John O'Nolan: mad or brilliant?

by admin on September 29, 2010

in Innovation

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John O’Nolan is a FreeAgent fan to the point where he has made so many recommendations that they are paying him to punt the service. He says he’s made some 250 recommendations which probably makes him the company’s top salesperson albeit he’s not employed by them but works as a web designer. If that wasn’t enough he floated the idea of opening an accounting agency.

Accounting is boring. I’m sick of new companies that try to make it “cool and edgy” (pretty colours don’t make accounting any less boring) and I’m tired of old companies who have such a mind-bogglingly low level of creativity that when naming a company, they simply combine the surnames of all the founders into a long, meaningless string. It’s amazing(ly stupid) that almost no accounting companies in existence actually use the word “accounting” in their branding.

On that basis, I’d name my company something like “Hate Accounting!” but I’d refer to it lovingly as “HA!”

OK – I can buy that. He says later in the post:

Everything about our business would be about designing an experience for the customer. A pleasurable one.

Is John mad or brilliant? When I first met with the FreeAgent people they said that having tax calculation as a differentiator meant they could almost consider the solution as the gateway to establishing a practice. It is an interesting idea though I pointed out at the time there’s a lot more to it than that. In similar vein, I said much the same to John on Twitter. Stuart Jones was not impressed. In email he said to me:

Before you do this ask yourself the question what would £30 per month buy from “the web design industry” and compare it to what you will have to do as an accountant especially if you’re going to “have an agent give you a ring each month (or whatever time interval you’d prefer) to give you a rundown of your finances, in plain English. They wouldn’t ask you for a single thing, they’d just relay information back to you and then tell you about ways in which you could save money. E.g. “If you purchase X piece of equipment for your company before X date, we can actually write off 50% of that on your tax bill.” Simple.

Simple yes but only if you have the skills!

Indeed. But then I also thought about something I’ve argued for a long time. The profession is ripe for disruptive innovation. Take away 70% of the reason why people need accountants and there isn’t a lot left unless you can re-invent. If someone like John can come up with a business model that works and which can accommodate the employment or outsourcing of tax work for his chosen niche then why not? If you take his proposed cost plus the FreeAgent monthly cost then you’re only at £55 per month max. That’s a long way below what SJD (for example) want to charge at around £90/month with you doing most of the donkey work.

It’s an intriguing idea and one that could just work for those that only want a bare bones service but still need some hand holding.

In the meantime, Xero is taking an alternative but interesting approach. Things just got a bit more interesting…

Comments on this entry are closed.

Anonymous September 29, 2010 at 7:26 am

The crux of this is the “70% of the reason why people need accountants”:

1. Not all online software allows users to prepare records which are accurate enough to allow the figures to be submitted to HMRC and Companies House;
2. Too many users think all accountants are merely bookkeepers and if they do the bookkeeping there’s bugger all else to do! (I do, however, accept that most accountants are nothing more than bookkeepers!
3. At this price it would be a “bare bones service” as are so many of the “accounts factories” you have mentioned elsewhere. I can accept that but will the users accept it when their accounts are rejected by Companies House and/or HMRC launch an inquiry into the accounts because of HMRC’s tests. If the users accept it is a “bare bones service” that’s fine.

dahowlett September 29, 2010 at 7:35 am

@stuart – you are right to flag the quality card but as I am seeing, there are plenty of businesses out there that will be content with this kind of service. It is in that vein that I argue professionals should seize the SaaS capabilities as an opportunity to consider developing their own factory alternatives. I can see how this would work well for clients and profitably for those prepared to take the plunge.

dahowlett September 29, 2010 at 7:35 am

@stuart – you are right to flag the quality card but as I am seeing, there are plenty of businesses out there that will be content with this kind of service. It is in that vein that I argue professionals should seize the SaaS capabilities as an opportunity to consider developing their own factory alternatives. I can see how this would work well for clients and profitably for those prepared to take the plunge.

Dan Frydman September 29, 2010 at 8:22 am

Mad or brilliant? I think a bit of both… nice opener to make me read about tax. That was inspired…

Dan Frydman September 29, 2010 at 8:22 am

Mad or brilliant? I think a bit of both… nice opener to make me read about tax. That was inspired…

Anonymous September 29, 2010 at 8:23 am

One key point I’ll make (which I also posted on my blog) – Stuart asks what £30 would buy you in the web design industry:

One thing that £30 a month in the web design industry would buy you is a premium WooThemes.com developer subscription with unlimited access to hundreds of top quality themes which you can use to set up professional websites in minutes.

