VC Funding will be the deathbed of SaaS

...if this madness continues!  Sometimes as a leader of a small to medium business it feels really good to have made decision in the past that are subsequently proven to have been right.  In recent breaking news (September 2017) it was announced that Turn/River (Venture Capital) were now the new owners of Huddle.

Original Computer Weekly ArticleComputer Weekly published an article titled "Huddle Tight Lipped over what new ownership means for public sector customers".  Reading the article made me feel good, because it vindicated decisions we made in Trivaeos' past.  I joined Trivaeo sometime in mid-2012.  In doing so I agreed a fundamental business funding strategy with Pat Graham, our Founder and Majority Shareholder.  We both agreed that I would be responsible for enacting and delivering against a business focused totally on sustainable growth. We would use our organic profits to drive growth by investing our profits into improving our technology and growing our customer base carefully.

We both pushed for this strategy simply because our experience showed that Venture Capital organisations and the Banks behind them are 'greedy' and rarely bring out the best in the organisations that they have an active interest in.  They focus on the 'return on the investment' not the cost of the return upon that investment. We found their behaviour abhorrent at best.  We didn't want to sell off our 'Family Silverware' to a bunch of cash focused sharks that didn't share in our vision or values.  Our vision has always been to provide CRM and ERP genre solutions to the worlds' small and medium business communities that they can actually afford whilst making a big difference to them, making them more efficient and effective.  We wanted to, and still do, build solutions that don't require armies of engineers or consultants to deploy.  We deliver solutions that have a time to value measured in days; not 18 months because our solution requires no planning, no architectural analysis, no 18 month deployment cycle.  Our clients sign up, train, configure and start adding users in hours or days; not months or years.  So, yes, we deliver applications and solutions across Trivaeocloud and CloudWorksIT that match the REAL needs of our clients.  Funnily enough, we actually do listen to our clients.

In short - Trivaeo was and still is committed to actually helping businesses and the people behind them with products, software and services that actually remain for the long haul.

Our strategy was sometimes a struggle to maintain, especially when we saw companies like Huddle flaunting 10's of Millions of Dollars, like some sort of "Harry Enfield" - 'loadsamoney' yuppies! (Original Harry Enfield)

We found ourselves actually having to defend our strategy to our wives "Why we are not jumping on the funding bandwagon".  People often asked us why we weren't "Paying to Play" by bidding on Google or other prime search engines.  Given that the cost of acquiring even a speculative potential customer sign up from Google can be so high we simply couldn't see the benefits in spending many hundreds of dollars to acquire a client where there lifetime value would be less than the amount spent to acquire them in the first place!

Today, Trivaeo continues to grow at a sustainable rate by servicing clients that are delivered to us by our highly committed network of Partners. Partners that add value during the sales and marketing process. Rather than feed a greedy VC with $60 million, we are creating 60 Millionaires that own their own business and will continue to support Trivaeo as we take our unfair share of this $23+ Billion dollar a year market.

Like the boom that went to bust for 99% of the businesses, the next bust is going to come from the companies that grow artificially by “buying business” instead of earning the right through the creation of quality content and the building of communities. These companies consider themselves to be beyond accounting practices that have proven to be true since the invention of money.

Not sure what the future has in store for Huddle. Perhaps the bankers can throw more money and save it? But I do know that the original founders will get exactly what they deserve for picking the easy route. Huddle in particular is nice technology, but it is clear that the lifetime value of the clients was not as high as the acquisition cost.  How many Millions did they waste?  They ended up with a bloated organisation with costs to run in excess of the revenue stream.  How bad is that?

Trivaeo will continue on its own unfashionable course and will eventually be seen as the best suite of business applications a small business can buy. Yes, I know it sounds ridiculous, but we aim to deliver meaningful and future proofed solutions to business problems in exchange for payments that any business can afford. Its the “Fair exchange principle” that seems to have been long forgotten in this age of growth without profits.

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