2009 – So far so good!

Q1 2009 is done and dusted. Despite the misgivings and the general economic environment we had a good Q1, posting an increase in sales over Q1 ’08 of just over 50%. As we account in GBP the weaker pound helped (we get more pounds for the same amount of dollars) but the story of the quarter is basically one of continued growth.

In terms of marketing and conferences we had a busy February attending the DIA EDM conference (which as always is a very good conference for us) and the Qumas User Conference – always a lot of fun! So in many ways it's just more of the same. Whilst the conferences do generate new leads for us we are also benefiting from having been in the market for so long – PleaseReview was launched in January 2005. We have started getting opportunities from existing users moving companies and introducing PleaseReview to their new companies. This is wonderful as they come with their own in-built references.

We are continually examining our marketing mix for efficiency and, for example we have adjusted our Google Adword mix as we found that certain generic key words were costing a considerable amount of cash (ie generating lots of clicks) but not generating any ‘stickiness’ on the website. We are also experimenting with other on-line advertising. Dilbert.com is a site that almost all of us view for our morning ‘fix’ and therefore it seemed sensible :~)

On the product front, are busy working on version 4 and, theoretically, we went code complete on 31st March. What we actually mean by that is we went code complete for the major ‘high risk’ stuff and are continuing development of peripheral enhancements whilst the main testing is started. Obviously at this stage there is a certain amount of bug fixing ongoing but, we are sufficiently advanced that, we can be confident of releasing v4 at the end of June as planned. What will be released is still open to debate as the scope of the peripheral enhancements we are able to include is wide open and will depend on the level of bug fixing required. There is a fine balance between enhancements, testing and documentation to ensure that we maximise our development team’s time whilst delivering full tested and documented software to the quality our clients expect.

One of the key aspects of v4 is a re-worked look & feel. We wanted to maintain the pedigree whilst at the same time addressing some of the user interface issues and the slightly dated look we were beginning to acquire. We did consider briefly commissioning UI consultants but soon discounted that idea for an internal led approach. One of the reasons I wasn’t keen on the consultant led approach wasn’t so much the cash (although conserving cash is always a good thing) but the fact that when I was invited to participate in the Beta trial of a software product last year, the user interface was, in my opinion, over complex and not at all intuitive. UI design is definitely an art form. Not only is some of it a matter for personal preference but it's amazing how little effects can make big differences. What is also amazing and somewhat frustrating is how much time UI design can suck out of the team.

One of the books all those involved in UI input have read is Don't Make Me Think!: A Common Sense Approach to Web Usability by Steve Krug. The title says it all really and that has been our aim. There is no ‘right’ way to do something. The key is simplicity and consistency. It will be interesting to get the feedback when we let the new UI loose on our users.

This quarter, I’ve picked up on a couple of interesting articles related to IT start-ups and company building.

The first article is “The Web Startup Surgeons” by Micah Elliott. This was picked up by a member of the team and circulated for comment. I think we are all agreed that the thinking behind the article is correct – there are a lot of hats which need to be filled. However, we (I and the team here) don’t really agree with the combinations Micah put forward and could spot an obvious gap. Admittedly, it does depend on where a company is in the cycle but as soon as it starts generating revenue, a financial person is mandatory. Someone needs to look after the cash, issue invoices, and generally chase clients for payment – not all clients pay on time! Some even lose invoices! Shock horror!

Also, I think lumping marketing together with customer support is less than ideal. The primary purpose of a commercial business must be to get and keep customers. The term ‘customer support’ implies the existence of customers. So how do you get them? You do not simply publish a ‘better mousetrap’. Sales and marketing is a critical part of the business. The bottom line is that multiple hats must be worn but the key is to have a good team of people whose combined strengths not only form a winning team but also address the critical three elements of any business, namely Sales and marketing, building and delivering the product, and the finances.

This brings me onto the next article which is entitled “Words of advice for hard times”.

The subject of the article is Ben Goss is the co-founder and chief executive of Distribution Technology, which is apparently "a fast-growing developer of financial advice software for financial institutions" and his second start-up. The interesting bit is at the bottom of the article with the subtitle “A veteran reveals his do's and don'ts for software entrepreneurs”. The dos and don’t are:

*Do your research. Understand the market and understand your customer's needs. Know how you are going to make some money.

*Do try to fund as much as you can yourself - particularly at this time. Go as far as you can on your own means, but if you think you are going to need capital, get it before you really need it - you will receive a much better price.

*Do locate where you can benefit from talent and facilities - clustering is very important.

*Don't be tempted to make money any which way - avoid being distracted by revenue opportunities that take you off course.

*Don't hire just anybody. It is a big temptation when you need people, but do not lower the bar on recruitment. If you are serious about expanding a business, you must seek out the right talent.

I have to agree whole heartedly with 4 of his 5 points. The only one I’d change is the location point which I’d adjust to place the emphasis on locating somewhere you can benefit from your connections. For example, we are based in the South West of the UK and everyone in the UK office has worked together or for the same company at some stage in the past. We are all either ex-colleagues or connections of ex-colleagues. When we set-up the Malaysian office we were able to benefit from my connections in Malaysia to source legal advice and premises. Once we had our team leader we were able to benefit from his connections to recruit.

