by Patricia Ames
Workflow magazine attended Tigerpaw Software’s 2015 Partner Conference in late October, where we had the opportunity to interview the wonderfully unpretentious CEO, James Foxall. At the event, Tigerpaw announced the launch of its new all-inclusive Software-as-a Service (SaaS) product, Tigerpaw One, a rethinking of the their established Professional Services Automation (PSA) tool. We delved a little deeper and discussed Ouija boards, recurring revenue streams and Foxall’s big gamble. Join me in the SpeakEasy.
How many years have you been holding your partner conference?
This is our fifth event in six years. It is growing every year. This is the biggest event we’ve ever done by about a third with nearly 500 attendees.
What are the main verticals that you cater to and who are your biggest competitors?
MSPs, telephony, IT VARs, point-of-sale, AV, security and surveillance. But the channels are converging.
Our biggest competitors in the managed services space would be ConnectWise and Autotask. ConnectWise is the biggest, Autotask is the second, we’re the third, and there really isn’t a fourth. There are a lot of companies that would like to climb up and offer a full PSA solution, but I think the PSA space has matured to a point where it is going to be difficult for somebody new to break in. The depth of the established PSA products and number of clients we have are quite big at this point.
What do you see as some of the biggest challenges coming in the next few years?
Convergence and education. I think the challenge is to help our clients have related, supportable, but multiple lines of business. If they’re not already operating a recurring revenue model on their service side we need to help them get to that recurring revenue model and help them be efficient.
There is a lot of talk about the MSP industry becoming commoditized. I don’t think being a small, pure MSP is necessarily the right kind of business model — it doesn’t scale well. That type of model won’t protect you from commoditization or new competitors entering the field. In my keynote I talked about the different threats entering the market from everywhere. You need to take care of the network. If your client wants a phone or security system, you need to offer it or partner with someone who does, or the vendor that does sell those products to your client is in the door. In this era of convergence, they are probably offering data services as well and will try and push you out.
We also need to offer lots of training, including training that is not product-related. For example, being a successful MSP is not just about billing for all of your recurring revenue. We’ve got great tools for that. Companies need to learn how to sell managed services. That’s the challenge. We think it’s very important as a partner to not just provide training on a product; if you look at the curriculum at this event, we have sessions on how to add a line of business, how to sell, and how to manage your sales pipeline. I believe that the evolution is not just how to swing that hammer, but how to build that birdhouse with it. The challenge for us is not just education on our tools, but business education in general, and really being that partner to help guide our clients as they grow their business.
What went into the decision to change your product offering to an all-encompassing SaaS model?
We used to sell Tigerpaw by modules. We have four modules — there’s a sales module, a service module, an inventory module, and there’s a quoting module. Then there were all of the add-ins on top of that, and the mobile applications. To price it for a client, we would need to know how many people in each department would have access to which modules. I compared it in my keynote to getting out the Ouija board and an org chart. It became a numbers game, which is not productive. It lengthens the sales cycle and confuses the buyer. It’s a bad thing.
Now, with Tigerpaw One it is simple — what’s in it? Everything. What else do I have to pay for? Nothing. How much is it? You don’t have to buy it — it’s a SaaS product, so it is a rental model and you don’t have to make a capital expense. You don’t have to think about a lease. You can literally slide right on into it with monthly payments. It’s a great proposition for new clients.
Certainly from a pure cash perspective, moving to a SaaS model changes our revenue stream; it’s a big investment. Instead of getting a large sum up front for an initial software purchase, we’ll be receiving a few hundred dollars a month, so we’re very mindful of that.
It seems like it would simplify the sales and implementation process as well.
When people have full access to the entire Tigerpaw suite, it changes the dialog we have with our clients and their implementation. We no longer have to start the conversation with “well let’s see, what did you buy? Let’s talk about how you implement that.” Now we can look at their specific business case and give them the proper order that they should do the implementation without being limited by what they might or might not have purchased.
Part of Tigerpaw One’s purpose is to make sure our customers have all the tools they need to be successful. We think that over time, that’s really going to change the educational process. We can now formalize and standardize more than we have today. If we know the customers all now have the email connector, then that can become part of the standard implementation process.
It’s a holistic approach. The first step being, you get everything. Then we move into training resources, and how Tigerpaw can guide the user through the implementation process. It makes it possible for us to come at it from a lot of different angles. I don’t have a magic bullet to increase utilization rates, of course — I’d love to have one.
Do you feel like there’s this big clock ticking in the background? That you must push as fast as you can to get users ramped up?
