New Podcast: “SMBs Have No Time”

New Podcast: “SMBs Have No Time”

There are few people with a broader or deeper perspective on the small business SaaS world than Mark MacLeod, the latest guest on the “Above the Cloud” podcast series. 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 solo-preneurs 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. With this background, it stands to reason that Mark would have some great insights on what it takes to win in SMB SaaS.

Here are some highlights from our conversation.

Customer Support is King. “Many vendors have this perception that they can’t afford to offer customer support,” MacLeod said. “The opposite is true. They can’t afford not to offer customer support.” The logic being that mastering customer support will pay for itself by turning customers into a sales channel by driving positive word of mouth. He cites his former company Freshbooks as a leader in offering obsessive customer service, noting that all Freshbooks employees are trained in customer support, from the marketing team all the way through to introverted coders.

It’s All About Channels. “I can’t think of a meaningful company that has been built without indirect channels at some point.” However, timing is critical. MacLeod argues that companies need to get some traction with direct sales before seeking new channels makes sense. “If they do it from Day 1, it’s like pushing a boulder up a hill, because they haven’t built a brand yet.”

Customer Experience is Also King. Granted, the lumascape for small business software tools makes the Milky Way look minimalist. But the small business market is so large and fragmented there is room for multiple players. Mark made two important points on this. First, brand building is not just for the well-funded. The best brands are built on delivering an amazing customer experience (see point above about customer support). Second, while the small business market is large, much of it is defined by the non-consumption of cloud software (a point confirmed by the Tech Adoption Index). However, as younger business operators supplant older ones, an app first mentality will increasingly dominate small business, which will expand the sales funnel for all.

Small Businesses Don’t Have Time to Breath. Let alone have time to muck around with software. “SMBs have no time. And technology hasn’t fixed that. If anything it has made things worse.” The point being that while automation is taking place and becoming a much bigger factor in SMB software, it remains true that any solution that doesn’t credibly offer to save a business time will struggle.

You can listen to the full podcast here

Thanks once again to our podcast sponsors for their support for Above the Cloud and the Tech Adoption Index.




New Podcast: “A Product First Go to Market Strategy”

New Podcast: “A Product First Go to Market Strategy”

In a business world awash in buzzwords and phrases, let us lay one more on you: product-centric customer acquisition. As buzzy as it sounds, it’s a profound concept. Give valuable yet free stuff to lots and lots of SMBs knowing full well that the overwhelming majority of them will never be paying customers. But those that do will be the right customers, profitable and with a low propensity to churn.

Our latest episode of the Above the Cloud podcast features an interview with Adam Blake, CMO of ThriveHive, a SaaS-based marketing platform for small businesses. A key focus of the conversation was unpacking the beautifully counter-intuitive logic behind ThriveHive’s product-centric marketing philosophy.

Blake explains the product-first philosophy on the podcast.

“The old way of doing things is sales first, involving cold calling and so on. We want to go with product first, then sales,” Blake explains.

The reason is to have enough relationships to be able to use the platform (enabled by AI) to learn which free customers would really benefit from an upgrade.

“We don’t expect to sell to everyone who uses our free products. Quite the opposite. We expect the vast majority to use our free products,” Blake said. From this larger number the platform looks for signals to “find the folks who are the right fit for us…It is not good for us to sign up a business, have them pay for our software, become dissatisfied and churn. We lose money (in this scenario) and they will be upset. Let’s avoid that.”

Blake also discusses its latest example of a high value free service, ThirveHive Grader, which helps SMBs optimize their Google My Business listings. ThriveHive launched Grader today.

GMB optimization will be the next wave of presence management, and ThriveHive believes it has a jump on the competition with Grader.

The new tool grades SMBs on how well they’ve optimized their GMB listing, and offers to help them improving their scores. Google has greatly expanded the features offered on GMB, but SMBs have failed to keep up, with few adding more than name, address and phone number to their claimed listings. Yet adding more content to GMB has a dramatic impact on a small business’s visibility, Blake says.

“The GMB directory has become so important to local business,” Blake said, “We believe [Grader] is the most comprehensive freely available tool for business owners and marketers to grade their Google My Business listings and get a truly comprehensive view of what they need to do to improve it.”

Blake will be a headline speaker at the LSA’s Tech Adoption Summit, Nov. 6-7 at The Laundry San Francisco.

You can listen to the podcast here

Thanks once again to our podcast sponsors for their support for Above the Cloud and the Tech Adoption Index.





Will Every Business Eventually Become a Subscription Business?

Will Every Business Eventually Become a Subscription Business?

A hot (relatively) new business book is making the argument that we are making a fundamental shift from an ownership economy to a subscription economy, where we essentially rent what we need for as long as we need it.

The book, Subscribed: Why the Subscription Model Will Be Your Company’s Future and What to Do About it,” makes the argument that most products and services will eventually be sold via subscription, and companies that fail to catch up with the trend will be left behind. The book’s author, Tien Tzuo, is pretty adamant on this point.

“If you’re not shifting to this business model now,” Tzuo writes, “chances are that in a few years you might not have any business left to shift.”

The main reason for the shift is that customers (consumers and businesses) are increasingly uses to pay for products and services this ay, and they will demand this model for an increasingly diverse array of services. The subscription trend in this sense is tied in with the on demand and gig economy. Consumers want only to pay for what they use, when the use it and do not want to be tied down by long term obligations or heavy up front investments.

The book is highly relevant to market shift that spawned the Tech Adoption Index, this blog, the Above the Cloud podcast and the Tech Adoption Summit. In a B2B context the subscription model (along with the cloud) is what has enabled small businesses to access technology that once required a large cash outlay to purchase software that had to be installed locally. And re-installed as new versions were shipped. In many cases software was prohibitive for all but larger enterprises.

