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Ep. 57: Richard Starkey - Digital Nomads
March 30, 2020 | 18 Minutes
Richard Starkey, Managing Partner of CronosNow, joins Count Me In again as the first returning guest of the series. In his first episode, Richard talked about his background and some of his personal experiences to explain why accounting and finance skills are so important to entrepreneurship and running a business. In this episode, Richard talks more about what he has learned over the past year and his shift in business mindset. CronosNow is now about Shopify Accountants and Richard is managing the business as a digital nomad. He tells us the benefits and challenges of this lifestyle and how this decision impacts his business and clients. Richard Starkey is someone who has interest in a number of startups, some successful and some what he refers to as "great life lessons along with some humble pie", and being a digital nomad is just the next step. Download and listen now!
Contact Richard Starkey: https://www.linkedin.com/in/richardstarkeyyves/
FULL EPISODE TRANSCRIPT
FULL EPISODE TRANSCRIPT
Welcome back to Count Me In, IMA's podcast about all things affecting the accounting and finance world. I'm your host, Adam Larson, and I'm happy to bring you episode 58 of our series today. We welcome back Richard Starkey, serial entrepreneur, digital nomad and one of the first guests we had on our show. He talked to Mitch again this time explaining his shift in business focus and highlighting the benefits of being a digital nomad. Richard's first episode remains one of the most popular in our series and we're sure the second one will be just as well received. Let's go to the conversation now.
The last time we spoke, you talked about how CronosNow automated a lot of accounting services. I know we've kind of focused on the small to medium size businesses, entrepreneurs, the opportunity that you recognize since that conversation. How is your business focus really changed?
I think it's been quite an interesting journey because we've landed up actually never in our niche quite a bit and that's been driven by our marketing. As I personally have learned more about marketing, which is key to any digital nomad will you, if you can't market online, you can't fit an income and the other aspects is also just increasing the speed at which we learn about the new systems that we implement and the way we implement them for clients has become a lot less so we can, we can implement a new system in a fraction of the time compared to what I thought we would be able to even even a couple of months ago. So I think we've learned to kind of be the monster of a very small niche. We get things done quickly and marketing that niche in a much more effective way. How clients get the gains because we are able to pass a lot of the cost savings along to them. but also we get to keep up what are those gains, which means we're more profitable on net space that we make and I just, I've learned in that space that's as an accountants and I think I might be, I'm definitely going to generalize in my next statement, but we do have a tendency to overcomplicate things, right? And the tail wagging the dog as aware. And I've just really learned about the importance of the principle that it 80-20 rule and the reality that although accounting is incredibly important to us and perfectionism in that space, it's quiet, quite difficult to overcome for most of our clients are entrepreneurs. You know, the accounting and back office function is never going to be something that turns them on and gets them excited. Right? It's something, it has to be done and only if it becomes an absolute priority if something's going wrong. Mmm. So yeah, it's been a very interesting, especially in the digital nomad world because that's what we are, my wife, myself, our staff. But that's what our customers are.
And I just want to kind of clarify something for our listeners too. You mentioned the principle and 80, 20, you know, what in your opinion, is the end goal of following this principle? You know, what are you actually trying to accomplish?
The end goal is that we need to deliver on an objective. So obviously it's about fitting the objective correctly, but that 80 20 rule for us as accountants means that we, we actually deliver it. We don't land that we're running over budgets. We don't run into never, never systems that never end. So it's about delivery and efficiency in that delivery.
So I think, you know, being in this technologically advanced, you know, business environment, having the opportunity to really complete, I know what you said about 80% of what you're looking for with automation. So roughly 20% of the time, you know, that's where the cost savings comes from that you were referring to, right?
Oh yes, absolutely. So I think there's the kind of sets, the 80% of aim to deliver the 80% in the 20% time. And then along with that, the, another application of principle, which we've discussed previously, is looking to automate, a lot more of the FM cost. So if we can achieve 80% of what we want in terms of automation with 20% of the FM costs, well, I mean we have to let go affection as tendencies and deliver on what the customer wants because ultimately the customer also one better to lower costs. So you can deliver 80% with automation, with 20% of the efforts. Why not?
