New Podcast: “Websites Aren’t Dead” featuring Mono Solutions’ Jillian and Matt

New Podcast: “Websites Aren’t Dead” featuring Mono Solutions’ Jillian and Matt

Our first podcast of 2019 features a conversation with Jillian Als and Matt Matergia, two of the key players at Mono Solutions, about the constantly changing small business website design and fulfillment business. They spoke to us back in December from Mono’s Copenhagen headquarter.

The purpose of having them on Above the Cloud was to talk about how the website business is adapting to the era of full-marketing stacks and SaaS and diminished website traffic and Facebook and Google My Business and a growing DIY culture and so on and so on.

Some of the ground we covered included:

  • Do small businesses still believe a website is a necessary element of their digital presence?
  • Are millennial and younger business owners less likely to see value in websites?
  • Do websites really need to be sold? Or will small businesses increasingly choose to bypass the sales reps and just go DIY?

“We are seeing the role of the website evolving. It’s different than it was five or ten years ago and even from two years ago,” Jillian said.

She argues the website remains essential to SMBs for (at least) two reasons. The first is that the website serves as an authoritative source of data. The other is to serve as an opportunity to control a business’s branding.

And for resellers, websites remain a sticky product that provides a bulwark against churn, and a good base product to begin building out the full marketing stack for SMBs (campaigns, CRM, scheduling, etc.)

Copenhagen-based Mono builds websites for high volume resellers like digital agencies, directory publishers and others. As with most companies selling software-based products to SMBs, Mono understands it needs to widen its aperture and look for new channel partners. Telecoms, SaaS companies and other channels with abundant SMB relationships are all on the table for Mono.

To that end, Matt attended a Channel Partners event last year to kick the tires on the MSP (managed services provider) channel, a potentially new path for SMB software companies eager for new channels. Matt’s observations on that experience and the suitability of MSPs for selling their products will be interesting to anyone facing the same challenges in finding new resellers. Mono does not sell directly to SMBs.

Matt’s big takeaway from his experience at the MSP gathering is that digital marketing services providers may struggle to get much mindshare from MSPs that are used to working with big IT budgets at companies at the upper end of the SMB market.

“With the IT guys, they are going after companies with maybe 500 employees that spend hundreds of thousands of dollars per month,” Matt said. “How do you make marketing services attractive to these reps?”

It’s a tough nut to crack, but identifying and evaluating new, and perhaps unconventional, channel opportunities is a key task for Mono. This is also a key area of focus in 2019 for the Tech Adoption Index program.

You can listen to the full podcast with Jillian and Matt here.

We encourage you to read the Local Search Association White Paper commissioned by Mono and published in November. The report reveals how different firmographics view different services models. Many of the themes touched on in the podcast are addressed in this report.

Newly Flush Tax Jar Determined to Maintain Its Unique Culture

Newly Flush Tax Jar Determined to Maintain Its Unique Culture

TaxJar, a company that automates sales tax collection for eCommerce businesses, just raised $60 million from Insight Venture Partners, with the assistance of our friends at SurePath Capital Partners. TaxJar’s last funding round was a $2 million seed round in 2014. The company launched its first product in 2013.

TaxJar says it will use the funds to continue to expand its entirely virtual team, which now includes 60 people. The company also plans to ramp up product development, research and go to market for its newest offering, TaxJar Plus, which is aimed at mid-market companies.

TaxJar reports having 15,000 small business customers, which means the latest raise amounts to an investment of about $4,000 per existing customers. TaxJar generates $84 per year ($17/month) per customer from its basic program, though it’s new Plus product aims to generate higher fees from larger businesses with more complex needs.

Looking at it another way, it’s remarkable that a completely virtual company with 60 employees can raise this kind of money. It’s latest raise amounts to $1 million per employee.

Any way you slice it, this investment is an enormous vote of confidence in TaxJar’s product, as well as its ability to scale deeper into the SMB space as well as upmarket. While small business software is a challenging space in many ways, the beauty of it is that the U.S. SMB market is so vast that multiple players can have success without having to dominate their segment of the market.

This investment also is a big bet that there is a tremendous upside in enabling SMBs to sell online, which TaxJar does by making a complex process, collecting state sales tax, simple.

In a blog post explaining their decision to take on such a big funding round, TaxJar founder and CEO Mark Faggiano said the company has been profitable for two and a half years and only took on money if they could adhere to the principals that got them to where they are.

