Startup Vic’s Professional Services Pitch Night

For the first of Startup Vic’s monthly pitch nights for 2018, professional services were put under the spotlight. There is a public dialogue on the types and numbers of roles that will disappear due to automation (the professions are no different) and here were four startups seeking to engage in that conversation. Assuming that every industry and every occupation is vulnerable to disruption (and should be alert to the potential opportunities that presents), why should accountants and lawyers feel left out?

Image sourced from Startup Vic Meetup page

Myaccountant

With the promise of enabling users to lodge their BAS return from a smart phone, this app is aimed at micro businesses that struggle with bookkeeping and accounting tasks. Since accounting software packages do not support direct BAS lodgement (although expect this to change…), the app charges $39 per BAS, with no bookkeeping or accounting fees, and shares the fee with the accountants who do the lodgement.

The app is able to extract data from vendor APIs such as Expert360, Airtasker, Uber, etc., and connect to users’ bank accounts. Since launching in January, the app has generated 200 sign ups, with very little direct marketing or paid acquisition so far. The app is also aiming to achieve ISO 27000 (information security).

The panel of judges would have liked to have heard more about the acquisition strategy, and how the app deals with income and expense categorisation, different tax rates, zero rated items, and export sales etc. They also wondered about the competition, and overseas markets

Contractprobe

Developed by Neural Contract, this product uses machine learning to review contracts in 60 seconds. Using a scoring model, it rates documents according to established best practice and bench-marking, suggest sample text for missing clauses, and identifies problems found.

The service is available for ad hoc use, under a monthly subscription, or as custom packages.

According to the founders, the service can save 40% of the time usually spent on contract reviews. It offers a high level of privacy – the uploaded contract, report and transaction ID is deleted upon completion (although it wasn’t clear what records are retained for the purposes of clause analysis, data and analytics – including client profiling and user context.)

To reassure any lawyers in the audience, the product stills relies on human input to apply judgment to the choice of clauses, for example. However, a clear value of the review process is ensuring that phrases and key words are properly defined in the contract.

The judges wondered where this product fits in with open source documentation and pre-drafted documents, whether there are specific verticals more suited to this service, and what trust and liability issues might arise. Is it more of a “clause-spotter” rather than an expert system? How does it address statutory clauses, and the question of whether clauses are actually enforceable?

The service has about 40 clients, including law firms, and is now moving into corporate clients.

Businest

This product is designed to help with cashflow management, which the founders describe as an “iceberg” issue. They point to data that suggests 87% of SMEs have issues with cashflow.

Claiming to use AI to coach SMEs and accountants, the goal is to allow business owners to focus on what they do best, and move accountants from “compliance to advisory”. Applying its own algorithm to cashflow analysis, the service also provides training content to advisors.

Offering both SME and advisor pricing models, the founders have launched a pilot with MYOB. They also point to market research and commentary (CEDR, AFR, CPA, CA…) that indicates the market wants it.

The judges felt that the banks won’t rush to endorse the service (although under the open banking data protocol, they won’t be able to prevent customers linking their accounts) because they are used to the interest they charge on overdraft facilities and credit cards.

Brandollo

This is a marketing tech start-up, aimed at SMEs that struggle to access tailored advice. Targeting B2B clients, in the professional services sector,  with less than 80 staff.

Briefly referring to the use of AI and ML, the service claims to reduce marketing costs by 80%. It offers a brand gap analysis and makes recommendations, that can be implemented without external help. The process looks at execution issues, content requirements, and actual solutions.

Aiming for 200,000 clients in 5 years (currently standing at 200+), the main competitor is Benchmarketing. Brandello offers a freemium model, with a 3-tier paid-for service. They can connect clients to experts, provide a quote to execute and then take a commission on the resulting solution.

 

Based on the judges’ verdict, the winner was Myaccountant. While the people’s choice was a tie between Myaccountant and Contractprobe.

Next week: The General Taxonomy for Cryptographic Assets

Expert vs Generalist

My recent blog on the importance of experts prompted one reader to comment that he preferred the term “specialist” (in a non-medical sense) to “expert”. This got me thinking about the notion of “experts” as distinct from “generalists”, and whether we need to re-evaluate our assessment of skill, competence and aptitude when assessing someone’s suitability for a task, project or role. (And these days, is “generalist” itself something of a pejorative term?)

A few days later, I was having coffee with a strategic consultant who is known as a future thinker. He describes himself as an “extreme generalist” (with no hint of irony), because he has wide-ranging and multiple interests, some of which, of course, he has deep domain knowledge and experience. But because his work and his curiosity take him into different realms, he maintains a broad perspective which also allows for the cross-pollination of ideas and concepts. (I think we all recognize the value of analogy when problem solving – taking the learning from one discipline and applying it to a new scenario.)

Separately, but in a similar vein, I was discussing career options with a senior banking executive, who did not want to be pigeon-holed as a banker, because her core skills and professional experience would lend themselves to many industries, not just financial services. So in her case, this expertise would best be applied in a particular type of role, not in a specific domain, or a specialist capability.

And during an earlier discussion on leadership with yet another futurist, I found myself debating the notion of situational styles, as opposed to structural models – both of which require skill and expertise for CEOs and managers to be successful. But broad experience will be just as important as formal methodologies, and general business knowledge just as valuable as technical specialisation. (On reflection, as with so many constructs, it’s not a case of either/or – more a question of adaptation and dynamics.)

