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Re: OpenERP Marketing


Hi Guru,

   You always write such a long email but hit my hear with every sentence.

   In china we have some same situation you said, plus no decision maker nor end user can communicate in English easily, this make OPW hard to sell, on the other hand, few chance to sell official SAAS, but I do found a china silver partner we never heard of (no contribution or share) sell much enough to be silver.

   I do prefer OpenERP SA do more services to partners, training\ module certificate\annual fee are all welcome,  this is not only for good of win-win business, but also good for better openerp product.  

   SAP involve improvement idea  from his big consulting partners like AC and IBM, cause ERP is a complex software and there is hard to involve "End User contribute".

my 2 cents.

Jeff Wang |  jeff@xxxxxxxxx | 18016291663 |02158980787
@OpenERP_Jeff "As simple as possible, As complex asneeded"

Maintainer of Open ERP china community 


------------------ Original ------------------
From:  "Raphael Valyi";<rvalyi@xxxxxxxxx>;
Date:  Fri, Feb 28, 2014 02:33 PM
To:  "Fabien Pinckaers"<fp@xxxxxxxxxxx>; 
Cc:  "openerp-community"<openerp-community@xxxxxxxxxxxxxxxxxxx>; 
Subject:  Re: [Openerp-community] OpenERP Marketing

Hello Fabien and others,

much has been said by other experienced partners/communitymembers 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 3things are dragging you backward:

lack of marketing consistency in the time


prostituted ecosystem
Let's dig further into each point and see what I mean andwhat can be done. I know that in some area you are alreadyimproving, 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 acompany you can trust worldwide to run your critical mission ERP. Asoftware that will do at least some part of your accounting, thatwill hold all your critical company data, that will cost you somuch...

But too often OpenERP was changing its message in inconsistentways gain the durable mindshare you would find in Linux, orPostgreSQL for instance:

A few example:

branding: you were once TinyERP, then OpenERP. You now tell usthat you will eventually change the brand name again (hey wedidn't had our sorrySAP yet this year :-p )

business model: you were an integrator, then an editor, nowagain eventually an integrator again, or may be a Venture CapitalSaaS startup and the last is't clear either...

main product position: first a framework to do anything, then acomplete ERP, even largely compared to SAP in your marketing lastyear, now a website builder for dummies...

position toward community/partners: first in 2007-2009:"dear hackers, work with us please, publish your modules andlet's create together the best open source ERP, no catch!"Then by 2010: "hey give us money guys or we will ignore you myfriends" Finally, kind of: "guys we will ignore yourmerges no matter what now, but keep sending money by focusing onreselling our wonderful 70% margin services please or we may kickyou out of the business you helped us building"
If you want people believe you are a strong company with astrong product, you cannot afford to give the feeling you are goingwhere the wind is blowing.

Now, beyond any offshore headcount, we are all smallcompanies. Eventually building the next ERP is largely beyond usall; this is why open source community and even non profitfoundations are for.

2. Frustrations

I think 10 happy new SaaS customers are not worth a very angrypartner or customer who invested in OpenERP and got frustratedlater by how it went.
Here is a concrete fresh example of what I mean but you canfind such example every month or so:

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

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

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

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

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

3. Prostituted ecosystem

Of course, this is legitimate, you want to attract a few folksto 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 inthe communication, then you just predate the value of your productand your revenue network. That is you literally cannibalize yourmain revenue stream to try to grow your new barely profitableproduct line.

For instance you now say "create a free website withOpenERP". This is catchy, fine. But you know what, when a 20employees company invested (a lot) in a v6.1 or v7 project and seesthe current limitations of OpenERP, he really prefer to see aperspective how the 2000 open bugs will be solved, or the patcheshe used will be merged, or the pain he had to move from 6 -> 7is going to be less in the future.
So when such a customer, o potential customer sees insteadthat OpenERP frontpage is about building "free website",even if he is wrong (the WMS refactor is fantastic), he cannotavoid thinking "these guys should be kiddingman...".

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

So I mean, "professionals" think OpenERP is maturefor everything because the message is that "anybody can manageany company on your SaaS". If it's so mature and totallyfree to download the same, they will offer the same cheaper andnothing will be left to fix the 2000 open bugs and other currentlimitations or even just give you any sustainable revenue.

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

And there is almost nothing to win for OpenERP SA with thesejoe coder guys you know. If you take a few other open sourcesoftware that don't build a catchy marketing, say Asterisk,PostgreSQL, SolR, whatever, well unskilled joe coders just stayaway from it as they get it's not for them. Then noprostitution, a healthy eco-system develops at its own pace.

