Interview with Michael Crincoli, President of The Neat Company - Part II

1/17/18

Michael Crincoli

Click here for Part IPart III

Simplifying work and reducing clutter through data digitization and organization

Michael Crincoli is president of The Neat Company. Headquartered in Philadelphia, Neat is dedicated to helping its customers become more organized so they can gain control over their documents, work more efficiently, and save time. The company’s scanners and software enable users to digitize key information from receipts, business cards, and other heterogeneous, paper-based forms of data. Neat integrates with various popular accounting and business software applications such as Microsoft Outlook, H&R Block, Quickbooks, and MailChimp.


EDWIN WARFIELD: You joined Neat in 2010, right before the company pivoted from hardware to software. Tell us about making the strategic decisions to adopt a new business model. What obstacles did you come across?

MICHAEL CRINCOLI: I started my career at Pioneer Electronics. Selling hardware into the marketplace without a very significant point of differentiation is very difficult. The fortunate opportunity I had when I joined this company, and really what made me successful here, is that the software application itself was my point of differentiation. The value proposition that we’re leaning on today from a SaaS model perspective is the same as it was in 2010 as my point of differentiation when I was selling hardware. For me, the passion around what this application does and what it means to the small business market, and what it means to the end users, hasn’t changed; it’s just the opportunity now to really focus on that and evolve that to much beyond what our scope was when we first started.

It’s very easy to be inward focused. I’m not taking credit for the evolution, because it was a collective decision over many people throughout our lifecycle, but operating from the outside in and looking at the customers and looking at the market, I’ve had a few experiences in my career where we didn’t do that—you know, our chairs were swung to the inside of the room, not to the outside—and you become more about what you can do, and not what you should do based on what the market is.

I would say the key driving factor is that things were evolving, things were changing, and you face obsolescence if you don’t react to those things. That was the guiding light in terms of “What’s happening in the market?” and “What do we need to do to focus as a company?” I think the transition out of hardware and some of those other things were a lot of business decisions associated with that, because margin structures and the cost to support hardware, the cost to acquire hardware—if you look at the complexity of a hardware business dealing with retail partners and all of the associated accounting with them, compared to a SaaS model with recurring revenue is a much different proposition. I would say several of those variables in concert with each other over time, with the board’s involvement, with the various management teams that we had over time—that led us down to this path.

It’s easy to say we are going to be a SaaS company; we don’t want to be in hardware anymore. What comes with one stage of your life versus the other stages of life is something called association. When people hear the word “Neat,” often they associate us with hardware. Also go-to-market: for years, we had a box with a solution inside of it and we parked it on the shelf of Staples and Best Buy, and the consumers walk by, and that was the handshake or the interaction. In addition to the product and the organizational changes that come with it, it’s really around how we communicate to customers, how we reach them, where we reach them—the importance in leveraging partnerships around that, so people can understand the solution.

The benefit that we have today, based on the history that we’ve had is that the brand is known. There’s a very strong association with expense management, spend management, so the big heavy lifting around “What does this brand do?”, there’s an understanding within the consumer segment: it’s about the association with hardware. The work that we have ahead of us from a marketing standpoint, and partnerships, and the way we position this product, it’s very important for us to make that pivot and focus on the value proposition of hardware, of the software itself and the tasks that we involve: partnerships with QuickBooks, association with things like the ProAdvisors, which are the accountants and bookkeepers and the teams of people that are out in the market, on behalf of Intuit and visualizing their products, getting those relationships, so we’re in those same conversations.

The same thing with the shows that we go to. We used to go to Consumer Electronic Show in Las Vegas, which was very much a hardware environment, a retail environment. Today, we go to things like QuickBooks Connect, Scaling New Heights, The Tax Preparer Show, Account Techs—those are catering the accounting of bookkeeping space but the small business market, so we build a presence in that market from a solution standpoint.

Connect with Michael on LinkedIn

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Edwin Warfield, CEO of citybizlist, conducts the CEO Interviews.

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