- Duration: 24 min
- Platform: zoom
- Source: Read.ai 01JPTG3X74HN3HNHBKRFQEY1H2 (https://app.read.ai/analytics/meetings/01JPTG3X74HN3HNHBKRFQEY1H2)
Transcript
[Karlin VanMoorleghem]: Hi, Michael. Sorry. Hey, Carla. How are you doing? Good. How are you? [UNKNOWN_SPEAKER]: Good. [Michael Houck]: Oh, good to finally face-to-face meet here. Yeah. How are you doing? [UNKNOWN_SPEAKER]: Pretty good. How about you? [Michael Houck]: Were you still abroad? [Karlin VanMoorleghem]: No, I’m in Nashville right now. [UNKNOWN_SPEAKER]: Oh, nice. [Michael Houck]: Checking out if I want to maybe move here. We’ll see. How is it? [Karlin VanMoorleghem]: I have never been. [Michael Houck]: It’s been rainy and cold the entire four days I’ve been here. So I haven’t gotten to do too much yet. But it’s a bummer. [Karlin VanMoorleghem]: Yeah. Are you like looking at downtown Nashville or more like the suburbs? [Michael Houck]: I don’t know yet. I’m looking at places in both. And we’ll see sort of what strikes my fancy. Downtown, I’m staying near downtown. It seems kind of touristy. [Karlin VanMoorleghem]: But have you been? I haven’t. But I know so many girls that go on girls trips there and obviously do the whole strip. But I’m sure it’s fun. [Michael Houck]: Yeah. To Broadway tonight. I’m going to the hockey game. So we’ll see what the vibe is like, [Karlin VanMoorleghem]: That’s awesome. Good. Well, welcome back to the States. [Michael Houck]: Yeah, thanks. Good to be back. It was after a while you get you get sort of a restless for for something more familiar. But look, thanks for grabbing some time. I don’t take up too much of your time. Basically, you know, we are thinking of about ways that we can add value to our newsletter audience. There’s like 75,000 founders, 80,000 somewhere in there in that audience. And there’s sort of a lot of legacy trust in me from them. And so we’ve been selling, we’ve tried to monetize in different ways, but what we’ve realized is that what they really want is just help with their business. And so we built a ghostwriting agency over the last like nine, 10 months or so, and it’s done And so the thought is, okay, well, what other services do founders need that they themselves maybe aren’t like experts at, right? And so we’re thinking about design, we’re thinking about like branding design, probably specifically, we’re thinking about legal, we’re thinking about finance, so a few different things. And so I’m just trying to do some due diligence and understand like, you know, I don’t know, what do I not know about this kind of space and, you know, maybe there is a way for us to sort of partner more deeply. So, yeah. [Karlin VanMoorleghem]: It’s interesting that you say that, because I feel like a lot of businesses are kind of thinking along those lines of like a business owners need this help. Right. Like it’s a pain point for these, especially like the small to midsize companies that maybe have someone like you do where it’s like just a bookkeeper. But then like ultimately they need more than that. But right. The resources on that. So I kind of feel like that’s a good value add to someone. I mean, depending on what type of services you want to provide them. But I know other companies that have done this, like, I don’t know if you know merchant services, like they kind of have like portfolio companies. And they also kind of started out like a financial service arm. Within the last, the guy started it, I want to say less than two years ago, and he’s like already up to $2 million of revenue a year. So it's, I think, and that's like a perfect business too, where it's kind of similar to what you have, where they have all these followers slash companies that are kind of like under their umbrella. And so adding that service was like an easy solution for them. Yeah. [Michael Houck]: Like I'd love to get to a point where like a year from now we have like four of these different agency businesses. Right. So it's really just a prioritization. I think on the financial side of things, the way I see it, and I'm not deep in this space, so I'm not the expert here. There's like a low-end offer of like, we'll do sort of the basics, the bare bones, whether that's an ongoing monthly thing or whether that's sort of a more ad hoc thing like we've done. And then there's sort of the, for the venture-backed startups, there's like the higher level, like fractional CS, FFO, strategic fundraisers, planning, things like that. So I sort of see those as two buckets and probably a different offer being built around. Is that accurate? Is that what you see? Yeah, 100%. [Karlin VanMoorleghem]: And interestingly enough, the guy I spoke to at Merchants, he was like, we will not even do an ad hoc project. He's like, we simply only take on monthly recurring, which, right, that's where the money's at, where you get that monthly recurring. He's like, we're only money on like a couple accounts, but like I make enough on the others where it's fine because it's hard to see every month. So that was interesting for me to hear him say that. But, you know, if there's enough demand for everyone that has like the monthly reoccurring, then why not avoid the ad hoc? Because those ones always take more time, the ad hoc ones. But yeah, to your point, I think that all of those different services are needed. But like what will be the most profitable? Probably the fractional CFO slash the ongoing monthly services. Yeah. But are you envisioning where you have like the people that are performing the work in house or you perform, are you envisioning something like say you have a group of 10 candidates that you know can do this work for your founders and you're going to refer the work to them and then you're going to take a cut of it? Is that kind of what you're envisioning? [UNKNOWN_SPEAKER]: Yeah. [Michael Houck]: So I've thought about it both ways. I'm not sort