Financial Management – Tommy Vincent

Tommy Vincent:
What a lot of entrepreneurs don’t learn until later on in the maturity of their business is that the finance matters quite a bit, especially when you start doing exit planning. Getting those right things in the right categories seems like it’s just an annoyance when you’re early and you’re building and all that, but it really starts to matter when you’re looking at exit planning or succession planning or wanting to value the company and all that kind of stuff. So our mission as a company is to help make entrepreneurs lives better and easier through excellent financial management, more subtly guiding them to a better chart of accounts, making sure things are in the right order. And we will flag things like that.

Dana Robinson:
Exit Plan is a podcast for business owners and those who want to be business owners. I’m always in search of the lesser.

Dana Robinson:
Known stories of entrepreneurship.

Dana Robinson:
In the exit plan podcast, you’ll hear stories from startup to sale and hear from the professionals who helped business owners achieve their exit. Hosted by me, author, and private equity manager Dana Robinson, along with my co hosts and guests, you’ll hear real stories, tips, and tools that will help you plan for the exit you want, whether you are still working at a day.

Dana Robinson:
Job or running a business.

Dana Robinson:
Let’s get started with this episode of the Exit Plan podcast.

Dana Robinson:
Hey, everybody, it’s Dana Robinson coming to you on the exit Plan podcast, formerly the opt out life. One of these days, we’ll get Nate back on. Today I’ve got a guest that was brought to me by one of Nate’s proteges, Devin Krzysztowski. If I can even say Devin’s name correctly, introduced me to someone local in the business community and network that would make a great guest, Tommy Vincent. And here he is.

Tommy Vincent:
All right, thanks, Dana. It’s good to be here. Looking forward to chatting up with you, and, yeah, Devin’s a good man.

Dana Robinson:
He’s good. Shout out to Devin. We were bantering before going live about the fact that you’ve got a surfboard in your background. So.

Tommy Vincent:
I know, I know. And this stigma, you know, they’re like, he doesn’t work.

Dana Robinson:
Yeah, yeah. So I told Tommy that I was at a networking event in Texas, and someone from, you know, very important capital allocator from New York had one of these stand up, you know, quick speed networking, and she was incredulous that we could actually get work done and be fund managers that live in San Diego. So I think she pictured us living in an office like yours with a surfboard hanging behind us and never getting anything done. But we all know work hard, play hard, right?

Tommy Vincent:
Yeah, that’s right. Exercise makes the brain work well, too, right? A little cold plunge. I think it’s a nice way to start the day.

Dana Robinson:
Well, Tommy, we’re going to talk a little bit about the business that you’re running because I think it’s a tool that can be really useful for companies to want to optimize. I try to preview at the beginning so people don’t want wonder whether it’s worth listening to this podcast interview. Tommy runs a company called Hub analytics. It is an AI tool that you plug into your quickbooks that does dazzling things that are going to help you run your business, optimize, create value. I’m impressed with it and have had our landscape company set up to become a user of that. So I’m going to start to get to see some of the actual output in real time in a business that I’m heavily invested in. So stick around if you want to learn about the tool, because that’s where we’re going to get to. But as always, if I can dig for an entrepreneurial journey, I’m going to get it.

Dana Robinson:
So, Tommy, you mentioned being in Silicon Valley. I don’t get too many Silicon Valley stories down here. They all seem to make their money and then move to Texas. So, you know, the.

Tommy Vincent:
That’s funny. That’s funny. I’ve got a few folks that have followed that path without a doubt, but actually quite a few more that are, that are starting to migrate down south now, you know, since, especially since COVID.

Dana Robinson:
So pay your taxes, people. Pay your taxes and stay in the state with you, with your, with your vc winnings.

Tommy Vincent:
Yeah, absolutely. Well, that’s my intention. That’s for sure. So, yeah, my story as far as my background goes and my career has always kind of taken the line. I like to think the intersection of sales and technology and entrepreneurship, always some kind of combination of that. But my first kind of go around in entrepreneurship was right out of school. I did, let’s see, I did six months at some corporate thing I didn’t really enjoy. But then my dad owned a commercial printing company out in Long beach and my grandpa was an entrepreneur before that.

Tommy Vincent:
So it was always in the blood, will say. And so, you know, when I graduated, school was the great recession. I graduated in middle of 2007, took a core, yeah, took a corporate job. But, but actually, you know, when there’s blood in the streets, they say, right, so there’s a lot of opportunity. And so as it related to my dad’s business, we were, we took the opportunity in commercial printing to kind of gobble up some micro sized m and a gobble up some competitors in the Los Angeles area over about a two or three year period, which was a lot of fun. So I was getting to help him with that. We were just doing some basic deals with some earnouts and things like that, but it was really book of business acquisition and maintaining that book of business. We had all the facilities, we had all the equipment, all that kind of stuff.

