Interview with Kevin Kogler (MicroBiz)
MicroBiz is a cloud based point of sale, software solution.
I interviewed Kevin Kogler, MicroBiz President to find out more. This is the two hundred and eleventh in a series of DW startup interviews. Big thank you to Kevin!
How would you describe MicroBiz in under 50 words?
MicroBiz is cloud-based POS software for omni-channel retailers. It features real-time multi-store inventory management and enables retailers to manage their operations using iPads, Android tablets, smartphones, PCs and Macs. Its Magento ecommerce extension allows retailers to operate their Magento ecommerce sites and retail stores from a single application.
Can you tell us a little about your background and what inspired you to start working on MicroBiz?
About 2 years ago, I attended an eBay technology conference in San Francisco to further research the free open source Magento ecommerce platform as a replacement for an outdated proprietary ecommerce platform developed by my prior business, CAM Commerce Solutions. eBay featured a local soccer store named Soccer Pro to highlight how easy it is to launch a new ecommerce site using Magento. It turned out that Soccer Pro is right down the street from where I live. So, a couple weeks later, I was shopping at Soccer Pro and noted that their legacy POS system was totally disconnected from their new Magento ecommerce site – forcing Soccer Pro’s owner to do double data entry and creating situations where he sold items online that were no longer in stock in his store.
I immediately realized the opportunity to sell a modern cloud iPad POS system to the 170,000 retailers using Magento. The next day I decided to start the process to sell my current business in order to start a new business which would develop a cloud POS platform specifically designed for multi-channel, multi-store retailers. We posted a video on YouTube that recreates the light bulb going off.
You put together MicroBiz after feeling frustrated with technologies already available to you. What did you do differently?
The biggest difference is that we decided to build an entirely new application rather than trying to do what most established POS companies are doing – using middleware to connect old legacy POS/ERP systems to an ecommerce platform. We also wrote the new application using the most modern, open source technologies and frameworks available. Rather than create a closed ecosystem like most legacy POS applications, MicroBiz has an open standards architecture which will allow MicroBiz to easily connect with whatever third party technologies and services that a retailer wants to use. For example, a retailer will be able to use MicroBiz as a platform to connect with mobile payment providers and other cloud based ecommerce, accounting and marketing applications (such as Magento, QuickBooks Online and MailChimp), to create an integrated store management platform for a fraction of the cost of a legacy retail ERP systems.
As you decided not to raise any venture capital, was it difficult to finance in the initial stages?
We are a little different than most start-ups. The “new” MicroBiz was created by spinning an existing POS product out of a larger POS software vendor. So, we have an existing brand and base of customers that have generated much of the cash used to fund the development of our new iPad POS product over the past 18 months. However, we still have to be very careful how we spend our money, as we do not have millions of dollars from a VC sitting in the bank. We have almost exclusively used open source technologies and looked to hire developers in lower cost areas. For example, our development and support team is based in Las Vegas – which offered significant cost savings vs. the San Francisco Bay area. While its amazing how much technology is available these days for free or through hosted offerings, the lack of VC capital to date has forced us to be very focused and make some hard choices on what features we can added to the product during our start-up phase.
What was technically the most challenging part of developing MicroBiz?
From the first line of code, MicroBiz Cloud was built to integrate with the free open source Magento ecommerce platform. So, every feature in the store management system has to be designed to be able to work with a Magento ecommerce site. For example, our system is designed so that any change in a customer or item record in a store system must instantly be updated in the ecommerce system, and vice versa. While this has significantly added to our development costs, it has resulted in a seamless integration between the MicroBiz store management system and the Magento ecommerce platfom.
Prior to the sale of CAM Commerce Solutions where you were President, what did you learn from working at Citigroup and Credit Suisse as a technology investment banker?
I was a banker during the first dot com bubble and saw many companies being created for the wrong reasons. Many of these companies were way too far ahead of market demand or were more focused on creating a good “story” for investors rather than creating a company with a differentiated product and a sustainable business model.
