Jason Staats: AI, finding your niche, and leveling up your tech stack

In this engaging webinar turned into podcast, Jason shares insights on how accounting firms can grow and thrive in a rapidly changing landscape. He emphasizes the importance of specialization, the impact of AI, and the need for firms to adapt to market trends. The conversation covers common pitfalls, the role of private equity, and strategies for effective AI adoption. Jason also discusses the significance of social media in building a brand and offers advice for career progression within the accounting profession.

Takeaways
Specialization can lead to higher profitability.
Understanding your target market is crucial for growth.
AI is transforming the accounting landscape.
Firms should focus on high-value clients.
Private equity is influencing the future of accounting firms.
Change management is essential for AI adoption.
Networking can provide valuable insights into tech solutions.
Social media is a powerful tool for brand building.
Career progression relies on interpersonal skills.
Embracing technology can accelerate career growth.

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Transcript

Jason Staats (00:05)
welcome everybody to today's event, Ask Jason Stats Anything. Jason, how are you? Good to see you.

Davis Bell (00:11)
I'm good. Great to be here. Thanks for having me.

Jason Staats (00:13)
Yeah, of course. So I'm Davis Bell. I'm the CEO of Canopy. I'm extremely excited to be joined by Jason. Jason is, I think, the closest thing we have to a celebrity in the accounting industry. I see him at events, and he's like people ask him for selfies, which they don't ever ask me for. So I myself am a little starstruck and really, really grateful to be here. So we got tons of questions during registration.

And we're going to answer as many of those as we can live. And if we don't, then they're going to get answered on Jason's podcast and shared on his blog afterwards. But before we dig in, I want to just introduce Jason. He's spent 12 years in public accounting, started as a tax preparer before acquiring and scaling and then exiting a $5 million CAS firm. He's now a leading voice in the accounting profession. He's known for creating practical, forward-thinking content through his platform, Jason On Firms.

His podcast, his newsletter, video content, reached thousands of firm owners each week. And also the founder of Realize, a thriving community for progressive accounting firm leaders. Keynoted more than 40 conferences worldwide, widely recognized for sharing real world insights to help firms navigate change, adopt new technology, and build more efficient people-first practices. Also, I think just hit 50,000 followers on LinkedIn I saw the other day. So congrats on that. Very cool. I'm excited to have you.

Thanks for being here.

Davis Bell (01:32)
Thanks, man. This will be fun. Thanks for everybody for turning up,

Jason Staats (01:35)
Yeah, seriously. I think with that, we're going to go to our first poll question. So Jason, we're going to start a little bit here with firm strategy and some of the higher level things.

What I want to first ask is if you still own your firm today, where would you be investing time and resources to grow your firm faster and more efficiently?

Davis Bell (01:55)
Well, I think it's I think it's just being more in tune with with who you're trying to serve. That's probably the biggest blocker for most of us still is the fear of getting away from serving everyone and being willing to narrow down to a more specific type of person. I went to a new barber a few weeks ago and I know some accounting firms that just work with barber shops and salons and all that. And I'm talking with this guy. He's been doing this for like 20 years and he

He asked me what I do and that's just always a ton of fun to try to explain. I asked him about like, who does he work with? This guy for the last 20 years has only ever been working with generalists, just very traditional accounting firms. And I'm like, you know, there's firms that just work with barbershops. And he was like, I mean, he just lit up like that blew his mind. He was so excited.

And us on the other side of that, we like to say, it's all the same. It doesn't make a difference. But like for the, for whatever reason, for the entrepreneur, they get very excited by that. If they can be served by somebody that is, you know, attuned to kind of what they do. that's where I would be pushing as like for a specific avatar.

Jason Staats (02:57)
I think that the interesting thing to me about that dynamic is accountants like to buy software that's built for accountants, right? Like that's the thing for sure. We only build for accountants and we get asked, are you going to build for lawyers or wealth managers? And we're always a hard no on that because there is just a lot of benefit to that. So I think that principle applies certainly in reverse. What do you think is behind the fear of

of not being a generalist? it around just, there enough people? Are there enough barber shops in the world? Or is it just fear of turning away money? What's behind it, do think?

Davis Bell (03:36)
A lot of it's just not having done it before. So like the naysayers who aren't into it, they usually haven't experienced both sides of it. But I mean, think it's it's the fear of having to walk away from what you know. There's a book, The Win Without Pitching Manifesto. The analogy they use is like you're standing in a room full of doors and you know, if you walk through that door, you can't go through all those other doors again.

But what you don't know is when you walk through that door as you're in another room. like, we just kind of have this limited mindset of what we see and can do today without recognizing that if we actually commit on going deeper on one specific thing, there's actually going to be a whole much more nuance there that will be every bit as much fun.

Jason Staats (04:19)
Sure. Do you have suggestions for maybe picking one? Do you think about it from the perspective of an underserved market or a personal affinity? How would you advise someone who's like, okay, Jason, I believe you, I'm going to go find my barbershop set of clients. How would you advise them to think about

how to pick one.

