Adjuvant Informatics

adjuvantinformatics

Greg Wilson suggested that I try profiling a company like Adjuvant Informatics from Hamilton, ON. This is a market that I have only passing exposure to, and therefore the details of this analysis could be questionable. I’d be happy to publish the feedback from others with more knowledge in the space.

Management Team

The Adjuvant Informatics management team is made up of Dan Meyer, Dr. James Paul and Anders Elmik. Dan Meyer is the founder of Med-Tel Software. As of 2006, Med-Tel was reporting having 1,000 clients and continuing to grow. Mr. Meyer has a track record in providing successful clinic billing and reporting software. Dr. James Paul is an anaesthetist with a specialty in pain management.   

Market

I’m not an expert in this market. Suffice to say there is a lot of money spent on pain management ranging from the costs of medications to the management and effectiveness of treatments. Healthcare as a whole is an increasing part of the developed world’s economy, consuming over 16% of the GDP in the US and estimated to grow beyond $3.3 trillion annually.

The market for pain management medications in 2006 was estimated at approximately  $26 billion per year and growing. The market is estimated to be growing at an annual rate of near 30%, and will reach $40 billion by 2010. However the medication market is just one piece of a complex pain management puzzle. Understanding the market requires understanding the medications, the hospital costs, the medical staff costs and the impact on the patient.

In 1998, the average length of stay in hospitals for people who had surgery was 5.1 days and a greater than 160 million surgery-related days were spent in hospital. There is growing support that pre-operative risk management and post-operative pain control is thought to result in more efficient use of health resources, decrease overall costs and increase patient quality of life by reducing the chances of acute pain becoming chronic.

Product

Adjuvant Informatics builds tools to help clinicians and hospital administrators manage information related to patient pain.

Its product, the APS Manager (for acute pain service) not only captures and analyzes patient drug orders, doctor visits and critical incidents, it also allows information to be saved in a searchable database. It was installed in Hamilton Health Sciences hospitals in 2002 and has since been picked up by Toronto General and Sunnybrook as well as hospitals in Australia and Norway. Others in Israel, Central America, the United States and Germany are studying it. – Steve Arnold, Hamilton Spectator

The product suite aims to provide standardized data capture and analysis tools for hospitals that take in patients scheduled for the operating room. The tools gather information to assist in research into patient risk analysis.

Coupled with the platform for each hospital, Adjuvant Informatics is building a centralized data store for clinical anaesthesia “allowing hospitals to make comparisons between their own patient outcomes – such as side effects and length of stay” with those of other hospitals. The centralized data store is being used in conjunction with Cardinal Health to provide data to patient’s drug-administering pump infusion devices to management the distribution of pain treatments and their effectiveness.

The goal of the product is to “make the use and tracking of pain medicine more accessible to hospital staff and hospital systems”. Adjuvant’s products allow hospitals to do systematic reviews of patient outcomes, of critical incidents, of cost management related to giving medicinal narcotics to patients.

Business Model

The market for health care solutions seems to have 2 main market opportunities: cost-reduction or safety-increasing. Basically, does the solution reduce the costs of the care provided or does the solution increase patient safety or the quality of patient care. Adjuvant Informatics sells an enterprise software solution to hospitals to help them manage their patient pain information. The solution includes a suite (read menu) of software applications including Pre-Op Clinic, APS Manager, and offers hardware and software solutions for bedside data entry. The business model is either a subscription model for software or a more traditional enterprise software license plus annual support contract. 

Customers

Adjuvant Informatics has a great list of local and international hospitals and healthcare networks using different parts of their product suite. The list includes:

  • University Health Network, Toronto, ON – Pre-Op Clinic
  • St. Joseph’s Healthcare, Hamilton, ON – Acute Pain Manager
  • Cardinal Health, San Diego, CA – APS Manager
  • Ullevaal University Hospital, Oslo, Norway – APS Manager
  • Prince Charles Hospital, Brisbane, Australia – APS Manager
  • Sunnybrook & Women’s College Hospital, Toronto, ON – APS Manager

It appears that customers come through focused conference attendance including: Canadian Anesthesia Society Annual Meeting; British Pain Society Annual Scientific Meeting; American Pain Society, etc. Targeted lead generation focusing on anaesthesiologists and pain management professionals. Then a standard enterprise/institutional sales practice that follows up after interest and demand is generated at events.

Strategic Relationships

Adjuvant Informatics has built strategic relationships with:

  • Cardinal Health – Integration of APS Manager software suite with Alaris Gateway suite provides access to networked pain medication devices that provide medication delivery for 1.5 million patients annually. And generates more than $2.7 billion in annual revenue for Cardinal Health.
  • University Health Network – Co-development of a new preoperative assessment module in partnership with Dr. Scott Beattie of the University Health Network.
  • National Research Council of Canada – to develop the International Clinical Anaesthesia Database

Relationships with key hospitals, like UHN, for product development and deployments are a great way to ensure functionality , usability and compliance. The strategic partnership with Cardinal Health allows access to a manufacturer and distributor of healthcare devices that allows for integration in existing hospitals and health maintenance organizations.

Competition

There are direct competitors in pain management software including Pain Associates International Network. However there is larger competition in traditional electronic medical records software providers. This is because the majority of the data gets captured by these tools today. Extending these systems to include pain management risk assessment criteria could put the Adjuvant Informatics solution at risk. However, the aggregated data in the ICAD solution offers an opportunity to perform robust cross facility analysis of risk factors and successes. There is an opportunity to build connectors to import data from the larger EMR companies. There is a growing category of new providers in the space including Microsoft Health Vault and Google Health which provide SaaS solutions for capturing and maintaining consumer health records.

