Do you take responsibility?

Did you know that taking responsibility, blaming yourself, can actually improve your profitability?

Every business faces setbacks, like:

• someone accidentally unplugged the power at your data center and your web site goes down
• the economy takes a dive and you lose some customers
• your top talent leaves to get a higher-paid job in order to better support her family
• one of your employees makes a mistake and it costs you or your customer time and money
• your shipments are late due to bad weather
• your customer’s web browser doesn’t display your web site correctly

We’re faced with a challenge: How can we explain this to our creditors, investors, and customers who depend on us?

We’re tempted to point the finger at whatever or whoever seems to have caused the problem.  However, studies have shown that avoiding responsibility is not the best approach to take.

In “Yes! 50 Scientifically Proven Ways to Be Persuasive” they present a study done to determine the effects of taking responsibility for the problems your business is having.  They presented the study respondents with two sample company annual reports; in one, the company laments the poor state of the market and increased competition as the reason for poor profits, and in the other they blame their own internal processes saying that “as a management team, we were not fully prepared …”  Study participants gave more positive feedback about the company that took responsibility.

You may be thinking “but, how can I take responsibility for things that are not my fault?”  This may take some creativity, but it’s an uncomfortable truth that we are responsible for the events of our life.  You can take responsibility by admitting that you could have:

• chosen a different data center
• chosen a more recession-proof business
• saved more money to carry you through a tough time
• hired employees more carefully
• trained your employees better
• selected a different shipping company
• been more conservative in your estimates about delivery dates
• provided our own web browser
• been more diligent about cross-browser compatibility
• and so on …

An important pitfall to avoid is thinking that just because something seems far out of your control, that you can not be responsible for it.  Everyone has their own line to draw between what they are willing to be responsible for and what they are not.  I encourage you to see as much responsibility for yourself as you can handle.  Anytime you’re dealing with a complaint or breakdown in your business - whether with your investors, employees, or customers - ask yourself “how can I be responsible for this?”

The next major concern about taking responsibility is “won’t I look bad?  Who wants to work with someone who screws up all the time?”  First, the study shows this kind of attitude will be appreciated by others; they will see you as in strong and in control of your business instead of being blown about by the winds of circumstance.  Second, people already know you’re responsible, so avoiding responsibility makes you look dishonest and unwilling to face up to your mistakes.  If they see you being responsible they will have more confidence in you and your business and see you as someone with integrity who deserves respect.

It’s important to keep in mind, also, that being responsible for something doesn’t mean you have to do anything about it.  You are simply taking the position that your choices led to the circumstances you are in now; that doesn’t mean you made the wrong choice, or that you have to fix the economy.  You just accept and admit that you didn’t fix the economy, you didn’t avoid today’s problems, and you’re sorry.

Note that this discussion of responsibility should not be applied when resolving insurance claims or contract disputes.  Yes, you could have been driving on another road, and yes you could have selected a different person to work with.  However, in these circumstances when people refer to responsibility they are really asking “who was negligent?”  Take responsibility for the impact on your stakeholders but don’t pay the bill for carelessness of others.

In the operation of our small business accounting software we believe in taking 100% responsibility for anything that causes our users an inconvenience, whether it’s the economy, poorly written laws, or even other peoples’ software.  Sign up now for a 30-free trial and see the difference.

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I have had some great customer service interactions this week from the comfort of my home office at incredibly odd hours of the day.

I had mentioned in a previous post awhile back that I used to be concerned about answering email inquiries outside of office hours for the fear of being seen as “unprofessional” or “amateur”, or worse yet, to be uncovered by my customers that I work from home. 

It seems like working from home has worked well for servicing our clients.  We noticed that in our target market, many people sign up and log in outside of normal business hours.  If I can make the assumption that most of our clients are self-employed or small business owners, this would make perfect sense.  The other day, I was doing my own bookkeeping from 10 pm to 3 am on a Saturday night er…morning… and my web analytics are showing me that most of our clients actually prefer to do their bookkeeping at night or on weekends (strangely enough, no one else works at 3 am though).  I also feel that there is more authenticity in my responses because I am in my own element.  I guess there goes the idea of “work life balance” (which I think is a total myth by the way). 

