The Accounting Podcast

At Xerocon 2019 in San Diego, Blake and David met up with Jamie McDonald and Jamie Shulman - The Two Jamies - of Hubdoc, which was acquired by Xero last year for $70 million in cash and equity. This year, Jamie McDonald was appointed to the role of Executive GM, Product, Accounting and Global Services at Xero. Jamie Shulman, Hubdoc Co-Founder, continues to serve as Co-CEO. The guys talked bank feeds, big Wow moments, some Hubdoc growing pains, the importance of showing up, and more.

Show Notes

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Show Notes

  • 00:57 – Meet one of the Two Jamies - Jamie McDonald, Executive GM, Product, Accounting and Global Services at Xero
  • 01:44 – Jamie M talks career, and his new promotion
  • 02:45 – What’s ahead for Hubdoc? Jamie M discusses the acquisition, some of Hubdoc’s newest time-saving features, and plans for building a more powerful platform 
  • 05:10 – Jamie M talks about Hubdoc’s global positioning and how working across multiple time zones is maybe his least favorite part of his job 
  • 05:57 – Touching on the Xero-Stripe integration – one more way to save time and eliminate headaches
  • 07:31 – Keys to being successfully acquired – show up everywhere, listen, really listen, do lots of stuff that adds value, repeat 
  • 10:14 – The other Jamie, Hubdoc Co-Founder and Co-CEO, arrives! 
  • 11:00 – Has fetching docs (Hubdoc’s forte) become a new pain point for accountants and bookkeepers?
  • 13:15 – Do we really want to live in a world without bank feeds? Why said feeds and fetching soar above the manual-entry alternative
  • 16:15 – Jamie M talks about the potential for new business with the plethora of US banks and how Hubdoc is focusing on building an innovative, powerful, and reliable API that targets the accounting, bookkeeping community 
  • 17:58 – Jamie S pontificates on how the new Wow moment – machine learning – is helping offset some of Hubdoc’s challenges with fetching 
  • 19:14 – Here’s to another 10 years (and more) of success! 
Connect with Jamie McDonald
LinkedIn: https://www.linkedin.com/in/jamiemcdonald/
Twitter: https://twitter.com/jamiemcdonald

Connect with Jamie Shulman

LinkedIn: https://www.linkedin.com/in/jamieshulman/
Twitter: https://twitter.com/JamieShulman

Get in Touch

Thanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. 

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Creators & Guests

Host
Blake Oliver
Founder and CEO of Earmark CPE
Host
David Leary
President and Founder, Sombrero Apps Company

What is The Accounting Podcast?

The Accounting Podcast (formerly the Cloud Accounting Podcast) is the world's #1 accounting, bookkeeping, and tax podcast! Join us weekly for a roundup of accounting news, analysis, and interviews. Plus, earn free NASBA-approved CPE credits for listening with the Earmark app. Learn more at https://earmarkcpe.com.

This episode of The Cloud Accounting Podcast is sponsored by LivePlan. Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners preferred virtual advisory services? Did you know that the number one thing they want from an expert advisor is strategic planning and review? This is even more than general-ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to CloudAccountingPodcast.promo/liveplan. That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N.

Blake Oliver: Welcome to The Cloud Accounting podcast. I am Blake Oliver.

David Leary: And I'm David Leary.

Jamie McDonald: And I'm Jamie McDonald. I'm the co-founder and co-CEO of Hubdoc, along with the other Jamie - as we're known, [00:01:00] The Jamies - and now, the executive general manager of product for the core accounting platform at Xero.

David Leary: Since this is an audio podcast and there's two Jamies, can you say which Jamie you are, so people are clear? [crosstalk]

Jamie McDonald: That's a good point. I'm Jamie McDonald. The Jamie M. The Product Jamie.

David Leary: You're the tall one?

Jamie McDonald: The tall Jamie.

David Leary: The tall one, okay.

Jamie McDonald: Old Jamie, Grumpy Jamie. All of the unpleasant names for Jamie.

Blake Oliver: I was so excited to see when you ... Not only the Hubdoc acquisition, or [00:01:30] the Xero Hubdoc acquisition. Congratulations. But also, now, that you're doing product for Xero. Was that part of the deal? How did that come to be?

David Leary: Yeah. There's a major promotion. You know you got a major promotion when there was a press release about it.

Blake Oliver: Yeah.

Jamie McDonald: I guess the first thing to say is thank you. How did it come to be? I think I was meant to do this job, and I've been training for it for the last five years from when I chased you guys down, when we entered the space in 2014. I've [00:02:00] been spending my whole time thinking about how to build the small business ERP on top of the QuickBooks platform and the Xero platform, and now being part of the Xero family ...

You guys know Hubdoc. The whole core point of the application is data automation and building a collaboration platform between accountants, and bookkeepers, and the small businesses they serve. It's just a logical extension of the work I've been doing with the product and engineering team at Hubdoc. I just feel so lucky to get to work with some of the designers and [00:02:30] engineers who have built Xero, which is a product I love so much. We're gonna build some good stuff.

Blake Oliver: Can you give us a sneak peek?

Jamie McDonald: I think I did yesterday. The roadmap story is pretty clear. I think we wanna build more data automation into the platform. I gave that 'find and recode' example yesterday. It's a simple feature that saves people a boatload of time at the end of every month, correcting errors. It's like, "How do we just do that 10 times and [00:03:00] make the core application just really, really powerful?" Then, all the stuff that Craig talked about and Nick, this morning, about the platform. Those are our big bets on the future of business recordkeeping, and I think ... Just super-duper exciting.

David Leary: Because we do have some developers and app developers that listen to the podcast, how was this journey of being acquired?

Jamie McDonald: What we always say is everything in life starts with people. Jamie and I are big on our relationships [00:03:30] with our team and our customers. The values that we've blogged about at Hubdoc are around just building authentic human relationships, being transparent, and giving a shit; kind of a sense of craftsmanship around product and delivering amazing experiences for our team, so that they say, "This is the best place I ever worked" five years from now.

I think what's been great about joining Xero is just a giant overlap in values, and culture, and the focus on [00:04:00] being human and authentic. That's been great. Working on a platform where 1.8 million customers are going to be using the stuff that I collaborate on building, that's pretty amazing. I think the work that we are doing ... There's another decade of SMB cloud adoption ahead of us, and I just feel lucky to do it. There's stuff about being acquired that's different. I'm learning to operate in a bigger company again. I've done that- [00:04:30]

Blake Oliver: Yeah. Where were you before Hubdoc?

Jamie McDonald: I was at Expedia back in the early 1.0 days of the internet.

Blake Oliver: Yes. Yes.

Jamie McDonald: I saw a company explode in scale, hiring crazy, and winning in the market. That was that early career experience for me that I say ... Worked with the smartest people; built a product that won in the marketplace; had fun, and just grew a ton professionally. I think bringing some of those skills, relearning them, inside [00:05:00] Xero, which is one of the best SaaS companies in the world, it's tough not to be excited about the opportunity.

Blake Oliver: Hubdoc grew up in Toronto.

Jamie McDonald: Yeah. We're in Toronto.

Blake Oliver: Are you still in Toronto?

Jamie McDonald: I still am in Toronto. I think we're moving from thinking of ourselves as Hub Dogs to thinking of ourselves as Xeros. Toronto's gonna be a big engineering hub for our company on a go-forward basis.

Blake Oliver: That's great.

Jamie McDonald: We also developed software, obviously in New Zealand. In Auckland, and Wellington, primarily, and then have a big office in Melbourne. [00:05:30] I've got teams in Aussie and New Zealand who I work with closely now, as well.

Blake Oliver: Got it. Those time changes are making for some fun meetings-

Jamie McDonald: Let's not talk about the time change, Blake. That's the one bad part of my life.

Blake Oliver: Yep, understood. The big news yesterday was the Stripe partnership. For our listeners who couldn't make it to the event, why is that a big deal?

Jamie McDonald: I just think it's pretty obvious and pretty awesome, [00:06:00] which is like, when you send an invoice, wouldn't it be great if your customers could pay it? It's like let's ... I joke with Craig. "It's like you built a Pay button. What's the big deal?" I think that's awesome. I'm also a Stripe customer at Hubdoc.

