Latest / The Accounting Podcast / Accounting Salon Interviews: Kenji Kuramoto of Acuity
Transcript
- Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Kenji Kuramoto: I'm Kenji Kuramoto. Blake Oliver: Thanks for joining us, Kenji. It's great to have you here at The Accounting Salon, Year Two. Kenji Kuramoto: Year number two. Blake Oliver: In New Orleans. Kenji Kuramoto: Great to be here with you guys. David Leary: Face to Face. Kenji Kuramoto: Face to face. It is a little daunting for me. I listen to you guys every week, and I just hear you talk about how you're never together, and you're actually both here in [00:00:30] front of me, and that you, David, are using your closet. It was fun being at lunch today, hearing your son confirm that, yeah, his dad actually goes into the closet, and actually records The Cloud Accounting Podcast. David Leary: It's a professional studio. It's not a closet. Blake Oliver: It sounds very good. Kenji Kuramoto: We need to talk with your son about that a little bit. He's born to cover. David Leary: Now, with you being a tax expert, can I write this off? Can I write off the wife's clothes that are in there, as well, because it's our soundproofing? Kenji Kuramoto: Yeah, yeah. We've had a tax practice for all of a couple of months, so that makes me an expert, so, I'd say do it. David, go for it. Do it. David Leary: Good. Blake Oliver: You [inaudible] tax for just [00:01:00] a month now? Kenji Kuramoto: A little longer [cross talk] Yes, we just we just launched this past season [cross talk] Blake Oliver: What's going on with that. What was the impetus? Why did you get ... A lot of people wanna get out of tax. Kenji Kuramoto: Yeah. Blake Oliver: They don't want it. That's why they've been getting into this cloud-accounting thing. Let's do the books. Let's be the advisors. You're getting into compliance now? Kenji Kuramoto: We have a totally, at Acuity, at our firm, a backwards approach to all this. It's just the way it worked out. We started at advisory like 14 years ago. We added bookkeeping [00:01:30] about five, or six years ago, and now we just added tax. I think everyone else is probably smarter than us, and goes the other direction, but yeah, we're adding the compliance, and the lower-level pieces of the accounting stack as we go on. Everyone else is going to advisory. We're diversifying from it. Who knows whether that's smart or not. Probably not. David Leary: Do you think one direction's easier than the other? Kenji Kuramoto: I do think that yes it is. I do think the ... We were very fortunate to start an advisory. That's, I think, been a little bit easier in some ways. The [00:02:00] biggest challenge for us is to keep an open mind, and not let ego get in the way, because when we started, we were fractional CFOs, and thinking of doing bookkeeping. Blake Oliver: Well, let's step back for a moment. Tell us a little bit about your firm - where it is now, where you came from. I think people will be very interested to hear that, in addition to all the services you offer. How did you get to this point? Kenji Kuramoto: 14 years ago, started in just outsourced, or fractional CFO work. That was my background. I worked with tech startups in Atlanta, Georgia. I [00:02:30] had just, you know, a good time talking to other friends who were founders of tech companies. We'd go out for beers. Over lunch, they'd say, "Hey, Kenji, can you help me on my business model a little bit?" or, "Here's what my funding deck looks like." Just started doing that on the side. Then another friend of mine joined me. That was the original vision of Acuity was just to provide outsourced fractional CFO services, just for tech startups in Atlanta. Then, over time, actually not a lot of time, we added controller services pretty quickly, because it's a place I had been, as [00:03:00] a controller, for many years, as well, too, was you add a controller. Then we thought it was going to be just controller, and CFO fractional services for start-ups, and early-stage companies, and that was gonna be it. Then, we kept hearing over, and over from clients, like, "This is great. We love the controller/CFO services, but ..." Really, the blocking and tackling of bookkeeping is a real problem. In fact, we couldn't get to a lot of our advisory work, because someone would hire us to come in, and do some big financial model. We'd get in, and the underlying bookkeeping, it was garbage. We [00:03:30] couldn't get to a lot of work. Finally, we thought, you know, maybe let's think about doing bookkeeping. Yeah, it was a little hard for us, honestly. That's what I meant earlier about the ego thing, where we thought, "Well, wait a minute, I'm a former Big Four person, and I've only been a CFO. Why would I do bookkeeping?" Then, I think, once we had clients talk about how badly they needed it, and the second piece that really helped us was it was really the emergence of the cloud-accounting software. Just the namesake of this podcast, right? We saw those two kind of converge for us, and [00:04:00] thought this may be the time to actually get into bookkeeping. Blake Oliver: It sounds like, if I may summarize, that you saw that- you had the need to do the bookkeeping, because garbage in/garbage out. You wanted to control that data. Then, the technology is what actually enabled you to do it in a cost-effective way. Kenji Kuramoto: Correct. We had a few fits and starts with maybe we should just hire a bookkeeper. Our experience was we'd be sending these bookkeepers, running around all [00:04:30] through Atlanta traffic, which is terrible traffic, for those who haven't been there ... It's just a really ineffective means to put people out on sites to go deal with desktop software. It just felt like this is a crazy mob. There's no way to scale it, so, we pulled back a little bit. Once the cloud-accounting software started emerging, then we saw, okay, wait a minute, we can maybe go back to this, and scale that. Blake Oliver: How many people are in your firm now? Kenji Kuramoto: We're at about 85 employees. Blake Oliver: Wow. Kenji Kuramoto: Yeah. Blake Oliver: Last year, you did a really cool presentation [00:05:00] on ... What was it called? It was something on building a boiler room? Kenji Kuramoto: Building a boiler room. Who would want their own boiler room? We just said that kinda tongue in cheek. It's something actually that Amanda Aguilar and I are doing, and we're gonna do some ... If anyone wants to sign up, through Elefant, by the way, we're gonna talk more [cross talk] Yeah, teach people how to build your own boiler room. Blake Oliver: The term has some negative connotations, clearly. I love the movie, "The Boiler Room," by the way, but what you were teaching us had really [00:05:30] powerful real-world lessons. It's kind of amazing to me that more firms don't ... I guess I should step back and say what do we mean by boiler room. It's these outbound sales tactics, right? Kenji Kuramoto: Correct. Blake Oliver: It's hiring business-development representatives straight out of college, pretty much - a lot of cases, right? Kenji Kuramoto: In almost all cases [cross talk] Blake Oliver: -a lot of cases. Then, they're out there prospecting for you, and trying to get meetings booked, right? It's like the traditional SaaS business-development [00:06:00] model applied to an accounting firm. Kenji Kuramoto: Yeah, exactly right. Blake Oliver: So many firms are just sitting around there, waiting for referrals, and you're actually out there getting business. Kenji Kuramoto: I think the less negative terminology, versus using boiler room is really what ... The way we look at it is it's learning how to sell without you, as the firm owner, yourself, being the one doing it. How can you sell more as a practice, but you don't have to be the one to be doing all that [00:06:30] selling. That's just not a scalable tactic, and it's not a way to do it. That's really ... Yes, you think about creating these boiler rooms as kind of a funny, edgy way to say it, but really what we're trying to do is say, "How can you, as a firm owner, build up a sales pipeline, and you're not the one actually having to do it?" Blake Oliver: I think it's good. For those listening, who are not so familiar with The Accounting Salon, I think it's become ... Well, hopefully it will be a tradition, this year, to take a somewhat nontraditional approach to your titles, and your presentations. Kenji Kuramoto: Absolutely. Blake Oliver: We had fun with it. Kenji Kuramoto: We [00:07:00] do. We do David Leary: What I've noticed about your website is the way you reference your bookkeepers. You built out your ... You took that jump to, "Hey, we're gonna have bookkeepers, but you didn't really call them bookkeepers. I always forget what the title is, but they're just not a normal bookkeeper name. Kenji Kuramoto: Right. We call them Cloud Specialists. That was very intentional. I think clients still use bookkeeping. The terminology of bookkeeping gets thrown out a lot, but we felt it important, between me, and our [00:07:30] other leadership team members, and our Cloud Specialist team leader, to really help give a bit of a different identity to our team. Yes, they're performing traditional bookkeeping