Barriers to Entry

  • Government regulations
    Healthcare is a highly regulated space with concerns around patient safety, privacy, legal status, interoperability, future proofing, among other legislative and regulatory guidelines. Having a management team and company familiar with the process and an approach for approval is a huge advantage for Adjuvant Informatics. There are also a ton of standards for electronic medical records including HL7, ANSI X12, HISA and others.
  • Intellectual property
    Founded by an anaesthesiologist and a software developer, Adjuvant Informatics has a built a suite of tools for managing the clinical activity of the anaesthesia departments of hospitals. The in clinic experience and understanding of the practitioner’s concerns, coupled with a deep experience building billing software with Medtel Software should provide Adjuvant Informatics significant head start momentum. 

Summary

Adjuvant Informatics has shown there is an under-served market for pain management solutions. There are open questions to me about:

  • Average size of a deal with hospitals or other HMOs both in terms of revenue and profits
  • Length of time to close each deal

This coupled with further research into the actual size of the market, i.e., finding numbers about either the effectiveness of the solution for reducing patient costs or reducing patient risks are necessary. This will help determine if the model is to sell the solution to clinicians or hospital administrators, or insurance companies. It is unclear to me from looking at the publicly available information who has the largest financial pain or the great power in choosing the solution. It seems that there is still some work to be done in defining the revenue sources in order to find funding.

So far, Meyer estimated, Adjuvant has chewed up $400,000 in capital "with no real revenue stream yet.

"Clients are just starting to trickle in. Our goal is to become the standard, like Windows, and we have a chance of doing that, but there’s also a real potential of not making our goals," he said, adding the company is talking to angel investors, banks and other sources.

"With $1 million we could finance a very aggressive assault on the U.S. market," he said. "Until then, we have to be very tactical in how we market."

Going Broke for Biotech By Steve Arnold, The Hamilton Spectator, Jan 16, 2006

RIM – User Experience Analyst – 0803425

Mississauga, ON

Description

Research In Motion Limited® (RIM)® is a world leader in the mobile communications market and has a history of developing breakthrough wireless solutions. RIM’s portfolio of award-winning products, services and embedded technologies is used by thousands of organizations around the world and includes the BlackBerry® wireless platform, the RIM Wireless Handheld™ product line, software development tools and software/hardware licensing agreements. RIM is seeking driven individuals who can take our wireless data products to the next level in the global wireless market. Are you ready to make a difference in the world of mobile communications with RIM?

Position Summary

As a member of the RIM User Experience team, the successful candidate will support user-centered design throughout the product development process, from concept to commercialization. Working closely with other cross-functional teams as well as customers and partners, he or she will define user models, work flows, and interaction design for a variety of products, create wire frames and low-fidelity prototypes to show design concepts, conduct user research and usability testing, and translate research findings into concrete design recommendations. He or she will package, present and ‘sell’ ideas and recommendations to other teams and to senior management. Additional responsibilities include contributing to user interface specifications and standards, working with interaction designers to create design concepts and prototypes, and contributing to product requirements and use cases.

Qualifications

Essential Skills and Qualifications

  • Post-secondary education in human computer interaction, systems design engineering, interaction design, or a related field
  • 3-5+ years experience working in a professional environment on user experience research, feedback, and design
  • Demonstrated ability to work on multiple projects at once in collaborative, fast-paced environments
  • Strong research and quantitative skills, including statistics and data analysis
  • Excellent problem-solving skills to translate research into practical recommendations
  • A proven ability to articulate design concepts using rapid prototyping tools to define task flows, user interactions, and information architecture
  • Ability to dialogue with cross-functional teams (from product management to development) to deliver industry leading solutions
  • Excellent written and verbal communication skills to articulate user experience ideas effectively to both technical and business audiences
  • Experience planning and facilitating usability testing, focus groups, and customer interviews
  • Solid understanding of user interface design principles and practices
  • Must be passionate about user-centered design and user experience
  • Demonstrated ability to handle multiple demands with a sense of urgency, drive and energy and work in a fast-paced team environment

If you’re driven to take wireless technologies to the next level, it’s time you join the team at RIM. We offer a challenging environment that fosters creativity and rewards excellence. Employees also have use of our award winning BlackBerry!

Apply

Tripharbour.ca – All aboard

tripharbour.ca It’s been fun to tease Stuart MacDonald about Tripharbour being his first startup. Stuart is the founder of Expedia.ca, however, it’s hard to compare building a startup with a $400 million marketing budget with the experiences most entrepreneurs have, where they’re lucky if there is budget to hire a marketing person and not just have a couple of engineers doing marketing instead of sleeping. Stuart is getting a taste of the guerilla marketing activities and community building techniques that he has brought to Toronto as speakers at the past 3 Mesh conferences.

Quick Analysis

Management Team

The management team at Tripharbor includes Stuart MacDonald, Ian Burdett, John Starkey and Pat Perdue. This team  is full of ringers. Stuart is the former CMO for Expedia.com. Ian Burdett was a Finance Director at Thomas Cook Canada and Signature Vacations. John Starkey was Director of Biz Dev at Expedia and ran an interactive agency in Vancouver. Pat Perdue was the customer experience manager for Tommy Hilfiger USA and Tommy.com. Great group with strong backgrounds in travel, online retail and marketing.

