Startable – Healy Jones’ & Prasad Thammineni’s Blog

3 Out of 4 Small Businesses Expect Mobile Tech to Become More Important to Success

A survey of small business owners by Bank of the West shows that SMBs are aggressively trying out new mobile technologies, including devices, apps and cloud services, and expect to use more and more of these services to power their companies. It’s pretty exciting to see how the mobile technology revolution is being lead by small businesses, not enterprises.  According to the survey, small business owners really think that THEY are going to be the ones to most benefit from mobile technologies – even more so than big enterprises.

Most small companies that invested in mobile technologies saw a positive return on their investment – it sounds like the time and effort was worth it for most of those surveyed. Also positive is that only 35% of the businesses had made NO investment in mobile technology – although, I’m willing to bet that at this point most are not thinking about or including their cell phones, which pretty much everyone has at this point – and which also does make people more productive.

SMB’s Get Positive Return on Mobile Investments

Mobile Increases SMB Efficiency

2/3 small businesses have seem increased efficiency from mobile technologies and 60% believe that mobile technologies are completing functions that other technologies can not accomplish.  This is pretty exciting, as it proves that mobile will create new, exciting markets that have never before been contemplated! Wahoo mobile developers!

Mobile Creates Efficiency

My company, OfficeDrop, is seeing continued adoption of our small business cloud storage apps. These are lead by our mobile apps, like the iPhone PDF scanner application and our Android scanner app – both of which are having banner months! Check them out today if you are looking for a good way to manage your small business files in the cloud from anywhere, at anytime, using mobile and desktop devices.

I’m quoted in a PC World piece about how apps will change the nature of desktop software. I had a long conversation with the author, Jared Newman, about how OfficeDrop’s apps, both our smartphone scanner apps and our mac desktop scanner app, ScanDrop, are dramatically changing how we distribute our SaaS product.

The article’s thesis is spot on:

Not surprisingly, many developers are enthusiastic about the easy distribution and streamlined billing that app stores provide, yet these stores also introduce challenges–some that are unique to desktops, and others that have plagued smartphones since the dawn of the iPhone App Store.

I spoke with Jared for a while about how we were wrong about how customers wanted to use our service. They actually want to download and install apps, not use the web. We were off by 100%.

The soon to be famous Healy Jones quote is:

Healy Jones, vice president of marketing for OfficeDrop, noticed this shift away from the Web immediately after his company released mobile and desktop apps for its document-scanning service.

OfficeDrop, which provides searchable cloud storage, says that it sees seven times more user engagement through its apps than it does through the Web browser, Jones notes. Since releasing its first apps in 2011, OfficeDrop’s user base has grown from 7000 users to 140,000 users.

“We had a thesis that people did not want to install software; that the cloud meant that people could use a browser to interact with software and would never have to install anything. We were completely wrong,” Jones says. “People love installing software.”

Obviously I’m really bullish on apps. That’s also why I’m very bullish on tablets (and part of the reason OfficeDrop recently released an Android tablet version of our app.) Apps are how people want to interact with software. I’m happy people like HTML 5, but if it isn’t installed it’s not gonna grow as well as an app.

Gartner is predicting that Software as a Service will hit $14.5 billion in 2012. 17.9% growth off the previous year – not bad at all.

SaaS grow should stay robust until 2015 when Gartner says it will be $22.1 billion.

I happen to think it will stay strong beyond 2015, but I’m pretty sure that this just a limit of how far out Gartner wants to make a prediction at this time, not an actual limit of how long SaaS will continue to grow.

A quote from the release: “After more than a decade of use, adoption of SaaS continues to grow and evolve regionally within the enterprise application markets,” said Sharon Mertz, research director at Gartner. “Increasing familiarity with the SaaS model, continued oversight on IT budgets, the growth of platform as a service (PaaS) developer communities and interest in cloud computing are now driving adoption forward.”

Another cool thing about the Gartner press release is that it’s dated May 27, 2012 – they are really forward thinking over there!

