FreshBooks and Enterprise 2.0

by admin on October 22, 2006

in Innovation

While at Office 2.0, I met with FreshBooks CEO, Mike McDerment. Readers might recall I really like Mike’s approach to SMB service organisations in his FreshBooks service. It goes without saying that Mike is one of the good guys, genuinely concerned to meet customer expectations and yet be open when things go pear-shaped.

Coincidentally Isabel Wang referenced Freshbooks (and Echosign) as part of a discussion loosely around ‘emergent collaboration’ as a key distinguishing characteristic that marks out the business as value driven in the technology enabled future. Rod Boothby picked up on Isabel’s view, looking to refine a definition of Enterprise 2.0 that helps people weave a way through the maze of innovation:

I was thinking of it narrowly in terms of super users. As in software is only emergent if end users build their own solutions. Examples would include folksonomy tagging, blogging when blogs are seen as a tools to support information distribution or to facilitate open conversations. And Teqlo is likely to be the best example, where people literally roll their own applications.

…emergence also happens when non technical end users change the way work gets done by simply selecting a SaaS solution.

A good segue back to Michael. We discussed where FreshBooks goes next. this from his blog:

Applications that use the web as a platform have the potential to begin an era of providing new value for their users…

All the users that profile themselves (e.g. tell us “I am a web designer”) will begin receiving useful comparative business metrics they can use to benchmark their business. For example, a web designer might like to learn:

* What is the average invoice size for web designers?

* How long does the average web designer take to get paid?

* What is the average monthly revenue of other web designers?

We’re going to tell our active users their industry average AND their own average, so they can see how they stack up….Remember when you had to pay Forrester $1200 for a report like this? It’s times like this I catch a glimpse of how our service – and services like ours – will begin to move markets.

Pretty much sums up the bulk of our discussion. Notice that users don’t have to do anything? The system magically deals with the market intelligence stuff in background. Beat that Mr. FCA. The next big feature set will be expenses. On Isabel’s site I said:

Their approach drives a stake right through the heart of traditional accounting both in-house and professional. In discussing where they go next, expenses is the obvious next step. Now think this – self organising groups within the FB network could start benchmarking both the revenue and expense sides of their businesses, share ideas, learn from each other. How good is that? No accountant required? I doubt it but for the large part made redundant at the transactional level.

Is that emergent? I think so. It is emergent becasuse it is the user of otherwise foisted technology that is helping FB shape its direction. If the services work, they’ll flourish, if not they’ll wither. Now where can you do that in traditional software approaches?

This is where the innovative SaaS players will make a huge impact. FreshBooks now stands just shy of 95,000 users. It was 60,000 in July. That’s a customer acquisition rate I defy any other software provider to better. This has happened because from the very start, Michael’s team think about issues from the user’s perspective. The fact it disrupts traditional approaches to accounting is an along the way consequence of thinking differently.

The profession will have to learn to live with this kind of thing, adjusting its training and learning to suit the higher levels of business understanding that will be required to cut it in a competitive consulting or audit bid. And it might be sooner than anyone thinks.

Just shy of a year ago, an editor for an online accounting title thought I was barking mad to think SaaS would be a big deal in 2006. He now sees that the telescope of time really is having an impact on how we think about the professional relationship to business in a world where the social aspects of our relationships are truly under the microscope.

The service provider targets are moving so quickly it is almost impossible to keep up. Hence the need for a continuing debate about the definition around Enterprise 2.0. Whatever it is, I am pretty sure it will be shaped by the actions of SMEs and not Big Business. That will have a profound effect on the way professionals approach their focus of learning. Back to Michael.

Michael’s business has become global. His company blog contains bags of useful information about what it’s like to be a small business, especially around the consulting type of organisation. he hasn’t spent a penny on traditional marketing, relying solely on Word of Mouth and the attention of a handful of high profile bloggers. I wonder what the Blinksale people have to say about all that?

But, in all this terrific discussion, some practical obstacles get missed.

  • Regardless of the utility of these services, many large organisations treat their email transmissions as spam. That’s happened to me with both Blinksale and EchoSign. That despite pre-warning recipients that I would be using those services.
  • Another company I know refuses to take email from Wanadoo in France or Gmail, the presumption is that all such ‘stuff’ must be coming from spammers. No amount of exception pleading gets past the email gatekeepers.
  • Yet another company insists on sending NDAs via courier instead of using EchoSign. Why? Because it keeps an admin in a job.

Argue however you like these are one off cases but if so, then why am I running into them at nearly every turn? I’m either incredibly unfortunate or, as is more likely, the new services have yet to find a satisfactory way to bridge the old and new. Hmm – I wonder how we get over THAT one.

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Al October 22, 2006 at 10:46 pm

Well to get over it we have to solve the problem that the old system has, trust or lack of it. Opt in wins over targetting, that means we have choice, we implicitly trust our own choices.
http://www.folknology.com/Dennis_s_AccMan_-_Fresh…
which refers to BEER : http://www.folknology.com/BEER_Internet_Event_Rou…

Good to see you back after your trip..

regards
Al

Isabel Wang October 22, 2006 at 11:02 pm

Hi Dennis,

It takes patience, according to Reid Conrad from Near-Time. But he thinks large enterprises are becoming more receptive by the day to SaaS. Jason Lemkin from EchoSign mentioned also that he's actually getting faster than expected large enterprise adoption. And customers who initially used EchoSign to collect faxes have been migrating to e-signatures.

I guess every new solution faces Andrew McAfee's "9x email problem". But with time, more and more companies will discover that an admin's salary + courier fees costs waaaay more than 9x EchoSign's fees :)

Dennis Howlett October 23, 2006 at 4:19 am

Reid is absolutely correct. My problem is that ALL the un-named companies are clients in (ahem) technology. The over the bleeding edge variety…allegedly.

Al October 23, 2006 at 12:48 pm

Well the 9 x email analysis works for replacing email (or replacing in general). The situation however does not always require replacement (not just black and white). Often new innovations can run along side existing technologies delivering vertical value rather than replacement value. They may later actually replace in some rare cases but it is not required fot it do so for value or ROI. This is even more so in Business and the Enterprise arena (compared to consumer), most organisations that have been around for any length of time have and maintain legacy equipment/platforms. A good example is SalesForce which is commonly used by individuals and teams within enterprises (bypassing the I.T. dept) which is used along side existing infrastructure I.T. Often this is the backdoor by which successful new innovations can enter the enterprise.

Isabel Wang October 23, 2006 at 1:45 pm

That's a great point, Al. And hence Rod Boothby's very funny post on the "taxi fare secret". His point was E2.0 vendors should bypass the IT department and evangelize to individuals, because

If you charge $9/user per month and make each end user pay their own way, then each person has to get the company to cover just $9 in expenses. $9 is cab fare. Taxi cab fare doesn't require approval. Or… $9 might be just cheap enough for people to be willing to cover it themselves. Maybe they'll call it a telecommunications expense.

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