I Built A Tax App To $28K/Month In Only 8 Months

$23.2K
revenue/mo
1
Founders
5
Employees
product
ComplYant Inc
from Los Angeles
started August 2019
$23,152
revenue/mo
1
Founders
5
Employees
854K
alexa rank
324
followers
120
followers
market size
$581B
avg revenue (monthly)
$9.55K
starting costs
$20.8K
gross margin
83%
time to build
12 months
growth channels
SEO
best tools
Product Hunt, Verifigator, Twitter
time investment
Full time
pros & cons
37 Pros & Cons
tips
4 Tips
Discover what tools Shiloh reccommends to grow your business!
Discover what books Shiloh reccommends to grow your business!
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Hello! Who are you, and what business did you start?

Hi! My name is Shiloh Johnson I am the founder, and CEO of ComplYant and we help business owners navigate the messy world of tax compliance using technology.

We supply our customers with customized tax calendars that guide them through what forms are due, when, and how much they can expect to pay for those tax bills. We also help them save for the coming bills and process payment when ready to be filed.

Currently, our revenue is at $28k monthly recurring revenue in just eight months from launch.

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What's your backstory and how did you come up with the idea?

I have sort of a non-conventional background in accounting. I have an undergrad degree in accounting and a graduate degree in taxation. The average accounting student would go work for a big four accounting firm after graduation, working 18 hours a day during tax season and then continue to work their way up the ladder. However, because I was a young mom and had to work my way (full-time) through college, I couldn’t work 18 hour days during any season with a family.

So I pivoted, taking a tax clerking job with an in-house tax team and working my way up that way. I spent 13 years working for large corporations like Aramark and Technicolor. I worked in their in-house tax teams, handling everything from sales and income tax to annual reports and business licenses. And for large corporations that have multiple locations and nexus in just about every state, it was no easy feat.

I then went on to start my own tax practice serving small business clients that had crazy tax issues. For example, I had a client that thought that she could collect sales tax from her customers and not pay it to the state. She reasoned that she read somewhere that food wasn’t taxable. What she missed was that prepared food is taxable. She also missed how absolutely illegal it is to collect tax from a customer and not remit it to the state. So that was a $50k mistake, and there were so many more like it. I remember thinking, how can I help more business owners navigate the early years of a business. The rules in tax are the same for both small and large businesses, the difference is large companies have the infrastructure to hire a team of knowledgeable support to keep them out of hot water. So I decided to build that for small entrepreneurs.

I started jotting down ideas, sketching designs on a yellow notepad. I spent $10k for a dev team to make the first version. I got the money from my tax business, it was going well and I learned how to live on little and use the rest for the app. So I was working on client work during the day and ComplYant at night. Oh, I just realized the irony. I tried to avoid 18 hour work days for the sake of my kids, only to wind up working 18-hour workdays. But thankfully, my kids were teenagers so they were fine not having me around as much.

Take us through the process of designing, prototyping, and manufacturing your first product.

I’d love to tell you that the first version of the app flourished and I made lots of money. But I didn’t, it tanked. I had 50 people download it and test it and it was horrible. They didn’t understand it and didn’t like it and I had a certified failure on my hands. Not to mention a wasted $10k (yea that one hurt). So I scrapped it and went back to the drawing board.

Here’s a tip: don’t pay to be a part of anyone’s accelerator or incubator that is not offering you investment.

I then asked 100 people to trade time and advice in exchange for allowing me to pick their brains about how they manage their tax as entrepreneurs. I was trying to get to the root of what a paying user really needed. And it was unanimous: they needed to know what tax responsibilities they were required to pay, when to pay them, and how to save the most money in the process. So that is what I built. We tested the product on those interviewees and that’s when I knew I had something good. I also learned that what I think people need doesn’t matter. What they are telling you they want matters so much more.

I found the first development team that helped me suss out my ideas into wireframes on Upwork. They were a Russian-based team and they did fine, I really didn’t care how it looked, I just wanted it to work. And it did work, it just wasn’t any good. Around the same time, a new accelerator program promising to help people build version ones of their product offered me a spot in the program to which I had to pay $800 to be a part.

