CEO To Rainmaker
CEO To Rainmaker
Episode # 82 The Anatomy of a Startup
So good morning folks. Gene Valdez here, welcome to today's show, episode 82. Can you believe it? The title of the episode is the anatomy of a startup. Many of you watching or listening today are either a startup or you're thinking about being one. All I can say is I don't want to put bad news on it, but the mortality rate for startups is very high. So you got to know your P's and Q's.
Speaker 1:My guests today are Sean Washington and Tamara Washington, who are veterans of Startup Ventures. They're going to share with us their thoughts, good and bad, so fasten up your seatbelts. So what, if I would, could we get? Before we get to the meat of it, I'd like to just give a little bio on my guest speaker, sean and Tamara. Thank you for joining me now.
Speaker 1:Sean is a CPA and a graduate of San Diego State College and formerly worked for the IRS, america's favorite company, and he learned his along the way. He worked with a few other small regional accounting firms before he branched out in 1991 and created his own accounting practice, which now is called the Sean Washington Accountancy Corporation. So he's been doing that for how many years, sean 34. 34 years. He is the co-owner of this business with his wife, tamara, and Tamara does the heavy lifting. Sean takes all the credit and Tamara joined the firm in 2004. So she takes care of the clients, makes them happy, takes care of operational issues so that's a full-time job. Care of operational issues so that's a full-time job Now.
Speaker 1:So the seed of any business is an idea. Where do ideas come from? They come from the kitchen table. So Sean and Tamara were sitting at their kitchen table. They had an idea and they decided that they wanted to act on their idea. They sort of fell in love with their idea, but it was right in their wheelhouse. They had the experience and we're going to get into great detail about that, but it is an app called Mileage Quest which I'm not going to get into detail on that. They can do that. But so now they have another entrepreneurial venture startup going, just like they did when they had the Accountancy Corporation 34 years ago and, from what I understand, they work at both companies tirelessly.
Speaker 1:So how many hours are in your week? There's only 40 in mine. I don't know how they do it. They must have some secret vitamins or herbs or minerals or workout videos you see on YouTube. I don't know how they do it, but they definitely have the energy and we're going to learn a lot about that a little bit later. So I wasn't supposed to say this. Sean begged me, but in 2004, he was named the sexiest CPA alive by People magazine, and I always say if it's fact you ain't bragging. So enough of me rambling on, let's bring out Sean and Tamara. Good afternoon.
Speaker 3:How are the two?
Speaker 2:of you Great I'm doing much better.
Speaker 3:Now I can brag and say that I'm married to the sexiest man in the world. That's true, I'm doing much better. Now I can brag and say that I I'm married to the sexiest man in the world. I'm encouraged.
Speaker 1:That was 2015.
Speaker 3:That was 10 years ago. Oh my gosh. Well, nevertheless, it's a feather in my cap.
Speaker 2:It's a good thing, nobody fact checks, but All right.
Speaker 1:So I guess the where's the beef question is you guys are. You're already working hard. You're making a lot of money. Why start another venture? Tamara, you handle that. Why did you start this?
Speaker 3:You know it's. It's a wonderful thing, I tell you, for being married to your boss, being married to your best friend, being married to your confidant, because you have all that wonderful time to spend with each other, to have conversations about a host of things. Yeah, and what happened was actually this was during tax season, I'd say about 10 years ago. It was during tax season and, of course, we're always looking for best practices, right? Yeah, always wanting to contribute to the success of our clients were approaching that 11th hour of tax season, we were like you know what? We have to plan better and assist our clients in planning better when it comes to preparing for tax season. And everyone knows that the first quarter of every year is an absolutely harrowing event for, or a time period for, anyone that prepares tax returns.
Speaker 3:It's stressful on the staff, it's stressful on the clients and you know we were just pondering, we were trying to figure out ways to better assist our clients in gathering their data right.
Speaker 3:So I'm sure you've experienced yourself where it's April 1st and you're thinking oh, the deadline is on the 15th. My CPA, or my tax preparer, is stressing me out. They want X number of documents to serve as backup, and that indeed is the case. That's just the reality of our world. But that's the long answer. The short answer is Sean and I were trying to figure out a way to assist our clients in gathering the data more efficiently. Ok, and we're using something that perhaps folks aren't aware of as a tax deduction, and that is mileage reimbursement.
Speaker 1:Yeah, yeah. So a lot of people travel a lot for their business.
