It is the rare failed startup that gets a second act.
But that’s exactly what inDinero — a flashy startup started back in 2010 that began with a teenage cofounder and CEO, tons of press, a Y Combinator, $1.2 million in seed funding and a Mint-style service that offered a self-service tool for tracking small business finances — has managed to achieve.
But Cofounder and CEO Jessica Mah — who cofounded the company at the age of 19 while still a student at UC Berkeley with her business partner, Andy Su — soon discovered that what InDinero was offering was not a successful business model.
“What we first did didn’t really work out,” Mah said. “We thought we would bring personal finance tools to businesses to help them have better insights on what’s going on, but it was really hard to build a viable product. People just don’t need that. They need their accounting done; they need their taxes done.”
What followed from there is what generally happens to unsuccessful startups: The money started to run out, and employees were laid off.
But where inDinero’s story differs is that the brand was able to bounce back by switching up its business model and rebranding itself. Today, inDinero is a profitable and successful company with about 200 employees and offices in San Francisco, New York City, Portland and the Philippines.
And the company is now thriving because Mah said she and Su realized that their initial business model was not the right one and changed it up to be an “all-in-one” solution for businesses seeking accounting, tax and payroll services.
“2012 is when we realized that we have to come up with something way grander and way more bold,” Mah said, and after several years of unsuccessfully trying to partner with accountants for referrals and recommendations to grow inDinero’s business model, she said the company decided it would just be easier to become the accountants themselves. “We’re going to be full service — actually do the accounting, do the taxes and do it better than them — and we’ll sell it better than them, and we’ll scale it hundreds of times bigger than them.”
Mah said she came up with a new business pitch to outline the company’s revamped business model, then called up all her entrepreneur friends to pitch it to them to see if the idea had any legs.
“I just went through my phonebook. I went through my Facebook, my LinkedIn and I started selling the new inDinero to them to see if it clicked with them,” Mah said. “And thank god that it did because otherwise we’d be out of luck.”
InDinero began hiring employees again in July 2012 to help it fulfill its new accounting-focused business model, and Mah said inDinero’s new strategy was “immediately successful” in terms of helping the company generate new sales and clients.
“The key thing at first was that I realized that people didn’t want to have to work with these accountants, because they’re slow, they don’t have redundancies, there’s no real team built around them,” Mah said. “We were getting calls from people who were like, ‘Yeah, I have a bookkeeper who sends me these financials once a month, but I really don’t have a good understanding of what’s going on, and now, she’s in Hawaii and I’m screwed because she’s on vacation.’ That’s where I got the idea, and I said, ‘Oh my god, we could just do it directly for these customers and build a far better offering.”
Mah said what separates inDinero from other accounting services is that it is a much more service-oriented business focused on the needs of its clients.
“These bookkeepers aren’t helping these companies know more about their business and manage a better business,” Mah said. “So, inDinero, we can do accounting and tax, but really, the goal is we want to be their business management solution. At the end of the day, how do you help them run a better company?”
But what Mah believes truly separates inDinero from the litany of failed startups maligned to the trash heap of the tech and business worlds is she and Su’s dogged determination to see their company succeed.
“What happened for us that’s particularly unique here is that this was our first job,” Mah said. “We had not worked for another company before; therefore, it’s not like we ever knew what it would be like to have to job hunt … This was all we knew, so we felt kind of stuck here. There was no Plan B. Plan A was to make inDinero work one way or another, and Plan B was to make inDinero work one way or another.”