Accodex Partners raised $500,000, boosting valuation to over $6 million
Can you tell us a bit about yourself?
My name is Chris Hooper, I am the CEO of Accodex, a start up based in Adelaide. I am in the business of predicting the future of the accounting profession, and it’s my mission in life to change the accounting game forever. Besides running Accodex, I also spend my time teaching and mentoring accounting and business students who are destined for great achievements. In addition, I also do a bit of writing and speaking on the industry related trends at universities and conferences.
Can you tell us more about what does Accodex do?
Accodex has built an online cloud-based platform that enables freelance accountants to manage everything that ranges from tax returns, management of reports, strategy meetings and financial statements. All of these can be done on the cloud server. By centralizing the administrative and back-end functions, we help make the life of freelance accountants easier, which gives them the time to focus on connecting with new customers and providing better services for them. Our platform also makes the accounting experience remarkable for business owners by providing them with a high quality and cost-effective service that empowers them to run smarter and more successful companies. We recently merged with Clear Business Dynamics. This merger will allow us to offer our clients the opportunity to run their entire businesses from a mobile phone.
“A lot of people pay the most attention to a start up in the first year of operation because this is when the probability of success or failure is the highest.”
Accodex Partners won the ‘Innovator of the year’ award at Australian accounting awards.
Did you purchase a shared server for Accodex?
We did a lot of research into other accounting softwares on the market, and we discovered Xero. Back then it was a fairly new start up based in New Zealand. While their product was not finished, it had a lot of potential on the licensing route. They shared the same vision with us and understood the problem like we did, namely the high risk of human error when dealing with accounting work, especially in the handling of double data.
“Find a mentor who is 10 years ahead of where you want to be because they can help you get there a lot quicker”
Thus we then had the choice to either back these guys or go to the bank and borrow some money to pay for another accounting software. I didn’t like the idea of accountants jumping from one accounting software to another, because the average accountant would have to use around 6 different apps and switch between them every day. We wanted to commit to one single accounting platform and so we made our decision to go with Xero. This was a monumental decision because it meant that we would need to build all of our infrastructure around this software.
Can you share with us the achievements Accodex Partners have made over the years?
Currently, we have a really good team working for us and this allowed us to achieve a lot of amazing things over the past year. Recently our venture won the 2015 Australian Accounting Awards as “Innovator of the Year”. Recently we raised $500,000 in funding and are now being valued at over 6 million dollars. This funding will help us expand into the US market. In July this year we opened our first office in North America and I will be looking to relocate to the U.S.A next year while launching offices in three different states there.
Received ‘Citizen of the year’ award
Our momentum and credibility was gained the old fashioned way. A lot of people pay the most attention to a start up in its first year of operation, because this is when the probability of success or failure is highest. Our first milestone was to survive in the first year, and then the second one was reaching 2 million dollars in revenue. I remembered David Dham, my mentor from Health & Life Accounting, who said that surviving the first year of operation was the hardest job to get done in starting up a business and if you manage to do that, the second year will be a piece of cake. It took us 4 years to get to 1 million dollars and now it looks like it will only take us a year or 2 to make 10 million since we gained so much more credibility. We are at a stage where our growth can reach an ‘exponential’ value.
“I don’t know anyone starting their own business, who isn’t scared of failure.”
What do you attribute your success to?
For me, the definition of success would be to set and achieve a goal and the last goal was to get the company valued at over 2 million dollars. It was definitely a success in that respect. Now, our next goal is to develop the remaining part of the Accodex network within the next 10 years. Until we achieve this, we would not consider ourselves successful, because that’s what our current objective is. I won’t accept success as a mantle until we’ve at least got there.
What kind of strategy did you utilize earlier on?
We used the concept boot-strapping. The business is 100% funded by our savings and cash flow. When people have too much money to spend, they tend to spend it irrationally, but with boot-strapping people are forced to spend money wisely to reach a maximum impact. I have seen a lot of start ups that get access to early stage funding, which means having more than enough cash in the bank to spend,while decreasing the pressure and risk levels. When you don’t have that pressure, you don’t feel the risk as much. Your desire to survive also goes down and this leads to a lack of sufficient results.
Earlier on we decided to be profitable from day one.We understood that it would ultimately cost us a lot in terms of growth. However, we believe that this will allow us to reach our overall goals much quicker.
“When you don’t have that pressure, you don’t feel the risk as much. Your desire to survive also goes down and this leads to a lack of sufficient results.”
Sharing my vision at TEDx for the accounting profession
When you actually started operating were you aware of the risk of failing?
