Sunir Shah from Freshbooks told me a great story yesterday. Back when the cash register was first invented (in 1879 by James Ritty), it didn't generate significant interest among shopkeepers. NCR founder John Patterson created a market by selling the concept of receipts to consumers.
Sunir, likewise, emphasized that Freshbook allows its 185,000 users to manage invoices, view payment history and track dispute resolution status. Up until now, Freshbooks' primary focus has been the professional services market: consultants, law firms, graphic designers, etc. But with the release of its new API, Sunir says Freshbooks is expanding its target audience to include web hosting providers and SaaS developers.
What I find most intriguing about API 2.0 (complete with documentation, blog and forum - these folks are well prepared!) are its future capabilities. At the moment, consumers are not yet able to manage purchases from multiple vendors through the same interface, but Sunir says this functionality is coming soon. Since FreshBooks is famous for publishing aggregated data with which vendors can benchmark their own' performance against industry peers, consumers may soon start receiving the same quarterly report cards detailing which SaaS apps organizations like theirs are using.
I've always thought one of the greatest value proposition that web hosting providers *don't* deliver is helping customers leverage each other's knowledge and experience. (Yes, everyone has forums. But no, forums aren't enough.) Could Freshbooks help? How will API 2.0 measure up against ModernBill's MBAPI and SWSoft's HSPComplete + OpenFusion? Stay tuned!
Keep in mind social networks are still in their infancy, and likely overvalued -
http://valleywag.com/tech/hypebusting/facebooks-platform-273355.php
Posted by: Alex L | June 28, 2007 at 08:14 PM
Amazon's auto-recommendation technology reportedly drives 30% of sales. Aggregate Knowledge helped Overstock.com generate $100M in incremental revenue. I would argue that the ability to help customers leverage each other's experience is *under*-valued :)
Posted by: Isabel Wang | June 28, 2007 at 08:47 PM
Certainly. But what does that data mean to a company that doesn't sell products?
I believe that is where we will see a social network succeed or not.
It's sort of like opening up a restaurant in a good location - for about 3 yrs you'll get plenty of business from all the folks who want to eat at the 'new place'. But, if you don't put your food where your mouth is, they won't come back and it won't take long to realize how hard it is to win customers and create sustained revenue. As long as the users are taken care of they'll keep coming - if that doesn't happen it'll capsize.
Posted by: Alex L | June 29, 2007 at 02:34 PM
A company that doesn't sell products? Web hosting providers certainly don't fall under this category. Every single web hosting CEO I've met dreams of increasing add-on revenue. But trying to make direct, 1-on-1 sales is just like Amazon hiring sales reps to manually send customers book recommendations.
And no, social networks are not about opening restaurants in new locations. Instead, they help sell each table more drinks, more appetizers, more desserts... Yes, good service improves customer experience, but if people aren't asked, they might stick with $8 burgers instead of $100 bottles of wine.
Posted by: Isabel Wang | June 29, 2007 at 02:41 PM