Latest / The Accounting Podcast / It’s people! The Botkeeper investigation continues; Avalara buys AI tech; Intuit earnings; new limits in QuickBooks; and more
Transcript
- This episode of The Cloud Accounting Podcast is sponsored by Veem. Are you tired of slow, stressful, and expensive bank wires? There is a better way. You could Veem it. Veem is a simple, affordable, and fast way to send, and receive payments around the world, or to the business next door. Veem bypasses current wire-transfer processes, saving users time, and money. Veem also integrates with your favorite accounting software like QuickBooks, Xero, and NetSuite, making manual data entry a thing of the past. Cloud Accounting Podcast listeners who sign up for Veem will get 10,000 VeemBack Rewards points. That's a free $100 for each of your clients that sign up. Head over to CloudAccountingPodcast.promo/veem; that is Cloud Accounting Podcast dot promo V-E-E-M to redeem this exclusive offer. Remember, Veem it, and it's paid. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: Where do we start, David? David Leary: I'm surviving the Tucson Blizzard of 2019, right now. We could start there. It's snowing [00:01:00] in Tucson. Blake Oliver: It's snowing in Tucson, which is ... I had a bit of a storm myself, this past week. I don't know if you saw that. David Leary: Yeah, I did, actually. I think a lot of people saw it this week, from the podcast we did Friday, or we wrote it, I'm sorry, last Saturday, and then, it went live Monday, or Tuesday? Blake Oliver: Yes, I think it dropped on ... I can't remember anymore. David Leary: Monday night, or Tuesday morning, something like that, yeah. Blake Oliver: Monday; Monday night, yeah. David Leary: That went live, and then there was a bit of a Twitter storm- Blake Oliver: Twitter storm- David Leary: -which got a little exciting. Blake Oliver: Yep. You had a snowstorm; I had a Twitter storm. Maybe for [00:01:30] the new listeners, and for those who have been with us. maybe a recap would be in order of what we discussed last week. David Leary: Absolutely. You want me to summarize? Blake Oliver: Yeah. David Leary: Okay. Last week, we made an observation - Botkeeper - that, at one time, it seemed like Botkeeper ... Everything was bots, bots, bots, bots, bots, bots, bots, but then, Enrico sent an email out. Their founder sent an email out that actually said, "Hey, a lot of work ..." They also have work done in The Philippines. Went out with that; that [00:02:00] went out. Then, all the sudden, more information came out, and then arguments started; sometimes, it was in jest; sometimes it wasn't. Then Jodi made a video. There's just a lot of action happening - back and forth, back, and forth, back and forth, and things got ... In a way, people got a little off the rails. Words with law, and lawyer, and legal got tossed around, right? Blake Oliver: Yeah. This was a first for me. I have never been ... I don't think I've ever been threatened with legal action before, in a public forum, like that, so this was ... Enrico came [00:02:30] at me, and publicly, and in direct messages, threatened legal action against me, and also my employer, to be named as a third party. His director of marketing even reached out directly to our CEO and tried to get me in trouble in that way. That was that was interesting. It didn't work. David Leary: Yeah, but the good news ... The good news in all ... Okay, bad ... In the meantime, you've interviewed Enrico. You've chatted with him, corresponded. I've had an hour-long phone call with Enrico. Enrico, [00:03:00] I think, sent you an olive branch, and you replied back with an Oliver branch, right? I think things are not as crazy as they were. Blake Oliver: Yes. David Leary: There's still some open questions, and it's good ... Next Friday, mark your calendars; next Friday at 2:00 p.m. ... You'll have to watch The Cloud Accounting Podcast Facebook page. I'll create an event, and we'll get this all spun up with details; watch the Twitter, as well. Enrico is gonna agree to come on, and address some of the open questions that maybe are still out there. [00:03:30] Blake Oliver: Also we'll talk ... Really get more of a demo, and an interview with Enrico. We'll do a good hour of Facebook Live, so we can really understand some of these things, and just chat through 'em a little bit, because there's a lot happening. He's gonna talk about some of the stuff that ... Since the podcast, he's gotten some more emails in, and then, I think, also, you've started working on a blog post; just taking a long time. It's pretty detailed. We're gonna talk to Enrico on Friday, if he accepts, and try to [00:04:00] get answers to these questions. I-. David Leary: He did accept. I sent the invite- Blake Oliver: Oh, okay, great. David Leary: He clicked Accept, so we're [cross talk] Blake Oliver: So, we're on. To set the stage, I don't know, I think I was up until 2:00 a.m. last night, doing research, because I wanted to make sure that I didn't get sued for anything I say today on the podcast, and that I know what is going on when we talk to Enrico on Friday. I'd love to share some of that with you now, David. David Leary: I think you even tweeted that you said you had 20 pages of notepad, so I kinda ... I did see your notes. Blake Oliver: Yep. David Leary: I think - Blake Oliver: Up to 29 pages, now- David Leary: 29 pages ... Blake Oliver: What [00:04:30] I did is I wanted to be clear about what I said last week, and make sure that I wasn't making a mistake, or that I had a wrong impression. I did a bunch of googling last night, for many, many hours, and I found every single Botkeeper-focused article/video/website that I could find. There have been something like over 20 articles in [00:05:00] the press, in the last, oh, I don't know, two years, maybe more, that I found. I was trying to figure out how does Botkeeper, and how does Enrico portray Botkeeper to the public, because that has been my concern up to this point. That's what got me interested in Botkeeper to begin with is because I thought to myself, when I heard about it, that it sounds too good to be true. Botkeeper advertises itself as a robotic bookkeeping service, a [00:05:30] bookkeeping service that is powered by bots. David Leary: In a way, it's super-super-effective. Blake Oliver: Oh, yeah, it's [cross talk]. David Leary: -there's other similar services on the internet of kind of an accounting firm with engineers, but you can't name any of them. This is the one that's getting ... I mean, the name ... It's a great name. Blake Oliver: Yeah, it's great. Enrico, he got on Fox Business News. He's been featured in much of the accounting press; in the mainstream press, in TechCrunch, and in the tech world, representing Botkeeper, [00:06:00] and saying that they have developed an AI that can replace a human being; that can do what a bookkeeper does. As somebody who started out as a bookkeeper, and who knows something about AI, I know that just, in general, AI is not there yet. Nobody has figured out how to make an AI that can replace a human being; that can pass the Turing test, when it comes to, say, doing the work of a bookkeeper, right, David? Would you agree that, if somebody had done that, that would be really big news? David Leary: If somebody 100-percent did it, yeah. A lot of these companies that [00:06:30] are in our space - the Expensifys, Intuits, Xero, AutoEntry, just on, and on - they've been working on this for like eight years, nine years, 10 years. It's hard to get to that last mile. There's still a little human intervention. Blake Oliver: The thing that got me interested in this is that the Fox Business News segment, where Enrico was on cable news, talking about Botkeeper, he never mentioned human beings one time. I understand it's only a two-minute segment, so maybe that's not fair, but [00:07:00] the way that he presented Botkeeper in that segment, it didn't sound like humans were involved. Then, there was an Accounting Today article in December, in which he said, "It's a full bookkeeper replacement. It's a robo-bookkeeper." Those are the two things that got me started on this. Then I went, and I did more research. Obviously, I can't cite every single article in this podcast. It would be really boring- David Leary: That's why you're gonna write a blog post, right, because- Blake Oliver: Yes, I'm gonna put this online, but, in summary, this is my impression, is that [00:07:30] occasionally, in this coverage, the human element is left out completely - as in that Accounting Today article, that Fox Business News appearance. There is no mention of human beings being involved, and the impression that I got, as a listener, or a reader, is that wow, this is some amazing AI bot that is doing everything and has completely replaced the bookkeeper. Now, they don't do that all the time. Most of the time, humans are mentioned, but it's characterized as AI doing [00:08:00] the work with human verification, or it'll be characterized as, "A combination of accountants, machine learning, and AI," but the balance of what is robotic versus what is human is not made clear at all. That's what I'm curious about is what is the balance of robotic versus human? Because Enrico says humans are involved, but in an email to me, he said that humans aren't doing the work ... They're just verifying the work. I just don't think that's true, based on the research that I've done. The [00:08:30] rest of the time, when I read about Botkeeper, that's what's happening is that it's directly asserted, or implied that AI is doing the work, and humans are just verifying the data, and training the bots. That's the impression you get from the website, too. If you go to the homepage, you look at, under How It Works, on the home page, it says the bot categorizes expenses, pays bills, invoices customers, accrues revenue, and expenses, reconciles accounts, and enters data into your accounting software. The next item on that graphic says, with an arrow that goes from the bots to the humans, [00:09:00] says, "Next, the team of skilled accountants review your data to ensure accuracy, handle complex accounting, and assist with any needs or challenges.". I did an interview with Enrico, which I will also publish - I have had it transcribed. The full audio will be available - in which he said, in his own words, that Botkeeper does not pay bills. It's a human being that pays the bills. It is not accruing ... Well, it's not doing adjusting entries to accrue, or defer revenue, or expenses, and even though the website says that it reconciles accounts, there [00:09:30] is actually no way that Botkeeper could be doing that through the API in QuickBooks, and Enrico said as much - that a human being is the one running the reconciliation report every month. David Leary: I saw your transcript with Enrico. I know you're gonna do the blog post, and a lot of those details are in here. I think you went through workflow, by workflow of the accounting flow - how is payroll done, how is this done, how is this done? I know Enrico actually answered some of these things in a very human way; like, "Hey, we're starting to get there. We're working hard on that. It's not fully done." It's a little bit more transparent in his [00:10:00] answers he gave in that. I think that's the part that's missing in all the other talk. There's a disconnect there, but then, I think you also said ... You mentioned to me, you were like, "There's some impressive stuff." Blake Oliver: I have to say, I was impressed with the transparency that I received from Enrico, when I was on the phone with him on Monday, this week. He spent over an hour with me, describing this stuff. That was great. That was, of course, before the whole tweet storm. Yes, there [00:10:30] are some interesting things happening at Botkeeper. No, I haven't verified this myself. This is based on what Enrico said, and I hope that we get to see it live on Facebook, on Friday. The thing that Botkeeper is doing that is fairly impressive is the categorization of the transactions; that the transactions are fed from the QuickBooks Live bank feed ... I'm sorry, not QuickBooks Live ... I've got QuickBooks Live on my mind. The transactions are fed from QuickBooks Online bank feed into the Botkeeper algorithm, where [00:11:00] it then uses a machine-learning algorithm to determine how to code those transactions. It's not just something simple like coding based on the vendor name. It looks into the entire history of the company, across the Botkeeper database, and figures out how to code it, and it can- David Leary: It's like bank feeds on steroids. You have a bank feed. It's coming down with X in it. You can set up rules yourself, but this is like, before you even have to make a rule, or go look at this, "We have all this other knowledge. Because of other clients, [00:11:30] and other things, we have knowledge about ... We're gonna hopefully categorize these for you." It's almost like ... For people that are using bank feeds, it's almost like bank feeds on steroids. Blake Oliver: Exactly. If you are submitting documents to them, such as detailed bills, the claim is that Botkeeper gets the line-item detail, and then they can code the line items based on the description, using that machine-learning algorithm. If you buy- David Leary: In theory ... Okay, sorry- Blake Oliver: -let's say you buy apples from Vendor A, Vendor B, and Vendor C. It [00:12:00] will know to categorize all the apples to apples expense account, even if it's never seen Vendor C before, but you've had a transaction history with Vendor A. David Leary: That's solving a real problem, too, because I know like ... I have GoDaddy, and sometimes it comes through; GoDaddy comes through, and it's hosting, and I need that to go to advertising. Sometimes, GoDaddy comes through, and it's my Office 365 subscription. I need to have that to go to SaaS subscriptions. I can't do that out of the box, right now. Blake Oliver: All that stuff is super-cool. [00:12:30] Again, I haven't seen it. I hope to see it on Friday, but categorizing transactions is not the only thing that a bookkeeper does, I'm sorry to say. Bookkeepers do a lot more than that, and I think most bookkeepers would be insulted, if you said that all that they do is code transactions, so, that is troubling. I'm curious to know how Enrico justifies the claim that he makes, when that's what ... The AI is cool, and everything. It is [00:13:00] advanced compared to something else I've seen, but it's not a replacement for a human being. David Leary: I think one of the big arguments that was taking place on Twitter is this: are humans involved? Are humans not involved? Taking that out, what is the reason that's important to CPAs, and accountants? Why is that an important question that's out there? Blake Oliver: I received an email after the podcast aired, actually before the whole tweet storm, that was from [00:13:30] a CPA, who is a current Botkeeper partner, and said that he had heard about what was going on and sent me a screenshot of his - what he says is his - Botkeeper agreement. Said, "I went, and dug up my bot Botkeeper agreement; screenshot below. As you'll notice, it says data will be processed in the United States. Furthermore, Philippines was not mentioned on their website, not even now, in a lengthy sales discussion [00:14:00] with a rep at ENGAGE, nor in a one-hour private demo with Enrico that I received in late 2018." The screenshot of the agreement says, under the Client Data section, "In connection with client data, client affirms, represents, and warrants that client owns, or has the necessary licenses, rights, consents, and permissions to use, and authorize Botkeeper to use all client data in the manner contemplated here under, and to transfer to, and process such client data within the United States, as may be required by applicable [00:14:30] law.". No mention of offshore. No mention of data going offshore. No mention in the agreement of using offshore labor, sending data over to The Philippines. No mention of that, according to this CPA, in the sales discussions at the AICPA ENGAGE Conference, or from Enrico, directly. That's a big question for me is why ... How could this happen? I'm not saying that was Enrico, necessarily; maybe [00:15:00] he thought that this was all being disclosed. Maybe there's some sort of structural problem going on at Botkeeper. The reason I asked on Twitter, "Will anyone send me their Botkeeper agreements?" is because I'm trying to figure out if this is not disclosed. To answer your question, David - this is very long-winded, I know - this matters because CPAs are required, under the AICPA Code of Conduct to ... Well, here, I'll quote it for you. "When you're using a third-party service provider ..." There's actually a provision in [00:15:30] the AICPA Code of Professional Conduct. Let's see, it says, "Before disclosing any confidential client information to a third-party service provider, the member, the CPA, should do one of the following: enter into a contractual agreement with a third-party service provider to maintain the confidentiality of the information, and provide reasonable assurance that the third-party service provider has appropriate procedures in place to prevent the unauthorized release of confidential information to others." If Botkeeper is not disclosing to CPAs, and to CPA [00:16:00] firms that the data is going overseas, then they are not able to provide, necessarily, that reasonable assurance that the unauthorized release of the information to others has been prevented, or secured against, because once, say, a bank statement, or a W-2, or W-4 goes overseas, US law doesn't apply over there. How do you go get that data back? That's a problem. David Leary: It's interesting, because I [00:16:30] kinda ... I'm almost feeling like this is a bigger thing, beyond Botkeeper. Are CPAs, and accounting firms doing their own due diligence? Then, are app devs, and services like this, are you doing your own due diligence, across the board? I know that ... Now, these are just guidelines from the AICPA, right? Blake Oliver: Mm-hmm. David Leary: Which is kinda different versus GDPR stuff, government regulation ... This is just like a personal code of conduct, right? Blake Oliver: This is the code [00:17:00] of ethics that you have to abide by, if you wanna be a CPA. If you don't, then they'll kick you out; you lose your license. So, kind of important for us, anyway. David Leary: Yeah, got it. Blake Oliver: It may not be ... I don't know if any of this is illegal; it might not be, but it's certainly questionable, when it comes to ethics. I would consider it very questionable not to disclose this to the people who are using your service, to your partners. David Leary: I think that was a note that kind of was in the olive branch, in what Enrico said. That's something [00:17:30] he can totally address in the Facebook Live. They are gonna try, and communicate their international presence better, because he kinda- Blake Oliver: Well, he said- David Leary: It's been great [cross talk] Blake Oliver: He said that he would provide a copy of their agreement to me, so that I could take a look, and didn't. That was supposed to happen, I think, end of day, Wednesday, or Thursday, and here we are - Friday. I checked in with him today, and he still