However, the key bit of advice Ben gives is his last point. It is fundamental - don’t hire just anybody! At CDC (my previous start up) we went through a period of rapid expansion and there was considerable pressure to get ‘bums on seats’. This led to hiring mistakes and, as I have mentioned in earlier posts, they cost time, money and emotional stress. A chain is only as strong as its weakest link. Better not to hire than have a weak link.

So as we move into Q2 I’m pleased to say that sales are continuing at a steady pace and there is great interest in version 4. It going to be an exciting quarter.

What does 2009 hold for us?

Well, as I read November’s blog posting I struggle to know what to add! The financial news remains all doom and gloom and the predictions are that the recession will be long and deep. Yet our position remains the same.

We had a very good 2008 with revenue almost exactly doubling year on year. We had worked hard to keep overheads down which means profitability was good. So we enter 2009 with a good recurring revenue stream, a decent cash balance and a good prospect list. Another key aspect is a complete lack of debt. This is extremely important in the ‘credit crunch’. It seems that a lot of perfectly viable companies may go to the wall simply because they can not get credit to ease cash flow.

So, our financial position is good, the hatches are battened firmly down and we will be keeping a very tight control of our overheads.

The last couple of months of 2008 held few surprises. We exhibited at the DIA eCTD conference in San Diego and then at the Open Text user conference in Orlando. Both shows were good for us and produced new opportunities.

Just before the eCTD conference we experimented with a ‘breakfast seminar’ at a local hotel. The idea was that we would attract local San Diego biotech companies to come along and learn about PleaseReview. It was always going to be something of an experiment. Whilst, pre-internet days, the breakfast seminar approach was, in general, a very successful activity, I wasn’t sure how it would pan out in 2008. The answer was, as a means of meeting prospects, ‘not brilliantly’. As a means of connecting with existing clients, ‘very well’!

It could of course be the way we marketed it but, whatever the reason, we ended up with approximately 50% of our target number of attendees and had more clients than prospects in the room. Thus it turned into more of a mini user conference than anything else.

So, the lesson I take away is that as a means of interfacing with prospects the seminar idea needs more work. As a means of meeting and gaining customer feedback, it appears to work well.

From a product perspective, we released v3.6 as anticipated and started work on v4.0. At the time of writing, the main area of v4.0 functionality, namely the greatly enhanced collaborative authoring functionality, is looking good. It will be on the internal test server by the end of the week. I’m looking forward to playing with it.

The feedback from the v4.0 webinars was overwhelmingly positive and I have no doubt that if we deliver what we have said we will deliver, we will continue to prosper.

Keeping half an eye on the venture capital scene (as we are prone to do) shows that it's just as well VC funding is not in our plans. This article in the Financial Times suggests that all is not well in VC land. No surprises there I guess as all is not well in many places – especially those to do with finance.

So we sail into 2009 with the prediction that it going to be tough for the sale of computers, software and outsourcing services. Tell me something I don't know.

There is little point in repeating the November 2008 blog posting which includes a still valid analysis of my thoughts on what will happen in 2009 so our plan remains simple. We will keep our heads down, we will continue to work hard, make great software which people want to buy and be very well positioned for the eventual upturn.

Another very good year – but what happens next?

Only a month late in posting what I aim to be the quarterly blog! And what a few weeks it has been – we appear to have been watching the western world’s financial system implode. This, of course, has had an impact on business and makes planning for next year very difficult – if not simply impossible.

I echo the sentiments of John Chambers, CEO of Cisco who is quoted in the Financial Times as remarking it was “difficult to provide a forecast given the dramatic variability”.

What makes it more bizarre from our perspective is that we are in the process of having a very, very good year and had been planning a modest expansion for next year. We will have more than doubled our revenue (again – 2nd year running) and were in the process of recruiting when it became blindingly obvious that caution was advisable and cash would be king. So, with expansion plans on hold we prepare to close out this year and wonder what will happen next year.

However, before we look ahead lets look back. Personally it been a frantic summer with a long family holiday in Africa followed by a short one in Spain (yes, we Europeans like our vacations) which gave way to the ‘standard’ September through to Thanksgiving rush. This period is ‘conference season’ and, for me, that means travel.

In the nine weeks of September and October I have been on five trips including one to Malaysia and three to the USA. Basically I have been on the road every other week and have the same schedule to Thanksgiving – another two trips to the USA in November and then, in early December one trip to Barcelona for the DIA EDM conference - then I’m done. Phew. I’m finalising this text at the departure gate in Terminal 5 at Heathrow. Next blog I promise to rant about Terminal 5 – but that is another story.

The three US trips have been for exhibiting and speaking at conferences, namely: RAPS in Boston, the Master Control user conference in Salt Lake City, the EMC CMA in Philadelphia and AMWA in Louisville. On the whole these have been positive experiences and will result in business. We have yet to come the DIA eCTD conference in San Diego, the Open Text user conference in Orlando and the DIA EDM conference in Barcelona.

Attending the conferences is not only good for business, its ‘mandatory’ if you want to be in the loop and find out what is happening to whom and how – ie good old fashioned gossip. It useful to know who is winning, who isn’t and the general word on the street. Its also a great opportunity to put faces to names and we love having existing clients and users (most of whom we have never met) drop by the booth to say ‘hi’.