Here in Brazil specifically, we struggled to grow in number ofemployees compared to Akretion France. Main reason is the low levelof education here (only 3% of guys over 30 went to university andnot always very good ones). And because large companies likepetroleum or banking still make a lot of money, then the verylittle elite can easily earn 3x (seriously) what they can earnworking with IT for SMB's or they even just go outside ofBrazil for the most skilled guys.

So okay, for once, this is 500 years non protestant colonizeddeveloping country economics (please don't rebel you folks andkeep sending us the primary products at banana cost). But also, wecertainly could never charge the price it really cost here exactlybecause otherwise the mostly IT unlearned SMB's would thinkthere is an alternative of doing it with X specially when X justsent you a check to be partner and you just rewarded them with achocolate medal of being official partners.

This is an irrational market like believing Santa Clausexists.

But you OpenERP SA, as an editor, you can CHOOSE to eithereducate that market like for instance I did with the ERP whitepaperat Smile in 2008 (Smile in general has been really good ateducating the open source market in France, at least in the2000ties).
Or instead you can act in such a way that cultivates theignorance.
But this has a direct cost for you OpenERP SA. So forinstance, from the 15 partnerships you solds here, there is only 3guys left and may be some are yet to leave. And these partnershipsyou sold quickly never turned into a sustainable revenue stream aswith the European partners who developed before some accountmanager policy would prostitute the market into something notsustainable.

So among these 15 partners, as we "trained" them, Iwould say half where nowhere close to be able to integrate OpenERPhere, or were unwilling to do the effort (we have been penetratingthis 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 woulddo it). That is these are guys that were attracted by the catchymarketing but who will potentially join the frustrated folks.
As for the other half, they eventually had the required skillsto start but choose to stop partnership and in most of the casethey also just stopped working with OpenERP.
In this later case, I think that this is because they ended upthinking it wasn't worth the effort. Or that is, the overallprostituted market made of flow the fresh unaware guys kept themaway from being part of the eco-system.

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

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

Well, first, this is pretty normal in the copyleft open sourcesoftware that only a very tiny fraction of the folks pay yousomething. This has been true with MySQL, with Redhat (hereeverybody uses CentOS free), with Java EE, with manythings...
You have to live with it and properly design your businessmodel so that it fits this reality. While time changed, Redhat forinstance did well with it. There are also companies who are verysuccessful economically while still producing free software that isabsolutely free and use by a tremendous amount of people, 37signals for instance.

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

If I review services Akretion us to buy, like Amazonweb-services, I believe none of these services are products with a70% gross margin, or we usually find alternatives.

Remember open source is not about concentrating investment tobuild hypothetical monopolies, it's instead about a free opencompetition of new ways to build software at a fraction of the costof the legacy proprietary industry which cannot let informationflows freely because it's so embarrassed by IP protection andlegal bureaucracy. That is open source is about cutting costs bymaking the right synergies between other ope source components (sayinstead of NIH) and keeping reasonable margins that make happyconsumers.

So for instance I claim you could build an integrated CMS ande-commerce with 80% of the features at a fraction of the cost, notembarrassed by the AGPL if you used the right existing buildingblocks. That is I say, "watch out the attractiveness of yourproducts", but I'm consistent with that lower revenuestream because I also say "you could do thatcheaper".

But mostly, I want OpenERP SA to understand that this is nottrue that so many people are "cheating" your product likemy Account Manager seems to believe.

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

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

But you know what? These guys mostly have an usage of OpenERPthat is so limited (at least here in Brazil for instance), that ifyou asked to charge anything, they would just drop OpenERP andsimply 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 theseguys are part of the short term potential market and if you overscale your marketing to that hypothesis.
Instead, you should acknowledge this reality and live with itIMHO.

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

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

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

I would fear you would slowly climb that "long slow saasramp of death" constantly throwing money into the fire bybuilding superficial "wow features" to try to acquire newSaaS customers that would soon move away all the more easily thatthis is free software, always running after your EBITDA figures tokeep the show on:

And I could imagine that at the end that ramp, shareholderswould of course have the final temptation to forget the initialagreements with the community (the non financial shareholders ofyour 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 Ihope you will keep doing good. Now, I wonder though, if everythingis going so right the way it is, why would you suddenly opt formaking these marketing expenses you are talking about in yourpad?

In any case, I advise you consider my points when doingmarketing: this is no simple product, avoid catchy marketing fordummies and properly channel all your communication to the righttarget.

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

Raphaël Valyi
Founder and consultant
+55 21 25162954

On Sat, Feb 15, 2014 at 11:03 AM, FabienPinckaers <fp@xxxxxxxxxxx> wrote:
Dear community,

Over the past years, we did not invest a lot in marketing. We putmost
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 inmarketing
activities. I just wrote a "very draft" internal documentto discuss the
brand positioning of OpenERP:

I would like to have your point of view on these marketing thoughtsfor


Fabien Pinckaers
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