329 - Engineering a Solution: How One Developer is Fixing Accounting with Code with Trakker Apps' Edward Kellman

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started. Edward Kelman, welcome to Listening with Leaders. I, I am looking forward to this conversation. You are one interesting guy. Professionally, you're a civil and structural engineer turned software developer and serial entrepreneur. What story. So let's get started. Tell us about your backstory.

Oh, I graduated from the University of Michigan in civil engineering. After a couple years, I got my PE right away, so I'm a licensed professional engineer for many years. I went into the general contracting business, and I was a general contractor for 30 years. During that time, I started another service business where we pump engineered bacteria into the drains in food service establishments. And I currently service about 200 customers monthly in that business. And then as an offshoot from that, I started an Amazon business selling parts for 3-tier sink repair only. Every kitchen in America has a 3-tier sink—wash, rinse, sanitize. And I told you I have a service business. It was in the restaurant business, and I noticed that every 3-tier sink was always busted up. So I put together a store on Amazon with all products related to 3-tier sink, and it's in the high 8 figures now.

So when you started out as a PE— figures, excuse me, 6 figures. 6 figures. Did anybody ever— did you ever think that you'd be out of engineering and be an entrepreneur?

I've always been pretty entrepreneurial, but even As a general contractor, I was entrepreneurial because I was self-employed. I've been self-employed for over 30 years.

So are you still doing general contracting?

No, no, and I'm glad to be out of it.

You sound like me, glad to be out of the law. So tell me about Tracker Apps. That's your latest brainchild.

Tracker Apps. After I did my Amazon store and I saw how profitable it was making digital transactions essentially and not meeting any of the customers. I wanted to go to the next level with that. So to me, that seemed to be a mobile app of some nature where I could sell my software if it was good enough without actually even knowing who the customers are. That's the ultimate for me because I deal with customers and we all know how tough that is. That's right. Both in contracting and in my service business. So that was the challenge for me. What did I do? I basically came up with a great idea. I took double entry accounting, which is a universal language used all over the world, the whole purpose of which is to generate a profit and loss and a balance sheet for a company. That's the method by which we generate those two reports. That every company really needs to report their performance. So I took the database, I made an Excel database of double-entry accounting, and I expanded it with extrinsic variables. And for this work, I received two patents from the US Patent and Patent Office. And it's really a revolution in accounting is what it is. And then I put the whole thing together into an ERP banking platform where banks can— I believe I can get 12,000 to 15,000 new accounts per year in my first year as my ERP banking accounting platform for a financial institution, which is my ultimate goal.

So tell me how you roll this out. These are— okay, let me back up before we get to that. I saw, I think I saw on your website that you were really sick of Quicken, which QuickBooks. It's a bloated, expensive program that used to be really great. And so many other software platforms has gone to, gone, gone down the tubes. What, what does Tracker Apps do that improves over the Quicken applications?

The first thing we do when we enter a transaction, let's take the accounts receivables module, for example, which is called Invoice for Business. This is a billing machine for anybody doing anything, including multi-user. If you can imagine creating invoices, putting them in your customer's email box with a pay button, you hit the pay button, you get transferred over to the financial institution where you pay by Visa or ACH typically. And then the financial institution sends a simple message back to me and I update my entire program and my aging report and my, my bank account gets a new deposit in it because they just collected the money at the bank. So I've done a complete integration between the bank account balance and the customer's books. In addition, the customer is now completely digitized in the cloud. Can access anything from anywhere. And when I told you that I expanded the database with additional variables, now I have all new analytical metrics, reports based on the new variables. These are reports that never existed— users, jobs, You can compare your job to all the rest of your customers and rank your jobs and see where all your performance is coming from. It's just packed with new data metrics that didn't exist for analyzing the other side of your business, not the profit and loss, not the balance sheet.

Is this app phone-based or is it all platforms?

I'm sorry, what did you ask me?

So is this a, is this like a smartphone-based app or can it work on a desktop or an iPad?

It's meant to be used on the smartphone. Okay. Unfortunately, all my demonstrations have to be done on computer, and we use the browser-based version. But you can really fly through when you— for example, if I pull up in your drive and I say, hey, you got a stump, you want me to grind it for $300? And you say yes, you go on here and you push Expense, you enter the name, you might have to enter this particular time a new customer data, but you throw in the customer, the amount, what you did, you hit enter, everything's automated after that. Within 30 seconds, you can have an invoice in his inbox. Wow.

