Solving a Truly Universal Problem, Competing with Software Built in The 80s, SMB Notes from Xero, and Other Observations with Tallyfor’s Co-Founders, Peter and Ben Wen


In the following exchange (2023’s last), Tallyfor’s co-founders, Peter Wen (@peteypete) and Ben Wen (@benwen), evoke a (much-needed) blank-canvas air to starting up a B2B SaaS business with their nerdy, lively, and forward-looking account of building in the tax space.

Situating a product’s universal premise
Building against (and with) decades-old competitors
Selling cloud infra and tax software
Finding an elegant price and why churn isn’t a problem (yet)
Hiring and onboarding as experts and beginners


Situating a product’s universal premise


All startups, in some ways, are non-obvious.

Why else would they exist?

Maybe it’s a nugget someone found in the sand. Maybe it’s something they’ve been ruminating over for years. Maybe they’ve experienced it at a company they had worked for. There are many ways to stumble upon startup ideas.

And sometimes other people might think an idea is crazy or not worth the time, it’s the founders who have to decide how they are going to change the world.

What are we changing with Tallyfor? Tax. How tax is done, collected, and thought about. Tax exists in every society. I often ask people jokingly, “do you think alien lifeforms have a tax system?” “Yes! To resource the building of a spaceship!”

Back on earth, Tallyfor’s go-to market is focused on accountants and tax professionals, but our grander mission is really about getting to the societal benefits of a streamlined tax system.

It is, if I dare say so, a universal thing.

We’re always asking ourselves: how do we automate that universal thing?

I don’t want to get too philosophical, but if you look at the evolution of language, of numbers and words, there could be an argument made that accounting came before language.

The fundamental business of commerce is trading between two humans. That’s predicated on numbers and accounting. No one can truly lay a claim (including Luca Pacioli, the so-called “father of accounting” in the Western world) on founding accounting. It’s part of the human experience.

Then there are all the undeniable intersections between accounting and computing: from the abacus to the mainframe computing. It’s everywhere and so closely tied to origins of software.

That’s why we’re building in this space.

Building against (and with) decades-old competitors


I was a CPA. I did accounting and taxes and financial reporting for 10 years. I didn’t follow the traditional path of being a CPA, but I saw the breadth of what that world entails.

It’s obviously an important piece of the business world. Know your numbers. Know how money comes in. Know how it goes out. What cut does the government take and so on.

I did all of it, very manually, for years.

Because that world remains technologically challenged. Software just isn’t built for that category first. It’s not obvious for an engineer/innovator like Ben to say, “hey, let’s build accounting software.”

It takes a domain expert to identify the gaps, to take the risks and build out a team that executes on the problems.

Later in my career, I was fortunate to join Xero, and learn about how a product gets built. Then I wanted to achieve what they had for tax.

A thing that isn’t obvious to most people is that accounting and tax accounting are actually two different things. Two different kinds of people do them. They’re done for different reasons.

The tax space is even more neglected from a software standpoint than bookkeeping. It’s also a little scary. It’s a little complicated. There are a lot of laws and rules to build tax software.

But I saw that no one was addressing these.

Of course, there are other products out there. If you’ve been to our marketing site, you’d notice we have this playful dinosaur chewing grass and there’s a meteor heading towards it. That’s the reality of this market today.

Most professional tax software was literally built in the 1980s. 1980s! These products are still very much cash cows for companies that built them decades ago. That’s what a professional is having to live with. It’s pretty obvious that someone should build better for this space.

I do think that the ecommerce category has moved the sales tax world ahead. Every single merchant needs to do it. The volume is tremendous. It had to be automated and increasingly digital-first.

What we’ve done at Tallyfor for tax professionals is that we’ve strategically picked the mid-point to organize the data. What accountants call the Trial Balance. Where some of the information is being summarized but not being prepared for tax yet.

We want to start here and then branch back up to the transactions or down towards financial reporting. The Trial Balance is our approach to attack first.


All of those companies that we poke fun at for being dinosaurs are also good partners of ours because we have found, and this goes back to finding an underserved market: We’re going after something that the main players don’t want to pursue because they have turf to defend.

In some sense, we’re a neutral third party that sits between these two sides. On one side of the program are these book/accounting providers like QuickBooks, Xero, and Freshbooks, and on the other side the professional tax products like CCH, UltraTax, and ProConnect.

Selling cloud infra and tax software


My background is this mashup of being: a technologist (my original calling), a computer science guy from college. Some finance. Then, doing a bit of enterprise sales (JPMC, ATT) at a startup which was acquired by IBM. Then realizing that I wanted to go upstream to marketing.

How has the transition been, for me, now, serving accountants and tax pros?

I don’t think there’s too big of a difference.

At the end of the day, when someone wants to buy something, it’s either because they’re feeling some excitement for a thing (ex: pumpkin-spice lattes; not holding that against anyone) or it fixes a problem for them. The aspirin that soothes a headache.

Adding to Peter’s scope for universality, to serve a need is a universal product goal. Those same things apply whether you’re selling cloud infrastructure or tax software.

The buyers for both of those things are very analytical. Both are able to consume high levels of detail quickly. Frankly it would have been harder for me to sell a general consumer product, because I’m quite a nerd.

So it’s been a natural transition.

There are big differences, of course.

One is always typing on the keyboard in a text editor. One is always typing on the keyboard in Excel. :))

In all seriousness, though, I will be the last person to say that I know anything about selling to the CPA market. We’re very, very fortunate that we have Spencer [Christeck] on the team. He was among Xero’s first US hires.