If you've ever reconciled revenue inside of Stripe, we've had to use third parties building all rules ... Making that pain go away will save 10 hours a month for somebody in our company, which is awesome. Then this [00:06:30] recurring monthly invoice that just goes out, and you can set up the payment automatically - it sounds so elementary and obvious, but it's just an example of digitizing analog workflows, getting rid of the paper, getting rid of a check in mail, and making it all happen. The good news is SMBs get paid faster, which is what we're trying to do.

Blake Oliver: How big is Hubdoc these days?

Jamie McDonald: What's the definition of big, Blake? We're huge!

Blake Oliver: How [00:07:00] many Hub Dogs are there? Whatever numbers you can share in terms of customers, that sorta thing ... I think people are- well, if you're a developer, you're interested, and you want to have an exit strategy - where do I need to get to get there? Then, if you're an accountant - sorry to throw two questions at you - They're wondering, "What's gonna happen to Hubdoc now that it's a Xero company?"

Jamie McDonald: Yeah, for sure. There are two questions there, which is: "If I wanted to get acquired as an app developer, what would I [00:07:30] do?" I think the Hubdoc formula was stolen from David Leary. I teased him about sushi lunch five years ago, in Toronto, when David came and visited us. We show up, which is really ... It sounds stupid, but we showed up at the Twitter chats. We showed up at the trade shows. We talked to people, and we listened.

David Leary: You have to play the game [cross talk]

Jamie McDonald: Then we went back to our office, and we built software for them. We said, "Does this work for you?" By [00:08:00] building that community of advocates that we were solving problems for, they told Intuit, and Xero, and Bill.com that we existed and were important to them. That's how we showed relevance. Then you drive your API connections up, which means that you're growing on the platform and people noticed that.

Blake Oliver: I wanna highlight how much you guys really did show up, because the Two Jamies were at every conference. You guys were at the booth, yourselves - the founders of the company talking with people all [00:08:30] day long. How did you ... That takes amazing stamina.

Jamie McDonald: Yeah, I just think it's ... That's like entrepreneur camp. We always, I wanna say, laughed, but remarked on the leaders of other businesses who would show up with their wheelie bag, give a talk for an hour, and then leave the show. We make a point of staying for the whole thing, and taking customers out to dinner, and meeting with partners, and listening, because that was the way we could get better. The [00:09:00] only reason I'm in this job now is because I understand the workflows in the same way that you've gone from being a bookkeeper to a software person. You understand the workflows. That's the only way I can do it.

David Leary: I think we have another guest we could bring on. Believe it or not-

Blake Oliver: Oh! Do we have a special ...?

David Leary: The other Jamie has arrived. Let's try to give him headphones here ...

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Blake Oliver: All right, we're back.

David Leary: Jamie, the other Jamie is here. For our listeners that don't know what you look like, so they can differentiate, please describe yourself.

Blake Oliver: This is like a dating profile or something?

Jamie Shulman: I'm affectionately known as Jamie S., and I focus [00:10:30] on customers. I think we look quite similar, David.

David Leary: The Nice Jamie? The Younger Jamie?

Jamie Shulman: No, we're both nice. Yes, younger by a bit,

David Leary: Okay.

Jamie Shulman: Thank you.

David Leary: I'll jump in, because it's interesting, now that you're both here. Something went off for me. I was at another conference yesterday. It's all getting gray now. Recently, I was at a conference ... Because Hubdoc always was- you guys were the fetchers. You fetched documents all over the internet. Two comments from two different bookkeepers. They're kind of getting sick of [00:11:00] fetching, because security, the logins ... Fetching is difficult. They're finding like, "I'm just gonna ask my client for the paper bank statements, because I control that process." Can you guys speak to the evolution of fetching? I would argue, you two might be the experts on fetching.

