A Paperless Way to Track Receipts
Les Spero, PhD, Founder and CEO, NeatReceipts
Time inefficiency is what motivated our company to develop a product to eliminate the time-consuming labor involved in preparing and submitting expense reports.
Preparing these documents took two days out of every month, taping receipts to pieces of paper, copying them, and then sending the receipts and expense reports off to corporate to be processed. It's a true arts and crafts project,a total waste of time.
In the midst of that frustration, my son Rafi and I sought to do something about the problem. I had been involved in many start-ups, so it was only natural for me. We decided to develop a paper-free expense tracking solution for small businesses employing business travelers. What we wanted, and eventually created, was a mobile scanner that would give customers, particularly the road warriors, a software solution that scans receipts, invoices, expense reports, tax forms, business cards, and other documents and organizes them into easily accessible databases.
Step one in our entrepreneurial process was to raise funds. We sought out Ben Franklin Technology Partners, a state-funded organization in Pennsylvania whose goal is to invest in start-up businesses. Matching funds were required to have them consider our idea. Our cash match, and their loan of $100,000 gave us $300,000 to finish and take the product to market. Within a short time, the NeatReceipts SCANALIZER was born.
Once the product was completed, a distribution channel was needed. We knew our product could be best used by road warriors, so live kiosks were set up in airport terminals, the stopping point for thousands of business travelers daily.
We started with a small sales team in a kiosk at the Philadelphia airport. Shortly after that, we developed a Web site utilizing MonsterCommerce.com, a site that helps start-ups build online stores. Before long, we were selling four to five units a day.
Early on, as sales grew, our staffed kiosks became a valuable way to collect customer research, and we discovered that our customers needed to organize more than just receipts and expense reports. People wanted to manage their business cards, documents, and invoices to clear all the paper clutter off their desks.
As we analyzed sales data, sales seemed to come only from certain parts of the country cities serviced by the airport terminal where we operated a kiosk. To grow, we would need to open kiosks in additional terminals and other airports. Kiosks were then opened in Boston and Newark.
Sales shot up to 125-150 units per month within the next three months. Sales volume continued growing, and our next move involved hiring a distributor. A consulting firm also was hired to help us think through strategy. It was difficult to be objective while in the midst of our own creation.
With the consulting firm's help, we focused on developing new markets and decided to pursue relationships with retail chains. Staples became our first retail partnership in 2005, and our goal became doing making the venture a success for both of us. That new relationship, combined with some savvy direct mail marketing, proved to be very successful and led to another upswing in sales.
In 2004, we hired a one-woman PR firm to create more awareness for our product. With her help, our first approach involved staffing a booth at ShowStoppers a tradeshow in Las Vegas showcasing consumer electronics. The press attention we received from that show was phenomenal. The New York Times published an article on ShowStoppers and showcased SCANALIZER. That exposure helped grow monthly sales from $40,000 to $100,000.
Shortly after, we were featured on HGTV's I Want That!, and we are fortunate that repeat airings of that segment continues to result in corresponding spikes in sales.
With attention to growth, we sought out PR services from a larger organization to help move our promotional initiatives to the next level. SCANALIZER continued to receive media coverage, and during one week in December 2005 we were featured in articles in four top-tier newspapers: The Wall Street Journal, USA Today, The New York Times, and The Financial Times. Our PR firm had hit a homerun. Soon after our product appeared on Martha Stewart Living, an exposure which also resulted in a blip in sales as well as residual sales activity.
In 2006, we found ourselves raising money again, this time, $5.5 million in financing with Edison Venture Fund. Our goal is to expand distribution through relationships with other retail outlets, two of which we're launching in the fourth quarter of 2006. Additionally, we anticipate increasing our presence in airports from four to fifteen in the coming year.
Starting and then growing NeatReceipts has been nerve wracking at times, but it has also been deeply rewarding because it allows me to work with my son, who I consider my business partner. In addition, our talented staff of forty professionals is task focused, and they have the freedom to set the parameters needed to do their jobs. As a result, we have very low turnover.
Our collective goal moving forward is to stay customer focused by continuing to improve technology and refine the SCANALIZER so our customers save time and resources and become better organized.
© 2006 Ewing Marion Kauffman Foundation. All rights reserved.