During his tenure with the Xero sales team, they grew their US base from under a 1,000 customers to over 30K customers. He held several other sales roles in the SMB space, mastering how to sell with a product-led-growth momentum.

I’m always watching him and cramming in notes as fast as I can. As much as I believe, there’s always a common thread between products, the actual, tactical go-to-market approach (PLG-first with Tallyfor) is quite different.

Speaking of product-led growth, I’ve worked at places that didn’t know much about having an online component, or what a subscription was. In the early days of SaaS, Marc Benioff was saying, “it’s the end of software.” Driving nerds (including me at the time) crazy.

“End of software, what do you mean?”

“No, no, end of software licensing!”

What we do with the SaaS world (with Chargebee in our case) is continuing that evolutionary progress from selling CD ROMs that had to be installed on one’s hard drive, to just having the desired amount of software subscribed to on a moment-by-moment basis.

I think it’s not said enough that this is fantastic both as a seller of stuff and as a buyer.

Finding an elegant price and why churn isn’t a problem (yet)


There’s been a lot of mini-testing in terms of pricing and charging.

Once we have that locked, our mantra is to make it easy for the customer to buy and know what they’re buying. To make it not seem like a massive decision like, “am I going to have to sell my Tesla or Corvette to buy this?”

That’s the fundamental lens.

There will be more testing and lessons as we go along. But I do think we’ve landed on something which is quite elegant. An annual subscription, that’s fairly priced. For $750 a year, you can get into the platform.

For growth, we have a priced unit. We call it a binder in the tax world. It’s a project. Maybe it’s a tax planning project. Maybe it’s a tax filing project or it’s an accounting services project. We call it a binder.

It harkens back to the physical three-ring binder, where people kept their stuff.

In addition to the subscription fee, we simply charge per binder, one price, and then they can just add new binders as and when required.

We’re young and early. So fortunately, we have very low churn at the moment. That’s probably because it’s a fairly sticky product. And there’s not many other alternatives out there.

It’s obviously a metric we’ll look at very closely as we grow. We have some hypotheses on how to keep it low. I do know from the accounting world that churn for this space has been historically quite low. Intuit has a very low churn rate on most of their core products.

And the lifetime value of an accounting/tax product is actually quite long. It’s longer than maybe most usual SaaS businesses. Because the products become a necessary part of what people do

We benefit from an inherent unmet need.

Hiring and onboarding as experts and beginners


Hiring, as a small team, hasn’t been a challenge.

Ben probably has some secrets on how we get our engineers. As mentioned, we were very fortunate to get Spencer, a good colleague of mine from my Xero days to join us as the growth guy.

All startups kind of go to their networks first. You have tighter relationships there. You have a better sense of understanding. We’ve found so far that being a small, efficient team is highly valuable, if you can impart the knowledge across the team and we very much do that (Ben is a great advocate).

He’s always like, “we have to get to a place where it’s not just in your head, it’s in everybody’s head.”

We’re very considerate in approaching why we’re doing it. Here’s the cost and the benefit and here’s your role in it. That’s something we do after we hire. Obviously, getting good engineers is really important.

In some ways, saying we do tax software automatically focuses the applicants, “Hey, we’re doing something in taxes, it’s not a gaming thing, but it’s got some math,” they go, “I love that.” :slight_smile:


Tax is as exciting as the next game from Blizzard or whatever.

That’s what Peter told me!

I think the important thing is that at a startup every role is super important. We’re such a small team. Whether it’s the engineering folks, or the customer-facing folks or the product folks, we aim to get everybody aligned.

We’re going through the process (like everyone), essentially going from an engineering-focused one, “hey, does the thing even work?” to a product one, “hey, does it work well for this market?,” and finally to a customer-facing one, “does it work well for these users?”

It’s also important to understand the sales process too. We make sure that we continue to be here to serve our customers and the market. In terms of domain expertise, to go back to the top of the question, it helps a lot to have domain expertise.

I still think tax is a four-letter word.

So I’m still going through the process of saying, “okay, how do things actually work?” But it’s been super important to have a domain-expert brother as well as a product-knowledgeable salesperson to tell me, “no Ben, tax is a three-letter word.” :slight_smile:

So, I’m slowly getting it.

But the externality of not being in the accounting and tax space has also given us a little bit of an advantage. Me, being an outsider…I literally have [graciously picks up a tome] Luca Pacioli’s book on my desk. The Rules of Double-Entry Bookkeeping and in Italian, Patricularis de computis et scripturis.

That willingness to go first principles is a little bit that I bring to it.

Peter brings the product domain chops and I get all nerdy with it.


Related reading from the Relay archives:

SparkToro’s co-founder, Rand Fishkin, on being a 2nd-time founder: " The low lows aren’t there, but neither are the high highs"
Basis’ founder, Bebe Kim, on making the personal (and software) transition from legal to finance


Thanks for sharing these notes, @peteypete and @benwen! Great to read how passionately you’ve built the company. Given its category, integrations must have held an important role at Tallyfor. Can see a bunch of them. How did you go about prioritizing them in the beginning when you were still shaping the product itself? Anything you’d do differently there?

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Thanks for the question Krish. The first few integrations were market leaders, Quickbooks and Xero on the accounting side. The tax software integrations were customer driven, I.e. more opportunistic.

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