the bulk of this was actually outbound sales calls to accountancy practices.

What surprises me is how little we spent on marketing. Far less than 10% of our total expenditure. And a sizeable chunk of that was on a single exhibition.

Growing the eco-system

A big part of our strategy is growing an eco-system around our accounting API.  This has grown a lot in 2009. We started the year with less than 10 integrated applications and now have well over 20 with many more on the way.

Really Simple Systems CRM have just started beta testing their integration and we have some cool stuff in the works with Receipt Angel.

The only hiccup we’ve had is with our FreshBooks integration. They were understandably unimpressed with the orginal version of my blog post announcing the integration because it had a sentence that pointed out one of the obvious reasons for integrating – that you could migrate entirely from FreshBooks to KashFlow if you needed a full accounting system rather than just a great invoicing app. So they decided not to list us on their site with all of the other apps that are integrated with them.

Having other applications integrated with us brings a number of benefits. We get exposure to the customer base of the integrated app, our existing customers get more benefit and KashFlow becomes a more compelling offering for potential customers.

It also helps to ensure customers stay with us. We don’t believe in vendor lock in so make it very easy for customers to leave us with all of their data  if they want to. If they’re using a number of applications that all feed accounting data back to KashFlow then it’s one less reason to leave us.

We”re continuing to add lots of new functions to our API so developers can deliver more usable products to their customers.

Our iPhone app is on the way very soon too. I promise!

White Label and Resellers

We’ve quietly launched a white-label version of KashFlow already and you’ll see a couple of well known names (including a FTSE100 firm) releasing web-based accounting software this year that is actually KashFlow under the hood. We’re also working hard on the reseller channel and getting some great (poncy buzzword alert!) synergistic partnerships up and running.

Resellers in other territories

We’re not currently planning on actively marketing in other countries – there’s still plenty  to do in the UK market. But we’ve been approached by many companies that want to resell KashFlow in all sorts of countries from Iran to UAE and the US, Canada, New Zealand and Australia.

It’s something we originally shied away from. Localising an accounting package isn’t fun. If you’re planning a global SaaS business now go with CRM instead of accounting!

But with the necessary localisation work now done, we’re about to finalise agreements  with resellers in two foreign territories.

Needless to say, we expect great things from these partnerships.

What I expect for 2010

We have a good office and plenty of room to grow in to. The expensive hiring of experienced people is done too. So I’m not expecting our fixed cost to increase by much. Although a lot of our new costs were only brought in towards the end of the year, so expenditure will increase in 2010.

We may need to increase our infrastructure costs if our user base continues to grow as it has for the last few months. We now average over 60 trial sign ups every day and we’re working hard on converting those into paying customers at higher and higher rates.

With everything we have going on, I’ll be disappointed if we don’t more than double our turnover to significantly > £1m this year.

So given I expect to double income and keep expenses relatively flat – what to do with the excess money?

We’ll probably start by hiring more developers. It’s important that we continue to innovate and add the new features our customers are asking for.

We’re also already on the look out for an addition to our support team. The vast majority of our new customers come from word of mouth referrals, and this is largely down to the great job the support guys do. So investing in support staff brings in more business.

We really should also be spending a lot more on marketing. People I speak to are always surprised at how little money we actually spend on marketing considering our relatively high profile in the accounting software space.

So it’s exciting to think what we could achieve with a solid marketing plan with some money behind it. The goal is to become the default choice when it comes to accounting software for small business and startups.

I hope that this was useful to someone besides the competitors that seem to be multiplying like rabbits!

The thing about cults is they don’t tell you the bad news until you’ve handed over your life savings and moved into the compound. It’s not until your first night in the dorms that they tell you you’re obliged to let the leader have his wicked way with your wife.

The same is true of the Apple cult.

The iPhone is good, but it has its downsides and falls over on some pretty basic functionality. But of course the fanboys don’t talk about it until you’re lured in and deemed to be one of them, and even then it’s in hushed tones.