hasn't sent it, so I don't know what's [00:18:00] going on. David Leary: I think we have some time, here. Next Friday's five to seven days away. Actually, maybe less, when people listen to this. Again, we're doing 2:00 p.m. on Friday. Watch the Cloud Accounting Podcast Facebook page; watch Twitter. We'll get information, details on this. Obviously, you're gonna write a blog post, which is gonna have details about this come out, and the open questions that are still out there. Those will be out there, and then, that gives Enrico time to digest, and then we jump [00:18:30] on the Facebook Live, and we chat this out. Blake Oliver: I'm looking forward to it. David Leary: Anything else happen in the news? Should we take a stab at other cloud accounting stories this week? Blake Oliver: Yeah, let's talk about ... Here's a related AI story is with Avalara. Avalara has acquired artificial-intelligence technology, and expertise from Indix; it's a company called Indix. Avalara is buying them. The idea is to take Indix's AI technology and apply it to the problem of organizing [00:19:00] its database of global sales tax information, to make sure that Avalara's database is always up to date on the changing rules, and regulations in every single local jurisdiction, which is thousands in the United States, alone. David Leary: They're gonna do it using AI technology. When we started the podcast, it felt like, last summer, everything was all blockchain, blockchain, blockchain, blockchain. Now, I feel like how the stories ... Everything's AI, bots, AI, chats. I almost feel like we're gonna have to have a whole beat on this, right, this [cross talk] Blake Oliver: -on [00:19:30] the AI beat. You can take blockchain. David Leary: Okay. All right, that's how we're gonna divvy this up? All right, all right. We could do that. Got it, got it. I think Intuit announced earnings yesterday, and that was huge news. Blake Oliver: They are doing really, really well, right? What is the ... The stock has bumped up. What's going on? David Leary: Yeah, I think the stock crossed 250 bucks today, or something. It's crazy. They announced their second-quarter revenue increased 12 percent, led by a 30-percent rise in small business online ecosystem [cross talk] Blake Oliver: Actually 38 percent. [00:20:00] David Leary: 38, sorry. I need thicker glasses. 38 percent, so it's even better than I imagined, obviously. A lot of this is ... What's really interesting about this, for Intuit, it's QuickBooks and small business. Intuit, if you go back 18 years ago, it was always so heavy TurboTax. Small business was small business, and was just ... It was moving along. Now, it's just amazing how much the Small Business Division is contributing to Intuit, overall. The fact that they really need with those numbers; I mean, that's what they come out ... A couple [00:20:30] of interesting ones that stood out to me was the QuickBooks numbers. QuickBooks, internationally, is just under a million subscribers now [cross talk] QuickBooks Online. I think that was interesting. Then, the other one that was interesting is the overall subscribers to QuickBooks Online, now, 3.9 million. Let's just call that 4 million. Take 4 million there ... Take Xero. I think they said they were at 2.5, or something. Start adding in whatever Intacct's got, and take FreshBooks ... Is cloud accounting [00:21:00] pushing the 10-million mark, now? Getting there, overall? It's gotta be close. Blake Oliver: Matt Paff had some tweets about the Intuit earnings; I don't know if you saw those. What he highlighted was that QuickBooks Desktop revenue is actually up 7 million, which is 4.76 percent versus the same period last year. David Leary: They're moving Desktop customers into a subscription model. Blake Oliver: That's increasing their revenue, even though they're still on Desktop. That's [00:21:30] brilliant. David Leary: Subscription model's the way to do it, yeah, because, if not ... I think, historically, the Desktop software ... If you've ever bought Desktop software, nobody paid per month. You buy it once every three years. Microsoft Office, you buy it every three years, when you get a new PC, and you install a new version of Office, and you pay for it. If they get you on subscription ... I'm probably paying more for Office, now, I don't know, at eight bucks a month, or whatever I'm paying. I might be paying more, when it's all said and done. Blake Oliver: What was interesting - we're gonna have to wait to see more about this - was a tweet from Sasan Goodarzi. He [00:22:00] said, six hours ago, "Shared our Intuit results yesterday with investors, and talked this morning with Jon Fortt, and Squawk Alley, highlighting how we're building an AI-driven expert platform to deliver the benefits customers seek with speed, while digitizing the service industry." What does that