Startable - Healy Jones’ & Prasad Thammineni’s Blog

Along the lines of my recent series on what makes a good platform (part one, part two) Shaival Shah has a post on how Hunch uses its API to drive growth.

This is my second post on what makes a good technology platform company, from the point of view of the companies that integrate into the platform. (I’m calling these companies “platformees.”) Here is a link to the first post, “So you want to be a platform? part one.” Again, this is focused on SaaS applications.

Good communication with partners on your platform. In my previous post on what makes a good platform I mention “consistent strategy.” The world is not perfect and companies do need to make changes sometimes! Solid and early communication with platform partners is the best way to prepare your platformees for change. Email seems to be the  best way to manage this, from my experience. It is also very helpful when the platform itself has good internal communication. When a startup (like mine) has a conversation with a member of the partner team at a platform we use that conversation as a basis for making important decisions (like committing time or effort to developmental or marketing plans.) If another person on the partner team at the platform then does something that destroys the effort we’ve spent it is very costly to us. Companies that want to be platforms need to realize that startups have very, very limited resources. We can’t afford to waste effort, because if we are not growing then we are dying. As an addendum to this, I would add that having a person or team that manages the relationships with your platformees is very helpful.

Reliability. When a big platform app goes down and the customer can’t use the little SaaS company’s integrated offering… well, the customer tends to blame the little guy. Telling a customer who is trying to access critical business data that “so-and-so big company is experiencing technical difficulties again and there is nothing I can do” really doesn’t help him/her have confidence in your app. Secondly, if new users can’t sign up then it means I’m not growing through your channel when you are down. Third, and I think a lot of SaaS companies tend to forget about this - we are still early in the adoption curve for SaaS. Most small business owners and many consumers are still not entirely comfortable with using/storing critical applications online. No one is going to be comfortable switching to online services if they are prone to outages.

I’ve got a few more points that I will try to make in the next post on platforms. Until then, happy integrations!

One of OfficeDrop’s growth engines is our integrations with other SaaS services, like 1) Google Apps or Evernote, 2) with more traditional software offerings like Intuit, etc or 3) that work on particular hardware -i.e. Apple’s iPad. These players are positioning themselves as “platforms.” With open APIs and dedicated means of pushing their existing customers to these integrated services via marketplaces they trying to increase the stickiness/usefulness of their own services while creating an ecosystem of developers who expand the power of their offerings.

In other words, companies like OfficeDrop create  stuff that works with the platform’s service and the platform company helps OfficeDrop sell the integration.

Our platform growth strategy is working; on some days half of our traffic comes from the 3rd party platforms we work with. And this traffic converts!

Now that OfficeDrop has integrated with a number of platforms I think I’m starting to notice some patterns. Some of these integrations totally on fire, driving great traffic and conversions. Others are not really doing that much and were not worth the development effort that we put into them.

I have been writing and rewriting this particular blog post for over a month. It’s getting pretty long, and continues to evolve, so I am going to publish it as a series of posts. I was prompted to actually get this series started by the recent Facebook move to replace application boxes with tabs, which I will comment on below.

Here is my opinion on what makes a good platform from the view of a platformee. (I made that word up.)

What makes a good SaaS platform - a view from the bottom up

1) Developer support. Having a working API is table stakes… at this point if you want to get busy, smaller SaaS companies to devote valuable development resources to getting on your platform you need to make it easy to write to your service. Documentation, good forums, and if you really want to make it work you need a developer support team will answer questions. A great example of this was the Evernote team; they really helped us get our system working with theirs. Although OfficeDrop was one of the very first companies to integrate with API it worked from day one - mainly due to the high level of support and fast response times their API dev team gave us. This is our listing in Evernote’s trunk.

2) Consistent strategy. Facebook’s move made me think of this today (see the following write up on the box to tab change they are making.) When smaller players integrate with a larger company’s platform, they smaller company makes assumptions about how the platform will work going forward. The decision to spend valuable time integrating and then promoting an integration is based on these assumptions - and for a smaller company this is a very big deal. At OfficeDrop we have limited development and product dev resources; every hour is precious. When a platform makes any change it has an impact on the ecosystem. Technical changes, like Apple’s decision to no longer support flash, can make months of development effort worthless (thankfully this did not impact us - we were thinking of using flash to do drag and drop in our iPad app, but picked a different way.)  From a marketing perspective, anything that makes it harder to install or find installable apps is a dangerous change to the ecosystem. I wonder if Facebook’s recent decision will make it harder for people visiting a friend’s page to discover new apps… if so, this is just as dangerous as a massive technological change.

I will post some other thoughts on what makes a good platform is subsequent pieces! Would love to hear thoughts. I’ve got five or six (depending on how I group it) other points I’ll share soon…

I’ve had great luck at OfficeDrop using the “crowd” to help us with important decisions. We very actively survey our customers on new features, pricing changes, etc. Our most important use of the crowd was when we changed our name from Pixily to OfficeDrop. This name change was an important step for us, since we wanted to reposition ourselves from a document scanning company to a digital office provider. SmallBusinessComputing recently quoted me on using crowdsourcing; check out the article!

Prasad has a new piece on Small Business Trends on Turning email newsletters into customer insights. I’m a little partial to this newsletter since I helped OfficeDrop create these testing tactics (I’m not claiming that these tactics are unique, just that I was the person to bring them to our marketing efforts.)

