SM3 Sometimes You’re Just Wrong

As I mentioned yesterday, over the next few days I will share some background behind what happened between the release of SM2 (this January) and SM3 which will come out in a few days. Please tune in to the webinar.

You need to know how we arrived here so you can be as successful as you possibly can be.

Much like SM1, SM2 was a work in progress. We put out a fantastic product at a fantastic price point and a business model that has made us an insane amount of money. You know how they say there is no such thing as a free lunch, right? Well, the reason Shockey Monkey is free is because it’s used by our partners who, once on Shockey Monkey, sell a lot of ExchangeDefender products and services.

With SM2 I had hoped to open up the same opportunity to third parties (for a fee) but there was a catch – I’m not just letting you SPAM the SM users with pointless ads, you actually have to help us produce content and training for the users on how they can best leverage the service to make something out of nothing. It’s something that worked incredibly well for ExchangeDefender… but it’s something that flopped catastrophically. While we had a ton of people step in to sponsor it, having your ads displayed somewhere is no guarantee of sales. That’s just not how it works in SMB, you don’t get the deal just because you exist, you have to earn it.. or more bluntly, SM would have to do this on it’s own.

Please… take our money..

Due to it’s popularity.. Shockey Monkey got a lot of interest from both the VC and the big software companies in the channel.

I spoke to everyone that wanted to discuss it.

Without exception, everyone was interested in the ExchangeDefender piece which was obviously not on the table. Everyone wants the cash cow to be a part of the deal because that’s how they can finance the deal. That’s kind of where things typically fall apart though – folks are accustomed to taking over brokeass companies that are typically in debt. We have 0 debt and are incredibly profitable – so it’s not your typical “investment” where daddy pays off your credit card and allows you to keep a contract job with a golden parachute. You have to break off a lot of cheese.

The more time I spent with some of the smartest people in our industry discussing the sale and explaining the business model the more something became readily apparent: they had no plan for it beyond what someone else was doing. To which the obvious question becomes: Then why don’t you go and buy them?

As of the summer, Shockey Monkey is no longer on sale and going forward I’m declining any invites to sell it. Why? Because the painful part of what needed to be done within SM to make it a top tier product has already been done. Sales force? Done. Sales automation, marketing automation, HR automation, career management.. Done. The stuff that I really did not want to do myself and would have been easier to hand off to someone else.. is at this point complete. That’s business – sometimes you try to take the easy way out, when that doesn’t work you can either give up or get back to work. I owe an immense amount of credit to my senior management who sacrificed a lot of sleep to bring us to this point.

Now..

I will discuss this in the next few blog posts but I spent a lot of time with some really smart people as they looked at SM and poked at every single side of it to figure out how it made sense. No matter how smart and successful we happen to be, we’re really good in the tunnel and tend not to be able to see but one light at the end of it.

I owe perhaps the most thanks to Arnie Bellini whom I showed the whole thing and pitched a bunch of different applications for the system. We did a little “hot and cold” type of an exercise.. “Is this something you’d consider to be valueable?” No. “How about this, do you think a business owner would care about this?” No. “What about all this data over here, it’s unmanaged and unchecked but is it a source of potential or worse, liability? “ Maybe but no.

The more incredibly smart people I talked to, the deeper we went down the tunnel of only seeing one light at the end of it, only one possible fit and one real potential.

If that were true, I’d be working for Microsoft today.

I will break down the details to you in a bit but I will offer you this teaser: We make an incredible amount of money at ExchangeDefender connecting the bits and pieces of stuff for our clients. Exchange to SharePoint, workstations to LocalCloud, email to Encryption, etc, etc, etc. But what the hell for? To enable clients to communicate better and run their business.

We have this tunnel vision that we are stuck in: If we just throw more infrastructure and assemble these building blocks, business owners and managers will be able to do what they need to in order to manage their business. Even if they hit it like a caveman where all this technology, infrastructure and tech consulting only leads them to replace their memos / faxes and document libraries with a digital crutch.

Here is the bitch though: The easier those lego bricks become to assemble, the less margin there is and the less complexity and the less opportunity. When everyone focuses on cheap and slow and easy everyone loses. So the best reach for stuff to give them an advantage.

I believe that advantage is Shockey Monkey – not just for IT businesses but for any SMB – and I look forward to showing you how next week.