mean? An AI-driven expert platform? Is he talking about QuickBooks Live? Is he talking about TurboTax Live? What do you think, David? David Leary: Like I said, this tipped. That's all anybody's talking about is AI. Maybe [00:22:30] Intuit is further along their AI than they already said before, but there's no doubt all this is coming ... This is the thing, if Botkeeper's got amazing stuff happening to juice the bank feeds, what does Intuit have? You're right, this is super-vague; has all the buzzwords, though. The only thing they left out was blockchain, but he's got all the buzz words, and we're gonna have to watch this, and see what this means. These interviews, obviously, they're probably on broadcast TV. I haven't seen them, so if they show up on YouTube, or something, sometime this [00:23:00] week, we'll see them, and tweet about them. You're right, this could open up a whole 'nother can of- six episodes of excitement to talk about. Blake Oliver: Speaking of QuickBooks, Intuit and Online driving their revenue growth, there's a tweet from Lorilyn Crum asking Twitter, "Hey, when were these rolled out?" She's put up a screenshot of the usage limits in QuickBooks Online. She says, "First I've seen on a client. Did these limits used to exist, and they just weren't as explicitly stated?" She posted the screenshot of the usage limits. [00:23:30] I kind of sort of had this in the back of my head that I knew this was a thing, but I hadn't really paid attention to it. Apparently, when Intuit rolled out QuickBooks Online Advanced, they also started gradually rolling out usage limits on all of the lower plans. Were you aware of this, David? David Leary: I did get an email, because I'm signed up as a QuickBooks ProAdvisor, so I did see an email, and I did see some people talk about this a couple weeks ago. I actually think I had it in, and slotted as one of the stories, and I just ... We didn't make the cut that day. There was other stories to talk about, so it didn't make the cut. I [00:24:00] have seen this, that this is happening. Those of you that aren't aware of this, if you have a client on QuickBooks, and they grow beyond whatever ... Blake Oliver: This example is QuickBooks Online Plus, which is, I think, the one that most people are on, now the limit is you can have five billable users. You can have 250 accounts in your Chart of Accounts, and you can have 40 classes. and locations. That's the limits. If you want-. David Leary: Which are good-sized. If [00:24:30] I'm an enterprise with 40 locations-. Blake Oliver: Well, this is the thing. I saw somebody complaining about this, because they said, "Well, you know, we use classes to track jo [like a job-costing kind of thing] so we have way more than 40 of those;" or, if you're a not-for-profit, maybe you have to track a ton of different programs, and now you're getting forced into this Advanced. The reason I think this is very relevant to the earnings call is because, gee, I wonder if Intuit's earnings are up, because they're squeezing more money out of existing customers, too; forcing [00:25:00] them onto the ... How much does QuickBooks Online cost? It's not cheap, right? David Leary: The advanced one, I'm not positive on the price, but I think it's pushing that $89-$90 mark versus $34.99, or whatever I'm paying ... This is interesting about ... You bring up the classes, and I think this is - you're right - a perfect example. I use classes in my QuickBooks Online. I am nowhere near an enterprise, like literally ... This is a teeny, teeny little operation, but I'm [00:25:30] kinda anal, and I like to have things organized. I like to create a class for conferences, right? Blake Oliver: Yeah. David Leary: If I do a lot of conferences, and I'm tracking that conference - was it profitable/not profitable - P&L by class, I'm gonna use up these 40 soon, and I'm gonna be ... I'm gonna be Advanced, then I'm gonna have to pay a bit more money. Blake Oliver: You're screwed. You're gonna wanna switch to something else, because - I just looked it up - Advanced costs, without the discount, $150 per month, David. David Leary: Or I could just create- I could [00:26:00] just merge my classes. Blake Oliver: Yeah, but that sucks. Who wants to have to junk around with trying to stay under these artificial limits? Of course they will- David Leary: People will do it, though. I remember, when I used to do tech support for QuickBooks Desktop. People do anything they can, not to spend the next dollar- Blake Oliver: Well, yeah. That's one of the biggest hole with QuickBooks Desktop is people sharing user accounts - the biggest security problem. David Leary: Yeah. Blake Oliver: Any app that charges per user, you've got people sharing access to accounts. That's a disaster, which is actually [00:26:30] why ... One of the things that appealed to me about Xero, years, and