I really like the point about allowing replies to the marketing emails. I send a lot of emails our to our new subscribers, and let customers reply to me directly. This helps cut off customer service issues early in the process, and also can get a good dialog going with individual customers.

One point that that did not make Prasad’s piece is that we also let customers know about upcoming new releases/products via the newsletter. It is a great way to get early-bird signups to new products.

16 Ventures, a firm that helps SaaS companies with their marketing, has just posted a piece comparing 3 different SaaS vendors’ pricing pages. The key takeaway - don’t lose the marketing message on the pricing page; it’s not just a checkout page but it’s another opportunity to hit home the main marketing message. I am committing this foul on my own pricing page…

Worth checking out for people launching their own SaaS service.

http://sixteenventures.com/blog/is-your-pricing-page-a-momentum-killer.html

Scott Kirsner recently let me know about a great upcoming event in Cambridge - the Momentum Summit (http://www.momentumsummit.com). The conference is bringing together experienced local entrepreneurs and letting them share advice with the local startup community, and sounds like a good opportunity for people like me to hear from people who have done it before. The conference seems to have a internet/online business angle, which is also pretty perfect for me!

Some of the people speaking have done some amazing things; some of the execs who caught my eye are:

Gail Goodman, Constant Contact CEO

Steven Kaufer, TripAdvisor CEO

Trynka Shineman, VistaPrint CMO

David Cancel, Performable CEO

According to Scott, the purpose of the event is to “ to bring in some of the most successful CEOs, founders, marketers, and salespeople from our region, and have them share their advice on how small companies developing great products can build really big customer bases.”

As a guy trying to grow OfficeDrop’s customer base into something really big, it sounds like a good conference to me!

I also think that the proceeds will benefit a local non-profit, Stay In MA (a scholarship program for Massachusetts-based college students), which is an added bonus.

I’m happy to announce (a bit belatedly) that Pixily is now called OfficeDrop. Changing the company’s name was a pretty big deal, but it has gone smoothly. There is much more to it that just finding a domain that we could purchase and redirecting URLs. The biggest thing for us was getting feedback from customers and getting their buy in on the new name concept. So far so good!

I hope to post on our journey to find a new name soon, but have been so darn busy that I haven’t had a chance!

Brent Frei has a post on VentureBeat on increasingly interesting SaaS “app store” battle. I really care about this battle because Pixily has integrated with Intuit’s AppCenter, and it is an important part of our distribution strategy.

While Brent argues that Microsoft is losing out and will not become the powerhouse platform for the next generation of internet applications for business, I’m not yet so sure. In my mind the platform that best drives new customer growth for the largest number of third party applications will be the winner.

I think that the winner will be determined by applying the most marketing muscle plus the best user experience (both for the app developers but also very importantly from the end customer’s perspective.)

That’s my two cents; read his article.

Vivek Wadhwa had an interesting post today on selling in TechCrunch. I’m learning some serious lessons on selling now that I’m the head of marketing at Pixily - although I am very much still a novice sales manager! I reserve the right to be completely wrong/change my mind on any or all of these points

1. Aspiring to a touchless sales model is great, but small business customers like to know they can reach you on the phone. Many great SaaS companies have a great sales funnel that terminates when a customer signs up online without speaking to a sales rep. I think most small business SaaS startups hope to create this type of sales cycle. After all, how can you have a profitable company if you need to have a sales person on the phone closing $15 per month sales? But, at Pixily, we’ve found that phone calls result in sales and great free to paid user conversions. We offer a free trial, and a decent number of our paying customers choose to sign up for the free trial and eventually convert to paying customers. The highest converting (free to paid) lead source is the customers who call us and who we sign up for the free trial over the phone. The convert to paying customers by over 3x vs. the next best source. (Note: “source” is probably not the right word to use, but it’s Saturday and my coffee isn’t kicking in quite yet…) Is this sustainable in the long term? I’m not experienced enough to know at this point.
2. Customer service reps make great sales people too! Vivek mentions how developers make great sales people. I’d very much agree, since our developers often drive closed leads from networking events they attend and from conferences they speak at. But we are having success with our customer service reps doubling as sales people. First of all, they know the product. Secondly, they understand how live customers are using the product. Third, when a free user calls in to ask a question it’s the time to try to sell them on an upgrade!
3. Customers do the darnedest things with the product - asking them “why are you interested in my product” is really helpful in selling. For example, one of Pixily’s products is a simple document scanning service. We happen to be pretty good at scanning documents, and can offer it profitably as a stand alone service. We had a bulk scanning customer who was a magazine publisher. He wanted to get his old magazine issues (from the 80’s and beyond) online, but only had them stored in print. Once we actually really understood how he wanted to use our product we were able to sell him - even though we were more expensive than a couple of local scanning providers in his area. We’ve sold this particular product a few more times, mainly because we “get” what the customer’s end goal is.
4. Managing a sales pipeline is harder than it looks. When you are the VC, you get to see all these pretty sales funnels at board meetings. When you are the person trying to grow the business, keeping the different campaigns and leads all moving along in the funnels is much more challenging! I guess it’s just in my nature to enjoy playing/measuring our sales channels by output, but I have to fight the instinct to not spend too much time in analytics and not enough time in selling/content creation.
5. When selling online, content is king. I’ve had a ton of luck getting great content out of a marketing intern we recently hired. Not only has he built an entirely new site dedicated to document scanning, he’s also put out some very helpful blog posts and made content upgrades to our web site. All this content is producing - both in terms of us moving up on Google, getting more traffic and improving our conversion rate.