Tommy Vincent:
So that was fun for a couple of years. But commercial printing, you know, really wasn’t calling my name, it wasn’t pulling on my heartstrings. So, you know, just looking at where Silicon Valley was going at that time, it was already like 2009 ish, 2010 ish. I got moved up to San Francisco, kind of focused my targets on enterprise sales in software is kind of something I had learned about through my network and started doing that. So I got lucky and I landed a good job with a company called Yammer at the time, which was founded by a guy named David Sachs, you know, kind of PayPal mafia guy, but, and we had a really good exit, so I really kind of cut my teeth there. Learned enterprise sales for a few years. We ended up exiting that company for 1.2 billion to Microsoft after a couple of years. So really got to see a lot of activity, which was just eye opening and it was, I was learning a ton.

Tommy Vincent:
Stayed at Microsoft for a few years and went back into some more startups in Silicon Valley. We took out the next company I went to from like 13 million to 100 in annual ARR. So good stories and not all great exits actually, for that matter, but still learning and all these kinds of things. But fast forward kind of started to pivot my focus in 2019. My wife and I had just relocated down to San Diego, and so since then we’ve opened up a co working space dedicated to mental health professionals because she’s in that space. And then we opened up a mental health group practice underneath her a few years back. And then most recently, I’ve landed at it with hub analytics in this software that we’re doing, and we’ll talk more about that in a bit. But it’s, I’m loving it.

Tommy Vincent:
It’s really exciting. And we’re just coming out of private beta right now and the response has been pretty excellent, so we’re excited to get it out there more broadly.

Dana Robinson:
Cool, cool. Well, let me dig backwards just a little bit because I think a lot of people, the only thing that ink magazine or any entrepreneur magazine publishes are the success stories. I love you. Dropped it. And so let’s dig back to it. One big success tends to spoil people and often drives them to make some pretty irrational and delusional decisions. The failures are painful. We tend to want to diminish them, not tell those stories.

Dana Robinson:
I like that you referred to some exits that weren’t so good because there’s still exits. I mean, they’re still part of your journey and part of what shapes you as an entrepreneur. You know, often when I ask these questions, people are a little cagey about answering in detail. Maybe bad, bad outcomes aren’t fun to talk about, but also sometimes they end in litigation. So people are like, I can’t really talk about this failure of mine, but let’s just say it was a good lesson. Can you reflect a little bit on the good and the bad? You, billion dollar exit. Obviously, you’re a member of a team. It’s not like you cash out and move to Texas, but you get to experience the high that’s associated with a team that’s brought this thing up to this.

Dana Robinson:
Sell it for a billion bucks to the biggest company in the world.

Tommy Vincent:
Yeah, absolutely. I think successes and failures, I think everyone has them. I think it’s delusional to think you don’t. But I think you learn on both sides of the equation sometimes. I think people over index on failure. I love failure. I learned so much, like, really? Because I’d rather just be successful and learn that way. But there are learnings on both sides of it.

Tommy Vincent:
I think one of my biggest takeaways, in all honesty, I can talk about the details of exits and all that, but one of my biggest takeaways is the network that gets built in something that’s going well and has a positive exit. And so when I look at that first one that I got to be a part of, that network has gone on to do incredible things. Maybe it’s overconfidence or whatever it is, and that network tends to stay tight because it was such a positive exit and a bottle of champagne and the whole thing. And those kinds of things really seal some bonds. Whereas in the other side of the coin, let’s just say, still good experiences and still some pretty good relationships, but it’s not that celebratory. Let’s bring the group together. And, you know, people tend to go different ways, and some people exit the companies on different terms. We’ll say, whereas, you know, in the success story, everyone kind of exits in the same way.

Tommy Vincent:
It was like, that was awesome, you know, so that’s been one of my biggest takeaways, without a doubt, is I still stay in contact with a lot of the folks from that original really positive exit we had to Microsoft. That was, what was that, twelve years ago now?

Dana Robinson:
Yeah, yeah, absolutely. Besides the, that’s a great lesson, great observation. I think having some wins solidifies that network. I call it relationship capital. This is the well from which you’ll draw value. That’s more valuable than money, is that network. What about as you head into these other ventures, whether it’s the co working space or hub analytics, what are some lessons that you’re bringing into that the things you don’t want to happen that maybe were bad things that occurred in your other businesses or good lessons that you learned from the successes that you’re bringing to what you’re doing right now?

Tommy Vincent:
Yeah, definitely. I think that I tend to index on relationships and I’ve seen business done a lot of different ways through all those experiences. And I have seen some environments that were less positive than others. I think that there’s some, sometimes there’s. I think we’re beyond this now. But there was a point in time when there was that rise and grind culture, right. It was like hard driving type a like, and especially in enterprise sales when pressure is on and things like, there’s a lot of steamrolling people and you know, the tough guy kind of thing. And I’ve seen it, you know, kind of work.