I’ve been a BlackBerry fan for years and I never thought anything could replace my beloved Curve. The main thing that had put me off moving to the iPhone was the keyboard. I can bash out an email pretty quickly on the curve keyboard and didn’t think I’d be able to achieve the same speed with a touch screen.

Call it a mid-life crisis (at 31), a desire to be cool, maybe the desire for a decent web browser or perhaps even just a case of app-envy – but I decided to give the iPhone a try.

Let me firstly say my concerns about the keyboard were unfounded. Once you get used to it you can be just as fast as you can be with a BlackBerry. I made the mistake of trying to use the keyboard in landscape mode thinking it’d be easier as it’s spread over more space. It doesn’t help though. Your thumbs have to travel a greater distance. If you’re coming from a Blackberry then you’ll find it easier to stick with the familiar narrow keyboard.

It’s a really nice bit of kit but here are some of the limitations I’ve found that might be useful to know if you’re considering the switch yourself.

Lack of sound settings

On a BlackBerry you’re used to being able to configure the ringtone and volume for every little thing independently. So you can have one tone and volume for messages and another for calls. Not so with the iPhone. One volume level for everything.

Lack of choice on ringtones

Being used to select any MP3 for my ringtone, I was disappointed to find I can’t do that with the iPhone. I’m aware you can mess around with a file in iTunes to get your own MP3s as ringtones. But it’s a bit of a kerfuffle.

Not a standalone device

I can’t remember the last time I had to attach my Blackberry to a computer. There was no need. Email, contacts and calendar synched over the air to our Zimbra mail server and everything else could be done on the phone itself. With the iPhone you really need to have a computer with iTunes on it to set it up and maintain it.

Single indicator and options for all mail accounts

On the Blackberry I had a product called NotifySync that hooked up to my Zimbra server for personal mail and I used the native mail client to monitor support emails. I managed to get a similar arrangement on the iPhone by setting up two email accounts. However, the indicator telling me how many emails I have is now useless as it includes new emails in all accounts. There’s not a way to have it just show the count for selected accounts. The same problem exists with the alert settings for each account – whatever you select applies to all mail accounts.

No flashing light

With the Blackberry, I could set it to have the small LED flashing if there was a new email. No such option with the iPhone. You either have to be audibly alerted to new emails or periodically pick it up and activate it.

No options for “Home” screen

The thing I miss about the BlackBerry is it’s “Today” view where you can see immediately your next couple of diary entries and unread emails aty a glance on the main screen. No such option with the iPhone. Just pretty square icons.

Accessory compatibility

I prefer to have a charger in the office and at home so I don’t have to carry one around. I had a docking station at home that charged an iPod so I foolishly assumed this would also charge the iPhone. It doesn’t. Despite having the same physical connection the iPhone complained that the “accessory” wasn’t compatible with it and couldn’t be used to charge it.

Disclaimer

I may have missed the options for some of the above – if so please do correct me using the comments section below. I’m aware some of the issues might be resolved by “jailbreaking” the phone too.

There are plenty of good things about the iPhone too – so I will be sticking with it. But the truth needs to be told!

When KashFlow was first available back in 2005 it was a very, very basic invoicing tool. It produced invoices with sequential numbers and you could mark them as either “paid” or “not paid”. Nothing more. This was intentional. We (or “I” as it was then) didn’t want to make assumptions about what businesses wanted from what was to be a fully functional accounting software

The Approach

We were lucky with our timing. There weren’t any other web-based accounting apps worth mentioning at the time and we weren’t under the level of scrutiny new entrants in this market place are today.

So we took our time and asked our customers to tell us what they wanted added. Once we’d covered the main bases we’d only add new features it if they passed 4 tests:

1) Customers must be asking for it – so not just something we think would be cool to have
2) It mustn’t distract from the simplicity of the software
3) It shouldn’t remove any existing functionality
4) Wherever possible it should be off-and-onable, defaulting to off so as not to confuse or distract customers

Rule 4 can cause a problem as people taking an initial look at the software today can be fooled into thinking it doesn’t have many features when in fact there’s probably no other accounting app, online or offline, with the depth of functionality we now have.

