openerp-community team mailing list archive

[Raphael Valyi <rvalyi@xxxxxxxxx>]

Hello Fabien and others,

much has been said by other experienced partners/community members and I
mostly agree with what they said.

So I'll give my main points to be constructive:

I also think OpenERP image could be better. And I think 3 things are
dragging you backward:

   1. lack of marketing consistency in the time
   2. frustrations
   3. prostituted ecosystem

Let's dig further into each point and see what I mean and what can be done.
I know that in some area you are already improving, but give my analysis
anyhow:


1. lack of marketing consistency in the time

It takes a lot of time to build the image of a software and a company you
can trust worldwide to run your critical mission ERP. A software that will
do at least some part of your accounting, that will hold all your critical
company data, that will cost you so much...

But too often OpenERP was changing its message in inconsistent ways gain
the durable mindshare you would find in Linux, or PostgreSQL for instance:

A few example:

   - branding: you were once TinyERP, then OpenERP. You now tell us that
   you will eventually change the brand name again (hey we didn't had our
   sorrySAP yet this year :-p )
   - business model: you were an integrator, then an editor, now again
   eventually an integrator again, or may be a Venture Capital SaaS startup
   and the last is't clear either...
   - main product position: first a framework to do anything, then a
   complete ERP, even largely compared to SAP in your marketing last year, now
   a website builder for dummies...
   - position toward community/partners: first in 2007-2009: "dear hackers,
   work with us please, publish your modules and let's create together the
   best open source ERP, no catch!" Then by 2010: "hey give us money guys or
   we will ignore you my friends" Finally, kind of: "guys we will ignore your
   merges no matter what now, but keep sending money by focusing on reselling
   our wonderful 70% margin services please or we may kick you out of the
   business you helped us building"

If you want people believe you are a strong company with a strong product,
you cannot afford to give the feeling you are going where the wind is
blowing.

Now, beyond any offshore headcount,  we are all small companies. Eventually
building the next ERP is largely beyond us all; this is why open source
community and even non profit foundations are for.


2. Frustrations

I think 10 happy new SaaS customers are not worth a very angry partner or
customer who invested in OpenERP and got frustrated later by how it went.
Here is a concrete fresh example of what I mean but you can find such
example every month or so:
http://goo.gl/U3O9X9

I participate to many open source projects and I see that OpenERP is
particular in having quite a few frustrated people, even a few haters
(sorryOpenERP etc..). These guys typically invested a lot in a way or an
other and got frustrated at some point. Hence they make it a personal
question to bash you.

You are not selling a simple product. On the contrary, an ERP is a very
critical product (even if you don't want to call it an ERP). That means
people will investigate (people who don't investigate won't make a valid
customer, they will just fail their project) and at some point sooner or
later they will meet that frustration and IMHO it kills efforts to build a
positive marketing.

Even if they enter without knowing too much, in an ERP project, shit will
happen sooner or later, then they will read the bug tracker or something
else and they will get the impression they have been lied as the image
passed through the marketing was kind of trying to hide these frustrations.
Having the feeling somebody lied you is really a reputation killer.

So what?
I'm not asking you to make everybody happy for free. Not at all!
We all have bills to pay and we know how it works. But I think OpenERP
should simply create less expectations and ensure it can live with the
economics it means initially.
I think when you over-inflate the expectations artificially in a way or an
other, if you fail to deliver the "sorrySAP" you spent so much marketing
promising for instance, then there is always a pay back later and I think
it's not worth the illusion of the initial easy going.

Are you sure you won't create new frustrations around your new CMS and
e-commerce that you are already keen to compare to Magento and Drupal? What
makes you believe it?


3. Prostituted ecosystem

Of course, this is legitimate, you want to attract a few folks to your
online offer. But you have to do that with care!
I think when you try to give the image that OpenERP is "cheap", if you
don't take a lot of precautions in the communication, then you just predate
the value of your product and your revenue network. That is you literally
cannibalize your main revenue stream to try to grow your new barely
profitable product line.

For instance you now say "create a free website with OpenERP". This is
catchy, fine. But you know what, when a 20 employees company invested (a
lot) in a v6.1 or v7 project and sees the current limitations of OpenERP,
he really prefer to see a perspective how the 2000 open bugs will be
solved, or the patches he used will be merged, or the pain he had to move
from 6 -> 7 is going to be less in the future.
So when such a customer, o potential customer sees instead that OpenERP
frontpage is about building "free website", even if he is wrong (the WMS
refactor is fantastic), he cannot avoid thinking "these guys should be
kidding man...".

