e-Commerce: Complete. Configured. Connected.
Network Sales
The Other 99% Of Entrepreneurs by Guest Blogger, Sramana Mitra
Feb 9th
This week we are pleased to have Sramana Mitra join us as guest blogger. Sramana is a noted entrepreneur and a strategy consultant in Silicon Valley and is an author of several business books and a very active blogger as well. You can find out more information on Sramana at the end of this post. Of note, in 2010, Sramana started a program called “1 Million by I Million,” the goal of which is to help, through her virtual program, 1 million entrepreneurs achieve 1 Million or more in revenue – by the year 2020. At Plimus, we have a simple business philosophy; we make money only when our sellers make money. We think Sramana and her 1 Million program is a natural fit for our sellers, and we hope many of you will take advantage of what this program has to offer. So, without further delay – Sramana welcome.
Thank you Plimus for inviting me to blog to your followers today. I want to talk with you today about my recent piece Reengineering Capitalism where I highlighted a phenomenon that the global entrepreneurship ecosystem is paying very little attention to: Over 99% of entrepreneurs who seek funding get rejected. Yet, the entire world is focused on the 1% that is “fundable.”
The media, when pitched a startup story, is interested in who funded the venture. They seldom ask how much revenue the company has or if it is profitable. Incubators take pride in how exclusive they are and how many “deals” they “reject.” Angels and VCs, of course, discard most of their “deal flow.” And entrepreneurs? They seem to have confused the definition of entrepreneurship altogether. Entrepreneurship, they mistakenly believe, equals financing!
This is wrong.
There are numerous stories of successful businesses that have been built without a penny of outside financing. I want to share with you some wisdom from the heroes of the other 99%. They live in a world of entrepreneurs who enjoy their freedom and are not looking to sell their businesses or take them public. You could say these businesses are built-to-enjoy, as opposed to built-to-flip. Needless to say, outside financing, by definition, requires an “exit,” and for most businesses, that means a sale to a larger company.
But the entrepreneurs I will introduce you to today are not interested in selling their companies. They just want to continue doing what they are doing: building value.
Meet Girish Navani, CEO of eClinicalWorks, a super-successful healthcare IT company based in Boston. He has never taken any funding but has built a $100 million-plus business by delivering value to customers.
Girish says, “I don’t foresee leaving the company for at least 10 years. I would like to leave it a private company with no external investors and absolutely no thoughts whatsoever about Wall Street. I am having fun and take great pride in my freedom. There is no reason I would give that up. We are a cash flow positive company. We have recurring revenues and no debt. We have a large customer base that is growing exponentially.” [You can read Girish’s full story here.]
Meet Andrew Fox, CEO of ClubPlanet, a $30 million-plus nightclub ticketing services company that is also 100% founder-owned. Andrew loves nightlife and says, “The business is very successful and has a lot of room for growth. I think that we have a lot of suitors out there who mention really ridiculous numbers at times. This is such a great lifestyle business that I don’t know if I could ever sell it. All of my previous businesses I built to sell, but this time around you might find me right here in thirty years. I hope by then it is $300 million a year. Based on our growth trajectory, we are seeing really good signs of improvement. [You can read more of Andrew’s story here.]
Then there is the oft-cited Sridhar Vembu, who has turned all tables with Zoho, a $100 million-plus SaaS company that competes with Google, Microsoft, and Salesforce.com without a penny in outside capital.
I have had numerous conversations with Sridhar over the years, and each time he reinforces the same basic philosophy: “I want to build this without outside capital. I don’t want to sell the company.” [You can learn more about Sridhar’s methods here.]
Each of these entrepreneurs could raise money in a nanosecond given how much success they’ve had. The fact that they don’t gives you an idea about the advantages of the self-financed, organic growth model. No matter how much Wall Street gyrates, these entrepreneurs experience and demonstrate a level of stability and steadiness that is exemplary.
Imagine if the American economy had many more such steady private companies that are far removed from the movements of the speculative markets, how much more robust things would be? It really is time that the media starts celebrating more of these kinds of heroes: the other 99%.
And for young entrepreneurs, as you evaluate role models to emulate, perhaps it is not a bad idea to also consider some of these lesser-known heroes. They can give you a picture of the realities of an alternate, deeply satisfying universe.
In conclusion, I want to leave you with a 1:49 minute video message. Please listen to it, and stop for a moment to think about your path forward. Is a single-minded focus on fund-raising your only option?
Plimus Program Promotes Quality of Online Vendors
Jan 30th
Plimus has expanded its quality assurance measures with an expanded program designed to increase the levels of transparency and accountability of vendors using the Plimus e-Commerce platform. This program carefully analyzes the business practices and market offerings of digital products and online marketing vendors.
In the press release, our CEO, Hagai Tal, said, “Payment processing is really just a long line of trust: each player in the chain must trust those both up- and downstream in order to agree to complete a transaction. As a leader in the industry, we are continually seeking to firm up our processes to ensure with 100 percent confidence that consumers are being handled properly, and that there’s nothing misleading going on at any stage of the game. This program is necessary for the long-term health and stability of the whole industry and for the continued success of the many excellent vendors selling their products through Plimus.”
Our quality assurance program reviews vendors’ business practices and transaction histories to ensure that the products and services sold through the Plimus platform meet strict business and industry standards. Accounts are selected in cooperation with Plimus partner card association underwriters and payment processors, and we work to complete the reviews within 30 days.
For more than a decade, Plimus built a strong industry reputation based on our leadership of the virtual payments industry. The integrity of the industry requires that vendors, affiliates and payment platforms alike focus on the quality of the products sold online. Plimus’ ongoing quality programs meet these needs and set new standards for quality in the industry.
Great Hill Partners Acquires Plimus for $115M USD .
Aug 8th
Today is a big day for the Plimus team! We proudly announce that Great Hill Partners has acquired Plimus for $115 million dollars. Great Hill purchased 100 percent of the company from a shareholder group including Susquehanna Growth Equity LLC, Plimus founders, key management members and employees.
Through continued growth in our seller base, Plimus has experienced equally strong growth in transactions, revenue and profit. Following the close of the deal, the current senior management team and employees led by CEO Hagai Tal will work with Great Hill Partners to continue carrying out Plimus’ long-term business plan.
As quoted in our press release, Hagai Tal says, “With our solid existing customer base and favorable market trends, we are fortunate to work with Great Hill Partners to expand our ability to capture the opportunities ahead. Our Plimus teams in the U.S. and Israel will continue to focus on our clients’ successful monetization in an increasingly global, complex and expanding online and mobile world. Our vision of e-Commerce 3.0 and frictionless e-Commerce will fuel these solutions.”
To learn more about this announcement, click here to review the entire release.
Team Up To Grow Your Business
May 19th
You’ve got to hand it to the computer hardware manufacturers: they know a thing or two about wringing every last penny out of each sale. Go configure a laptop at Dell or HP, and you’ll find more options than you can shake a stick at. Most importantly, you’ll notice that lots of those options are not, in fact, manufactured, or even conceived of, by the equipment manufacturer.
For many online software sellers, the primary limitation on sales is the finite size of the product catalog: once a customer has bought everything you make, you run into a wall.
But think bigger: how about if you could expand that product catalog without dropping another penny on R&D? That’s what a lot of vendors are starting to move to, and it’s working very nicely, indeed. Here’s how to get in the game.
First, find a complementary vendor right here in the Plimus Community, or through your own contacts. Agree a fair commission rate for you to resell their product – 30% or so seems to be a figure most organizations can live with. Now, every time a customer buys from you, offer them the opportunity to also buy your partner’s product.
Most companies who shy away from this are quite reasonably concerned about the impact on their own sales process: what if the customer sees too many come-ons as offensive, as abandons their purchase?
You can offset this by
- Offering the upsell in your Thank You page, so that you ensure you close the deal before upselling; and
- Placing the ad for your partner’s product in a follow-up email. The attach rate will likely be lower, but it’s a great way to get into the game without taking a new risk in the checkout process.
It is very easy to execute these sorts of campaigns inside the Plimus E-Business Platform, and you have no reason not to do so – that it, unless you don’t want to maximize your profits and grow your business.