Davis Bell (04:43)
for people with very expensive pains. That is, if I can come in and solve that, there's a tremendous ROI to their business. And not all pains are made equal. That makes it very easy to come in and command kind of top dollar for what you do, because that is like a really core expensive problem you're solving. I want to solve rare pains. The more rare the pain is, the less alternatives there are to me.

So if like, I'm just making something up. Let's say somebody that runs some sort of, you know, phishing operation or something like that has very specific compliance needs. And then any other firm that's ever been able to help them with this thing. Like that's a rare pain. I can solve that for them, then we're kind of one of one. But then third, depending on the type of firm you're trying to run, if this is a, by and large going to be a single owner,

sort of practice where you're building a team around yourself in a perfect world. It's something that you enjoy, that you can actually be energized to go and talk with these people every single day. And there are exceptions to this advice, but people like to say, like, don't make your hobby your job. And I've just always thought that like, as life advice, that kind of sucks, like take all the things that you love and run away from them.

The cool thing about accounting is everybody needs accountants, right? is there a way that you can marry doing the accounting with something that you're passionate

Jason Staats (06:02)
Yeah, so for me, like a barber shop would be a bad fit as an example.

Davis Bell (06:07)
I actually

thought that and I didn't know if it would be okay to make that joke, so I'm glad you did.

Jason Staats (06:11)
But yeah, you're saying, hey, you're a surfer, go surf surf shops. You get to be around surfers and surf shops and it makes your job that much more enjoyable.

Davis Bell (06:19)
Yeah, ideally, I mean, ideally they have both expensive pains and the money to pay to solve those pains. if you're into golf, golf caddies, like every one of these little spaces, there's kind of a whole ecosystem of different types of folks that you could serve. And that's almost certainly better than, I don't know, stumbling into something that you don't have a passion for.

Jason Staats (06:37)
And I think, mean, correct me if I'm wrong, but I would imagine the specialization actually drives those premium prices, right? Because if you're doing, if you're just general purpose 1040 person, like there's lots of folks that do that. Whereas if you intimately understand the needs of a golf caddy as an example, you're probably going to be able to charge a little bit more for that.

Davis Bell (06:59)
You ought to be able to. It comes down to like, are you actually solving these pains in a higher ROI way than a generalist firm would? Oftentimes, we're afraid to like commit to niching down or it feels like this big dramatic thing to do and so you don't start when in reality building a niche just happens one client at a time. And the only world where you're ever going to commit to that niche is where you've got a small number of clients and you can see that they're

much more profitable than your traditional clients. And then just keep baby stepping into that. Like it's not until you have a mountain of proof that this is much more profitable work that you'd really like burn the boats and rebrand yourself as, you know, the golf caddy firm or something like that.

Jason Staats (07:40)
I mean, my mind is always boggled. We was talking to a customer of ours, and I won't mention the niche because I don't want to let everyone know. But I mean, it was so micro, it was so narrow, and it's a big firm, and it's all they do. And if you'd asked me, like, do think you can build a large accounting firm in this niche, I would have been like, no. But obviously, I didn't know what I was talking about. I think that main fear of, like, is this big enough? Can I make?

Can I grow and become big? unfounded a lot.

Davis Bell (08:06)
That's a huge blocker. If we think back 20 years, pre-internet, how are going to build your accounting firm? Are you going to rock up to chamber meetings and that sort of thing? If you want to work with dentists, and there's three dentists in town, good luck. You probably have to run a generalist firm out of necessity. These days, we've got the internet, which can help us find people in just very high context ways. And the way all these algorithms work is on like,

It's not really based on who you follow anymore as much as what you're interested in. if you're just out there having conversations about the tax implications of being a golf caddy and traveling 50 states and international and all that stuff, it unlocks a way more micro opportunity than there's ever been before.

Jason Staats (08:51)
absolutely. Awesome. let me ask you another question. You talk to lots of really smart, forward-thinking firm owners and operators. What trends are they preparing their firms to either play defense against or take advantage of?

Davis Bell (09:05)
Yeah, I mean, I know we're going to talk AI, but I think we oftentimes don't think about AI's impact on the broader ecosystem of alternative solutions to us. take something like a TurboTax, which now has fully done for you offerings. Basically, it's an accounting firm. AI is going to actually make those things vastly better.

set to improve and continue coming up market. Right now, I'd argue there's a pretty big gap price wise between a small business owner that wants to go to like a pure software or productized solution and pay 300 bucks a month for bookkeeping or 1000 bucks for a tax return or something like that. I'd say there's a pretty big gap between those productized solutions and working with a professional shop. And it's too bad because you end up with folks that's like, don't

may not have the money to pay what a pro ought to be paid for that work. But then the alternative really sucks, like DIYing it or going to a product solution that just won't do it well. I'm hopeful that actually productized services come up a bit to fill that void, but it will continue putting pressure on tax pros to keep going up market. I TurboTax, full service.

Small business tax prep federal only this year cost $1600 for a small business owner to come up talk with a tax pro that they'll never again meet like won't offer them support if they get a notice or anything like that. That's federal only and I would hazard a guess that the national average for tax firms like what they charge for small business tax prep just for doing the forms like this isn't bookkeeping clean up or anything else, which is a big part of the work, right?