Tommy Vincent:
But ultimately what I’ve seen work is hiring awesome people, treating them extremely well, and building a community of people inside your own company that have a shared vision and have a shared kind of passion for what you’re doing. And that’s honestly one of my biggest takeaways. And also that, I guess outside of that is that nothing happens overnight. Everyone sees the success stories happen overnight and I think, oh wow, look at that. Straight to the top. And it’s like, no, the iceberg is way bigger below the surface, right. And so I’m a big believer in this idea of compound interest, right. Of just doing the right things day in and day out and adding to.

Dana Robinson:
That, yeah, there’s plenty of failures. I mean, to your point of Runway, and I can speak to this if it’s not your case, your burn rate is really important. And where your capital is going to come from based on that burn rate is really important. And I have several of my not so great outcomes have not come from bad ideas or bad people or toxic environment or bro culture or any of the things that probably take down a startup just ran out of money and it took too long. You got to count on that as part of the business. When you’re going to say, I’m going to build this thing, do you think that’s carrying into your view with hub analytics?

Tommy Vincent:
Yeah, absolutely. It’s funny, success doesn’t happen overnight, but you do need to be urgent all the time. Or at least that’s one of the things I’ve taken from Silicon Valley is, you know, you never know when, when the gig’s up. Right. Or we know when something can change dramatically.

Dana Robinson:
Right.

Tommy Vincent:
Even if, you know, whether it be Covid, which is obviously a massive example about how that impacted some people’s businesses, and anything can happen. Right. And so, you know, if you’ve got a good idea, you got a good thing and a good, you know, good couple of team members, you really got to slam on the gas, you know, and, you know, and hope for, for success as early as you can get it, but not expecting it at the same time. And to your point, I think you make a great point, which is planning for it not to be an overnight success, right. Because if you are and you got these big burn rates, you’re just not setting yourself up on good footing to actually make good strategic decisions down the line, because the more pressure you add yourself, the more you’re going to make rash decisions. And, yeah, so I’m always trying to manage for the future a little bit.

Dana Robinson:
Good. That’s, you know, that I think good advice to the entrepreneurs out there, that overnight success is what you’re driving for, but you really have to plan for the longer haul, and that means a lot of things. Right. You have to really be, have visibility into how am I going to pay my bills for what might not be a short period of time. I mean, I’m in the second year of not drawing a paycheck, to be honest. And, you know, I have fantastic assets and all that, but we, you know, we’re running a fund with other people’s money. I’m not going to draw out of that to pay my bills. I’m going to try to deliver myself and co investors a lot of returns instead.

Dana Robinson:
And that horizon, I call it the doomsday clock. My wife wants to know, when should we worry about money? Every month we look at the doomsday clock and say, all right, we’re okay till next year, whatever time. And then we hope that keeps pushing forward a little bit with other returns on other investments and whatnot, such as.

Tommy Vincent:
The life of entrepreneurship. I mean, honestly, it’s, it’s higher risk, high reward. That’s what we’re in it for. And, but it’s exciting and it’s challenging and all the things. Right. I think it is a special breed that likes to do it, but there’s a lot that goes, there’s a lot of benefits we get from it even, you know, in successes or losses, you know, so.

Dana Robinson:
Yeah, well, the, let’s talk a little bit about what, what got you into the hub analytics and, and, you know, what’s, what’s driving that now, what, what it’s all about. Um, you know, let’s tour the, the company and then we can talk more about the specific product as well.

Tommy Vincent:
Yeah, absolutely. So, um, we’re, I mean, it’s, again, we’re really excited about this. So I started, you know, this came up, I started jamming with an old friend of mine who was actually more into the space than I was. He was kind of got into outsourced accounting outside of another entrepreneurial venture he had already done, and he got to learn the space a little bit more. So he actually educated me and brought me into this. But where we really saw a lot of opportunity, and I think I’m seeing more of this today, is AI has come a long way. When chat GPT came and kind of hit the fan, everyone took notice. But AI has been developing for, you know, the last two decades over and over again.

Tommy Vincent:
It just got kind of overshadowed by bitcoin or whatever else is the flavor of the day. Right. But the interesting thing is when you think about AI, there’s these kind of segments of it, right? Well, like you have general aid, general AI versus specific and all these things. But the best AI out there is still narrow and it’s still about automating repetitive tasks. And I think a lot of people are like, oh, it’s going to replace the, as humans or this and that, who knows? Right? But right now, where we have reliable output is on these narrower tasks. And we looked at the finance realm and the accounting realm as really a great opportunity to take some repetitive work off of the plates of people so they could spend more time on higher value things. And so we looked at hub analytics, we looked at, or we looked at outsourced accounting and thought, well, what can we build, what can we automate in this process here? And we looked at it in a breakdown of four main roles that part that kind of make up an accounting department. We looked at the staff accountant, accounting manager, controller and CFO and said, okay, well, where, where can we add value? And we started on the far end of the spectrum with staff, accountant and bookkeeper.