“Knowing that we could continue on the same path growing a profitable business ourselves, we were very clear with any potential partner that there were, and always will be, some non-negotiables for us: Our culture, remaining 100% remote, taking care of the team, putting our customers first, and, retaining control of the future of TaxJar,” Faggiano wrote.

Faggiano also said in the post that the company’s limited use of outside capital to this point means they have had to learn to be capital efficient, which will pay dividends moving forward as they deploy the $60 million to grow the company.

The emphasis on having a 100% remote organization is interesting. One of the themes underscoring our work at the Tech Adoption Index is that with the emergence of an app ecosystem that businesses can use to start and operate a company, much of the operational infrastructure once considered essential no longer is. The office is one of these elements. TaxJar is a living example of how to run a business in the age of the business app.

Sharon Rowlands Signals New Direction for Web.com

Sharon Rowlands Signals New Direction for Web.com

Web.com’s hiring of Sharon Rowlands as its new CEO signals new owner Siris Capital means to bring substantial changes to the Florida-based website builder. Rowlands is known as a turnaround CEO. She will replace the retiring David Brown at the end of this month.

In 2014, Rowlands took over as CEO of ReachLocal (which was later acquired by Gannett in 2016) and then became President of USA Network Marketing Solutions in 2017, while continuing her role at ReachLocal. She is also a former member of the LSA board of directors.

Rowlands previously helmed other media and technology companies, including Allegrity and Penton Media. Both roles involved either restructuring or repositioning the businesses.

Rowlands will join Web.com just three months after the company was acquired by Siris Capital for $2 billion and taken private. Web.com offers website design and online marketing services for small businesses.

As we noted in our post this week about the Top 10 SMB Technology Stories of 2018 (the Web.com acquisition is No. 5), while the acquisition price was a premium on Web.com’s most recent share price, other lenses provide different views of the transaction.

“While we wondered about the high valuation of Service Titan — $660,000 per subscriber — the Web.com transaction offered another data point, $588 per subscriber. With a reported 3.4 million customers, Web’s transaction demonstrated that purely pursuing customer acquisition at any price does not lead naturally to an attractive exit. While early shareholders may have done well with this deal, the per customer valuations hints at some softness in Web.com’s business model.”

Rowlands earned high marks from colleagues and partners for her management of Reach Local, in particular for placing a greater emphasis on customer experience. She has a big opportunity to improve how small-business customers perceive Web.com. The company has consistently earned low marks on Alignable’s Small Business Trust Index, an NPS-style measurement of how small businesses view the brands that serve them.

Here are a few questions we have about what is ahead for Web.com under Rowlands.

  1. Will she impose a major change in Web.com’s strategic direction? For example, will she shed products and add new ones, change their target market or curtail/accelerate international expansion?
  2. Will we soon see talent from Gannett migrate to Web.com?
  3. What will success look like for Web.com and for Rowlands?
Top Five “Above the Cloud” Podcasts of 2018

Top Five “Above the Cloud” Podcasts of 2018

Back in mid-2018 we decided that the Tech Adoption Index program needed a forum for conversations with some of the most interesting and influential figures in the small-business software world. From this emerged “Above the Cloud”, a podcast that tries captures thought leaders’ views on what it takes to win in SMB software, all in 30 minutes or less.

We produced 13 ATC episodes from June through December 2018. Below is our editors’ list of the top 5 episodes of 2018. These choices were made primarily based on popularity, with some consideration given to episodes we felt were very good, despite lesser audience metrics.

No. 1: “SMBs Get Lied to a Lot” Featuring Gene Marks, The Marks Group

Gene Marks writes about small business technology trends in his weekly column for Forbes magazine, as well as in The Guardian, and talks about small business issues in regular appearances on Fox, MSNBC and other outlets. He also lives these issues in his day job as a CRM reseller, where he comes face to face with small businesses owners struggling to understand how to deploy new technology in their businesses. Gene has a front-row view of how the questions we ask at the Tech Adoption Index are playing out in real life.

Top Podcast Quote

“The way I think of SMB software in 2018, 2019 is, if it is implemented the right way, it will get you where you want it to get you. It’s like there is a Ford Taurus, a Toyota Camry, and a Honda Accord. They are all really great cars and they will get you to our destination. The problem I see with my clients is, they are not using all of the features.”

