2010 May | Joshua Nozzi

Zendesk Saga

May 202010

Mikkel Svane ( @mikkelsvane ), CEO of Zendesk, made what must have been quite a difficult apology for the price increase fiasco two days ago. What are my thoughts? Well, I’m not quite sure.

When this all started, I raised a few points about trust. I stand by those points firmly. I wasn’t angry at the price increase itself. Here were my complaints:

The disproportionate amount of increase
The unrealistic value placed on features (like forums) that are not optional and that free, open-source does better
The inarguable abuse of the term “grandfathering”
The data lock-in for cheaper plans
The substantial disparity in pricing, compared with competitors with similar or superior offerings
The poorly-phrased responses from Svane on Twitter and in Zendesk’s forums

All of this amounted to a breach of trust in the company. Their actions belied the corporate image they’ve worked so hard to put forth. In short, it was a grievous error in judgment.

Then, two days and a few hours after the whole thing started, Svane posted an apology titled, “Sorry. We messed up.”

I would be a hypocrite if that’s all it would take to make everything okay again. Have Svane and his investors learned their lesson? By lesson, I don’t mean, “the social web can fuck you up as easily as it can help you,” as it’s obvious they have. Rather, the lesson to which I’m referring is, “if we say we’re good guys, we can’t make a douche bag move.”

I honestly don’t know the answer to that. The real question is, “will I stay or will I go?” For now I don’t know. I’m undecided. I need to know I can trust Zendesk not to decide to hold my data prisoner and jack up their prices again. Their promise to “grandfather” existing customers in (the proper use of the term) isn’t in any contract. It’s their word, which has been tarnished recently.

Plenty have praised Svane’s apology – I’m one of them – but that doesn’t mean all is now well. So, stay or go? I’ll let you know. I’m sure I’m not the only one debating this, either.

Zendesk Third Impressions

Rants, Jokes, Opinions, Tech Industry

May 182010

Awhile back, I wrote about the SaaS help desk company Zendesk and their “crazy girlfriend sales tactics.” Not only was the article a hit, but it prompted a very good response from Zendesk itself. As a result, I posted a fair-is-fair retraction and basically endorsed the company. Now it looks like I have to post a retraction.

Gone is my playful attitude. Gone are my good feelings about what could’ve remained a great “business companion”. What did I like and what went so suddenly and terribly wrong? Glad you asked.

The Good

Zendesk is quite good, despite a few limitations. It’s simple and straightforward. I speak only about the ticket tracking aspect as that is all I need. The web interface is pleasingly simple and the system itself is reasonably fast. The technical support (and even general PR responses) have been beyond stellar.

The Bad

The UI still needs some work. Zendesk mentions iPhone (and by extension, iPad) compatibility and that’s largely true. However, like a Flash-based solution, Zendesk uses some mouse-over UI actions (such as hovering to preview a ticket, menu access, etc.) which provides for an awkward user experience on a touch-based device that has no concept of “hover” or “mouse-over”.

As I painstakingly detailed, Zendesk had some problems with how it approached the conversion of trial customers to paying customers. I damn near told them to fuck off on that alone. As I just mentioned above, however, their response to this made up for the annoyance.

The Ugly

On May 18th, 2010, Zendesk announced (in a very complicated set of pages and an e-mail) their pricing would change. The customer responses in the comments of one such page weren’t just a groaning over a minor increase, they painted a picture of outrage, disgust, and (above all else) level-headed descriptions of how they might be able to justify a 10-15% inrease in the current economic downturn, but certainly not what can be up to a 300% increase in cost. Some even suggest reasonable pricing or an a la carté pricing scheme. See “What People Are Saying” below for a sampling of these comments.

What’s so wrong? There’s not too much added – certainly not enough to justify what can be up to a 300% price increase.

Zendesk offered a “grandfather” plan for existing customers at quarterly and yearly intervals. Unfortunately, this up-front payment only extends the current pricing for the duration of your pre-paid term. After that, even existing customers will have to pay the New and Improved Price.

On top of the massive increase in cost, the unpredictability of the cost of the service is not easily dismissed for any reasonable business owner or CTO. While the “Starter” plan they will offer still remains cheap – and, to be fair, still gives me what I need – there’s no guarantee they won’t pull the same dramatic increase stunt they did with their other plans.

