FloQast on Seamlessly Hitting Product-Market Fit to Become a Favorite Unicorn
Found in 2013, FloQast made a good name among top startups in Los Angeles. Following a B2B business model, this company has helped over 600 businesses to manage their accounting department by providing cloud-based software support.
8 years ago, when Michael Whitmire, Co-founder of FloQast, was looking for a seed round for his new startup, he was rejected by over 100 L.A. investors. Now, this Sherman Oaks-based SaaS company has closed a Series D round of $110 million led by Meritech Capital, bringing the company’s valuation to $1.2 billion and officially marking it a unicorn. Let’s read on to uncover the secret for this growth.
The “Classic Entrepreneur Moment” That Led to a Solution for Manual Task
Whitmire got the idea for FloQast when he worked as a senior accountant for talent management software company Cornerstone OnDemand. As the company was in the process of going public, Whitmire noticed some issues with the month-end close process: it was disorganized and stressful beyond what was required. At that time, it was lack of tech-based solutions that could help auditors streamline tasks and avoid costly mistakes.
“Imagine having a sales team without a “customer relationship management” solution. That’s effectively how accounting has been operating,” said Whitmire.
In what he called a “classic entrepreneur moment”, Whitmire decided to solve the problem in a better way. Soon after, he left Cornerstone and started FloQast. The company’s minimum viable product was able to bring them into the Amplify accelerator in 2013. Its cloud-based software tackles the niche market of corporate accounting departments and works to improve their workflow and automate the process of closing the books at the end of each month.
The accelerator was specifically looking for SaaS companies at the time, something Whitmire now sees as a stroke of luck. Since then, much of what has contributed to the company’s success is the perception of a pressing need for software like this. Currently, there are more than 1,400 departments globally that use FloQast, including Zoom and Instacart.
Many of the investors – who may not accountants themselves – saw the company’s appeal as they have experienced the struggles of not getting their numbers from accounting in time. However, in fact, the company’s true customers are accountants. That is shown on company’s tagline, “By accountants for accountants,” encapsulates what appeals to the customer base.
Lesson as a Business: All about Product, Market Fit
FloQast’s tagline refers not only to the fact that two accountants co-founded the company, but that around 40% of the company’s staff has a background in accounting. As they once were in the customer’s shoes, they know exactly the product that is needed.
“That shows through in our culture, our customer service, the product, the brand,” said Whitmire. “People want to work with us because we’re one of them. We’re accountants, we get it, we’ve been there, we’ve been in the trenches.”
In fact, this company is not an accounting system as lots of people get confused it with packages like QuickBooks or SAP. It works in parallel with those accounting systems. It is a collaboration and workflow and team management solution: integrating with ERP systems, and pull out all the data needed, and automate the reconciliation process. In short, it has applied technology into accounting task.
That’s why this company’s big competitor is also in LA, Blackline Systems. The big difference between FloQast and its competitor in Woodland Hills, besides the history long-lasting, is the customer segment and the way they are approaching.
“They’ve solved it at the enterprise paint point, where we are at the mid-market. Our product was built specifically for the mid-market, and we’ve been riding the wave of IT budgets, which are starting to open up, and companies are really instantly signing up because this is a big pain point, from their perspective.” – said Whitmire.
However, the whole story was not as smooth as it is now. In fact, FloQast ended up scrapping the entire very first platform – which got this company into Amplify. The reason was it hadn’t approached the problem from the right angle. According to Whitmire, at that day, this company focused on unfit product function and market.
“I think the most interesting learning experience I’ve had, from building up the company, is how my role has changed over time.” – Whitmire answered the biggest lesson that he learned as far as an entrepreneur.
To overcome that crisis, the co-founders have to change their viewpoint and hired great people to regrow the business. The whole company at that time put appropriate product development and fit market into the centric consideration and worked for them.
And that action proved its effectiveness. Product development at FloQast started with feedback that the employees received from current clients and prospects. From there, they can understand what the major pain points are around the month-end close and how FloQast might fit in. From the product perspective, they’re focused on their core application and solving that pain point, and in time they go wider and start solving other problems around the close.
“Getting feedback is a collaborative effort across sales, marketing, and account management, and it’s rewarding to work with these teams to ensure our products address the needs of all stakeholders.” – said Alex Nordin, FloQast’s Senior Tech Accounting Consultant.
Now, FloQast’s matter is just continuing to sell, and scale. It’s noticeably clear they’ve found product market fit.