One time, due to pregnancy related heart burn, I got up at 6 am to drink some soy milk.  I thought I would take this perfect opportunity to check my email and how many new sign ups I’ve got (I wake up to new sign ups on a daily basis and this makes interrupted sleep that much more fun) when I noticed an email inquiry from someone in Eastern time.  6 am my time was 9 am their time and their work day has already started.  Needless to say, the person who sent the email was pleasantly surprised and impressed at my “excellent customer service”.  Another time, a client who just signed up wanted to know how to enter multi-currency transactions in our accounting software.  It was around 7 pm at in the evening when I got a help inquiry and I was able to provide a response within 16 minutes of receiving the inquiry.  I even got a reply from this new client saying “You guys rock”.  This could not have been possible if I was working during “normal” business hours.  I have even been responding to email inquiries from Japan at 11 pm with much appreciation from the client.

One thing I am beginning to realize is that our clients do not work during normal business hours and neither should we.  If I could speak to the decision makers of large companies, I would suggest they consider allowing their workforce to work from home.  Give each support staff an iPhone / Blackberry so they would be delighted to receive emails at all hours of the day.  Responding quickly and authentically to client support inquiries seemed to be more useful than looking productive during office hours.

That’s all I have to say for now.

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Let me get the record straight, I do not consider myself and expert in marketing.  The good thing about being the owner of my own business, is that I can give myself whatever title I want. 

Now that we have the disclaimer out of the way, here are some of my thoughts and insights about marketing for SaaS applications - both as a result of working on our small business accounting software as well as observing what other people are doing.

Offline Engagement for Online Software?

The world of operating a business online is relatively new.  While it has been around since the 1990’s, it cannot compare to centuries of merchant activity offline.  Some of the questions we were considering when we first started developing Clarity Accounting was: how are we going to market an accounting software?

This was back at the end of 2007 when we sat down to have a discussion with the possible founders.  When we first started, there were 3 of us, one backed out because he couldn’t see a clear marketing model and didn’t see this project to be worthwhile to commit to (this will have to be discussed in a separate blog post about forming the core team of a startup company).  Initially we thought that the best way to market an accounting software was to go after the accountants and bookkeepers.  This seemed like a really good idea.  We thought, each accountant / accounting agency may have up to 100 clients (or more) and if we can enlicit 10 of these agencies to use Clarity Accounting, we can gain 1000 clients!  Marketing was going to be EASY! 

Until…

The grim reality sets in — Accountants Can’t Sell.

I remember meeting Wayne Zielke, owner of Ledgers Online, and having a discussion with him about the possibility of engaging accountants in the sales process when he broke the news to me.  Surely this could not be true.  Look at Intuit! They have the largest network of “Quickbooks Advisers” actively promoting their software, how can this not work?  Recently in a panel discussion, the person in charge of Quickbooks Online said, “There are 25 million users of Quickbooks, 1 million of which are accounting professionals…”, leaving door open to 24 million other users.

Using the traditional offline approach of establishing sales channels hasn’t really worked that well for us as a startup company so far.  Maybe we just haven’t been around long enough to gain the credibility necessary to secure those sales channels.  What I understand about the offline world is that it is about building relationships — leading to a longer sales cycle.  With our price point of $10 / month, it has become clear to us that this method of gaining customers would not be a good use of our time and resources.

I have seen several companies attempting to use offline strategies to distribute online software and I find that these companies simply ended up spending too much time and resources trying to build those offline relationships.  The online world is a place where people go to “skip the middle man” and clients appreciate having a direct connection with the vendors who are providing the products and services.

There is no doubt that there is a market for offline products and services.  When I go to networking events, most people have never heard of the idea of using accounting software that is hosted online.  Almost all the small business owners I have met have not even thought this was possible or available in Canada.  Software as a Service is still a relatively new phenomenon, most users are still considered to be “early adopters”.  Trying to convince them to use online software to deal with their financial matters is like trying to pull off an arm or a leg.  However, I do think there is hope as people are becoming more and more comfortable with banking and purchasing products and services online.

Online Engagement for Online Software

This is the path many software as a service companies have taken in an effort to increase subscribers and users.  Based on the success of some of the companies I have seen so far such as Salesforce and Freshbooks, many businesses are jumping on the online bandwagon.  Social media tools have the astonishing effect of pulling together people with similar interests who otherwise would have been strangers.  People who are actively engaged online are more likely to utilize products and services that are hosted online.  I do find the online world to be increasing saturated, but i don’t think it is nearly as saturated as the offline world.  Someone approached me today about the possibility of doing “print advertising” to promote our online accounting software and I thought to myself, “are they joking?”.  I replied saying, “if you can give me some compelling reasons why I should consider print advertising over spending my marketing budget on internet marketing, I’m all ears!”.