Speaker 3:Exactly, exactly so, when the clients would come to the office with their shoe boxes full of receipts which is what I do, what I used to do. Good Used to do Speaking in past tense, so that's good to know. But yeah, they would come to us with their shoe boxes and you know that's a fair amount of time that's needed for our staff to go through everything and you know, organize and whatnot, and of course we have to pass that cost on to the client.
Speaker 3:So you know, as far as the best practice piece we were like, what can we do to assist our clients in making sure that they can monetize all the time that they're spending in their vehicles traveling for business or going back and forth to the doctor's office or to the physical therapist?
Speaker 3:or you know even if they volunteer for their or their place of worship. You know if they're volunteering, um, you know, for the united way, it doesn't matter. All that time can be tracked and it can be used as a tax deduction. So where it's the education piece that we're concerned about? We want to make sure that folks are educated to understand what is available to them, but we also want to assist them in streamlining the process of tracking their miles.
Speaker 1:OK, so Mileage Quest is an app. It is, and succinctly, in 20 words or less, what does it?
Speaker 3:do. Okay. So it is a smartphone app, it is available both on the iOS and the Android platforms, and the software essentially streamlines the process of managing your mileage, and it's done so through technology. It's a triangulation process, right? So you have your cell phone, it talks to your calendar, and then it also talks to a GPS system. So with all those three in place, you're able to generate qualified IRS compliant reports. Irs compliant.
Speaker 1:Very important Okay.
Speaker 3:Absolutely, because the IRS gets really cranky when you submit for deductions and you don't have proper backup.
Speaker 1:Well, sean used to be one of those guys. He gets cranky right.
Speaker 3:Absolutely oh, and the staff would just lose their minds, and I'm sure you know a lot of companies that reimburse their staff for mileage. It's more than a notion. There is a process. But the good thing about MileageQuest is it does produce those valued reports, so it streamlines the process of getting authorization for payment as well as serves as a backup when you're filing your tax returns.
Speaker 1:Okay. So, sean, this question is for you. So you started your accountancy practice in 1991, and you started MileageQuest in 2021. Were there some parallels in terms of startup issues that you were confronted with that make you set back a little bit, or was it all smooth sailing? What did you learn from starting well, both of you? What did you learn from starting both of these companies?
Speaker 2:well, when the accounting firm was started, uh, I was single. I had a roommate, roommate, I rented a room.
Speaker 1:I had no expenses. I don't need to get into your personal life.
Speaker 2:I had no money and so it was grassroots and the building process was quite a bit of time, Whereas with Mileage Quest we actually have a client base that actually were some of our first subscribers to the app. And of course we have the resources now to hire the appropriate consultants and staff to help get Mileage Quest to that next level. So that's the difference.
Speaker 1:So then, really, it's a matter of resources. It's critical to a startup or a potential startup, absolutely, whether it's people, capital, equipment, whatever it is, you got to have resources, right, okay, so awesome. So how's the business doing now? Hold on, let me back up. So, sean, with regards to Mile mileage quest, what do you do? What's? Your job description. And then I'll ask Tamara the same question, because I know she's the majority owner, because she doesn't trust you.
Speaker 2:That's right. Okay, Well, I am a co-founder a minority co-founder.
Speaker 2:Okay, that's fine, but my job obviously, obviously, is CFO, so we have a bookkeeper and so my job is to make sure the payment platforms work, are secure and we're able to manage it. New startup is everybody says I'm a sales guy who thinks he's an accountant, so I'm involved with the sales aspect of what we do Customer subscriber success. We call it Connecting the dots, getting people to do trial versions of the app and demos, and helping the sales team deploy and selecting our pipeline of potential subscribers. So that's what I do.
Speaker 1:Okay, and Tamara, what do you do?
Speaker 3:Well, I'm a co-founder as well and I am the CEO president and CEO of the corporation, so I am the quarterback, so to speak. You know, charting the course, you know, as far as the company is concerned, is a dual responsibility, that is, me and Sean. But for the most part I'm on the day to day operations, ensuring that we are following all the compliance that's required. You know, managing the staff, ensuring that they're staying on point with what the vision is for the company. So I'm the queen bee, in other words.
Speaker 1:Did you see the movie Beekeeper with Jason?
Speaker 3:I sure did, we know what the queen bee does.
Speaker 1:Yes, so yeah. Now, how is the business doing? This is now your fourth year, right? Are you where you thought you would be? Are you a little behind? Are you ahead? What do you see as the challenges for your startup, which conceivably could be a challenge for one of my listeners' startup?
Speaker 2:Okay, well, for your listeners, make sure they hire a good accountant to help them do projections. We obviously do projections and we monitor them.
Speaker 1:Why is the projections important?
