Solo and Start, Zoho Extends Solutions to Serve Every Business Stage

From gig worker to large enterprise…for software to operate your business, one size does not “fit all”. There are all sorts of reasons for that; scale, resources, reach, complexity and probably many other things I’m not thinking of right now. There are also many considerations in selecting a comprehensive business management solution. You have a set of requirements and needs that fit your current business, but depending on your growth plans, you may need something that scales to the next level / phase of your business and even beyond. None of that’s particularly surprising but it does bring up several questions.

According to the US Small Business Administration (SBA) in 2019 there were 50.7 million businesses in the small category, employing less than 500 people. Out of that though, 81% or ~41 million are solopreneurs. Solopreneurs don’t necessarily stay solo though, with many deciding to grow the business and add resources once they have a successful start. Entrepreneurs can start solo or with co-founders, but they have the clear intention of growing and scaling from the start. Small businesses have learned to use a digital first strategy and to leverage automation to increase productivity. According to Semrush they are 65% more likely to invest in technology. But the question is which technology? There are business systems built for freelancers, solopreneurs, small business startups, growth businesses (scaleups) and ranging up to large enterprise. Many of those products are built for one or two of these growth phases and are the only product set (or its type anyway) that the providers sells. In other words, they end (or start) as viable options as you scale the business.

Zoholics

The first week of May Zoho had its user conference at its US headquarters in Austin. They invited a number of analyst to attend an analyst program as well, and of course there were a number of interesting announcements. Hidden in those announcements is a set of new offerings currently in beta, designed to extend Zoho’s reach down to solopreneurs and also bridge the gap to startup creation and growth (and the rest of the Zoho solution portfolio). The proposition of engaging with a customer as they launch their solo business and providing a series of offerings to help them grow and scale along the way is a long view on gaining and retaining customers, something that is in character for Zoho.

To understand the potential impact on Zoho’s business it’s useful to put these new products and services in the context of the rest of the solution portfolio. Zoho has a very broad set of solutions for businesses of all sizes that are at different stages of maturity. A subset of them have evolved to a level that scales to enterprise size businesses while the whole portfolio is targeted at the mid-market, but easily scales down to smaller businesses. The most evolved, like Zoho Books (financials), for example, easily scale from small to large enterprise. This is typical for software businesses with a broad product portfolio. As new products are introduced they target small and mid businesses, then as the product matures it gains the features and stability to scale up market. Zoho uses the “land and expand” model for growth, again, not an uncommon approach. Because of the breadth of its product portfolio it can establish a beachhead with one or a few products and then, after proving the value, see the customer adopt an increasing number of the other solutions. One of the keys to continued growth then, is getting a business to use at least one product as an on-ramp to the rest of the portfolio. This is where the new programs resonate and create opportunities to gain the trust of the business as it starts, and provide support throughout the lifecycle of the business. In many ways this is similar to the education programs provided by vendors with products that require a deep skill set to use like CAD software. The vendors, like Autodesk and PTC, provide the curriculum for learning high skill based technology starting in high school or even elementary school, creating a population of trained and skilled experts ready to use the products. Having available skilled employees drives demand for the software in the long term. For Zoho, this program has the same implications for starting with a solopreneur and providing value from the start with simple business management tools that ease the business into the Zoho community. Taking a deeper look at the two offerings will make this clearer.

Solo

The first of these solutions, Solo, is targeted at solopreneurs and freelancers (I suppose that’s obvious from the name). It is a solution “recipe” developed from a subset of existing features in the Zoho platform that scales down to provide a basic business operating set of tools primarily on a mobile device. The focus on the mobile experience is important as the majority of solopreneurs globally operate their business from a smartphone. This is particularly pronounced in developing economies where other compute devices are not as usable or available. Many of the developing world countries have jumped over traditional infrastructure for providing Internet access and invested in 5G technology first (necessity driven innovation). From a feature perspective Solo provides all the basics, meeting management, contact management, work management, collaboration / communication (email and chat), expense management and financial management (payments, invoicing, banking, etc.).

At this point, you’re probably saying that there are already companies that provide these types of solutions. Most (if not all) that I’ve seen though, are from a provider that only serves this market, so there’s no long term option to easily move to more scalable solutions as you grow. If you’ve ever migrated from one business software solution to another you know that migrating to a new solution is disruptive and can be expensive. You could choose not to move your data, move it manually, or if you’re lucky an existing integration, but each of those solutions have consequences that could be avoided if the migration was simply from one app to another on the same platform.

Start

If Solo is phase one for a solopreneur then Start provides services that ease the transition from solo business to startup business. The service is presented as a business “formulation” service. If you’ve ever started a business, you know that there are several things that need to be sorted out, and if it is the first time you’ve gone through it, more than a little confusing. The following graphic shows the current services offered in the beta Start package as well as the complete evolutionary path for your business.

As you can see the “bridge” services are establishing LLC and getting US tax ID EIN, registering your business domain, business phone service (Zoho Voice) and an app to manage your business profile (a product called Zoho Publish). That bridges the business into the standard financials package Zoho Books, Zoho Email and building your website. On the roadmap is also setting up a bank account, a business credit card, a merchant account and managing your social presence. All of these activities need to be done to establish the business, and having them centralized can speed up the process and simplify getting everything done. One other product was announced in beta as a part of this series of solutions called Zoho Tables. Conceptually it is designed to help businesses move from a simple spreadsheet (which is often the way small businesses manage a range of business activities at first) to a full featured app. In addition, once established the startup has access to the entire Zoho portfolio including the Zoho One suite.

Zoho consistently develops programs, products and business practices aimed at taking a much longer view of their business and this is no exception. Moving the “start line” back to the very beginning of a solopreneurs journey provides an essential and foundational business operating system that can scale with the business. A business that starts with a set of solutions that can scale with it, could very well add many businesses to the Zoho community for the long term.

<Note: Zoho is an Arion Research client>