Here’s a tip: don’t pay to be a part of anyone’s accelerator or incubator that isn’t offering investment. Also, you get what you pay for. I’m not sure why I thought $800 was going to get me a better version of the product. I finished the program with absolutely nothing. But I still wasn’t defeated. I went back to the drawing board.

I was back on Upwork and this time I looked for one developer with Laravel experience. That was what version one was built on and the only coding language I knew. I also narrowed down my search to coders in the US because US tax rules are more complex than anywhere else in the world, and I needed to make sure my dev understood that.

I took all of my interview responses to my new coder and he helped me get through the basic version 1.5, a customized tax calendar. We also moved the product from a mobile app to a desktop platform. Then I tested it on people and charged for it. I figured if they’d pay then they really needed it and it would be worth continuing to build.

I was right. At that point, the product was earning $2300 monthly recurring revenue and I was so amped. To me, that was enough money to prove that I could build something great and that I was ready to raise outside investment.

i-built-a-tax-app-to-28k-month-in-only-8-months

i-built-a-tax-app-to-28k-month-in-only-8-months

Describe the process of launching the business.

So there wasn’t really a grand launch reveal, there was just this constant flow of build, test, release, feedback. Even now that is how we operate. We build a feature, we test it, and then we release it to the public and get feedback about it from customers. The time frame from when I first had the initial idea to when I incorporated was one week. I move fast.

I’ve learned not to be afraid to put something in front of customers, that is really the only way to figure out if it’s any good.

From that time to the horrible version was three months. And from the improved version 1.5 until now it has been a year and a half. I received my first investment check in October 2020 and have raised a total of $1m pre-seed funding from venture capitalists. Before raising in October, I was funding the platform with the money that I made from my tax practice. I took just enough to pay my bills and spent the rest on the platform. I told myself that I wouldn’t quit supporting my clients until I could secure enough funding that allowed me to pay myself. And after a year I was able to do just that.

I have learned and continue to learn so many things. Learning that paying for things that are usually free for most people is an indicator of a scam. I’ve learned that many people say they can help and few that really can. I have learned not to take the losses so hard but to figure out what I’m supposed to learn and adjust quickly. I’ve learned not to be afraid to put something in front of customers, that is really the only way to figure out if it’s any good. Obsessing over something that no one has seen is a waste of time. But ultimately, there is really only one lesson that matters: just start, and never quit.

Since launch, what has worked to attract and retain customers?

What has worked to attract customers has been a collection of a few things. We host free workshops for small business owners that tend to translate over to new users. It gives us a chance to demo the product for our ideal user base. We benefit in that we are an accounting product and every business owner needs or wants accounting advice so we use that as an opportunity to teach them about why they need our product. It's a pretty easy sell once people know what we actually help them with. This is an important growth stream because it costs us nothing, it only requires time. The same is said for podcast interviews and features. Early on I paid an up-and-coming PR strategist for a profile write-up and help with press submissions. She really helped me narrow down my salability as a founder without the heavy cost of an agency, she was worth every penny. However, we no longer use any PR reps.

We keep a regular business tax blog and the SEO tracks pretty well. My team and I write for it one time a week, giving business tax advice; you can check it out here. This works well because people engage with the content, and we try to write little-known facts about tax that are digestible and engaging. But it does take time; think of it more like a slow consistent burn.

We also invest in optimized Google Ads. In October of last year, I hired a Google Ad specialist as a contractor, and her sole function is to help us manage our ad budget, optimize what works, and remove what is not working. That person has also been a pivotal hire in the growth process. We do spend on the ads, but they convert, and we spend wisely.

We have a marketing manager on staff and she runs our email marketing campaigns (along with everything else) through our sales funnel. We use Hubspotto automate the process. And we use Google Analytics to track all of our marketing efforts. I spent $1000 hiring someone on Upwork to help us set up our GA tags and tracking. This is imperative, if you can’t do it yourself, hire someone to help. It is absolutely worth it. Because having all of the marketing efforts are pointless if you are not tracking them to see what works and what doesn’t.

We are on all the social platforms for presence and visibility. But we only pay for LinkedIn ads. This is because a LinkedIn user is our ideal customer, and it has been a very successful ad tool for us. We are also starting a Facebook group to help facilitate issue complaints, support, and workshops.