Tommy Vincent:
And we said, okay, well, do we want to work here? And what we assessed in the market was that there’s actually a ton of tech already doing that. You can look, there’s, there’s 50 companies out there trying to automate bookkeeping, and some of them are doing a good job. You know, even including like Intuit is headed in that direction with Quickbooks themselves. That’s kind of already happening. But we looked further down the value chain of finance and said, okay, well, what is the controller doing? What is the CFO doing on a given daily? And that’s where we, we saw a lot of opportunity and that’s where we centered hub analytics around. So what our solution does is, you know, a number of different things, I suppose, but we help ensure like proper accuracy of the bookkeeping once it’s been completed, whether that’s done automatically with another solution or with a bookkeeper. But we’re also doing a lot of automation around the financial packages that get generated. So it’s a lot of set it and forget it KPI’s and company goals.

Tommy Vincent:
But then especially, we’re really weaving in the AI as of recently to take on a lot of automated commentary and automated narrative around every financial aspect of an owner’s business. So, you know, the average person out there might be looking for their books, and maybe six weeks later they get their books back from whoever’s doing them outside, and then the business owner has to put on their CFO cap and try to make sense of it. All right? And we’re really trying to meet the owners there and offer that value at a fraction of the cost. And so that’s where we saw a lot of value. We built up hub analytics and did private beta for a while with some customers we already had as part of our outsourced accounting firm. And the response has been awesome. And so we’re excited to take it to market, as I mentioned earlier.

Dana Robinson:
Right, so this outsourced accounting firm, is that a partner in the business and therefore like a first mover, like a first customer to deploy the product into their existing base of clients.

Tommy Vincent:
Yeah, that’s exactly right. We had the benefit of having kind of a proving ground with our own outsourced accounting firm, those clients, and got to in our own employee base over there, which gave us a chance to really get the tires kicked and iterate over time and really had this really great sandbox for development. So, yeah, that was a big part of our ability to, I think, develop such an awesome product right out of the gate.

Dana Robinson:
Yeah, well, and you could take an MVP to select a number of those and say, this is a cool tool, you mind using it and helping us with feedback? And so you get that iterative development process in real time with real users.

Tommy Vincent:
Yeah. Oh, definitely. And that’s what it is. I mean, it’s all about MVP’s and then making tweaks and tweaks and tweaks. So we’ve been at it for over two years at this point and making a lot of tweaks along the way. And so we feel like it’s in a pretty great place as of now and with a lot more features to come as well. But we feel like we’re really starting to hit the market. We can tell and measure that by how much time we’re saving on the outsourced accounting side of the equation, are we able to service our customers better and faster? And we’re really starting to see that, really start to see that come to fruition for our own, for the partner firm that we’ve got as a first customer.

Tommy Vincent:
Now at this point, we’ve done that was, I suppose, more like Alpha. And so more recently we’ve been in private beta. So we’ve got a number of agencies on other outsourced accounting firms where we’ve white labeled and allowed them to kind of start doing the same. And we’re getting similar results, which has been really fun.

Dana Robinson:
Okay, so that’s an interesting product observation. You built the product to function for an end user, business owner, business owners, finance department, CFO, whoever is up the chain from your staff accounting, but your power user is an outsourced, is a bookkeeping or accounting firm that deploy this across all of their clients and then capture some economics for providing these additional tools without necessarily them going off and trying to do it on their own. They’re getting all the benefit of it and they’re managing it for their clients.

Tommy Vincent:
Yeah, that’s exactly it. I mean, we actually have two kind of go to market motions and you hit the nail on the head. So one motion is working direct with business owners, right? So a business owner can kind of sign up for this, sync up their quickbooks or whatever their system might be. And once that’s done, we mapped our chart accounts, some of the details there, but that’s it. So that business owner is going to be able to generate really comprehensive financial reports, or as comprehensive as they need them to be, ultimately, but simplified and generate that and look at the narrative that comes out of that and says, hey, look, you’re a little overweight per industry standards on cogs. You might want to think about Reitzen, you know, renegotiating a couple of vendor contracts, whatever it might be. So this AI is pretty incredible in doing that analysis, and that’s for a business owner. And so we’ve got a bunch of folks, a bunch of partners in the platform today doing that.

Tommy Vincent:
But then, to your point, we’re also working with what we would consider the agency side of the space, right. Of the industry, which is fractional CFO’s and bookkeeping shops and other outsourced accounting firms to help, I suppose, automate a lot of the operations and see a lot of efficiency gains there. And for them, the choice would be, what do we want to do with that savings? A lot of them are passing that savings forward to their customer base and getting more competitive in the market. And some of them are actually just pocketing the time, so to speak, and spending more time on business development. And those things, we’ve definitely found that, like we’ve, we’ve, we really fit well with outsourced accounting firms, fractional CFO’s and bookkeepers, right? And just helping them kind of standardize their reporting, do it cleaner, do it better, do it quicker, and so they have more time to work on their businesses versus in their businesses. So we’ve got a bunch of partners on that side of the equation that we’re really enjoying working with.

Dana Robinson:
Dana Robinson here.

Dana Robinson:
Quick plug for my book, the King’s Fly swatter.

Dana Robinson:
You can see it here behind me. If you’re watching this, I’ve got it in my hand. Beautiful hardcover book printed to make it giftable, something that you can share with a family member buy as a gift.