No. 2: “Humans Aren’t Resources” featuring Tolithia Kornweibel, Gusto

In August, we visited Gusto’s impressive new offices in San Francisco’s waterfront to sit down with the HR startup’s marketing head Tolithia Kornweibel, who was a headline speaker at the LSA’s Tech Adoption Summit in November. Our conversation with Tolithia covered a wide range of topics, from partnerships to competition to customer experience.

Top Podcast Quote

“In a customer acquisition arms race, the winner is not always the best product. That could slow us all down.”

No. 3: “SMBs Have No Time” featuring Mark MacLeod, SurePath Capital Partners

There are few people with a broader or deeper perspective on the small business SaaS world than Mark MacLeod. Mark was the founder CFO at Shopify, which helped democratize e-commerce by enabling SMBs to become online merchants. And he ran finance, corporate and business development for Freshbooks, which has made cloud accounting accessible to freelancers and solopreneurs the world over.

Today Mark leads SurePath Capital Partners, a financial advisory firm that helps small business software companies raise capital and find buyers for attractive exits.

Top Podcast Quote

“Many vendors have this perception that they can’t afford to offer customer support. The opposite is true. They can’t afford not to offer customer support.”

No. 4: “The Art of the Demo” featuring Josh Melick, Broadly

Josh Melick, co-founder and CEO of Broadly, has small business in his DNA, with parents who were small business owners and a resume filled with stops at leading SMB-focused companies. After stints at Ingenio, YP and DemandForce, Josh and fellow engineer Assaf Arkin founded Broadly in 2013 with the mission of helping small-businesses generate more customer reviews, a key currently in driving small business success or failure.

Top Podcast Quote

“We believe in the art of the demo. For inside sales to work in this market, you need a sales cycle that is short. You have to go from start to finish in 15 to 30 minutes.”

No. 5: “Selling to SMBs is Hard” featuring Ted Paff, Customer Lobby (founder)

This episode was a combination clinic and therapy session for anyone who has ever tried to build software products for small businesses. Recorded in November at the LSA’s Tech Adoption Summit in San Francisco, our very own Neal Polachek interviewed Ted Paff, a former VC turned entrepreneur who founded Customer Lobby in 2007 and sold it in 2017. Today when Ted isn’t sharing war stories at conferences, he’s likely to be found on a beach with his surfboard.

Top Podcast Quote

“It’s hard. I don’t even know where to start. It was a long road. I kept looking for a panacea. A silver bullet. And there was none,”

Once again, we want to thank our sponsors for supporting the podcast in 2018:

New Report Tackles the All-in-One SaaS Sales Dilemma

New Report Tackles the All-in-One SaaS Sales Dilemma

Several topics and themes have been persistent during the course of producing the Tech Adoption Index program for the LSA, as well as the Above the Cloud podcast. Chief among these is the debate over the “full stack” vs. point solutions.

There are many layers to the debate — including whether software that does everything can be as good as software that is focused on doing one thing very well.

Another layer to this conversation is whether the clear benefits of selling the full stack (lower churn being one of these) are offset by the difficulty of selling multiple products in a single sales call. This is a worry for those closely monitoring their sales metrics. Longer sales calls and more calls to close is not the direction any manager wants to see its sales organization move.

A new LSA White Paper commission by Camilyo takes on this question of whether selling the full stack is worth the challenges it presents to a sales organization. The paper, “The All-in-One Sales Challenge“, shares best practices from a variety of experts on SMB software sales, as well as front-line execs at media companies that are finding their way in selling all in one SaaS platforms.

As the report notes, demand for the full stack has been demonstrated consistently in small business survey research, including the LSA’s Tech Adoption Index program. The latest TAI wave shows that 65% of SMBs would rather run their businesses through a single SMB software platform.

While the demand is there, the paper makes clear that selling the full stack successfully involves some strategy. The paper shares these insights in order to help sellers gain the benefits of selling the stack (more revenue and higher retention) without suffering any of the potential downside (longer sales cycles and poor customer experience).

Here are a few examples:

From SurePath Capital Partners Founder (and former Freshbooks exec) Mark MacLeod:

  • Invest in service, even if it doesn’t seem to make economic sense
  • Use discovery to upsell after bringing customers on with one or two key features

From Localsearch (Australia) CSO David Holihan:

  • Verticalize the sales message, not the sales force
  • Find the sales hook for each category (plumbers, hairdressers, etc.) and tailor the message to them

You can read more of the ideas and best practices in the full report.

Download the Report Here

The following video features a talk based on the White Paper that I gave on behalf of Camilyo at the recent AsiaComm conference in Thailand.