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Bootstrapping to Inc. 500: Tallie CEO Chris Farrell (Part 3)

Posted on Thursday, Sep 25th 2014

Sramana Mitra: What did you do? then Did you put together some sort of a customer advisory board of people who were prominent leaders in the accounting space?

Chris Farrell: You’re right. It wasn’t anything as formal as a product counsel. It was actually a series of relationships. I began cold-calling a number of people in the industry introducing myself and the company and essentially engaging them in a dialogue. It was, at first, very informal. We just talked to the experts about how they saw the industry and how software companies could help.

Sramana Mitra: What were they telling you in terms of what was missing from all these other solutions? It is a crowded space. There were other QuickBooks plugins that tried to tackle expense reporting. What was missing in the market that allowed you to create a position?

Chris Farrell: My opinion is that most companies would claim integration with a system. Integration is a very broad term and it’s a nice marketing bullet to put on a website. However, when we think about what might constitute integration for accounting systems, you would start with file import and export. People would have file import and export features and would call it integration. However, file import and export would not address air handling and had a lot of issues around the depth, quality, and the timeliness of the information transfer.

We knew we had to build a direct integration that was going to synchronize all the key data elements in both directions. For example, we would pull in the employee or project data. We would send back to the accounting system all of the accounting details they would need including the department information and project information in a manner that met their configurable workflow. What I mean by that is when we send data back to QuickBooks, there are multiple destination points. You can create a check, bill, or journal entry.

Our ability to essentially target the exact needs of the accountant on a client by client or a partner by partner basis was relatively new to the industry. Nobody else was doing that. Still to this day, most people are putting together basic integration with very few configurable elements and claiming victory. Whereas, we’re trying to see the problem through all the way down to the finest and most precise details.

We believe this is very important in our go-to-market strategy. We’ve been very successful with it because the old days of CIO buying software and forcing it upon the users of the company are going away even in large organizations. The purchaser in smaller organizations is the practitioner. You really need to nail all those details. Otherwise, the disconnect between what people perceive they’re buying and what they’re actually buying can be quite wide.

Sramana Mitra: You told me earlier that you went after the small business market. Obviously, QuickBooks is a small business accounting system. Is there any kind of segmentation in that? What you’re telling me about departments and projects means that you’re going after slightly on the larger end of the QuickBooks audience. Is that correct?

Chris Farrell: Absolutely right. We talked to the QuickBooks luminaries and we know the QuickBooks market is very broad. One of the earlier things we did was to evaluate the QuickBooks market and to essentially figure out what was possible for a company our size. You’re very much resource-constrained in terms of customer support. So where we invest our time becomes even more critical. We chose to go after the larger of the QuickBooks space and target them because their needs are going to be different. Small one to three person companies are likely to have most of the spend happening out of the owner’s pocket. The need for workflows and accruals is not there. Once taken to a larger scale, the need for departments tends to emerge.

Our go-to-market strategy through the luminaries was allowing us to approach the larger of the companies. For example, a small entrepreneurial organization probably isn’t paying attention to the luminaries in the market. Intuit has a buffed QuickBooks pro advisor community. Those people are servicing the largest of the QuickBooks accounts. That top 5% of the QuickBooks ecosystem is where the meat of our market is. We want to understand that early and we figured the luminaries approach was going to allow us entry into that core segment.

This segment is part 3 in the series : Bootstrapping to Inc. 500: Tallie CEO Chris Farrell
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