Jamie McDonald: Yeah. I think we can definitely claim to be. People have worked on the problem for a long time. I don't know that there's anybody who could be called the expert in fetching, except for maybe the people who go after Ticketmaster [00:11:30] on the day that Rihanna starts a concert sale. The message we give to our customers is the nature of our technology is such that it doesn't work all the time. Websites change. There's two-factor authentication from banks. The feedback that we get from our customers is, "At the reliability levels that you deliver on, it works for us. It's maddening when it breaks." It's exactly like a bank feed breaking inside [00:12:00] of QBO or inside of Xero. It's like, "Wow. This is frustrating. I wanna do my job right now." But the idea of not having a bank feed is so horrible that you would never go back to that prior universe.

I think people want the documents that we get for them and find value in them. I think reliability is a constant battle for us, and we're spending more, and more money on how to scale that infrastructure. We don't have all the answers. It might not work. But one thing we [00:12:30] are, always, is transparent to our customers about the challenges with the technology, and the reliability of the service. We tell the truth about here's what to expect. Yeah, some people find it easier to ask their clients to get the documents, themselves, but if you've got more than 20 clients and each of them has four or five banks, it gets time-consuming.

Jamie Shulman: David, I was at Scaling New Heights with you in Salt Lake City, there, and I talked with a lot of our customers - the accountants and bookkeepers - about this topic. Hearing [00:13:00] Jamie mention bank feeds, it's interesting ... They're connected - bank feeds and the fetching of the documents - because one of the reasons we hear from customers - who we have historically, and still today - is why they still very much want the bank statements in North America; checks, as well, with the bank statements. It's because of the lack of reliability on the feeds.

Perhaps, there'll be a day in the future where bank feeds will actually come in and be totally reliable, and accurate with no duplicates, or omissions. Then maybe the bank statement need will go down, but right now, more than- as much [00:13:30] as ever, we hear people still wanting them. Despite, as Jamie said, the ability to get them isn't what one would maybe want, in terms of 100 percent getting in the documents - the rights ones at the right time - even when it's less, it's still much better than having to go do that all themselves, manually-

David Leary: Across the board-

Jamie Shulman: Yeah.

David Leary: -because not every feed you have is gonna all break at the same time. It's odd bank here ... I think us insiders, if you wanna say this, we get it. It's the bank's fault. It's somebody else's fault. It's not Hubdoc's fault that a feed didn't work, but I think the frustration for a lot of accountants and bookkeepers [00:14:00] is two-factor authentication, this breaks; they have to go back to the client, "Oh, I need your new password." They're forcing you to ... "What was your favorite pet's name?" You've gotta do all that dance. You look, as an accountant or bookkeeper, kind of scattered to your client. Some of them are reconsidering, like, "Well, why don't you just give me paper?"

Blake Oliver: You know what I see this as is a part of a bigger problem, which is probably the greatest challenge, I think, for cloud adoption and accounting is the ... It's not 100-percent reliable, the way that you used to get that paper bank statement [crosstalk] [00:14:30]

David Leary: Don't say that, because now we're gonna get ... You can't say cloud is not 100-percent reliable, because now all the desktop people are gonna come after us [cross talk]

Jamie McDonald: "We told you, Leary!"

Blake Oliver: Stuff breaks. These connections break. Integrations break all the time. You've gotta go figure out what went wrong and how to fix it. That's frustrating for people who like consistency, where it's the same every month. That was my biggest challenge, early on, at least. Maybe it's gotten better now, but 10 years ago, when this whole thing was really new, I was dealing with [00:15:00] apps changing all the time and APIs breaking.

Jamie McDonald: Yeah, I think part of it is the nature of software development, which ... Platforms ship new features. Things change. I use the language, "We're building this small business ERP that's connected by API, and 700 apps on the Xero ecosystem who are pumping in data to that platform." I'm proud of the reliability of that. It generally works, right?

Blake Oliver: Yes.

Jamie McDonald: It's so much better than the universe we existed [00:15:30] in before. It isn't enterprise software that's nine nines, or whatever it is, and bulletproof, but I would just encourage people listening to give it a shot. It works pretty darned well.

Blake Oliver: Yeah.

David Leary: I think Xero has ... There's what? Six banks in Australia. There's six banks in Canada. You can work really closely and have deep API relationships with all of them, right? Do you see the opportunity for ...? Because there's 10,000-20,000 banks here in the States?

Blake Oliver: It's not that many, is it? It's like 3,000.