There is absolutely a clock when it comes to the initial implementation. Once a client makes an investment in Tigerpaw, we feel a huge amount of pressure to get them to what we would call “basic implementation.” It’s common knowledge that most users don’t run most of the capabilities available in any PSA. That begs the question of what to implement. It’s a tough question. We try to define it right up front in the sales process. We talk specifically about the level we can get the user to in 30, 60, 90 days — dependent upon them showing up, following the rules, taking our phone calls, and doing what they need to do. Statistics show that if we don’t get you up to a point where you’re functional in six months, there’s a good chance we’re going to lose you. Unbelievably, I’ve had people that are willing to pay for years when they don’t use the product, but that’s not what we want. We want our clients successfully implemented, and running successful businesses.
That’s part of why we’re so excited about Tigerpaw One. We can continue to build upon that 30-60-90-day framework. Now when we call our clients, it is not to sell them something, but instead to help them. They’ve already bought into the product. Our job now is to help them become more successful by showing them how to utilize the full power of what they have. It’s a very good win-win when our clients are up and running and functional.
How “sticky” are you? I assume that once you have someone on-boarded and functional after six months that it makes it more difficult to leave.
Absolutely, and we track that carefully. We have a surprisingly high customer retention rate. It’s very difficult to compete with a PSA. The RMMs have become commoditized to an extent over the years, but the PSA is very sticky as long as you have them using it.
A PSA provides a lot of value, but it does change a company’s processes. Once employees are trained on the tool, it’s touching many different applications and all of the departments. If a customer decides to change vendors, all of those processes end up being changed too. New tools need to be purchased and employees need to be retrained. So a PSA is very sticky if done right, and that’s why we’re so motivated to make sure people are successful with it. We have some clients that have been with us for more than 25 years.
I’d imagine the next challenge for your team is to get the users and their executives and any new interested people to understand what you’re doing, and embrace it.
For new clients, it’s going to be great. It’s actually far simpler. But we recognize our existing clients have made an investment, so we’re going to give them an opportunity to go to Tigerpaw One if desired. We want to make it painless. This isn’t a money grab from our existing client base, but it is the right way to sell Tigerpaw going forward. I like the prospect of being able to look my clients in the eyes and say “anything we build you’re going to get.” We believe that this new model is going to make it easier for people to transition from other PSA products as well, because clients aren’t burdened with a big capital expense anymore. They are already used to paying a monthly fee to somebody else. Now they don’t have to factor in the initial purchase of new software when calculating the cost of transition — they can just pay a better vendor and get everything. I think that’s a compelling story.
What are you investing the most in, in the next couple of years?
A lot of whiskey. Oh — that’s just the immediate future, sorry.
It sounds like you’re going to need it after the announcement that you’re going to give Tigerpaw One for free for the year to all conference attendees.
Tigerpaw One helps fulfill our promise of total business automation. We’ve invested a tremendous amount of resources into building it and we’re very proud of it. We recognize, however, that the majority of people that stand to benefit the most from our launch of Tigerpaw One are new Tigerpaw users – our existing clients have already made an investment into Tigerpaw. It just made sense to us to reward the loyalty shown by our attendees by giving them a full year of Tigerpaw One free — no strings attached.
As if changing your entire sales model wasn’t enough, do you have other initiatives planned for the next year or so?
We’re investing in people. We’ve added staff and we’re still hiring. We still have a lot of open positions. That’s probably going to be one of our biggest points of investment. We have product development we’ve got to do. We also need to provide training for our clients. Our help desk is something we take pride in — providing support to all users at a client location, and we certainly don’t want to cut back; in fact, we want to increase these efforts. We want to do more and we want to do it better. A lot of our resources and training are going into helping our partners understand this converging market.
You’re going to see us spend more resources in our partnerships, and what we are doing with some of our RMM partners is an example of that. We are not just making the API for our partners, but are also providing guidance on the implementation of the integrations being built. We are doing joint marketing with them as well as joint education. Earlier this year I went on a UK roadshow with AVG in an effort to help educate MSPs on the value of an integrated solution. Having solid partnerships is critical to the success of our clients — and we’re investing in that.
We really want to build more product. We want to build more training resources. We want to help our partners, provide more support to our ecosystem, and we want to have the right people on staff to help us do all of that.
Are you running into any difficulties getting the talent that you need?
We have fairly high standards and a challenging application process; we’ve learned that’s a really good thing. We also have an unemployment rate of less than 3 percent in Omaha. So it is a bit of a challenge.
Give us three words that describe how you would like to be viewed by your employees.
That’s a great question. “Authentic” would probably be the first word, then “caring” and “dedicated.” I can’t say that’s what they think of me, but it’s the way I try to behave and live my life and would like to be thought of.
Now give us three words that describe Tigerpaw as a company. Can you separate yourself from your company?
Wow. They’re the same words.
When you said the words, it sounded like your vision for Tigerpaw.
That’s interesting. You just gave me a revelation — absolutely.
So look how intertwined the two of you are!
[Laughter] At least the alignment’s there. I’m glad I didn’t have a whole different set of core values.
This article originally appeared in the December 2015 issue of Workflow.