functions, but we think the role needs to emerge, and needs to change. In fact, part of our mission at Acuity is to bring in great bookkeepers, and to really help them develop their skill sets, so they can be these Cloud Specialists; they can be advising on different apps. They can become real specialists in all these integrations, because, what [00:08:00] we see at Acuity is that the environment's getting more complex, and clients are using that complexity of all these new solutions to build custom software - basically, a custom accounting function - for their own small business, which is unbelievable. It's truly amazing, when you think that, historically, the only companies that could ever have an actual customized accounting solution was somebody who's buying Oracle, millions of dollars a year, and are doing these huge, massive implementations. Well, now it can happen for smaller [00:08:30] businesses, depending on which pieces of software you use. As long as you go cloud, you've got this huge availability of the app marketplaces, but what you're going to need more of is someone who understands how all these apps work together, and how they integrate. That's what we're trying to prepare our team for, and even using some of the naming of like, "Hey, we view you as Cloud Specialists," so that's what we're trying to get them to ... Blake Oliver: There's a million apps out there- well, hundreds, not millions, but that's a lot. Kenji Kuramoto: It's a lot. It's a lot. Blake Oliver: A lot to know, and a lot for your team to know. How do you guys go about creating tech stacks? Do you [00:09:00] do it by industry, or do you just sort of do it as you go? How do you educate your team on all this? Kenji Kuramoto: They're both. We just had, pretty recently ... If anyone wants to go take a look at how we approach it, you can take a look at our site, Acuity.co. We do have a partner kind of page. If you look at our partner page, it's really our tech stack. You'll see, I think, today, we've got about 20 pieces of technology that are in our tech stack. You can kind of re-sort it, a little bit, by industry, and it'll kinda make some changes. It's only 20, right now. [00:09:30] Those are actually 20, though, that we've had to go through a vetting process of us at Acuity saying, "Okay, we feel like this is a software that we can help support on the integration side. We can work closely with the developers who built the software." Yeah, we've taken it, and we really view it as instrumental to who we are. We give them a whole page on our website, and talk about, "Hey, here's who our technology partners are." It's actually a fairly lengthy process for us to go through and vet them. We don't [00:10:00] just let anyone in, and say, "Hey, great, I got this new cloud-accounting app; can I put it on your page?" No, we've gotta make sure you can support it. David Leary: Is that fairly a new process for you? Because I feel like when I met you guys, originally, at that time, you had all your processes down to sell your service. I think you were on-boarding ... This is gonna be an exaggeration, but like 30 new clients a month, right? Kenji Kuramoto: That may have happened one month [cross talk] David Leary: -but, at that time, you didn't have any ... "We've put some lines with QuickBooks; some at Xero. This client might use Bill.com. We have three different expense apps; three different time-sheet [00:10:30] apps we use ... It sounds like you've kind of started to standardize across your client base now? Kenji Kuramoto: We have. We were doing some of that back then. We've been a little more disciplined with it now. Yeah, that's correct, David. We have kind of focused a little bit more on what we truly can scale, and iterate over, and over. We're usually not going to tell someone, if they're on QuickBooks Online, or on Xero, and they're using some app we've never heard of before, we're not gonna throw them out. We're not gonna say, "Well, great, we can't support you.". One thing that I [00:11:00] think we've tried to be better about is, yeah, it's great to be a little bit agnostic. We felt, ourself, that way; we want to give our clients freedom of choice. I think we were a little ... Probably the last time we talked about this, we were too much in that role, to where clients came back, and told us, "That's great that you're giving us this freedom, and flexibility. Can you just tell us what to use? Just give me some direction." I think that I missed that before, where giving people all this choice in a massive ecosystem is actually not that helpful. It's a little bit more helpful to be really