Dan Lee, Beetil

December 14, 2011

This is the next post in the Founder Centric Startups series.

Dan Lee (@youdodan) is the founder and CEO of YouDo, a software services business based in Wellington. They are the development company behind many successful websites, including Powershop and NZ On Screen.

But, today I’ve asked him to tell us a bit more about their spin-off startup, called Beetil:

What’s the purpose of your company?

Our purpose is to build the world’s easiest service management system, to help small to medium IT companies manage their technology more effectively.

What does your company do?

Beetil is a software-as-a-service based service management tool that helps small to medium (and the odd large) IT organisation manage the services they provide to their customers more effectively.

What is the business model?

Nice and simple. We charge on a per user per month basis. The service management tool market is very large, and pretty crowded, but our relentless focus on “making things easier” for the user means we have carved out a nice little niche.

How do potential customers learn about you?

We rely on word of mouth, some good Google juice, and a healthy sprinkling of Adwords. I’ll be honest though, we’ve done bugger all marketing really. But that’s changing.

How many customers do you have?

We have over 80 companies around the world using our product. Approximately a third are based in North America, a third in the EU, and the other third in NZ and Australia.

Who are the people working with you on this?

Beetil keeps three people employed full time, but often draws upon the skills and expertise from YouDo, which is our specialist Ruby on Rails development shop.

How did the business get started?

It all started with the frustration of not being able to find a service management tool that was suited to small to medium companies. Having been a CIO and IT manager in my previous lives, I’d never come across any service management tool that I thought suited an SME. The cheap ones were just too simple and amateurish. The expensive ones did everything including making you a cup of tea, but came with hefty price tags. All of them were ugly, unusable, and made peoples’ lives a misery. Sensing an opportunity, we researched the market a little more and confirmed our suspicions. There were lots of other SMEs who agreed with us, and none could offer up a solution that suited them. YouDo was going great guns at the time, and we always wanted to move into product. And so Beetil was born.

How have you funded your growth so far?

We’re the classic bootstrappers. We’ve funded the development of Beetil through the profits we’ve made from YouDo. Not a single drop of investment from outside. It’s worked well but, particularly in the early days, it was pretty hard juggling the priorities of product development vs services you had to deliver to bring in the dollars. Now that we have a good customer base and some good steady income it’s far less of an issue. That said, as CEO of YouDo and CEO of Beetil, I know that one day soon I won’t be able to do both justice.

What are the mistakes you’ve made?

We’ve made plenty of them, that’s for sure. When you’re building product, it’s easy to get carried away with all of the sexy stuff, and take your eyes away from the more (seemingly) mundane tasks such as finance and planning. Set yourself up as a company from the outset, and even if you’re bootstrapping the business, run it like you’re running a proper company and treat the bootstrapped cash as “funding”. It sounds so obvious, but we didn’t do this, and there’s no doubt we wasted a good chunk of money as a result. Whilst product development is fun, you’re dealing with (often your own) money, so you need to be disciplined.

What are the biggest challenges you’ve faced so far?

Selling. We initially took the approach that if build a good enough product then the product would sell itself. There’s no doubt that this still makes a lot of sense, but you still have to get the right people coming to your front door, and you still need to help a lot of them “over the line”. It’s really important to know who your target market actually is. Beetil has been live for over two years now and it’s only in the last few months that we have really confirmed exactly who our target market is. We always had a “sense”, but it was still too wide - and we probably wasted a lot of cash going to the wrong conferences, or sales pitches to the “wrong customers”.

What’s your ambition for the company?

We’d love to see Beetil become one of the “de-facto” IT service management tools. Much like when you think of cloud based project management tools you think of Basecamp, we’d like people to think Beetil when talking cloud based service management tools. We’ve got a good steady growth rate and are already turning a small profit so have a stable base to build a profitable business in it’s own right. If we keep on going at the rate we are we’ll be doing very well thank you sir.

What advice do you have for other founders?

It’s all common sense really. Common. Sense. Everyone’s read the books, people will offer you plenty of (the same) advice, but it boils down to the fact that you are building a business here, not just a product. If you’re a geek like me, you’ll find that hard. We’ve found that having an independent voice we can trust has been a massive help. And it stops us from sticking heads too far up our own backsides.

I think the other piece of advice I’d have is to stick it out when the times get tough. You’ll experience a roller coaster of emotions with your new baby, but when the times get tough you need to get tough yourself and stick it out. It’s really sad to see the number of potentially promising ventures just pack up and go home at the first sign of trouble. A good dose of common sense and good bit of planning (see first point of advice!) should see you through. I subscribe to the “fail early, fail often” mantra - I’m just saying that life ain’t always a bed of roses. So harden up.

Other guest posts in this series: