In the year aheadby Sebastien Mirolo on Sat, 23 Jan 2016
Jan 1st 2016, we survived. Bigger fishes didn't make it. Two customers are going live with their product next week. Three deals were signed. The quota for January was met. Time to look at what lies ahead.
The boutique entrepreneur
Most of early DjaoDjin customers are first generation immigrants, second-time entrepreneurs. They are on average in their 40s, worked at a large corporation in a highly-regulated industry (real-estate, health-care, energy) and are looking toward a path to independence. The boutique service businesses they create on the DjaoDjin platform often implement compliance regulations in what many technology startups would consider esoteric niche markets.
These entrepreneurs are often not technical at all. They and people they sell to follow the tech scene like a reality show on TV. Most do not have a twitter account, few heard about Pinrest, Reddit or GitHub. Those entrepreneurs, though, have life long connections with everyone that matters in their niche market. Connecting with the DjaoDjin Team is the spark that turns their dream into reality. We are proud of the responsibility.
We provide some technical support to these entrepreneurs yet the bulk of our support to them is about managing the development of a software product, understanding cash flow in a subscription business, backlog accounting and pricing strategies.
As a result, DjaoDjin moved into an investor role more than a platform provider for many of these boutique businesses, signing revenue sharing agreements or taking equity when appropriate.
The web front-end developer
If that fits your profile, please shoot us an email. We are looking forward to give early access to new features to selected UX designers.
Why does this product exists?
djaodjin.com was built for all people looking towards financial independence through an online subscription business.
The World has moved into a knowledge economy. The war for talent is raging through technology startups. Software developers are rare. People with the skills to build and keep services up on the Internet 24/7 are even rarer.
The trend towards Software-as-a-Service products and marketplaces is effectively a direct result of the shortage of talented developers. Organizations across the world use IaaS (Infrastructure-as-a-Service) providers like AWS to leverage network, system and operational engineers they could not have access to otherwise. All the way up organizations use SaaS (Software-as-a-Service) providers to leverage business logic developers.
Uber and other on-demand startups have shown millions of non-technical people a path to financial independence through a flexible life-style, yet those same disruptive companies have taken a hard line "on-premise full-time employees" when it comes to manage their own technical talents. On the other hand, the most talented software developers are strong free spirits. Independence is a push that lead many of the best to become contractors and consultants.
DjaoDjin thesis is that most online boutique businesses only require a part-time CTO, someone to make sure the lights are on and add a feature here and there (as cash-flow permits).
Thus djaodjin.com is platform for DIY (Do-It-Yourself) membership sites.
Skills and proficiency
The DjaoDjin platform enables three set of users to cooperate and run an online subscription business.
- The boutique entrepreneur
- The UX designer
- The server backend developer
Boutique entrepreneurs have a lot of solutions at their disposal to build a website (ex: Wordpress, Wix, etc.). Those solutions support monetization very poorly. Adding a Paypal button is possible, though soon e-commerce entrepreneurs will gravitate to solutions like Shopify. Entrepreneurs looking to monetize an online service as a subscription often describe DjaoDjin in those terms.
Even though it is possible to build a paid-for membership blog or manage a rental real-estate property with no code on DjaoDjin, Software-as-a-Service products implement quite a bit of business logic. With the DjaoDjin web proxy, a HTTP firewall that implements authentication and payments, server backend developers can focus on coding their micro-service application, then with a DNS redirect and a few high-level subscriber-based rules, transform that micro-service application into a full-blown Software-as-a-Service, all in a few minutes.
Discounts are a make-or-break feature and these features were implemented early on. Next security is important. The best security framework is one where access rules are easy to explain and understand. We had implemented four roles:
- anonymous visitors can visit public pages.
- subscribers use the product they are subscribed to.
- contributors have read-only access to back-office business logic (list of subscribers, revenues, etc.).
- managers can modify back-office logic (create pricing plans, add discounts, etc.).
It seemed a fair balance between complexity and flexiblity. To our surprise, the biggest pressure from customers was the ability to create their own set of roles. Many customers wanted to give specific access to customer representatives, business partners, etc. It lead to a significant changes inside the models and code base of the open source djaodjin-saas.
Internationalization, Taxes and StripeConnect
Even though we focused first on a solution to the US market, it didn't take long for Canadian customers to find us. An online product is global from the day it is goes live. That is not without headache when you help people make money as opposed to just collecting theirs.
Fortunately we can rely on Stripe to do all the heavy lifting of charging credit cards and moving money around in a way compliant with US and local laws. None-the-less there were extensive changes we had to make to the platform as a result of the legal and technical framework of dealing with international customers.
We relied on the Stripe Recipient API which is now deprecated. Strike One. Recipients had to be in the US. Strike two. The money accumulated into the platform Stripe Account. Even though the cash never touched DjaoDjin bank account, technically it was available, so we ended up having to send 1099-MISC and/or 1099-K to the customers. Strike Three. Out.
StripeConnect is a better workflow. With it Stripe has a direct connection with the customer (Stand-Alone Accounts), or a direct connection to the customer on your behalf ( Having your customers accept the Stripe terms of services is required for Managed Accounts). Your platform is then only routing payment from a subscriber to a provider, never having access to the money. This is key. Stripe takes care of the international currency transfer and tax reporting requirements of connected accounts.
After much thought and experiment with the StripeConnect API, we decided to use Stand-Alone Accounts, rework the user interface to replace references to banks (routing and account numbers) by references to deposit accounts, prominently displaying Stripe logo and StripeConnect buttons wherever necessary.
We work first and foremost with independent contractors whenever legally allowed. In that respect, it does help that the team is distributed internationally.
A distributed team is a key feature we insist on. Gathering for social activities is awesome but co-locating with other team members for work is discouraged. This is an important feature of our culture. It avoids the gravity pull of an office and insures that all communications are done through public and private knowledge repositories. Our peculiar organization has challenges but allows us to recruit all sorts of people all over the World looking for a flexible balance between time and income.
Anyone joining the DjaoDjin Team has either run their own business or are looking forward to start one. This is important. First the level of autonomy given in a highly distributed organization requires self-starters, people with a drive. Second DjaoDjin thrives when its customers do. You just understand and can help customers better when you walked in their shoes.
To further educate people joining the team on the challenges customers face, DjaoDjin pays for services in advance as a retainer. It is up to each team member to report their hours every week and manage their own backlog accounting ledger.
If that fits your profile, please shoot us an email. We are always hiring.
More to read
If you are looking for more posts about what it is like to build subscription products, you might enjoy How to bring your own service online, Open Source: Marketing and Recruiting and Back to school: lessons learned this summer