Speaker 2:Sean, because you have to know what your costs are and you have to have a target for bringing on business and you have to know what your break-even point is and when you're going to reach that break-even point right. And also it helps you and the budget was done even before, while the app was being developed uh, even maybe a little bit before, to see to make sure. Mathematically this would make sense right is it real? Is the pricing realistic? Is the number of subscribers realistic and what's the cost related to that?
Speaker 1:and so you want to get to break even pretty quickly, okay, I mean that's that's important for startups, because if, if they don't estimate correctly what their break-even point is and let's say they secure some kind of financing wherever they get it if they don't hit break-even, they're going to run out of money. Okay, so who, for the both of you, who is the target market? Is it individuals? Is it businesses? Who's your? What's the profile of your typical customer these days for MavageQuest?
Speaker 2:Well, since I'm the salesperson, so I'll tackle that and then tomorrow I'll probably come in. So basically, we identified 20 sectors that would have a great need. 20? Yes. 20? Yes, Wow, that would have a great need for this app. A couple of them are healthcare accountants, outside sales, construction, insurance, finance. And healthcare is probably the broadest, because a lot of healthcare-type companies the employees use their own vehicle to go to and from to see patients, therapists, home health aides, caregivers, et cetera. So we have 20, like I said, targeted industries that we focus on from a marketing perspective and basically the app is designed.
Speaker 2:Initially it was designed for the accounting profession to refer to their clients, but as the evolution of the app, what happened is it's really now much broader. It's for individuals that may be independent contractors, maybe somebody that does sales and they drive their car around to do promotions and talk to people and then it's also for B2B, business to business. So we found that companies with six to 25 employees that's our sweet spot they need this app for so many reasons. It creates efficiency, because some people do handwritten mileage logs, some people do Excel there's usually mistakes Whereas the app syncs to the calendar and you can export a reimbursement report from your phone to your supervisor so they can see you're from two locations. They know that it's GPS driven and it's just. It's a great way to manage the mileage reimbursement process and for payroll and AP staff it's so much faster.
Speaker 1:Okay. Would you not agree, then, that one of the number one business tips for a startup is to clearly identify your target market, because you can't be all things to all people and find the ones that you think and maybe it'll be it'll work out for you that has the highest and best need for your service or product, whatever. It is Absolutely Right, okay. So what's the future look like now? Tell me about your sales force. Well, right now, the sales force, the company, your strategic partnership with them.
Speaker 2:Yes, okay, salesforce, which is the largest CRM organization in the world. They're out of San Francisco and Chicago. We became qualified supplier vendors for them, and so we're in their ecosystem for them, and so we're in their ecosystem. And Salesforce has taken us to market here shortly within the next 30 to 45 days and so we are a part of the Salesforce ecosystem. They've taken a look at the app. They really like the app and they wanted to bring us in their ecosystem so that they could offer our app to their customer base worldwide. Tamara, do you want to add anything to that about Salesforce?
Speaker 3:Yes, the exciting thing about the relationship with them is they had us enroll in their supplier diversity academy.
Speaker 3:And that was pretty neat because we were one of 45 companies in their cohort and this was their inaugural cohort, so that was pretty cool as well. But it's great what Salesforce is doing to bring businesses together. They are very much into the B2B space to the B2B space, and just the promotion of our company to their sphere is incredible, where oftentimes a startup won't have the opportunity to get in front of major corporations like this and network with their partners. We were blessed to have that opportunity. So for those who have started their companies if you're in the tech space, if you're in event planning, it doesn't matter I certainly would suggest that you look into Salesforce to see what they're about. Other companies have their ecosystems as well, but of course, we are speaking quite highly about salesforce because they embraced us and have taken us under their wing, so that's what I have to share there okay, I mean I could talk about this for hours.
Speaker 1:If one of my listeners out there wanted to get a hold of you guys and the company, what and what's the best way to do that, and I'll also leave it on the notes of this episode so they can pick that up.
Speaker 3:Certainly, we do have a toll-free number for those that want to give us a call. That number is 877-955-4667. So that's certainly a good way to get in touch with us. We're on social media. We are on LinkedIn. What is it? Meta? We're working through the Meta platform with Facebook and Instagram, and then you can always go to our website.
Speaker 1:Okay, okay, that's great. Is there any last minute takeaway you could give to my listeners that are in the startup category? Sure.
Speaker 2:What I would say is well, as a CPA and as consultants, clients come to me and Tamara, and they say they want to start a business, and my first question is is how much do you know about that industry? Oftentimes they know very little about that industry, correct? Then my second question is how are you going to pay for this? Well, I'm going to take money out of my retirement account. Maybe that's not a smart thing to do, so there's. So a couple of things have to happen.
