Interview with Rushabh Mehta (ERPNext)
ERPNext is an open source integrated Enterprise Resource Planning (ERP) software.
I interviewed Rushabh Mehta, ERPNext founder to find out more. This interview is the hundred and eleventh in a series of DW interviews. Big thank you to Rushabh!
How would you describe ERPNext in under 50 words?
ERPNext is a web based app for small businesses that allows them to manage all their processes from accounting, inventory, CRM, support, projects to managing their website. It is also open source.
Why Open Source?
There are many reasons. ERPNext is built on a lot of open source. We use MySQL, Python, Apache, our servers run on Linux, plus we have used a lot of open web libraries in the product. Also in the long term, I think Open Source is the future. If you look at the competition, there are more than 50 good proprietary products out there, so again Open Source was a way to differentiate. All in all, it just made good sense and I am really happy to have taken this decision.
Tell us more about how ERPNext is used.
ERPNext has a ton of features and most customers use only 20%, but like Joel Spolksy said about Microsoft Office, it’s a different 20%. Some customers use accounting, some use inventory, some sales, some projects. Every time we kill a feature, some customer is always annoyed. So we have to strike a balance between simplicity and completeness. Eventually most users start exploring different modules.
What is your background? What made you decide to start working on ERPNext?
I have a Master’s degree in Industrial Engineering, so I am not formally trained in Computer Engineering. After my graduation, I joined my family business for a bit where they were trying to find a good ERP system. They had just come off a failed implementation and were vary to try a new vendor. Since I knew how to write code, I just started off with making my own ERP. It seems like a very foolish decision right now.
Where are you based?
We are based out of Mumbai, India
Does Mumbai have a good startup scene?
There are a few exciting startups in Mumbai and angel investors who are active, but there is no real community, not even a good mailing list. If you look in India, Pune, Bengaluru (Bangalore) and Delhi are the hotspots for tech startups.
Interestingly, Mumbai has a very large number of software consultancies and unknown product companies that started before outsourcing took off. In the 80s and 90s, the only option for talented hackers was to become entrepreneurs. They are still flourishing, but are outside the radar of the “startup” / VC crowd and media.
What technologies have you used to build ERPNext?
Has your initial vision changed since launch?
The initial vision is still the same, what has changed is that I now realize that this process is going to be a lot slower than what I initially imagined.
What was technically the most challenging part of developing ERPNext?
Managing the complexity is the most challenging part. ERPNext has a more than 6-7 complex modules that are fully integrated and that increases the complexity by a huge margin. Also remember that there are only 3 developers who are working on this full time and we do everything from new development, support and production.
How long did it take to put together ERPNext?
We are still on it! I would say it took us 4-5 years to make a stable product. Our current version is quite stable, but we are still not happy with this.
How have you marketed ERPNext? Which tools and techniques have been most successful?
We have mostly used Google Ads to market this on a very low budget. Also being an Open Source project, gives us an opportunity to list on Wikipedia, which is also helpful. This has worked reasonably well for us. We are also blogging more regularly now and also plan to restart our newsletter.
Though we are not signing up in big numbers, we are happy with the rate at which we are signing up new customers. We have to balance between support and development. If we signup too fast, we will have to sacrifice development.
Do you have any new projects in the pipeline?
We are working on a radical new version of ERPNext that should keep us busy for the next few months. Since we are barely breaking even at this point, we think we still need to push this product further before we divert into new projects.
You say your pricing is revolutionary. How did you decide on your pricing model?
I was very influenced with Chris Anderson’s “Free” and this whole concept that software business has very little variable cost. I think the current products in the market are terribly over-priced because of their elaborate sales processes.
Our pricing is bench-marked with accounting apps like Quickbooks and Freshbooks. We think that users should be able to get a lot more at that price than just accounting.
What do you wish you’d have known 5 years ago that you know now?
I think there is no substitute for experience. I would have been much happier if I was able to judge my abilities and limitations a lot better. I over-estimated my skills and the product that came out was not that good. Looking back, I would have been happier, if I was able to cut down my expectations, if not ambitions. It would have been much smoother.
Where do you see ERPNext in 5 years time?
The rate at which we are progressing, if we are able to keep it up, we will be among the top 3 ERP products in the world in terms of usage. For the company, we hope to be reasonably profitable and recognized as a leading Open Source developer.
Has ERPNext got the feedback and growth you expected since launch?
It’s the feedback that keeps us going. Conventional wisdom is that ERPs require elaborate sales and implementation process to get going, and the organizational change that is associated with it. So when someone writes in that we have already implemented ERPNext and want to convert the trial to a paid account, it still gives us a high. Not only because we won a customer, but they were able to self-implement too. 25-30% of our users are able to implement without a single email / chat with us.
We even recently received our first “donation” by a user from Egypt for Open Source, who bought commercial support just to support us!
Who would you say is your biggest competitor?
Like I said earlier, we compete at different levels:
1. Accounting apps like Quickbooks, Zoho and others.
2. Commercial web ERPs like Netsuite, ERPly, Plex and others.
3. Open source ERPs like OpenERP and Open Bravo.
4. Small Business ERPs like ERPly, Worketc, Brightpearl and other (they don’t call them self ERPs, which is smart).
This space is really heating up. I discover a new app almost every other week.
What is the biggest hurdle you have faced or are still facing?
Biggest hurdle is that 90% of small business owners have no idea what “ERP” means. Traditionally ERPs have been for large enterprises only. So creating awareness is a challenge. But I think word-of-mouth will eventually solve this.
Which startup do you most admire?
There are lots, but I would pick 37signals to be the most influential and inspirational. Not only do they execute very well, but are also able to share that knowledge with the community.
What one piece of advice would you give to startup founders?
Please write unit-tests, before or along with your code. The later you will do it, the more you will regret it.
What are you most excited about at the moment?
At the moment we are working on a radical rewrite of ERPNext. This version will not only reduce our code by 50%, but also streamline a lot of our features. We are also doing Test Driven Development (TDD) where ever we can. This is really exciting and gets me up and running every day.
Can you convince the reader to start using ERPNext in under 50 words?
If you are using separate apps for accounting, inventory (if you deal with physical goods), sales / CRM, purchasing, just have a look at ERPNext.
Finished reading? Check out ERPNext!