Informer: Growth Challenge: IntelAccount - Upsize Magazine, June • July 2010

[Informer]

Growth Challenge: IntelAccount

Bolster original model
first, then replicate,
experts tell IntelAccount

by Beth Ewen

INTELACCOUNT''S LEADERS have ambitious plans for their two-year-old automated accounts payable service, which they say can cut the cost of paying bills by as much as 70 percent.

They want to become the Paychex of the accounts payable world, says CEO David Crane, referring to the widely used payroll service. His company is one of three winners of this year?s Upsize Growth Challenge.

About 25 clients signed up so far are believers, Crane says; he figures he needs only about 40 to turn cash-flow positive, which he expects by the end of the summer. He has attracted $500,000 from individual investors and added his own money to capitalize the firm.

One executive, Mike Rodich, tells those assembled for the first Upsize Growth Challenge workshop that he envisions a $100 million national company in five years.

CEO Crane, participating via phone from the company?s new New York office, dials back the enthusiasm but still puts out a big number: $48 million in revenue in that time period is the goal.

Either way, the company has some infrastructure work to do, agree the experts who gathered March 21 to help this year?s three Upsize Growth Challenge winners reach their goals.

?Figure out the model and duplicate it,? says Craig Murphy, partner at McGladrey & Pullen, the accounting firm in Minneapolis. IntelAccount has had some success offering its services through CPA firms, and has begun private-labeling its software so such firms can offer it to clients under their own name.

Murphy thinks the smaller CPA firms, not the Big Four, would be amenable to a relationship with such a service, ?because they have the small businesses with the hurt? as clients.

Rick Wall, CEO of Highland Bank and the contest?s finance expert, urges Crane and Rodich to invest in a direct sales force, building it to about 8 to 10 people, and learning from each sales pitch.

?My perception is you have a very scalable product. You need to build a sales force,? Wall says. ?While it does make sense to go through partners, you are at a point where you need to do one-by-one selling.?

He recommends adding professional employers organizations, or PEOs, as another type of service firm whose clients could benefit from IntelAccounts? software. Firms that have outsourced human resources functions to a PEO will likely be amenable to outsourcing an accounts payable function as well.

Elin Raymond, president of The Sage Group in Minneapolis and the Upsize Growth Challenge marketing expert, points out that IntelAccount needs to illustrate to customers how accounts payable is causing them pain, something they may not realize.

?You?re doing an educated sell. It takes a little longer. You have to hit people over the head. They might not even feel the pain,? she says.

IntelAccount has a nifty tool on its Web site, an ROI calculator that lets prospects figure out how much their current accounts payable system costs, and how much intelAccount?s service can save. Raymond recommends they go much further with the site.

?Put case studies and client stories on the home page. Pepper client testimonials on every page,? she says. IntelAccount should focus media relations on each new geographic area they plan to enter. ?Get a media list and go after them with your story,? she says. Emphasize ?how this is going to benefit small businesses.?

Add a list of clients, she says, although Crane expresses concern that such a list would reveal information he?d rather keep confidential. Raymond says the benefits of such a list far outweigh any negatives.

Michele Vaillancourt, attorney with Winthrop & Weinstine in Minneapolis and the Upsize Growth Challenge legal expert, thinks such a list would give law firms like hers reassurance. ?We make vendor decisions? based on which companies other large firms are using. ?Then you get a sense of comfort.?

She was happy to hear that IntelAccount has addressed its intellectual property issues?at least, almost all of them. Although they used off-the-shelf software for their product, the integration between the software pieces is protectable.

?The A/P process has been around since the abacus,? Crane points out.

That?s true, Vaillancourt agrees, but the company still has much to protect with existing products, and will have even more when they implement a new system, something Crane says they?re working on.

?Make sure you have the right agreements with anyone designing? your products. ?The integration part is what you need to protect. Make sure you have the agreements with that person so you own it,? she advises.

Crane says their agreements are in place with all but one vendor, and Vaillancourt urges him to tie that one up as well.

Kirk Hoaglund, CEO of Clientek and the contest?s technology expert, continues the theme of shoring up. ?You have aggressive plans to scale the business and everything has to scale along with it,? he says.

IntelAccount, and all companies that want to get much bigger, faster, should pay attention to disaster recovery, resiliency (the amount of time it takes to recover) and redundancy.

Crane says they?re working on creating a true mirror site to protect against a system breakdown. Hoaglund says that should be a ?hot? mirror, or actually operational, and located in a different city than the original. ?That?s expensive,? he says. ?But if you?re going to be a $100 million company, it?s not an expense, it?s a requirement.?

David Crane and Mike Rodich, IntelAccount: 612.605.3161; dcrane@intelaccount.com; mrodich@intelaccount.com; www.intelaccount.com

[WHAT THE EXPERTS SAY?]

?ABOUT BRANDING
Describing your company succinctly is difficult, IntelAccount?s executives say, and Elin Raymond of The Sage Group agrees that?s difficult for many firms. ?It?s hard to do it when you?re a founder. You see all the seedlings as well as the trees.? Companies should hold focus groups with customers. Ask them, ?What was the key thing that attracted them to you?? Boil down the common themes into key messages.

?ABOUT INTELLECTUAL PROPERTY
?Make sure you have the right agreements with anyone designing? your products, urges Michele Vaillancourt, Winthrop & Weinstine. ?The integration part is what you need to protect? in IntelAcount?s case, but all companies should take this advice: ?Make sure you have the agreements with that person so you own it,? she advises. ?IP is slippery. It?s not like land and you can put a fence around it."

?ABOUT DATA SECURITY
Every company should schedule a test restore of their information backup system. ?A big mistake is they make backups but they don?t know if they work. We make our clients schedule test backups,? says Kirk Hoaglund, Clientek.

?ABOUT PLANNING
Business plans should include realistic goals, and especially details about interim milestones to be reached and how you plan to get there, says Rick Wall, CEO, Highland Bank. It?s fine to start with a revenue goal, but support it with specific plans such as number of sales people needed, expenses tied to office locations, etc.

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Originally Published: May 2007