Market

According to Datamonitor, in 2003 the cruise line market segment had a market value of approximately $16.2B and was expected to grow at a compound annual growth rate of 3.8% to just over $19.7B in 2008. This is below the estimated 8% expected market growth, and the “the cruise market is the fastest-growing segment of travel, expanding at 9 per cent a year” according to Stuart MacDonald,. Hmmm, this might be biased in Tripharbour’s favour. However, the cruise industry appears to be growing even as other segments in the travel industry brace for a downturn due to less disposable income related to high gas prices.

In 2007, according to the CLIA over 12 million guests travelled on a CLIA cruise line. The general profile of cruise traveller is:

the 2008 cruise vacationer is upscale (with a median household income of $93,000), educated (69 percent have a college degree) and the median age of cruisers is now 46 years old, down from 49 in 2006, which shows that cruise vacations continue to appeal to younger travelers.

The next set of questions are about how and where customers learn about and purchase cruise vacations. The CLIA report indicates that travel agents are best for planning and booking a cruise and travel. comScore reported that online travel spending increased 14% between 2006 and 2007 to $20.3B. Phocuswright is predicting better applications will target the “50+ generation” to encourage online bookings. A review of UK online travel shows that approximately 9% of Internet users book travel online; and an additional 17% research holidays online before booking over the telephone. The NYTimes published that the cruise industry online booking sites are “an exercise in frustration”. This seems to be partially due to the CLIA continuing to support a channel that has withered in other parts of the travel industry. In the same NYTimes article, Terry L. Dale, president of the CLIA, said “because a cruise is a more complex product than a flight or a hotel room, "the cruise industry will always encourage consumers to work with an agent”. It just feels like an industry that is ripe for reinvention, with agent bookings shrinking from over 90% of all cruise bookings to under 75% according to Scott Barry, analyst with Credit First Suisse Boston. Phocuswright estimates that the 2007 US revenues from cruise sales was $13.4 billion with only 7% ($994 million) coming from online bookings. Of the online bookings, approximately 70% ($695.8 million) of purchases were through online travel agencies as opposed to cruise company Web sites.

Product

I don’t have a lot of experience in the evaluation of cruise web sites. The CLIA estimates that 90% of all cruises are booked through travel agents. However, 54% of cruisers and 60% of non-cruisers believe that they will get the best cruise price from an online travel retailer. Most, 86%, are comfortable with planning their cruise online and just less than half are comfortable with booking online.  The Keynote Benchmark study offers the top drivers for cruise purchasing sites:

  • Booking process
  • Activities research
  • Site design and organization
  • Customer support

The Tripharbour tools are not as refined as a general travel e-commerce vendor, but they offer a cruise focused purchase experience including the presentation of ship plans and room locations during the checkout process. Tripharbour offers a community driven approach to review and comment on cruises and cruise lines. It will be very interesting to see if Tripharbour can build or leverage social networking tools to increase the conversion rates of users connected by the social graph. Stuart has already mentioned the use of social media to help build a deeper brand experience and to leverage community participation for their burgeoning cruising community.

It is still early days on the Tripharbour product and there is a lot of room for improvement. And it will be interesting to see the evolution of both the booking process tools and the continued development of social tools. These tools do not exist and there is an opportunity to define their effectiveness.

Business Model

I love these relatively simple business models. People use Tripharbour.ca to find cruises, people book cruises using Tripharbour, cruise lines pay Tripharbour a commission of between 10% to 17% of the ticket price. The Tripharbour team has 2 main challenges, very similar to the challenges discussed for FreshBooks, reach and conversion. Reach is about capturing the widest swath of cruise purchasers possible. The most common solutions are related to providing great content, strong search engine optimization, and display and search advertising.  The Tripharbour team has great depth at both traditional and Internet marketing and advertising and looks to be equipped to adequately monitor and adjust their efforts.

The second challenge is conversion. Once potential clients get to one of the Tripharbour sites, getting them to purchase a cruise. A secondary measure is community vibrancy and activity as the creation of cruise related content and connections between members will help improve the content aimed at helping potential customers choice the right trip.

Over time an additional metric of loyalty or return rate can be added. Building customer profiling and communication tools to help clients build digital memories, share their experiences, and select more expensive cruises.

Strategic Relationships

I have very little understanding of the travel industry. Tripharbour is a member of TICO and CLIA. CLIA = Cruise Line International Association is a cruise line industry association focusing on the growth and promotion of the cruise industry including efforts towards increased safety, reducing environmental impact and regulations. TICO = Travel Industry Council of Ontario is a government mandated organization where membership is required to protect consumers under the Ontario Travel Industry Act, 2002. Tripharbour with membership has joined the association that let’s it legal operate in Ontario and a lobby organization for the industry in which it operates. Good basic, legally required pieces of operating a travel company.

Tripgarbour has developed relationships with 12 cruise lines, enabling it to offer cruises in wide variety of world wide locations. Tripharbour is an indirect sales channel for each of the cruise lines. 

Competition

Traditional competition from big online travel sites including Expedia, Orbitz, and Travelocity and from the cruise lines they are reselling. The majority of the online competitors continued to be focused on working with travel agents including EasyCruise, Galileo. The cruise lines are experimenting with social networking features to help potential customers plan and reivew their offerings. CarnivalConnections.com provides planning, scraplogging, cruise reviews, and message boards focused around the Carnival brand. It is easy for the existing cruise players to build similar community and social features, the advantage that Tripharbour brings is that it’s community is about the cruise lifestyle not a specific cruise line. Tripharbour should be able to build trusted third-party resources and continue to offer price based incentives to cruise shoppers.

Barriers to Entry

This is also to evaluate on an industry that I know very little about. All of the barriers to entry analysis appear to provide reasons to not get into the market.

