Great stuff, Ben. Actually, I am advising an AI-native bookkeeping company. What this startup drastically underestimated is (1) how hard it is to make customers change their behavior (i.e., using the AI services and NOT emailing the CS reps), and (2) what kind of customers they attract. In this case, they chose the startup so that their bookkeeping mess is cleaned up for a small fee. We've seen quite a number of customers who cancelled after the mess was cleaned up (with a lot of human work).
Frank - thanks for sharing. Changing behavior is always hard, and founders always underestimate it!
But I also find it interesting that customers used this AI-native bookkeeping company for 1 quick job (maybe the most annoying one), and once that was settled they went back to how they did things before, or took things in-house, or perhaps hired someone else.
... or continue with their messy bookkeeping (That’s at least the assumption that we have). Another explanation that we were discussing. It is psychologically easier to have a remote company cleaning up the mess than opening yourself to a human accountant/tax advisor. The startup currently has the mindset that every customer counts. I’m working with them to understand that not all customers are created equal. You want to grow with your ICP where you can predict the amount of service costs. You don't want to accept any customer. A few qualification questions are available—but they shy away (currently) from saying, “I’m sorry we are not the right partner for you.”
Thanks for the read! I was thinking about the unit economics of this a few months ago, this breakdown is super useful thank you so much!
Great stuff, Ben. Actually, I am advising an AI-native bookkeeping company. What this startup drastically underestimated is (1) how hard it is to make customers change their behavior (i.e., using the AI services and NOT emailing the CS reps), and (2) what kind of customers they attract. In this case, they chose the startup so that their bookkeeping mess is cleaned up for a small fee. We've seen quite a number of customers who cancelled after the mess was cleaned up (with a lot of human work).
Frank - thanks for sharing. Changing behavior is always hard, and founders always underestimate it!
But I also find it interesting that customers used this AI-native bookkeeping company for 1 quick job (maybe the most annoying one), and once that was settled they went back to how they did things before, or took things in-house, or perhaps hired someone else.
... or continue with their messy bookkeeping (That’s at least the assumption that we have). Another explanation that we were discussing. It is psychologically easier to have a remote company cleaning up the mess than opening yourself to a human accountant/tax advisor. The startup currently has the mindset that every customer counts. I’m working with them to understand that not all customers are created equal. You want to grow with your ICP where you can predict the amount of service costs. You don't want to accept any customer. A few qualification questions are available—but they shy away (currently) from saying, “I’m sorry we are not the right partner for you.”