Startable – Healy Jones’ & Prasad Thammineni’s Blog

Really? Does this make any sense? Intuit announced that QuickBooks 2011 will not have a free document management plan due to a change of accounting policies. The email they recently sent to QuickBooks users said:

Free Document Management will be discontinued in QuickBooks 2011

What’s Changing?

Document Management is free in QuickBooks 2010, and it will stay that way. But after May 15, it will no longer be free in QuickBooks 2011.

Why?

A change in our accounting policies requires us to stop offering free services in any version of QuickBooks after 2011. We’re not happy about it because we know Document Management could be an integral part of how you do business.

Waaaa? It’s an accounting software company, you’d think they could figure out a way to not let the accountants drive important business decisions. Does this mean that Intuit will never offer a paid version of Mint because they’ll have to end the free version? Does this mean that no packaged software companies can do a freemium upsell model for attached services? If the latter is true, will a company like Microsoft – that makes a lot of money off of one time installed software – be totally unable to acquire freemium SaaS companies? Will Intuit never be able to acquire a freemium company like Box.net? This seems nutty.

I just don’t get this move by Intuit, unless the real reason that the free plan is being eliminated is because they just aren’t making money off of the free to paid upgrades and this is a way to kill off the free plan with an excuse that is so obtuse customers are unlikely to question it.

What do you think? Are the accountants just running the show at Intuit and forcing business decisions to be made off of accounting rules, or is it likely that the free plan just wasn’t working for Intuit as a business/marketing model?

Here is most of the email that I was able to screen capture:

QuickBooks discontinues free document management

Note, I have no info other than this email about Intuit’s document management policy change. And these opinions and questions are 100% mine, having nothing to do with my employer.

Yup, we updated our home page again! OfficeDrop’s new home page is an attempt to get our potential users into a more specific sales funnel more quickly. As we’ve grown and expanded our product line it has become confusing for our new site visitors to find the particular service that they are looking for.

I’ll update when we figure out if the change actually helps improve conversion. Wish us luck!

I’ve just had a couple of articles published on other sites. I guess that is my excuse as to why I haven’t been posting very much on Startable recently…

Raising prices without causing a customer meltdown

If you recall, OfficeDrop changed prices last year. The pricing change went very smoothly – unlike some other pricing fiascos we’ve witnessed recently. I discuss the reasons I think our pricing change went smoothly. In particular, I think SaaS companies are challenged when they try to raise prices because of the recurring, generally non-contractually bound, relationships they have with their customers.

Press release tool for small businesses

I love some of the Grader products offered by Hubspot. In particular, when I was first learning to write press releases their free Press Release Grader was very helpful. I explain on DIYMarketers why I like this press release tool and recommend it to other business owners.

What is going on with the Massachusetts technology VC scene? While the rest of the US seems to be recovering nicely from the VC nuclear winter of death, Boston is lagging. Check out this chart of quarterly VC technology deals from Q4 2009 to Q1 2011 by CBInsights:

Is it just me, or is it odd that the dollar total for MA dropped by over $100 million while New York City increased by well over $150 million? Those are big swings, and I’d hope that the two would move in tandem – but obviously they are not!

The deal total for MA has held pretty steady for the past few quarters, ranging from 39 to 43… but NYC is doing a great job crossing the 50 deals per quarter barrier for the past two quarters.

I like to think of the two ecosysems as pretty highly correlated, with people moving back and forth or traveling back and forth on Acela pretty regularly. For example, OfficeDrop’s investor is from NYC but he’s up in Boston one a month and is open to making investments anywhere along the Acela train line. I know for a fact that Boston VCs are actively looking in NYC for investments – but are they still looking in Boston?

Something doesn’t quite jive here for me. I’m seeing a ton of interesting seed stage internet companies in Boston getting traction and funding. But are we missing out on the current internet bubble?

Checkout the CBInsights post here.

A new survey claims that over half of consumers are aware of the cloud, only 9% say they understand what it is. And surprise, younger people are more interested than older ones!