  • Government regulations
    Different geographies have different requirements on travel agents and regulated insurance. Tripharbour operates in Ontario and has met the requirements to be a regulated travel agent. Compliance with the regulations is necessary for competitors but it is entirely dependent on their geography.
  • Economy of scale
    A large experience firm like Expedia may decide to capture the cruise market by decreasing their commission rate and passing the savings along to customers. This could dramatically reduce the prices offered by the competition. Equally, Tripharbour may appear more competitive by reducing the commission fees collected to help differentiate and beat out other players.
  • Advertising
    Again the majority of my arguments should dissuade the Tripharbour team from starting. The advertising budgets, the reach, and the amount of spend by the big players is incredible. However, there is an opportunity in both social media and in a niche market, i.e., cruising, to build a strong highly successful company. 

The barriers to entry for other participants are not particularly difficult to overcome. However, the experience and focus of the Tripharbour team should provide an advantage in understanding of the current industry including opportunities for partnership, product optimization, and gaps in current strategies. The Tripharbour team is key in differentiating from potential competitors and is a significant barrier to entry for other entrants to overcome.

Summary

Tripharbour has proven that there is a huge market opportunity in building tools to help sell cruises. There is a huge potential to leverage the social graph to optimize the marketing materials and increase the conversion rates for new purchasers, and to increase the average spend by returning buyers. Figuring out how to leverage social media and users behaviour away from the Tripharbour site may help improve the marketing spend. I wonder when the revenue curve exceeds the expenditure curve. On a small scale, I am assuming that Tripharbour is making money, the question really is how long until it is making more than currently invested, or how much more needs to be spent to gain significantly traction. Tripharbour has a team of online travel industry veterans engaged in building a differentiated product, and refining the marketing tools to increase revenues in a defined and growing market. The question will be how much marketing spend does Stuart and the team need to do to pull users away from the large online travel agencies/portals.

Tripharbour is an execution play. The depth of the management team provides a huge strength in being able to deliver a product in a focused industry and effectively market the service to grow revenues. The assumption is that the team can effectively use social media and guerrilla marketing to attract a large enough audience. And that the e-commerce experience and community features will provide the tools necessary to convert members to paying cruisers.

FreshBooks – Bill me already

freshbooks Mike McDerment has helped kick the Toronto software entrepreneur community in the pants. It’s hard to believe that he’s been doing it for as long as he has been. Three Mesh conferences in the past 3 years, building FreshBooks and a number of successful and not-so-successful DemoCamp experiences. Mike has been documenting his lessons and advice for entrepreneurs on his blog, and .

Mike and the FreshBooks team have done a great job going after a under-served market with a product that solves a costly problem for a lot of small businesses. The FreshBooks product helps companies create and manage invoices. They quickly can show clients how much they can contribute to a companies bottom line. There are even rumors floating about the Interweb that FreshBooks has caused Intuit, the 800 pound gorilla, to change their marketing strategy for Quickbooks Simple Start. Why is FreshBooks a Toronto startup to watch?

Quick Analysis

Management Team

The FreshBooks executive team consists of a number of Mike McDerment, Joe Sawada, Levi Cooperman and Mitch Solway. Mike and Joe successfully built a web design professional services firm, Anicon, whose team includes 3 of the FreshBooks founders. The transition appears to be from a professional services firm doing web design and development professional services to a product company (whose name has changed from 2ndSite to FreshBooks). Mitch is an excellent senior marketer with experience of leading a marketing organization during the critical growth year. His LinkedIn profile indicates that Mitch managed a team of 26 people and grew sales from $3M to over $100M. Great acquisition to the FreshBooks team, a seasoned marketing veteran with experience driving traffic and growing sales.It’s a good team with personal experiences with the invoicing difficulties experienced by web design and development firms in managing the financial interactions with clients.

Market

The creator of Quickbooks, Ridgely Evers, has created a company to create a tool to solve business and financial management for smaller companies, he estimates the market size for the number of “True Small Businesses” at 5.1M in the United States. The business accounting market was estimated at $600M in 2005 with QuickBooks accounting for almost 87% market share. It’s obvious that companies need accounting and invoicing tools, and they are willing to pay for a solution that is aimed at enabling a better view into a business for small business owners instead of bookkeeping professionals.

Product

The focus on invoicing is a great strategy for FreshBooks. FreshBooks is a suite of tools that help customers get paid. This is a painkiller. FreshBooks has been aggressively filling in the product suite with tools for tracking time, expenses and estimates, these features help to refine the product offering beyond just invoicing into truly a financial management tool for service based organizations. FreshBooks has exposed most of their functionality through a developer API. The API offers a great way for external developers to integrate their applications to the provided services and for the FreshBooks team to build internal tools and user interfaces to consume and publish upon. Building on an API service, should help FreshBooks in extending the application going forward, adding features requires extending the API and building a browser based client to add to the FreshBooks web site.

The addition of roll up data analytics to provide customers with performance metrics and benchmarking shows that FreshBooks has been working on market leading features that have helped set companies like Mint apart from it’s peers.

Business Model

People pay FreshBooks to use their software. Check out their pricing. Mike McDerment has written about their experiences iterating through pricing models including the impact on conversion rates. But the business model is very simple get people to pay for your software. There are challenges related to the Freemium Pricing Model, where about 3% of registered users become paying customers. There are then 2 key metrics that the FreshBooks guys should be tracking: reach and conversion rate. Reach – how many people in their target market have had contact with FreshBooks advertising, at a conference, through customer evangelists, etc.? Conversion rate – how many registered users become paying users? Does pricing, features, adoption cycles, integration with other products, what are the pieces that drive the conversion to paying customer? The additional questions around customer retention exist, but lets assume that there is a high customer retention rate.