How are you doing today and what does the future look like?

Today we are a venture-funded startup, so profitability isn’t necessarily top priority but growth is, so we’re focusing on continuing to test and build on our sales funnel. Our MoM growth averages 65% so that's exciting. Our churn rate (people who cancel their subscription) is almost zero. And we’re focusing on a big feature launch in October and raising our next round of funding around the same time.

Our long-term goals are to take ComplYant all the way to IPO in 5-7 years. We have to change the tax system. We have to change how entrepreneurs do the hard stuff like a tax to lower the barriers to entry and keep people in business longer.

Through starting the business, have you learned anything particularly helpful or advantageous?

Yes, particularly about founder health. Managing my mental, physical, and emotional health has been tough but is of the highest priority. As the leader of the business, I have to be fully present for decision-making and clear thinking. That becomes immensely more difficult with health roadblocks.

There have been forces outside of our control that has been a major factor in our success like timing. We're a tax product and we launched on Product Hunton tax day. That was a huge uptick in sales, I couldn’t have timed it better if I tried. We also launched during Covid when more people were starting businesses than ever before. Some helpful habits that have changed my productivity level have been getting an executive coach. A good coach will help you build a brand, not just a company. Also, building a morning routine. Win the morning, win the day. What is the first thing you do when you wake up? It's often an indicator of how the day will go for you. Is the first thing you reach for a phone or a glass of water? Do you exercise? Write out your day in a planner? I’ve found the Productivity Planner to be extremely helpful in optimizing my productivity.

What platform/tools do you use for your business?

Because we are a tech startup we use lots of tools some of my favorite include Clickup, its great for company-wide task management. Hubspot for marketing, we use it to manage our email funnel and customer lists. It does that and so much more.

We love Slack, our entire team is remote so it helps with team communication. It's our digital office. We use Rippling to manage all things HR. It works really well for small teams.

What have been the most influential books, podcasts, or other resources?

I love everything about the founder's journey, about how they got started. It reminds me that there are all kinds of beginnings and that you can make it what you need it to be, that the point is to start.

So podcasts: How I Built This, Black Tech Green Money, Business Wars, Tech Tonic, POCIT, My First Million. And books: Discovering Your True North, Real Women Real Leaders, Zero to One, Measure What Matters, Founders at Work.

Advice for other entrepreneurs who want to get started or are just starting?

I think it's important to always keep the main thing the main thing. Meaning, try not to get too far off track from your original intent. Don’t let raising money or trying to get money deter you from your why, keep your why at the forefront. Running a business will ebb and flow, you’ll have highs and lows, try to stay in the middle, not going too high with the highs or too low with the lows. The roller coaster will make you sick.

A mistake I often see people making is the chase for perfection. I’ve seen business owners delay for months and months redoing designs or overthinking things without ever making any real headway. Nothing, and I mean nothing, can replace feedback from real customers. Just put it in their hands and let them tell you how they’d like to see it improved. Don’t be ashamed of your product. Maybe you don’t have the best designs or packaging, but if it works it works. Good hand cream is good hand cream. Whether it’s in perfect packaging that you spent tens of thousands of dollars on or it’s in a plastic baggie with a zip tie, good hand cream is good hand cream.

Don’t despise meager beginnings. So, say you don’t have $300k start-up money to get your idea off the ground, or the bank won’t give you a loan, or you don't have good enough credit for an expanded credit card balance. Build it anyway even if you have to learn to code, even if you have to make it in your kitchen or you only have the money to make one at a time.

Everything you do in those early months will define you as an entrepreneur. Did you stay resilient or did you quit? Did you find a way out of no way? Did you learn how to do something you were previously afraid to do? Did you do it when no one believed in you? Those trials give you a competitive advantage over others who have fewer trials. You aren’t worse off for struggling, you are better, stronger.

Are you looking to hire for certain positions right now?

We are always hiring engineers because tech is nothing without builders. We’re also looking for a Sr Designer and a Sr Product Manager. Our positions are full-time paid/remote with a great work-life balance and some pretty cool swag. Email your resume to [email protected] if you're interested.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

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Shiloh Johnson,   Founder of ComplYant Inc
Pat Walls,  Founder of Starter Story

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