When you pimp everywhere that OpenERP is full features and starts at 39
euros/months, man, in developing countries at least, you create an army of
un-experienced joe coder guys who just start thinking:
"fantastic! I can do everything on OpenERP SaaS to manage a company, and
better, I can download exactly the same software for free! Man, I will
start a business locally and I will be so rich! I will compete with SAP and
local ERP's with that free software I was so smart to discover just now!"
So these guys start offering OpenERP on every website at costs that are so
ridiculous while in fact THEY JUST DON'T IMAGINE at all there is work
behind to make it work in a given company.

So I mean, "professionals" think OpenERP is mature for everything because
the message is that "anybody can manage any company on your SaaS". If it's
so mature and totally free to download the same, they will offer the same
cheaper and nothing will be left to fix the 2000 open bugs and other
current limitations or even just give you any sustainable revenue.

But what is the middle term effect of that? Well these guys fail an
incredible number of projects (different people each time), not only that
spreads frustrations a lot, but also, it predates the business of your
serious partners who make success stories and bring you money. Here in
Brazil I would say 95% of the guys who try to implement OpenERP fail, I'm
serious, when there is no budget left we always end up knowing about all
these failed projects we cannot rescue anymore because the folks just had
illusions in first place.

And there is almost nothing to win for OpenERP SA with these joe coder guys
you know. If you take a few other open source software that don't build a
catchy marketing, say Asterisk, PostgreSQL, SolR, whatever, well unskilled
joe coders just stay away from it as they get it's not for them. Then no
prostitution, a healthy eco-system develops at its own pace.

Here in Brazil specifically, we struggled to grow in number of employees
compared to Akretion France. Main reason is the low level of education here
(only 3% of guys over 30 went to university and not always very good ones).
And because large companies like petroleum or banking still make a lot of
money, then the very little elite can easily earn 3x (seriously) what they
can earn working with IT for SMB's or they even just go outside of Brazil
for the most skilled guys.

So okay, for once, this is 500 years non protestant colonized developing
country economics (please don't rebel you folks and keep sending us the
primary products at banana cost). But also, we certainly could never charge
the price it really cost here exactly because otherwise the mostly IT
unlearned SMB's would think there is an alternative of doing it with X
specially when X just sent you a check to be partner and you just rewarded
them with a chocolate medal of being official partners.

This is an irrational market like believing Santa Claus exists.

But you OpenERP SA, as an editor, you can CHOOSE to either educate that
market like for instance I did with the ERP whitepaper at Smile in 2008
(Smile in general has been really good at educating the open source market
in France, at least in the 2000ties).
Or instead you can act in such a way that cultivates the ignorance.
But this has a direct cost for you OpenERP SA. So for instance, from the 15
partnerships you solds here, there is only 3 guys left and may be some are
yet to leave. And these partnerships you sold quickly never turned into a
sustainable revenue stream as with the European partners who developed
before some account manager policy would prostitute the market into
something not sustainable.

So among these 15 partners, as we "trained" them, I would say half where
nowhere close to be able to integrate OpenERP here, or were unwilling to do
the effort (we have been penetrating this market because we work like 70
hours a week for 5 years now, without holidays here and this is only at
this cost that we would do it). That is these are guys that were attracted
by the catchy marketing but who will potentially join the frustrated folks.
As for the other half, they eventually had the required skills to start but
choose to stop partnership and in most of the case they also just stopped
working with OpenERP.
In this later case, I think that this is because they ended up thinking it
wasn't worth the effort. Or that is, the overall prostituted market made of
flow the fresh unaware guys kept them away from being part of the
eco-system.


Okay, so I believe I said what I had to say about point 1, 2 and 3.


Finally, when I talk with our Account Manager, I see that some folks at
OpenERP think that a lot of companies are using OpenERP for free without
paying you a cent and I even see some frustration of OpenERP SA with that
(you Fabien even mention people using OpenERP not paying as the main issue
in your pad).

Well, first, this is pretty normal in the copyleft open source software
that only a very tiny fraction of the folks pay you something. This has
been true with MySQL, with Redhat (here everybody uses CentOS free), with
Java EE, with many things...
You have to live with it and properly design your business model so that it
fits this reality. While time changed, Redhat for instance did well with
it. There are also companies who are very successful economically while
still producing free software that is absolutely free and use by a
tremendous amount of people, 37 signals for instance.

You cannot change the nature of open source and GNU licenses, so you have
to ensure your business model fits this reality. Having services that are
paid or developing other non derived products (in the AGPL sense) that are
not free can certainly be part of the solution. Now, be careful because
when you claim you make 70% of gross margin on some products (Enterprise
you said), it means people have plenty of room to look for alternatives
instead of building win-win partnerships.

If I review services Akretion us to buy, like Amazon web-services, I
believe none of these services are products with a 70% gross margin, or we
usually find alternatives.

Remember open source is not about concentrating investment to build
hypothetical monopolies, it's instead about a free open competition of new
ways to build software at a fraction of the cost of the legacy proprietary
industry which cannot let information flows freely because it's so
embarrassed by IP protection and legal bureaucracy. That is open source is
about cutting costs by making the right synergies between other ope source
components (say instead of NIH) and keeping reasonable margins that make
happy consumers.

