April 29th, 2009 by Duane Jackson
If you were reading this blog last year then you may remember Sage proving they were worried and clueless - worried about SaaS, and clueless about how a small firm like KashFlow can use the internet to get our story heard.
After we stole their thunder they reported us to Trading Standards over a pricing comparison on our site. Because of their aggressive approach towards us, when I then found security holes in their attempt at SaaS, Sage Live, I blogged about it instead of quietly telling them.
The combination of a flawed product and their bullying antics resulted in a torrent of bad PR, including Daniel Goldman (son of the late, great Sage founder David Goldman) writing on his blog that Sage should have kept schtum.
Well, today I’ve agreed a resolution with Newcastle Trading Standards. We agreed that it’d take considerable time and resources on my part to prove my case (reckon Sage knew that?) and the easiest thing is for us just to remove the comparison that they objected to so we can focus on growing the business. A bit of an anticlimax for those of you expecting blood and gore in the tornado I’m afraid.
Sage Live itself also seems to have been a huge anti-climax. Everyone in the SaaS accounting industry was excited about Sage entering the foray. But just as quickly as it arrived, it was taken offline to “as a precaution” after my post about their security issues. Their line to the media has been that it’ll be back as soon as the issues are fixed. That was 3 months ago. I’ve been hearing on the grapevine that the problems are so fundamental that it’ll never be back – not in anything like it’s former guise anyway. As if to confirm those rumours, I’ve had recruitment agencies in touch this week touting CVs of developers and sales people that worked on the Sage Live project.
It would seem that when it comes to Sage and the Cloud – they’re in an Egpytian river. Paul Walker, their CEO, yesterday told silicon.com:
In the back office accounting area, business solutions, we’re seeing very small, slow growth in terms of demand [for cloud computing]. We have a number of products that meet that demand that so far is relatively modest.
He did go on to make some more positive noises, but I don’t think he realises what’s going on in the industry right now, today. Not in 3 – 5 years.
It seems Sage are really tightening their belts at the moment with a round of redundancies being offered. Not surprising you’d think given the recession. But we’re recruiting and so are at least 4 other SaaS accounting companies that I know.
Two other contrasting bits of news recently: Salesforce.com, the darling of the SaaS industry, recently passed $1bn in revenue. Whilst Microsoft, the grandaddy of installed-software, have reported their first year-on-year fall in revenue for 23 years.
I read once that the short-term impact of new technology is often overestimated (hence the dot com bubble), whilst the long-term impact is usually underestimated. I’m inclined to agree.
Thanks to @10Yetis for the heads-up on the silicon.com article
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Tags: Microsoft, Recession, SaaS, Sage, SageLive
Posted in Cloud Computing / SaaS, Technology | No Comments »
April 27th, 2009 by Duane Jackson
1) Forced unemployment or redundancy
If you’re unemployed, then great – you have no other demands on your time.
If you are employed, especially by a big company, then there may be a redundancy package on offer. So not only can you leave and get up and running with your new business – but you can do so with some cash.
2) Cheaper Advertising and Marketing
Due to less demand, you’ll be able to advertise your new business venture at much lower rates now than this time last year.
3) More talented people
A year ago, it was very hard to find good people on the job market. Now the situation has reversed and there are lots of people – talented people – looking for work.
4) Lower salary expectations
It’s competition that drives up prices. There are less jobs available hence less competition to employ people. So the salary you need to pay to get good staff is lower than it was.
5) Companies looking for more value
Due to money being tighter, companies are more willing to change suppliers if you can offer them better value for their money.
So stop thinking about starting a business and go and do something about it.
Tags: Recession, startups
Posted in Small Business | 4 Comments »
April 17th, 2009 by Duane Jackson
We’re backing a campaign to get the VAT registration threshold increased to 100k.
Currently, if your business turns over £67k or more then you are obliged to register for VAT. Sometimes registering for VAT can be beneficial, and if you are using software like KashFlow then the administrative burden is virtually non-existent – it calculates files your VAT returns directly to HMRC.
