Interview with Taylor Mingos from Shoeboxed

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Site: Shoeboxed

In this interview learn from Taylor Mingos about cloud based apps that can help your freelance business. Shoeboxed is the company he runs, which can save you time by scanning and organizing your business receipts for you. It integrates with Freshbooks and other affordable, open standards online apps as well. Taylor discusses quite a bit about launching a startup, filling a niche market’s needs, and expanding abroad. So for those of you looking to expand beyond freelancing and launch your own business, this interview will be especially interesting.

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Editors Note: This audio interview was originally commissioned for Netsetter; however, that blog was put on permanent hiatus, so we’ve placed it here on FreelanceSwtich for you to enjoy.

Transcription of Audio Interview

Thursday Bram: Hi, this is Thursday Bram. I’m here with Taylor Mingos from Shoeboxed.com. Taylor, can you tell us a little about Shoeboxed and what you guys do?

Taylor Mingos: Sure. Shoeboxed, we’re a web start-up, a Software As A Service (SAAS) company, we mostly service freelancers and small business owners and we help them get their paper clutter-like receipts, business cards, bills, invoices-digitized with the data extracted totally by us. And we have a lot of integrations with other web apps, such as Outright.com, Freshbooks, Batchbook. We have a new integration with Salesforce. We help get your physical data into these really cool web applications.

Thursday Bram: How did you guys get started with the idea behind Shoeboxed?

Taylor Mingos: It’s been many years in the making, you know. I’ve run small businesses since being in high school. And being in high school, I ran my own video editing and post-production business. That was when Adobe Premier and some of these software packages that were very inexpensive came out, allowing people to do at home what traditionally big production houses had to do with very expensive equipment. And starting a business providing video editing post-production services-that was kind of my first foray into entrepreneurship.

And, kinda that experience, one of the things I hated most about owning my own small company was dealing with paper work, you know, invoicing people, keeping track of receipts for taxes and for documenting your expense log, billing clients, keeping track of dinners and stuff like that and equipment purchases. And that’s kind of where the idea first came about for Shoeboxed, was “man, this paper clutter is a really big hassle.” And people have been talking about the paperless office since the 1960s and we’re still not there yet.

And then kind of over the years, did a number of social media websites, dating sites, was involved most recently before Shoeboxed, in what would become the largest social networking site in Germany. One of the first in poise-it was basically a German version of Facebook-it was not officially associated with Facebook-became the largest social network over there. At that experience, while I was working there, it was clear that that company was going to be successful and exit for a large sum of money, we started kinda thinking about what were some interesting spaces to look at out there.

And we ended up keep coming back to this idea of really trying to bridge the divide between the paper world and all these new exciting stuff that is happening online. We saw a lot of growth in applications starting for freelancers and small businesses and thought it was a really exciting time to be involved. And you know, longer term where developing some software to help prevent generating paper in the first place, but right now we’re focusing on servicing the need of the marketplace, I guess, which is actually digitizing the paper with human verification into all these different apps.

Thursday Bram: Very cool. You mentioned that you saw a lot of room for growth in targeting freelancers and small business owners. Is there a particular reason that you felt that this was a great opportunity? Why did you choose to work with small business owners specifically?

Taylor Mingos: Right. That’s a good question. Well, I can answer that on a couple different fronts. Well, first of all, coming out of a social networking site in Germany, it was very clear at the time-not only in Germany but also in the states-there’s a big bubble I guess you could say, in social networking. I think in Germany alone, there were over 8 or 10 social networking sites for pets that were all Angel or VC funded. There were probably over 8 or 10 social networking sites for athletes that were all Angel or VC funded-and these are business models where you need to get millions of users to get even 5 or 10k a month in revenue-if you’re lucky.