This is why we tell people that if they think it can’t do something they need, they should get in touch with support as it probably does do it.

The Result

The result is that we now have an application that’s got lots of features that are of genuine use to small business owners, rather then lots of confusing menus full of jargon and options you never use – the main thing that put me off other programs available when we started.

We’ve kept our approach the same over the years; actively soliciting suggestions and sticking to the rules above. You’ve not let us down. We have a list of great feature requests and we’re constantly improving the software based on those suggestions.

Until relatively recently we’d pick the features we (myself and one other developer) were going to work on and just go for it. This meant we’d get new functionality released very quickly and this kept us ahead of the emerging competition.

And now

Now we have thousands and thousands of customers and a team of developers (they rarely let me touch code these days) we needed to implement a more methodical approach to developing the application. So this is how one of your suggestions goes from initially being received to being live in the software.

Your suggestions

The suggestions we receive from you are all logged on a database, nothing is discarded no matter how silly or complicated.

Once every 4 weeks I sit down with the development team and let them know which suggestions I want implemented over the next 4 weeks.

The way I decide what I want them to do is based on how many people are asking for a particular feature and how complex it is. I’d be lying if I said I don’t take into account who’s asking for it too. We have some Partners who spend tens of thousands of pounds a year with us and I’d be silly not to give more weight to their requests than I do to others.

They go away and develop the features on a development server we have in the office. Once they’ve finished, the new features are copied to a separate test server we have here and it’s tested by non-technical end users. Assuming the features work as planned they then go on to the “live” system where you get access to them.

This works really well and means we can still get new features out quickly and regularly.

The down-side is that if you make a suggestion for us, it’s virtually impossible for us to tell you how long it’ll be before it’s available. It may be a great idea and we plan to add it in the next development cycle. But as requests flood in each week, the list changes all the time so your suggestion may get put back if other requests become more popular or more pressing.

Pricing

An observation. The basic invoicing tool we launched with cost £13.99/month. Since then, despite going from a basic tool to a full accounts package that’s winning awards all over the place, and spending 100’s of thousands of pounds developing the software and infrastructure, we’ve only upped the price once – to £15.99/month. And that was only for new customers. If you joined us back when it was £13.99, that’s what you’re still paying.

I read with interest a post on Emily Hill’s blog about Dell claiming to have made £6.5m from their Twitter activity. Well done. Dell! Twitter is very useful as a sales channel/tool, I’ve previously written about how it’s been really useful to me in growing KashFlow.

Whilst Dell seem to be doing very well from Twitter on the sales front, they’re doing considerably worse with using it for customer service or brand monitoring. It’s in the brand monitoring stakes that Twitter comes into its own. Where else can you be instantly informed about a dissatisfied customer having a moan about you?

A number of big companies have sussed this out already and are very good at looking out for unhappy customers or would-be customers and nipping the problem in the bud. Some companies even have a dedicated Twitter or social media team that are highly responsive. Whether this two-tiered approach to customer service is healthy or not it a debate for another day.

If you tweet something negative about Virgin Media, Rackspace or (dare I say it) Sage, their Twitter team will pick it up pretty much instantly and do their best to help you out.

Vodafone are a little slower (see “It’s over, Vodafone. I’m leaving you“) but still making an effort.

Dell just don’t seem to care at all.

I had a whinge on Twitter (as you do) about problems trying to place an order with them and then with actually getting an order date that didn’t move every week. Even directing messages directly to Dell didn’t illicit a response.

I’m not alone. @NetHosted has been having, and tweeting about, a whole myriad of issues in dealing with Dell and just gets ignored by them.

By sourcing sales leads from Twitter, they’re only going to make the problem worse. These new customers, by the very nature of where Dell got them in the first place, use Twitter. So if they’re not happy, you can be sure they’ll be tweeting about it.