But for small businesses that sell to consumers, VAT registration can cause a real problem. Their customer can’t reclaim the VAT – so the business can either put up their prices or take a big hit to their profits.
Elaine Clark from Cheapaccounting.co.uk has started a petition. She says
I have a client who is approaching the VAT registration threshold. They cannot increase their prices to cover the VAT to be paid to HMRC as there is a large competitor in the vicinity and the price competition is tough so they will have to absorb the VAT into their profit.
It will probably mean the closure of their business and the loss of their livelihood. This is something which I think should be avoided.
So if this government are serious about helping small businesses survive the downturn, they can start by increasing the VAT registration threshold to £100k.
Please take 2 minutes to sign this petition - it will help to save small businesses.
Tags: Recession, VAT
Posted in Accounting, Small Business | 4 Comments »
February 17th, 2009 by Duane Jackson
A common topic of conversation amongst business owners these days is how the recession is affecting business. My stock optimistic response was something about more people starting businesses in a downturn than at other point of an economic cycle. The theory being that lots of people are finding themselves with a redundancy cheque and lot of spare time. As the majority of our customers are small businesses and startups, a recession works in our favour.
Privately, I wasn’t convinced by my theory. Especially after a chat with my good business buddy, Richard Osbourne from Efiling. He says they’re seeing a downturn of between 35-45% in formations from the consumer market.
I thought the worse we’d see here at KashFlow would be slower growth. We’re a young company, rapidly expanding.
It’s now been widely reported that Sofware-as-a-service (SaaS), the business model we use at KashFlow, is growing very nicely in the downturn. All of our KPIs (monthly turnover, # of sign-ups for our free trial, etc) would certainly seem to agree.
We’re also being approached by lots of companies and organisations that have existing customers bases of thousands of SMEs. They’re looking for new ways to extract a profit from them and want to explore reselling our software. Nice!
But what about this huge downturn in company formations? I think I’ve found the answer. There was an article in this weekends FT with the headlne Redundancy spurs rise in start-ups.
The Federation of Small Businesses (FSB) said the level of company start-ups would rise over the next year as people used their redundancy packages to set themselves up as selfemployed. But the FSB cautioned that a majority would remain sole traders, dashing hopes of job creation.
If they’re remaining sole traders then that would account for mismatch between the growth we’re seeing and the massive drop off in company formations.
Tags: Recession
Posted in Small Business | 3 Comments »
November 19th, 2008 by Duane Jackson
I like to keep an eye on the blogs of a few business analysts and commentators to try to keep a some sort of perspective on the industry I’m in. It’s easy to be so caught up in it sometimes that you don’t see the wood for the trees.
I’m a relative new comer to the exciting (honestly, it is) world of business and certainly haven’t run a business through a recession before – so I’m keen to absorb as much info from the more experienced hands as possible.
One of the blogs I follow closely is Richard Holways UKHotViews. I remember quoting Richard in my first business plan as he was one of the first to predict the growth of cloud computing (or the ASP model as it was called back then).
A post on UKHotViews that caught my eye this morning was A great time for new businesses (a title he stole from an FT article and I in turn have stolen from him).
The gist of it is that he thinks that new tech businesses, and specifically cloud computing will do well in hard times. The reasoning being that the industry big guns are so distracted by the need to reduce their outgoings (and headcount) and protect their existing revenues that they don’t spend time and money on innovation.
That sounds good to me.
KashFlow and our fellow cloud computing start-ups in the accounting software industry have been slowly but surely chipping away at the customer base of companies like Sage, Intuit (Quickbooks) and the like for some time now. The speed at which we are taking away their customers is starting to gather pace. Beating them in industry software awardshelps of course : ) Plus we tend to attract a lot new businesses. So not only are we taking away existing customers – we’re also decreasing the supply of new ones.
Long may it continue.
Tags: Cloud Computing, Quickbooks, Recession, Sage
Posted in Cloud Computing / SaaS, Technology | No Comments »
