We are pleased to present an interview with Kurt Kunselman, COO and Product Architect of Yellow Labs Software.
Yellow Labs Software is a US software company that builds its flagship AccountingSuite™ solution on the 1C:Enterprise platform. The principles of our company are to give small businesses and accountants that serve them, a platform to grow their business and provide customers with 24 hours a day access from anywhere in the world through an internet connection. On top of the foundation of our cloud service, we also utilize the 1C:Enterprise platform to build native extensions to the AccountingSuite™ application. Examples include Asset Tracker, Expense Reporting, and Foreign Currency Reporting, to name a few. To take it to another level, we also offer private customizations and extensions based on the 1C:Enterprise platform. The solution can be hosted by our public hosting option or a private hosting option at an additional cost. In the end, we offer a fully customizable solution to match the needs of your business.
The company started prototyping around 2011. It began with a meeting at a dog park that eventually inspired the company's current logo and branding. The dog park interactions eventually turned into prototyping in a basement (what we call in San Francisco, California, an in-law, which is like the lowest floor of the house below the entrance). We presented our prototype to 1C and the interest became very high. We moved into an office in San Francisco, the first WeWork in San Francisco, actually, back in 2012. Officially, our start date for the company, which is Yellow Labs Software, is November 15, 2012. So, we stayed in that office for a while, and then in 2016, we moved to the prestigious San Francisco Financial District. And this is significant because that was the same building that 3 other well-known and publicly held companies were in. In 2020, we finally moved out of the WeWork system into our own office in San Jose, the heart of Silicon Valley.
Over the years, we have received a couple of awards, including one from Accountex, Software Review Sites, and the media for CPAs and Accountants.
Overall, our company of about 20 employees is mostly virtual. So, 80% of us actually work outside the office. In total, we have a team of 45 people that work on all of our products and solutions. We do integrations with Gusto, the leading cloud payroll solution in the US; Stripe, which is the leading payments for developer solution; Yodlee, the largest bank feed solution; Paya, IPO 2020; Bill.com, IPO 2019, which is the largest bill payments provider for cloud; Avalara, which is cloud sales tax, IPO 2018; and our most recent integration partner is Billergenie, that is rapidly becoming the Bill.com of receivables.
We have three major product teams at our company. One is for the core functionality of the AccountingSuite™ product such as Documents, Forms and Reports. There is an API team which is for our Developer Ecosystem that creates integrations with us (DEco). Finally, we have a customization/custom projects team that builds public extensions, custom programming/extensions and custom data imports.
And on the sales side, we have two teams: an accounting partner team and a small-medium business team or SMB team. The SMB team extracts many of our customization projects from business prospects and existing customers.
Q: When and how did you get the idea for this solution?
My background is accounting, which was first half undergrad and second half real world in the 90s. From 2001 to 2011, I was an accounting software consultant for small to medium sized companies in the San Francisco Bay Area. I was a reseller and implementer for 3 Small and Medium Sized desktop products. Around 2008-2009 we started getting competitive with 3 cloud-based ERP packages. It made me wonder, "What is going on here?" Because there was a change, and I started getting recruited by some of these companies. So, I started looking into it, and I noticed what was missing in these cloud solutions we were competing against. There was a new solution from the eastern hemisphere entering the U.S. market on the lower end. I noticed that on the cloud there wasn't anything higher that was reasonably priced for small businesses on the cloud to manage inventory. So, at that time, 2008-2011, you started seeing these product start-ups doing 3D printing, drones, contract manufacturing. Yet, there was no cloud accounting and inventory solution or readily available distribution solution without someone having to do a bunch of add-ons.
Q: What challenges do companies and potential customers face?
Well, it is almost predictable. You know, most of these companies have been on desktop solutions, and now they want to come to the cloud. When they go to the cloud, they find that the features they had when they were on their desktop solution are missing with a cloud solution. And if not, they have to pay exorbitant fees to have them. So, that is the first challenge, and it is very predictable. The next kind of challenge seems to be copy-paste from desktop to cloud for handling of prepayments, inventory, tracking orders, assemblies, as well as the inability to customize a cloud solution.
