A Product Market Fit Show | Startup Podcast for Founders
00:06:29 · Cosmin Nicolaescu
[00:06:29] S0: Typically, people are either gravitate towards areas that look similar in terms of problem solve. And it's like, hey. What you're doing here, if you tweak it a little bit, you can apply it here, and we certainly had that. So as an example, we started with individual returns, and then people are like, could you help in other types of tax returns? Very natural kind of evolution of the product. The second type of asks are completely different, but big pain points. And so we've had customers, actually even in this past week, they're like, hey, engagement letters are a pain in the ass, we haven't found something good that helps us with that, there's a lot of these products and they're all very limited, could you actually build something there? Nothing that we've kind of like showed them or build that that has that, but there's a confidence of the quality of work that you've shown and the impact in this area is so high that we believe we could apply that same level of talent in another area that is very painful for us. We saw the same thing with audit where we've had the partner from audit in different firms be like, hey, I've heard all the wonderful things you guys are doing on the tax side, how can I start using you guys on on the other side because we have similar kind of problems with the existing tools and processing our workflows, if you guys could do something similar on the other side, that would be great? Now doing the same thing on CAS, so you can kind of see that FOMO that that trickles within your organization.
00:07:50 · Pablo Srugo, Cosmin Nicolaescu
[00:07:50] S1: And to be clear, these are not like potential customers who are saying, if you build this, then I'll buy. These are actual customers for the most part who are saying, I like your product. It's great. I'm buying. Can you also do this other thing? Can I also pay you more for this other thing? [00:08:03] S0: Correct. Yes. You're already solving this problem, and I'm rolling this out. Can you also do more? [00:08:08] S1: Yes. Which is a big difference. The other thing I wanted to dive in on is the value prop. So now we'll talk a little bit more about what your product actually does, but that's the key ingredient of product market fit. Right? It's not just they're using it, they get value. It's what value are you really delivering to your customers?
00:08:25 · Cosmin Nicolaescu
[00:08:25] S0: So for us, we look at it from two perspectives. One is how are we helping the accountants directly? And most of it is productivity, quality of work, enjoyment. Like, are you doing things more productive and the things that you're doing are the ones that are more interesting in your job versus boring, annoying, mundane, whatever you wanna call it. I think that's part of it. The other part is the client experience. A lot of the firms, and that was one of the thing that attracted us to this space, is accounting firms have worked with their clients for a very long time. They deeply value those relationships, and that's probably the most valuable thing in the business outside of the people that they they have in in the firm. And they're very focused on like, I don't know how I can provide a better client experience for my clients. And if I'm able to do that, then I believe I will be more valuable to them, it will be even stickier because I think people are realizing that over time, technology will solve more and more problems that are kind of mechanical in nature in this space, like filling out things, extracting information, some set of workflows, but the client relationship is the most valuable thing and that's where the value creation exists and the kind of new set of services. And so a lot of them are trying to optimize for that as one. That is a big differentiation in the pitch of having an end to end product that helps both the accountants and their clients feel better.
00:09:46 · Pablo Srugo
[00:09:46] S1: And maybe just tell me a bit like the the before and after, especially when you were talking about this product market fit moment specifically, like, what you delivered at that point. What were they doing before? And then because of your product, what what did that enable them to have their day be like?
00:09:56 · Cosmin Nicolaescu
[00:09:56] S0: So before, let's just talk about ten forty individual taxes because that is what we we just finished our first tax season at scale with. Before accrual, the best accounting firms in this country and the the most innovative ones would have anywhere from three to four tools to 67 to eight tools. That's kind of the range. And so they would have a tool that was their client portal. They would have a tool that would keep track of the intake forms that customers have to answer and upload documents. They would have a tool to store documents. They would have a tool to extract information from said documents. They would have a tool to review things. They would have a tool to have the client review stuff. They would have a tool to actually sign stuff. And so it's just like each step basically had one or two tools. And part of it was the ecosystem that has been created. Part of it is the evolution over time, it's like, you were using this tool and then we started using this other tool and now we use both tools because like, that's the general saying, right? Like, how do you solve a problem? You add a tool and now you have three problems. And so that was the landscape and firms using accrual, they basically get excited about the impact that we can have, but they also look at it from a pure kind of vendor management. It's like, oh, I can collapse like many of these tools into a single tool. And it's both useful for me as the firm where I have less tools to manage, less trainings I have to do for people, etcetera, but also for my clients. Like, to give you an example, there's two places where clients interact with their accountant in the tax workflow. One is gathering information, the other one is reviewing the tax return and and signing off. You would imagine that those are the same tool because that's and that's what the client is using, and it's not. You literally have, like, as a client, at the very minimum, you had two different portals in various forms that you had to to interact with for different stages. That's kind of crazy that that's the world that we used to live in.
00:11:48 · Cosmin Nicolaescu, Pablo Srugo
And then in between, you had a variety of these tools, and not only were the tools not that helpful in terms of productivity, but they required so much manual work from like admin staff to go in and out of those tools, import and export and transform data, put it into Excel, resave it. It it just feels like a very leaky bucket. The problem of, [00:12:07] S1: you know, having too many tools, it's classic. Right? Like, especially with b two b SaaS, like, that was the whole thing. You have all these point solutions, blah blah blah. And, you know, trying to build an all in one was always like the gold standard. You know? Like, the that's a classic pitch, the all in one solution, whatever. I'm seeing with AI, it's like coming back, but it it seems to be working in a way that it it wasn't working before. My question though specifically is how do you make that work? And and if you think about that first customer or maybe one of those first customers as an example, like, how do you tell a customer, trust me, you get rid of these six tools and you'll do it all in mine. It's gonna be it's gonna be great. It's gonna be fine. Right? Like, it all sounds great in theory, but, you know, how do you get them there?