Are they bespoke? Nope. Are they *more* than sufficient for most people? Absolutely.

I don’t know enough about accounting to judge whether or not my (idealistic) take on the industry is in any way viable – but based on my knowledge of startup-business owners and what they care about, particularly in the online world… I’d say there’s a gap in the market.

As I understand it, in the late 70′s one man set out to design a device that would allow anyone to take music with them in their pocket. People told him it was impossible, that nothing so small could be invented that would play back music with quality like a record, or anything close to it.

A few years later the Sony Walkman revolutionised the music industry and changed the world.

Anonymous September 29, 2010 at 10:41 am

John, I think you’ve misunderstood my point. Being blunt – what would you do for £30 per month in your industry?

Anonymous November 16, 2010 at 5:19 pm

I think I already answered that? WooThemes turned professional websites into a commodity, iStockPhoto turned professional photography into a commodity, this is the same concept. £30 buys you a standardised product/service which can be replicated in bulk to support lots of customers.

I think your misunderstanding lies in the amount of time that you expect each client to take up with this business model. The type of client that this service is aimed at *doesn’t want* to talk to you and take up your time. They simply want a cookie-cutter solution so that their accounts can be taken care of and they have a little bit of piece of mind.

Anonymous September 29, 2010 at 10:41 am

John, I think you’ve misunderstood my point. Being blunt – what would you do for £30 per month in your industry?

StuartJones September 29, 2010 at 7:26 am

The crux of this is the “70% of the reason why people need accountants”:

1. Not all online software allows users to prepare records which are accurate enough to allow the figures to be submitted to HMRC and Companies House;
2. Too many users think all accountants are merely bookkeepers and if they do the bookkeeping there's bugger all else to do! (I do, however, accept that most accountants are nothing more than bookkeepers!
3. At this price it would be a “bare bones service” as are so many of the “accounts factories” you have mentioned elsewhere. I can accept that but will the users accept it when their accounts are rejected by Companies House and/or HMRC launch an inquiry into the accounts because of HMRC's tests. If the users accept it is a “bare bones service” that's fine.

dahowlett September 29, 2010 at 7:35 am

@stuart – you are right to flag the quality card but as I am seeing, there are plenty of businesses out there that will be content with this kind of service. It is in that vein that I argue professionals should seize the SaaS capabilities as an opportunity to consider developing their own factory alternatives. I can see how this would work well for clients and profitably for those prepared to take the plunge.

Dan Frydman September 29, 2010 at 8:22 am

Mad or brilliant? I think a bit of both… nice opener to make me read about tax. That was inspired…

JohnONolan September 29, 2010 at 8:23 am

One key point I'll make (which I also posted on my blog) – Stuart asks what £30 would buy you in the web design industry:

One thing that £30 a month in the web design industry would buy you is a premium WooThemes.com developer subscription with unlimited access to hundreds of top quality themes which you can use to set up professional websites in minutes.

Are they bespoke? Nope. Are they *more* than sufficient for most people? Absolutely.

I don't know enough about accounting to judge whether or not my (idealistic) take on the industry is in any way viable – but based on my knowledge of startup-business owners and what they care about, particularly in the online world… I'd say there's a gap in the market.

As I understand it, in the late 70's one man set out to design a device that would allow anyone to take music with them in their pocket. People told him it was impossible, that nothing so small could be invented that would play back music with quality like a record, or anything close to it.

A few years later the Sony Walkman revolutionised the music industry and changed the world.

StuartJones September 29, 2010 at 10:41 am

John, I think you've misunderstood my point. Being blunt – what would you do for £30 per month in your industry?

JohnONolan November 16, 2010 at 5:19 pm

I think I already answered that? WooThemes turned professional websites into a commodity, iStockPhoto turned professional photography into a commodity, this is the same concept. £30 buys you a standardised product/service which can be replicated in bulk to support lots of customers.

I think your misunderstanding lies in the amount of time that you expect each client to take up with this business model. The type of client that this service is aimed at *doesn't want* to talk to you and take up your time. They simply want a cookie-cutter solution so that their accounts can be taken care of and they have a little bit of piece of mind.

Anonymous September 29, 2010 at 3:50 pm

We’ve been beaten to it! There’s a firm doing it for £37.50 per month INCLUDING the FreeAgent subscription!

StuartJones September 29, 2010 at 3:50 pm

We've been beaten to it! There's a firm doing it for £37.50 per month INCLUDING the FreeAgent subscription!

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