That's perfect. Yeah, I just wanted to make sure that, you know, we kind of clarified that and know another, the term that you've referenced now is the digital nomad. And I know, you know, I've done a little bit of research on this and my understanding is it's essentially someone working exclusively online. So I just wonder if you can kind of expand on that a little bit and tell us what that really means to you and for your firm.
So first of all, I agree. And in terms of the simpler kind of view of the term digital nomad. It's all about somebody can work online. but for me it goes a bit deeper. It's about, about having freedom rights. So it's, we can work. My staff, myself, my wife we work from wherever we want in the world. So we have freedom in terms of location and to large extent, we also have freedom in terms of time. So yeah, we could be working and we've done this quite recently, sitting on a beach in Cape town, you know, I'm sitting with a non alcoholic beverage while we're doing our work, but that's, we could just as easily be sitting in a coffee shop. So that ability to work online and deliver the same results, but actually at a lower cost is what drives our effectiveness in the, they're just from nomad space, if that makes sense.
Yeah, that's great. And I am quite envious of sitting on the beach in Cape town. I think that sounds like a great place to work. but I know, you know, you're not the only one. And what I mean by that is many businesses are going online, a lot of client services are being provided remotely. So I'm sure you can speak to this better than I can, you know, what are some of the challenges of working in that kind of environment?
Ah, so I think there's quite a few challenges that come with it. I'm far outweighed by the benefits, but some of the challenges if I talk about it from an accounting practice perspective is that a lot of our clients, sometimes we'll battle with the technology for communication specifically. So yeah, you and I might be comfortable on zoom. Another of customer might understand Google and other one might know Skype. And this is actually quite a geographic thing, which is interesting. And learning when we actually just got to pick up a phone, for seven clients. so I think the, the challenges really come down with your client's comfort with the technology that you use. And I'm also seeing a shift in order to make that easier, which is really a way of overcoming some of these challenges is I'm really enjoying the shift to single sign on, across devices. So, you know, sign in with Google's name with Facebook. So I generally will try and overcome these challenges that customers feel about the fear of new technology when your system by trying to find applications that fit with the accounting software, with the imagery management software, et cetera, that fits with software that they really have signing for. And I'm just loving G suites at the moment. I'm chasing up Zoho as well, which is interesting. but along with that, the kind of real top Western brands, so if you think about GSV to HubSpot, zero QuickBooks, what of them are also starting to develop a similar look and feel? We will see the fonts look similar. They use of negative space and design and user experience. It looks similar. So I'm not sure if they are doing that on purpose or if it's just the design train. But it is quite interesting. I'm noticing that a client who's comfortable in G suite would generally be comfortable in HubSpot, be comfortable in QuickBooks or zero because it looks, feels similar. so what are the challenges? I might find a a new toy at the moment I'm playing around with Zoho because of the Zoho one package that just looks like incredible value, but the look and feels different. So I spent all this time building our customers into a nice combination that looks and feels similar and Zoho has got a different board process behind it, a different design. So for me to convert a customer into that space, even though their savings, the learning curve is the challenge because now it looks and feels different again, very much. How, or even going back five years ago when you were trying to get someone to move from Skype to Google Hangouts or you know, especially in the U S zoom has taken over. So it's their look and feel that familiarity, which is a human to human nature for matter. If it's what caught a driver, what technology they use.
That was kind of really focusing on, I would say, the communication with the clients. Right. And how you're able to kind of essentially deliver the services of your business. But what else is it about this digital nomads, business and, you know, AI, different things that affect traditional accounting. I know you briefly mentioned earlier some of the things that go into, you know, potentially like reconciliations or, financial statements. You know, how has that part of your business really evolved even more?
