Posts Tagged ‘Datagate America’

Success with Usage-based Billing

April 3, 2018

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With the rapid growth of the “as-a-service” business model and the abundance of new services enabled by the Internet and mobile apps, it’s fair to say that there has been a major mindset shift in the monetization of new businesses towards subscription and usage-based billing.

It’s easy to forget that other, more mature businesses categories, such as telecommunications, water, gas, electricity, news media and others, have been using subscription and usage-based billing for decades and have built up a substantial amount of experience, knowledge and I.P. in the subject – not to mention substantial recurring revenue streams!

My business, Datagate Innovation has learnt a lot from the telecommunications industry in particular, where it’s common practice to bill fixed monthly charges for fixed connections, usage charges for calls, texts and data, whilst also offering bundles of usage of various services for a fixed charge. We think this I.P. is invaluable, not only in billing for telecommunications and utility re-sellers, but also for the new and emerging business categories, such as Internet-of-Things, Software-as-a-Service and Artificial Intelligence, among others,

Datagate Innovation’s purpose in life is to help re-sellers maximize and grow their recurring revenue with fixed and usage-based billing, whilst minimize their billing costs through the use of our Cloud-based Datagate rating and billing platform.

The majority of Datagate’s clients are Managed Service Providers (MSPs) who re-sell telecommunications services and IT services to their business customers, but we are starting to get traction in other industry categories, such as electricity and water, who also work on a usage-billing basis.

This month Datagate published a case study for Ranch Hills Water Supply Corporation (RHWSC), who are based in Texas and are using Datagate to bill their water customers on a usage basis.  By shifting their billing to Datagate and a usage-basis, they increased revenue by around 26%, while cutting their billing time by around two thirds. Datagate was configured to receive water usage data from RHWC’s Kamstrup Ready Manager system and post the resulting bills to RHWSC’s Xero accounting system, after emailing them directly to the end customers.

The big opportunity we see for all service resellers today is the convergence of different types of usage-based services that can all be sold through a single reseller.  We are already seeing our clients combine IT and telephony, as well as telephony and electricity.  As long as it’s usage-based and we can get access to the usage data, then Datagate can bill it, on a single invoice.

The billion dollar CEOs – lessons in SaaS.

February 18, 2018

IMG_0778Last week I attended SaaStr Annual 2018 in San Francisco, the world’s largest SaaS industry event, with over 10,000 SaaS founders, VCs and executives in attendance.

The presentations were given by a selection of very successful founders, CEO’s, executives and investors from around the global SaaS industry.  I found myself referring to many of the CEO/founders who had achieved business valuations in excess of $1B as the “Billion dollar CEOs”.

SaaStr spanned three days, and I attended on behalf of my company Datagate Innovation as part of a 100 person delegation of SaaS entrepreneurs from New Zealand, organised by Callaghan Innovation and NZ Trade & Enterprise.  Our delegation also attended some excellent presentations from New Zealand SaaS business founders that have physically moved to North America and were generous in sharing their experiences of doing so.

For me, the value of participating in this delegation and attending this type of SaaS industry event, covered three main areas;

  1. Recognizing the common patterns, challenges, ups and downs of starting up a SaaS business. Despite my own experiences, it’s still good to hear of the billion dollar CEOs going through the same or similar challenges and reaching a massively successful outcome.  The value of this kind of psychological reinforcement cannot be overstated. In any industry it’s important to know what is normal and what is not, on the path to success. It also helps to know that you’re not alone and others face the same challenges as you on a daily basis.
  2. Learning new concepts, strategies, common metrics, KPIs and how the SaaS industry operates internationally.  It’s easy to get caught up in your own business, in your own locality without seeing the bigger, wider picture.
  3. Making new industry contacts.  I was fortunate to gain new American contacts at SaaStr and New Zealand contacts from within the Kiwi delegation itself.  Conferences like this are ideal to widen your business network, because you have so many people with a common interest from all over the world, in one place, at one time.
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The New Zealand SaaStr delegation, meeting at the Nasdaq Entrepreneurial Center, prior to SaaStr.

 

A few of my favorite take-outs from SaaStr and the American-based NZ SaaS businesses (that happen to apply to my business Datagate) are as follows;

“Nail It before you Scale It” 

The short concise sentence above sums up how SaaS companies should transition from their start-up stage to their growth stage.  I think in many ways it encapsulates the essence of SaaS.

During the “Nail It” stage, the focus should be on understanding your customer, building your minimum viable product (MVP) that addresses the needs and wants of your customer, determining your unique selling points, your messaging and your sales strategy.  Ideally you should work with a small set of early-adopter customers to refine your offering based on their real-world feedback.  Focus on understanding and maximizing the value you are creating for your customers, aim for minimum churn, maximum customer satisfaction – before you even start focus on major revenue growth.

