Small is good. Big is bad.

March 14, 2007

On my recent bus journeys into work, I’ve been listening to the Future of Web Apps (FOWA) conference podcasts. A great and productive way to while away your dead time.

DropsendI was listening to Ryan Carson about how much it cost them to build DropSend – a fantastic little web app used to get around sending large files by email. They spent no more than 30,000GBP (about 80,000NZD) to build this great little business.

The speech was given over a year ago now, and at that time DropSend had over 10,000 registered users (this was two months after launching)! Their pricing plans range from free, through to a full business service costing US$99pm.

And then this morning, I came across Telecom’s billing analyst service. Effectively it is an online web app to view your Telecom bill. Great, I thought! Something they should have done years ago, but better late than never. Not rocket science, or anything revolutionary though.

Billing AnalystThen, imagine my surprise shock and horror, when I was informed that, as a valued Telecom customer, there is a $250 setup fee and a cost of $99 per month! Now, our company already pays Telecom (literally) thousands of dollars per month for services – but to be hit with this as an additional charge is taking the p*ss.

Now, look at the numbers. These are crude, but hopefully lead me to my points.

  • let’s assume 3,000 businesses need this function
  • at NZ$99pm, AND a NZ$250 setup fee, that’s NZ$4.3m per year
  • Telecom tell us that billing analyst was “off-the-shelf”. It looks nothing special to me – but let’s take the Telecom factor into account here and assume it cost them five times what it cost DropSend (5*NZ$80k = $400k)
  • Year One Profit = just under $4m

My Points

  • Telecom should be looking after me as a customer, not charging for what should be a given.
  • Either Telecom are shafting my bottom line and making theirs much fatter, or it cost them millions upon millions to install their “off-the-shelf” product – I imagine both! (something sound familiar)
  • If I am right about my second point above, big corporations are incapable of doing anything cost effectively, and
  • That buying products “off-the-shelf” saves you bugger all money at all.

At the end of it all, though, we’re still gonna sign up and pay since Telecom bills are harder to understand than a Chinese encyclopedia, so anything upon anything will help. But it kind of feels like you’re paying them more money to fix what is a crappy billing system in the first place.

They’re a funny bunch! I can’t wait for the day that these big dudes see the light.

One Response to “Small is good. Big is bad.”

  1. Ryan Carson Says:

    Glad you found the podcasts useful. Best of luck Dan!

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