Interview with Duane Jackson of Kashflow Accounting Software

I have long been a fan of Duane Jackson founder and creator of Kashflow. I find it interesting that he is very vocal in his marketing approach and he has no problems in pointing out “flaws” in his main competitors offerings – I like the approach and many marketers say that controversy sells.

So I have managed to get Duane’s ear to ask him a few questions about his approach and others about his company that he has kindly offered to answer for us today. So let’s kick this off:
 
Q: For all the postings you have made to your blog on the subject of Sage, is this marketing approach something you thought about before you kicked it off or just something you thought you should just make public to show what they are doing (or something else) ?
 
A: Sage are the biggest player in the UK accounting software industry and were once the biggest software company in the UK. So I think it’d probably be more remarkable if I didn’t mention them on my blog.

There was certainly no plan to have the blog mention Sage as often as it has. It just so happened that not long after I launched the blog, Sage attempted to take a piece of the web-based accounting software market that we had helped create.

It was by pure chance that at the end of last year I found myself with exclusive information about a new Sage product that noone outside of Sage knew about.
 
I did consider not blogging about it, but decided it’d be silly not to. So in the end I did and it attracted a lot of attention. http://blog.kashflow.com/2008/11/28/sage-live/
 
 

Q: Do you think it has raised the profile of Kashflow (if this was a strategy of yours?) as I see even the Times Online picked it up.
 
A: It’s done wonders for our profile – more than I ever expected. It probably helped that a few days later Sage threatened us with legal action over a different issue. As a result we’ve had coverage in the national press, including The Times, The Telegraph, The NY Times and a number of other places. A few industry journalists have also said that they first heard about KashFlow as a result of the running with Sage.

After they launched their product, I found some very serious security holes. I used to be very involved in the information security scene many years ago, so I’m well aware that I should have gone straight to Sage and told them rather than blog about it. But because of their aggressive stance towards us, and because the information wouldn’t lead to any businesses losing data, I decided to publish. http://blog.kashflow.com/2009/01/21/sage-live-security/ and this resulted in them having to withdraw from the market http://blog.kashflow.com/2009/01/28/sage-take-saas-product-offline-due-to-security-concerns/
 
This led on to lots more profile-raising coverage for us. It also meant that my company name would be forever connected with a £2bn company attempting to enter our market. Not a bad marketing coup really. Whenever Sage Live is mentioned, so are we. In fact, at the moment we’re #1 on Google for the term Sage Live.
 
Q: Last year you managed to get an excellent partnership with PayPal by integrating your software with them. Other smaller companies may be thinking along the same lines so do you have any advice on how small business owners can approach larger companies ?
 
A: We were really fortunate that PayPal approached us rather than us having to approach them. They even helped to fund the developments which resulted in us being the first accounting application in the world to be PayPal certified. For such a big company, I’m always amazed how entrepreneurial the guys at PayPal are, and at how entrepreneurial they’re allowed to be.
 
Q:  You started Kashflow with a small grant from the Prince’s Trust some years ago would you still recommend this route for young entrepreneurs today?
 
A: Absolutely. Although the cash I got from the Princes Trust was important, in hindsight it was the other help I got from them that was more essential. As well as mentoring, you get access to workshops on various areas of running a business and access to specialists.
 
They also run networking groups for Prince’s Trust supported businesses. This turned into more of a peer-support group than business networking. But without that group I know my business wouldn’t be as successful as it has been, Plus I made some really great friends from that group.

The Princes Trust do an amazing job that no other organisation in this country comes close to matching. As you can imagine, it costs them a few quid to run it – they need to raise a million pounds a week. I occasionally help raise funds via their Technology Leadership Group (http://www.princes-trust.org.uk/support_us/leadership_groups/technology.aspx) and have been lucky enough to meet some great technology entrepreneurs like Bill Gates. I certainly know what my first big charitable donation will be!
 
Q: Do you have any other tips for people wanting to start a new business in today’s tough economic environment?
 
A: There’s a big difference between starting a business in the middle of an economic boom and a time like now where the economy is struggling.