I would argue the average fee is probably less than $1,600 right now. So we kind of got to keep an eye out for the rest of the market and what's happening to make sure we're not setting up a camp somewhere where kind of the big automated solutions are. But that's probably a good thing for us in the end because we're delivering a more premium service.

Jason Staats (11:02)
Yeah. that's sort of classic disruptive innovation theory, It's like to start at the low end. got to position yourself in a way that, you know, I think it's, I agree with you, it's good news in that, I think if it can be accomplished by software,

there was probably a decent amount of that work that people weren't wanting to do and it wasn't creating a ton of value. But I agree, you have to have an alternative to that. And I think that might go back to the niche thing. Those productized solutions are certainly not going to be able to speak to the golf caddies, as an example, in the way that someone who knows those niches intimately.

What are you seeing the most common thing firms do that's totally self-defeating? And I'm going to cheat because I saw your post there two ago about, know, it's like, raise prices, cut the turd. So, you know, you can certainly give that as your answer. But if there's other stuff, but I want to shake people by the lapels and just be like, come on, you're killing yourself. you know, stop doing this. And then the thing like, start doing this.

Davis Bell (12:00)
I mean, I would say most of us when we got out of bed this morning, we already know, we already knew what we needed to do. We just haven't done it yet. Right. I mean, that's like, that's the world most of us are living in is like, you don't need one more webinar or conference to tell you what you need to do. You kind of already know. But that's not a very fun answer and kind of just bums you out. I would tell you instead.

So every client list is made up of like A, B, C, and D clients, right? Like the folks who are paying you top dollar and are just so happy about it and the folks that complain about every bill, you mark it down, they still complain like you're D clients. I think a really common trap is when you're thinking about change, say you're rolling out a canopy or something like that and you want clients to use the portal more or something like that. Oftentimes we will look at changes like that.

through the eyes of our C and D clients who we know will complain. And we won't make the change that's good for our A and B clients. I could tell you, like, I I spent a lot of years letting C and D clients get in the way of building the firm that my A and B clients needed. So just like being willing to move those clients along when they're not a fit.

Knowing that not all client feedback is made equal like it really really isn't if they're C &D clients We probably shouldn't be working with them now, let alone three or five years ago. So why are we letting them speak into the five-year plan? That's probably the the toughest one. Yeah easier said than done

Jason Staats (13:18)
Sure, of course. Yeah, I think what we've learned is you do have to pick sort of who you're focused on. if you introduce feedback from the folks that you're not focused on, you want to think you're capable of sort of differentiating between the two kinds, but it's actually like super hard and they end up having an impact on how you think about your business and the choices and decisions you make. I think it is difficult and

you know, people want to be service oriented and we all have customers always right, like sort of stamped on our forehead. But you know, it's more like target customer ideal customers is always right. okay. Awesome. let's talk a little bit about one of the trends we're seeing, which is private equity, acquiring accounting firms, I feel like for the first year or two, I heard about this,

I heard about it more on panels at conferences than I did actually in reality. I think that's changed where we do see evidence of that. how do you feel that it's going to impact and shape the industry? And how would you recommend that folks who run firms think about it?

Davis Bell (14:20)
I think the PE model is super interesting. It's really easy to dunk on because I think there's been a lot of negative sort of side effects of that stuff. But the funny thing is like the PE model is actually more similar to the progressive accounting firm model that me and a lot of other folks talk about, like where they're moving away from the traditional partner structure, more like running it as a business with a traditional org chart. Like that is the PE model.

for all of the problems that it has. maybe somebody is going to nail it at some point. It doesn't feel like anybody has yet. You know, the interest in accounting firms, that's probably a good thing for accounting firm owners. I can tell you for myself, like, I don't know that for me, I don't know that an exit like that would have ever felt great in my case. Like, and this is kind of a personal decision of what are your goals? Are you ultimately building a firm to sell or not?

For me, I mean, I could tell you we got a lot of great staff and clients from other acquisitions and all the, everything that kind of shook out of those trees when that stuff happened. But for me, like if I'm building a practice, that is something that is kind of personal to me and I'm getting people to buy into the vision and all that and come to work for me to then do the, kind of do the rug pull and cash out and be like, I'm onto my next thing. That was always a tough thing for me to get.

get excited about. Not everybody's wired that way. Definitely folks that are more kind of &A oriented. And I would say increasingly, there's even &A happening like within networks of like folks that you know very well and you understand their firm. And that's, that's very different than going to a regional or PE to come in and buy your firm. So there's different flavors of it. They're definitely still figuring it out. I mean, it's almost certainly a net positive thing for folks who can run accounting firms. But it'll be interesting to see how it plays out.

Jason Staats (16:01)
Yeah. I think in some ways too, a market reaction to some demographic challenges of folks who just are at retirement age and wanting to move along. I would agree with you, it creates optionality, but as with any option, it has its pros and its cons.

Look, we would have our podcasting licenses revoked if we didn't get into AI a little bit, and we've already started to. we'd love to dig in a little bit. Based on your conversations with folks who run firms, how would you characterize how they're thinking and feeling about it? And then what are they excited and worried about?