Watch out for the Dell backlash, it’s coming.

The first thing I do when I first log in to Windows XP is right click the “Start” button go to Properties and set it to Classic mode. It’s what I like, it’s what I’m used to.

So when I recently had a play with Windows 7 it was the first thing I looked for. The option wasn’t there. And rightly so. The Microsoft guy I was talking to convinced me I need to embrace all the new changes and the new way of working with the operating system.

Considering I’ve clung on to a lot of the ways of doing things from Windows NT and ignored lots of the new stuff in XP, it’s quite a big change for me to adapt to Windows 7 what is fundamentally an entirely different OS.

So I’d decided I do indeed need to make a conscious effort to learn to use a new OS.

I ordered a lovely new Dell laptop with solid state drives and Windows 7. After numerous changes to the delivery date and unreturned phonecalls I’ve now given up and cancelled the order.

I asked on Twitter for recommendations for a similar laptop with solid state drives and got deluged with the usual “buy a mac!” responses.

I know lots of people who have moved over from PC to Macs and not regretted it. In fact, I’m not aware of anyone that has done it and regretted it. What has put me off in the past is the big change in how you work with the OS.

But as I’d already made the decision to make the step change from XP to Windows 7, the step straight from XP to the Mac OS looked less daunting than it had.

So I warned everyone in the office that I was going to Regent Street and when I got back I’d look much cooler as I would be a Mac user.

I returned an hour later, no cooler but slightly damper thanks to the great weather. The Mac store doesn’t have the Mac book Pro in store with solid state drives.

So I’m now going to order it online (although perhaps wait until January in case it saves a couple of quid).

I wonder if others, faced with a similar big change in their OS will also consider moving to a Mac?

If you’re a watcher of the accounting software market, you can’t have missed the fact that Microsoft withdrew their accounting product recently. The very short notice on the withdrawal of the software, along with the payroll element being turned off  left lots of customers stranded. The customer base was sold to Mamut who don’t have a great track record of looking after bought-in customer bases.

Richard Tyler at The Telegraph has picked up some interesting info from Microsofts PR firm.

Firstly the numbers:

There were 650 companies using the payroll element of the software. This was quite a neat implementation of their Software + Services strategy that I was dismissive of back in February. So the accounting software is locally installed but the Payroll calculations were done externally out in the cloud.

There were 90,000 users of the free version of the accounting software and 10,000 paying customers.

There were some seriously peed off MS customers talking to the media about how the short notice left them high and dry when it comes to paying staff over the christmas period.

Microsoft have stepped in and said it will now pay the 650 customers to use Mamuts payroll software. Good save!

Side Note: Mamut don’t seem to understand SaaS. A press release with the title “Mamut reveals SaaS service for Irish SMEs” caught my eye recently. Further inspection reveals it’s not SaaS at all. They’re just using the services of RentSoft who have technology to allow you to rent software you’d usually buy outright. RentSoft had a relationship with MYOB so I guess that’s how this came about.

On Monday I posted a blog entry with the title SEO is no substitute for a marketing plan.

It attracted quite a few interesting comments, but I felt one of the comments deserved to be highlighted.

The below was posted by Ian Hendry from WeCanDo.BIZ.

It’s interesting to note that if you ask someone in the generation below me to ring a doorbell, they use their thumb to do it. This seems weird to me as I use my index finger. But then I haven’t been brought up using my thumbs primarily for texting; if I had then my thumb might also have become to the dominant digit.

It goes to show how new technologies can change habits in a generation. And a new generation could see Google confined to the rubbish heap.

People are now increasingly asking the crowd for answers through Facebook and Twitter rather than combing through hundreds and thousands of pages of historical content on Google.

Stats are already showing how much more time new web users are spending on social networks compared to where we’ve spent our focus.

It makes sense as availability of social networks becomes, through mobiles, ubiquitous that they also ask questions and for recommendations that way too. Why go and sift through a library of answers other people got when I can just ask my followers?