So to those who take the time to drop by - thank you for taking the time to tell us how much you enjoy working with PleaseReview or, in the very small minority of cases, where you have an issue, thank you for giving us the opportunity to discuss it and put it right.

So this time of year is a long slog on and off planes with a fleeting visit home every other week. However, motivation is easy if things are going well and life is good at the moment. Revenue is high, confidence is high and we working on the much anticipated but much delayed v4 of PleaseReview.

A little bit of competition for PleaseReview is beginning to emerge – mainly based around SharePoint which has too many disadvantages to mention here – but competition is healthy. We feel very well positioned. We have well proven market leading technology, an established mature user base, an established mature product and no shortage of new ideas going forward.

In terms of product management, we are on the point of releasing PleaseReview v3.6. This release will tidy up and finalise some issues left over from v3.5 and includes a major slug of new functionality which permits even tighter integration with 3rd party systems. This functionality has been built for a specific client but, as with everything we do, is fundamentally generic and available as part of the standard product. There will be a v3.7 release before Christmas to cover a release of the SharePoint integration but, from a PleaseReview perspective, it will be functionally identical to v3.6.

We have announced a series of confidential client and prospect briefings to ensure that everyone is well prepared for v4.0 when it hits the streets in Q2 2009. Once again I think we will be taking the lead in the whole area of document authoring collaboration and will be setting the pace.

When we formally released PleaseReview v1.0 back in January 2005 (it was in beta in 2004) I reckoned we had an 18 months lead on the market. I was wrong. It was more like 3½ years and I see no sign of this lead diminishing – famous last words!

There is, of course, the thought at the back of our minds that, with the lead we have, we should raise a load of venture capital and throw a significant amount of marketing resource at consolidating our lead. This is a refrain I keep returning to for the simple reason it’s a subject we need to keep re-evaluating. Regardless of whether ‘now is the time’ in terms of the business cycle, it’s a philosophical debate. Both Clare Beazley (our CFO) & I have been through the VC route previously and know what to expect. On the few occasions that we have spoken with VCs we do get the feeling that they would like it if we were ‘less experienced’. I think it’s an attitude issue. VCs like to think they are bringing something to the table other than cash, but generally they aren’t. So, if we wished to do anything, it’s a question of finding someone who is comfortable with our view which is quite simply ‘we know what we are doing – you are simply the cash source – so divvy up and let us get on with it’. Someone recently pointed me at the sorry tale of ArsDigita by Philip Greenspun as to what can (and regularly does) go wrong with the input of venture capitalists.

So currently we are happy and not planning any external investors. We are cash rich (yes, its been a good year) and have a significant percentage of next years’ overheads covered by recurring revenue. Thus, even if we lose some of these revenues, we enter the uncertainty of next year with the hatches battened down expecting to survive and even thrive in the storm.

So that leads us to ‘what happens next year’. Great question! I don’t think anyone knows. We obviously are very dependent on the USA market and, I guess, that will depend on what happens economically over the next 12 months. I return the Mr Chambers’ comments: “it is difficult to provide a forecast given the dramatic variability”.

We know that we are in the budgets of several companies for next year so we assume and hope that they will get to spend their budgets. Time will tell.

The Life Sciences business is generally long term and considered, by some, relatively recession proof. However, now, about 50% of our revenue comes from outside life sciences and we suspect that these markets will suffer. As a counter to that the £/$ has been moving our way of late making every $ of revenue worth more in £. However the fall in the value of the £ means that the cost of the Malaysian operation has risen. As our $ revenue is higher than our Malaysian Ringit expenses, ultimately, a weak £ suits us well. Oh, and by the way, please do not expect our US$ prices to fall next year as a result. We price the software in US$ and then convert to other currencies. Also, over the last couple of years, we have taken the pain (the £ was at $2.10 at one point) so we look forward to the gain.

So, our plan is simple. We will keep our heads down, we will continue to work hard, make great great software which people want to buy and be very well positioned for the upturn.

Steady as she goes …..

Q2 – done! And, the good news is, done successfully! Sales growth year-on-year is currently running at about 10%. This may initially seem disappointing but there is plenty of upside and we have several really excellent prospects. With a few projects cancelled for budgetary reasons (see my last post) we are benefiting from the strength and depth of the prospect list.

However, we are not satisfied with 10% year-on-year growth and expect the growth over the whole year to be much higher. The reality is that, despite what people would have you believe, sales do not come in with a perfect linear progression showing the ‘ideal’ quarter on quarter growth. Sales are more like buses. Just when you are wondering whether any will turn up several all come along at once.

I believe that almost every deal has its own symmetry and will come in ‘when it’s ready’. I almost never try and ‘rush’ sales through an organisation. Once it’s in progress its in progress – it will pop out of the process eventually. Sometimes sooner than expected, sometimes later than expected.

We have a couple of orders ‘stuck in the pipeline’. The sale is ‘made’ in so far as the purchase process has been started by the client side. However, the order has got stuck/become lost/whatever in the purchasing/legal/IT/whatever department in the client company. But we have no control over the process and can do little but gently prod and wait it out.

