Paycycle gets on a *pay* roll

Paycycle gets on a *pay* roll

Summary: If there is any truth to the saying "necessity is the mother of invention" then the government offices in Canberra should be a more fertile breeding ground than hotel rooms frequented by Tiger Woods.

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If there is any truth to the saying "necessity is the mother of invention" then the government offices in Canberra should be a more fertile breeding ground than hotel rooms frequented by Tiger Woods.

Among the myriad of inefficiencies, red tape and bureaucracy that characterises government life, one public servant noticed a particular pressure point in the management of contractors and payroll.

After lengthy stints working at several government organisations and agencies, including AusAID, Stuart McLeod identified a niche for contractor management services.

In 2006 he started Contract 1, which manages the payroll requirements of contractors dealing with recruitment agencies and government organisations. It generates annual revenue over $10 million, he said.

The experience gave him the knowledge and confidence to team up with friend and former colleague John Freeman and develop Paycycle, an online payroll software system for small businesses.

Development commenced in June 2009, the beta was released last November and the product went live in April 2010.

McLeod said a major catalyst for the software was the emergence of accounting software Xero, a web-delivered alternative to the popular product MYOB. Xero does not offer a payroll product, and partners with other companies, including Paycycle, to provide this service.

Revenue is generated by a subscriber model, with over 700 registrations, he said, and the business is "moving fast towards break-even point" with 1000 customers expected by the end of the year.

Commentary

Strengths

Paycycle was developed with a specific market need in mind. It appears to be well supported by McLeod's experience in government, and starting up a related business.

Weaknesses

With a small number of development staff, time to innovate on the product is reduced by the need to respond to customer queries and eliminate bugs.

Opportunities

An opportunity is present in the shake up of the small business accounting software market, which has been in flux as MYOB has come under some criticism for its slow response to developing a suitable online product.

Threats

Xero has multiple partners in Australia, which means Paycycle does face competition for a relatively small user base. And McLeod admits the international growth potential is limited, as payroll is very specific to each country.

Bootstrappr verdict: BOOM

Paycycle will be a success because it responds to a specific market demand, a pressure point identified by Stuart and John from their time in the public sector and also starting up a business.

Topics: Government, Enterprise Software, Government AU, Start-Ups

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5 comments
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  • IMHO Paycycle has two big annoyances at this early stage (and this is feedback I've provided to the developers):

    1. It runs within and requires Silverlight. Gawd.

    2. The user interface is hideous. It looks and feels like it was designed by a Windows programmer who really wants to work in the game industry. It's as if this was the meeting at which the UI guidelines were established:

    Project lead: "Who will be using this product?"

    Team: "Small business accountants and bookkeepers."

    Project lead: "What interfaces will feel familiar to them?"

    Team: "MYOB. Quickbooks. ACT."

    Project lead: "What products will we need to interface with in the near future?"

    Team: "Software-as-a-service apps like Xero and Freshbooks."

    Project lead: "So, given that we've established we need to appeal to small-biz bookkeepers who are probably used to MYOB and who will probably be integrating web services like Xero, what should our product look and feel like?"

    Team: "XBOX MEDIA CENTER!"

    Lead: "Yeah!"

    Team: "AND LET'S DO IT ALL IN MICROSOFT SILVERLIGHT!"

    Lead: "Yeah!"

    (/facepalm)

    Paycycle looks as if it has had no actual input from a user-experience specialist. It's just a mess of unlabelled buttons, confusing icons, big unclickable elements that look clickable, brightly-coloured things spinning and animating for no reason, with a high-contrast "bright colours on dark background" colour scheme that would make a bookkeeper have a seizure. This is a product designed for people who are used to Excel but it looks like it was designed by someone used to Battle.net.
    SHG-e1b00
  • Wow.

    With some people you just can't win can you? An Australian small business startup who is just trying to make their own little way gets a nice piece written up on a widely read website like Zdnet and you find smartarses who need to voice a self serving opinion, that has nothing to do with Mahesh’s excellent article.

    First, Simon, you’re the only person that has ever disliked our interface with such intensity. Nearly all of the feedback we receive is complimentary, that the layout is logical and easy to use and the product overall is a pleasure to use.

    The discussions you create in your own little head demonstrate your clear lack of understanding of the seriousness with which the owners of SMEs approach their business. In actual fact we had one of the most well respected and well regarded (and most expensive) UX experts work with us in the design phase. He provided the framework that you see today. I’ve made him aware of your comments, and invited him to respond. He may or may not choose to do so.

    Third, who are you to opine about our user interface and generalise on behalf of all our users? I went to your About Page at your “Seriously, this really is Just another WordPress weblog” but it states “I should put some stuff here.” I can only assume that you are Australia’s greatest User Interface expert. That you deliver complex yet elegant user interfaces to your clients on a regular basis. You would also be cognisant of the issues that we face each day in designing and enhancing the product for our users. I can only assume that you can provide us with a superior interface for our next phase of development. I look forward to your input.

    Our choice of technology had everything to do with the technical skills we had available at the time, the rapidity with which we could bring the product to market, yet acknowledging the fact that Silverlight is not ideal in every client’s situation. As we develop functionality such as the employee portal, we will be moving toward a more traditional web model.

    Finally, your two points in your comments have nothing to do with our business model, the excellent service that we provide our customers, the simple manner in which we deal with complex payroll issues or the value that we have already built in the business since conception only 18 months ago. We feel that you denigrate the hard work that all the people involved with Paycycle put in each and every 14 hour day.

    I’m the first person to admit the product is far from perfect. That, infact, software is never complete. There is always something more you can offer or provide existing functionality in a more efficient manner. We are also happy to accept constructive criticism from our user base which we take very seriously, and such discussion has a direct impact on our product development.

    What I fail to understand is how you think your article contributes constructively to any relevant discussion other than to demonstrate your own small mindedness and lack of cleverness and wit.
    Paycycle
  • Dear Paycycle (whoever is behind that pseudonym),

    Your critique of the Wordpress default theme should really be directed towards the developers of Wordpress.

    "you’re the only person that has ever disliked our interface with such intensity. Nearly all of the feedback we receive is complimentary"

    Those two are not necessarily connected. Across all products in all industries nearly all feedback is complimentary - people who like something are more likely to speak to the maker about their experiences than people who don't like that thing. The people who don't like something don't complain to the maker, they just stop using it. Or don't start.

    Reality check Paycycle, I'm trying to help. I think there's a niche for your product and I congratulate you for trying to fill it. But be aware: there are Xero consultants out there warning people off Paycycle because the interface is too confusing. If you aren't aware of this, you're not listening to the right people.
    SHG-e1b00
  • Well done Paycycle, being a start-up is hard work and you guys have done an exceptional job of building an awesome product in such a short period of time.

    I think it's best to ignore comments from SHG... It's tall poppy syndrome!

    If you focus on the facts:

    You have 700 customers in such a short period, Awesome work. You have to be doing something right!

    User Interface is important and yours is simple and easy to work through. However lets not forget MYOB has a terrible interface yet they have over a million customers...

    Keep up the good work!
    Connect2Field
  • "The discussions you create in your own little head demonstrate your clear lack of understanding of the seriousness with which the owners of SMEs approach their business ... who are you to opine about our user interface and generalise on behalf of all our users? "

    Fast forward to the year 2012, and I notice that Paycycle has done two things:

    1. Ditched Silverlight.

    2. Started again with a clean simple bookkeeper-friendly interface designed to fit into Xero's look and feel.

    :)
    SHG-e1b00