Pilot’s Founding Story: How We Set Out to Build the Best Bookkeeping Service in the World
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Pilot was going to be our third and most exciting company. After building and selling two other B2B startups, we wanted to solve a huge, pervasive pain. Something with a gigantic addressable market with a painfully unmet need (isn’t that the dream?).
Don’t get me wrong—I’m very proud of our first two companies. Our first was acquired by Oracle and the second by Dropbox, which is nice validation that we were doing something right. I’m even more proud that the same three friends from MIT’s computer club — Jessica McKellar, Jeff Arnold, and I (Waseem Daher) — built all of them without hating each other.
But in early 2017, we were ready for a new, exciting challenge. We put our heads together and planned a grand new undertaking.
It’s okay to chuckle when you realize the company we built is doing bookkeeping. I know: bookkeeping isn’t sexy. But as I explain below, we experienced the pain points of bookkeeping first-hand. As we learned later, we weren’t the only ones. After digging deeply into bookkeeping ourselves, it was clear that there was a lot we could do here.
So here’s a glimpse into how and why we set out to build the best bookkeeping service in the world. Things like:
- How we came up with Pilot after first solving our own bookkeeping problems
- How we started by having all three founders just do bookkeeping
- The exact problems that make bookkeeping a uniquely challenging service to get right
- Why we believe the best company requires a mix of software and human talent, not just one or the other.
At Pilot, we have a team of expert bookkeepers (with software superpowers) doing your books in QuickBooks Online. Let us take the bookkeeping burden off your plate: Try Pilot Now.
“Why are you even doing your company? This should have been your product.”
Pilot’s story begins when we sold our first startup, Ksplice. The tech we built allowed you to apply updates to servers without rebooting them, and Oracle was excited to acquire it to bring that capability to their customer base. During the acquisition integration meetings, their finance team noticed we’d built some powerful bookkeeping software—and it caught their eye.
You see, as we built Ksplice, we realized bookkeeping was a real pain. Rather than hire someone to do it for us (which in hindsight would have been far easier), we built some software tools that made it easier to do high-quality bookkeeping ourselves. In retrospect, was this a good use of our time? Absolutely not. But we were young and naive and the bookkeeping was a huge pain…
Anyway, in talking about our bookkeeping with Oracle’s finance team, we described some of the things we’d built, and they paused. The room went silent, and they said: “Oracle is the most sophisticated financial technology company in the world. We don’t have anything like this. Why are you even doing your company? This should have been your product.”
At the time, we laughed it off. Our business wasn’t bookkeeping—it was rebootless software updates! This was just an internal tool we had built to help ourselves out; it wasn’t interesting to us at all. We didn’t realize the value of what we’d created yet (or just how pervasive the pain really was). But that comment from Oracle’s finance team planted the seed for us—the thought that, hey, there’s actually something really magical and valuable about the idea of doing bookkeeping in a truly tech-enabled way.
When we sat down to plan our third company, that memory—combined with our first-hand experience of the pains we had doing our own bookkeeping in our prior companies and the knowledge that it’s a problem that literally every business has—spurred us to build Pilot.
From the beginning, we knew we wanted to take advantage of significant software development to make bookkeeping more accurate and reliable. But has any business owner ever said, “I would really love more accounting software?” No. What people want is someone to solve this problem for them, in an end-to-end way, not a tool that requires you to frustratedly Google error messages when something isn’t working.
To provide that, we had to solve the problem of doing bookkeeping accurately and painlessly, using a combination of people and software. Or as I like to phrase it: people doing what people do best, software doing what software does best. Finding the right balance there ends up being pretty tricky.
Becoming the Best Bookkeeping Service: Balancing Software and Human Intelligence
A lot of bookkeeping involves laboriously clicking around in QuickBooks. I would know. When we launched Pilot, Jeff and I spent our days doing all the bookkeeping ourselves. We called up all our friends, signed a few as clients, and got to work. We had experience doing our own books for two companies and knew we could translate it into a quality service.
The early company was Jeff and me doing our clients’ bookkeeping by hand in QuickBooks (like any other bookkeeper would) while Jessica worked on developing the tech. It wasn’t pretty work at first, but we were motivated by the conviction that we could build software tools to do the heavy lifting.
We got a real, visceral familiarity with the problem. We time tracked everything. And once we had the data we needed, we sat down and prioritized based on two things:
- How error-prone a task was
- How long the task took.
Anything susceptible to human error that took a while and could be done in software was on our list. And that list was long.
Why was that list so long? Fundamentally, bookkeeping lends itself really well to this approach. Bookkeeping is effectively tracking how money has moved into and out of your business.
To figure that out, you look at a bunch of data sources: your bank statement, your payroll statement, your credit card statement, the invoices you’ve sent, etc. All of these statements are highly structured descriptions of transactions: dates, amounts, and memos. You take those entries and you record them in QuickBooks according to a well-defined set of rules — the rules of bookkeeping.
What’s really good at taking highly structured data and robustly and accurately transforming it according to well-defined rules? The answer is definitely not “a person.” And that’s why the software we’ve been building over the past few years can do this work way more reliably than any of us can.
Amusingly, the core customer experience for our very first customer back isn’t all that different from that same customer’s experience today. Which makes sense, right? They just want bookkeeping off their plate and love having the knowledge and expertise of an experienced, dedicated bookkeeper at their disposal. That’s exactly what we provide, and it’s intentional: We never set out to replace every process with software. Some things just need a human touch.
The reason we do such high-quality work is that we’re leveraging the right techniques for the right jobs. Error-prone, tedious processes should be done by software. But there are places where you want the white-glove personal touch. Because our team is not distracted with the really tedious, mechanical steps of the process, we can do an amazing job supporting our customers. We get to know their businesses really well. Software lets us make that a priority.
Over the last few years, we’ve applied those solutions primarily to tech startups. Why? It’s a great test-case to make sure our techniques can work really well across a wide range of customer shapes and sizes—these startups grow so rapidly in a way that forces us to exercise those muscles. As a result, we’ve developed a ton of experience in the early, mid, and late stages of many companies.
While we continue to work closely with startups, we’re also rapidly expanding into a number of new verticals (like e-commerce), and are actively adding additional services (like tax preparation). Because we laid a strong foundation and grew deep roots within the startup community, we can do that with confidence.
Becoming a Trusted Advisor
We put a lot of emphasis on being a trusted advisor when it comes to bookkeeping. People love that they can ask us questions, and that there’s a smart, talented, knowledgeable person on the other end who is an expert in bookkeeping for their industry. But what we didn’t expect was how much they would value our recommendations in other areas as well.
We’ve been asked about many other back-office products and services (see our recommended financial stack as a result of these questions). My favorite request was when a client asked us what we thought their parental leave policy should be—a great reminder of how important and trust-filled our relationship is with our clients.
Knowing how much our customers trust and respect us is the best part of my experience at Pilot. And it just reinforces the principle we built it on: Give computers the work that computers do best, and let people do what people do best. When you do that, everyone wins.
At Pilot, we have a team of expert bookkeepers (with software superpowers) doing your books in QuickBooks Online. Let us take the bookkeeping burden off your plate: try Pilot.