Why Transitional Services Are the Key to Easing the Shift to New Platforms

August 25, 2006

I’m about to coin a phrase, or make a fool of myself by describing a concept that has been around for ages. Hold on to your hats, here come my thoughts on “transitional services”.

But First, What Are Transitional Services?

Transitional Services facilitate a user’s transition from one platform to the next. Or at the very least, ease their pain.

Whenever there is a platform shift, there is transition and straddling. For example, for the past ten years the photography industry has been shifting from celluloid to digital. The industry and its consumers are undergoing a transition from one platform to another. This transition has consequences. Many users are reluctant to transition because they are invested in the first platform. I.e. “I have cameras and film, slide projectors and photo albums”.

When users decide to transition, some may want to bring their old platform content (printed photos) to the new platform format (scanning photos). They find themselves at a point where they’re straddling the new platform and the old. Both the transition and straddling phases create pain and opportunity in the marketplace.

Why Are Transitional Services Essential to Moving Processes Online?

I wrote venture capitalist Paul Kedrosky saying I think there is a huge and growing market for transitional services in Web 2.0. I pointed out how helping people get from offline to online processes — while helping to ease the pain of the straddling phase — will be a strategy that start-ups and established players can leverage. And that I foresee an increasing number doing so in the coming years.

This whole conversation was sparked by FreshBooks‘ recent release of its transitional ground mail service. The solution is to help businesses transition their invoicing/receivables process online. Significant benefits can be realized online: streamlined processes, reduce costs and improved customer relations. Businesses want to get online, but there is a world of pain awaiting them in the transition phase (“How do we build the service we need?”) and straddling phase (“How do we manage our cash flow when half our clients pay us online and half pay us offline?”).

The ability to painlessly transition customers from ground mail invoices to online invoices and recurring billing is what FreshBooks offers. But there are other examples of businesses that facilitate traditional office activities. You can create and send photo albums as gifts via Flickr. This is an example of a reverse transitional service where Flickr is facilitating a transition from the new platform (digital images) to the old (printing and mailing images).

What’s magical about all of this, and a hallmark of a transitional service in the Web 2.0, is how the line between the online world and the offline world blurs. The slicker the service, the more seamless the delivery, the more the offline world gets pulled online.

What Are the Opportunities in Leveraging Transitional Strategies?

In terms of opportunities, I foresee more and more services leveraging transitional strategies. Transitional services will be delivered as value-added backend services and incremental revenue generators.

So, while none of these concepts is new, and the act of delivering such services has been around for some time, I have seen no overt attempts to define the phenomenon, so I have done it here. If it has been done elsewhere, please let me know — rain on the parade, it’s okay. As I have not had as much time as I would like to consider all the implications of transitional strategies, I encourage you to sound off with your own thoughts. Can you think or other examples? Better yet, can you think of industries in need of transitional services, where ripe opportunities exist? Please comment below.

about the author

Co-Founder & CEO, FreshBooks Mike is the co-founder and CEO of FreshBooks, the world’s #1 cloud accounting software for self-employed professionals. Built in 2003 after he accidentally saved over an invoice, Mike spent 3.5 years growing FreshBooks from his parents’ basement. Since then, over 10 million people have used FreshBooks to save time billing, and collect billions of dollars. A lover of the outdoors, Mike has been bitten so many times it’s rumored he’s the first human to have developed immunity to mosquitoes.