Tuesday, February 14, 2012

SageLive - My Part In It's Downfall

I want to tell you a story! This story is the first part of two posts put together to emphasise my contention that SaaS is a cultural thing as much as anything else and that's why therefore, large pre-SaaS organisations struggle with it (I've split it in two purely because it's too long as one post and it divides quite conveniently).

During a recent discussion on Twitter Adrian Pearson asked me whether I considered SageOne to be a SaaS solution. I replied: 
@topaccountants For me, No. It's an attempt at SaaS by a non-SaaS biz that don't get SaaS and it competes with some SaaS products 

What follows is some background as to why this is the case.

The Main Event

Late 2008, DuaneJackson, KashFlow CEO, asked me to accompany him to the BStartUp Expo at Kensington Olympia. Being my boss at the time, I curtsied reverently and off we went!

As is often the case, Sage were the major sponsor of the event. Hence the largest stand, dead centre and visible from all angles, with an army of staff. We got there latish and flew around quickly in anticipation of battling with the east London traffic on a Friday afternoon. 

We stopped by the Sage stand on the way out as it would have been rude not to. TBH it was all pretty uninteresting as we made small talk with a couple of the guys. Until that is, I spied a laptop ticking away at the end of one of the counters. For some unknown reason I remarked to Duane that it looked like a SaaS solution! 

To this day, I don't know what it was about the green and black screen that made me think that (what does a SaaS solution look like from about 15ft away?). As Duane rightly responded, Sage didn't have a cloud offering. As it happened, he was wrong (kind of) and uncannily, by chance, we happened to be chatting to the proud parents of (the soon to be) infamous SageLive. And I mean proud: they were positively bursting!

Situation Comedy

There then played out a classic, farcical, sitcom type scene whereby the guys could hardly contain themselves as Duane (by now, very interested) proceeded to rain down questions on them. All the answers had a common theme, such as:-
  • "Yes, it is at least as good as KashFlow"
  • "Yes, KashFlow are the main competitor"
  • "Yes, it does this and that, just like KashFlow"
  • "KashFlow are definitely the driver for developing this product"
  • "Of course there are others, but KashFlow, KashFlow, KashFlow...."
Get the idea?

Here were representatives of a multi-billion pound organisation - one of the world's largest software companies and the UK's biggest - obsessed with a small start-up with about half a dozen staff and less than 2,000 customers, each paying £16 a month or less!!

After a couple more minutes of having his ego fed, Duane relented and showed them his business card! From here on in the whole scene just got really surreal. 

There was the delight as these guys realised they were not only meeting their hero but had a golden opportunity to talk to him as well as show off what they'd built. They just couldn't contain themselves. There was also the furtive glances of the Sagees as they whispered to each other (in effect) "That's KashFlow"!

If this all sounds like unlikely, over-dramatised, romanticised nonsense, good! It's meant to. Because that's what it was. That's what made the whole scene so surreal. To this day, one of the most surreal I've both witnessed and been part of.

The next few minutes was taken up with a brief dem and the general impression Duane had was that it seemed pretty good. Or that was at least the impression he gave, though he was only half taking it in! Likewise it looked OK to me (for what it's worth). 

Ultimately, just how 'good' it was or wasn't, was besides the point. Duane was formulating a plan! Anyhoo, we finished up pretty quickly, quite abruptly in fact. Handshakes, back-slapping, card-swapping etc and off we marched leaving behind a cast of Cheshire Cats! "Wow, that was...and he liked it", etc etc etc.

An Education 

So off we ran (pretty much), back to the car. Duane was excited to say the least. In hindsight, probably the most excited I've ever seen him! The next two hours we sat in that dreaded traffic-jam, trying to get back to the old KashFlow offices in Pitsea, Essex. And Duane didn't care one iota. He'd already got to work before we got to the car. Calling a small PR co and immediately on to pulling the strings.

The truth is we were really surprised to have stumbled across SageLive. There had been rumours of a Sage response to SaaS. Much debate about how and why Sage should and would react, or not. And the general consensus was that the sooner the elephant known as Sage, validated the market, the better for all those smaller SaaS vendors in their efforts to educate the marketplace! But until that day, there had been nothing. 

Then out-of-the-blue, an unpublicized, public outing. Why? I don't know what their thinking was. What were they thinking? I don't know that such an action had even been sanctioned. But, it was a downright stupid thing to do. Made all the worse,  because their perceived nemesis stumbled upon it and then had the savvy to know how to use it to a maximum effect. Made all the worse because they had a perceived nemesis! But more on this later.

