NYT: Simple Software Solutions From Those Who’ve Been There

WHO better to understand the software that a small-business owner needs to run a company than another small-business owner?

Such thinking was the inspiration behind NetBooks, a software company introduced this month by Ridgely Evers, the owner of DaVero Sonoma, a farm in Healdsburg, Calif., that produces olive oils and artisanal wines.

“Most larger companies don’t understand this market,” Mr. Evers said. “They don’t respect it. How in the world can they serve it?”

With the design driven by Mr. Evers, NetBooks, of Rohnert Park, Calif., has released software applications for what it calls “true small businesses,” the 5.1 million or so owner-operated, self-financed companies that employ 2 to 50 people.

His own experience running DaVero shaped Mr. Evers’s conviction that small businesses need something other than watered-down versions of applications designed for much larger companies by executives and developers who have never been entrepreneurs themselves. It helps that Mr. Evers is the brains behind the original QuickBooks accounting software, giving him experience as a software entrepreneur.

“The companies we’re targeting are profitable from Day 1 because they have to be or they’re gone,” he said. “If you’re designing a service for the true small business, you choose ease of use. You don’t choose simplistic. You choose simple.”

Easy use was behind Mr. Evers’s decision to deliver NetBooks applications through the Internet rather than sell them at office-supply stores. The service is tailored for entrepreneurs who do not have the luxury of turning to staff technology experts to get set up and who need access to their financial and operating data from virtually anywhere.

Among the day-to-day tasks that NetBooks addresses are sales and customer relationship management; inventory, production and shipping tasks; and bookkeeping and financial reports. The service costs $200 a month for up to five users.

“The process of learning about the service was very interactive and positive,” said Paul Rosen, who owns Paromi Tea in Bethesda, Md., and is a NetBooks customer. “I saw that it could do everything I needed it to do. The customer service is amazing.”

The fact that the application was Web-based was a major reason Mr. Rosen chose it. “It allows me to be completely mobile and stay on top of everything,” he said.

NetBooks is not alone in thinking that small-business owners are more likely to buy services developed from their perspective and that the Internet is an efficient way to deliver them.

Take YourCostCenter.com. Brian Drucks, the president of the service, developed the application to determine a more precise way to price jobs for his fourth-generation contract-painting business in Mendham, N.J. As he began describing the application to business contacts, they helped him realize the service could work for accountants, contractors, architects, graphic designers and other professionals.

“Many people set prices at the beginning of the year, but when their expenses change, they don’t adjust them,” Mr. Drucks said. His service “allows you to recover those variable expenses that slip through the cracks,” he added. “You can make an educated decision versus making a decision based solely on your gut.”

YourCostCenter.com will calculate adjustments in job costs to offset possible losses. It costs $199 a year for one to five people and $399 for six or more. Mr. Drucks said he offered the application over the Internet for two reasons: first, most small-business owners he knows rely on getting their e-mail this way and are comfortable paying a subscription; second, it is easier for him to add features. “As a Web-hosted package, it never has to be complete,” he said.

For Arnie Bellini, the chief executive of ConnectWise, an information technology services company in Tampa, Fla., the decision to offer his own operations management software to peer companies was a revelation.

While discussing the possibility of selling his company about 10 years ago, Mr. Bellini spoke to potential buyers who said they were astonished by his 40 percent profit margin. They told him that many of his competitors said they earned average profit margins of about 5 percent.

He and the potential buyers realized that the difference was the business methods that ConnectWise had adopted because of its software, Mr. Bellini said.

“We started going to our friends in the industry to tell them about it,” he said. “They literally demanded that they get a copy of our software. They told us we had to sell it.”

The result was ConnectWisePSA, which the company sells as an Internet service for $50 a month per user, or as a $750 packaged product.

Analysts say software companies like NetBooks and ConnectWise play to the diversity of small businesses by avoiding a one-size-fits-all approach.

Michael Speyer of Forrester Research in Cambridge, Mass., who focuses on information technology issues affecting small businesses, said that many high-tech companies segment potential customers by the number of employees they have, overlooking the concerns of entrepreneurs versus those of corporate managers.

By contrast, NetBooks considers factors like how active the owner is as a manager, how much daily control he or she requires, the owner’s attitude toward using technology and whether a venture capital company has invested money in the business.

“I like the fact that NetBooks has taken a psychographic approach to finding out who their customers are and what they really want,” Mr. Speyer said. “This is really what counts. I think the way they characterize the market is spot-on. Stages of development are really what counts.”

Sonal Gandhi, an analyst with JupiterResearch in New York, said that small businesses were more open to using an application developed by one of their own. “There is certain functionality they crave,” she said.

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