Well, it's been such a, such an interesting, well last 12 months, I would say. The developments of, I'm not sure if AI is the right word, but I think of it in my layman accounting mind as artificial intelligence is the ability for software, for instance, to, to read a document, learn how it's been extracted and allocated before and replace or speed app, a huge amount of what used to be a men, you know, bookkeeping process. So, for example, you know, well accountants would would understand the pain of getting a couple of hundred expense proceeds, right? Brought to you in a terrible folder that you would now set. It sets me to catch a manually into an accounting system or spreadsheet even, Now with programs like receipt bank will have doc, you know, you just literally asked your customer and it's beneficial for them as well. Don't bring it to me, just take a photo with the phone using this app. Very simple every day that's uploaded receipt bank, Hubdoc, whatever system you're using, read those receipts and is incredibly accurate and has learned which accounts those need to be dedicated to. So if I take an average client to who runs no credit card and is paying for a couple of expenses and steps by cash, are saving three, four hours a week in terms of data capturing. And on top of that we're saving because there's less areas. So I'm seeing customers in terms of time having to be spins that would usually be bull. We are able to reduce that billing by 50%. Sometimes right at a high accuracy level. There's another program DocPass, which I've started using, which doesn't just do expense receipts, but you might have huge PDF documents sent from a warehouse, , scans a few minutes of setting it up and you've got all the data, there's just all ready to go and you can feed it into what an assistant you need. It really is amazing. With that from an accounting perspective, if we get away from the in house bookkeeping, functional data and she functions, the financial reporting function I think is, it's changing around the world. I talk a bit more from an international accounting perspective. I'm an risk. I'm not a U S bought guys match being in the UK and South Africa, but, and I believe the U S is a little bit further ahead of the rest of the world, but they are now really working hard on what they call the taxonomy. All right. And the adoption of XBRL, which is extensible business reporting language. There's really, it kept being adopted around the world, which means that financial statements that are submitted to a company house or sec or wherever it may be, are coming in a standardized format that's understood by XBRL and therefore can be uploaded very consistently to not only company house administration reporting systems are only tech systems, but also financial research and yeah, market data. it really is changing the way that we're able to use financial statements in a large scale, I bet. Makes any some sense.
Oh, absolutely. And I think it's a great way to kind of wrap up the conversation and you know, we started off by talking about the different advancements in technology, how that's kind of reshaped your business and you really tried to focus on this niche market. I last question to you is, you know, you seem to be very forward thinking and proactive in adopting these new technologies. Recognizing opportunity. Where do you see some potential room for improvement in the business as it stands now? You know, what do you think might be next as far as adjusting your services and making it even more valuable to your clients?
The, the next step? in terms of my CronosNow business, which I'm sure a lot of other smaller practices, you know, we aim to keep small so we can keep high levels of customer service, etc. But you also want to be able to scale to some extent and the old model of accounting practices would, you would have an army of yeah, first and second year young accountants with a few senior people would have a systematic approach with data going in and kind of hang out. But now that's not where you're making many more. You can't justify charging big fees with data capture. So where we bring going forward is how do we add more value to a customer beyond the counting? How do we help them make decision making? How do we use that data more efficiently, not just for tax returns? So at the moment it's quite an interesting space because I've got a lot of experience as CFO and CEO level, over the last 15 years before I came back to the accounting space. But to try and Cision that knowledge in a formulaic and systematic way is something that I'm wrestling with now. I do have a sense that as all this data in his system had been built out, computer processes and systems will be able to drive accountants adding value even though they don't have the experience. So it would be a bit like a doctor who, you know, maybe doesn't study for seven or eight years in the, in the, in the not so distant future, but maybe he can have a shortest amount of studying in a shorter amounts of experience that he can get out and have a bigger impact quicker because he has a huge medical reference behind him, right. That the computer can almost help with diagnosis. I think accounting systems, the financial systems will help with business diagnosis and entrepreneurial diagnosis. so that along with the global kind of nature where my business is going, is trying to lead me to really think about how do you help not just the business, but the entrepreneur, be a true digital nomad. How do they go with their treats and best with the tax rates fit what they're getting back from that country? How did they get the freedom to go live in Europe or live in Asia if they want while still running their business with a proper system of processing control? So we're learning about that next stage. What's beyond the accounting system? The accounting system works nicely. It works smoothly. It's nice. It's cost effective., How do we add more value?
This has been Count Me In, IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.