Blog Post from February 06, 2019

How To Be A B2B2C SaaS Company In 2019 (And More!)

The original version of this article can be found on the website for Software Business Growth magazine at this location.
It is reprinted below.

Guest Column, February 6, 2019.
A conversation with Bart DeCanne, Sophatar

Bart DeCanne founded Sophatar with a vision of creating a truly novel experience at physical venues by leveraging the various mobile, sensor, video, and audio technologies he worked on for more than 20 years at chip and OEM electronics companies.

Recently, Bart took time to answer questions about marketing, product management, and what he wishes he knew when founding Sophatar five years ago, as well as offers advice to software companies looking to start channel programs and selling to the retail and hospitality markets.

Q: What has your background in marketing and product management taught you that you’ve applied to founding Sophatar?

DeCanne: I worked in the semiconductor industry in different product management and marketing roles for companies employing more than 30,000 people (Texas Instruments) to a few hundred people (Audience, the last company I worked for as VP Marketing) prior to founding Sophatar. Now I’m working in software which is quite different, but I’ve been able to bring a detail-oriented focus and solid execution because of my background.

At my last company we did one chip a year for noise reduction of voice calls and sold over 100,000,000 of them. It’s a cut-throat business — if you miss a spec or a performance target you won’t be designed-in since, unlike cloud software, you can’t just do a new release of a chip. It takes months, and by then the design-in window is gone. As a result, there is a huge focus on detailed product definition and double- and triple-checking the implementation that I’ve been used to in product development. I’ve found rigor sometimes lacking with software-only folks, especially in startups, so I was happy to be able to contribute that in the way we work and do things right the first time without giving up agility.

Q: What does it mean to be a successful B2B2C SaaS company in 2019?

DeCanne: In our segment of customer engagement for brick-and-mortar retail and hospitality, there are so many ways to approach the online/offline convergence and target today’s customer with various sensor and camera technologies. But I think the industry is getting ahead of itself.

Product looking for market … just like the consumer industry 10 years ago with 3D TV was assuming customers will put on glasses, will consumers really put on headsets to look at how a piece of apparel looks on them in virtual reality in a store? A few years ago, I heard a statement from the head of an innovation lab of a high-end retailer who said: “No, since our customers are women who don’t want mess up their hair.” So much for all the best technology in the world! To be successful I think you need to keep grounded and make smart improvements.

Secondly, with the latest focus on privacy it’s key to have customer acceptance of new technologies. Tracking customers via face recognition or Wi-Fi sniffing may not be okay since there is no opt-in. It will only become more sensitive going forward and some technologies can expose brands and retailers to potentially high liability risk

At Sophatar we shy away from that and make sure there always is a customer opt-in. For instance, in our proximity signage — where we detect if you’re in viewing range of a digital signage display and then turn your phone into a remote control for that screen to support interactive demos, product information, etc. — we don’t access your in-store location unless you give us location access. Since we have a customer-facing technology, which pure analytics companies are lacking, there is a clear perceived benefit to the customer to grant us that access.

Q: The B2B software review website Capterra lists 236 companies in its “Digital Signage Software” category. How does Sophatar stand out in the crowded market?

DeCanne: I would use a couple of sub-categories to classify suppliers of digital signage software. Most of them are CMS (content management systems) that includes signage templates specific to certain verticals or applications such as menu boards in restaurants, way finding in retail, etc. That has become a very crowded field because, technically, it has become very easy to do a CMS as most signage is now HTML5 based and no longer uses proprietary technologies. Then this software includes a scheduler to playout the content.

Sophatar differentiates because we integrate with both sales and presence data, then generate dynamic digital signage that takes into account information extracted from the data to more personally target a viewer via both digital signage and mobile.

Basically, in signage we move from a static playlist to dynamic. And we can overlay this onto existing, non-dynamic playlist systems — in essence we can become an add-on to any existing CMS. Furthermore, we offer handoff to mobile to either push content from signage to mobile or have your phone become a remote control for public signage to select the content you want to see.

This combination of signage software, data ingest, data analytics, and mobile — then offering that as a SaaS offering or API to third parties so it can be overlaid onto existing systems — is quite unique and we have a pretty broad awarded patent on our proximity signage.

Q: What did you wish you had known when you founded Sophatar in 2014?

DeCanne: Coming out of an engineering driven industry I’ve been amazed by the inaccuracies retailers are being told by some traditional vendors. Traditional technology suppliers to retail work project-based, charging by the number of hours.

For instance, an app developer will say a mobile app is needed for a specific feature and will gladly talk about the complexity to integrate it. If you want to trigger push notifications when customers come near a store, then you need a mobile app and integrate location services, right? Well, not really so.

We can do this with mobile wallet passes that are natively supported on IOS and Android phones. We can update them at any time in the background, gather customer info, etc. Retailers are not being told about these and other native capabilities of the mobile platforms because traditional software development houses cannot charge by the hour.

We come in with a month-to-month SaaS model instead and a platform. We actually don’t like to do custom work since it’s not scalable. Rather, we make a platform with different components you can pick from as an end user, but that give us some real synergy if you use it as a whole.

Q: What advice do you have for other software companies thinking about starting a channel program?

DeCanne: Make sure you have an incentive program to the channel that supports recurring revenue and a way for them to add value. All resellers are being squeezed by hardware becoming less expensive, more standardized, or even available as a consumer product (think of iPads being used as point of sale instead of dedicated hardware). They are looking for other revenue sources and SaaS software is very welcome if you can support a recurring commission to the channel. If the reseller can provide some added service, then he can layer on a service fee that makes sense for the retailer. It cannot be just a hardware service support fee anymore.

Q: What is your vision for Sophatar a year from now? Five years from now?

We have a couple of really interesting partnerships and direct customer projects forming that we’ll announce over the next year to put Sophatar solidly on the map as a supplier of customer engagement solutions for physical sites. In five years, I see us being a key supplier both on customer-facing and backend solutions in retail and hospitality by combining technologies that traditionally have been supplied by different vendors. It’s a field ripe for disruption where I believe it's not the legacy suppliers necessarily at an advantage as technology shifts to mobile and non-proprietary hardware like we have seen in the POS and digital signage space over the last years.

Q: What other advice do you have for software companies selling solutions to the retail and hospitality industries?

DeCanne: As a relatively small player compared to the industry heavyweights in our area of B2B2C customer engagement, it’s key to align with larger companies and address a key void in their product offering where it’s not in their DNA to address it themselves. Then their sales team can promote your solution as you become part of their total value proposition.

For instance, in our relationship with Star Micronics — a hardware manufacturer of thermal receipt printers for retail stores — we provide the missing piece of extracting structured sales data from print receipt images. Before they could only offer the printed image to customers and partners which is not directly useable in most cases. Now through us they can promote the printer as a central hub for sales data, actually irrespective of the POS software used since we parse different receipt formats into a unified API.

While partners are very different from customers and you shouldn’t lose out of sight the need for direct customer engagements as a software company, good partnerships with existing established ecosystem players can really enhance both your reach and credibility in this space.

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