Comments on: Kashflow hits 2,500: so what?

By: Duane Jackson

Duane Jackson — Sun, 01 Feb 2009 16:21:21 +0000

You say Freshbooks has 48,000 UK "users" - as I said on my blog I am talking about paying UK users. Do you have any info on how many of those 48k are actually paying customers as opposed to those taking the fee version of FB? To clarify your openng paragraph - the 120 practises are members of our Partner Programme which costs £799/yr. So they still count as 'customers'

By: William Parker

William Parker — Fri, 30 Jan 2009 10:32:12 +0000

Just returning to Dennis's original posting I have to agree with the vertical focus that is required for SaaS companies like ourselves coming into the market. There is no doubt that the big players (Sage, Quickbooks etc.) dominate the "generic" or non-specific market for book keeping software and, particularly in the current economic climate, people will stick with what they currently have unless there is a genuinely compelling reason to change. In a similar way I'd like a new car but the one I've got isn't broken and unless someone invents a car that doesn't need fuel (i.e. is cheaper to run than the one I have) I won't change!

I'm sure that even the big players would agree that competition and innovation in software is good for all users and that new entrants to the market have to challenge the established norms or there is little point in us existing as the established players are doing a good job already! To use my car analogy above again, if a SaaS player can come into the market with a proposition which says we do have a compelling reason for you to change even if your current application isn't broken then that SaaS company has a genuine future. In our case we think our vertical focus in designing our solution with accountants in practice and franchises in mind has to form the basis of these organisations considering switching from their existing packages. Without this focus, as you say, it will be a very slow slog for us to make inroads into the market…

By: Dennis Howlett

Dennis Howlett — Fri, 30 Jan 2009 09:22:50 +0000

@Paul – let's back up here a bit. Kashflow is the company tilting at Sage. Both their numbers are in the public domain. The logic is obvious so unless you've got some hard facts you'd like to share kindly keep sarcastic comments away from this blog.

By: Paul Harris

Paul Harris — Fri, 30 Jan 2009 02:26:18 +0000

Apples are Apples,
Oranges are fruit,

You my Sage, are a rounding error

By: Dennis Howlett

Dennis Howlett — Fri, 30 Jan 2009 00:22:11 +0000

Sorry Paul that doesn't make logical sense. I assume you have the data on various segments of the addressable market plus data on the various players' market share etc? If so then you'll know that 5K is most certainly a rounding error. If you annualize Kashflow's stated numbers and compare to Sage UK results = 0.2%. That's a rounding error by any definition.

By: Paul Harris

Paul Harris — Fri, 30 Jan 2009 00:14:33 +0000

5K+ is no rounding error – not when its currently a high % of a market that is going to develop exponentially over the next 4 years

By: Dennis Howlett

Dennis Howlett — Thu, 29 Jan 2009 23:24:32 +0000

@paul – I'm a huge saas fan but 5K customers is a rounding error. 50K? now that's a different proposition. Hoping for a flip is a bad idea – tips your hand too easily and automatically pulls the price down. Plus you've got to look at the DNA problem. It's not that simple for Sage which as we know is trying to make its own move in this area and currently stumbling. Given what it says about dev etc, it could have bought Kashflow a while back and pocketed change in the process.

By: Paul Harris

Paul Harris — Thu, 29 Jan 2009 23:13:48 +0000

Very interesting comparing Kashflow and Xero…
Both have very similar customer numbers (Kashflow 2500, Xero 3200)
(Kashflow had a 15 month headstart, Xero have taken the high cash burn approach)

Kashflow predicts they will double their customers (over 5000) by the end of the year,
Xero should also be able to do the same…(I would suspect by May 2009)

Both of these companies are doing well (especially in their 'home' territories), Sage are really letting these competitors get a massive head start…

I can see Kashflow being bought out by Sage within 2 years ~ for a sick (SICK) amount of cash. Xero sounds like they want to be in it for the long haul…

Both of these companies have laid a very solid platform and both will be very successful

By: Dennis Howlett

Dennis Howlett — Thu, 29 Jan 2009 21:07:35 +0000

I'd thought that myself about the 120/2400 but then a 1-4-1 comparison is not really fair without some input from the usually lively Duane.

Yes – winweb's offering is unique in the marketplace and on eI should have mentioned. It gets around the 'niche' issue by layering other useful services.

By: Jason Holden

Jason Holden — Thu, 29 Jan 2009 21:02:39 +0000

2,400 users and 120 practices sounds great.

Except, that is only an average of 20 clients per practice, so it sounds like these practices are not doing enough to promote Kashflow and its online benefit to their clients, why not? Up to date accounting figures has got to be a must, now more so than ever in the recession.

Having a niche market is certainly a good strategy, such as that of FreeAgent.

Take winweb (my practice is a gold partner with winweb), they have got Viking offering their product for free if you spend £30 (I think) with Viking, well lets face it if you’re a Viking customer then that is easy to do, and winweb offer far more than accounting software, which is their niche in the market place.

So what are the rest doing? Offering generic accounting software is just not enough, whether it is on or off line.

Just my two pennies worth.