Once upon a time I thought most of these people who are actively engaged online are young people (3 to 25 years of age — that’s what I would consider young), but now I am seeing a much older crowd being interested in online applications — people in their late 30s to mid 40s.  If you feel offended by this statement, please try to understand that I am 28, therefore, people who are older than 35 are “old” and younger than 25 are “young”. 

Long story short, I still think online engagement is where online businesses should focus their attention.  This is especially true for startups on a limited marketing budget.  Offline engagement should be considered when some level of brand recognition and credibility have been established.  Even then, I still think leveraging the power of the internet provides the best bank for the marketing buck.

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Today is an interest day, maybe because it is Halloween.  We have had 2 people email us within a 2 hour time span asking “What are your future plans with Clarity Accounting?” and “Where are you going?”.

First of all, I am greatly flattered by peoples’ interest in our small business accounting software.  We have come such a long way in such a short time and have a quality piece of software to show for it.  I would like to take a brief moment to share my response to the question:  “Where are we going?”

In terms of where we are going, we are looking for a crystal ball (do you happen to have one?). It is hard to concretely say exactly where things are going.  We believe that this is a sensitive time period and it is very important to remain flexible. Obviously we would like to grow our user base, make more money, and live happily ever after… Does any of you have any other suggestions?

Given that statement, there are a few things we know for sure:

• Our operation is financially stable and steadily growing
• Our intention is to provide the most innovative small business accounting software possible
• We want to empower people to deal with their finances powerfully either through the use of our online accounting software or through software integration / partnerships with other products and service providers such as Freshbooks, Booking Calendar, and Ledgers Online (development is currently underway)

One thing I have realized is that making a difference in peoples’ lives does not only include selling subscriptions to Clarity Accounting.  There is so much more to it than simply providing accounting software.  We have really good reasons why we work long hours and stay up late at night.  I can’t even say this is “work” because it has been so much fun connecting with people from all around the world.  I never thought something seemingly boring like accounting can be the central link for establishing great customer interactions and key connections.

Our goal is to incorporate fun, innovation, and inspiration in our quest to transform peoples’ relationship with money.  That, is where we are going…

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Last month, I wrote a blog post about doing the bookkeeping for Habitsoft, Inc (creator of Clarity Accounting) using our own small business accounting software. It has been a scary thought for me since I wasn’t the accounting brain behind Clarity Accounting.  My business partner has been doing all the bookkeeping for our company ever since we first started.  However, I was determined to try because I really believe I am very similar to 80% of business owners who dread bookkeeping.  Doing this will help me gain a better understanding of those we serve.

Our fiscal year started in October 1st, 2008 and I began to do the preparations for being the best bookkeeper the planet has ever seen.  I went to the local office supply store and got myself a huge accordion file with 21 pockets (the usual size is 13 pockets).

I labelled the different pockets of the accordion file with different expense and income categories as well as separate pockets where I keep our bank and credit card statements. I also added an envelope in each pocket for smaller receipts so that everything can be neatly kept.

Then, I felt I couldn’t do ANY bookkeeping until I got myself a Stapleless Stapler. 

If you have never seen one of those, you are missing out!  They come in all shapes and sizes and ideally used to staple credit card receipts and purchase receipts together.  I always wished I can just get one receipt for everything, but the reality in my part of the world is that I often get two receipts when I purchase things with my business credit card or debit / charge card.

The way the stapleless stapler works is that it makes a whole through two pieces of light weight paper and clip it together without ever using a single staple.  I had so much fun with stapling my receipts that my bookkeeping was done in no time at all

I also got a car mileage log book that I keep in my car.  I think that really is the best place to track car mileages because it is easier for one to record how many miles or kilometres driven for business while still sitting in the car.  I don’t think we will ever add a mileage tracking feature on Clarity Accounting for that very same reason.  While it may be nice to do EVERYTHING online, there are certain things that are better done “offline”.  Of course, there might be a possibility of doing a blackberry / iphone integration that will allow one to track mileages “online” from anywhere…

Now the challenge will be keeping up with my bookkeeping on a semi monthly basis.  Bookkeeping is one of those tasks that if one ever falls behind, it is such a headache to get back in the game.  I think this works for most things in life. 