So, those are some of the challenges that the companies and potential customers face here in the US market. When we talk about the US market, we talk specifically of a small to lower end medium-size business market, which is up to about, say, up to 15-million-dollar range (we will just use that). And these are the challenges they face.
Q: How does your solution help customers?
One of the ways our solution helps customers is that we centralize on the cloud things they need without bringing in so many add-ons. That is number one. They love that we have built a kind of a collaborative cloud supply chain and that they can stay in the 1C:Enterprise platform. Sure, they will use Amazon, sure, they are going to use Shopify, but they can still use their centralized system, such as the AccountingSuite, without a bunch of add-ons. And, of course, they love the fact that we can customize on the cloud. This is what drives so many people towards us. One more way our solution helps our customers is, kind of feeding off the customization on the cloud, is there is a developer network of 300 thousand 1C developers. So, if we need more developers, we can reach out on more and more projects.
Q: Why did you choose the 1C platform for your solution?
You know, the story of 1C and the founders is a great story, and I just love that. It was accounting, and I am an accountant. And 1C Accounting was their first big product. From the engineering perspective, software perspective, rapid development … that is huge for us. The idea that you could develop to one platform and then use it for, say, iPad and laptop is great. I love the idea of how it operates. When we built AccountingSuite, it was just business logic. The platform is there; just change the business logic, and that is it. Then I found out, "Oh! There is a network of 300 000 developers!" Granted, they are mostly in the Eastern hemisphere, but that's fine. That was a huge win. And the fact that there were 14 000 partners … like "Ok. These companies trust this platform so much that they are willing to bet on this platform!" So, that gave me a lot of confidence. There was also a similarity to the other platforms I worked with before, so there was a comfort zone for me as well. And then, at that time, it was 2011-2012, there were already 1 million businesses on the 1C platform, so I already knew it was a proven platform and proven tech.
So, coming back… It is easy to build on, easy to change what you’ve built, and it is very robust. With that robustness, what I love is that while on the SMB market, we can still build on an enterprise engine, the same engine that you can build ERP software that competes against global leading software companies. And we can take that engine and bring it to the small business market here in the US for companies and accountants.
And last but not least, you will always hear us say this, the customization capabilities. That is just icing on the cake, but that is really awesome.
Q: What other 1C technologies do you use and how?
Great question. So, for our 1C tech stack, which means that we are using 1C:Enterprise for many different aspects of the product offering and underlying technologies: platform, web service, extensions, customer data analytics, internal system administration, internal analytics, and customizations... we built the AccountingSuite on the 1C:Enterprise, of course, currently, 8.3.16, then 8.3.17 is coming up. Then the 1C:Enterprise sits on top of 1cFresh, which is great because we are a cloud solution, and we need to be able to scale. So, the 1cFresh allows us to scale in multiple ways: not only to scale our core product subscription service, but it also helps us scale for the customization business. Then other additional technologies that we use include the QMC product (the QlikView Management Console), which allows us in the product team to analyze where people are using the product, the number of transactions, where there is slowness, where there might be issues with people posting. Then it also allows our admins' team to analyze some of the backend issues as well, and also strengths …where things are going fast and where things are going great.
And in addition, just recently, we started using the 1C AI server. For right now, we are using it for just one project, specifically for the categorization and matching of bank feeds.
Q: What advantages does your solution give to your customers due to 1C technologies?
It is definitely enterprise capability for small to medium-sized businesses (or SMB as we call it). The ability to quickly and rapidly change the existing functionality. Moving on to user use… it is multiple tabs for documents, lists, and reports, which is great because this is a huge advantage in the cloud. Also, what is great is that in on-premise software, but in ours, we have tabs, and our users love that. Another similar advantage is the multiple tabs for entities or clients. CPAs (Certified Public Accountants) love this. So, if I have ten clients, I can open up ten clients and go to each one quickly. Thus, if I'm working with one client and I get a phone call from another client … boom… open it up, work on that client, give them the answer, close … boom… and now I am still back to the client I was already working on, so I don't have to get out of one client to get to another, and that is a big issue in cloud, and we are able to get around that issues. Again, CPAs love that as well as some of our business owners who have multiple businesses.
And last but not least, it is customizations on the cloud using the 1cFresh technology. In 1C:Enterprise 8.3.16, we have started utilizing the improved extensions technology that is built-in, so there have really been some advantages that our customers are getting due to the 1C technologies.