This was pure gold of course to Duane and KashFlow and an education for me. Using mobile phone and 3G laptop, he did what the Sage PR and marketing machine had failed to do. Tell the world about it! Thus making sure that from then on in, every search and mention of SageLive came with 'added KashFlow'!!!! Here's the blog post that he wrote that very day.

This all took surprisingly little effort, but paid in spades. In both marketing and PR, but more importantly, trials and paying customers for KashFlow! As the news spread, all commentary noted Duane's part in unveiling the existence of SageLive. 

Sage's initial 'no comment' type attitude was incredible. Incredibly, having kicked-off on a Friday evening seemed to mean that Sage weren't even aware  of what was happening for two and a half days, at least! It was their product for Chrissakes! It was almost like they were embarrassed about it! By the time they started to deal with it, it was far, far, too late. 

To this day Google SageLive and find all the commentary of it's appearance,  existence and sudden demise in two short, but eventful months, from several high profile titles; all with a hat-tip to Duane Jackson/KashFlow, but nothing from Sage!! 

How it all played out is almost legend and you can find it all easily enough. If you interested to know more, this is the infamous KashFlow post about 8 weeks after the Bstartup show revealing the glaring security holes that signalled the demise of SageLive. Should you want to know more about what happened, ping away and I'll try to help. 

The point

Look, I got a real education being up close and personal, watching one guy and his bootstrapped startup pulling the strings of a multi-billion pound org: getting untold marketing mileage out of them and making sure any pathetic attempt they made to compete or even stomp on them just added fuel to the fire!

But, this is not some KashFlow 'love-fest' - in true BBC stylee, "other excellent SaaS accounting solutions do exist". Just trawl this blog to find plenty mentions of most of the other players! Or vendors can even tell us about yourselves in the comments below, if you like.

I had to mention what it was like from (my perspective) the KashFlow side of the fence whilst on the subject (I've been asked about this a few times), but the main reason for telling this story is to lay the foundations as to 'why and how Sage is fighting a losing battle in going toe-to-toe with the SaaS vendors in the UK' (part 2 of this post).

The fact that Sage made a complete pigs-ear of SageLive from a technical POV is symptomatic of the fact, not the reason why. My personal experience is a good example of what is probably true throughout the software industry. The follow-up to this post recalls other anecdotes from the intervening three years as well as diving into this debacle and gels nicely to prove the point. Meanwhile I'll let you digest this.

Footnote: The title to this post is a homage to the glorious Spike Milligan;  paraphrasing the title of one of his seven short autobiographies (Adolf Hitler: My Part in His Downfall - on Amazon for less than £5!!) which are all truly hilarious genius and highly recommended.

Wednesday, February 08, 2012

To SaaS Or Not To SaaS...

I have mentioned before, how some of the world's biggest companies have fallen over themselves in a vain attempt to be known as SaaS. A classic example of a dysfunctional organisation getting the wrong end of the stick, while arrogantly swimming in their own hype. Blatantly ignoring who and what they are as an organisation, let alone whether it's a viable option for them.  

A well documented phenomenon is the difficulty that traditional software companies experience in migrating their products to the cloud, let alone morphing their entire organisation to SaaS. Social psychologists will tell you that cultural change in even the smallest of organisation is nigh on impossible; let alone when you have thousands of employees and a management team that just don't get it.

The fact of the matter is, you can try to emulate the SaaS model, but if you approach it with the same old, trad software company attitude, you're just gonna fail. Period. Or err full stop!

So maybe some credit is due to those who don't try then. Maybe they truly do get this fundamental issue; understanding that it would be simpler and much less painful to simply set fire to their platform than attempt the excruciatingly painful, cultural shift required to have a chance of success! Maybe!?

Technology Company or Service Organisation? You Decide!

Therefore, it's best to make the conscious decision early on as to whether you want to go down the SaaS road or not. I mean early on. Like, even before a line of code has been written is not too early! Certainly, long before delivery is strongly advised. 

If, 'to SaaS or not to Saas' is the question, then there are many perfectly adequate answers. Changing strategy or trying different tactics, even to pivot entirely are relatively easy undertakings and likely necessary as things evolve, but to change organisational culture is an altogether different animal entirely. SaaS done well, looks easy (that's kind of the point). But, the majority of tech companies aren't SaaS for a good reason!