of firm one way or the other. Um, I think from perspective, we probably get better margin with, like, bringing everything in-house and can charge more for it by, like, having it be our own brand and things like that. But at the same time, that's obviously a lot of work to spin something like that up. So there's appeal to sort of getting it started at least early on by working directly with folks who have already had this built up. Exactly. But I think, like, the long-term vision that I would love to do if we can pull it off and if we you know, are successful with it would be like, we have like a team of in-house, like CFOs, right? And they run their own practices. And they partner with us because we're generating leads for them on a consistent basis. And they have some equity in the main company or something like that. And they have a couple of folks underneath them who handle sort of other tasks for their clients. And that's sort of how I see it. The expert so but having like sort of these people run their own practices but have some buy-in to the larger company I think that intuitively makes some sense to me no yeah I think that makes sense and I you [Karlin VanMoorleghem]: know i've definitely talked with people who are like oh you know I want to put you on my website but obviously like I want to take a cut of it right but anything I refer to you um you know you pay me 10 of um so I'm definitely right But there's an interest, I think, both ways. But I will say, of so many people that I've networked with and talked to, the common theme amongst everyone I've talked to is that finding the body to do the work. Because so many people are leaving this industry, it's becoming fewer and fewer people. So they're like, we have so much demand for the work, but not enough people to do the work. [Michael Houck]: Why are people leaving the industry? I'm curious. [Karlin VanMoorleghem]: It's just been all over. They say the hours aren't appealing. You know, you don't make enough money for what you're working. It's almost like sweat labor. Like when you first come out of school, like what you're working, which right, it's good for everybody to come out doing that. But then it's kind of like that, what path can you go? Like how much money can you really make, right? For as much as you're gonna work. So it's just like everything I'm reading is that like the enrollment and accounting is way down and that people are just leaving the industry, which is interesting. [Michael Houck]: Where are they going? [Karlin VanMoorleghem]: I feel like more tech jobs. Oh, like in-house tech companies? [Michael Houck]: No, no, no. [Karlin VanMoorleghem]: Meaning people are not going into the accounting field anymore. They're doing more like tech. [Michael Houck]: Oh. [UNKNOWN_SPEAKER]: Yeah. [Michael Houck]: Even higher in the funnel than that, basically. Right, right, right. Exactly. [Karlin VanMoorleghem]: So I mean, I will say I've talked with a lot of firms that are kind of providing these services. And they're like, yeah, we struggle to find people to do the work. [Michael Houck]: Yeah. I mean, look. My hypothesis is that AI is going to encourage a lot more people to build products. It's easier to do that. And so we're going to see a sort of groundswell over the next few years of like bootstrapped entrepreneurship, right? Folks who are doing these, like, they're not like traditional small businesses, but they're not like venture backable, hyper-scalable companies. They're like somewhere in the middle of those two. And so I think there's going to be a lot of demand for services for those types of businesses. And so that's sort of where this comes from, but obviously we need to be able to hire people to do it too. [Karlin VanMoorleghem]: Right, exactly. And I'm not trying to discourage you, I'm just relaying obviously like the things I hear and come across. Yeah, of course. [Michael Houck]: Which is obviously not surprising. Yeah, I mean, it's interesting. Maybe there's a model where like this sort of higher level of fractional CFO people are these folks who are going and have some experience maybe, but then the sort of like, the sort of more traditional, like just bookkeeping and accounting work is done by, I don't know, recent grads or something like that, or even international folks who are sort of economical to hire. I don't know, interesting. [Karlin VanMoorleghem]: Well, yeah, and that's kind of like my job a couple of jobs ago where I was a consult, a fractional CFO, we had a team in India and it's like the U.S. Team would just push us to use the team in India, understandably so, because their billable rate was, you know, like a quarter of what ours was. But just, I mean, there'd be like a few people that'd be like amazing, but those amazing people would always be on like certain accounts and you could never grab them. So, like, you get stuck with somebody who doesn't know what they're doing and then you're redoing everything they're doing. So, it's kind of like if you can find the right person in India, I think it's a great solution for that cost, but I was just finding a good one. [Michael Houck]: I guess, how do you identify someone who's like, like, you know, me, someone who doesn't know the industry? How do I know if I'm interviewing like four different people? Okay, this person like red flag, or like this person seems like a good, good person to hire. [Karlin VanMoorleghem]: To be honest, I've been like bamboozled by so many people that you do not know until they're working with them. It's like, I feel like people that I've interviewed, I'm like, oh my god, this person's dead. Genius, they're perfect. And then they get in the role. And I'm like, what, like, you don't know debit from credit. So I will say it's hard. Like I've tried stepping on my game, like, you know, providing them with like a financial statements that it