Strategic Relationships

FreshBooks has begun building some strategic relationships including:

Both of these relationships are a testament to the speed and flexibility of the FreshBooks offering. Sunir Shah blogged about the experience of integrating with Amazon FPS and compared it to PayPal and Google Checkout. Freshbooks will benefit in speed to market and additional early-adopter marketing once the FPS is generally available.The Authorize.Net Merchant Toolbox is very straight-forward, being on a list of 21 preferred vendors by a leading merchant account and credit card gateway, should help drive traffic and customers to FreshBooks.

One opportunity for FreshBooks is to seek a strategic relationship with third-party accounting and bookkeeping partners. Creating a referral or associates network for bookkeepers, including a set of offline tools that use the FreshBooks API, could help expand the reach of the product and build a strong indirect sales channel. 

Competition

Mike provides his thoughts on his competition in an interview with CenterNetworks

“I think there are two classes of competitors. There are traditional accounting software providers. The other group is other startups like BillingOrchard and BlinkSale.”

Crunchbase lists FreeAgentCentral as an additional competitor in the web-based accounting and money management tools for freelancers. Competition from traditional accounting software vendors including Intuit’s QuickBooks and NetSuite’s Accounting ERP solution. NetSuite is probably less of a competitor as it targets SME with an offering that is closer to small ERP than individual provider. QuickBooks is an interesting competitor because of the large ecosystem of accountants and bookkeepers that use QuickBooks to perform the accounting tasks for small businesses and freelancers. The same can be said for other competitors including: Sage; Peachtree; Microsoft Accounting; MYOB; etc.

BlinkSale and BillingOrchard are focused on invoicing. Where Freshbooks has evolved their offering to include many of financial functions that a small business needs including:  estimates, time tracking, and expenses. Freshbooks has built a suite of financial management tools for generating, managing and tracking invoices. A better competitor is NetBooks whose offering includes SaaS financial tools that include a wider set of ERP features including sales, invoicing, inventory, and costs. NetBooks appears to be focused on product-based businesses, where FreshBooks feels like it is optimized for services-based businesses.

Barriers to Entry

FreshBooks is a execution play. They have built a product that people want. It solves a very valuable problem. And they continue to add more value to the ecosystem than they take out. There is room for another larger, more established player to use their marketing might to box out FreshBoooks but it more likely that they might try to acquire FreshBooks and integrate it into their product offerings. Here’s what differentiates FreshBooks and provides barriers to entry in the market.

  • Intellectual property
    Just as discussed in the LearnHub analysis, there is nothing to indicate there is an intellectual property protection for FreshBooks. But as John Green points out in the commentary, intellectual property protections are not required to build success market play companies. The intellectual property protections may come in the understanding of the small market business owner and their financial practices and mindset. Having a process to quickly gather, assess, prototype and iterate on changing market conditions along with a easy to customize infrastructure should allow FreshBooks to have an advantage.
  • Customer loyalty
    Customer-centered design is in the DNA at FreshBooks. Adding conferences and generating support, while gathering feedback makes customers love FreshBooks. Check out the feedback on the RoadBurn tour. Understanding the needs, wants, desires and day-to-day lives of your customers lets you build solutions to their problems. It might help explain why FreshBooks had a 99% referral rate. I’m assuming that this means that 99% of existing customers sent a referral message to a potential new customer. I wonder what the conversion rate on referrals is for FreshBooks?
  • Advertising
    FreshBooks has not done a huge advertising spend, but they have been very effective in targeted advertising to the Web 2.0 service firms through placement on key sites (TechCrunch, The Deck, etc.) and by having a strong presence at key web design conferences: FOWA, Mesh and SxSW. The FreshBooks team has made very effective use of their marketing and PR budget to generate buzz and get on the radar of many of the Web 2.0 and startup media players.
  • Sunk costs
    Customers have sunk costs once their financial data has been entered into FreshBooks. However, with the FreshBooks API it is easy for a competitor to build a data migration tool and make an easy path for dissatisfied FreshBooks users to move off the platform.
  • Network effect
    The addition of the benchmarking service may help build additional network effect from participating in the FreshBooks ecosystem. However, billing and accounts receivable are a very individual company practice. There is some opportunity to gain improvements by implementing best practices, however, best practices are not network effects. Unless FreshBooks is able to negotiate lower transactional costs on merchant account transactions or leverage the behaviours of the crowd there is no network effect available.
  • Vertical integration
    This is potentially the most under investigated barrier to entry for FreshBooks. Building an integration with bookkeepers and accountants could offer FreshBooks an indirect sales channel and provide customers with both the tools and professional services.

Summary

FreshBooks is a company that is truly customer driven. You can see the commitment to the user experience with customer dinners when the FreshBooks team visits a city (San Francisco; the Roadburn and New York). They have build a great product that fills a gap in the offering by the 800 pound gorilla. They have assembled a star team of Toronto technology and marketing talent. They have built a successful business by adding value to their customers ecosystem. I have some questions around customer acquisition costs and the lifetime value of a customer including referrals, but it looks like a great business that needs some marketing muscle to grow to be a multi-hundred million dollar a year business.

FreshBooks is hiring and has openings for:

LearnHub: Social View of Learning

learnhubSaw on TechCrunch this week that John, Gosia and team had redeisgned the home page of LearnHub. Congratulations!

