Tuesday, March 31, 2009

What it would take to start a CiviCRM ASP

So we tried to start a CiviCRM/Drupal based ASP to solve the constituent relationship management/website/online donation/ mass email problem that most charities face with CivicSpace.  It failed, but that does not mean that another attempt will also fail.

There are three basic approaches to doing a CiviCRM/Drupal ASP:
  • Technology first
  • Customer first
  • Hamster first
The technology first approach is building out the infrastructure to handle a high volume, self-service ASP.... low monthly price and high customer volume. This requires either piles of money or the super-committed technical geek founder to do the work. It relies on the build it first, then find the market approch. We did that at CivicSpace and we "ran out of runway".

Customer first says lets go out and build a lot of demand. Sure it will be really labor intensive to maintain the technology infrastructure and initially the customer service will not be great, but you avoid solving the technology problem until you have the real problem of too many customers and you need to build automation technology.

Hamster first is buy a VPS, put up a cool web page, market your product and hope for the best. The technology stack (CiviCRM/Drupal)  is actually fine for this approach at the moment, but you'll face bulk mail deliverability, scalability, performance and other issues along the way.

Tech and customer both require a fair amount of capital to pay for the technology development (the ASP platform) or the marketing (making the service known in a very crowded vendor space). Hamster first could financially support a single consultant and once they have a working model, could easily be put in front of investors to attrach "expansion" capital rather than "start up" capital. 

The other trap is the set up fees. We tried to make things self service... life is just too complicated. There has to be a set up service before your customer starts paying their monthly fee. My feeling is copy success... i.e. copy PicNet who have built a similar business on Joomla. People pay a couple thou to get started and then a monthly fee. I think they cracked an important part of the code.

Idealware releases new CMS report

So Idealware released the much anticipated CMS report covering Wordpress, Drupal, Joomla and Plone. Overall it is a must read and all around general "reference for the ages."

I'll start with the nit picks and then get to the good stuff.

First, the "market analysis" fails what my ex-boss used to call the smell test. Sure the methodology is perfectly defensible, but the result is no where near reality. The 10,000 pound gorilla is Wordpress, not Joomla. Even though Joomla has a lot of traction in the traditional NPO world, I find it hard to reconcile the numbers. Plus, in most of the rest of the world the word "charity" is used instead of "nonprofit" so you might want to also inculde that keyword.

The security methodology appears to be just plain wrong. It appears that platforms with more security advisories are considered less secure. I'll hope that the actual methodology was different, but if not, it shows a fundimental misunderstanding of how open source security works. 

The starting point is that there will always be bugs and security flaws in released software. The security of a platform is measured by the significance of those flaws and the speed at which they are resolved.

There can be both good and bad reasons for a high number of announcements.

(1) Code quality is poor - more security flaws are released in the the wild

(1) A larger community of people is testing and therefore identifying security vulnerabilities.
(2) The community standard for what constitutes a security vulnerability is more stringent than a comparable project.
(3) A more transparent security process. No security problem is ever fixed without the release of a security advisory.
(4) The lifespan of security issues is very short... no security issues "linger" after they have been identified.

In general, the number of security advisories is a flag to look a bit deeper. High numbers of advisories can be either good or bad, you need to dig deeper to draw a conclusion.

The good stuff is the financial model behind the report. The ad model is really a quite good one. Since charities don't have the money to actually buy the report, get the consulting shops to buy advertising.

I think they should take it one step further. There is little upside to ad sales to cover the production of a report + surplus. Idealware has a good neutral reputation. They do a good job of maintaining it.

Why not broker leads to companies? All the idealware information is "hidden" behind a registration wall. Idealware's interactions with information consumers provide an opt in for vendors to communicate with them. Those opt in leads are sold to vendors. 

This is a lot more involved than the ad model, but has a much higher upside as your volume goes up. Haven't done the numbers to see if this is really viable and don't have a solid sense of what the consulting firms would pay, but I suspect it would work.

Monday, March 30, 2009

FINALLY, the vendor community steps up

So I look at this new Blackbaud NOW product and I must say, they have their corporate strategy right on to own all of the charity software market, soup to nuts.

Blackbaud NOW is basically Groundspring/ Network for Good -- a set of services designed for very small charities -- accept online donations, keep a central contact database, send mass emails. They take around 5% of your donation and you get the service for free.

Judging from the mailing address in Indiana, this is built on etapestry's technology (PS, please spring for a web designer, guys, the etapestry site is an eye sore). I find it interesting they didn't build something on Blackbaud's Infinity platform, but hey. They also couldn't spring for an email blast tool, but I suppose that might open a can of worms for them-- their email tool is basically designed to send email to individual contacts rather than mass mails with open tracking, etc.

If I put my cynical hat on, I would say this is just an etapestry lead gen tool, but I'll give them the benefit of the doubt and hope it is the precursor to real service for small charities. And hopefully some corporate strategist at Blackbaud has figured a way to serve the bottom of the market in order to feed prospects into their higher end offerings.

It makes me a little sad since CivicSpace offered this basic package plus soo much more , but alas... we were a bit to early and under-capitalized.

And finally, yet another data point that a CiviCRM-based ASP would be a good value proposition! Come on folks, anyone?

Thursday, March 12, 2009

CiviCRM Continues to Make Constituent Relationship Management Accessible to Small Groups

With the latest CiviCRM release (2.2) I am reminded that the CiviCRM team is one of the few groups actively making a product designed as a solution rather than just a tool. 

The single most important feature in 2.2 is the Simplified Configuration option for CiviMail. Email marketing is a critical engagement tool for charities and all other civic groups. But for the folks that don't have the money to use commercial services, there just aren't any integrated, simple options. The new CiviMail solves that by just connecting to a SMTP server to send mail. Got Gmail? You now have open and link tracking!

Sure there are still spam management concerns... that's what paid services like CiviSMTP are for.

And yes wouldn't it be great if there was an ASP.... [any (social) entrepreneurs out there interested?] .

And, yes, other folks out there are making strides-- the Salesforce Foundation is taking some steps in the direction of an out-of-the-bax charity experience, but that hasn't been their primary focus over the past few years. As Michelle Murrain notes, the out-of-the box functionality of CiviCRM is just better... donation pages, marketing email, relationships, smart groups and more are there and with a few clicks can be working for a small group in a couple hours. You have to (sometimes)  purchase and (always) integrate those solutions into Salesforce.

Now if we get the CiviCRM usability up a few notches we can have a horse race for meeting basic charity and civic group needs.