curated [00:11:30] in this massive ecosystem. That's actually a more helpful strategy, so we're trying to be a little more thoughtful about that, as well, too. David Leary: Obviously, we have lots of listeners, and they can learn things from Blake, and myself, but what's the one thing they can only learn from Kenji? Kenji Kuramoto: The best way to come and learn from me is to see this ... You can learn how to create a very weird hybrid, called video podcast, if you want. Maybe how not to do it ... We did take, actually, inspiration [00:12:00] from ... When I say 'we,' it's my business partner, Matthew, and I took inspiration from you guys. We love what you do on The Cloud Accounting Podcast. We thought," Wonder if we tried to do a video version of it that's a little bit more unique to us ...?" Something, if you want to come in, and see how ... Again, maybe learn a little bit about the do's and don’ts of how to have a video podcast, come check us out. I call it "Drink While You Think," our YouTube channel. By the way, if anyone wants to come be on ... You guys are definitely scheduled yet to come on it. Blake Oliver: Is it live? Do you do it live? [00:12:30] Kenji Kuramoto: We used to do it live. We no longer do it live, now. We had some problems ... There's one of those examples of I can teach you what not to do, or at least the way we did it. Now, you can look at earlier episodes that were live. Now, you can look at ones that are a little bit more edited. For us, it's a way to ... As we've said, our only goal with that is that we love to have a drink with our friends, and just talk about things in our life. For me, and Matthew, it's that we're dads; we're entrepreneurs; we're in this cloud-accounting space; we're big sports [00:13:00] fans. If we could have a drink with our friends, talking about that every single week, then, we're happy. That's the only thing we're trying to do there, with that. Blake Oliver: Do your staff watch these videos? Are you worried that this ... You guys are just at home, hanging out, drinking beers, and talking on webcam. Is that intentional? Is that part of the culture? Kenji Kuramoto: It is absolutely intentional. Well, they know this about ... They're not surprised by anything that's on there. In fact, it probably does reinforce a bit more of who we are. We're just- we're [00:13:30] pretty open-minded, pretty open-book about things. In fact, we've found that as we've gotten bigger, and bigger - 85 employees, now - that it's helpful having all kinds of little ways to make sure team members hear what kind of things are in our head. We don't mind them at all listening to that, but sometimes, they find it hilarious, when we come in next week, and they're laughing about things we said on the- David Leary: I'm sure that you ... Especially, if you think about that ... You have this bigger organization, now, and I'm sure you probably have an employee that gets hired; they probably end up working for you for six months, and you didn't even know they were working for you. You're probably getting to that size, right? [00:14:00] Kenji Kuramoto: We are. David Leary: This is another way for you to be relatable to all the employees in your company. Kenji Kuramoto: I hadn't thought about that, initially, David, but you're right. It is something that ... I'm speaking on this at another conference in a few weeks, or, actually, later this week about scaling a firm. That's probably one of the lessons that was hard for me to understand was that there are gonna be employees I don't know, that I haven't met for six months. There's a whole bunch of clients I have never met; I don't even know their names. I think what you guys have shown through the medium of [00:14:30] podcasting; I think others will; Lopez has been good about video. There are still ways to create personal connections without knowing someone face to face, which is awesome that we're doing this here, face to face, but this is not something that probably any of our families would let us do on a regular basis. Blake Oliver: That's it. It's a combination. You need both, right? You gotta have face time. You get that online time. Build relationships. Awesome. If people wanna build a relationship with you, Kenji, online, where can they reach you? Kenji Kuramoto: The best place to reach me is on Twitter. That's at just @KenjiKuramoto. A little tough [00:15:00] to spell, but I think you all can figure it out. @KenjiKuramoto, on Twitter, is the best place to reach me. Blake Oliver: All right, sounds good. Thanks, Kenji, for your time. Kenji Kuramoto: Thanks, guys. David Leary: Thanks, Kenji.