LearnHub is the evolution of Nuvvo. It’s a set of online tools designed to make learning fun and engaging for students, and easy and effective for teachers. It’s built on new technology, Nuvvo was built on a Java stack using Hibernate and Struts. LearnHub is build on the Ruby stack using Rails. It also represents an evolution in understanding of how important communities and interaction are in the learning process.

“We participate, therefore we are”

What is the social view of learning? Joshua Porter summaries very nicely,

The mere threat of social interaction changes our behavior…if you know your work is going to be put on public display, you’ll be much more motivated to make it good.

John Seely Brown presents Learn 2.0 as a shift from a view where knowledge is something that can be transferred to students. To a view where it is the social interactions and activities that help support the learning of content.

“This perspective shifts the focus of our attention from the content of a subject to the learning activities and human interactions around which that content is situated. This perspective also helps to explain the effectiveness of study groups. Students in these groups can ask questions to clarify areas of uncertainty or confusion, can improve their grasp of the material by hearing the answers to questions from fellow students, and perhaps most powerfully, can take on the role of teacher to help other group members benefit from their understanding (one of the best ways to learn something is, after all, to teach it to others).” – John Seely Brown [Minds on Fire – PDF]

LearnHub supports a set of social activities. Including blogging, comments, quizzes, tutoring, testing, and a reputation system. The reputation system provides a mechanism for students to evaluate teachers, the input and tutoring advice of other students, and generally create a public mechanism for building trust amongst the participants. The combination of using a socially motivated reward system, i.e., reputation, along with participatory social tools seems like a fantastic start for successful social learning communities. Coupled with the lessons from Nuvvo about how to build efficient course management tools, it sets LearnHub up to be a competitive player.

Quick Analysis

Management Team

The management team consists of Malgosia Green, John Green and Michelle Caers. The team is relatively inexperienced, but looks like a strong young team. Recent experiences building a succesful acquisition in Silicon Valley and lessons learned from a failed attempt at Nuvvo, should provide a strong basis for keeping LearnHub’s product development and business development on track.

Market

Bersin & Associates estimates the LMS market in 2006 at approximately $480 million/year and growing at 26% per year. March 2008 post shows the market at over $700 million with a strong focus on Web 2.0 and participatory tools as a important focus for vendors. There is a strong market for LMS solutions in India where there is a good mix of public and private sector adoption of learning management tools, there is a strong educational market with a strong group of private universities that account for 90% of the educational spend.

Product

The LearnHub product offering shows the experience of having build Nuvvo. The learning management tools included for teachers are comparable to those included with Moodle and Blackboard: courses, lessons, polls, quizzes, tests, student management, multimedia instruction, etc. The advantage for LearnHub is the participatory nature of the product is not bolted on after the fact. The LearnHub tools appear to be built around social learning. The integration of a reputation system that leverages many of the standard social design patterns, allows LearnHub to build tools for educators around a participatory community that supports individual learners improving the learning experience. The reputation system combined with the focus on easy-to-use instructor and participant experiences really set LearnHub apart from their enterprise competitors.

Business Model

There are still some open questions about the business model. The current model appears on the surface to be advertising based, there are Google Adsense on each pages, and larger educational institution brand advertising. With an investor like Educomp, there is bound to be additional business models brewing.

Strategic Relationships

The investment and strategic relationship with Educomp places LearnHub in a very good spot. Educomp is a large Indian educational technology provider with a strong presence the K-12 market in India. This is a strength for Savvica.

Competition

There are 2 leaders in the LMS space with the closed source Blackboard/WebCT offering, and the open-sourced Moodle. Moodle offers individual professors and instructors a great course management system, but it is missing many of the features and functionality necessary to run an institution. Blackboard is the 800 pound gorilla in North America and has recently added managed hosting and community features.

Barriers to Entry

Much of the barriers to entry analysis requires looking at information dependent on details of the business model, marketing plan, and a better understanding of the relationship with LearnHub’s investor Educomp. The barriers to entry in the LMS market appear to be related to existing vertical integration and key agreements in the educational market.

  • Globalisation
    My thought here is that the partnership with Educomp provides rapid access into the larger local Indian educational market. And that the size of this market will allow LearnHub to be able to adjust the tools for use in other English speaking markets.
  • Customer loyalty
    LearnHub is building tools that people enjoy using. And is trying to build a community around learning that allows students to eventually become teachers. Customer loyalty and community liveliness are metrics that can be track as LearnHub develops. First steps include their agile, human-centered design and development process.
  • Network effect
    There are strong network effects that are dependent on finding the right instructors, institutions and courses. Content is still king, and with the right participatory model surrounding the content LearnHub is set to build a vibrant community that replenishes the content but also improves the learning experience.
  • Sunk costs
    It’s pretty easy, once you get your courses and material entered into the system there is a huge cost to move them to another provider. Getting the right content and instructors is key to leverage the learning tools and community tools.
  • Research and development
    Let’s just assume that LearnHub continues to be out in front of the R&F curve. Leveraging an existing community and layering in new tools and techniques as they are discovered, invented or evaluated for effectiveness.

One key barrier that is difficult to assess from the outside is the one of intellectual property. Much of the LearnHub system is public, and many of the social design patterns are freely available an published by others (see Yahoo’s Reputation Design Patterns). It will be interesting to see how quickly existing LMS providers adopt social tools, Blackboard has a Community System but appears to be offering this as enterprise software to educational institutions to deploy. Missing the internal insight it’s very difficult to assess the intellectual property protections. In my search of the US Patent Office, I could not find any filings related to Savvica or LearnHub.

