The Evolution of an ISV
I get that it is mostly partners and Microsoft employees that read my blog, I have not really targeted my content toward customers, which was probably a mistake, but that is a topic for another day. Today, I want to break down some significant changes we made to our ISV strategy and why.
Every ISV is Different
Our strategy is obviously not going to work for every ISV. For us, I think it makes sense, for others it could be non-sensical. In this post, I want to further expand on our recent strategy to make our RapidStartCRM Apps free, and how we plan to generate even more revenue than before as a result.
I had a Dream
When I first conceived of the idea of RapidStartCRM in 2015, there was nothing else like it in the market. “Dynamics CRM Online” was a complicated product to deploy and get adoption on… and still is. We built a solution that sat on top of it, mostly hiding the complexity. I had joked to James Phillips once, that every time he adds a new feature, we have to go back into our solution and hide it… he was not amused. But this was not my dream. My dream, was that users would just install RapidStartCRM, pay us some cash every month, use it as-is, and leave us alone. I dreamt of thousands of companies just using the solution as we designed and intended for them to. Well, that last part of my dream never came true. Almost every single customer wanted some sort of “tweaks”! They completely ruined my plan of laying off all of my tweakers…and pocketing their salaries.
Resistance is Futile
I spent quite a few years trying to crack the nut of I.P. without services. It’s okay, my tweakers were aware, and apparently knew better than me the futility of this effort. At some point you just have to play the hand you’re dealt. So we pivoted from trying to minimize services for customers, to instead leaning in on that inevitability. Where I had hoped our revenue mix would be 10% Services and 90% recurring I.P. cash, it ended up the other way around. And of our services revenue for Forceworks, 90% of that was coming from our RapidStartCRM customers. This is also why we recast our apps as “Accelerators”, an acknowledgement that no app is perfect for any customer.
Five Years In
Business is great, growth is great, revenue is great, albeit not in the ratios I originally intended it to be… but I got over it. So now what? What could be my next move, to go to the next level? I mentioned in my last post the spark of a new idea, that came as a result of building a new idea, ISV ConnectED. Looking at the WordPress ISV freemium model got me thinking. Some of these WordPress addons have hundreds of thousands of users. I’m sure most of those users are sticking with free, but it does not take a large percentage of them to opt for a “Pro” version or something, to add up to a significant chunk of change. In looking at our Apps, we make 10X in services over the recurring revenue on the apps themselves. If the apps were free, I would be betting that sacrificing the 10%, would easily be made up for in addons and services for much faster growing user base. Decision made!
I need a Plan
Just removing the costs of some apps was not going to be enough, the strategy had to be more comprehensive than that. A ton of new free users is useless if you cannot monetize them, even worse than useless actually, as there are still costs. Step one, how to support them. Knowing previously, that most customers were going to reach out for help to get the most out of something they were paying for, we had not worried too much about our documentation. We had documentation, but not at the level that would be needed to support a large number of free users. Why do I care about the free users, particularly the ones who are never gonna buy anything? Because we live in a world of ratings today. If your free apps are crap, or useless without paid extras, or you don’t support them at all, your ratings in the marketplaces will plummet. Good ratings are hard to get, you almost have to beg even your happiest customers to go to the time to give them. Free users got nothing but time to go blast bad ratings all day long. It is the single biggest risk in the freemium strategy. Fortunately our apps are great, probably because they were not originally developed to be free.
So reasonable support is important, even for free users, but you can’t go broke providing it. It comes from 3 places in our strategy. The first is more comprehensive documentation. The more issues that can be addressed in your documentation, the fewer frustrations a customer will suffer. But a lot of issues can pop up, that are not able to be covered in even the best documentation in advance. The next step for that free customer is a free support forum. There is no SLA in a free support forum, and hopefully over time, customers will be able to get answers to previously asked questions there, or from other users, as well as us checking in.
This is about the best we can offer to a free user, and it should be good enough for many of them. But you have to give them a path forward if that is not enough for them. But that path, at that stage, does not need to be free anymore… but it still can’t be too expensive. So we bubble up our RapidADVANCE managed service offerings, a paid program that can provide that next level of support, in a few flavors. But what if that still is not enough? Again, 90% of our business was coming from customers who wanted significant customizations… so this brings them to our Forceworks Support Block model, the model we have used for many years now for current RapidStartCRM customers, or all other non-RapidStartCRM customers, including enterprise customers, and P2P projects. It is basically our SI model.
Other Revenue Options
We are also working on two other primary monetization paths. The first is what we are calling “Simplementations” via Forceworks. This is something that we have been offering for a while for some of our non-public I.P., and it seemed like a natural fit for our RapidStartCRM apps as well. Basically, Simplementations are fixed cost, scope and time engagements for targeted scenarios.
Lastly, paid addons… an area that we will be focusing on heavily in the coming months. Our RapidStartCRM apps, are like platforms on a platform, this was intentional many years ago, but only to streamline our providing services for them. But they are perfectly designed for adding additional “packaged” capabilities quickly and easily. We already have some of these, RapidPROJECT and RapidSERVICE, for example. Again replicating our motion of taking something Microsoft made too complex , and creating a simple version of it. In this case, RapidPROJECT is a subset of PSA capabilities, and RapidSERVICE is a subset of Field Service capabilities. BTW, neither of these require RapidStartCRM as a pre-requisite. But over the years we have built all kinds of things on top of RapidStartCRM in response to customer requirements, and many of those things would have broad appeal, if we packaged them up.
So this is going to be a busy development year for Forceworks. I’ll keep you posted on our progress. If you are an ISV, I would really appreciate your joining ISV ConnectED, I may need the gas money for my motorcycle.