In fact, one of the main benefits of being a private business with no investors is that we are not beholden to a Board of Directors and constantly having to justify ourselves. When you take venture capital investment you gain Board Directors and it from that point you can do no right. If you meet the targets the Board considers them to have been insufficiently ambitious and simply raises them. If you fail to meet the target because it was overly ambitious then you have failed – no excuses! It’s that simple.

Being beholden to no-one other than ourselves we can take a longer term view and ‘go with the flow’. There is no point in trying to ‘bring sales forward’ to meet some spurious end of quarter or end of year target. We can judge each sales situation on its own specific circumstances and make decision on that basis. I treat the end of quarter sales figures as an interesting historical report.

From the business perspective, cash flow is the one to watch. We simply need to be able to meet our commitments. As such, we closely monitor cash cover. In other words, if we sold nothing more, how long before the cash runs out? In fact, we monitor two forms of cash cover. One position is actual cash in the bank and the other cash in the bank and monies owed to us. As a conservatively run business we like to see 6 months cash cover at any given time. This gives you time to react to events if need be.

Talking of reacting to events, I recently read an interview in the Sunday Times with Nassim Nicholas Taleb the author of “THE BLACK SWAN, The Impact of the Highly Improbable” (read the interview here). This was my first introduction to Taleb’s thinking and it immediately struck a cord. His basic message is ‘expect the unexpected’. He claims to have correctly predicted the credit crunch by noting in his book published in May 2007 that, according to the above reference interview, “most economists, and almost all bankers, are subhuman and very, very dangerous. They live in a fantasy world in which the future can be controlled by sophisticated mathematical models and elaborate risk-management systems”. His point was, of course, that reality is not like that and stuff comes in from ‘left field’.

I believe the same about business and business planning. In my December 2007 posting I mention that one of my ‘certainties in life’ is “No plan survives the first encounter with the enemy”. This is the same philosophy – expect the unexpected.

This quarter ‘the enemy’ came in the form of the v3.5 release. It fought back. Despite being ‘code complete’ at the end of March, the release didn’t happen until mid-June. In order to achieve that we had to cut some of the functionality as we simply couldn’t get it to work reliably. We also have more published ‘known issues’ that we would like in the release code. However, life is like that. You have to draw a line in the sand, make tough decisions and get the release out. If you don’t it continues to suck resources and you simply don’t move forward.

Reliability is, of course, the reason why we test the software. We actually test it comprehensively. Many of our users are ‘power users’ with some very complicated Word documents. There is no point in putting out something that works with simple documents and falls over with something more advanced. It’s a simple equation. If we can’t get it working reliably on ‘complicated’ (aka horrible) documents then we will not release it. This is not purely altruistic! A quality product reduces support costs and provides a stable long term platform for growth.

So v3.5 was three months late. In our defence, Tim Robinson, our CTO, reckons the v3.5 release was probably the most complex development we have undertaken since the initial development of the product. I think we are all surprised and a little disappointed at the outcome.

The question is “if we had investors, would be have (i) released it earlier when we weren’t happy with the quality, or (ii) released it at the same time and taken the punishment from the Board”? Either way would have been painful.

Interesting – I hadn’t set out to discuss investors in this blog entry. In fact, I hadn’t set out with a plan at all. I just wrote. The investment or no investment debate must be playing on my mind :~).

So where does that leave us? Well obviously v4.0 is delayed or is reduced in scope – or both. In addition, it’s looking like we are going to have to have a v3.6 release for commercial reasons. One significant prospective client wants some specific enhancements and that will require a release in the October timeframe. However, I don’t want all the development effort averted to the v3.6 release and want to keep part of the development team focused on v4.0. No question, it’s going to be balancing act.

From a marketing perspective, we have been to three conferences since early April. The ACRP conference in Boston in late April was extremely disappointing. A good conference with lots of people – just no-one interested in what we had to offer - a simple case of the wrong conference. Never mind – it’s another one on the ‘we won’t do that conference again’ list.

We then attended The Better Software conference in early June in Las Vegas. This was our first pro-active foray into the non Life Sciences market. We have received considerable interest in PleaseReview from the software development community and, at one client’s behest, have added support for source code review into v3.5. So this was our chance to get out and be pro-active. It went well and we have already booked out place for next year!

The other conference we attended in June was the main DIA conference in Boston - an excellent conference. A great mix of clients, prospects and new leads and we were almost constantly busy. Another one we have already re-booked.

It was at this conference that it came home to us how, over the last year, the client base and especially the number of users has expanded considerably. For the 1st time we had users turning up at our booth and telling us how wonderful PleaseReview is and how it has transformed the way they work. It’s great news, not only because the best marketing is still ‘word of mouth’ but also because it validates our approach and what we are doing. It also makes us smile.

From a longer term perspective we have begun raising our ‘heads over the parapet’ and started talking with and presenting to the analysts. I suspect this will bring some interesting times and we have already had one or two venture capital companies wanting to chat. At this stage we are politely declining the opportunity to open a dialogue.