Couple this unpredictability with their removing technical support (“community support” is “no support from us”, guys, let’s be real) and the ability to export your data from the Starter plan and the prospect of remaining a customer of theirs would be borderline stupidity.

What People Are Saying

The following comments were pulled from the page mentioned above in case they “disappeared”.

More than double what we’re paying or lose email support? Yeah, no thanks. We’ll begin the process of moving away from Zendesk today.

Please tell me there’s a typo somewhere here. My annual fee for Zendesk is going from $2124 to $4956?! I used “cost savings” as justification for moving to Zendesk with my upper management. That just went out the door.

I wish I could increase my prices 300% but I would have a mass exodus from my product! I think ZenDesk may have just made a huge mistake and I am sure many of their clients feel they are held hostage!

Why not just charge on an À la carte basis for new features that only a subsection of users will even be interested in?

One question for the Zendesk CEO or CFO – would you use a company who didn’t have a stable price plan you could predict, with price increases in line with RPI?

I’m just trying to wait it out before I have to break the news to my boss. All of our departmental spending is being scrutinized, and I don’t know that this increase will make it past Finance.

The fact that I have to even spend time think about this now after spending precious time integrating ZenDesk and educating staff makes me even more angry at ZenDesk. Booooh! ZenDesk, Booooh!

A reasonable increase in price for a additional in features is certainly to be understood or even expected. More than doubling the price I pay currently pay is not reasonable by any definition. As many others have pointed out, the ‘grandfather’ clause is merely a stay of execution.

If a business has no reasonable expectation or ability to forecast costs, a premises based solution will be the only way to go. Especially when you consider the fact that all our historical customer project data is housed with Zendesk and that their cancellation page says that it will all be deleted immediately and permanently upon cancellation.

…when using SaaS services, you expect stability and fair pricing. This is extortion and we WILL cancel our service and move elsewhere if required.

Come on be serious, this is extortionate.

I’m sorry Zendesk, but this is not how to treat your customers. A 10% increase or something would have been ok and I guess no one would be complaining. But this is really too much.

… and it goes on. Techcrunch also posted an article.

Conclusion

Zendesk has shown a lack of respect for its customers and their budgets. Some speculate they’ve planned to gain x number of customers, have the high-end customers invest hours and money in customizing and integrating the system, increase the price (and drop “low-end” customers) and show an overall increase in profits. I have to say that’s not a bad theory at all. I think I share it.

As I explained to “Olivia” (as I called her in previous posts), I feel threatened by this as a business owner. My information may no longer be mine to take with me if I decide to leave. I may have to face similar decisions even with the minimum plan if Zendesk suddenly decides their minimum pricing should be equally outrageous and they should even it out.

The bottom line is, I’m afraid I can’t endorse Zendesk any longer. Lack of predictability, no official support at an affordable price plan, and information lock-in add up to a big steaming pile of shit for $30/month. I’ll pass, thanks. Had I known then what I know now, I would never have signed up.

Update (May 20)

This has unfolded into an outright saga. CEO Mikkel Svane had some things to say on Twitter that didn’t exactly smooth things over:

I hope all the new sexy Zendesk features don’t drown in today’s noise.

Leaving office with headache. Not happy about pricing reactions. Less happy that it overshadows what an awesome system Zendesk has become.

While the second comment drew some fire (“the headache is of your own making” and similar sentiments), it was the first comment that really riled up Zendesk’s customers. Many were none too happy at their valid and reasonable complaints (many of which agree on a better approach at tiered pricing – more on that in a moment) having been blithely dismissed as “noise.” Some on Twitter have repeated, more or less, the same idea: “How Not to Treat Your Customers” or “How Not to Roll Out Price Increases.” Even Zendesk competitors are weighing in, offering price-matching and rate lock-in.

Of the many voices expressing outrage (and the few churlish pokes), a growing number of users actually suggested what I feel is a fair compromise. They would accept a fairly substantial price increase in return for tiered pricing. That is, the “exciting new features” (such as a basic implementation of forum software, which users point out is not as feature-rich as the many free, open-source alternatives available today) should be optional, as should the knowledge base features. The more services you use, the higher the pricing. Some even suggested they’d pay more for heavier volume.