years ago, when they first came to the US, and I signed up with them, is because they didn't charge for the number of users. Actually, still, I think they have unlimited tracking categories, which are the class equivalent in QuickBooks. David Leary: The dumb thing about this, I'd have to say ... It makes it easy for people to digest, and understand, and figure out, but it should actually be based off of real usage, like, "Hey, you're making this much volume, and [00:27:00] server load." Maybe you have 100 apps hooked up to the thing, and it's constant making API calls to your QuickBooks. It should be on server load, not an arbitrary number-. Blake Oliver: Yeah, something ... David Leary: I could easily have 40 classes, but I'm not putting any server loads-. Blake Oliver: Or you might not even be using classes at all and be a gigantic company. It's just weird. David Leary: Well, thank you for bringing this up, because I didn't ... I've kind of ignored this story. Now, I realize this actually impacts me. I'm gonna rethink how I'm [00:27:30] using classes now, actually, because I could see me exceeding 40 classes. Blake Oliver: Yeah, really. You'll have to let me know what you end up doing; how you get around it. Maybe there's an app for that, David. David Leary: Yes, we'll figure that out, but, yeah, thanks for actually ... Aw, man, maybe I'll derail the rest of the podcast, now, thinking about my class strategy. Thanks, man. Blake Oliver: Oh, well, no, David, speaking of Intuit taking you to the dry cleaners-. David Leary: Oh, boy-. Blake Oliver: You've got a story about actual dry cleaners. David Leary: Yes. I came across a story that is not actually [00:28:00] about cloud accounting, but I totally think it is. It's Tide, you know, like Tide laundry detergent. They are now launching an omni-channel on-demand laundry service. As soon as I saw this article, and read about it, I was like, "This is like QuickBooks Live." Tide, who is the vendor ... Tide was the vendor. They were the supplier of the soap to all these dry cleaners, et cetera. They now are gonna basically create an app; think about your ... Like an Uber app, a Tide app. You, as a consumer, will [00:28:30] book somebody to come pick up your laundry, and it's all going through Tide. I'm paying Tide. Then, apparently, these dry cleaners will have to then be paired up, and they'll go through Tide to pick up laundry, wash it, and then deliver it to you back ... Whatever that that process is. Essentially, it's similar. Tide's now playing middleman between the consumer, and the dry cleaners. Blake Oliver: Tide is going from becoming a supplier of laundry detergent to a platform for laundry services. That's what- David Leary: Yes, which is similar. Blake Oliver: To [00:29:00] draw the analogy, Intuit is going from being a provider of accounting software to being a platform for accounting services. David Leary: Yes. The dry cleaners are like the ProAdvisors, and Tide is QuickBooks, the vendor. Blake Oliver: There you go. David Leary: I just thought it was a very interesting ... As soon as I saw it, I was like, "This is the exact same story." Blake Oliver: Thank you for bringing that story into my life. I enjoyed that. David Leary: What's interesting about this - they're branded is Tide dry cleaners. QuickBooks Live could be [00:29:30] interesting. What if you, as a bookkeeper, now get to call yourself QuickBooks Live, and that's your storefront? Imagine the people that might come to you now. It's interesting. Blake Oliver: Could be helpful; could be hurtful. We'll find out. Speaking of QuickBooks Live, we had a little bit of follow-up on that, right? David Leary: Yeah. We recorded the podcast last Saturday and no sooner did I get off, and I saw a tweet from Patti Scharf. She makes this great video from Catching Clouds every Saturday morning. It's [00:30:00] like Saturday Morning Slow Down, I think. She's got a little branded coffee mug [cross talk] She has her take on- Blake Oliver: Let me just stop you there, David, because we may have some new listeners who are not familiar with the in-depth coverage, we have done on QuickBooks Live over the last few weeks. Just for those of you folks who haven't heard about it, QuickBooks Live is an "assisted bookkeeping" service that Intuit was testing pricing for on [00:30:30] their website, a few weeks ago. David, and I broke the story about it. It blew up. There were dozens of blogs all over, podcasts talking about Intuit potentially competing with bookkeepers; I suppose much the same way that Tide is now competing with dry cleaners. It has not rolled out yet. Intuit said it was just a test, but we actually have a lot of evidence to suggest it's really further along than just a test. Anyway, David, back to the story. David Leary: Back to the story ... The summary of the quote [00:31:00] in