Simon Jones
VP of Strategic Solutions
Photo credit: http://www.flickr.com/photos/oakleyoriginals/2786948178/
Extend Your Game’s Life Cycle
May 12th
We all know the life cycle of a casual game in the marketplace: slow sales, followed by a huge (but short-lived) spike when you are ‘discovered’ by the gamer faithful, followed by a long tail of limited sales.
Once a consumer picks your game, the chances are they’re going to go looking for one ‘like it’ more quickly than you can push out a sequel – the laws of time/space make it impossible to keep up with the voracious appetites of the gaming consumer! So, unless you can start building games at a superhuman pace, you need to either find another way of filling your product portfolio or risk losing your relationship with your customer.
That’s ultimately why large distributors like Bigfish are able to keep building a market – the consumer returns to their site and finds more offerings. Sadly for the game developer, that can mean a deep dilution of your brand, and a complete loss of a direct business relationship.
But there’s a way to avoid this: cross-marketing. Team up with another developer or two to cross-market one another’s products from your own site, ensuring there’s more to consume each time the customer returns – and that they’ll be primed and ready for your next release.
Working together, you can reduce the time it takes to grow a new title’s popularity: simply cross-market it each time a current title is purchased. You can also maintain the volume on recent (but dipping) games, by returning the favor as new blockbusters take their place at the top of the charts.
Set up a standard business relationship, where you agree a commission for each sale of one another’s titles, and then let Plimus take on the effort of distributing revenues. This is found money for the most part – or at least money that would otherwise go to a distributor and can now be used to keep the quality of new games up.
Jason Kiwaluk
Sales Director, North America
Photo credit: http://www.flickr.com/photos/ilovemypit/2267178231/
New Network Sales Model Changes the Online Sales Game
May 5th
Traditionally, online sellers have fit into one of two models. Either they are a pure retailer, selling other companies’ products at a mark-up. Or they are a ‘factory outlet store’, selling their own products and services direct to consumers.
The second – the factory outlet stores – are leaving literally millions of dollars on the table.
Do the math. A merchant that has one product to sell, at $40 a pop and a goal of selling fifty thousand units next year has put an artificial cap of $2 million in revenue on their business. And once a buyer has put their trust in the merchant, there is nothing more to sell them – that business relationship is valueless.
To understand how much profit is being left on the table, first cast your mind back to the last time you reached the check-out at a grocery store. You’ll recall that the space around the check-out is densely packed with impulse-buy items: packs of gum, gift cards for iTunes, magazines and more. Each of these items represents a high-margin opportunity to add to your eventual bill. And that space is actually bought for the most part by the products’ manufacturers – because they know that once you have your wallet open, you’re highly likely to add another item to your basket.
Now imagine an online buyer purchasing your $40 software package. They would be more than happy to add an impulse-buy item, if you offered them one. Maybe a casual game at $9.95, a support package for $14.95, even a PC Accelerator for $20. If you could take a 30% to 40% revenue share on selling these items, your business’ revenue could increase by as much as 20% – without the need to invest in building new software.
And now imagine running a monthly newsletter to each of your buyers offering a ‘special deal’ on another partner’s product with another 40% revenue share on, let’s say, a $40 item. Assume you have a user base of fifty thousand, and a conversion ratio of just 1% – that would mean you could look forward to 500 sales per month, or six thousand per year at $16 revenue each. Combined with the promotions you offered in the purchase process, you’ve now increased your revenue potential by a full 25%.
The really good news is that you can do this right now, without any financial investment, by using the Plimus e-Business platform. With your own account in place to take care of the e-commerce for your own products, you can swiftly agree to re-sale deals with companies like Namco, Avanquest, Surf Secret and literally thousands more. And of course, you can seek partners who will re-sell your products on a revenue share basis, increasing your audience size.
Plimus merchants are seeing initial invoice sizes as much as 43% higher using Network Sales, increasing their revenues and helping them build a sustainable business for the future.
Simon Jones
VP of Strategic Solutions
Photo credit: http://www.flickr.com/photos/elvissa/823054325/