Davis Bell (16:35)
Leaders are almost universally excited. Staff, if they haven't really meaningfully started implementing it yet, your staff are scared because it's this ambiguous thing they don't totally understand. I find firms that are actually leaning into it in a meaningful way, like everybody's excited, like they can see like, dang, like this is really helping with what we're trying to do. We can help more people and all that. So I think it boils down to kind of the

role within the organization. you know, if you're a leader trying to be mindful of everyone's kind of inherent self preservation instinctive, there's a lot of people telling them that this stuff's going to do what they do. And if that if their identity is kind of wrapped up, and well, that is what I do. And you mean this thing's going to come in and take some form of that, like, there's just going to be some trepidation there. The best way to demystify all that is, is just to get it in people's hands, like just to

make it a part of how you work, make the time for it. Change management, oh, change management in an accounting firm, that's hard, very hard. If you're change management blocked right now, pile of new AI tools isn't gonna change that bottleneck, you're still gonna be change management blocked. So difficult to navigate. if there's like, I think if there's one bit of advice I can give you on change management.

I think change management issues are normally incentive issues. So you come in, you're all excited. You're like, we're going to able to get more work out the door this way. And you put that in front of your team and it just kind of falls flat. Like we've probably all experienced that at some point. They don't have the same set of incentives that you do. They are not as, if you're the firm owner, they're not as, as enthused to line the pocket of the business owners and make the firm more profitable and all that as you are.

And until those incentives are more aligned, it's just going to be really hard to get people excited to that level. So a growing trend now is like firms leaning more into production-based pay and, and they're just being some financial upside for them to ride the wave with you so that when you're excited about it, they're going to be excited about it too.

Jason Staats (18:33)
Yeah. So a couple of things in there I want to sort of press on. So the first is, it seems you've noticed a difference between the level of fear and trepidation for those who haven't actually gotten their hands dirty with it versus those who have. Is that fair?

Davis Bell (18:48)
Yeah, yeah ambiguous things are always more scary, right?

Jason Staats (18:52)
Right. So it's like once people sort of wade into the pool a little bit and start using it and playing around with it, then it's sort of like, OK. And what do you think is behind that? Is it that they're seeing, yeah, this thing's not going to take my job? Or is it that they're like, wow, this actually is going to take the piece of my job. I hate it anyway. What's behind the relief there?

Davis Bell (19:14)
In some ways, it's like, well, if anybody's going to put me out of a job, I'd rather it be me. Because there will be an element of like, what we do will change. And this is how it's always been. mean, every task that's on our list today is on a path to extinction. Like it will either go away or it will get automated. And that's way it's always been. One thing that's changing now is maybe it's more compressed and it's happening faster. So...

If the work that we do today goes away or half of it goes away or 20 % or 80%, the bigger question is what will we be doing instead? There's a lot of other stuff we can still be doing and new stuff that'll probably come up too. So I think it's probably that context once you're down into it, you're seeing like, oh, sweet, I don't have to do this or that anymore. But I'm now seeing new opportunities that maybe we didn't have the chance to get into before because we've got kind of a better tool set to get this stuff off our plates.

Jason Staats (20:06)
Yeah. Yeah, I mean, I think that I agree with you. I think what's so fascinating about AI in particular is it's the first sort of emergent technology that you can ask that where you can ask the technology how to get good at using the technology. And so I think that, you know, it's like a PC came along and it's like, you know, you're like the caveman in Space Odyssey 2000 and

You know, got to crack open these manuals. And it was like a pretty steep learning curve, right? Whereas what I think people maybe don't fully realize with AI is that if there's intimidation, you know, I was talking to someone who's like in their seventies and they were feeling intimidated and wanting to understand it. And I was like, well, just ask, just ask the tool itself and it will tell you and how to, you know, there's prompts to get good prompts. it.

So it's unique in that sense and I think can alleviate some of that fear of the unknown different than any other technology.

Davis Bell (21:03)
we had a video recently that just got smoked in the comments. It a short form video that was showing how to do something in Excel with AI. And it pulled in a bunch of new viewers that had kind of no context about the channel. And they're like, whoa, you don't need AI for this. You can do it this way, that way. All these like super kind of power user things like write a SQL query for this or that. That's the better way. And it's like, you really think everybody knows how to do that? Like the point.

is almost no matter where you are on the skill spectrum, it can take you up. To your point, it's the most patient, knowledgeable tutor we've ever had. Regardless of where you are, even if you are the SQL nerd, they can write a better query for you just using it to take whatever you do and do it better. That's the point.

Jason Staats (21:45)
Yeah. You can also, I think what's amazing about it is like, we all have those questions that we feel like we should know the answer to. And like, once you're on the job for a little bit, you're like, if I asked this, people are going to be like, can just, you know, close the door to your office and be like, what is a, you know, obvious thing that you should know the answer to, which is kind of empowering. So, and then yeah, the incentive alignment thing is, critical because I think if people were thinking about, Hey, my job is, I sort of get paid.

by the hour to move this pile of papers to this pile, then that's going to be pretty scary, right? But if you can motivate them and incent them differently, then they're probably going to be a little bit more up for that change. So I guess maybe next question, I think about AI sort of in two ways, right? I think about this curve of capability, which is how good is AI getting?

quickly, you know, is a steep curve, shallow curve. I we can agree it's like pretty steep in terms of how good it's getting, how quickly. The second thing is the adoption curve, right? And those are different things. we, you know, we see lots of firms that are, mean, cloud computing has been around for decades and decades. we, you know, there's lots of folks who are still have a server in the closet somewhere, right? So even though we've had the capability for many, many years, the adoption is nowhere near a hundred percent.

talk to me a little bit about each of those. Specifically within the context of accounting, how do you see that AI capability curve moving over time and the adoption curve as well?