I propose a mix of both. I personally only need the ticket tracking portion. For up to two people. For not too many tickets per month. I’d rather pay only for that, and if I decide later I need other features or if I suddenly start processing hundreds of tickets a month, I would expect to pay more.

For now, it looks like the company is in damage control mode (taking surveys, saying little). I now have a strong feeling the shareholders are behind this decision (‘pump-n-dump’ perhaps, or just outright cluelessness). True or not, I think there’s a whole lot of reconsideration going on right now. Either way, my faith in Zendesk has been severely shaken. I’m still planning to move to another service (and to take advantage of the sudden flurry of competition).

Google-itis

Rants, Jokes, Opinions

May 172010

The SouthtownStar posted an article about “Google-itis,” which is a cutesy term for Internet-fueled hypochondria and/or self-diagnosis. It hit home a bit, as it made me think of a loved one going through the same thing. Hypochondria aside, “google-itis” can be dangerous.

I know several people suffering true social anxiety (some worse than others) for various reasons. A loved one close to me has been battling his own for years. A few years ago, however, he found what he thought to be a great resource: an internet forum for social anxiety sufferers.

At first I thought it was a good idea. There he could commiserate, gauge the intensity of his own suffering compared to others for context, vent, etc. I didn’t bother reading any posts on the forum myself. That was a mistake.

After awhile, listening to his descriptions and having read a few posts myself, I began to feel uneasy. It looked like a lot of self-diagnosis with no moderation by knowledgeable people. But it seemed to be helping him, so I only mentioned (several times) not to take people’s opinions there as gospel – they’re sufferers, not psychologists (or pharmacists). After all, I reasoned, the biggest problem with psychological problems is that we can’t see our own problems objectively – we can’t see ourselves from outside our own minds.

It’s only recently, however, I’ve been relieved to hear from his own mouth that this forum is bad news. I would call it dangerous. Virtually every thread is full of self-diagnosing wanna-be pharmacists, describing the interactions of these drugs with brain chemistry (using general terms) as if they fully grasp these complex systems with no degrees whatsoever. There are no psychologists serving as moderators. There are no volunteer pharmacists to debunk misinformation or gently explain that individual brain chemistry is far more complicated an issue. There is no voice of reason to tell someone firmly, “you don’t know what you’re talking about and you’re giving people dangerous advice.”

No, their information comes from what they’ve read online. They describe how they use this drug and that, mixed with a little of this or that, augmented by that, etc. Some make recommendations about what medications another should try. Some even go so far as to recommend illegal drugs (with no mention of precise dose and no references to how these drugs actually achieve the purported affect), heedless of the possible disaster for someone with psychological problems. I’m not an anti-drug crusader or anything (I think the “war on drugs” is a colossal failure of public welfare), but it doesn’t take much intelligence to see what a bad idea this is.

Some of the advice amounts to, “you should augment tricyclic antidepressants with LSD.” Yeah, that’s a great idea. I can see it now, “Works for me … I haven’t murdered a kitten with a staple remover in weeks!”

Yes, I’m conflating anxiety and psychopathy for comedic effect, but here’s a fun fact: “social anxiety” can be a satellite condition around a more serious general psychological issue.

What’s most dangerous about forums like this is, like anywhere else online, all some ass-hat has to do is use the relevant terminology (correctly or incorrectly, it doesn’t matter) and speak authoritatively to make the sheep follow. These sheep, however, are desperate for a solution for a real problem and since “psychological problems” can also include messiah complex and narcissism, this combination makes the ass-hats with an audience all the more dangerous.

I’m happy to say my own loved one has seen this for what it is, but if you suspect someone in your life is falling into the “google-itis” trap (whether for hypochondria or a true illness), it’s up to you to point out what a dangerous idea it is to put their faith into a “resource” where any ass-hat can claim to be an expert.

Hypochondria can be funny – even endearing – most of the time. Googling the psychopharmacological advice of self-described experts who suffer psychological illnesses themselves is a bad idea.