At MicroBiz, we are very focused on providing small to mid-sized retailers with easy-to-use and affordable software to manage their online and offline retail operations. This may not be as “sexy” as many other start-ups today, but this is a large market opportunity with a clear demand and need for the product. Being a banker also taught me the value of profitability – so we are very focused on measured growth and a rational pricing/cost structure.
You allow retailers to try out your POS application free for 14 days before committing. How successful have you been in converting users?
We have been happy with the positive feedback received from these trial users, and most of the users that invest a few hours trying to learn the system request a paid subscription. However, because our application is much more feature rich than most other cloud-based POS solutions, our users tend to be more sophisticated retailers looking for purchase orders/receiving, inventory management and other multi-store features in a cloud-based application. So it is a longer sales cycle than more simple, single store cloud cash register solutions.
You have nearly 25,000 retailers on board. Did you expect such rapid growth when you initially launched in 2012?
The fact that 25,000 retailers around the world have purchased MicroBiz software does show that our solutions meet the needs of small retailers. It’s also created a nice base of retailers that know about MicroBiz. While not all of this growth has occurred since 2012, we have been pleased with the market acceptance of our new cloud iPad/Android POS offering.
How much competition is there in there in cloud based POS?
It’s a pretty competitive space, but the cloud POS market is becoming more segmented. Most of the cloud POS vendors focus on the restaurant/hospitality space, and have robust reservation and table management features, but typically lack any real inventory management functions. Of the cloud POS vendors that focus on the specialty retail space, most are designed to replace cash registers at single stores, and either lack or have only very basic inventory management features and no ecommerce integration.
MicroBiz was designed from the first line of code to be multi-store and integrate with Magento. As a result, we have much more sophisticated store management features and functions – such as customer records that show both store/online sales, item records that show real-time inventory at all locations, special orders, store transfers, integrated gift cards, etc.
What is your primary focus in terms of new developments for MicroBiz at the moment?
A good retail management solution can take years to build, so we still have a lot of work ahead of us. We are focused on adding more multi-store back office management functionality and building out integrations to third party applications and services most requested by our customers.
Where do you see MicroBiz in 5 years time?
This is a huge market opportunity. The rapid adoption of tablets and smart phones will change the way people shop. In 5 years I see consumers using their mobile devices to instantly tell them where they should buy a product – either from an ecommerce site or from a nearby store that is confirmed to have that specific product in stock. Retailers will have viability into where their customers shop – whether on an ecommerce site, at stores or from other online marketplaces. I see MicroBiz as the management hub that runs these smaller multi-channel retailers and exposes the store’s current inventory to all the locational based search engines and online marketplaces.
MicroBiz will also track and provide actionable data on customer activity across all channels, and allow the retailer to sell goods anywhere, anytime and with any type of device. I believe the way we shop will change more in the next 3 years than the last 20 years, and see MicroBiz as the key platform enabling smaller local retailers to compete in this evolving market.
What one piece of advice would you offer to any soon to be startup founders?
Be laser focused on your market opportunity and try to do a few things really well instead of being average at a whole bunch of things. I live in the heart of Silicon Valley and see early stage companies get caught up in the hype surrounding the start-up community all the time. These companies tend to get distracted by all the opportunities and end up changing direction too often, wasting precious resources and time, and creating a mediocre product. Instead, focus on creating a really great product and then focus on the one or two go to market strategies to connect with the market segment most likely to be early adopters of your product. Do not try to have your product be all things to everybody or try to sell to every opportunity in the market at once.
Can you convince the reader to start using MicroBiz in under 50 words?
If you operate one or more retail stores and have an ecommerce site selling e cigarettes or anything else, you should use MicroBiz. MicroBiz’s cloud-based POS software features real-time multi-store inventory management and runs on iPads, Android tablets, smartphones, PCs and Macs. Our Magento extension operates Magento sites and retail stores from a single application.