So for instance I claim you could build an integrated CMS and e-commerce
with 80% of the features at a fraction of the cost, not embarrassed by the
AGPL if you used the right existing building blocks. That is I say, "watch
out the attractiveness of your products", but I'm consistent with that
lower revenue stream because I also say "you could do that cheaper".


But mostly, I want OpenERP SA to understand that this is not true that so
many people are "cheating" your product like my Account Manager seems to
believe.

In fact, just like kids believe in Santa Claus, many companies are just
"TRYING TO USE OpenERP". But when you know from the inside (
http://people.via.ecp.fr/~alexis/openerp/ ) what it takes to use OpenERP in
place of ERP X, you know that these guys are only TRYING. But they aren't
able to use OpenERP in place of ERP X. They are using it just as a CRUD
repo, where they would use Excell, MySQL+PHP, Access... a bit more only.

That is this is the very nature of the Internet, the culture that
"everything is free". It created a generation of free loaders who just want
eveything for free.

But you know what? These guys mostly have an usage of OpenERP that is so
limited (at least here in Brazil for instance), that if you asked to charge
anything, they would just drop OpenERP and simply go to the next item on
their "free solutions list" (Spreadsheet, MySQL, illegal copy of M$ Access
etc..)

You would make a terrible mistake if you really believe these guys are part
of the short term potential market and if you over scale your marketing to
that hypothesis.
Instead, you should acknowledge this reality and live with it IMHO.

And you know what? At Akretion I believe we produce even more free software
by headcounts than OpenERP SA itself. For instance we made 95% of the core
localization with mostly Renato and me and it weights 30% of the server
layer of OpenERP and Akretion made 4x more mature free modules than just
that.
So I mean, we really know what we are talking about, we largely have the
same issues as you have (many folks also use our software without giving us
a cent) and at least this is my answer to the issues you raised in your pad.


All right. Happy you said you were at break even yesterday. So I hope you
will consider that feedback and keep going in the generous mission of
building free software.

You know what, as one of the guys who invested heavily on OpenERP (not
financially, I mean personal investment), my biggest fear was that some of
the mistakes I depicted would throw you into the hands of Venture Capital,
liquid capital, with no long term vision, no responsibility and no
understanding on the subtleties of building an unexpected business model
atop of open source.

I would fear you would slowly climb that "long slow saas ramp of death"
constantly throwing money into the fire by building superficial "wow
features" to try to acquire new SaaS customers that would soon move away
all the more easily that this is free software, always running after your
EBITDA figures to keep the show on:
http://businessofsoftware.org/2013/02/gail-goodman-constant-contact-how-to-negotiate-the-long-slow-saas-ramp-of-death/
"

And I could imagine that at the end that ramp, shareholders would of course
have the final temptation to forget the initial agreements with the
community (the non financial shareholders of your project) and have the
temptation to try closing the product, as so many other open source
products did before.

So I really welcome the news you reached your break even and I hope you
will keep doing good. Now, I wonder though, if everything is going so right
the way it is, why would you suddenly opt for making these marketing
expenses you are talking about in your pad?

In any case, I advise you consider my points when doing marketing: this is
no simple product, avoid catchy marketing for dummies and properly channel
all your communication to the right target.


All right, thanks to the ones who were courageous enough to read me!
Happy hacking with OpenERP!


-- 
Raphaël Valyi
Founder and consultant
http://twitter.com/rvalyi <http://twitter.com/#!/rvalyi>
+55 21 2516 2954
www.akretion.com









On Sat, Feb 15, 2014 at 11:03 AM, Fabien Pinckaers <fp@xxxxxxxxxxx> wrote:

> Dear community,
>
> Over the past years, we did not invest a lot in marketing. We put most
> our efforts in R&D and Sales departements (starting from 2010) and
> services (started in 2012).
>
> Things are changing and we are now ready to invest a lot in marketing
> activities. I just wrote a "very draft" internal document to discuss the
> brand positioning of OpenERP:
>   http://pad.openerp.com/p/r.Zzg7LhlqI7elyigb
>
> I would like to have your point of view on these marketing thoughts for
> OpenERP.
>
> Thanks,
>
>
> --
> Fabien Pinckaers
> CEO OpenERP
> Chaussée de Namur 40
> B-1367 Grand-Rosière
> Belgium
> Phone: +32.81.81.37.00
> Fax: +32.81.73.35.01
> Web: http://openerp.com
>
> _______________________________________________
> Mailing list: https://launchpad.net/~openerp-community
> Post to     : openerp-community@xxxxxxxxxxxxxxxxxxx
> Unsubscribe : https://launchpad.net/~openerp-community
> More help   : https://help.launchpad.net/ListHelp
>