And one reason we were interested was we saw this SaaS was a growing area, where there is actually a business model. You know, people charge for their service because small businesses and freelancers are usually willing to pay a small fee if the service provides value to them. That aspect was interesting. We also just saw, just as a trend in the marketplace saw more and more of these offerings. Salesforce of course was really, really well-known, but there were a lot of other things out there-invoicing, payroll, CRM, and so forth for freelancers and small businesses and we wanted to be a part of that growing market. And it’s a very quickly growing market. You know, 5 or 10 years ago if you were a small business owner or a freelancer, you had to pay an enormous amount of money that would have been prohibitively expensive. To get kind of a good ERP, your good full-out solution to managing a business. We’re talking tens of thousands of dollars probably a month. And now days, it’s 25 dollar packages here and there that you can put together and run your entire business in the cloud. It’s really exciting.

And the market just has incredible potential to grow. When you look at Constant Contact, which I think is the most successful in terms of users, you know email marketing software package, and I think they have, they are apublically traded company, so these numbers are out there, but I think it’s about 400,00/500,000 users. When you think about it for a second that there are 26 million small businesses in the States, it’s not that many. I mean, that’s a lot of users and they’re making an awesome amount of revenue, but there are a lot of small business owners and freelancers out there, that are only now just becoming aware that there are these products that can help them manage and market their business more effectively in the cloud. So, it’s a real growing space, with growing awareness. When email marketing companies, when companies like Shoeboxed talk to business owners, often times, unless they’re very web savvy, we’re not even having to sell why we’re better than some other solution out there. We just have to-most small business owners don’t even know that there are these solutions out there that help them run their business in the cloud. And that’s going to change more and more over the next couple years, and it’s going to be exciting for both freelancers and small business owners, but as well as the startups that target them.

Thursday Bram: I know that Shoeboxed is involved with the Small Business Web Directory. Can you tell us a little about what that is and how you guys got involved.

Taylor Mingos: Yea, I would love to. So, the Small Business Web is kind of a loosely organized-more of a manifesto than a club, I guess you would say. It was founded-Shoeboxed was one of the founding members, along with Outright, Batchbook, Freshbooks, and Mailchimp. Basically, what we really wanted to help advocate with the group was better open standards for transferring data between applications, as well as to help market each other a little bit. We have products that work really well with each other and in some cases, Shoeboxed would love to notify our users that a great thing that Batchbook is doing because we integrate with them and so forth. And it kind started as this manifesto to allow users data to be open and not kind of walled in, like some traditional companies would do, or desktop companies would do. Really promoting simple, open standards for exchanging data, promoting single sign-on, promoting things like this that are good for the user. And it’s grown enormously.

So we started the group at SXSW last year, and this year was kind of the one year anniversary. And it that year, I think the group is at about 180 companies that have kind of signed on to the manifesto, which your required to have an open API to join the group. I think Google Groups is officially a member, Rackspace cloud is a member and co-threw a party with us and some other small business web founders. It’s just really grown and there’s a lot of excitement for this. And members of the group are attending and kind of representing the group at different developer conferences and standards setting conferences to try to promote and really advocate for some really simple standards, so that all these apps that serve freelancers and small businesses can really work nicely with each other and provide a cohesive, unified experience.

Thursday Bram: Wonderful. I want to circle back around a little bit to how you started up Shoeboxed. How did you create a team that could put together-Shoeboxed has just grown amazingly in the past couple years-how did you put together the team that could do that.

Taylor Mingos: Yea, team building is an ongoing thing as part of a startup. Obviously, it’s very important who you have working with you. When I first wanted to start the company, the company I had worked at previously was acquired. I was finishing up my degree at Duke University, in the states, and I started putting together a team of people that ranged from people who had very little interest in startups and wanted to do it as a summer thing to people who had a lot of interest, people who wanted to try something new. And putting together kind of people who-that were willing to come with me to Germany actually and I’d pay for their ticket, their lodging, their expenses and so forth to help me start this company.

So the initial team was kind of a lot of enthusiastic friends and people I had known through acquaintances from Duke as well as people from the previous startup I worked at in Berlin-including Tobi, who is Shoeboxed’s CRO, had an investment banking background, also worked at a German startup. We went to Berlin and the reason we went to Berlin was just because that’s where I had the biggest contact network. Obviously contacts and knowing people is very important and I didn’t really have a contact network established in New York or Silicon Valley as much as I did in Germany. So we went there, talked with some of our mentors, got some feedback on the idea, raised an initial round, and then moved back to the states.