Q: Who are your customers?
All of our customers are based in the US. It doesn't mean they don't have an office outside of the US, but still, they are based in the US on a national basis. Fifty states and we have customers in all states, but the majority of our customers, which is about 75-80%, are accountants and CPAs. So, that's the accountants and CPAs that service the businesses. That is the majority of our customers. The business sizes range from 1 to 20 employees for each business, except when you get some of our customization clients that are bigger businesses. They are almost to the midmarket, but that is what the customizations allow us to do; it is to go upstream.
As for industries, we've got music, distribution or light distribution, logistics, some light manufacturing, and agriculture as well.
Just a couple of examples, there is a chocolate company, The Good Chocolate, that distributes through Amazon, its website, and also to different stores nationwide.
We've got a company called Independent Distribution Collective. They distribute a lot of media for about one thousand artists and different companies. We have other examples as well, but that is just some of our customer base.
Q: What are your goals for the next few years?
For right now, we are going to continue growing and building the customization business, which sits on top of our existing AccountingSuite platform stream business. We'll also do customizations that may not be a part of the AccountingSuite solution, but those are more kind of one-offs. We will also be adding more 1C extensions to our existing AccountingSuite offering and service.
Also, we are going to be building a trusted 1C developer partner network and start giving some of our preferred partners opportunities to sell on our extensions store.
In addition, we will be adding more integration partners since that is the key for the US market. By this I mean outside integrations that integrate to AccountingSuite either with the use of our API or we use their API and integrate it inside of AccountingSuite.
And last but not least, we are going to be adding the 1C AI technology to our existing applications.
Q: What advice would you give to other ISV companies working with 1C?
When building products and solutions, don't get overly confident but also know that anything is possible with the 1C:Enterprise platform. Have solid communications with the platform team and the platform community. Don't try to do it by yourself; instead, really work with that community. If you have any recommendations, please send those to the platform team.
Also, you're going to want to find a niche or a vertical where there are existing pain points, where there is already a problem, and still, there is no solution. Here is an example: CRM. Believe it or not, in some markets, it has only about 30% penetration, so that means that 70% of that market doesn't have CRM. So that would be considered a pain point.
And you must remember to do the following: teach engineers to think from the user perspective, not just solve the problem with technology. But would your friend who never used 1C be able to use your solution? If so, it is scalable.
Also, very important, and this can be tricky, allow the Sales Customer Success in QA Team Leads to be highly involved in the decision-making process about how the solution should be designed.
And with those, you will be a very successful 1C company.
Below you can find some information about the solution.
About the AccountingSuite™ Solution
AccountingSuite™ is a powerful, all-in-one business application for accounting, cloud banking, order management, inventory management with assemblies, e-commerce, payroll, project accounting, time tracking, and 3rd party integrations into one cloud-driven platform. The solution is built on the 1C:Enterprise platform, which powers over 1.5 million businesses worldwide and is a top platform for corporate automation.
Cloud Banking connects to over 11,000 banking institutions, syncing customer transactions automatically.
Accounting & Reporting gives business owners fast, customizable access to the financial information and reporting tools they need to make critical business decisions.
Sales & Purchases. The Sales Module gives business owners and entrepreneurs flexibility in orders, invoicing, customer returns, customer refunds, and accepting customer payments. In turn, the Purchasing Module makes purchasing, vendor management, and receiving inventory fast and easy.
Cloud Commerce connects to any store a customer conducts commerce online.
Inventory Management allows users to track inventory levels, orders, sales, RMAs, and deliveries from anywhere, at any time.
Project & Time Tracking keeps track of employee and contractor time on projects, allowing customers to manage project costs, income and create billable Time and Materials invoices efficiently.
3rd Party Integrations using our versionable API at developer.accountingsuite.com or deep integrations built within the product by our 1C Engineers utilizing our technology partner's APIs.
AccountingSuite™ allows specify preferences for dozens of options throughout the solution, like currency, sales tax, default accounts, units of measure, locations, and inventory assembly.
Multiple tabs. A horizontal toolbar at the top of the screen displays a tab for every page users have visited so that they can return easily.
To learn more about the solution please visit https://accountingsuite.com/