Speaker 2:One you have to really understand the industry that you're going into. You have to obtain the knowledge or have someone partner with you that has the knowledge, versus taking your life savings and throwing it into a business that you don't have the background or familiarity about that industry. For us, we work in the reporting and finance tax industry and so we understand the nuances associated with mileage, claiming on a tax return and backup documentation requirements, so for us it was a natural fit. So I would say definitely go into or partner with someone who really knows that industry if you don't have the knowledge base.
Speaker 1:Okay, so I'm so. You've started this successful venture. It's on course. What's the next big step? What does your future look like in 2025? And what's strategic behind that that? Maybe you don't have to give any particulars to my audience, but what? Because you've got to be always thinking when you have a company, what can we do better? Right, that's my opinion what other markets. Could we tap that?
Speaker 2:we're just not aware of okay, so I'll go first then and tamera you. You kind of come in, okay. So so, basically because I'm on the sales side right um, we're, we're looking, looking at different channels to introduce our app to, and we have so many irons in the fire, so to speak, to enter into different sales channels and it's really exciting. We're super busy.
Speaker 1:Okay, let me stop you for a second, Sean. So maybe a startup who is using a certain distribution or delivery method should look at other ways that how they can get their product or service in the hands of their potential consumers.
Speaker 2:Absolutely.
Speaker 1:Don't rely on a one trick pony. Okay, okay, got that. That makes sense to me, especially in this day and age.
Speaker 2:Right, so that's what. So that's, the first thing is expanding sales to meet our targets, and then the second thing is continuing to develop the app. You have to continue to, you know, add new features, make it relevant, make it faster, make it, you know, useful, and you know they call it UI, UX, user interface and user experience. You want to make sure that that continues to be on the cutting edge. So I focus on app development and the sales piece.
Speaker 1:So that's what I do. I've always suggested to my startup clients that when they have an idea, always suggested to my startup clients that when they have an idea, or whether that, um, they might run it by some friends or family uh, you know, the technical term is focus group and just say what do you think about this idea? And some and, as you know, sometimes family and friends are brutally honest they'll say, well, that's the stupidest thing I ever heard of. Or they might say you got a winner there, dude, roll with it. Did you do any of that? Or you just felt that, with your background and experience, that you were right on target we felt, with our background experience, we were it was a good thing to do.
Speaker 1:Yeah, yeah because it seems like with your background with the IRS and the fact that you're a CPA, you've seen the pain of poor bookkeeping and therefore the need. It wasn't really hard to discover it in your opinion Correct, okay, well, I think that's a wrap, guys. This has been really fun. Guys, this has been really fun. I wish that you existed when I was a business development officer for banking, when I was driving, traveling all over southern california and sometimes my employer would reimburse me for gas and sometimes I would write it off as a deduction on my schedule c, but it was always a mess. You know, where did where did I go? How much there? What did I do here? How much was personal use? How much is business use? I'm not wired like that. I can't do that, and I of course nobody wants to get audited. So I think you have a winner there.
Speaker 1:And I hope you guys do phenomenally well You're already doing phenomenally well and keep up the good work. People will get a hold of you and that's a wrap, unless you have any other things you'd like to state before we summed up.
Speaker 2:Well, thank you for having us on, really appreciate it. And I'm thinking how long did you work in banking 30 years, you say 40?.
Speaker 1:About 20, 25 years.
Speaker 2:So I just did a quick calculation. And if you had claimed all of your mileage like you were supposed to and invested that money, you'd be another million dollars richer. I'll just leave you with that today. Okay, All right.
Speaker 1:Everything's quantifiable Sean Washington, sexiest man alive at the CPA and a member of the Mensa CPAs. He's good looking and he's smart. How you beat that? You got the world by the tail, dude you are terrible tamara you're lucky you found tamara yeah, I know she's amazing and everybody knows, and a husband, wife, the husband and the male always think they're decision-makers, but everybody knows the truth is. I already know. If the wife says, no, that's it, it's over with or you're on the couch.
Speaker 2:So true, so true.
Speaker 1:Alright, guys, I'm going to sign off. For all my listeners check out the podcast directories that you use. See it on YouTube under CDO to Raymaker. And it is the anatomy of a startup how to do it right and be successful. Bye-bye now.
Speaker 2:See you later. Thanks so much. Take care. Bye now. Good luck, everybody.
Speaker 1:Bye-bye.
Speaker 2:Bye-bye.