We thought the questions asked in the discussions area in our Crowdfunding Raise were superb so we wanted to replicate them here. Please let’s keep the discussions going and put forward your ideas to keep growing Crunch (and therefore your investment!)
Investor query (originally posted on Seedrs):
Hi, congratulations first of all for brilliant idea! My question is about your competitors like Xero, QuickBooks and sage who already are well established in the area of cloud accounting, how Crunch is different and how you will deal with the competition and has edge over these established competitors.
Thanks
Our response:
Thank you!
Whilst I agree that Xero, QuickBooks and Sage are competitors, they follow the old model of using accountants as their channel to market, whereas we sell direct to our clients - the ultimate end user - and make the Crunch application super simple.
Crunch promotes a software AND service model, a complete solution so clients don’t have to go on the hunt for a good accountant and take a gamble on finding one. This is the new model and given our numerous positive reviews, our clients (we call them members) love it too. Everything in one place!
The world is changing and Intuit, who own Turbotax in the US, have been adding CPAs (their version of a tax accountant) so that clients can go through their IRS return with a CPA on hand. This has enabled them to leap ahead of the traditional competitors like H&R Block (like Tax Assist in the UK). They have also added bookkeepers to Quickbooks in the US (and realised how difficult it is to add service) but then also had to deal with their channel, the accountants, who were up in arms saying ‘you are treading on our turf!’. So in short, the competitors you mention risk everything if they move to a software and service model, Crunch doesn’t. Note Freeagent has tried to add this but we are unsure of it’s success.
Crunch controls everything via its automated platform and works with accountants, not against them. We fill our network with brilliant accountants who undertake the Limited Company Annual accounts and self assessment production and interact with the end clients (members) via the platform to answer any questions about that piece of work. We add huge revenues to these small practices and we check everything via our own accountancy team so it’s hugely efficient and to the highest Service Level Agreements (SLAs). Note all our accountants in our own accountancy firm are the ones that answer the everyday email, phone and video help to our members.
Lastly, we can now give away the software for free, forever. A fully usable accounting software with more add-ons that you can shake a stick at! Someone can use it for free forever or add the VAT add-on or pay for an hour with an Accountant or upgrade to the full service. Can Xero give away their software? Maybe, but it’s a dangerous game in cannibalizing their revenue stream.
We will use this investment raise to prove out Growth Marketing and get the numbers rallying. So far we have 70,000 community members and 20,000+ software users (inc Crunch Free) and 10,000 Software and Service members. We can grow this!!
Hopefully that answers your question. I have recorded some videos to explain ‘under the hood’ at Crunch which should be super interesting!
Thanks,
Darren CEO & Founder