Finally, I can’t believe that I’ve written a couple of blog entries without mentioning our new office (opened in January) in the historic market town of Malmesbury. There is something quite reassuring about being at the forefront of information technology development in the shadow of an abbey which is about 900 years old. I think it gives a sense of perspective and provides a constant reminder that some things operate on a completely different time line. Which, I guess, takes us back to the fact that every deal has its own time line.

A good start to 2008

Well Q1 ’08 has been and gone. It wasn’t a bad quarter for us. Revenue was well ahead of the same period last year despite the indications of belt tightening. To date, to the best of our knowledge, we’ve had three expected orders cancelled due to budget cuts. So that is basically three lots of 6-9 months sales effort gone up in smoke. But I guess that is business.

When I posted my last blog entry I was on my way back from the US for a brief visit home prior to heading out to the Annual Euro DIA conference. My last post recalled the fact that I was in two minds as to whether we should do it (see 30th March 2007 entry). Well I decided we should and we went. What a mistake!

On first glance the whole thing stacked up. There were about 3,250 registered delegates. Allowing 750 of those for vendor booths (~250 companies exhibited) gives about 2,500 ‘real people’. So why was the exhibit hall empty? The DIA appear to have done everything right. Refreshments were in the exhibit hall and delegates had to walk past the booths to get to the refreshments. But the booth traffic was simply non-existent. From talking with other vendors we were not the only ones suffering. I had one, yes, a single meaningful conversation (ie one which may ultimately move forward into an opportunity) over the full three days. So, it was a complete waste of money, time and just about everything. Another one on the ‘we won’t do that again list’.

This leaves the whole question of how we market in Europe up in the air. Clearly exhibiting at shows is not going to do it. I have a theory about this. It’s a cultural thing. Europeans simply don’t have the same attitude to the booths, conference vendors, etc as Americans. Certainly, there is the language barrier but it goes deeper than that. The British, as an example, find the whole concept of talking to someone who may be selling to them somewhat distasteful and scary. Their image of a sales person is not a professional who knows their stuff but is more associated with the “2nd hard car salesman” or “double-glazing” salesman approach.

So that is it. I’m finally cured. No more European shows except the annual European DIA EDM conference. Even that is marginal but at least it’s relevant!

Back to European marketing …..

Speaking with several contacts there is a commonly held belief that ‘you can’t do Europe from a single country’. You need ‘feet on the street’ and, presumably, language skills, in each country. This is, of course, expensive and requires significant investment. It’s certainly nothing we can afford at present.

Then there is the re-seller/partner approach. That is attractive but we are a niche product and therefore will probably be difficult to find good re-sellers. However, it is certainly an avenue we need to explore.

There is, of course, the argument which says ‘ignore Europe’. Lots of Europeans visit the US conferences and shows. In fact, some would argue that those Europeans genuinely interested in innovative solutions and looking to solve specific business issues seek the answers in the USA rather than Europe. We have certainly seen some evidence of this and I believe that it is a partially valid argument.

So, we are currently thinking about it. You will see us continuing to concentrate on marketing in the USA and maybe try to add some firepower in the UK – our backyard. How we address the UK is yet to be determined!

There have been a couple of interesting articles about start-up and growth companies in the press recently.
This article in the FT “Founders take aim at a bigger target” (click here) discusses the fact that companies rarely make a success of the thing they first start out with and it’s the next phase product/service/offering which is successful. One example they give is PayPal starting life as a way of transmitting payments securely between Palm Pilots. Another, Flickr, the photo website, grew out of a multiplayer online game. The article goes on to discuss the novel approach of one entrepreneur/angel investor who is putting in place multiple two-man teams to develop ideas in parallel. The goal is to churn out as many promising ideas in as short a time as possible.

The concept that companies don’t make money on their initial offering is certainly true in my experience. CDC, my previous business, started out re-selling a US document management product and developed publishing technology to help itself compete and give itself an edge. It soon became apparent that our publishing technology was unique and much sought after. Therefore the obvious way forward was to port the publishing technology onto other DMS offerings. We caught the Documentum wave and ‘on a rising tide all boats go up’. We certainly did.

PleaseTech started out doing something different (XML publishing) and, through that, found itself in document review. Personally, I’m not convinced it is possible to get it ‘right first time’. However, you have to be out there demonstrating and listening - in the game, to put it another way. Demonstrating because people can’t visualise stuff from documents and listening because what they’ve seen acts as a catalyst for them to discuss what really is causing them pain. Pain = pain solution = revenue.

Another article of interest “Sequoia’s Gospel of Startups More True Than Ever” (click here) discusses the key drivers of success for any start-up looking for venture capital to drive growth. The first point, interestingly, is ‘clarity of purpose’. Not for them, presumably, the concept of a change in direction if the first idea doesn’t take off!

The article is broadly reasonable – although it does seem a little ‘motherhood and apple pie’ – and I agree with most of the points. However, there is no substitute for ‘being in the game’ and listening to feedback. I like to think that is how we are where we are. We were in the game, listened to prospective clients, and developed a solution. Yes, by-the-by we meet most of the points in the article: we now have a clear purpose, collaborative document review is a large market, it has potentially rich customers feeling pain for which we have created a novel solution which challenged conventional wisdom. We are a self-funded, organically grown company which certainly forces discipline and focus. Not having a large marketing budget, our limited marketing dollars have gone into securing clients and not raising our profile so we operate ‘below the radar’. The key point is that we didn’t set out to meet the check list – I think a successful company evolves into it.

