Entrepreneur chronicles: Snapbill
The idea for many a start-up has often been born out of the need to resolve an everyday problem. Two entrepreneurs needed a flexible and user-friendly billing system for their business and simply couldn’t find one. So they built one instead. Online billing platform, Snapbill, is one of those ideas where frustration evolved into inspiration. By STYLI CHARALAMBOUS.
When partners Jaco van Wyk and Josh Yudaken needed a system to process the recurring billing of their few hundred web-hosting clients at Lusion Technologies, the frustration of not being able to find a simple and cost-effective solution eventually led them to down the path of building their own. And with invoicing and sales being the lifeblood of any business, the two were surprised by the lack of the service offerings available not only to SMEs, but larger businesses as well.
After extensive research, the pair found a few systems that could perform parts of the sales process, but never an end-to-end system that allowed businesses to invoice customers with a multitude of easy payment methods to settle those bills. And even those that partly did the job were usually part of a complex accounting package that required a black-magic wand to operate. Others required an intricate integration via an API that would scare the bejesus out of most business owners. So the two set about building Snapbill that would firstly service their needs at Lusion and then extend the platform to be able to invoice in any currency and accommodate any type of tax.
Van Wyk is philosophical about how Snapbill came about. “In a way, we were lucky that Lusion had these billing issues with our client base because it allowed us to build the solution in an environment that had a real need for it, and we could gauge the feedback and requirements of a real set of customers. It also meant we could refine the product within Lusion before unleashing it into the market as an already well-developed product,” says Van Wyk. Having founded Lusion way back in 2002, the duo was aware of the problems businesses like theirs were facing when it came to billing and collections.
The first part of the solution was to build an invoicing system that didn’t require an accountant to set-up, a task two computer-engineering graduates could appreciate and relate to. The set-up process for new Snapbill users is quite intuitive with a graphical set-up process that any non-beancounting business owner can manage. “But that was just half of the problem” says Van Wyk. “We needed as many payment methods as possible to make it easy for clients to pay their bills, so we set about adding eight different payment gateways that allow everything from credit card settlement to debit orders and even Ukash vouchers.” Snapbill customers need to have accounts set-up with the payment gateways first to integrate with Snapbill billing.
Snapbill was officially launched in beta in 2009 to the local SA market. After adding more payment gateways and additional features, Snapbill ran without the beta label from March 2011, to much success and now boasts a growing number of SMEs and even larger corporations who are turning to the start-up for a system that is both easy and accommodates such a wide range of collection mechanisms.
First-time users can try the system free of charge, although limited to five clients and 15 invoices a month, with the Start-up and Premium plans up to Enterprise accommodating the larger-volume users. There is a monthly fee to access the platform, depending on the number of clients billed, and a transaction fee that depends on how customers pay their bills.
Because so much of the initial development was done within Lusion, Snapbill has never needed outside funding and didn’t take long to achieve break-even point. “Once we had a product we could take to market, the running costs of the business were mostly the cost of our time to add new features and marketing the business. So it’s something we could control in line with how many new customers were coming on board and we never needed to chase venture capital funding. We’re fortunate enough to have landed some really big insurance brokerages since then that run collections on more than 50,000 clients in a single batch.”
After a year of gauging interest in South Africa, in which more than a 1,000 local businesses signed-up to use Snapbill, the co-founders felt it was time to take on the international stage and unveiled the global beta version in January 2011.
Of the few end-to-end systems they found when researching the market, they noticed one common limiting factor. Geography. Those systems would only work in a specific currency and could only include certain taxes, so Van Wyk and Yudaken took the opportunity to build a platform that could literally work anywhere in the world. “Why limit ourselves to the South African market when the Internet allows us to service customers all over the world who share the same frustration. We built in the ability to bill in any currency and we use major international payment gateways like Paypal and Authorise.Net to facilitate collections.”
The majority of marketing efforts have been limited to Adwords and Facebook spend that has generated a lot of leads, but lacked the necessary quality to land the bigger billing clients. For that Van Wyk has to do the hard yards of new business development by calling on prospective clients and mining the customer base for referrals.
In the age of data privacy and piracy, the security of Snapbill clients customer data was a major concern for the founders. To keep billing information in the safest environment, billing platforms should be using Payment Card Industry (PCI) compliant servers. To ensure the safety of Snapbill customer data, the platform runs and stores billing information on the Amazon Web Service, using the same infrastructure that runs the world’s largest online retailer.
World domination is the goal of the dynamic Snapbill founders, who want to emulate the success of the online accounting service, Freshbooks that currently caters to more than 2-million businesses worldwide. Plans are also afoot to introduce SMS billing options, specifically for the African market, where cellphone penetration far outstrips computers and cash has ruled the roost as the preferred method of payment. There is certainly no intention to stop innovating and evolving. DM
Photo: Snapbill's prices and packaging. SNAPBILL.