had, like, you know, mistakes on them. And then like, can you identify what's wrong? So at least to kind of like, Jen's, so that has helped me doing that. But I'll tell you what, it's, it's hard, because, like I said, I brought in people that have been like, they're going to be amazing, and then have hired them. [Michael Houck]: So yeah, it's how I felt some engineers that I've hired over the years to sometimes you just you just never know. [UNKNOWN_SPEAKER]: Interesting. Interesting. [Karlin VanMoorleghem]: But I like that, like, I really think especially like, I don't know what kind of followers you have, like, are they mainly startups? Or are they certain industries? Or is it just all across the board? [Michael Houck]: Yeah. So our audience, like the newsletter is a founder advice column for like, start up. And there's a lot of like, folks who are venture backed, and in like SF, New York, LA, Miami. But then there's also this other cohort of people who are explicitly not in those sort of in group type networks, and they're more distributed around the country or, you know, to a lesser degree around the world. And they're bootstrapping their business. And you know, there are some of them are very early, some of them are doing millions and in revenue. So there's a wide, wide spectrum, but definitely people with sort of money to spend on, on services. [Karlin VanMoorleghem]: So, well, and I really feel like this makes kind of sense, especially if it is a lot of like business owners and startups and cause those are the guys who need the most help, right? Like, it's amazing when I talk to them and I'm like, you guys are doing X, Y, and Z, right? They're like, no, what? It's like, they're just clueless. So I feel like there's so much value that you could give them. [Michael Houck]: Yeah, I honestly bet that like, I know, with with the first project that we did together, it was just like, very time sensitive. And then like 1099. It's like, that was the goal. But I imagine if we do a call where it's like, let's dive into seeing what I'm doing and what I'm not doing. [Karlin VanMoorleghem]: There's like 10 million things in there, you'd probably be like, you should really be doing that. Right, exactly. It's scary. Like, I mean, I even have like somebody in like, Texas, who I was like, well, you registered for like, unemployment and withholdings in New York, right? Because they were a Texas company. They're like, no. And I'm like, you need to do that. You're going to get fined so bad if you don't have unemployment insurance. We got hit with a $12,000 fine. And I had been warning him and warning him, and he never did it. [Michael Houck]: And I was like, this is $12,000. [Karlin VanMoorleghem]: It's just the most costly mistakes could save these startups so much money. [Michael Houck]: I know. When I was running my venture-backed company, we had employees in five or six different states and then a few different countries too. But yeah, they're like the unemployment board and this and that registration. We probably missed it for like two or three states ended up having to pay expensive fines for it too. This is like, oh Jesus Christ. Oh my gosh. [Karlin VanMoorleghem]: It's such, it's like such a sad thing to spend your money on. You know, it's like, yeah, it's not fun, but yeah, there is a lot of stuff like that. Or even just like simple things. Like all clients were all be like, Hey, why do you have like all these uncashed checks in your bank register? They're like, I don't know. I'm like, have you ever reviewed them? They're like, no. And it was all like bad entries, but it was like, you know, $100,000. I was like, what cash number are you operating off of She’s like the QuickBooks number. I’m like, you have over $100,000 more to work with than you think you do. Like, you know, it’s just like simple, it’s like simple things, but that people just, if you’re like have like a bookkeeper, they don’t know what to do or find those mistakes. [Michael Houck]: That’s crazy. A hundred K extra would be. [UNKNOWN_SPEAKER]: Yeah. [Michael Houck]: It would be nice. [Karlin VanMoorleghem]: Right. I like finding those things for clients. [Michael Houck]: It’s like, yeah, that’s a good call to make for sure. [Karlin VanMoorleghem]: Interesting. I mean, I don’t, I love to be of help for you. So I don’t know if you want to kick this around in your head more, like, let me know how I can help or what information happy to just even give you feedback. Yeah. [Michael Houck]: I mean, look, we’re, we’re still deciding between a few different vertebrates. Like I mentioned, but we’re gonna do a financial services one, whether it’s Q2 or whether it’s Q4 or something. So I’ll keep you in the loop and yeah, it’d be cool to find ways to partner up, whether that’s us sending you folks to help get it off the ground or something deeper, maybe down the road. I really have liked working with you on what we’ve done so far. So yeah. Absolutely. [Karlin VanMoorleghem]: Yeah, no, that’d be great. And I think you’re onto something exciting. If you could have a captain audience, for it. You know what I mean? [UNKNOWN_SPEAKER]: Yeah. [Michael Houck]: We get unlimited thoughts on goal with them, which is, which is great. So yeah. [UNKNOWN_SPEAKER]: Good. [Karlin VanMoorleghem]: That’s awesome. Cool. Um, well, look, thanks for the time. [Michael Houck]: I appreciate it. I’ll let you run, but, um, yeah, I’ll keep you in the loop with how this develops and you can go from there with it. [Karlin VanMoorleghem]: And like, feel free to ever ping me a question I’m around. I don’t mind helping out or just, you know, just to give you any part of advice. So just let me know. Yeah, I will. [Michael Houck]: I’ll take advantage for sure, but enjoy the time off next week. [Karlin VanMoorleghem]: Yes, thank you. I’m excited. Well, it’s nice to put a face with the name. Yeah, for sure.