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 Philip Copeman answers the question of where we fit in the Accounting market.
"I see the Accounting Market in 4 distinct sectors", says Philip Copeman, Project leader of TurboCASH Accounting. There are are between 15 M to 20 Million current users and we have just over 100 000 of them. The good news is that while the overall market grows at 3% per year (And maybe less this year), the TurboCASH project grows at over 30% per year.
This blog is in response The many faces of small business and open source by Dana Blankenhorn.
The Spreadsheet market
I include personal money managers like
Quicken, the now defunct Microsoft Money and GNU Cash in this
section. These packages are for very small users. It is the
electronic equivalent of cigarette box calculations. They exist in
the Accounting market because, like all packages they are sticky.
Users start using them in a garage and find it hard to give up when
their business expands.
It is difficult to estimate how many
users use spreadsheet to run their accounts. My guess is about 5
Million. Most of these will be on MS Office, with Open Office as a
growing competitor. We try to make it easier for TurboCASH
users to import data from TurboCASH and to dump reports to
Spreadsheets, where they can manipulate the figures under familiar
conditions.
The SOHO Business Accounting Market
I use the now outdated word SOHO –
Small Office Home Office to describe the type of business that is
smaller than a SME that can have up to 500 employees.
Here we meet Intuit 5 Million users
in the US and Sage 6 Million users every where else (Peachtree,
Simply Accounting, SAGE Line 50, KHK, Ciel, Pastel.) MYOB with 700000
users in Australasia and Tally with 2 million users in India are also
players.
The SME Multi user Accounting Market
These are larger packages that require
integration. SAGE is dominant in this market with SAGE Line 500,
Accpac. Microsoft has also expanded over the last few years largely
through acquisition (Great Plains and Navision in particular).
The ERP Market
These packages kick in with the promise
of integration. They combine Accounting, Process management and CRM
and usually come armed with teams of “integrators” set for loads
of customisation. SAP and Oracle dominate through legacy. SAGE is a
new player in this space.
The Open source vendors Xtuple, Open
Bravo, Compiere are all still bit players in this market. These are our future allies.
Products are stuck in a sector
Characteristic of an accounting package
is that it gets stuck in a sector. You cannot “widen” your reach.
Make the package simper to use and you lose power users who want more
complexity. Make it more complex and you drive it beyond the
understanding of the lower users.
Turbo we want to make it as painless as
possible to move from a spreadsheet to TurboCASH and once you
have done so we want to carry you up to around 10 accountants in the
company.
Growth opportunities
If the opportunities to grow are not
horizontal, then we need to grow vertically while staying in our
limited market. That means taking share from the incumbents. We do
this through two main thrusts: a price that starts at Zero and ends
at $ 100 per year; upstreaming our users data to other communities
that can interact with TurboCASH users, like Banks, Web Sites
and other user groups.
Value of the Market
Don't get confused that at the
TurboCASH Porject we run a near zero revenue business model.
Make no mistake as to how big the stakes in the Accounting business
are. Our main competitors, SAGE and Intuit both have 3 Billion Dollar
turnovers. Trapped by PE ratios of around 10 they are slave to their
shareholders. Both recently laid off around 1000 workers each. They
grow at 3% per year we grow at over 30%. There is a lot of money to
made unseating them. We are open to partnership ideas. Unbelievably
we are cashflow positive and self funded. We would of course like to
be bigger and grow faster.
See my medium term funding ideas here
: http://www.slideshare.net/philipdc/turbocash-vc-presentation
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