I feel somewhat guilty for not boasting about our small business accounting software as one of my favourite bookkeeping tools.  I figure this should be something that is obvious.  Once upon a time, I tried other forms of self-employment and got Quickbooks to keep track of my income and expenses, I probably set up everything wrong and ended up abandoning it all together within 2 months.  Long enough that I could no longer return it to the store.  That’s why I think a subscription model for accounting software is great, you can cancel at any time.

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Did you know that you could even form a profitable business partnership with your competitors? Imagine your business growing in prospering in ways you didn’t think possible.

I recently attended a seminar on business partnership and it got me thinking about partnership for businesses -not legal partnership, but the general concept of partnership as applied to our customers, vendors, contractors, employees, investors, family members, and so on - anyone involved or affected by your business could be considered to be a partner of sorts.

I realized that if we could make them feel and/or act, like a partner in the business to some degree, that they would help us succeed in achieving our business vision.

Levels of Business Partnership

In the seminar we looked at three levels of Small Business Partnership:

1. Working towards a common goal - “useful” or “practical” business partnership; example: make 500 sales calls by the end of the year.
2. Working on carrying out a shared commitment - a “commitment” based general partnership; example: being committed to growing revenues
3. Working towards a shared vision, or inspiring possibility; example: being at ease with finances

Personally I find it hard to distinguish between the “goal”, “commitment” and “vision/possibility” unless I give it careful thought.  Here’s some clarification:

• A goal has conditions of completion; when these conditions are met, you can strike the goal from your list.  This isn’t true for the other two.
• An inspiring possibility is anything that really inspires you and “lights your fire”, but which hasn’t happened or doesn’t exist yet, except as a possibility.
• A vision is an ideal future scenario that motivates us to take action; basically an inspiring possibility which is a certain event, lifestyle, environment, or outcome.
• A commitment is an ongoing agreement of some kind, from which you can generate goals and actions that support and maintain it.  Commitments are best created based on an inspiring possibility or vision.  A commitment doesn’t have conditions of completion; a commitment can simply be dropped when it no longer serves any higher purpose.

When a business vision is no longer motivating, or an inspiring possibility is no longer exciting, they can leave behind “uninspiring commitments” which no longer have any “fire” or “juice”.

Watch out for these leftover uninspiring commitments - remember that a commitment can be abandoned at any time if it no longer serves any higher purpose towards your business partnership!

To end a commitment or abandon a goal, get in communication with anyone involved with that commitment and make an agreement with them so that your integrity is preserved. This includes you.

Generating Business Partnership

Business Partnership is generated when the parties involved realize that they are already partners. At that moment, helping the other person is helping you. Generating business partnership is about making people aware of the fact that you are, already partners at some level!

Typically when someone encounters you or your website, hears about your business from someone else, they probably won’t recognize that they have common goals, commitments, or shared visions with you. Your job as a marketer is to point this out to them at a level that makes sense for your target market. Creating a marketing plan based on business partnership would go as follows:

1. Draw a map of all the different groups that are related to your business
2. Identify a group you’d like to create a small business partnership with
3. Ask them (or someone who knows them well) about their goals, commitments, visions; also what kind of possibilities they are inspired by
4. Decide which of these you really share that have synergy with your business - be honest!
5. Mention these in your pitches, your web site, and other marketing messages
6. Where possible, discuss partnership with them and formally agree on your vision, commitments, and goals for the business

Mind mapping would be a great technique for this.  Our suggestion is to use mind mapping software.

Here are some brief examples of how other businesses create partnerships with the public.

• The iPhone creates partnership by fulfilling the possibility of excitement, joy, and play via the commitment to innovative and fun new technologies to play with.  It also fulfills a vision to have a useful computer you can fit in your pocket (if you have deep pockets …)  They communicate this by showing a lot of demo videos of all the fun ways that you can use the iPhone
• Vacation sites try to be your partner in seeking romance, adventure, and luxury.  They demonstrate a commitment to travel, affordable prices, convenience, and lots of options to choose from.  They attract their customers with images of sunset beaches, people doing fun activities, and luxurious hotel rooms
• Angel investors and venture capitalists always have a commitment to making a healthy multiple on their investments when the business is sold; however, I think they are often inspired by the possibility of ongoing excitement and drama as they ride the ups and downs of your business with you.
  If you were to engage your investors into the excitement of your business more, would that be a higher level partnership than simply transacting cash?  If they feel like a partner in the business they’ll also be more inclined to help out with additional financing

The Secret Sauce of a Business Vision

Designing messages around the visions and goals of our target market is nothing new, really.  We’re already bombarded with messages intended to excite us, to speak to our desires, and give the idea that consuming certain alchoholic beverages make us into witty pirates.  How can you stand out in this crowd?