Setting aggressive revenue targets too early will drive the wrong behavior from your team.  You don’t want to cut corners to get on to the next sale until you’ve nailed your product and your service offering.  Once your offering has reached “nailed it” stage, there should be no need to cut corners when you get to “scale it”.

Aggressive revenue targets should be applied only when you reach the “Scale It” stage, once you’ve nailed your product or service offering.  If you scale too early, you are effectively damaging your reputation and your future potential.

This “Nail It before you Scale It” approach illustrates why SaaS start-ups require such strong support from their investors in the early stages.

Notes from several of the Billion Dollar SaaS CEOs

It’s extremely important to “know your customer” and ensure that the messages you are putting out in sales & marketing resonate well with them.  One very successful serial CEO said that when he moved into a new business, one of the first things he would do is personally spend time with customers and end users to get a better understanding their needs and what value they were (or weren’t) getting out of his company’s product.

A lot of the on-line sales processes today are heavily automated. There are tools to track the on-line activity of prospects and keep them updated regularly with a stream of sales & marketing material so they won’t forget you! The amount and depth of research that can be done on prospects automatically on-line is staggering.

Sales & Marketing work differently in the SaaS world than in the conventional scenario. In SaaS, marketing operates more in parallel with the sales team.  Prospects bounce between marketing and sales throughout their buying journey.  The two functions, sales and marketing must work tightly together with a common unified message and strategy.

Your team dynamic, your culture and your brand are extremely important to the success of your business.  Don’t retain people who damage your team dynamic or harm your culture, regardless of how well they might perform on their own.  You will find it easy to attract good people to your business if you have a good culture, reputation and brand.

Diverse teams work better than mono-cultural, single-gender teams. Research has proven that on average, businesses with more diverse teams perform better. The top performing companies seem to have the highest diversity.  SaaStr themselves have their own diversity and inclusion program and claimed to have 45%+ women speakers at SaaStr this year and over 60% women + multicultural speakers.

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Entering the US Market from another country (such as NZ)

Seek to partner with a larger, established American business that targets the same customers as you do, but has a complementary product to yours (definitely not a competing product!). Make your product work well alongside their product and attend their trade shows to meet their customer base.  This is the quickest, easiest and most cost effective way to get direct access to a lot of your target customers.

Americanize your offering by working with your first early-adopter American customers to ensure your offering works well and is valuable for them. Every country has subtle (and not so subtle) requirements that differ from other countries (in the case of my business Datagate, we’ve had to do a lot of work with taxation and regulatory requirements for the American market).  Publish case studies of American customers using your product.  Testimonials from customers outside America are not as effective as American ones.

You need to build an American credit history by working through American banks and/or other institutions.  Credit ratings from outside America don’t count inside America.  Opening a bank account for your NZ-owned company can be difficult without an American credit history. It was suggested that it’s easier to open a personal bank account and use that first, to build up some history, allowing you to open a business account later on.

Due to the larger market size, you can be more focused on a narrower vertical market in America than you than you need to in a smaller economy such as New Zealand, where you tend to have to go wider to get enough sales volume.

It’s almost essential that the CEO of an American-focused business is located in America, in order to be taken more seriously by American customers, investors and banks.

American work visas can take a lot of time and effort to obtain, even if you are providing your own employment and employment to American citizens.  Don’t leave this until the last minute!

There might be challenges in getting into America, but it’s a huge market and well worth the effort.

Datagate opening for business in America

June 7, 2017

During my time in the United States last month, I received very positive interest in Datagate’s billing solution from numerous local and global industry contacts that I met with.  Many of these parties were known to me through my previous role as CEO of Enprise Group and my decade as a member & chairman of SAP’s Global Business One Solution Partner Advisory Council.

As a result of these positive responses and evidence that the same market forces driving demand for Datagate in New Zealand are also present in America; Datagate is now in the early stages of setting up sales partnerships in North America, to drive sales throughout that region.  We are excited about the potential of Datagate in the American market.

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Greg Robinson (L) and Kevin Smith (R)

As a result, Datagate has now formalized an agreement with Greg Robinson and Kevin Smith (pictured) of Pilot Solutions to represent us in the North American market as Datagate America. I’ve worked with Greg and Kevin before in my previous role with Enprise.  It’s great to work with people that I already know and trust to get the job done well.  Greg (who formerly worked for SAP in America) joined me in most of the meetings held during my trip and is now up to speed and instrumental in taking things forward with the various developments taking place for Datagate in America.

This is the first of a series of American partnerships, that we will be announcing in due course.