As a result of this ongoing dialogue, I was challenged to develop what I might describe as a 3-D model, comprising the following axes:

“Generalist”/”Specialist”: In product management terms, for example, the generalist understands the full end-to-end customer life cycle and the production process. Whereas, a specialist might know their particular part of the process extremely well, but has little to no awareness or understanding of what might come before or after. (Think of those frustrating customer calls to utility, telco and insurance companies – in fact, any business with highly siloed operations – where you get passed from one “specialist” to another, often revealing contradictory information along the way.) At the extremes, this dimension might be described as the difference between knowing a subject “a mile wide and an inch deep”, and knowing it “a mile deep and an inch wide”.

“Novice”/”Veteran”: This is probably obvious, but I don’t necessarily mean seniority, age or tenure in a specific role. When it comes to new technology, for example, someone who is new to the role, but who has just been trained on the latest software and equipment, may have better technical ability than someone who has been doing the same role for several years (and thus, has more knowledge and experience), but has not refreshed their skills. Although I concede that in many situations the incumbent veteran may have better developed problem-solving, trouble-shooting and decision-making capabilities. This axis is also really important to consider when transitioning older employees to new roles within the same organisation or team – if they were younger, they would probably be given more time to adjust, adapt and grow into the role. Whereas, an older employee may simply be expected to “pick it up” much more quickly, with less leeway for learning on the job, because of assumed expertise.

“Broad”/Narrow”: Here I am thinking about aptitude, rather than the degree of specialisation. Drawing on the idea of using analogies, someone with wide experience and a broad perspective (sees the big picture, displays both critical and design thinking) will have quite different qualities to someone with a very narrow focus (especially within a very specific domain or area of practice). Based on the particular context, do you need an all-rounder, or a placekicker? This axis also relates to the age-old issue of organisations only wanting to hire square pegs for square holes – it might make sense in the short-term, but risks stagnation and lack of fresh thinking over the long-term.

Assessed along these three dimensions, we might see that an “expert” could be qualified according to how highly they rate based on their overall “depth”, measured by criteria such as experience, knowledge and reputation, as well as formal qualifications.

Next week: Making an Impact at Startup Victoria’s Pitch Night

 

Law and Technology – when AI meets Smart Contracts…

Among the various ‘X’-Tech start-up themes (e.g., FinTech, EdTech, MedTech, InsurTech) one of the really interesting areas is LegTech (aka LawTech), and its close cousin, RegTech. While it’s probably some time before we see a fully automated justice system, where cases are decided by AI and judgments are delivered by robots, there are signs that legal technology is finally coming into its own. Here’s a very personal perspective on law and technology:

Photo by Lonpicman via Wikimedia Commons

1. Why are lawyers often seen as technophobes or laggards, yet in the 1980s and 1990s, they were at the vanguard of new technology adoption?

In the 1970s, law firms invested in Telex and document exchange (remember DX?) to communicate and to share information peer-to-peer. Then came the first online legal research databases (Lexis and Westlaw) which later gave rise to “public access” platforms such as AustLII and its international counterparts.

Lawyers were also among the first professional service firms to invest in Word Processing (for managing and drafting precedents) and e-mail (for productivity). Digitization meant that huge print libraries of reference materials (statutes and case-law) could be reduced to a single CD-ROM. Law firms were early adopters of case, practise, document and knowledge management tools – e.g., virtual document discovery rooms, precedent banks, drafting tools.

2. But, conversely, why did the legal profession seem to adopt less-optimal technology?

The trouble with being early adopters can mean you don’t make the right choices. For example, law firms in the 80s and 90s seemed to demonstrate a preference for Lotus Notes (not Outlook), Wang Computers and WordStar (not IBM machines or MS Office Word), and DOS-based interfaces (rather than GUIs).

Some of the first CD-ROM publications for lawyers were hampered by the need to render bound volumes as exact facsimiles of the printed texts (partly so lawyers and judges could refer to the same page/paragraph in open court). There was a missed opportunity to use the technology to its full potential.

3. On the plus side, legal technology is having a significant a role to play…

…in law creation (e.g., parliamentary drafting and statute consolidation), the administration of law (delivery of justice, court room evidence platforms, live transcripts, etc.), legal practice (practice management tools) and legal education (research, teaching, assessment, accreditation). Plus, decision support systems combining rules-based logic, precedent and machine learning, especially in the application of alternative dispute resolution.

4. Where next?

In recent years, we have seen a growing number of “virtual” law firms, that use low-cost operating models to deliver custom legal advice through a mix of freelance, part-time and remote lawyers who mainly engage with their clients online.

Blockchain solutions are being designed to register and track assets for the purposes of wills and trusts, linked to crypto-currency tokens and ID management for streamlining the transfer of title. Governments and local authorities are exploring the use of distributed ledger technology to manage land title registration, vehicle and driver registration, fishing permits and the notion of “digital citizenship”.

We are seeing the use of smart contracts powered by oracles on the Ethereum blockchain to run a range of decision-making, transactional, financial, and micro-payment applications. (Although as one of my colleagues likes to quip, “smart contracts are neither smart nor legal”.)

Artificial Intelligence (AI) is being explored to “test” legal cases before they come to trial, and more knowledge management and collaboration tools will continue to lower the cost of legal advice (although I doubt we will see lawyers being totally disintermediated by robots, but their role will certainly change).

There is further opportunity to take some of the friction and costs out of the legal system to improve access to justice.

Finally, and this feels both exciting and scary, is the notion of “crowd-sourcing policy“; some governments are already experimenting with hackathons to develop policy-making models, and even the policies themselves. But this does sound like we would be moving closer and closer to government by mini-plebiscites, rather than by parliamentary democracy.

Next week: Digital currencies are the new portals