+ n.b. I get phone calls from people whose budget is $9 a month (me: "Oh cripes, not again.")
When I have a $9/month budget, I would rather know up front (from the web page) that the reaction on the other end will be "Oh cripes, not again." The "call me for a quote" is a very strong signal that I need not bother to call, and I generally don't. It's the old adage "if you have to ask, you cannot afford it."
On the other hand, the OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.
<i>OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.</i>
There might be, but I wouldn't bet that way. There's a relatively small window of company size between the point when someone needs a payroll service (10+ employees?) and the point where it makes sense to speak with a person about what bits and bobs a payroll provider should include and negotiate a price for those services (maybe 200+ employees).
I'd guess that's the size of a significant fraction of Y Combinator companies, but I'm not sure how well that would hold up across all industries.
Well.. don't forget, the distribution of corporations by size isn't even nor is it linear – it's exponential. From small business data taken from: http://www.census.gov/econ/susb/ – 98.7% of all US firms have fewer than 500 employees. 36.6% have between 5 and 100 employees.
To approximate the range you gave, 20.6% of all US firms fall between 10 and 500 employees (The bins in the data don't match your range perfectly) – so it'd be reasonable to guess that ~14% of all US firms are between 10 and 200 people.
That's a fairly attractive market – especially considering that if you made it easy enough, you'd draw in more of the smaller companies (say 5-20 employees) and they represent an even bigger slice (~74.5% of all US firms).
So yeah, I think it's significant as a target market.
> between 10 and 200 people. That's a fairly attractive market
That's crazy. There's not near enough granularity to infer anything about the attractiveness of the market. A firm with 10 people is probably not paying a payroll company; a firm with 200 people almost certainly is.
If you looked at the data, you'd see the granularity you desire. I was summarizing, but it's all there for you to poke at if you'd like to.
Also, given the number of companies that have 10 employees vs. 200 employees, if you could figure out how to make those 10 employee companies outsource their payroll, you'd have a decided opportunity (and that was also my point and it's exactly the point that philwelch makes here).
The fact that you and everyone else assumes that a firm with 10 people makes it to small to sell to makes it an opportunity for innovation. A well-done web-based setup rather than the higher cost, high-priced sales person/pitch could easily bring down the costs to make it a more economical proposition to serve the (presumably) lower-margin but higher aggregate volume small business segment.
> A firm with 10 people is probably not paying a payroll company
Sounds like an opportunity. If you have 10 people, at least one of them is probably spending their valuable time on payroll; if you had an affordable self-service option that undercut the existing providers, maybe they would pay a payroll company. And the firm with 200 people, maybe you could undercut their payroll company as well.
If you have a $9/mo budget, you should already know that the reaction on the other end will be "Oh cripes, not again". $9/mo is $108/year, which really isn't much considering dev, support, infrastructure, non-tech staff, and overheads.
If you want interested, keen support, then do what is necessary: pull out your wallet and stop going for the cheapest thing possible.
One honest reason why some companies do 'please call' is that pricing structures can get complicated quickly, the intracacies of which may be necessary but may confuse the purchaser. I've just come out of a meeting where it's clear we're going to have to take a financial hit simply to allow our reselling agents an easier price structure to quote from (these agents aren't primarily technical staff).
On the other hand, the OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.
I wouldn't consider the payroll software business ripe for disruption. A few major vendors have been doing it with transparent pricing and no sales-rep interaction for years. The other thing is that payroll is not exactly an easy system with all of the complicated tax laws, forms, communicating with banks for direct deposit, etc.
When I have a $9/month budget, I would rather know up front (from the web page) that the reaction on the other end will be "Oh cripes, not again." The "call me for a quote" is a very strong signal that I need not bother to call, and I generally don't. It's the old adage "if you have to ask, you cannot afford it."
On the other hand, the OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.