Today’s Deal Radar focuses on Outright.com, an online bookkeeping software provider for small businesses. Founders Kevin Reeth and Ben Curren had started a home business and wanted a easy way to manage their business finances on the web but couldn’t find one. Their colleagues suggested that they start one on their own, and after much deliberation they founded Outright.
When they entered the market, they saw that 75% of the small businesses in the US have no employees. Instead, the owners file a Schedule C with their personal tax returns. Despite this, most accounting and bookkeeping software in the market, had been designed for significantly larger firms. The options that small business owners had were overly complex and often full of accounting jargon like “chart of accounts”, and “accrual method”.
Outright has designed its free bookkeeping application to be easy to use. The company feels that there is a growing interest and demand in financial applications (specifically those in the cloud) and new products to stabilize, secure, and streamline business. This is apparent from the growing popularity of web applications like Outright.com, including Freshbooks, Batchblue, MailChimp, and Shoeboxed. These companies have joined Campbell, California-based Outright.com in the growing network of online software vendors called the Small Business Web. They use open platforms to compete against much larger players in the industry. The popularity of these integrated financial applications emerged during the recession as small businesses looked for ways to cut costs but remain efficient. Since most IT setups require upfront investment, companies are increasingly choosing to use online tools. Further, the company feels that the open platform works well for their clients because they now offer more value to a customer than a single, larger competitor could alone.
The company entered the market through word-of-mouth publicity; positive mentions by bloggers and the press; partnerships and combined customer experiences. In April 2009, Outright.com teamed up with oDesk, giving the more than 220,000 professional providers there easy access to Outright’s web-hosted bookkeeping software, saving them from having to input all of their transactions. The partnership enables payments to oDesk providers to be imported directly into Outright.com, allowing professionals to see how much they’ve earned, write off business expenses, and calculate and pay their estimated taxes on time.
The company is targeting freelancers such as web designers and developers; small online merchants, such as eBay and Etsy sellers; real estate agents; consultants and contractors. Their main users are sole proprietors, self-employed professionals, entrepreneurs, or anybody who is working from home. Outright is currently operating in beta mode and is free. The company plans to keep its core platform free but wants to roll out paid tiers and services in the future.
The company raised its first round of financing of $2 million last winter from First Round Capital, Shasta Ventures and SoftTech VC and a number of prominent angels. The company doesn’t feel that it needs additional funding currently. However, they are likely to look for funding either at the end of this year or early next year.
This segment is a part in the series : Deal Radar 2009