Absolutely, I don’t know anyone who started their own business, who isn’t scared of failure. We were always aware of the risk that we could have potentially wasted our savings. I was married at that time, and so I could not take this risk lightly. Thankfully, I didn’t have a home loan to pay off or kids to worry about, but still there were a lot of issues that we faced.
“If you are the smartest or most successful one in your social circle then you are in the wrong circle. Being in the right social circle will give you more pressure that will motivate you to work harder and get better.”
What is your philosophy when running your own business?
I look at business in the same way as I look at sports. I’m not really good at sports, but I’m good at business and I want to win. You know, a lot of people, particularly those with smaller businesses, look at businesses as means to an end of leaving a job or providing just enough for their family. I look at business as a game. In fact, what’s the point in playing if you’re not there to win, and for me personally, I feel like the money side of things is the way of keeping score. We may not be winning on a revenue or a market capitalization at the moment, but we’re definitely winning on the growth metric. If we keep that one ticking along we will be winning on the other metrics as well. It is all just a big game and your desire to win is what makes the difference.
Did you get to utilize your experience from your previous job when starting this business?
Yes, I did. Not only that, I also spent a lot of time on Google and even more time reading business books at the library and online. There are a couple of books specifically focused on the purpose of accounting, which gave me the right knowledge I needed to start, manage, and grow this business.
“It is imperative that young entrepreneurs build their public speaking skills, because as an entrepreneur you pretty much have to do public speaking for the rest of your life.”
Speaking at ‘Xerocon’ in Melbourne
What important skills would you recommend young entrepreneurs to work on?
There are a lot of important skills that I believe an entrepreneur should have. Personally, I think it is imperative that young entrepreneurs build their public speaking skills, because as an entrepreneur you pretty much have to do public speaking for the rest of your life. I often give speeches at start up events.Sometimes it is to rally people together, and sometimes it is for acceptance of an award, but most of the time, it is for pitching about our product. There are different types of pitches as well, pitch for sales, pitch for deals and so on. Great public speaking abilities help you build a good brand. The more you speak, the more comfortable and confident you become, while your brand gains popularity as well.
“I look at business as a game. In fact, what’s the point in playing if you’re not there to win.”
What vital advice would you like to give young entrepreneurs?
Go out there and build a network of like-minded individuals. Get yourself a great mentor. I have been networking since the age of 19 and when I was 21 I launched the start-up club with James. I was leading the space. At every event, people were listening to me because I knew what I was taking about, and they knew who I was. Before I was 22 I had built a very vast network of entrepreneurial-minded people who were smashing it with their own ventures. A lot of them would become my clients later on.
I remember about 3 years ago at a Startup springs event, Matt Haluwitze, who is a very well regarded entrepreneur in SA said that if you hang out with 5 criminals, you’ll soon be the 6th. What he meant was so simple, and it made perfect sense. Your social circle should be a little higher than where you want to be. If you are the smartest or most successful one in your social circle then you are in the wrong circle. Being in the right social circle will give you more pressure that will motivate you to work harder and get better. The mentality in the entrepreneurial world is not comparable to the one of the 9-5 secure job world. If you want to be an entrepreneur, hang out with entrepreneurs because they have the same goals as you, they may even have the solutions and means for achieving those goals that you were not aware of… If your entire social circle is comprised of friends who are white-collar employees that work regular hours, when you start a business, there is a good chance that they will pull you down. When they start to pull you down, it is a good sign that you need to find a new social circle.
Find a mentor who is 10 years ahead of where you want to be because they can help you get there a lot quicker. They can help you get to where they are in less than 5 years. Pick the mentor in whatever part of life you are trying to improve on. For example, when you first start an accounting company, your mentor could be someone who has great experience in this same field, but when you are ready to expand your business internationally, then it is recommended to find another mentor who can lead you through that specific process. Now I have access to mentoring from different fields – we have a fully stacked advisory board and many experienced consultants, working for us.
“For me, the definition of success would be to set and achieve a goal”
If you can go back in time before you start your own business, what advice would you give yourself?
I would probably tell myself to read Harvard Business Review (HBR) earlier than I actually did. I very much value my subscription to HBR, and I think what HBR does is force you to think like a fortune 500 company executive. If I had started reading HBR earlier that would have definitely changed my trajectory nearby, and maybe I would have been much smarter and more responsive as a CEO.
Check out Chris’ amazing venture at http://www.accodex.com/
Do you think Accodex can become the next billion dollar unicorn start up?
We would love to hear your opinion.