Davis Bell (23:17)
Yeah, starting with the capability curve. I mean, it's, there's a lot of people smarter than you and I that can't seem to agree on how good AI is going to be in 12 months, let alone 10 years, you know, I can tell you, there's such an unbelievably astronomical amount of investment going into these things getting better right now. So much about how you make tech decisions in a firm is like,

It's where they're at right now, but it's also where that solution is going to go long term. Like if you're looking to hit your way into something that's, that's probably going to keep growing AI doesn't seem like a bad bet. I mean, it's genuinely like the new space race, like the act of the annual spend is actually well in excess of what the U S or the Soviet Union spent on the space race. Like it's wild. so we'll get better. And even just looking back at the last three years, it's like,

exponentially better than it was in the early days. I try not to focus too much on prognosticating where that will be rather like what I ultimately have control over, is where is it at today and how can we use it? So the adoption curve, it's getting better. I especially in 2025, for whatever reason, I think it's become more normalized.

we've had for a couple of years now, very secure ways to work with AI, even with client data. that's still like a very, maybe emotional is not the right word, but people feel very passionately about like, is this okay or is this not okay? Not unlike the cloud era where it's like, no, unless that data is like in my closet, I won't trust who has been. So.

Part of it's just the passage of time, I think, and getting up to speed with that. Hopefully part of it is like folks like myself and what Canopy does, where we try to put out really helpful, constructive stuff that isn't like fluff marketing disguised as education, but actually like practical stuff that meets people where they are. it's like, okay, tell me how to actually use it. So I think the adoption almost out of necessity has to go up a lot because it is such an opportunity.

The cloud transition probably happened on a 10 or 20 times longer time horizon than this, where overnight you have a very, very good opportunity and it's costing you time and money as long as you're not leaning into it.

Jason Staats (25:27)
I agree with you. mean, to the point on investment, our friend Mark Zuckerberg just posted a person from Apple for $200 million of, know, I think Tim Cook makes like 76. So the amounts of capital just absolutely being dumped into the space is insane. And, you know, who knows, there's lots of, as you said, there's lots of smart people who disagree on where it goes. But

I think the adoption curve will be different. I mean, we already know that generally, like you look at these curves of the usage of chat GPT effectively versus other emergent tech mobile phones or personal computers or whatever, it's like not even close. So yeah, think we view that as our job is that adoption curve, Is helping folks adopt this in a way that makes sense to them and that is sort of in context with what they do.

And we view that as even a little bit of a stewardship as it relates to the accounting industry. I think where are you most excited about AI tools in accounting?

What are the ones that you're stoked about where you're like, my gosh, if I had had this 20 years ago, 15 years ago, it would have totally just changed my life.

Davis Bell (26:34)
Oh, you want to get a little sci-fi? Let's get a little sci-fi. Yeah. So everybody's talking about AI meeting recorders, right? They've gotten very good at creating transcripts from your meeting. know, soon as a day will come, if it hasn't already, where you'll join a meeting and just there'll be a whole bunch of AI recorders and just you. And you won't know at that point whether to continue the meeting or not. As weird of like a social shift as this is right now.

Jason Staats (26:38)
Let's go.

Davis Bell (26:57)
Maybe the thing AI is best at right now is being able to pull knowledge from a transcript from something narrative. And I'm super into the idea of what the future of knowledge automation looks like. So all the tools we've really had to date around accounting, they're really focused on data automation. But when I have, say you had the last decade of meetings recorded for not only you, but for your entire team.

And AI can make that instantly accessible and give really high quality answers based on the things that you've already said. What do we do with that information? And I'm biased here. I've got my podcast. We're closing in on 500 episodes. And we've got an AI assistant that can see into all those episodes. It's over 2,000 hours of audio. And I can ask it any question about running an accounting firm. And it instantly gives me a response. That's really darn accurate.

that has pulled basically a page of text from eight past episodes and synthesized that into like a three sentence answer. So we have that technology right now and it's really, really good. What does it look like to use that with our meeting transcripts? Because if you think about kind of the business concept of, know, selling your sawdust, like what's the thing that your business just creates that maybe you're not monetizing? It's advisory meetings. You're hopping on meetings with clients every single day.

So how can AI sort of unlock the collective expertise of your firm in some really interesting new ways?