North America Leads SaaS Adoption

According to the release,  ”North America, specifically the U.S., currently represents the largest opportunity for SaaS, and it is the most mature of the regional markets. SaaS software revenue is forecast to total $9.1 billion in 2012, up from $7.8 billion in 2011. Consistent with other regions, North America shows the highest SaaS deployments in expense management, financials, email and office suites. Use of Web conferencing is higher in North America than in other regions, in part because of a highly distributed workforce.”

One of my sysadmins pointed out a great post from yesterday on using a decoy on your pricing page. If done well this can be a great strategy.

I’ve used this decoy pricing tactic on OfficeDrop’s pricing pages for a while. In particular, our digital filing pricing page has an expensive plan that has nicely increased overall conversion on the page.

The main result of this decoy is increased conversion on the page. In otherwords, a higher number & percent of visitors to the page pick a plan and become an OfficeDrop user. It hasn’t really changed the MIX of plans (very few people pick the expensive plan and the same % of people pick the other plans). But I consider the decoy plan a success because it’s getting more people into our funnel.

You can see the pop here when we added a decoy pricing plan to our standard digital filing pricing page. This chart is the % of visitors who visited the page and then signed up for a plan. I.e. the conversion rate of the page. Note that there is a little dip in the beginning that has nothing to do with pricing; it’s a data error. The way to look at this w/o the data error is the two little peaks on the left are close to the pre-decoy conversion rate average; the hump on the rigth is the new average post addition of the decoy pricing plan.

What the Decoy Pricing Plan Looks Like

The decoy pricing is the “ScanPro” “ScanFive” plan on the right. (Thanks for the typo catch Pete!)

Decoy Pricing Plan

It’s designed to be expensive and to make clear that we’ve got the ability to support additional users in the plans… it’s not really clicked that often.

Anyways, check out the post I linked to above. You’ll find it very solid, and it explains why a decoy plan works.

Lincoln Murphy, the well known SaaS Marketing guy, got pretty upset at a recent TechCrunch piece on the freemium pricing strategy that posted this weekend. Lincoln says (I’m on his email newsletter list; it’s pretty good): “In a nutshell the Complete Guide to Freemium on TechCrunch is a post by someone who got lucky enough to get their post accepted so he can get a backlink to his site from TechCrunch and where he takes the results of studies and some words from high-profile VCs and weaves it together into a post for the TMZ of the tech industry.”

Ouch. That’s a little harsh. The article isn’t bad at all. The conclusion is 100% great, actually.

What is Freemium?

However, I don’t think it’s the Ultimate Guide to what is a actually a pretty complicated pricing strategy. I happen to disagree with the author’s ideas that a time based free trial = freemium. I can’t tell if my disagreement is a big deal or not – his company, FutureSimple, has a free trial offer, so it’s hard to know how much of the piece is using that as the basis for the post vs. a couple of professors he references. I disagree with the idea that a free trial is freemium so much because OfficeDrop recently made the switch from a free trial to having a free forever plan and we called it “going freemium.”

My definition of freemium is that a user will have the opportunity to use the service/software/whatever forever without having to pay for it. It may be a limited plan or limited features, it may be ad supported; whatever. It just means you can use it for as long as you’d like without paying. FreshBooks has a freemium model, but you run out of “free” pretty quickly. You can jump through hoops to keep it free, but most likely you’ll upgrade. A free trial that expires after a set number of days doesn’t meet my definition of freemium.

OfficeDrop’s free plan is driven by our mobile distribution strategy. I write a little bit about why we think apps are taking over here. But you should listen to my conversation with Lincoln – I call it “Healy Jones on Freemium.” Our free plan is a free forever plan, with some upgrade triggers baked in – search limits, storage limits, OCR limits. But it’s a pretty good product for free; we are the only company offering free high quality OCR for scanned images coupled with storage. People seem to like the plan… and they also seem to like to upgrade to paid plans. We like that part for sure!

Lincoln is putting on a webinar on kicking butt with your company’s free trials model. I think he’s got some good stuff, so I’d suggest you register!

Yup, it’s me, Healy Jones, talking about the OfficeDrop cloud filing system switch to freemium with Lincoln Murphy of 16Ventures. Lincoln is that well known SaaS pricing guy, and we go over the switch OfficeDrop made from a pure web only service with a 60 day free trial to an app focused business with a freemium pricing model.