People are asking real people for help rather than depending on a bot and a database, mainly because with real people come real answers.

It’s already happening. Just take a look at the opportunities for business that we’re unearthing through our Twitter Sales Leads tool. Most of the posters of those business needs probably never thought to go to Google.

There’s a chance that depending on Google will become as shortsighted as depending on Yellow Pages seems to our generation of business folk now.

Certainly thought provoking. I intend to test the “doorbell theory” on the next few teenagers I speak to. (Game of Knock-down Ginger anyone?)

So are we currently undergoing a big change in the way we search for information? A change that will be cemented in a few years when todays teenagers join the business world?

Googles Eric Schmidt certainly seems think so. In an article on Real Business he’s quoted as saying:

It’s because of this fundamental shift towards user-generated information that people will listen more to other people than to traditional sources

Assuming it’s a given that the way we (and therefore, our customers) search for information is changing forever, there are a few questions demanding answers.

1) Will Google change quickly enough to embrace this change and retain it’s dominant position? History says not.

2) If not, what new companies are going to rise to the top of the getting-eyes-to-your-site pile? Odds are there’s a sleeping giant in our midst already.

3) How do we, as business owners with products and services to promote, capitalise on this change? Answering this might help answer #2

Today we have released integration with web-based invoicing application, FreshBooks.

By connecting FreshBooks to your KashFlow account you can automate the copying across of invoices and customers from your FreshBooks account to your KashFlow account. If the FreshBooks invoice is paid this will also be copied across or if the invoice is paid at a later date then you’ll be able to apply that payment, along with all of the details, to the relevant invoice in KashFlow.

It even maps your items in FreshBooks to your Sales Types in KashFlow. If you update an invoice in Freshbooks that’s already been copied to KashFlow then this is identified and you’re given the opportunity to copy the changes across.

Why?

There are a number of reasons you might want to do this. You may want your historical invoicing and customer data to sit alongside the rest of your accounting information and then keep it in synch for the future. This integration allows you to easily copy across all of your existing data into KashFlow

Or you may want to use FreshBooks specifically for your invoicing (it’s very flexible and we have a lot to learn from them) and have that data automatically feed into your accounting system.

Alternatively, you might want to allow one or more of your staff to enter invoices and customers but not view the rest of your accounting data. If this scenario you can give them access to a FreshBooks account and set up KashFlow to pull across invoices, customers and payments. Whilst only allowing yourself to log in to KashFlow and view all of your data..

Pricing

We don’t charge any extra for the integration and you can integrate up to 5 individual FreshBooks accounts with a single KashFlow account. FreshBooks itself offers free accounts with some restrictions on the number of clients you can manage but they also offer paid-for accounts with higher limits.

To get started just log in to your KashFlow account, click the Settings tab and select the “FreshBooks Integration” option.

If you don’t yet have a KashFlow account you can get one for free, with no obligation, for two months. Registration takes two minutes. Click here to register.

If you’re in the web-hosting industry then you have no doubt heard of WHMCS.

It’s the absolute cream of the crop when it comes to automated billing and client management and support. Whilst it’s suitable for (and used by) many other industries that want to give their clients a combined billing, management and support  interface, it’s gained a lot of traction in the web hosting space.

We like to be associated with the “best of breed” and a lot of our customers use WHMCS so getting integrated with them was a high priority for us.

At first we tried to use a third-party development company who turned out be totally incompetent and ended up taking our money and running (Note to lawyers of BoostPlatform – it’s not libelous as we can prove it!).

In the end we worked directly with WHMCS themselves and they’ve developed an add-on for their software using our accounting API. It copies across all customer and invoice/payment data from WHMCS and keeps KashFlow updated with any new payments and customers. All very simple and slick, but will save our mutual customers a whole load of time and eliminate the possibility of human error in manually copying over data.

The Addon is free of charge, so go take a look at http://wiki.whmcs.com/KashFlow_Accounting to get started.