Summary

The experience in Silicon Valley appears to have prepared John & Gosia in building a solid business plan around an existing problem with key differentiators in the community tools for elearning. There are a few open questions around a business model that allows LearnHub to generate significant revenues, and the barrirers to entry for a competitor. However, the investment by Educomp and the existing Educomp salesforce and business development efforts lends significant credibility to the LearnHub efforts. LearnHub is building tools that are leading the social learning trend and have strong investment and business development relationships in India.

Savvica, the company that makes LearnHub, is hiring.

TinEye

I am impressed with the progress that Leila, Paul and gang at Idée Inc. are making on TinEye. Yesterday, they released an IE browser plugin for TinEye. This follows their Firefox plugin and nicely rounds out the offering.

tineye-plugin

TinEye is a visual search solution. It allows you to find the web pages where an image appears.

tineye-ieOne example is you’re looking at purchasing a stock image to use on your homepage, and iStockPhoto.com says the image has been download 11,337 times, but you want to know where it appears online. You can use TinEye to find where the image has appeared. Check out what Rick has to say about the power of TinEye.

Lessons for you? Suck up to Leila and Paul. Check out the software they are building and run a check on the stock photography you are using; you never know who else is doing the same voodoo as you.

Voodoo! TinEye is like speculative fiction, that is, it meets Clarke’s Third Law.

Any sufficiently advanced technology is indistinguishable from magic.

Idee has built a great base technology for doing visual search in very large image collections. They have built a strong business around image and video monitoring. You can think of this services as a compliance and monitoring service. They help clients by providing right management and tracking. The monitoring reports provide clients a snapshot of where their images have appeared. The reports are used to automate editorial photo sales, perform competitive analysis, and copyright monitoring of collections.

Idée monitors and actively tracks millions of clients images and can identify where their clients images have been used in both print publications and the internet. They are the only company in the world to do this. Their image recognition system analyzes each client’s images and creates a digital fingerprint for each image and compares it to images scanned from publications and crawled from the Internet. The image matches found for their clients can be partial image matches as well. This means that a person appearing in one image, and then reappearing in another image but with a different background, will be found by Idée. – Jevon MacDonald on StarupNorth

TinEye is a diversification of the existing Idée technologies. Leila and Paul are trying to figure out the power of visual search.

Links for 2008-06-11

This is posted from ecto, which is a perfectly fine editor, but it’s no Live Writer, looks like I need to auto-run Parallels.

  • Bumptop beta invite
    I received my Bumptop invitation last night. And it looks like I’m not alone, Connor Turner published his experiences running it under XP. I haven’t read the requirements yet, assuming it will install on my Dell m1330, it will be going on later today after a backup. I’ll publish screenshots later.
  • Angel, VC, or Bootstrap?
    Anand Rajaraman from Cambrian Ventures (not associated with Cambrian House) talks about the risks and benefits of bootstrapping versus raising angel money. In particular, he discusses Greg Linden’s post-mortem of Findory, and the risks some entrepreneurs may experience when bootstrapping. It’s interesting model for angels that relies on personal relationships and technology expertise in the area of the company. This makes sense when looking for an individual investor, but I’m having a hard time understanding how this advice impacts organized angel groups, like National Angel Organization, maybe Dan or Bryan can help clarify.
  • The business that are now dead
    Ever since I heard Albert Lai say “How many of you work in traditional media, well, you’re f@&%ed!” at Mesh 2006, I’ve been trying to figure this out. It’s a great article challenging the death of traditional media. These are huge advertising markets, TV, radio, print are still big parts of the ad spend. They may not be growing markets. There may be greater opportunity and less capital risk on the Interwebs, i.e., it takes less money to start a blog network than a newspaper. But NY Times, BBC, World Online (never heard of them, well Django started there), News Corp and other traditional media folks are doing interesting business online. That said, bloggers and online media are not something you can ignore (even though you may think i said something else last week).
  • 9 Companies building on top of SharePoint
    ReadWriteWeb has a story from Enterprise 2.0 about 9 companies launching integrations with SharePoint. I wrote about nForm’s Midori which offers project management on top of SharePoint. There are 9 other companies including: Awareness; NewsGator Social Sites; Atlassian Confluence; WorkLight for SharePoint; Spotlight Connect for SharePoint; Telligent’s Community Sever Evolution; Tomoye’s Ecco and others. Tomoye is based in Gatineau, QC and has been building communities of practice tools.
  • Patterns for Designing a Reputation System
    Yahoo! User Interface Blog has published Reputation Design Patterns. Great work by the Yahoo team including Randy Farmer, it’s a great understanding of the social-design related UI elements for communitys and social networks.
  • The realities of life and startups
    James Robertson responds to Aaron Swartz about what keeps people from joining startups. For the first time since I started doing the startup thing in 1998, I deeply related to James’ comments. I have a new baby, I had a failed startup, and I’ve joined Microsoft. Time is the most important thing. Followed very closely by money. I try to spend as much time with my daughter as possible. Even at Nakama, I had a different viewpoint on work than my 20-something coworkers, I work a lot, but I don’t expect to spend 65+ hours a week in the office. For me, being able to have a pay cheque to pay my mortgage, to put food on the table, to provide the best possibilities for my child (hopefully children), these are the things that require either a well funded company or a job that I define at a company like Microsoft. The long and short of it, if you’re a student or a recent graduate, you should think about programs like YCombinator, even Canadians get accepted.