The main differences now are:

• There are more talented people looking for work
• Salary expectations are lower
• Advertising sales are down, so there are bargains to be had.
• Consumers and businesses are more likely to seek out services that save them money
• If you’re currently employed, there may be voluntary redundancy packages on offer.
• Companies are more willing to switch suppliers if there is a demonstrable saving involved

There hasn’t been a better time to start a business. So the only tip I could give is to get started now rather than wait for the boom times to return as they undoubtedly will.
 
Q: Now you have a successful business, what’s helping you continue to develop and grow your business ?
 
A: It’s been a very interesting and educational journey for me so far. I now have a business that’s serving thousands of customers every day, is fairly established in the market place and is making a profit. But to stay in that position we need to be constantly improving what we do and how we do it, especially as now there are some very worthy competitors in the web-based accounting software market.

A year or so ago I was learning how to rapidly scale the business to cope with the demand. Currently I’m learning how to get (and keep!) a management team in place and make sure they’re appropriately incentivised. And I’m sure this time next year I’ll be learning something completely different.

I have a very experienced and patient chairman and mentor, Lord Young, he has over 50 years of business experience and brings a lot to the table. We’ve also been working with some great people at Deloitte. I used to be of the mindset that “consultants” are a waste of time and money, but I now really see the value in utilising the specialist knowledge that these kinds of people have.
 
Q: Seeing as how you and your team are always coming up with new ideas, perhaps you can tell me what your typical day looks like ?
 
A: The ideas really come from our customers, not my team. We’re not a particularly creative bunch to be honest. From day one we’ve built our software based on what our customers said they want, rather than what we or the accountants decide they should have. That was a deliberate decision and I think it’s served us really well and has been instrumental in getting us to where we are now.

If you phone the office and ask for me before 10am you’ll usually get told I’m in a meeting. The truth is I haven’t actually got into the office yet. I’ve never been one for early starts but I make up for it at the other end of the working day.

I start the day by going through my emails, checking up on our competitors and taking a look at the important numbers (sales so far this month, number of paying customers, new trial sign ups).

I’m really rubbish at doing the small things – like remembering to return important calls or signing documents – so my PA Dominique will give me a list of the important small things I should be getting done that day and she’ll badger me throughout the day until they’re done.

From then on, every day can be different. Sometimes I might have to get involved with complicated support queries, or I might get involved with some of the programming – either actually writing the code or agreeing with our developers the best way to approach something.

There can be a degree of making sure the different departments – sales, support, development – are all speaking to each other and getting what they need from each other.

There will usually be calls from journalists or commercial partners to deal with. It’s all pretty boring stuff to an outsider!
Q: If a budding entrepreneur asks you where they should go to get advice on starting a new business where would you send them ?
 
A: Advice is just that – advice. Not instructions. Some mentors can’t make that distinction and they get their knickers in a twist when their mentee doesn’t follow the advice given.

I think that often the best thing to do is to get as much varied advice as possible, and then make decisions based on that. The best place for a range of advice is business forums. Just be aware that as well as great advice, you can also get some really bad advice from forums.
 
One of my most important advisors is my accountant, Alan Moore at Alpha Business Services (http://www.alphalimited.co.uk/) . I actually met him via a business forum. An accountant should be much more than someone you hear from once a year to get the accounts in order.

Accountants are naturally risk averse, whereas entrepreneurs are, by their very nature, the exact opposite. So they’re great to bounce ideas off and to bring you back down to earth occasionally. As well as the technical ins and outs of a business (annual returns, share certificates, etc) your accountant should be able to give you advice on actually growing your business. Alan is certainly the unsung hero behind KashFlow’s success.
 
Q: Thanks for your time today Duane – is there anything else you’d like to add to help people start a new business or even grow one ?
 
A: There are a lot of resources on the internet for people starting and growing businesses  – make sure you use them. And don’t be reluctant to spend money on things like marketing and professional fees. The old saying that you have to speculate to accumulate is true in business.

Posted in interviews | 1 Comment »

One Response

1. Tim Tav Says:

   This is a fantastic post. I like the Q and A format. I have never heard a more true statement than the accountants being risk averse, and in many case the same can be said for bank managers, and I mean the retail sector of course! The advice of getting accounting software training in order to help realise all the features of a powerful system is also very valid. Thanks

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