Jason Staats (28:18)
Right. Man, I think that's so interesting. I think because so many of the interactions that any professional has, certainly an accountant, I don't know if it follows the 80-20 rule, but it's probably close, which is you're sort of answering the same eight questions over and over over again. There's the two where there's real value add.

that is very specific and context dependent and all of those things. But it does create this possibility of just being able to extend that knowledge that you're sharing and being paid for to lots of other people in a way that probably doesn't involve you directly, like your physical time and presence. I read a thing the other day that was

you know, talking about the great AI opportunities are those where there is a valuable service that was too expensive to extend to too many people, right? So it's like, if you think about the tax advice that a billionaire gets, right? Like it's, it's just, you know, far in excess of what you and I get. And what you and I get is far in excess to what maybe an early professional gets, right? It was just going to go to TurboTax. So I think what you're talking about, knowledge automation,

you can imagine that sort of basically democratizing these services in a really cool way that would have profound economic impact too, right? If suddenly everyone's saving money on their taxes and their books are better and they're more efficient, that's where you can kind of live in this world of GDP growing 10 % kind of a thing, the budget being balanced and all those kinds of things, which are fun to think about.

OK, knowledge automation. I'm going to ask you a question about how to get over the intimidation factor. If we think about that adoption curve, there are barriers that prevent folks from moving up the adoption curve. What advice do you have for people?

who maybe even with particular focus on smaller firms that don't have staff and IT folks dedicated to this, to get started on figuring it out.

Davis Bell (30:21)
Yeah, to dig in a bit, there's kind of two sides to AI adoption. There is the AI that your partners help you adopt. And so that is like the stuff that's built into Canopy that is just sort of embedded and native to the workflows that you do. But then the other whole half of that, which is huge, is AI assistance, helping you in very specific to your scenario sort of ways, like kind of the Swiss Army Knife assistant to help you with whatever you're blocked on. And

What makes it really challenging to adopt is every other app that we've ever rolled out in our accounting firms. The process looks like the big boss is getting in a room and deciding what's the right one to use and is it worthwhile? And then you pull in an implementer and you kind of go through this training journey and everybody then understands how all the buttons work. And when you push the button, it does the same thing every time, which is not the case with AI. But you can't do the same thing with

AI assistance and like showing folks how to use it. Learning how to use AI assistance almost has to be more bottom up because it can serve very specific to you needs that maybe only you have in the firm. So it's tricky because if you come in and if you just manifest, well, here's 10 use cases for how to use an AI assistant, you're kind of missing the point. The point is like, and that can certainly work for kind of inspiration, but the point is that it can kind of do anything very specific to whatever it is.

that you need. my, I mean, my best advice for folks trying to get the team up to speed on AI assistance is you just need to meet with the team every single week and everybody shares, here's what I tried. Here's what worked. Here's what didn't work. Like the bigger surface area you have to see what other people are doing and just be exposed to other folks' expertise and what they're learning, the more you're going to absorb because there is no version of this where you can like, you know, stick

take the tablets down from the mountain and be like, here's all the ways to use AI. Like that kind of defeats the purpose.

Jason Staats (32:13)
Yeah, 100%. I mean, I literally just came from meeting with our executive team talking about how do we internally, I mean, we're building so much AI into Canopy, but how do we internally ensure that we're leveraging that? it is like, it's a lot, and we're a technology company, right? A pretty tech savvy group of folks, but it's harder than it sounds, right? There's a lot of trial and error. There's a lot of smoke out there. A lot of products that aren't great or that aren't great yet.

And hard questions. You mentioned, how much do I rely on my existing provider, like a canopy, to bring me some really cool AI stuff versus some of these emerging point solutions, independent agents and assistants versus, I mean, it's tough. It's not an easy thing. There's a reason people don't adopt these things. It's not just because they're stupid or lazy, right? It's complicated. And all that's in the context of a day job, which is kind of like, running.

burned. But I do like the idea of, we came up with one which is kind of like a hackathon, which is in an engineering context is you just let engineers disappear in a dark room for a couple of days and just put something together. It's ugly and gross and it won't work in production. But it gets the creative juices flowing. And I think we're going to try some of that on the internal AI side of like, hey, let's let all the different functions of the company just go mess around.

and get together and talk about it and get that creative process going. let's shift a little bit to broader tech stack of a firm. It can be challenging if you're a tech forward person at a firm to get everyone else on board. What advice do you have for those people? Let's say you're the just eager beaver.

tech person that's trying to push your firm forward, what advice would you give those folks for getting everyone else on board?

Davis Bell (33:56)
Godspeed, you're doing the Lord's work. Getting accounting firms kind of on to modernize tech and bring accountants around and all that. I mean, the biggest thing for getting your team excited, I think, at the end of the day, is incentives. But for the person in that role who's kind of wearing the tech champion hat and kind of looking into what's out there and deciding what to use next. I think the biggest mistake we make there

is we go out and we see like, here are all the different options. Here's what I think is best. But ultimately you have such limited information before committing to a tool and going in and actually finding like, man, it actually doesn't do this or that or the other thing. I didn't even know to ask this question. And oftentimes you'll go through, you'll change a bunch of tech and you will find that you still have the same tech FOMO and like tech stack dysmorphia that you've always had. And you actually

are no closer to like peace and not always being distracted by the next new thing than you were before. So I like my best advice is I think what we're actually in search of is confidence, is knowing that what I've got is good, if not the very best, then close enough for the next 12 months, because I need to be able to turn my brain off and compartmentalize change. I can't be perpetually

looking at all these new solutions and stressing the team out because we might do this or we might do that. The only way I've found to build that confidence is just to have a network of other folks from other firms that are going through similar tech transition. if I can go out and ask I see a couple of years ago, you went and you did XYZ, tell me what worked and what didn't work. If you've got a network like that where you can tap into those folks and see what they're doing, that's the only way that I know to really actually have

confidence to say, for the other smart firms out there that I look up to, here's what I know that they're doing. And I know that we may be here and maybe I can see a path to something better. But I at least have confidence in what that path ought to be. Rather than going down a rabbit hole like every time I get served an ad about an app that I've never heard of or something like.