her video is there's been a lot of talk about people, "Hey, well, if QuickBooks is gonna do this, I'm gonna skip to a different accounting platform." Then, her argument is it doesn't matter. Bookkeeping is kind of going away. Bookkeeping, as it's known today, and has been known historically, is going away. It doesn't matter what platform you're on, and that you really have to jump in, and embrace this, and change, and reinvent what your practice is. It's a good six-minute video. Everybody should watch it. She really nails it. Blake Oliver: The interesting thing that Patti said is, she said, "Don't [00:31:30] just worry about Intuit doing this. Everybody is gonna do this. This is what all the software developers ... Where they're going." Patti's not worried about it, and I think the reason she's not worried about it is because her business, her firm, is so niche, and so targeted toward eCommerce companies, and the needs of eCommerce companies that a assisted bookkeeping service from Intuit, where it's like TurboTax Live, those people are just gonna have no clue what's going on. They are not experts in eCommerce, [00:32:00] and they're never gonna be able to compete. David Leary: They're not competing with the $200 bookkeeping service. They don't even talk to an eCommerce person, unless that eCommerce person is doing a million dollars in sales, right? Blake Oliver: Yep. David Leary: Because they've gone niche. They've earned the right to do that, because they're in their niche, and if you can get to that point ... Another example - this is Chris Farmand, who does Small Batch Standard in ... He's outta Jacksonville, Florida. He only does breweries, but he is the best brewery accountant possibly in North America. He charges [00:32:30] what he wants to charge. Blake Oliver: David, all credit to you, you have been beating this drum for as long as I know you. The people who've done it are doing really, really well. If you haven't found a niche ... I think maybe, actually, on one of these episodes, you should sort of just do a summary of your niche argument. That would be really cool. Take some time, and you can just make the presentation. David Leary: Here's the summary: niche enables everything. That's it. If you go niche, everything else falls into place. That's the premise of my theory, but, yeah, we could absolutely do that. Before [00:33:00] we jump into another story, I want to assign a story to Patti, since she's the eCommerce expert. Blake Oliver: All right. David Leary: Etsy - Etsy's the online seller platform so people can sell stuff - apparently had a major nightmare. They had some ... They might've had a bug, and either it deducted money from seller fees out of some people's bank accounts, or deposited money in incorrectly, to where it's going to cause it to show up in a 1099. Then they tried to remove it. Then, people had checks bounce, and ... It's an accounting nightmare. From [00:33:30] Etsy's standpoint, it's a nightmare. Think about an individual small business person who sells on Etsy, like how messed up their books are now. Next week, I'll have more on this story, but it sounds like a nightmare. Etsy did not handle this correctly. Blake Oliver: Patti, we'd love to hear what you think about this. David Leary: Yeah, absolutely. Blake Oliver: David, I think that's all the time we've got this week. We'll just have to save all these other great articles for next time. If our listeners would like to get in touch with you, what's the best way to do that? David Leary: @DavidLeary. [00:34:00] Blake Oliver: @DavidLeary on Twitter, and I am @BlakeTOliver. You can @-mention us, tweet at us, direct message us. You can connect with us on LinkedIn, as well. Don't forget to like our Facebook page, The Cloud Accounting Podcast; search for that on Facebook. It's a great way to stay up to date on everything that's going on with new episodes, and articles. Blake Oliver: Be sure to subscribe to our newsletter. If you go to CloudAccountingPodcast.com, you can subscribe to my mailing list, and [00:34:30] you will get the show notes for every episode emailed to you every time we drop a new episode. Blake Oliver: Why would you wanna do that? Because then, if you heard a great article on your drive to work, or your commute, you have that email in your inbox, and you can go find the article, click it, and read it in more depth. Be sure to subscribe. It was a great chatting with you this week, David. I'm looking forward to Friday. What's the time, and date for that Botkeeper thing? David Leary: Friday, Friday, Friday ... March 1, 2:00 p.m. Pacific. Blake Oliver: All right. Follow [00:35:00] us on Facebook, so that you get notified of that Facebook Live. Should be very interesting to find out what is going on at Botkeeper. David Leary: Awesome. Bye, everybody. Blake Oliver: Thanks, David. Bye.