But decide now before it's too late

During my tenure at SaaS accounting vendor, KashFlow, we were aware of new potential competitors appearing at least once a month and often on a weekly basis. Often the actual cloud software element looked great, however, 99% of the time they would disappear just as quickly! Why? Because they hadn't made that decision. Consequently, their hard work was destined for the black hole of history before they even started. 

Just Add Website

Likely, the talented bedroom developers were totally unaware that they had to make any non-programming decisions. They probably believed that infamous misconception, 'great products sell themselves'. But as KashFlow Chairman, Lord Young liked to put it, "you can have the best bus in the world, but it's useless if nobody gets on it"! 

Your potential customers have got to know that your bus is coming! Having a domain to match your product name is simply not enough on its own. How many more times? You are not Facebook! They got a Hollywood revision because they are the exception, not the rule. Great products do not sell themselves. Your duty is to load the dice as heavily as possible in your favour!

Before breaking things down into the key elements of SaaS, so that you can load the dice, let's cover off some fundamentals to consider before you proceed with changing the world. Next!

Friday, February 03, 2012

Has LiquidAccounts got the X-Factor?

The strap-line for this site expresses a desire to cover more news. This is not as easy an undertaking as I would hope. I guess if it was, there would be even less justification for teams of journo's than there is presently (bearing in mind the disruptive pressure of the web and all that).

With that in mind I wanted to share what I'd heard of the latest comings and goings at LiquidAccounts as quickly as possible and chew on the fat a little. Having navigated today's scheduled meetings et al, I got down to getting out what was to be a short update. Including:-

"After a relatively quiet first month of 2012, some news! At the same time as Xero sharing the highlights of what to expect in the annual summary at the end of March - including acquiring the excellent WorkFlowmax (congratulations to Gavin and the team - well deserved). Both Diversity & AccMan commentate on this story comprehensively so I'll concentrate my focus on... 

...it's all change at LiquidAccounts! Matt Holmes & Lisa Kendrick (CEO & Marketing Director respectively) have been ousted amid rumours that the Board were less than enamoured with how they were keeping the company's books." <<~~ Diplomatic description!

I was then made aware that AccMan had got in their first!! Hey-ho. But seriously, it's not about who's first with the gossip; this isn't Facebook after all. What about the why's and where now? 

TBH - it's always sad to hear about the sort of thing that has happened at Liquid (and they're not the only ones in some form of hell!). So much blood, sweat and tears gets poured into these ventures. It's easy for judgement to get clouded. 

mentioned LiquidAccounts (be warned this link is to an epic post!) previously when I suggested that building their own payroll module was a bad move. This is indicative of a strategy likely to fail. 

Amid all the hype of cloud and the sexing-up of SaaS, it's easy to ignore the fact that it's an incredibly tough business model for a vendor early on. Especially at the entry-level, where every customer - that costs the vendor money to acquire - is giving you just a few quid a month.

It requires a real single-mindedness not to be distracted from the long-game, while making things viable in the short-term. Witness the extreme funding route of Xero.  

SaaS with longevity requires focus on a narrow remit by a team on a mission, continually reiterating and revealing more depth. It takes real discipline not to be distracted by the quick money of bespoke development work, for example! But it's worth it, in the long run.

I've said before that all the elements of a SaaS business must be given equal priority. Because it's so true! Sometimes it must feel like the competition have divine intervention as you bust a gut with a product that they honestly can't see to be inferior in any way. No wonder that some decide the only option is to build more stuff; to throw more tech at the problem. But that way is folly.

Dennis Howlett wonders as to whether others will be tempted to pick up the IP and the existing customer base et al. Like him, I doubt it. Doubtless plenty will sniff around, like they have plenty of others. But in reality there's still not enough for the big guys to get their teeth into at this stage.

I could be wrong of course. It only takes one after all. Though I'm sure what's left of LiquidAccounts would prefer at least two!

There is another option. Go all in! You've come this far after all. Find someone to give the organisation direction.  Make some tough decisions. Cut out all the fat, the techie bloat that undermines all the advantages that you have. Keep the existing customers on board. That's your fan-base after all. And ongoing revenue of course, while you turn this ship around.

Place bets on optimising an essentially powerful product to play with the big boys in the SaaS market place. 90% of the hard work has already been done. Put in play the likes of integration and creative channel partnerships. Optimise the zero-touch side of the business. Get all parts of the organisation  performing and performing together. I outlined the size of the market up for grabs just a month ago. A massive opportunity for LiquidAccounts. 

And we've still a long way to go before this particular X-Factor final.