David Leary: It's a ridiculous number-

Blake Oliver: It's still a lot, right?

David Leary: It's a [00:16:00] lot. Do you-

Blake Oliver: You probably know how many there are ...

Jamie Shulman: It's thousands-

David Leary: It's the opportunity for two or three banks to really pay attention to small businesses, pay attention to accountants, pay attention to technology. They could actually just steal all small business, because they become the reliable bank.

Jamie McDonald: I'll take a crack at that one. I'm excited about our relationships with some of the big banks in North America, both Canada and the US, and our opportunity to get direct feeds from them. But like you said, getting an API relationship with everybody, it'll take forever. We've [00:16:30] opened up a banking API, which I think is pretty innovative and cool, so that the neobanks ... We made an announcement today about Novo publishing to our API, and there's a couple others in the pipe that are exciting.

They're gonna go to the accounting and bookkeeping community and to small businesses and say, "Hey, we've built a feed that works reliably, that's enhanced, that's a different way of doing small business banking." It'll be a tough sell at the beginning, but you look at what Monzo's done in the UK, in [00:17:00] terms of scaling their base. I'm bullish on that opportunity for our ecosystem, because it'll make the whole banking industry get better.

The second answer to your question is we hear, all the time, from accountants and bookkeepers that, "Yeah, my clients asked me to recommend a bank, and I say, 'Let's go with these guys, because the feeds work pretty well, and Hubdoc works well with them'" type of thing. Maybe there's an opportunity, but I don't know ...

David Leary: Yeah, I think I've talked to accountants and bookkeepers who were like, "I move every client to this bank, because [00:17:30] of this." Usually, it's the bank-feed fetching. It's reliability, yep.

Jamie Shulman: An interesting observation ... This is a little bit different, but on the topic of the fetching of the bank statements, early on, when we started, that was the big Wow moment. People said, "Wow, it's magical that if we just have the credentials of our clients, we can magically just have these bank statements." I found - in the last couple of conferences, where I really get a chance to talk to hundreds of customers and prospects, including the Scaling New Heights one, and the one here - is that the new Wow moment I think I'm hearing more of is the machine [00:18:00] learning piece of our product, which isn't bank statements, but it's the pulling in of the transactional documents - the bills, receipts, et cetera. The machine learning Wow is something that we're hearing more of. It's just interesting. Now, we've got these Wow moments. One we're probably more challenged with on the fetching of documents, but the machine learning, extracting of documents, it's ... I'm hearing more about that being a Wow, which is nice, because it helps offset some of the challenges we're having.

David Leary: Yeah. The pain's shifted. The fetching is now the pain, but what you do with them, once [00:18:30] you get them is the Wow.

Jamie McDonald: I was joking with David before the pod and taking a picture of this microphone. I can post the Achievement Unlocked moment for Jamie and I. We've finally made it onto The Cloud Accounting Podcast.

David Leary: You guys have had an amazing year.

Jamie McDonald: What else is to be done? I'm sending the photo to my wife and just running a victory lap. Thanks for having us on the show.

Blake Oliver: Thank you. If people wanna reach you online and find out what you're up to, where should they do that?

Jamie Shulman: JamieS@Hubdoc.com. On Twitter, I'm just Jamie Shulman, my name.

Jamie McDonald: Yeah. On Twitter, I'm @JamieMcDonald - easiest [00:19:00] place to find me. We'd love to hear from the people listening to the show.

Blake Oliver: All right, wonderful, and-

Jamie Shulman: I was going to ... I want to just reiterate what Jamie said, because it is ... Maybe it sounds a little crazy, but we've been at this together, and we've been working with the two of you for years now. It's great to see the acceleration and what you guys have done with this. It's impressive.

Blake Oliver: Well, just think where we've come in 10 years and where we are going in 10 years. It's amazing.

Jamie McDonald: Yeah, there's gonna be a great decade ahead of us.

Blake Oliver: All right, well, on [00:19:30] that note-

Jamie Shulman: Thanks.

David Leary: Are we okay to sign off?

Blake Oliver: Yeah, thank you very much.

David Leary: Thanks, guys.

Blake Oliver: Bye, guys.

Jamie Shulman: Cheers.

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