So if you can build that network, there's lots of ways to do this. If you can build that network, that is kind of ultimately the most complete solution, I would say, to having confidence in your tech.

Jason Staats (36:08)
Yep. Yeah. And I know you speak out a lot on this and obviously you've built a community to that point. But man, there's just absolutely no reason to go to loan these days. I pre-internet drive across town or the other county and have lunch with somebody and grow them. like, it's just so easy now. And the time and money saved by not reinventing the wheel is

I think just incredible relative to the investment of belonging to Realize or going to trade shows or whatever. It feels almost criminal not to take advantage of those resources that you get from other firms and folks who've been down the road that you're going down.

Davis Bell (36:50)
And what's the alternative? Like, and I recognize we're on a canopy webinar here, but what's the alternative like buying based on what a software salesperson tells you? there's a lot of amazing people in this profession, but if that's your only source of information, like you know that that's fundamentally not like grounded in, you know, a more sort of complete perspective.

Jason Staats (37:11)
Yes. Five out of five Canopy account executives recommend Canopy is another one.

Davis Bell (37:16)
I bet they

do. Because he told them that they needed to.

Jason Staats (37:21)
this isn't software generally, it's certainly a thing in accounting, and it's a hard strategic question as a software company, and we've made our choice, but you have all-in-one platforms, right? One-stop shop, end-to-end, however you want to call it, and then you've got point solutions, standalone, that more do one thing, or maybe they do two things.

How would you recommend a firm think about that, right? Like what would you tell them as the best way to think through the pros and cons of each?

Davis Bell (37:46)
Everybody wants all in one. That is the best case scenario, right? You could just rock up to work and that one app will do everything. Ultimately, the right answer for you depends on how much of a specific feature do you need? Do you need a super robust client portal? And if you do, well then does your core set of tools, is it good enough or do you have to go pull in a specialty one just for that? The biggest source of tech stack bloat?

is not having the right sort of core operating system for your firm. Your practice management system is the most important tool that you pick in your firm besides your tax offer and your accounting ledger. Canopy is an example of a tool that I would put in the practice management system category because you want that core tool to do as many things as possible. The reality is for almost everyone when you get into it, like

there is no tool that does everything perfect. Because at the same time that all in one platforms are trying to build, you know, as good of a version as possible of all the things that you need, you've got other people that are just cranking on a very specific problem, because that's all they do is they just like all they get out of bed and they think about how do we do this one specific thing a little bit better. And as long as there's companies out there just cranking on those individual problems, you will still be kind of stuck between

Okay, is just this enough or do I need to also bolt this other solution in as well to serve the type of person that we're trying to serve? That calculus, that's kind of what it's all about, is being able to draw the line between what are the scenarios where that makes sense, what are the scenarios where that doesn't make sense. But I can say universally...

at the core of your tech stack needs to be a tool that will do as many jobs as possible because what none of us want is like 30 different things bolted together. I'm a real ecosystem guy, so like I love seeing the innovative folks doing new things and there will always be a place for them. But that's kind of the game is finding the balance, getting that core tool that will do as much as possible and then seeing beyond that what will move the needle for us.

in a meaningful way and is it worth the trade off of having to manage one more system?

Jason Staats (39:51)
I think that's a smart way to think about it. I agree, in the beginning of your answer, said, look, ultimately, everyone wants it all in one. And that's sort of, I would say, if we have one kind of guiding principle, that's been our guiding principle, is that all things being equal, if you could get it from one provider and it's good, people would prefer to do that. That's hard to build and takes a long time and a lot of capital.

That's why we've raised a lot of money and we just raised a lot of money was to pursue that vision. But I think we can acknowledge like that's not, know, Rome wasn't built in a day that's not done overnight and firms have needs today. And so I think, you know, they're they have to sort of like think through those trade-offs. But I would say product vision wise, we're definitely aligned. And I think that's, you know, we're well on our way towards that. But with acknowledging that there's there's some.

there are some gaps there that right now folks probably need to fill through some other applications. that's a hard strategic question, software company. And I think you can also, I advise folks, and with any software, not just practice management or accounting software generally, there are ways to understand in spite of what you might be hearing on a sales pitch, where a company is going.

And one of them is funding, right? It takes a lot of money to build really robust software. And I think that can be a clue around how much have they raised, and how recently have they done that. And then what are they talking about in their roadmap, webinars, those kinds of things.

let's talk about firm growth for a second here. You built a great business through social media. What recommendations do you have for firms when it comes to using social media to build a brand and drive firm growth?