Boost Employee’s Attachment through Suitable Award
The key to FloQast’s continued success has hinged not only on the quality of their product offering but on the company’s commitment to transparency, collaboration, responsibility, and empowerment of the right people with the right support. This approach has also benefited their team at the individual level, thus create great working culture. FloQast has firmly established itself as a team-first organization while building significant momentum.
“To start, we simply tried to create a company in which we would want to work. From there, we continue to hire people who are great at what they do and who we enjoy working with. Ultimately, this strategy drove our culture and created what we have today. Finally, we have a great product that is solving a very real pain point in a massive market, which provides our team with a mission behind our work.” said Adey Tadesse-Heath, Director of Human Resources at FloQast.
“Our employees have always been what differentiates FloQast, and that will continue to be the case as we move through this next period of rapid growth,” said Whitmire. “It takes a world-class roster of teammates to build a startup into a unicorn and adding to our proven team of winners will help us maintain our trajectory for years to come.”
For the fifth year in a row, FloQast has been named to the Los Angeles Business Journals’ Best Places to Work in Los Angeles. In those years, the company has gone from the true definition of a startup to a unicorn. The company culture has evolved tremendously, but at every major moment of the company’s growth — from a handful of employees at the infamous FloQast house to the dumpy office at Ventura and Dixie Canyon, from the fresh new 10,000-square-foot office in Sherman Oaks to a hybrid-work model today — FloQast has maintained an award-winning company culture. So, what is that culture?
#1. The Transparency with the Company Growth
As co-founder and CEO, Whitmire always tries to be as transparent with his team as possible. That spirit can also be seen in any other members of FloQast’s executive board or employees. They can talk about various topic: maybe their behind-the-scenes details like their financials, metrics, investors, and market developments.
Overall, the executive board believe that it is really important for management to be open about what’s going well and what’s going poorly with the business. By this way, all the members in FloQast’s team would find a purpose within their role, which gives them more motivation to contribute to work.
“I think we all want to be part of something that matters. When there is an opportunity like the one that we have at FloQast, it’s much more fulfilling to help build something that will leave a mark. Whether that includes building a great product, creating happy customers or crushing quota depends on the role.” – said Whitmire.
#2. The Flexibility in Working Space
According to Tadesse-Heath, the goal of FloQast is to give its teams the opportunity to thrive by working how they work best. What’s important is how employees work, not where they work, so it only makes sense to implement a flexible policy that gives each individual at FloQast the best possible chance at success.
That’s why in a post-pandemic world, FloQast employees will have the choice whether they wish to work in an office (where available), at home or a combination of both – unlike other all-or-nothing policies from many companies — fully remote or office-only. Each team member’s needs are different, and the company is committed to creating the best environment possible for each individual in order to build further on its award-winning company culture.
As VentureBeat puts it, FloQast is well-positioned to support the burgeoning remote work trend, which extends to its own employees. With a rock-solid foundation, the company is optimizing the operation with a view to expanding its best and brightest talent team from across the U.S. and beyond.
#3. The Strong Belief in Teams and Company’s Product
As mentioned before, FloQast team put product, more specific is their customers’ feedback in the center of consideration and work closely together to support the problem along the way. In the other word, they have strong cohesion based on the mission.
“We have highly-intelligent people who are fantastic to work with. We feel we have a tremendous opportunity to make a huge impact on the accounting space and to change the close process for businesses accustomed to managing the process in an outdated, inefficient manner. We are driven to make a meaningful impact on our customers’ lives, and that’s truly inspiring to be a part of.” – said Amit Nayar, Vice President of Engineering in FloQast.
#4. The Hyper-Collaboration
“If you want to go fast, go alone. If you want to go far, go together.” This statement is definitely true in the case of FloQast. Over its development history, this company has always honored the whole team’s contribution.
There is a hyper-collaborative product development process at FloQast. In this company, they don’t limit ideation to a select few people: they gather product inputs from every source they can think of because they feel building great products is a team sport. Not only do they gather feedback from their customers, prospective customers, but they also take it from their internal subject matter experts, as well as use data and the expertise from our product and engineering personnel.
“You never know where the best product ideas will come from, so we don’t limit anyone from providing input. Our product and engineering personnel are critical to deciding what will be built and how and when it will be built, but the ideas come from everywhere.” – said Nayar.
The Bottom Lines
Going from zero to a unicorn, who is the leader in accounting workflow automation, FloQast has focused exactly on what drives its development: the product, customers, and employees. By making efforts in applying technology in solving the customer’s pain point, accompanying with improving internal ecosystem, the company has successfully stay true to its vision. After all, FloQast has been able to create a platform that optimizes the accounting process.