A Product Market Fit Show | Startup Podcast for Founders
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?
00:12:42 · Cosmin Nicolaescu
[00:12:42] S0: I mean, obviously, it's a higher risk, higher reward in that, like, we have to build a lot more. Like, it'd be much easier for me to build any one of those tool replacements with higher quality, but the gains are much more incremental. So you don't get that order of magnitude productivity gains. I think there's two things that have resonated. The most important one is we started in the beginning and we still do with a vision of what we're building. And obviously, makes sense in our first year because the vision is the only thing that we had. We didn't actually have a product yet. Right? Like, we haven't built all these things. But even now, like people are buying the vision of accrual, helping them be the operating system across their firm without having that capability, by the we don't have all these different product and service lines in place, but that's like, is landing that message. It's, hey, here's one why this world will look better because you've been used to a world in which you buy multiple tools. I was at a conference earlier this year and one of the partners on stage was advocating for like, use the best tool into the best scenario. So I combine all these tools. And I I went to him afterwards and I was like, hey, actually I don't think that's going to work anymore, I think that's actually countered to that, and I want to kind of explain why, that's kind of the reason number two, but that's not a a common pitch. So first you have to paint a picture of what that might look like, and then you have to convince them that you can actually build it. Because to your point, you haven't, and so I'm taking a risk in in doing that. And that's why like having some level of credibility and and showing iteration very quickly, I can build that credibility when you don't have a product in place.
00:14:15 · Pablo Srugo
[00:14:15] S1: My feeling I'm curious on the pre Gen AI, post Gen AI, and, like, how that affects this exact pitch of this all in one solution. Like, one of my, let's say, educated guesses or whatever is that there was always value in in the all in one because obvious reasons, everything you just said. But with AI, it does feel like there's an extra label value of being able to have the context go across. Do you think that's true to even 100%.