For what it's worth, the mistakes that happened were completely on our end (actually I take full responsibility as they were under my watch). Zuora was nothing but amazing in supporting us to get us back to health. Luckily, thanks to Zuora and my team, we were able to get things going great. And the team (even post-acquisition) still uses Zuora to this day.
Thanks (I'm the author). At a high level, the tweak was a big change but I didn't realize it. We used to pre-bill a customer for the next period (e.g., quarter) based upon the previous period's usage. So if you go from 10 users to 20, then in the next period, we'd pre-bill for 20. This obviously is great in that it captures maximize cash flow upfront but it's tricky in that you need to use usage that you're getting right now to calculate future bills. In addition, the variety of our billing plans and legacy customers made this more complicated. Truth be told, I don't think I even fully understood the complexity (my finance and engineering team could give the full story).
A company in the UK I used to work for underwent a similar transition - we had an in-house system that billed upfront. Then brought in a outside product - only half way through integration was it discovered to bill only in arrears.
Instead of running an overdraft for a year we tried to rewrite significant parts of the billing system, tying up valuable expert talent, drawing focus away from growing the business.
had you seen the problem before the switch would you have run the overdraft solution? Or ?
Also - I would (now) treat even external systems as part of my eco-system and so nned full testing. Your views
Thanks for being so open about this. I've worked from the IT side with a lot of different accounting folks, and I can't imagine any of them sitting in on meetings in which changes of this sort were discussed without pitching a fit. I've tried and failed to get much smaller changes approved. (E.g., a change to G/L journaling configuration in our customer billing application that would have made absolutely no change to output but would have made supporting new products MUCH easier.) I would have thought that a business large enough to have a controller (and an ex-controller!) would have someone defending the billing process. I guess you became that person...
That's a good question and thanks for reading it (I was the author). I don't have a magic formula but I have concluded that when I decide to switch, the switch needs to be binary not gradual. I do agree you can't sustain it for long periods of time - I have another blog post in my head on that one related to other crises :)
This was a good post by Chris and I think there are a number of companies who are shifting in this direction. Overall, I think Marketing is getting a bigger share of spend in enterprise IT vendors vs. sales from previous days. That being said, I also note that several of the most prominent enterprise startups of recent times (Box, Splunk, WorkDay, etc.) have made huge investments in traditional, direct sales. My 2c is a lot of this is driven by the ASP (average sales price). In a market where the ASP is low (< $10K/year), you need a marketing driven approach to grow cost-effectively. But for businesses with ASPs > $100K or > $1 MM, direct sales is often still very cost-effective. I'm not making any comments on the "goodness for the world" of sales here, just its efficiency as a growth engine.
Totally agree with you. I think this is about hiring the right type of people. Honestly, marketing has a bad reputation with many technical people. So if you tried to hire a CS grad into an online marketing role, it might be tough. Hence the new title. Whatever works!
Definitely agree with the comments here. One thing to add is I think some of this comes down to ex-ante versus ex-post thinking. Ex-ante, many things are required to make any substantial change. Ex-post, we can scrutinize and analyze and sometimes create a version of history that points to one as the key factor. As others have pointed out, sometimes this is simply a top of the stack situation (last piece of effort is most important but would be true for whatever is last) and sometimes it's a genuine catalytic change (the last thing really was the biggest). But since our decision-making about the future is fundamentally ex-ante, there usually is no silver bullet. Also ex-post analyses are often based upon human surveys / analysis, which is highly flawed. If you ask people, for example, why they love a certain product, they may respond with one feature and you might think that was the "that one thing" when in reality, they might love the overall experience, branding, support or something else entirely.
So awesome. Nice work and very good for the startup community. One minor "nice to have" request would be to show the VC Series A ownership in a dynamic calc. Since many VCs optimize for 20% ownership or whatever, it's helpful to plan out various scenarios to see the ownership there (obviously it's easy to calculate so no big deal but might be helpful).
In disclosure, I'm a "backer" of app.net and am on the alpha. And as a hardcore Dark Knight fan, I can fall for any DK quote.
But while I respect MG's other writing, I don't agree with all of his conclusions here.
Some thoughts:
1. He states that "the web is simply not conducive to a user-supported service reaching the scale of a Twitter" to imply that success = scale. I actually believe the app.net could become a lot like HN - a relatively (web-wise) small group of people who all get value from the service - enough to pay for it. Does it kill twitter then? Probably not? But does that mean it's a failure? I don't think so.
2. Furthermore, let's examine this point that the only services that can get to scale are ad-supported. He certainly has good empirical data (facebook, twitter, etc.) to back him up. But in the software world, open, non-commercial efforts (e.g., linux, smtp email and more broadly the internet) have had gigantic impacts in terms of scale. As others pointed out, wikipedia is an example of a service in this vein. I think we haven't played out the experiment yet of what do open, non-commercial distributed services look like. I wouldn't give up on that. I personally think that any true communications utility long-term needs to be open (like email). app.net is still commercial so not fully there - but clearly (IMHO) more transparent and open than an ad-supported model.
3. MG also doesn't talk about one of dalton's meta-points which I also feel passionately about. The conventional wisdom seems to have accepted that an ad-supported future state - where ads follow us around, personalized to what they think we want, making us think our services we're getting are "free" when they really aren't - is the only possible future state. I know Tom Cruise got followed around by ads in "Minority Report", but that doesn't mean it has to be our future. I personally believe that humans will recognize over time the real cost of advertising and eventually converge to a more balanced world of paid and faux-free (ad-supported) services. I'm not saying ad-supported will go away - just that there will be choice (which was actually the main point dalton made in the first blog post he wrote on this topic).
Overall, I think Dalton should be commended whether his effort works or not. He re-sparked some very important discussions and was willing to take a chance on his ideas.