So talking of success ……….

We are finally ‘code complete’ on our version 3.5. Obviously the code is not locked away as there are bugs to fix, etc. However the software is currently in the formal testing process. We have a revised target date for the end of the month to ship but I suspect that will slip if the testing turns up issues. This is our most technically demanding release yet and its hard stuff. But we are moving forward and Tim (our CTO) and I are flying out to Malaysia next week to discuss the next major release (v4.0) with the development team. So that is progress.

On a final note, I am of course able to fly out to Malaysia because I managed to avoid doing myself any serious damage whilst attempting to snowboard in February (see previous blog entry). It was shortly after I’d written my blog and mentioned one of the reasons for giving up learning to snowboard was the fact that I was concerned that I would do myself a serious injury, that my attention was drawn to an article at the Times Online website regarding the cheerful subject of “Ski Breaks – the X-ray stories.” (click here) There are some interesting facts and great pictures in the article, but the one which leapt out at me was the statement that “snowboarders trying the sport for the first time are almost three times as likely to injure themselves as anyone else out on the mountain.” It seems I have an instinct for self preservation!

Perhaps that is what CEOs need. The flexibility to change direction when required, the clarity of purpose to move forward (when not changing direction obviously) but, most importantly, a well developed sense of self preservation!

A slow start to the year – but its business as usual now

Well I’m sitting in Miami International Airport as I type this on my way back home after the Qumas User Conference. I last visited Miami for the 1st ever Momentum (Documentum user conference) back in the mid 1990s. Back then there was a tropical storm. This time the temperature is a very pleasant mid 80s oF (~29 oC) and it’s only the end of February. I think I’ll avoid it in the summer!

The Qumas conference was, as always, a great deal of fun and I am suffering from a severe lack of sleep. The social side is just as important as the business side as it cements personal relationships which make for better business relationships. Well that’s my excuse for never knowingly ducking an opportunity to party and staggering into bed at 3:00am last night – it was 2:00am the night before! Luckily I have an 8 hour flight on which to sleep on my way home.

I’m then back in the UK for 2 days before heading off to Barcelona for the Annual Euro DIA conference. Readers of my blog will remember I was in two minds as to whether we should do it (see 30th March 2007 entry). Well I decided we should and we will go and take our chances. This comes back to my belief that we should be doing more in Europe whilst at the same time struggling to cope with the cost of doing business in Europe. This is one of my recurrent themes. I really don’t know the answer and this explains my vacillation.

With the US dollar losing value by the day (or so it seems) and the Euro gaining value, Euro income would be nice as all our costs are in UK pounds and Malaysian Ringit. However, it’s the USA where we are making most of our sales. This is why I was surprised to read in the FT that “American companies are falling behind in technology”. The article starts:

“There has been a lot of talk about technology companies facing a squeeze. But a more worrying international trend has emerged. US companies, once viewed as early adopters in corporate computing and the internet, are now falling behind global competitors in driving productivity and earnings growth because of technology shortfalls.”

There is a link to the article here but you may need to register to read it (I believe that registration is free): http://www.ft.com/cms/s/0/ee07c4c6-d980-11dc-bd4d-0000779fd2ac.html). This is certainly not my personal experience and it was only a last year the press were reporting that UK companies were 18% less productive than US companies due to the adoption of information technology. A brief Google search has found the following:

“In line with this hypothesis, Bloom, Sadun and Van Reenen (2007) find that US multinationals operating in the UK have much higher productivity than other multinationals in the UK and that this is explained by US companies’ better use of IT. Furthermore, they find that establishments that are taken over by US multinationals increase the productivity of their IT, whereas establishments taken over by non-US multinationals do not. They argue that these patterns are consistent with the idea that USfirms are organised in a way that allows them to use new technologies more efficiently than other UK firms and non-US multinationals.”

A link to the article: http://cep.lse.ac.uk/briefings/pa_uk_productivity.pdf
I remember thinking at the time that this would explain our success in the USA and the comparative lack of success in the UK – our ‘backyard’. Who is to know?

We have however, started to see some ‘tightening of the belts’ in the USA and its looking like a couple of income opportunities (one a roll-out and one new business) will at best be delayed. So I suspect it could turn into a tough year. The commentators are saying that the USA can not avoid recession which will affect the budgets and, thus, our revenue. So depressed US$ earnings with a depressed US$ ……………..

However, I’m a great believer in ‘whatever will be, will be’ and the year will be what it will be. We’ve done our sums, looked at the downside and concluded that we would have to have a disaster not to at least break even. The ultimate effect will be to suppress our growth and we are certainly playing our hand cautiously. So, enough navel gazing …...

The year seemed to start very slowly. Most of January was like a giant hang-over on 2007. We did have a rush of ‘fall over’ orders but personally I just couldn’t seem to get going. Reality hit early February with the DIA Electronic Document Management (EDM) conference held every year in the 1st week of February in Philadelphia. This is always a good show for us and it was again this year.