The switch in our pricing strategy has been pretty huge for OfficeDrop. It’s driving a lot of new user growth – both free and paid. It’s been only a month and a half since the switch and the change is clearly measurable with our analytics packages. So far, for our SaaS company, freemium seems to be working.

Check out the interview with on why OfficeDrop went Freemium here! Or simply watch the video embedded below.

Healy Jones with Lincoln Murphy on Freemium

I’m pretty excited about a new partnership my company has that just launched. OfficeDrop is working with Nuance’s PaperPort desktop filing system to bring the newest version of PaperPort, PaperPort 14, to the cloud.

The team here at OfficeDrop was able to connect our APIs to PaperPort 14′s desktop client, making it simple to right click any folder from within PaperPort 14 and automatically sync all files to the cloud. If you include the mobile apps we developed this means you can right click a folder and the text search, browse and share the folder and it’s contents from your phone. It’s pretty cool and the tech press seems to be getting it. You can buy PaperPort 14 at paperport.com, where you can also sign up for a free PaperPort Anywhere account. And the mobile apps are here:

• PaperPort Anywhere iPhone and iPad App
• PaperPort Anywhere Android App

Obviously preparing for this was a ton of work, which is why I’ve been totally silent on the blogging front. Hopefully now that we are launched I”ll have time to get back to posting more frequently!

Below is the press release by Nuance talking about PaperPort Anywhere.

Nuance Launches PaperPort Anywhere Cloud Service

Making it Easy for Millions to Organize, Access and Share All of Their Paper and Digital Documents, Anywhere and Anytime

BURLINGTON, Mass., August 2, 2011 — Nuance Communications, Inc. (NASDAQ: NUAN), a leading provider of speech and imaging solutions, today introduced PaperPort® Anywhere, a new cloud-based service that makes it easy to organize, access and share documents from nearly any PC and mobile device. PaperPort Anywhere lets users manage and access their documents in the cloud using web browsers, as well as using free apps from Nuance for Apple® and Google® Android® mobile devices.

The service uses the market-leading Nuance OmniPage® OCR (optical character recognition) engine to automatically create searchable documents from scanned and camera-captured documents, as well as faxes, making paper content as easy to search and find as digital documents. As a result, users can organize, access and share all of their document content on PaperPort Anywhere.

“There is a reason that recent surveys show over 51% of people still use paper files – it is in large part because current cloud services treat paper content as an afterthought,” said Robert Weideman, vice president and general manager for the Nuance Document Imaging Division. “PaperPort Anywhere goes further than other services by closing the content gap between paper and digital documents – making it easy to scan to the cloud, improving the way users manage both their scanned and digital documents, and by making cloud access easy and convenient.”

PaperPort Anywhere also integrates with the new release of Nuance PaperPort 14 for Windows®, the world’s most popular scanning and document management application for the PC, which was also announced today. PaperPort 14 provides automatic synchronization of Windows folders and files with PaperPort Anywhere. It also adds conversion of scanned and PDF documents into fully formatted word and spreadsheet files that can be edited on Windows, the Macintosh and through cloud services such as Google Docs and Microsoft Office 365. PaperPort 14 provides robust PDF capabilities, including the ability to create PDF from practically any application, and includes PDF-MRC, which creates scanned files that are up to eight times smaller than scanned PDF files without compression.

PaperPort Anywhere is valuable to anyone that works with documents, including the over 20 million registered users of Nuance desktop applications, and users of the more than five million seats of PaperPort that are deployed each year. PaperPort Anywhere includes free apps for Apple iPhone, iPad and Google Android devices, and is free for up to one gigabyte of searchable storage space. PaperPort Anywhere subscription plans include $9.99 per month for 10 gigabytes and $24.99 per month for 50 gigabytes of storage space.