There is a ton of chatter about a Justice Department anti-trust investigation into Google. There is no question that Google dominates search. See the following search engine market share chart from Compete:

And everyone knows that Google derives the vast majority of its revenues and pretty much all it’s profits from the search business – something like 90%+ of it’s revenue is from search related advertising.

So, my question is, if the Justice Department does something really aggressive and crazy and decides that Google needs to be broken up, how would they possibly split the business? No one can possibly claim that Android, Google Docs, and other industry leading properties that Google has developed are cash-flow generating independent, fully fledged businesses on their own. Despite the massive user adoption for these products, in their current form they are more of “scorching the earth” defensive products instead of stand-alone companies. If they were carved out of the company then they’d need  pretty deep private equity type backers to get them to a profitable form. Not impossible to imagine this happening (i.e. a PE group wanting to fund them for the chance at massive upside) but it doesn’t feel like the traditional AT&T/Baby Bell breakup.

I guess there is the Microsoft example where various governments forced MSFT to stop forcing computer companies to bundle IE or something like that. But how would you stop Google from giving away Android to mobile handset makers? Force them to start charging for it or something? I just don’t get it.

Anyone have any idea what type of action a government would take to punish Google for their search domination?

OfficeDrop announced a funding round on April 1st. As in April Fools day. I think someday I’ll do a post on tips for doing an April Fools joke press release, because we kind of messed up a little. Who knew that the newswire distribution agencies wouldn’t publish fake news that OfficeDrop rejected a, like, $6 billion acquisition from Google?

Anyway, here is the press release on our actual funding round:

OfficeDrop Announces $1 Million Funding Round to Support Major Advancements in Product Development

OfficeDrop’s Digital Filing Technology Enhancements Fuel Rapid User Growth, Record Momentum

CAMBRIDGE, MA - (April 1, 2011) – OfficeDrop today announced a $1 million round of angel funding led by White Owl Capital, which will be used to support product development and marketing for the company’s digital filing and scanning software. The investment comes on the heels of the company’s rapid expansion from a mail-in scanning service to Web and desktop applications that enable customers to scan to and manage documents in the cloud. OfficeDrop has seen more than 6,000% growth in customers since evolving its model from a mail-in only service to a combination mail-in and self-service scan-to-cloud software.

Prior to securing this round of funding, OfficeDrop made major advances to its product suite. In 2010 alone, the company announced the following developments:

• ScanDrop, a desktop scanning application for Windows and ScanDrop Mac that connects most scanners directly to popular cloud storage providers
• The OfficeDrop digital cloud filing system, an extremely popular scan-to-the cloud online storage for small businesses
• OfficeDrop Paper to Go, an iPad application to manage, search and share documents from anywhere
• Partnerships and integrations with the leading cloud storage applications including Evernote, Dropbox and Google Docs as well as popular small business software such as QuickBooks and FreshBooks.

“OfficeDrop’s technology is incredibly practical, and is driving the transition from paper to the cloud - a market that’s on path to be worth tens of billions of dollars,” said David Mars, partner, White Owl Capital. “Small businesses and consumers alike will continue to move important business functions to the cloud, and digitizing paperwork is one of the first steps to getting organized and saving money.”

The funding will also be used to continue the company’s growth into traditionally paper-heavy industries, including accounting and financial services, legal, insurance and real estate. Businesses continue to adopt public cloud computing technologies, with U.S. business cloud spending expected to increase by 112 percent between 2010 and 2014 (source: In-Stat). OfficeDrop will continue to invest in mobile app development, as well as consistent technological advancements to its current line of products.

“Every industry deals with the burdens of paperwork. Small businesses and consumers now have a way to easily organize these documents, and can access, share and edit their documents from nearly any device, anytime, anywhere. We make it simple: scan, organize, send directly to the cloud and find your information at your fingertips, anywhere you go. It’s that easy,” said OfficeDrop CEO Prasad Thammineni.

To download ScanDrop for Mac, visit the Mac App store. ScanDrop for Windows is also available for download on the OfficeDrop website. Learn more about mail-in scanning and document scanning to the cloud on OfficeDrop’s website.