As previously discussed, our lead profile at shows has changed. It’s no longer all new business but a chance to meet with prospective clients, clients and partners and gain the odd lead along the way. The valuable thing about shows is the face-to-face time you get with people. This may be just simply picking up the latest industry news (aka gossip) or having people walk past who have heard of you and have some misconception on your product and what it does. You also are able to get a hands-on feeling for your own status. The good news is that we certainly appear to have entered the mindset of people and are definitely on the agenda. One can ask no more.

I got back from Philadelphia on the Friday morning and immediately flew out on a family vacation to Spain for a skiing at Bacqueria Beret. This is Spain’s best resort. It was a bit of a last minute compromise on our part but met the requirement. It’s a pleasant resort but was suffering a lack of snow and, frankly, not at all challenging. We hadn’t skied for almost two years and thought that it would take some time to get back on game. However, most of us had skied the mountain by the end of day 2 and everyone had skied everything a day or so later. It was at the end of day 2 that I made my big mistake! I allowed my eldest son to persuade me to try snow boarding. He had spent a week snow boarding in the USA a few years ago. So three of us (eldest & middle sons & I) swapped our skis for snowboards and arrange a morning of lessons. The plan was to spend the next three days on the snowboards and have, at least, come down the mountain by the end of the week.

I think the only word is ouch! Suffice it to say that I do not recommend one’s late forties as the ideal time to try and learn snow boarding. There was a point during the afternoon when I thought I’d cracked several ribs. By the end of the day I hurt everywhere, had a splitting headache from smacking my head hard on the piste during one of my many wipe outs and was not looking forward to the next day. Moreover, as I hadn’t even left the enclosed nursery slope, I suspected that I could do myself serious damage if I were ever to take the snowboard on the mountain itself! In fact, after a mid-afternoon pause to lick our wounds, number 2 son & I decided to beat a strategic retreat and return back to skis – with considerable relief all round.

I’ve been trying to think of the business lessons on this little episode. Several vaguely interesting thoughts cross my mind. Firstly, it’s interesting to be in a position when you are starting something entirely new. Kids face that experience all the time but as adults we rarely enter a state where we know absolutely nothing about the situation and have no experience to fall back upon. All I can say is that, whilst I made progress and was able to control the snow board, it was not a pleasant experience – perhaps you really can’t teach an old dog new tricks. Secondly, its clear to me that if it becomes obvious that a plan isn’t going to work or is causing disproportionate pain, it makes sense to kill it immediately rather than throw good money after bad. It was clear that I was never going to be able to safely get down the mountain on a snowboard by the end of the week, it would have made for a miserable remainder of holiday and there was a good chance I would do myself some serious damage in the attempt. Therefore the sensible thing to do was realise this, accept it and change the plan – even at considerable loss of face within the immediate family!! As they say, ‘the best decision is the correct decision, the next best decision is the wrong decision and worst is no decision at all’.

Moving on ……….

From a product perspective we are still struggling to put v3.5 ‘to bed’. It’s in preliminary testing but is a complex challenge and is fighting back. I have previously discussed the fact that, as software developers, we do not have control of our environment. We have control of our product but not the environment in which it is expected to operate and the associated dependencies. It’s like trying to hit a constantly moving target. At each stage you need to pause, access the impact and then make a decision as to whether to accommodate the change or leave it until next release. Ultimately you have to draw a line, test against it and release otherwise nothing would ever be released.

In this respect I’m a great fan of the concept of ‘defendability’. Basically, can I defend our position when faced with reasonable questioning from a knowledgeable person? So whenever we have to make assumptions, consider hard-coding something into the software and/or ignore a ‘latest’ development for the immediate future, the question we ask is ‘is it defendable’?

We have been fighting on multiple fronts on the development/testing/release side of things. The integrations we offer make for a complex environment with multi inter-dependencies. For example, we finally got our Open Text Livelink v9.5 sp1 integration released. From a user perspective the Livelink 9.7 and 9.5 integrations look identical but they are fundamentally different ‘underneath the hood’. This is one of the problems in making estimates. It was reasonable to assume that, in back porting PleaseReview from Livelink 9.7 to Livelink 9.5, the code changes would be minor – not so! But as I have previously pointed out – if it was easy everyone would do it!

So the plan is to pin down PleaseReview v3.5 get it tested and released and then start work on a bigger 4.0 release. There are several integrations running in parallel. However, in theory, v3.5 will not affect the apis and be able to slot directly into the integrations with no further changes. I’ll let you know how it goes.

The good news is that, once v3.5 is release I’ll be relatively relaxed as, finally, I’ll be happy with the product. It will be where I would have liked it to be back in 2005 when we first released it.

Reflections on 2007 and looking forward to 2008

Well it’s the morning of the 24th December 2007 as I type this. The Clement Clarke Moore poem “Twas the Night before Christmas” springs to mind. Not much is stirring. A half hearted amount of spam ‘graces’ the email and very little else. With some music playing gently in the background, it’s a time to reflect on 2007 and look forward to 2008.

