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Posts Tagged ‘Small Business Owners’

The Evolving Online Finance Ecosystem

Last week we analyzed how the Web is transforming personal finance. Today we’ll take a broader look at the world of online finance, from personal to small business tools. To get an understanding of the online finance space, we spoke to the founder and CEO of one of the most promising startups in online finance, Rod Drury from Xero. Rod told us that he sees four types of markets in online finance: 1) Personal Finance (e.g. Mint, Wesabe, Yodlee); 2)
Small Business Accounting (e.g. Xero, Kashflow); 3)
Cloud ERP (e.g. Netsuite, Salesforce); and 4)
ERP (e.g. Microsoft, Oracle).

That segmentation makes sense to us, to let’s look now at how the online finance market is shaping up.

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Editor’s note: This story is part of ReadWriteWeb’s Online Finance series, a weekly, three-month long look at how the Internet has transformed finance. Up until April 15, the deadline for U.S. readers to file their taxes, we’ll be looking at how finance software has evolved, analyzing top web tools and posting video of our conversations with the people who are shaping online finance. If you are interested in sponsoring the rest of this Content Series, please contact our COO Sean Ammirati.

In our overview of Personal Finance, we explained how free tools like Mint, moneyStrands and Wesabe are making it easy for consumers to monitor their income and expenditure. The current market leader in personal finance is Mint, which was acquired by Intuit in October 2009. Today Mint has more than 1.7 million registered users, about 700,000 of them active every month.

The online small business accounting market is less well formed at this time, which means there are opportunities for startups. Particularly as for years now small business owners have had to suffer relatively expensive and complex desktop software – such as MYOB, Intuit QuickBooks and Microsoft Office Accounting.

Internet DNA

In an August 2008 article, we wrote that many of the small business accounting software incumbents were struggling to make the transition to online accounting. That was one reason why leading financial software firm Intuit acquired Mint, to import some Internet DNA. Just months later and Intuit is already planning to phase out Quicken Online and replace it with Mint.

Just as Mint came out of the web 2.0 world to re-shape the Personal Finance market, it will likely be a web-based company that does the same to the small business accounting market. It may end up being Xero, a completely online accounting service which was founded in July 2006. Xero hails from New Zealand, but is aiming for global success. Full disclosure, ReadWriteWeb uses Xero to manage its accounts. We’ve found the integration with online banking systems to be impressive, the design slick, and functionality such as multi currencies useful. Perhaps most importantly, Xero has the support of many accountancy firms.

Playing in Multiple Markets

According to Xero founder Rod Drury, another trend in the online finance space to watch is that "each vendor might play in the adjacent market as it’s good exposure." We’ve seen this happening for years with the likes of Intuit and Microsoft. But now even the small players, such as Xero, are doing it. Drury says that for his firm, doing personal finance "creates a great opportunity to talk to banking partners and enables us better access to banking web services." He added, "it’s a useful marketing tool, though the primary monetization is upsell to the business product."

We’ll discuss Cloud ERP products in a separate post, so for now please tell us your thoughts on personal and small business online finance tools. Which products do you use, whether for personal finance use or your business?

Image credit: An&

Discuss

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5 O’Clock Roundup: Apple’s mysterious event, iPhone credit card reader, Evernote hits 2M,

Here’s the latest action:

Apple’s Jan. 26 announcement? — Chasing the Financial Times, Fox News reports it has confirmed that Apple will announce a new product in San Francisco that day. Is it a tablet or an e-book reader? The tongues are wagging.

Mophie plans credit-card reader for the iPhone — It looks cool, but this Mophie product might fall into the nice but totally unnecessary department. The company normally makes battery packs and cases, but this device gives you an alternative to typing your credit card into various apps by hand. It’s aimed at small business owners.

Evernote hits 2 million users – The life-capture application has hit its second million in less than half the time it took to get its first million. Part of the reason is that it launched a popular app on the iPhone.

CES rumor mill – The biggest U.S. tech trade show isn’t until next week, but the rumors are flooding out. Motorola is reported launching two new phones next week, including an Android-based phone, according to analyst Trip Chowdhry.

The tragedy of One Laptop Per Child — One more design has been shelved, prompting predictions that this effort to educate the world’s poor children through laptops is a failure.

iPhone taking off in China? — The world’s most populous country hasn’t held out the welcome mat for the iPhone. But Apple may be having some success there with sales lately.

New TiVO on the way? — A packaging mishap may be a clue to whether TiVO is preparing to launch a new digital video recorder, sans dialup modem and including a cable card slot.

Seagate ex-engineer testifies against company — The engineer claims that Seagate had access to trade secrets from Convolve when it designed noise-reduction technology into its hard drives that infringed the latter’s patents.

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Intuit gets into the customer management business

Intuit, the company best-known for financial software like Quicken and QuickBooks, is expanding its lineup today with Customer Management, an application that brings Intuit into competition with established sales software companies like Salesforce.com.

Many of the small businesses that buy Intuit software use relatively primitive tools like a spreadsheet or a whiteboard to track their customers, said Intuit product manager John Flora, because more sophisticated customer relationship management (CRM) software doesn’t really address their needs,. Even though companies like Salesforce offer CRM for small businesses, that software is basically a stripped-down versions of an application that was really built for sales teams within large companies.

“It’s like trying to sell a soccer mom a new car by taking an 18-wheeler and taking the wheels off the back,” Flora said.

What makes Intuit’s product different? Flora said his team focused on simplicity, so Customer Management provides what small business owners need need — namely, a way to see and update all customer data in one place, including contact information, pending tasks, upcoming appointments, and more — without overwhelming them with features. There’s a BlackBerry version that lets you view that information when you’re out of the office, and Intuit plans to support other smartphones too. Businesses can synchronize data from QuickBooks (so you know if a customer has an overdue bill, for example), as well as contacts from Microsoft’s email program Outlook.

The pricing is small business-friendly too, Flora said, at $9.95 a month for up to five users.

Customer Management includes collaboration tools like shared calendars and tasks. Also worth noting: While Intuit offers both traditional and web versions of its flagship products, Customer Management is online-only – another sign that Intuit sees web apps as a big part of its future.

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