Wednesday, May 09, 2012

More SaaS Accounting in the UK (Part 1) - The Bananarama Principle

I guess I'm biased, but I really do see the UK's small biz SaaS accounting scene as a barometer of how software democratisation in general is gonna play out. It has all the crucial elements, including simplification, disruption, utter intuitiveness, innovation and creativity, heavy emphasis on customer experience, mobile platform strategy, product with personality and a sense of community amongst users...need I go on?

The sector and its key protagonists signpost the eventual commoditisation of small business services on the web. What's fascinating, is watching them get there!

To be more specific, watching them from early on, choosing different routes and then navigate those very different routes to get there. Using very different modes of transport, stopping at different destinations en route....finish with your own travel analogy! 

Some of the More Obvious Differences
  • different funding models
  • consequent different emphasis on cashflow
  • and consequent different expansion strategies
  • different marketing budgets and marketing strategies
  • different sales strategies - including channels
  • implementation of social media strategies at a time when social media has entered the fray and grown at much the same time.
  • varying reliance on zero-touch/light-touch sales via website etc
  • different eco-system strategy - use of API etc
  • differences in support infra-structure
  • different tactics for foreign markets (different importance placed)

Technology With Personality

One of the many particularly interesting aspects to an old SaaS biz geek like me, is how all the action and manoeuvrings in recent weeks highlights the very different ways that each of the leading protagonists goes about their business. This has been evident from the get-go of course.

Back in the day we had software. It was bland, bloated and a turn-off (I can vouch for that 100%) sold by software companies. Any pretence of product 'personality' was a contrivance of PR relating to the CEO's despite the product - enter Bill Gates, Larry Ellison & co. 

When I asked "Is Steve Jobs the Godfather of SaaS?", this was partly prompted by the phenomenon of a personality permeating the technology. Use Jobs and Apple's virtually instantly legendary products as an example and people get what you're talking about. 

Accounting software with personality??

As technology moves from software provision to service provision, personality enters the fray, even enabling this transition. Service is far more personalised than software of course and with the relentless, almost daily re-iteration of the tech that supports the service, integrated with meticulous use of social media, digital marketing, PR etc it is now possible for a brand to take on a far more nuanced and more solid, almost touch-it, identity. An identity that includes human-like flaws as well as a desire to delight users; and other contradictions, for example.

Once attuned to the brand and its product offering, it's possible to align that persona to how features are implemented and are likely to be implemented when new features and functionality hit, further down the track. 

The very different back-stories of the Founders affect the brand persona's at a profound level that includes implementation and deployment and not just the (more obvious) strategies and strategic decisions that each player makes. 

The consequence is that, for the first time, users buy into the brand persona of a service provider (of accounting software!!) which includes the personality traits of the Founders and 'significant others'! Including, how they:- 
  • implement new features
  • present new innovations and features 
  • declare war on the traditional incumbent software companies
  • present arguments for implementing strategies and tactics
  • communicate with users and the outside world
To this old SaaS biz geek, the intricately entangled mix of psychology, marketing, culture, brand, funding model, cutting-edge technology, ethos and business plan is absolutely fascinating, but more importantly is absolutely business critical!

But, It's Just Accounting Software!

And as some march on, others (including cloud vendors that are hugely successful in their native markets) watch on in wonderment, wondering why their supposedly more rounded product just can't get a competitive footing!

Of course the point is, the product is just a part of the solution! Anyone can replicate the feature-set of old school software and deliver via the cloud, for example. Many can improve on the functionality. Users want not only elegant solutions, but an ethos they can buy into. They want to know who and what you are!

I call this the...

The Bananarama Principle


"It's not what you do but the way that you do it, 

(repeat loads)

And that's what gets results!"

(Yes I know that this was actually a collaboration between Bananarama & Fun Boy 3, but that's besides the point. To make a point, I call this the Bananarama Principle. It's a valid point!)


Acknowledging that this generation of fanatical users buy into how a particular vendor implements features, informs discussions around strategy, branding etc and can even help to predict vendor behaviour. It also helps vendors understand that strategy is about playing to one's own strengths rather than copying others. 

This will inform a closer look at all the fuss around Yodlee and bank feeds in Part 2, and why some SaaS co's might choose not to get involved (at this stage), while some non-SaaS co's choose to get involved! What are Crunch up to and are they are a viable alternative?

At the same time, a closer look at the FreeAgent growth and what it all means, for all. Their acquisition of a US co no-one's heard of! Yep FreeAgent is betting big. Why are Xero and FreeAgent looking at the USA and KashFlow apparently not. Are Clear Books wrong to sink their resources into payroll, CRM etc? What it all means in respect to the original SaaS Accounting in the UK post from the first week of 2012.

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