PleaseTech has had a ‘cracking’ year. I do, of course, mean cracking in the sense of very good. WordNet tells me that the adjective ‘cracking’ is also ‘bang-up’, ‘bully’, ‘corking’, ‘dandy’, ‘great’, ‘groovy’, ‘keen’, ‘neat’, ‘nifty’, ‘not bad’, ‘peachy’, ‘slap-up’, ‘swell’, ‘smashing’ all of which mean ‘very good’. I’m not sure I’d claim that we had a neat or nifty year. To my mind those adjectives both imply some degree of tidiness which I'm not sure we can claim. I think I can say with certainty that it wasn’t a particularly groovy, swell or dandy year. I’m not sure what those adjectives imply but saying we had a groovy year would impart all sorts of messages I’d rather avoid.

Of course, if I was communicating solely to a British audience I’d run with ‘not bad’. Although I can’t immediately find a reference to it on Google, I’ve always understood that ‘not bad’ is the highest form of compliment one Englishman can give another without embarrassing the recipient. Other classics of British understatement are “I say old man, well done” and “The boy done good”. Not for us the exuberant adjectives of ‘awesome’, ‘fantastic’, spectacular’ and so on. George Bernard Shaw made a very pertinent observation when he noted that "England and America are two countries separated by a common language”.

Anyway enough rambling – lets have a brief catch-up and then look forward to 2008.

When I last blogged I was in the middle of a mad trip around the USA and Canada in late October. In fact, I was on my way to the DIA Canada conference in Ottawa. Well I think I can safely say that we won’t be going back to that one again. It was a complete waste of time from our perspective.

Of course, the good news is that since John Wanaker (1838-1922) uttered his now famous line “Half my advertising is wasted, I just don't know which half", things have moved on. We can track the performance of our Google adwords and we can tell not only which pages an individual visited on our website but also how long they spent reading them. However, with shows it’s not an exact science and sometimes you just have to take a punt and attend. So that’s one more on our ‘lets not do that again’ list.

In November, I was at the DIA’s eCTD conference in San Diego, then at the Gilbane conference in Boston followed swiftly but the DIA EDM conference in Prague. That completed an eight conference marathon in twelve weeks. It involved twenty flights including ten transatlantic flights!

Shortly after returning from Prague I had rashly agreed to give a presentation on “Establishing an Entrepreneurial Culture” to the management team of a large insurance company. The off-site location of the meeting would normally be a swift one and a half hour journey. As luck would have it I was listening to the radio which reported an accident on the Motorway so I set off across country. Arriving ½ hour late (but 40 minutes prior to my scheduled presentation time of 9:45am), I was greeted, mic’d up and, almost before I could utter a word, was led into the morning kick-off session just in time to be asked to give the person to my left a shoulder massage!

Yes it was a corporate “lets get the morning off to an active start” session. This involved shoulder massages (giving and receiving) and a Boomwacker symphony (which was actually quite fun) all led by a guy who was far too hyped up for that time of the morning. As I commented during my presentation which followed: “It never fails to amaze me how many ways there are to make a living in the world. Who would have thought that there was a market for someone to get top insurance industry executives playing music with what essentially are highly coloured plastic tubes at 9:00am on a Thursday morning. I’d love to have seen the business plan and, more importantly the look on his bank manager’s face when he explained it!”.

Being ‘landed in it’ like that did, however, rather neatly emphasise one of the key criteria of an entrepreneurial culture which is flexibility. With that firmly in mind let us consider 2008.

PleaseReview v3.4 is not more or less completely released. We are still testing (and finding issues with) running some of the client components on Vista but we will work our way through and eventually succeed. We have started v3.5 and are internally testing the alpha of the key functionality so progress is good.

2007 delivered over 20 new corporate clients (the largest a 1,000 user license) and saw our year-on-year revenue jump by over 400%. Clients came predominantly from Life Sciences but also from Law, Defence, IT and Financial Services. As exciting as that is, perhaps most gratifying is the existing clients purchasing more licenses and rolling out PleaseReview. As the old proverb states “the proof of the pudding is in the eating”. We like it when clients come back and say “more please”!

2007 has also seen new partnerships, integrations and OEM clients. These are vital to extend our reach and allow us to cover the bases. I’m very hopeful that these new relationships will start delivering significant volumes of business in 2008.

So, 2008 is essentially ‘more of the same’. Our aim is to continue the growth curve and make PleaseReview the de facto way to review documents. We will continue to proactively market into the Life Sciences industry but will also start to explore other industries on a more proactive basis.

From a product perspective PleaseReview v4.0 is earmarked for a release towards the end of the year. However, we would also like to get around to completing PleaseApprove. PleaseApprove has been sitting in an early Beta state for about 18 months. We just have to get it finished. That is easier said than done as we it diverts resource from PleaseReview. So we will have to take some tough priority decisions.

Taking, as we were, about priorities and flexibility, we have taken a decision to stop the PleaseReview subscription service. It is just not paying its bills. So, while the subscription service will no longer be available, we will keep it going for existing clients and will look at re-launching it is as a SaaS (Software as a Service) offering.

With the economic outlook not great and talk of a recession in the air, the only two things two things we know for certain going into 2008 are “the only constant is change” (Heraclitus of Ephesus, Greek philosopher) and “no plan survives the first encounter with the enemy” (Helmuth Karl Bernhard Graf von Moltke, Prussian General). Having said that we believe that we are well positioned to go on and have a ‘not bad’ 2008.