Dana Robinson:
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Dana Robinson:
Servant in the court of a babylonian.

Dana Robinson:
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Dana Robinson:
The lessons in this parable are entrepreneurial lessons, but not what you might think from the current entrepreneurial zeitgeist. If you or someone you know are looking for a real pathway to entrepreneurship, here’s the secret. Your job is the way out of your job. It’s counterintuitive, but once you see how it works, you can’t unsee it. Learn the way of the fly swatter from the parable of Ubar and from the stories I share from my 30 year business journey. You can get a free copy of the king’s Fly Swatter by going to danarobinson.com dot.

Dana Robinson:
That’s great. Let me ask a question I probably know the answer to. The most of the businesses I’ve seen transact in the sort of small medium business to lower middle market, they have messy books. They’ve been messy because of just the laws of human behavior and physics. They just don’t have the energy to knock this pattern off course. They have. Chart of accounts has never been fixed to be lined up with industry standards. They’ve been expensing a direct expense as an indirect, for, you know, 20 years.

Dana Robinson:
To what extent? I mean, is the tool reliant on good data? Is dirty data in, dirty data out, dirty AI out? Do we still need a smart accountant that’s willing to take the bull by the horns and fix people’s messy books and get them into a format that follows GAAP or industry standards. Have you experienced any of that? Because I’d like your tool to magically fix all of that and just take somebody’s messed up books and give me an EBITDA number that is accurate.

Tommy Vincent:
Well, we certainly try, actually. So it’s a good question because it tees up another part of the platform that we worked a lot on, and we’re weaving AI into as well. But so, and by the way, we’ve had the same experience. Right. A lot of what drove us in this direction, my partners and I, is that we started looking at small, medium sized business acquisitions and kind of in a similar space, and it was hard for us to evaluate. Just the books were a mess, and so you’d spend time kind of working through that just to get through an acquisition. We saw that there was an opportunity, or really we asked ourselves, well, why is that? And we feel that there was actually a really big gap in the market. And what our big point of view in the world really is for hub analytics is.

Tommy Vincent:
It’s our belief that accounting and finance for small businesses is broken as it is today. If you look at accounting and finance done right, you take a Fortune 100 company. Let’s assume something like a Nike. They’ve got resources for days and we try to distill down all these resources, these people, these tools, what does it all boil down to? What do these companies have that make their accounting and finance really great? And we picked out three things. We said, okay, well good data is number one, right, because garbage in, look at that. Isn’t that nice? Garbage in is garbage out as we all know. And so you know when you’re doing your accounting and finance, right, you got good data. That’s table sticks, gotta have it.

Tommy Vincent:
The second kind of pillar we looked at was advanced reporting, right? So great, you got good data. Now let’s go visualize it. Let’s go, let’s do our period over period analysis, whatever it is, month over month, quarter over quarter. Look at our KPI’s, let’s set our company goals, how we tracking, how are we doing? That was the second pillar that we looked at and said, okay, well that’s another feature of having your accounting and finance done, right. And then the last pillar we looked at was the financial thought leadership. Because if you look at somebody like again a Nike or any Fortune 100 out there, they’ve got the resources to have good coaching, right? They’ve got people in there who are absolute experts saying, okay, this is all telling us where we can’t, how are we going to improve the enterprise value of this company and all of those things? And that’s financial thought leadership. And so when you look at small business, they typically don’t have that. The reality is, is that to solve that problem, it’s a pretty simple solve.

Tommy Vincent:
It’s called an accounting department. The problem with small business is that an accounting department is nothing cheap, right? When you look at the salary of a CFO and a controller and an accounting manager and a staff accountant, you know, it’s, you know, well over $500,000 annually, right, just in salaries and benefits and all of that. And the reality is you probably need some function of some of those roles. You’re not going to hire a CFO and have them be your bookkeeper, right. And you’re not going to hire a bookkeeper and be like, well, why don’t you be my thought leader? You do kind of need this array of like this delineation of duties and this array of people, and it’s costly. And then you got to write job descriptions and hire and understand who to hire. And to the business owner, it’s just, it’s not really functioning. And what most small to medium sized business owners do, in our experience, is they end up with a bookkeeper, and that’s it.

Tommy Vincent:
Right. And they end up on Quickbooks. And there’s nothing wrong with bookkeeping, but they’re not getting the guaranteed accuracy because it’s detailed work, and nobody’s kind of looking over the bookkeeper’s shoulder just to double check because we all need it. They’re not getting the advanced reporting because they’re likely on Quickbooks or something similar, and then most likely, they’re not getting the financial thought leadership. They don’t have a partner in the business coaching them on these things. And that’s how we develop this product. So going back to that equation is, okay, well, how do we help ensure accurate data? Let’s start there. So we’re not going to do the bookkeeping, but can we create an engine that inspects the bookkeeping when it’s finished every month based on certain gap principles and best practices and accounting.