What’s missing in most of these marketing messages is that they are completely false, fake, and inauthentic.  The only way to make those messages effective to spend a boatload of money playing them over and over until they insinuate themselves into the subconscious of the audience who are influenced by them without even knowing it.

However, as a small business, we don’t have boatloads of money, so we need a bit of “secret sauce” to get “bang for our buck”.  What could that be?  You guessed it - be authentically in partnership!

For instance if you’re a travel agent, be genuinely interested in creating fun, romance, and relaxation for your clients.

If you create a partnership with a service provider (an SEO consultant or an IT operations outsourcing company) where you are both interested in personal growth, swap tips on personal development amidst your other communications and you have a fulfilling partnership in addition to getting great service.

If you sell online accounting software, create a powerful relationship between small business owners and their finances.  We have done just that. By working with us we go out of our way to ensure your business vision, your inspiring possibilities and your commitment to your partners.

Try our thirty day no risk trial for our online accounting software today and let’s make this a profitable partnership for both us.

General Partnership Can Transform Your Business

General Partnership is a powerful force which I believe has the potential to transform your business.  Keep an eye out for ways to generate partnership with those around you, treat those around you as if they are already partners in what you are up to (hey, it might rub off an and you’ll get things done), and enjoy the benefits of being in a world where everyone is working together on common goals - yours!

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Recently I wrote an email to Ben Kepes, one of the editors on Cloud Ave – a blog dedicated to writing about the phenomenon of cloud computing.  He had mentioned on his blog posts he was interested in reviewing a few online accounting software applications and I thought I would just write him an email and see what becomes of it. 

What resulted from our interaction was my first guest post ever.  I wrote a post about what I really think about SaaS (software as a service) and where I think this industry is going.  Before entering into the blog world with my personal blog Manifestation Stories (which has been long neglected since I started working on Clarity Accounting), I never thought of myself as much of a writer.  Less than a year after I started blogging, I am now writing for other blogs. 

Here is a quote on what I think about SaaS:

It is unclear at this point if any SaaS player will ever reach significant market share in their target market. Probably not in the way Intuit (creator of Quickbooks) can capture 90% of the US market share in the small to medium sized accounting software space. Interestingly enough, even Quickbooks Online struggles to get the kind of market share in the SaaS business accounting space, reaching 100,000 users online in 2007. This is nowhere near the numbers they are used to in comparison to their offline distribution.

Consumers are increasingly looking for SaaS solutions that can precisely meet their needs. One great example is Freshbooks - an online invoicing software that began by addressing only the pain of invoicing. They have since attracted more than 500,000 users worldwide. While there have been some grumbles within their online forum for them to add additional features to become an accounting software, it seems like Freshbooks is sticking to their plan of being the best online invoicing software possible for the time being.

It really seems like the most successful SaaS players are the ones who take on one or two pains and address them extremely well. Companies who create SaaS solutions with more features do not seem to win over those who focus on just a few features.

I also offered my crystal ball rendition of the SaaS market:

I have seen this as an increasing trend in the SaaS market place. In fact, our online accounting software has been approached by many of our customers and SaaS vendors to consider “integrating” with other SaaS applications. We couldn’t agree more. It doesn’t serve us or our clients for us to be the “jack of all trades and master of none”. It would be a lot better if we can just focus on what we do best and let others focus on what they do best. At the end of the day, we all win when customers get the best of all worlds.

As I am writing this blog post, Dobes is in the process of finishing and releasing our first working API.  If anyone is interested in testing it out, please let us know!  We already had 2 requests yesterday alone for a working API.

I think only time will tell if my opinion about the SaaS market has any merit. I certainly hope I am right — that way, I can be viewed as an expert. :P 

Where do you think the SaaS market is going?  Any thoughts?

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