PaperPort Anywhere Key Features and Benefits

PaperPort Anywhere makes it easy to organize, access, and share any document – both paper and digital – anywhere and anytime. Key features and benefits include:

• Organize All Your Documents in the Cloud. PaperPort Anywhere is more than cloud storage – it provides a better way to organize and use your documents. PaperPort Anywhere’s thumbnail and clip views of paper and digital documents are key features that help you quickly organize documents.
• Search and Find both Paper and Digital Documents. PaperPort Anywhere is powered by the Nuance OmniPage OCR engine, which provides the highest levels of accuracy for scanned documents and image PDF files, such as those from fax services. The best OCR means users can find indexed paper documents just as they do Word and spreadsheet files.
• Access and Use, Anywhere and Anytime. PaperPort Anywhere is accessible through any web browser at www.PaperPort.com, the web gateway to PaperPort Anywhere cloud services. Nuance also provides free apps for the Apple iPhone®, iPad® and Google Android devices, and supports Microsoft Windows through PaperPort 14.
• Share and Collaborate. PaperPort Anywhere makes it easy to share links to files stored on the site. The service also supports secure and permission-based emailing of files into PaperPort Anywhere accounts, making it easier than ever to collaborate and share documents with others.
• One Click Scan to Cloud. Only PaperPort Anywhere integrates with PaperPort 14 – the world’s most popular scanning and document management application for the PC. The combination results in unmatched document productivity and convenience.

Pricing and Availability

PaperPort Anywhere with up to one gigabyte of searchable storage is free. PaperPort Anywhere Premium with up to 10 gigabytes of storage is $9.99 per month and $24.99 a month for 50 gigabytes of storage. For additional information on PaperPort Anywhere visit www.PaperPort.com.

About PaperPort Anywhere

PaperPort Anywhere is a new, innovative cloud service from Nuance that makes it easy to scan, organize and share documents – anytime, from anywhere. PaperPort Anywhere is powered by OfficeDrop. It delivers enhanced search-indexing capabilities using Nuance OmniPage OCR.

Nuance Communications, Inc.

Nuance Communications, Inc. is a leading provider of speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with information and how they create, share and use documents. Every day, millions of users and thousands of businesses experience Nuance’s proven applications. For more information, please visit www.nuance.com.

Trademark reference: Nuance, the Nuance logo, and OmniPage and PaperPort are registered trademarks or trademarks of Nuance Communications, Inc. or its affiliates in the United States and/or other countries. All other company names or product names referenced herein may be the property of their respective owners.

# # #

Media and Industry Analyst Contact:

Jennifer Shelgren

Nuance Communications, Inc.

Tel: (781) 565-4758

Email: jennifer.shelgren@nuance.com

Ok I’ve got to brag a little here. OfficeDrop recently launched our newest mobile app, the OfficeDrop Android Paper-to-Go app, and we’ve had great success with new users and downloads. I’m working on a post about how SEO may be dying, at least for SaaS services, since the huge majority of our new users are coming from app marketplaces these days. I really think we are undergoing a significant shift in the way people find and buy software and web services… and I’m personally having a ton of fun trying to figure it out!

Anyways, here is some of the recent press OfficeDrop has gotten on our new Android app:

May 18, 2011

OfficeDrop: Scan Docs, Turn Them into PDF & Make Searchable (Android)

Using Paper-to-Go you can scan physical documents using your smartphone’s camera and store these documents … other file formats can be uploaded and processed as well. Read OfficeDrop’s Paper-to-Go Review on makeuseof…

Prasad just had a post published on TechCrunch. It’s about something we’ve been focusing on for a while – the cloud is making companies who should be competitors friendly. Entitled “Competing in the Cloud – Let’s be Frenemies,” it is our current “cloud manifesto.”

We are really thinking a lot about how to grow a cloud based SaaS business, and have learned a ton over the past year. OfficeDrop was one of the first startups to get into Amazon’s cloud services back in 2007, and we’ve noticed that cloud/SaaS software is very different from the packaged software business model.

Open APIs and integrations are really changing the way companies interact with each other. Startups that would once have tried to aggressively compete with larger players are now helping the big platform companies round out their product offerings, and large players who once would have squashed every startup in sight are now helping distribute competitive offerings.

OfficeDrop is really benefiting from these “frenemy” integrations – Google Docs, Evernote, FreshBooks and more have helped grow our business and make for happy customers. We aren’t trying to lock customers in and keep their data hostage. We understand that people want data portability and that our service is not a soup to nuts solution for all business cases. Anyways, we are really pleased that TC let us publish our thoughts. Please check out the post!

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.