Accountants plant the fintech founder flagby
A recent surge in accountants choosing to cross the tech divide and start their own fintech businesses prompts Richard Sergeant to examine the factors behind the trend.
While ‘accountant as fintech founder’ isn’t necessarily a new phenomenon, the past record of success in the field is, shall we say, patchy. What seemed to be a world-beating idea sat in the practice’s Herman Miller office chair often didn’t translate into a sustainable business.
However, the past few years have seen a bumper crop of accounting pioneers seeking to succeed where others have fallen by the wayside, with firms such as Hindsight, Xavier (now Dext Precision), AccountancyManager, Clarity, Coconut and FreshPay springing from the cloud.
So might this new cohort have better success? Here are a few factors that offer our tech trailblazers hope.
Technical barriers reduced
The advent of the cloud has opened up different types of technology, languages and ways of working. No longer is everything necessarily built from scratch or subject to slow development times.
“New libraries of code have become available that allow you to build more efficiently and increase the speed of delivery,” said James Byrne, founder of AccountancyManager.
This means development is much more collaborative in its nature, with fewer steps between those with the insight and ideas and the folks actually building the product. This means although it still isn’t cheap, you can get products up and running, tweaked and changed in a much shorter timescale.
The atmosphere for developing new tech is also dramatically different to how things were even 15 years ago. Encouragement and support for founders and their teams through organised networks and informal groups is everywhere, with tech hubs, incubators, accelerators and various government initiatives springing up around the country.
These provide assistance for business but also help accountants make the transition from firm owners (and entrepreneurs in their own right) to fintech founders.
John Jenkins, Founder of Hindsight, looked to local organisations for support: “Bodies like Silicon South really helped - it can be a lonely place as you take on this challenge. You’re outside of your comfort zone and need that sounding board.”
Industry knowledge baked in
In previous incarnations, the term “by accountants, for accountants” was not always a mark of quality or longevity in a product. These days, however, it’s seen as an important selling point among accounting professionals. “There’s no better way of understanding the problem and creating the solution than having been an accountant,” reflects Byrne.
Jennie Gillam, one of three accountant co-founders of newly minted cloud payroll tool FreshPay, says there’s growing frustration with vendors in the accounting software market. “Payroll software has not kept pace with how bureaus and payroll professionals work these days. They don’t understand or listen to what we need. Our starting point is how do we use our collective experience to make payroll better for everyone”.
The more accountants have access to and can see the possibilities for technology, the more frustrating it is if current products are more vendor-led than aligned with what is actually needed. With a proliferation of apps in the market, this baking-in of experience can now be seen as a premium, rather than a narrow view.
Learning from the vendors
Another factor enabling the rise of the fintech accountant is the deepening of relationships between software suppliers and the profession through user groups, conferences and other, more informal, means. This has provided the opportunity for accountants to take a closer look at how these businesses work.
Although adept at the idea and finance side, Byrne realised the broader team required to deliver a great product to market: “Modern software needs to deliver functionally, but also has to engage and be as easy to use as possible. You can see the investment that tech companies put into user experience (UX) and user interface (UI) design, and this has to be really well thought through into our product too”.
Similarly, Gillam reflects on the importance of great customer experience: “We’ve just hired two customer support people who can help onboard and assist with the data transfer, and in time we’ll look to bring on accountant manager and sales roles”.
Both of these reflect a very different approach compared to days gone by, where the commercial roles were recruited first to get the money in and visual appeal and general experience were less of a priority.
Digital advertising and social media
Getting the message out to potential customers, while still a substantial challenge, has also been transformed in recent years with the advent of social media.
Whereas previous products might have had the option of expensive exhibition stands and offline trade press advertising (AccountingWEB being the humble exception), the availability and cost of digital have helped speed up the possibility of exposure.
“There’s no way we could have gained the same kind of national coverage we got through google adwords by using traditional media,” adds Byrne. Gillan also cites the networking power of Facebook groups: “FreshPay started from conversations we had online looking for better solutions to the problems we had. Those same online groups have been our market research base and early adopters”.
Ever the cost-conscious crowd, the investment made in digital marketing, networking and ads can help bring these products to life and to market faster and more cost-effectively than has ever been possible before.
Rehabilitating ‘by accountants, for accountants’
For those with the temperament and appetite for risk, like Aynsley Damery with Clarity and Jonathan Gaunt at Dext Precision (formerly Xavier Analytics), the entrepreneurial fire is essential, but the need for accountants to use their professional experiences and make a difference is just as important.
And, if it can reverse a feeling that vendors have unhelpful assumptions around where they think an accountant's time is best spent, what their clients are ‘really after’ and disprove various tech-led threats of extinction, then it can only be a good thing.
It may take me a while to embrace ‘by accountants, for accountants’ again, but I could settle for ‘by accountants, for the best outcomes’