Canadians at YCombinator

Wow, at least 2 Canadians were accepted to this session of Y Combinator in Cambridge, MA. It looks like Y Combinator program is becoming the MBA program for entrepreneurs. Graduate from a degree program, work for a couple or 3 years, and then decide to start a company and get the unbridled focus offered by Paul Graham and the Y Combinator gang.
Michael Parkatti and Mike Marrone are writing about their experiences for the Globe and Mail in the Y Combinator diaries.
Michael provides some details about their backgrounds in the first post,

It’s been almost three years since I finished my post-graduate degree at the London School of Economics. In that time I’ve begun a career as a management consultant, worked for an Internet startup in Calgary (taking my finances to the breaking point), worked for a startup in Vancouver, committed to start a PhD program and now have started my own company.

Mike Marrone has a similar story. In the three years since finishing his Bachelor’s at Trent University, he’s worked at a small technology company in Ottawa, an Internet startup in Calgary, and Yahoo Inc. in Sunneyvale, California.

What a fantastic opportunity to get exposure to world-class Internet and software entrepreneurs. I had the pleasure of meeting Paul Graham at FooCamp07, and was just completely blown away by his personality, insight and engagement of entrepreneurs and designers.

My favourite part of the blog post is the description of what they are trying to do:

“we’re simply two guys trying to make something that people want”

Imagine that. Software that solves a problem. Makes peoples lives better. Changes the world. I’m curious at what was their Y Combinator submission. I’m curious to see what comes out at the end of the process. I’m curious if Michael and Mike decide to return to Canada after the Y Combinator experience. Whatever ends up happening, my hats off to these guys.

I can’t wait to see this story develop. I hope it turns out better than the 90 Days blog.

Level Platforms – UI Developer

Full-Time Position – Ottawa, ON

Level Platforms Inc. (LPI) seeks an experienced and hands-on full time UI  Developer. You will architect web pages and code these pages as HTML/XHTML/CSS templates and associated Javascript/ AJAX. You will perform analysis, design, documentation, implementation and unit testing as part of the software development lifecycle. You will provide on-going support and enhancements. You will be a part of the UI development team working with new Web 2.0 technologies as well as enterprise-class ASP.net.

Key Accountabilities

  • Responsible for the full life-cycle development of the front end from a technical perspective from requirements phase through the QA phase.
  • Responsible for the technical design, coding and unit testing of GUI related features and functionality.
  • Required to create design specifications for all feature implementations as well as document code.
  • A tireless advocate for the user: both in terms of valued functionality, and usability.

Skills, Abilities and Qualifications

  • College/University degree or equivalent experience.
  • 5+ years of professional development experience
  • Expert hands-on knowledge of HTML, XHTML, CSS, Javascript, AJAX, XML
  • Experience developing Web 2.0/AJAX based applications
  • Experience in ASP.Net & C#
  • Familiarity with relational databases and SQL
  • Experience translating wireframes / UI sketches into flexible and usable code templates
  • Adherence to web standards
  • Knowledge of developing cross platform/browser compatibility for dynamic web applications
  • Graphic and layout sensibility
  • Ability to manage and coordinate work flow and handle multiple assignments
  • Have a passion for usability
  • Excellent problem solving/debugging skills
  • Team player and work well in a team environment
  • Strong communication skills both written and oral

To Apply

If you have what it takes to be successful in this position, please send your CV’s (Word or PDF) to hr@levelplatforms.com.

Enterprise 2.0 – Midori + Sharepoint

My good friends Gene, Jess and team at nForm have finally demonstrated their awesome new project management applicaiton Midori.

midori

Midori is built on top of Sharepoint. And uses a completely custom layout engine.

Part of Midori is an engine that gives us complete control over SharePoint’s interface and interactions. We’re still refining the interface, but we’re able to make Midori look and work like just about any other web app (including standards-compliant mark-up and a bunch of ajax-y interactions).

The thing that blows me away is:

While we haven’t made it completely cross-browser compatible, I use it regularly from my Mac without trouble.

I don’t use my Mac for accessing many of the internal Microsoft SharePoint sites, mostly because the experience on Firefox 3 is unspectacular. But having built a truly cross-platform layout engine for SharePoint is a powerful tool. I wonder if they would consider licensing it to third-party SharePoint developers.That’s a different question.

Why SharePoint?

Gene suspects ‘we’ll even answer that nagging question "why SharePoint?"’. I have a few suspicisions including:

With companies like Atlassian shipping the SharePoint Connector for Confluence and NewsGator releasing Social Sites and SharePoint and SocialText’s SocialPoint (comments from Don Dodge), there is an ecosystem of products forming to help fill the gaps in SharePoint. It’s a product that is easy for IT departments to acquire, install and deploy. There are challenges (opportunities man, opportunities) for companies in deployment with the user experience and configuration options. But I could see companies like nForm, ThoughtFarmer and others building functional, usable, pleasurable user experiences on-top as a solution for the grow market space.

Don summaries some of Ross Mayfield’s , CEO of SocialText, interesting points about building on the Microsoft platform.

  • The "humanizing" of Microsoft has changed his mind about working with Microsoft. He cites Ray Ozzie, Robert Scoble, Channel9 and blogs from Microsoft employees as examples.
  • SharePoint 2007 is a market leader, validates the category, and grows the market for everyone.
  • The short term value (role) for a wiki that supports SharePoint is immediately apparent.
  • SocialText has a profit motive, balanced by freedom, that will sell more seats of SocialText and SharePoint. Everyone wins.
  • SocialText customers told him this was a good idea. You can’t lose when you listen to your customers.

I’ve spent the past year trying to balance my desire to build profit driven companies with the freedom of the open idea. But for companies like nForm, partnering with Microsoft is a great way to leverage a successful sales and marketing engine that can help you sell more software.

Plus nForm is hiring:

Resources