Open Source CRM (Customer Relationship Management) software is among what I view as the best solutions to common business problems if you are looking for alternative tools. Today, I am honored to share with you an interview I had with the co-founder of Zurmo – an open source crm. Please enjoy and I hope you find it useful like I did.
Zurmo Open Source CRM Co-founder: Ray Stoeckicht
1) Please tell me a little bit about yourself.
I am a 33-year old, obsessive compulsive serial entrepreneur from the Chicago suburbs. I have been working with Open source crm for the past 6 years. I co-own another CRM company Intelestream, which focuses on developing and customizing open source CRM applications. We work mostly with SugarCRM and different derivatives. We launched 3 CRM products since 2009, including Intelecrm, which is based on the SugarCRM Community Edition code base.
Before starting Intelestream, my partner and I started a telecommunications company that provided wireless Internet access to areas in the Chicago-land suburbs that did not have high speed internet. We sold the company in 2004.
2)Tell me about Zurmo and how it all came about
The origin of Zurmo surfaced 8 years ago when my partner, Jason Green, was working at an open source CRM company. He was an early developer and saw how the code infrastructure and overall development approach could be better. Things like Test Driven Development were not being done and that led to a lot of headaches down the road, not only for the internal development team, but also for the customers. Jason always wanted to build an open source CRM using the best practice software engineering methodologies. Back then, he didn’t know it would be called Zurmo, but that is where it all began.
Later on we started Intelestream and did hundreds of implementations on a number of open source CRM applications and we saw the same user adoption problems over and over. Sales people, marketing people and just about everyone do not want to use a CRM. In fact, user adoption continues to be the CRM project killer and the reasons are always the same: The system is difficult to use, clunky, overwhelming, and time consuming.
The other half of the Zurmo story was to fix the “I hate CRM” problem. Since we knew what people didn’t like, we had an idea of what would make things better and with Zurmo, we finally had our own code base to work with and include certain features like gamification and social CRM. This is just the beginning of what we want to do to increase user adoption. Our objective is to transition CRM from a dull system that sales/marketing people view as “the data entry thing” to an engaging, enchanting, and fun system that everyone enjoys using. So far so good. We started development in November of 2010 and released 2.0 in June ‘13.
3) What have you learned as a co-founder?
I learn things by the minute. Since Zurmo is not my first business venture or software launch, it has been nice to not have to make the same mistakes I did in the past, but there continues to be a steady stream of fail/learn/fail/learn on a daily basis. I have learned how important a thriving community and overall ecosystem are needed to rally around the project. We have had so many people all over the world help with translating Zurmo into 24 languages, offer input on where improvements can be made, and assist with prioritizing our development roadmap – Zurmo Roadmap
It is extremely important to have a solid group of evangelists that can provide feedback from a developer and end user perspective so that we can continue creating functionality that is most needed. I can’t tell you how many times we have taken someone’s suggestion and added their request into the application.
4) Which did you think is the most important; the right market, the right product or the right team?
I can make an argument for all 3. Really, you need a combination of all of them to have any success. The right product would not be the right product if it were not targeted to the right market (an underserved market) and built by a team of passionate people. We saw a gap in the marketplace when it came to open source CRM and have positioned Zurmo to fill it.
5) Thinking about your product Zurmo, what keeps you up at night or worry you most?
We continue to add functionality to Zurmo and it continues to grow, but I’m constantly concerned about how to add features while still keeping a minimalistic design. We take major pride in our user interface and user experience as it continues to be a major differentiator from other CRM systems. Adding features means there is more complexity and I’m always worried about how we can do this while keeping Zurmo simple, intuitive, and easy to understand.
6) What will you do if you fail?
Failing is the most effective way to learn so I do not fear failure. In fact, I encourage it. If you are not failing, you are not learning. If Zurmo doesn’t take off the way we expect, we will make adjustments until it does. Ultimate failure comes from giving up and that is not something we will do. I guess we will never fail…
7) What made you first think that starting a company was the right thing for you?
Most open source projects have a company that sits behind it and offers commercial support and other value-adds. We wanted to make sure customers had an option to buy our paid editions which include support, hosting, and integrations (such as Outlook, Exchange, and Google apps). Since introducing our commercial versions in January ‘13, we have seen really solid results for not only the paid versions, but also the freely downloadable Community Edition.
8) When did the business model become clear for your startup?
The business model is a moving target and will continue to be adjusted. When we began with Zurmo, we wanted to build the best engineered open source CRM application with the most innovative product direction. The main problem in our industry has to do with user adoption. 40-50% of CRM implementations fail and we felt that was unacceptable. We knew if we could solve this business problem, then we knew we could build a solid business. Our approach to solving this common problem was to make the system intuitive, easy to understand, natural, and fun. Gamification and socialCRM functionality along with a ‘pretty’ user interface have increased user adoption.
We currently have our freely downloadable Community Edition along with our commercial editions (Group and Pro). We have been doubling the amount of customers every month and the amount of installations continues to increase drastically. We have also had a number of companies white-label and OEM Zurmo. They use it to build their own branded CRM that they sell to verticalized markets such as the real estate, investment, and insurance industries. Zurmo is starting to become a strong platform to build on top of.
9) What is your advice to those thinking about starting a company?
Focus on solving a business problem. The good thing about problems is that they are everywhere and a good place to start would be thinking about the problems you face as an entrepreneur. If you have solid expertise or passion in a certain area, find a problem you can solve. Whether it is a product or service, build your business around that. It doesn’t have to be sexy or overly innovative. We are big believers in getting an MVP (minimum viable product) available as quickly as possible so that you can start receiving feedback immediately. We are all about agile development and using the same agile principles to starting a business.
10) What is Build and Resell app/vertical solution?
We have a few reseller options. First, we have a Reseller Partner, where a company would work with the commercial versions. There is no partner fee and partners receive 30% margin on all licenses and services (assuming the partner resold Zurmo’s Professional Services). If partners were to provide their own services (data migration, integration, customization, etc.), they would receive 100% of the revenue. Zurmo’s commercial editions are listed here: Commercial Editions .
The other option is an Embedded Partnership, which allows the partner to build a custom CRM for a vertical market and resell. It usually entails white-labeling Zurmo, replacing our branding with theirs, and taking out all the attribution.
The Embedded Partner is required to resell to a market that we do not compete with. We do not want to create our own competitors. The Embedded Partnership has annual costs per year and there are also costs for each user that is brought on.
11) What are your final thoughts today?
Keep surrounding yourself with people that are smarter than you. That has been very easy in my case…
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