Now, the SaaS model gives SMBs access to regularly updated software at a monthly subscription that spreads out the cost. And which cash flow is king for any business, it is particularly true for small ones.

One of the biggest challenges is the pain of switching to a subscription model. The book cites the case of Adobe, which experienced a painful revenue drop when it transitioned to subscription software. The book argues that this pain is temporary and the end result is stronger revenue growth. The “fish model” below illustrates this model.

Our view is that anyone building products for SMBs (software in particular) must think cloud and subscription first. it will be very difficult to compete otherwise. So this is a relevant book for those thinking about shifting their offer to the SMB market from an annual contact to a monthly recurring revenue SaaS model.

New Podcast: “A Completely Different Experience”

New Podcast: “A Completely Different Experience”

How does Microsoft think about the small business cloud? We asked that very question of Microsoft SMB Channel Strategist Abid Chaudhry, on our latest Above the Cloud podcast, “A Completely Different Experience.”

Chaudhry joined Microsoft early this year after a two-year stint at Endurance. Before that he and I worked together at BIA/Kelsey, where we looked at how small businesses were transitioning for the use of traditional media to digital, primarily for customer acquisition. Now, we are both looking at how technology can enable small businesses can improve their day to day operations.

Chaudhry notes that Microsoft’s sweet spot is businesses that have between 100 and 300 employees, certainly at the higher end of what most would consider a small business. And where Microsoft seems to be focusing its energy is on helping businesses operate “safely” in the cloud (secure document storage for example) and to provide the tools that facilitate a collaborate workplace (e.g., Microsoft Teams) that is increasingly mobile and remote.

The title of this episode, “A Completely Different Experience,”  refers to a thread of our conversation where we talked about the generational impact on how people work and the impact technology has and will continue to have in enabling new styles of work. This is something that Microsoft and any company building tools for small businesses needs to think about.

“What is interesting is that nearly a quarter of the workforce is Generation Z (ages 6-23),” Abid said. “They are looking for an entirely different experience when it comes to engaging with businesses. How do we change the way we think to tailor to that?”

This of course has implications for how these post-millennials expect to interact with SMBs (e.g., more via mobile, more via messaging apps, less via phone calls). It also has implications for how these younger workers choose to work and the kinds of businesses they will form.

“The SMBs coming up and starting lately are more likely to encourage things that would also be encouraged by that same cohort — like remote work,” Abid said, “You would not normally see remote work and small business go together.”

This insight suggests tools more common among enterprises managing a distributed workforce will increasingly be deployed by SMBs.

You can listen to the entire podcast conversation with Abid below.

Thanks to our podcast sponsors







Podcast Previews Tech Adoption Summit Speakers and Themes

Podcast Previews Tech Adoption Summit Speakers and Themes

Some of the biggest challenges facing those building SaaS products for small businesses will be addressed at the upcoming Tech Adoption Summit, Nov. 6-7, at The Laundry in San Francisco’s Mission District.

How to acquire SMB customers efficiently. How to build a brand that stands out in a crowded field of challengers and incumbents. How to use service and customer experience as differentiators and retention drivers. How to find new reseller channel that can bring your product to market deep into the small business space. How to bring your start up through the journey from launch to exit.

We have just posted our agenda and initial roster of speakers for this year’s event (last year we called it the Cloud Adoption Summit).

Over the past few months we’ve gotten to know several of this year’s featured speakers by interviewing them on our Above the Cloud podcast. Each of these roughly 20 minute interviews offers a snapshot of how each leader views the challenge of moving small businesses to the cloud.

Check out what each has to say.

Tolithia Kornweibel, Head of Marketing, Gusto

In this podcast Tolithia discusses among other things how HR SaaS leader Gusto scales customer experience, which is a huge differentiator for the company, which has thus far raised more than $300 million.

“Customer experience is a key competitive advantage for us and is part and parcel of why we have an NPS score of over 70,” Kornweibel said. “it is not just software, it is also a service that is designed around the a user who is not an HR pro.”

Tolithia is giving a headline talk at the summit.

Josh Melick, Co-founder & CEO of Broadly

Broadly offers a tool for small businesses to collect more customer reviews, and also tools for communicating with their customers across the channels they want to use — messaging apps, live chat and text. One thing we talked about on the podcast was Broadly’s decision to go direct to SMB with inside sales, a risky decision given the cost.

“It’s the hardest decision for a start-up to make. Many choose not to do it because it is so hard. I went direct because I want to hear directly from my customers,” Josh said. “I didn’t want the message to get garbled or lost. I wanted to feel their pain.”

Josh is giving a headline talk at the summit.

Jacqueline Cook, Chief Strategy Officer, Vendasta

Jackie talked about research Vendasta has done to identify best practices that reduce churn. She will cover the same subject matter in her talk at the summit.

“SMBs do not necessarily want a website guy and an SEO gal and so on,” Jackie said. “They want a single trusted provider. They want to hang their hat on the fact that they are the experts in running their businesses and they get to run their businesses. But I get to outsource some of these functions to someone that I trust.”

Josh May, Founder & CEO,

May’s company offers plug-ins for self-service websites. On the podcast we talked about how cloud technology has made it possible for small businesses to build a business affordably. “We’ve gone from a very expensive, complicated, limited world for small businesses to what is now the opposite,” Josh said. “Now you can get a site up in a matter of minutes and it is extremely affordable.”

Josh will be a panelist at the Tech Adoption Summit.

Visit the Tech Adoption Summit page to  review the agenda, speakers and register to attend. Space is limited and this show is expected to sell out. Early bird rates are in effect through September 28. This is the second annual event presented by the LSA’s Tech Adoption Index.