Davis Bell (41:29)
Kind of going back to the conversation of there being a greater level of specificity possible than ever before. I think sometimes we forget that unless we are somehow visible, then folks simply won't know that you exist. It's not as if we go out and put out your shingle and say we do XYZ and folks are going to walk down the street and just find out about it. It actually takes a bit of effort.

most people these days, like there's an initial period where you're building your client list, but most firms, they don't need more clients. Like they've got, most firms are over capacity. So why in the world would I ever do any level of marketing, which man, you want a word in a social post or YouTube video, they'll send accountants running. That's it, Davis, don't use it. But everybody is like,

I mean, you almost look down your nose at an accountant that would consider marketing because you're like, well, I got referrals coming out of my ears and more capacity. Most firms don't need more clients, but every firm needs better clients. And the solution to every problem in running an accounting firm is clients that will pay more for more or less the same work. So if I can bring in another A client that's twice as profitable as a couple of my legacy projects,

We take that one in, we cut two legacy projects. man, there goes capacity, there goes staffing problems, there goes profitability problems. the fact that we end up like heads down just trying to keep our head above water with the people that we have trying to do right by them and make sure that we're delivering that, man, that is what ends up getting in the way of any sort of activity, be it being visible on social media or writing a newsletter or going to a trade show or something like that.

Doing that is kind of what brings the better, the next A client in the door when you're doing that very intentionally, which is kind of the solution to everything that AILs affirms.

Jason Staats (43:10)
Yep. Yeah, absolutely. Which goes back to our initial point around specialization. The A client is a function of lots of things, but one of them is the price that they'll pay. And I guess to the extent you're specialized, that's going to command a greater price.

we did get a couple of questions around career progression and leadership. maybe in our few remaining minutes, we can sort of cover those. So what's something you wish you'd understood about the business side of accounting earlier in your career that

might have helped you grow and progress a little bit faster.

Davis Bell (43:43)
I think accountants are very logical. At least I am. I you're kind of, you're, I mean, you're almost asked to be a robot. You're very logical and you're like, well, XYZ, like this is, this is better. And if other folks can't see that, that can be really frustrating. The folks that end up having the highest impact in firms are the, like the people who can meet other human beings where they're at, like regardless of where that is in their journey, whether they're afraid of tech change, whether they're open to it.

Like I think the folks that ultimately move up the ladder and resonate with the most people are the ones that can have their own values in the way that they think things ought to trend, but also meet other folks where they're at when those things don't align. Because we've beaten on this enough so far, but inside of those accounting firm bubbles, you got all sorts of different types of people. And such a big part of

progressing a firm and feeling like you could do something new and novel and have your impact, which is kind what everybody's trying to do when they're coming up is like, what's the thing I'm going to do that's different or better or interesting that will make me stand out? Usually can't do that by yourself. So it kind of boils down to even though the cool idea may be something novel and very logical, success ultimately comes back to can I play in the sandbox and get other people excited about this?

Jason Staats (44:55)
Yeah. Okay. Interesting. I guess, do you feel like and maybe maybe maybe a little bit focused on earlier career folks, what actions or habits do you feel like, help folks stand out among the ranks? You know, staff accounting kind of kind of level. You know, what what's is going above and beyond look like at that stage?

Davis Bell (45:19)
I hope it doesn't just look like being the last car in the parking lot. I think oftentimes it does in more traditional firms. But I would say it is, you know, being the leader without having to be put in that leadership position. So like the folks that inevitably get there.

are the folks that their peers look up to. you're, you are just, kind of are that person and you lead by example by supporting your peers, by kind of understanding where they're at and how you can be a resource to them so that they're on your side and they want to see you find success. There's the very, I mean, there's the very boring answer of, you know, realization and X, Y, and Z, but like, I mean, I was, I was a pretty mediocre accountant.

I think what I found that I really enjoyed was people and strategy and more of the sort of administration of the firm was what I enjoyed and I think was much better at than the core technical stuff. oftentimes it's going to be the non-technical things. Like you can technical your way up into a manager position, but if you're an awful manager, like that's where it's going to end. So it's probably all the other things, the soft skills and how you're getting on with the rest of the folks around you.

Jason Staats (46:28)
Yeah, I agree with that. I also think there's this really crazy opportunity for anyone, it's maybe more, it's more present for younger, earlier career folks is become the person who knows about AI, right? Like if you're the person who can kind of wield the black box that lots of other folks don't understand, that's like making a pretty material difference in your outcome.

outcomes and efficiency and that of others, like that's a pretty powerful career accelerator.

Davis Bell (47:01)
I imagine if chat GPT was around when you and I were in college or high school, I mean, we would have been wizards with that thing, right? I mean, we would have known that thing front to back. so grads right now who have spent the last two years with AI tools, like they will have a entirely different level of AI proficiency than anybody else in your firm. And that's a cool opportunity, both for that individual and the firm.

Jason Staats (47:23)
Totally. Hey, we are out of time. It is always a pleasure. Really appreciate your time. Really appreciate all you're doing for the industry and very much enjoyed our connection. Thanks, Jason. It's pleasure.

Davis Bell (47:34)
Thanks, man. This was fun.