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Bootstrapped, Episode 55, "It's all part of the game."


#1

In this episode, we discuss Snappy shutting down, selling Snappy, resurrecting a failed product, Andrey’s trip to PAX, Peers conference, client work, Slack room atmosphere, games we’re playing, and games we can’t play.


#2

Good episode!

Ian’s blog post on closing Snappy answered a number of questions I had during the episode.

One remaining one is, given Snappy is (or could be grown to be) a competing product to HelpSpot, why sell it at all, even if you keep an interest in the product?


#3

R.I.P. Snappy :frowning:

I do not believe they are even close. The target audiences are so very different.


#4

That was a cliffhanger episode…now we all want to know about the mysterious possible sale of Snappy…

As soon as I got the email that Snappy was closing, I considered making an offer to take it over…but only briefly…sounds like many others thought the same!


#5

Yes, lots of offers to take it over :smile:

I’m hopeful something will work out. A number of very solid teams with very interesting ideas on it. Still, nothing is done until it’s done, but I’m pretty optimistic.

I probably should have just announced my interest to sell it vs closing it, but honestly I didn’t expect so many highly qualified groups to be interested. Still, there’s something about saying you’re closing it that may also get more attention than just saying it’s for sale, maybe so many groups wouldn’t be aware of it so who knows.

@steve yes it being a competitor is a concern. I do think it’s pretty far off in it’s current state, however, moving it up-market is a likely option for acquirers even if they leave a basic tier as is.

Keeping a percentage helps mitigate that. The reality is the help desk space is huge and complex. If it gets moved up-market and starts to make a dent it’s not very likely to dent HelpSpot, much more likely to dent Zendesk, desk.com, etc. So while we may lose a sale or two, if this theoretical Snappy takes 10 customers away from Zen for every 1 it takes from HelpSpot we’re still ahead.

Plus HelpSpot’s core of on-premise customers aren’t likely to be impacted by another SaaS help desk so that’s pretty safe.


#6

@ian you mentioned in the show you considered the enterprise market the place to be for a software company. A couple questions:

  1. Do you consider enterprise the place to be for only downloadable software or SaaS too?
  2. Do you consider HelpSpot’s current/future market to be “enterprise”? I know the HelpSpot site says it’s enterprise help desk software.
  3. What’s your definition of “enterprise”?

I’m curious about your comment in the show and wondered where/why enterprise is the place to be.

I agree that SaaS is tough and I have my doubts that it’s a good decision to start out with today but I’m still observing. Lots of success but also lots of small wins over the long haul which is hard to rely on.


#7

Well, I like the mid-market/enterprise space. I’m not really talking about top level Enterprise, flying around the country doing sales pitches (though I think that’s great to if you have a product that can support those prices). But, on the bootstrapper level I primarily mean selling into organizations of say 50 people+.

We sell to huge fortune 500 companies also, not that they use HelpSpot in their call centers, but a department uses, one group, a few brands, etc.

I just think it’s easier to get a small number of larger customers and fill in with small ones vs getting a lot of small companies and fill in with a few big ones. Certainly lots of counter examples to this of course, but in terms of maximizing success I think that’s the best way to have the best chance at getting your product off the ground.

I’m not sure on-premise vs SaaS matters so much, though I do think on-premise is underserved. Lots of open source stuff going on these days, but very little new commercial on-premise apps and there’s still a great market for those.


#8

Yeah, I was thinking those sized companies might be your target. It’s a market I used to service many years ago with a product that was installed on client’s servers. Over the years it has seemed that once SaaS made it’s appearance that it’s the only way to go.

Do you see much push-back from companies who want to use HelpSpot but don’t want to deal with on-premise? I know you have gone the route of having a way to host without the client needing to install/support. If you charge a fee for hosting + per user license vs. say $50 per user per month, I would think some companies not liking it. SaaS has companies assuming this is how they get software now…or do they? Do 50+ person companies prefer downloadable apps?

What is the support story look like with HelpSpot? With SaaS there isn’t one but downloadable you have to help people setup their servers. I assume you have an installer that takes care of some things but there’s a lot; setting up Linux, MySQL, PHP, etc.


#9

Some, we are building a HelpSpot Cloud system to make it more SaaS like. Certainly their groups that don’t want to deal with IT and all that. So it is a factor. I think building an app today and keeping an eye as you build on leaving open the option to on-premise it might be a way to go. So start SaaS, but don’t tie it so tight with 3rd party services that you could never unwind it. Similar to how Github offers and on-premise version.

On the pricing, we’ll be doing our HS Cloud pricing like that. I don’t think it’s much of an issue as entperise-y type companies often pay annually for things and most B2B saas push annual hard now. So there’s really no difference if you pay a SaaS company annually or us annually from that perspective.


#10

Update, we found a new home for Snappy: http://ianlandsman.com/snappy-is-saved/


#11

That’s great! It must be a huge relief to know there’s a good home for Snappy and its customers. Nice that you stay a shareholder, so you are involved in its future.


#12

Hey Andrey and Ian,

I’m really curious to here the “what happened next” story with Snappy…you left last episode on a cliffhanger, and I’m waiting for more…hope it comes soon!


#13

I think Ian found a buyer, or something. But I don’t know any details. We’ll probably talk about it in the next episode.