Tommy Vincent:
And that’s what we’ve done. So we built a 150 point inspection engine that spans across 17 categories of accounting once the books are done, and we’re checking for irregularities in that before we generate the financial package. And when we find irregularities, we don’t correct it, but we flag it. We say, hey, look, this isn’t really adding up here. You might want to go look at this, blah, blah, blah. We send it back to that bookkeeper, whoever their, their accountant is, to go make those fixes. And what we’ve seen is, you know, especially in the beginning, when people jump on the platform at first, you know, the first few times they run the reporting, you know, they’ll get like 15 or 20 flags on their accounting, you know, and then month two gets a little better. Month five, it’s even better, you know, and the accounting really starts to get cleaned up.

Tommy Vincent:
That whole garbage in thing is a problem, and we try to solve that first and foremost, which has been really awesome for a lot of the business owners we’re partnering with. And then that allows us to do the other ones better. Right. Once you got good data, then you pump out this financial package. It takes roughly about two full minutes to generate a very comprehensive financial package with all your KPI’s in there, with all the AI coaching built into it. So it’s pretty neat.

Dana Robinson:
That’s cool.

Tommy Vincent:
We’ve got you in the platform. We’re excited to have you as a partner, Dana. So we’re excited to show you some of what it can do.

Dana Robinson:
Yeah, thanks. Yeah, I mean, that’s the. We’re excited, you know, in a roll up situation, we’re trying to kind of, we’re always scrambling to put together financials in, well, we’re building a plane while we fly it. We have to keep running the business. We’ve got financial reports. We’re integrating a new business into that. And to my question about dirty books, it sounds like even a small business that puts this, plugs this in the going to get some analysis that might help them visualize or understand, you know, I don’t know. I’ll give you an example.

Dana Robinson:
It’s pretty common in the services industry. Fleet is not a direct expense. It’s indirect. And people put it in the wrong spot, then they put field labor. I’m sorry, field management and overhead and field management’s a direct expense. It should be flip flopped. To what extent? Like, is the AIH noticing things like that? Like, does this belong as a direct and is impacting gross margin? Or is it just that as people start to see, like, something’s not right, this is telling me something’s not right. Maybe I should go back to the accountant and ask about whether we’ve got the right chart of accounts just to show what’s going into direct and indirect.

Tommy Vincent:
No, that’s a great question. So we built the platform in a way that, how do I say, I suppose, subtly drives people into a better chart of accounts. Okay. So, you know, it’s, again, we’re not in the business of telling people how to run their business. We don’t want to do that. It’s too heavy handed. But there’s a, I think that what a lot of entrepreneurs don’t learn until later on in the maturity of their business is that the finance matters quite a bit, especially when you start doing exit planning, as you would know.

Dana Robinson:
Right.

Tommy Vincent:
And so, yeah, getting those right things in the right categories seems like it’s just an annoyance when you’re early and you’re building and all that, but it really starts to matter when you’re looking at exit planning or succession planning or wanting to value the company and all that kind of stuff. So our, you know, our mission as a company is to help make entrepreneur, like entrepreneurs, lives better and easier through excellent financial management. So we are more subtly guiding them to a better chart of accounts, making sure things are in the right order, and we will flag things like that. Right. I say, look, this is where it needs to be, and we want our entrepreneurs to understand what the value of their company is. Right. And also and educate them a little bit in the platform. The AI even itself does some education.

Tommy Vincent:
What is EBITDA? Why does it matter? And so it’ll give a little description of, like, every time we generate the financial report, here’s what DSO is, or here’s what DPO is, and here’s why it matters to your business, and here’s how it impacts equity and things like that. We’re really trying to set the entrepreneur up on a level playing field, especially the ones that are more mature and they’re looking at a potential private equity exit or something like that.

Dana Robinson:
Yeah, absolutely. So, yeah. Anyone listening? There’s almost nothing more important than clear financials. When you want to exit your company, you’d be judged for your LoI on those and then how much they match. The reality of due diligence is going to be whether your deal closes at the value you think, whether you’ve even been offered. So certainly anyone thinking about a business that’s going to exit in the years ahead ought to be moving this direction. And I guess a question I have is, can this be user? Is anyone using it to do due diligence on a target? Can I grab someone else’s quickbooks? Use your tool and use it to analyze the historic and current financials of a target 100%.

Tommy Vincent:
I actually had that idea for you, so I was going to talk more offline. But the short answer is, yeah, the longer answer is, you know, with all the right legal, you know, permissions and obviously all that, all those ducks in a row. But, yeah, we’re actually working with a couple of venture debt guys on, you know, financing and things like that as some kind of due diligence. And that’s a. But your short answer is, yeah, we actually are. We also do have some partnerships out there with some bankers, things like that, that we’re just getting going today. But, you know, early stages, you know. Again, our goal is to, is more focused on entrepreneurs, but, yeah, yeah, absolutely.

