A good 3 years ago I "discovered" a Norway-based SaaS All-in-One business suite provider, 24SevenOffice, and for a while wrote about them extensively. I truly believed I found a gem. They offered a modular but integrated system to the SMB market with unparallelled functionality: Accounting, CRM (Contacts, Lead Mgt, SFA), ERP (Supply Chain, Orders, Products, Inventory), Communication, Group Scheduling, HR, Project Management, Publishing, Intranet.
I think the reason I fell in love with 24SevenOffice was that they were living proof to my favorite theme, namely very small businesses can now have “enterprise” system functionality. I often referred to 24SO as "the next NetSuite" with a billion-dollar future, if they can execute (this was well before NetSuite’s IPO). As typical with startups, they initially put all resources into development, with zero marketing. But they had a one-person marketing machine: Espen Antonsen, a developer, who as co-Founder obviously felt obsessed enough to blog about the company, comment elsewhere online – in a short time Espen single-handedly created 24SevenOffice’s online presence – that’s how I, Phil and others discovered them.
Soon 24SevenOffice started to grow, expanding from home-base Norway to the UK and Sweden. They hired business management, and ramped up the marketing machine, doing some creative deals like an ad-deal with Norway’s leading rally-driver, or the first-ever-in-the-world deal with Fokus Bank, creating a single sign-on Web solution for customers’ banking and all other business software needs. (How is that for Banking 2.0, Ben?) Today 24SevenOffice is a publicly traded company in the Oslo Stock Exchange. Happy End for the Founders and investors. But is it really?
They are nowhere near to be "the next NetSuite", and chances are they won’t ever be. Instead they are a nicely growing business in a few European markets. And therein lies the rub: there is no such thing in software as a European market: there is only the UK, Norway, Germany … one by one, each being different, each with their own barriers of entry. If your product is a development tool, or any utility that can instantly be used without localization, you have the world market open to you. (Just check out Zemanta conquering the world from Slovenia). Enter business software, especially if it involves accounting: you have language, regulation, taxation issues: every new country you enter requires significant investment.
I believe 24SevenOffice missed the most fundamental rule of any business, the opportunity that only became available by the very model (SaaS) they are an early pioneer of: with no geographical boundaries go after the single largest homogenous market you can serve. In today’s world for business software that’s the US. 24SO should have focused on the US market and today they’d be on their way to become the next public SaaS company.
Of course what they achieved is no small feat eather, and they are probably happy where they are today. Espen, my first contact in the company (later I was in touch with the CEO and COO quite a bit) quit, here’s his farewell message:
When I started in 24SevenOffice at the age of nineteen back in 2000 we were four guys who tried to build a basic web-based CRM and invoicing system for small businesses. Since then the strategy, product suite and company has grown into one of the two most advanced and comprehensive web-based ERP-solution’s in the world. The company was listed on Oslo Stock Exchange last year and now has over fifty employees. Building a CRM-system and being one of the first products to use Ajax has been very interesting and I have enjoyed the years at 24SevenOffice. But seven years is a long time and I do not see myself as a programmer in ten or twenty years. I also prefer to work in a smaller company with more influence over the strategy.
I am confident in 24SevenOffice’s success in the future. I am nowhere near the sell-button in my stock portfolio. But I should say that my cravings to see the world and finding new challenges is not the only reasons why I am no longer with 24SevenOffice. Lack of international focus (specially US), choosing to build advanced and complex product modules instead of opting for easy and simple solutions, and little willingness to build cross-platform solutions were issues me and 24SevenOffice’s management disagreed on. Advanced is good but additional features should come in later versions and be less visible. 37Signals and Google may lack many features but it is the simple interface and workflow that makes them successful.
From 24SevenOffice he switched to 24SevenTravel. World traveler for a year – and not exactly to posh touristy destinations…
The photo above shows Espen playing table tennis with school kids in Nepal. He is now back, looking for his next gig. Not that he needs to work (so I guess), but it’s too early for retirement. (If you’re in the SaaS business, you might want to talk to him). In the meantime he’s sharpening his blogging skills again. Next up is a product review by Espen – then who knows what’s next.