Human-powered Software Services

Your bookkeeper, now with superpowers
Your bookkeeper, now with superpowers.

I’m very interested in human-powered software services. I recently signed up for bookkeeping services from Bench which replaced my frustrating experiences with purportedly easy to use bookkeeping apps like Quickbooks and LessAccounting. Which is not to say that those options are bad software options, but Bench takes a completely different approach that I like much better.

Quickbooks et al have iterated on the same paradigm: let’s make the same DIY software with a simpler UX and more machine-learning, auto-tagging and other kinds of complexity. But first of all, I still am not a bookkeeping expert. No amount of auto-tagging is going tell me which of the 13 government provided expense categories my $700 Heroku bill should go under. Not only that, but reconciling expenses is still a pain in the butt and I hate doing it. But my company is too small to hire a full-time bookkeeper so I’m stuck fiddling with software, hating every minute of it.

Bench takes a totally different approach. Their “app” is barely an app. There are a few simple input features: upload a bank statement, email receipts to a custom inbox and send secure messages. Then there are some output features that let you view/share your completed books in a slightly more useful way than a spreadsheet. That’s it. One decent developer could probably build most of it in a weekend.

The actual bookkeeping is done not by you, not by algorithms, but by… humans. Bookkeepers in fact. People with professional skills and knowledge on how to actually do bookkeeping — something I and most other founders lack.

Wut! I thought software was going to automate all humans out of a job. I’m not so sure. I think there are lots of opportunities to leverage software to give humans superpowers. This is what Peter Thiel’s company Palantir does. They build powerful software that helps human risk experts analyze and predict threats in everything from financial fraud to terrorism.

Let’s look at some defining characteristics of human-powered software services:

  • The company hires human experts, with outside training to do a job for you.
  • Replaces complex existing software that (a) has a high initial learning curve and (b) requires specialized or opinionated knowledge to operate correctly.
  • Scalable recurring revenue pricing structure (not hourly or per job).
  • Very simple UX for the customer. Basic input/output that anybody can learn in minutes. The fancy software is used by the experts behind the scenes
  • Not just a marketplace. The company is explicitly saying “We will do this job for you” not just connect you with people and rely on user reviews to vet.
  • The complex software is used internally to give the hired experts superpowers to allow them to very effectively switch between multiple clients, onboard (“scale up”) new internal experts, monitor quality and minimize overhead costs. This is what differentiates the business from just going to Upwork and hiring a freelancer.

This is a fascinating paradigm that I’d like to see in more areas. Some ideas that immediately come to mind:

  1. Project management: Tools like Asana and Basecamp are great. While they are increasingly more powerful and easier to use, there is a still a big onboarding process to get someone to use your project management tool they way your team uses it. Nothing slows down and irritates a tightly run team like a new hire who is constantly tagging things that should be new projects, assigning tasks incorrectly and forgetting to link their bug task tickets with Github. A part-time project management expert that jumps into the team part-time throughout the week could just do a lot of this work: taking unstructured data from managers and turning it into tasks with appropriately structured tasks, finding incorrectly entered tasks and editing them, coordinating between teams. In the process training people on the most effective ways to use the tool and teaching GTD strategies.
  2. Web marketing and analytics: Again tools like Optimizely, Mixpanel, Kissmetrics and Google Analytics are amazing but the learning curve and setup process is very very high. I’d much rather be able to install one single snippet to my site that gives a skill web marketer the ability to inject code to track site metrics, create customer funnels, A/B test landing pages and run retargeting campaigns. Let me tell you in plain English the campaigns I want to run, you set them up and send me a weekly interactive report. I think there are some companies like BounceExchange doing something similar to this.
  3. DevOps for small teams: My company is too small to hire someone full-time for DevOps. But we are on a common technology stack: Heroku, Postgres, Cloudflare, New Relic… I would love to pay ~$500/mo for someone to periodically tune the app, check for performance issues and be on-call in case of an outage. But this kind of a service needs to be scaled over many sites and it doesn’t make sense to try to hire one freelancer for it. I’m actually surprised New Relic doesn’t already offer this.

What do you think? How else can this model be applied?

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  • Nat

    Structured finance is a logical next one. An structured finance expert (who is usually an expert modeler or attorney)’s time is actually best spent vetting models and flexing assumptions, not futzing around in Excel. Why not a prompt-based interface for collecting the relevant inputs, with the model itself coded, rather than built in glitchy, reference error-ridden Excel?

    • Hmm, that’s a good one Nat. Spreadsheet-junkie-as-a-service?

  • Good one, Tyler. This is something I have seen for a while as well, just didn’t have such a catchy name for it.

    I’m actually interested in listening more of your opinion regarding marketers with superpowers. An analytics/conversion freelancer sounds good. Wonder who you think is the target market for that. Solopreneurs with an annual $100K turnover like you? Reckon businesses with 10+ employees already have a full-time analytics guy. However you are currently hiring a support and bookkeeping guy (no marketing).

    What about inbound marketing or marketing automation? I see most SaaS lose most of their traffic because their homepage is go to pricing or forget about us. Then in pricing is like sign up for a plan or forget about us. Email courses work very well for those not wallet-ready visitors. Do you see a niche in building an inbound funnel and keeping it warm with lifecycle emails and content marketing?

    A couple of years ago, I bought a bunch of emails templates from appsumo. They were kind of an online app with pre-populated copy. You just change the names and few details, and it was ready to be copied and pasted. I believe there is a potential “Bench” in copywriting for intro videos, email courses, long sales letters, etc.

    PS just signed up for your ebook. Looking forward the launch.