Dana Robinson:
So who’s like, let’s talk about the product itself. What, you know, is there, is it 10 million a year, 100 million a year? What’s your size, target? You know, is there a tiered pricing where you can get in and use it up to a certain size or revenue or something? So that ever. Is this for everyone? I guess is one question. I got it. My old law partner is running quickbooks for a small law practice. Is this going to help her? And is there a value proposition for the solopreneur, or is this really a enterprise level thing?

Tommy Vincent:
Yeah, it’s a good question, and we’ve kind of wrestled with it ourselves. Where is that fine line? I think what we’ve learned simply is that I think there’s a level of business that is too small for something like this because, and there’s nuance to that. But oftentimes when you’re under a million dollars in annual revenue, I kind of think that there’s only so much bandwidth to go around. And are you really exit planning? Maybe. If you are, then we would be a good fit. But most entrepreneurs we’ve spoken with aren’t really on that headspace. They’re thinking about growth, and it’s how do I grow? How to grow. And frankly, financials do help you grow more efficiently, without a doubt.

Tommy Vincent:
But do you have the bandwidth to study those financials every month and then make all these decisions when you’re that size? Like, oftentimes, no. So there’s that aspect. So I like to draw the line, you know, typically around a million dollars in annual revenue. Beyond that, I feel like as far as on the upper limit, the sky is kind of the limit to a degree. I think that when somebody reaches definitely around 100 million in annual revenue, like, they’re going to have the resources to hire in house as they should, like a finance and accounting department to do those things. And this solution can still benefit those teams without a doubt. I think that you can get leaner. You don’t need the whole stack of team.

Tommy Vincent:
You could hire a CFO and then pair them with our product and, you know, and he doesn’t have to do all that kind of heavy lifting. But I think our sweet spot is anywhere from, like a million dollars in annual revenue to like, say, 50, 60, 70, or up to 100, you know, and it starts to tail off there. So that’s kind of our sweet spot to your friend who owns the law practice, like, yeah, absolutely. Just depending on the size, I suppose. But I think another factor with I already mentioned is the maturity. So say they’re hitting a million bucks now, but, you know, the person’s been at it for a decade, and they’re just kind of wanting to know, where do my things stand? It’s a good time to maybe start taking a look at those financials, right. If you haven’t in the past. And this can accelerate that process because it can be daunting.

Tommy Vincent:
Like I said, it’s like well how do I do that? Do I hire a fractional CFO? Do they know this and are they intimately involved in this? Software can do it at a fraction of all that cost and really coach you up on it. So yeah.

Dana Robinson:
Cool. Well I got your journey. I got what the product is kind of. Where’s the business at on your own journey. So let’s, let’s sort of step through. You’re an entrepreneur, been through some, some exits, good, bad and indifferent. You’ve been, you know, through the small business startup with, with your wife and her practice in the co working space. Yeah, you got this cool startup going.

Dana Robinson:
I gotta, I gotta point out fantastic to partner with somebody that is your use case and also your first customer, you know, base to develop and then to launch into that. What’s on the horizon for this business? Is it going to be a big exit to Microsoft down there? Intuit. Intuit is going to buy you for a billion.

Tommy Vincent:
That’s exactly right. We’re going for that billion dollar exit. No time will tell. I try not to get too far ahead. Really what we’re trying to focus our efforts on is, but right now the customer is king. I mean it is the center of our universe. We’re still learning and like I said, we’re going more broader to market now and the product is in a really great place, but we still want to learn. We want to bring on as many customers as possible.

Tommy Vincent:
We want to continue to improve the product and really that’s it. It’s as simple as that. We try not to complicate the equation at all, but further down the road. Yeah, I think we want to exit this. My partners and myself I think tend to be, you know, we tend to like to get a little bit busy. Let’s just say maybe we’re ADHD, I don’t know. But we like to get our hands in other things and start new projects and you know, I think that we kind of also live by a certain kind of motto where, you know, people ask, well, when’s the best time to sell your business? And the short answer that we like to think of is when the market tells you to. So, you know, we think that it’s important to always have good financials because you don’t know when that market, here it goes again.

Tommy Vincent:
You don’t know when that market is going to tell you to sell your business. You’re not in as much control as you think, number one. And you want to have your financials dialed ready to go if that time comes quickly, and secondly, when that time does come, if the right offer is on the table, like, sure, we’ll take it. And, you know, if we have some other ideas and projects in mind that we want to do, we would certainly take that. You know, take a good offer, I think, in another couple of years, but we’ll get there. You know, it’s a crawl, walk, run. We’re just really enjoying working with the customer base right now and making tweaks and seeing kind of the aha moments for a lot of people that are in the professional space. These fractional CFO’s, like I mentioned, who are like, oh, wow, this is amazing.

Tommy Vincent:
Right? I can, you know, I can, you know, double my bandwidth. I got ten clients. That’s all I can really handle. Well, we’re going to automate all the, you know, the lower end work. Well, now we can get 20 clients on you, right. Because you got a lot more time to spend with customers and they’re doubling the size of their businesses, which is pretty, pretty exciting.