We moved back to the states because we raised the round to target US people. The IRS allowed scanned receipts and scanned documents and were ahead of a lot of other countries at the time. And we’ve been here in the Raleigh-Durham area since that move.

Thursday Bram: So I find it very interesting that you started around Duke and around Raleigh and Durham, when so many startups seem of the opinion that you HAVE to start somewhere else, like Silicon Valley. What is it been like to do a startup in North Carolina? Has there been benefits of working outside Silicon Valley? Has there been any challenges?

Taylor Mingos: You know, that’s a really good question. When we moved back to this area, it was primarily because we still had people that wanted to be involved in Shoeboxed that were still students at Duke. But we stayed-that’s no longer the case-we do have some interns from Duke, but that’s not the main reason we stayed here.

The main reason we stayed here is we’ve grown to really like the area. As a Duke student, I don’t think I was really that aware of what was going on in Durham, Research Triangle Park and Raleigh and Kerry, which make up the triangle area. But, running a business here, I realize there is a wealth of internet startups, there’s a wealth of gaming startups, lots of the big video game companies, like Epic for example, are located here, and there’s a strong community of people here actually that have run startups and have had exits.

On the Shoeboxed management team, we have about 7 or 8 exits for about 50 million dollars represented on the team that are all from local companies. We’ve worked a lot with companies in the area. iContacts is located here, Bronto, a number of other startups. There’s actually-I think-a directory of the area online for the entire area, as well as one that Shoebox helps sponsor and raise awareness of startups in the area-DowntownDurhamStartups.com. There’s a lot of resources here-more than in a typical city this size outside of Silicon Valley for sure.

Some of the advantages we’ve seen are because it’s a tight-knit community here, it can be very helpful working with different community members. The costs here, both in terms of HR-in terms of salaries, as well as in terms of rent, things like that are a lot, lot, lot smaller than in Silicon Valley or Boston.

One disadvantage of the area is there is obviously not as much capital here. I think that’s the biggest disadvantage. Shoeboxed was already funded when we moved here, so that wasn’t a big consideration was raising our first round. There is capital here in the area. I think you have to look a little harder than in Silicon Valley for it. And I think typically a lot of the institutional investors, the VC investors in the area, you know, might be a little more conservative than the companies in the Valley. But, there are great companies, great VCs here, great Angel investors here, there’s a very strong community.

It’s also a $300 ticket to get to Silicon Valley, so we’re there quite a lot for meetings and things like that, but for now we’re based here.

Thursday Bram: You mentioned that several of your team members went to Duke. Do you think that being around a University like Duke for somebody who doesn’t want to be in Silicon Valley would be a good criteria for picking a location?

Taylor Mingos: Yea, I definitely think it’s part of the eco-system. I mean, when you look at the advantages of any area, you’re thinking on a couple different levels and a couple different areas. One is access to capital. A big one is talent. And I think being near a university, plays into the talent side of that. You want to be in an area where people get startups. Where employees here understand how stock options work and understand what that is and they’ve worked at technology companies before and they’ve been involved in acquisitions in similar spaces before.

But you know, having universities nearby is also very helpful-great talent pool. There’s a lot of University resources in terms of networking events and things like that, that can be of great use. And Duke is an excellent university. Has really been growing its entrepreneurship network, doing a lot more events here in the Triangle. We’re also only about 15 minutes away from UNC. We have a couple of employees at Shoeboxed who take transit here from UNC-they’re still students. As well as we have some full-time members who are from UNC, which is Duke’s big rival school. And also NC State, which is located right down the road in Raleigh, has a really top-tier computer science and engineering program. It’s kind of the best one in North Carolina. So, that really does help, I think, keep the area strong, and feed the start up community with, you know, talent and energy and ideas.
And another thing here kind of on the resources-we actually have some incubators opening up here, Launchbox Digital is opening this fall, which is a second location for Launchbox which is a DC incubator. The Universities here, I think all have incubators. I know Duke does and NC State. And also the nations first casual gaming, video game only incubator is opening here, right near our office called Joystick Live, so things kind of also help keep students here in the area and attract talent.