Dana Robinson:
So, yeah, love it. The, how do you think about the product? And, you know, I’ve had this discussion recently with some, you know, I have a, a brother who’s in product and sort of the big environments, and we talked about why small startup sort of companies don’t focus on product. They don’t have a product manager. They don’t have a kind of usability and ui and human factors kind of science approach. They’re just like, we got a product, here it is. We don’t need someone managing our product. Have you taken any disciplined approach to that? Or is that, do you think that his theory is that that’s a later maturity phase of a business where you finally say, all right, someone’s going to manage this product, and then if we’re going to do something else now, we’re going to have some discipline. We’re going to manage the next product through a process of professional product management.

Dana Robinson:
And I ask with curiosity, because I’m involved with a SaaS business and I can imagine having something like what hub analytics does with a regular business. And Quickbooks could really light a SaaS company on fire in terms of the ability to really understand so many different KPI’s and moving parts to SaaS financials that I just, I wonder what the evolution of your product is and whether you could speak to that just for other entrepreneurs that are in, you know, in software.

Tommy Vincent:
Yeah, I think that. I think that it should always be a part of the, you know, the equation. So to speak to be tweaking. Look, I think you mentioned it earlier, right? Mvp minimum viable product is kind of the way you develop in SaaS. And what that means for anyone who’s not in SaaS is just like building the least amount of features, if you will, and testing that out in market. What are people needing? What do the customers want? And I think that in the beginning stages, you don’t necessarily need to have a huge or robust product team to do that. But what you do need is customers. Your customers are your product team.

Dana Robinson:
Right?

Tommy Vincent:
The customers are going to tell you. I would recommend for sure, like some level of, you know, it’s funny, I think the first step would be to graduate towards like a product analytics solution, right? So, you know, what are people clicking on all that stuff when you’re really early on, you don’t even need that. You just pick up the dang phone and talk to people. What do you like? What do you not do a reverse demo? Show me your screen. What’s, what’s throwing you off, right. And you can do that with your developer team pretty easy and get a long way. And then you implement that product analytics solution when you get so many customers that you really want to see that kind of feedback at scale. And even then I feel like you maybe have one product manager overseeing that.

Tommy Vincent:
But then as the business gets bigger and more complicated, without a doubt that becomes a bigger task and a bigger team that needs to get involved. But again, my partners and I have the mindset that leaner is meaner. And so, you know, if you get over inflated and you got all the resources in the world, I mean, you said it, you got big burn rates and I just feel like you’re putting yourself in a bad position. Right. I don’t think it’s, I think it’s unnecessary. So I think that, but I think that you got to put customers first and foremost at the center of everything you build for. Because at the end of the day it’s all about them and they’re going to give you a lot. Good ones will give you a lot.

Tommy Vincent:
And actually that’s kind of a final point, is that we’re really valuing good customers more than anything. We’ll take any customers, I suppose, but like really we’re looking to team up with some people who want to provide feedback, who are interested, who are great to work with and we’ve done that really, really well. I feel like in the last twelve months and learned a lot from that and so we feel lucky for it.

Dana Robinson:
That’s great. I love that. I think that’s a fair nod to growing through the maturity of a business but not burdening yourself with overthinking your product. As long as you’ve got customers that have given you the feedback and that become your users and pay and stay, I guess your attrition rate is going to tell you a lot about your product.

Tommy Vincent:
Probably it’s the ultimate.

Dana Robinson:
Appreciate it. We’ve got just a couple of minutes as we wrap up, and so I always want to ask if there’s some nugget of wisdom for entrepreneurs running businesses that you can bring to the table before we close, and then I’ll tell them how to find you.

Tommy Vincent:
It’s a journey, you know, it’s really just life management. There’s ups and downs, but I think showing up is half the battle and making those small changes day in and day out again. I said at the beginning, I’m a big fan of in business and in life in general compound interest. So just keep showing up and try to just ride the waves and I think you’ll be all right.

Dana Robinson:
So, spoken like a man with a surfboard behind him. Ride the waves and you’re going to be all right. Tommy Vincent, I’m glad you came on the ex plan podcast. I know that you’re on LinkedIn because I friended you there. Tommy t o m m y vincent v I n c e n t type that plus hub analytics and you’re going to find him. Is there a preferred way for someone to get a demo? What’s a URL we can throw out there for people?

Tommy Vincent:
Hub dash analytics.com right at the top of the page there’ll be a banner that says get a demo. Feel free to fill that out and we’ll be in touch with you right away. But feel free to reach out there or email me directly. Tommy.vincent@hub-analytics.com I’m happy to work with you directly.

Dana Robinson:
Awesome. Thanks for coming on the exit plan. Talk to you later.

Tommy Vincent:
Dana, it was a pleasure.

Dana Robinson:
Thanks for joining me on this episode of the Exit Plan podcast. I’d love to hear from you. Feel free to hit me up with questions or comments by emailing me at hello@danarobinson.com. or leave comments and questions by calling 858-252-7785 call 858-252-7785 and leave a message.