Thursday Bram: Very cool. Now I know that recently you guys recently expanded and opened a new office in Sydney, Australia. Could you talk about how you chose Sydney and maybe a little about the challenges of opening up literally on the other side of the globe?

Taylor Mingos: Haha. Literally. Well, you know, we’ve seen a tremendous amount of interest and people starting foreign versions of Shoeboxed. International expansion is definitely part of our plan. We really liked working with the team that is now Shoeboxed Australia and kind of going through their ideas for the country. They have a lot of experience in startups. They’re a good team. They knew the area. We had been thinking about doing kind of a trial launch of one international company before going all out and launching in a number of different countries, which we’re doing fairly soon here. It just seemed like a logical fit.

We actually, when doing some research, found out we had a lot of Australian users that we didn’t know we’re Australian users. Our system wouldn’t let our Australian users sign up for our paid plans. It restricted to US and Canadian addresses. And a lot of Australians had found a way in the site, in this one page, where they could change the address and sign up. So we had people using us and paying 50, 60 bucks to ship stuff halfway around the world to us-and quite a few of them. We started digging in more and more and seeing that there is a tremendous demand and there is a very interested market, especially for our first international marketing. We went through kind of opening with this team in Australia, Shoeboxed Australia, and that was about a month ago, a month and a half ago. 

And another great thing is we actually launched as Seabit Australia, which is the largest tech conference there, and won an award for the best business application, which is really great.

Thursday Bram: Congratulations. So, with Shoeboxed, I would think that you would face a few concerns that would be an issue for other startups, considering that you have a business application and you’re working with companies, business owners, and will eventually have to take their receipts and figure out their taxes at the beginning of the year. Has there been any difficulties adapting the system for Australia and for other countries?

Taylor Mingos: Basically, our system is really, it’s designed by a team-we’re a very international team already in terms of our own composition of the management team and experiences. We designed the system early on, thinking towards internationalization. 
And making sure we were doing certain things, just to make it easier down the road for when we pulled the trigger. So, because of our software, it’s been really straightforward actually. And that is a lot of foresight and a lot of thinking and implementing certain things from the beginning that made it kind of easy for us to launch an Australian version of the software.

Thursday Bram: Great. I just have one more question.

Taylor Mingos: Ok.

Thursday Bram: If you had the opportunity to talk to people who were kind of on the edge about doing a startup, trying to make that decisions, would you have any particular advice you would tell them to consider before making the leap?

Taylor Mingos: I, my biggest advice for people thinking about starting a startup is to just do it. Start it, see how it goes, don’t over-plan, especially if it’s a web startup. You can start a web startup, a website, throw a concept up there, for free or for very minimal funds. And I’ve talked to a lot of entrepreneurs who have ideas, who spend months, years kind of planning these ideas and they never really get started, get off the ground. 

And I think if you have an idea, have a concept, don’t wait until it’s perfect. Don’t wait until you have everything ready. Just get it up there, get started, start measuring how much attention it’s getting, are things going the way you thought, and then iterate, iterate, iterate, and just get it out there. 

I think-that would be my biggest advice, is that if people have an idea, maybe they’re not willing to quit the 9-5 just yet, but just do what you can, get it on there. I don’t believe in trying to keep things secret, I don’t believe in keeping your startup a stealth startup for 2 years, because then what usually happens is it never gets launched at all. 

And I think that’s my biggest advice for entrepreneurs-if they have an idea, just go ahead and launch it as quickly as possible.

Get some market feedback. Maybe some market validation and then go from there. 

Thursday Bram: Great. Well, thank you for taking the time to answer our questions.

Taylor Mingos: Well, thanks Thursday. See you I guess next year at SXSW, if not before.  

Thursday Bram: I hope so.