And this is all happening in the cloud? All in the cloud. So how do you make money on this?

That's just my first module. Okay. Of course, there's accounts payable and How do you make money?

How do you make money?

I want to make— I want the financial institution after a year of free service to charge their customers just like QuickBooks, because this would replace QuickBooks software, a certain fee per user per month. And I want to make a percentage of that. So I basically have a fee program like Microsoft where he makes a fee for every version of Microsoft that goes out. Only I've got it. I've upped my game. I'm getting it monthly. Okay. Okay. If I showed you my spreadsheet, you're literally making— 10,000 users would be $9 million a year for me and $2.25 for the financial institution at about $85 a month for this software.

Are you finding— are you finding banks interested in this?

I can't open doors.

You can't open doors.

One of my most frustrating issues going on right now, because I did this bootstraps and I don't have big money behind me, I cannot reach the technical executives in the financial institutions that would be interested in hearing about this. Impossible to reach.

That's gotta drive you crazy.

Been working on that for years. My publicist, Diana, who's in, in this meeting, they've really helped me a lot. And obviously I'm here with you now and we've been getting a lot of things done. So I think it's gonna get better.

Good for you. I'm curious, Edward, you look like you've been around the block a few times like me. What is it that gets you up in the morning? It gets really excited to go to work. You people our age should be playing golf right now, right?

Okay. You could have asked me that 5 years ago before I started Tracker, and I would have had trouble answering. I'm dedicated to one thing and one thing only. I want my technology to be seen on this earth. You know how many people use double entry accounting? Everybody. It's the same in every language, and I have completely revised, re-engineered, updated double entry accounting like it's never been seen before. And it outperforms by definition Oracle, Netsuite, QuickBooks, all of them, because they don't collect the additional data for the expanded database that I created, which now I can pluck all kinds of new solutions out of the database based on the first half of the database. And I got patents for that.

What makes you— you're obviously very passionate about this. Where's the coming from?

I'm just driven to get this going for success. I think it's phenomenal. I'll tell you what, with the possible exception of Windows, I think it's one of the finest pieces of software ever written.

Wow. And did you do the coding? Did you do the coding yourself or did you hire people to do it?

No, I hired people for the coding. I did the wireframes myself and I did the user stories myself. Okay. And then I handed it off to a programmer.

And now you got the product, product that's ready to go. As soon as you can—

I have 4 apps in the App Store. It's live on both app stores and it's ready for any bank to download the app. I give them login credentials. They can get up and running and see how it works.

Are you— I saw that one of the apps you had was for lawyers, especially lawyers managing trust accounts. Correct. And IOLTA accounts. So I'm curious. As to whether or not you're going to go direct to consumer, I guess, B2B? No, not too difficult.

Because I— here's the problem. I want a financial institution behind me to host the cloud, to give me credibility. Who's going to put all their financial data for the rest of their life in little old me who has to maintain an Oracle NetSuite database in perpetuity?

Uh, it's not possible. Got it. So you have the— I need a partner. You need a partner. So you get a financial institution that has got the wherewithal to build a cloud-based system that's gonna be around for a while.

I'll build the system.

Oh, you'll build the system. Okay.

I build the system over here, the bank's over there, and the only thing between us is API protocol communication. Very simple.

So I'm still bemused by Moving from civil engineering, structural engineering, and general contracting to this guy, something that's completely out of the—

It's mathematical. It's a mathematical solution is all it is. All right. I'm a mathematician, essentially. I designed a database. It's a simple mathematical solution. I looked at double entry accounting. I created an Excel spreadsheet that represented what was available today. And then I improved it. Simple as that.

And I take it you're still a— and I like to program. Yeah. And I take it that your company, you're probably a sole proprietor with no employees? Correct.

No, my service business has techs that service the restaurants. Okay. And I have a full-time bookkeeper. And other than that, it's just you doing the work. Amazon doesn't require hardly anything at all.

No, that, that, that business just goes, runs by itself. It's a miracle. It really is. Who would have imagined 60 years ago that you'd be able to do that?

It financed all this Tracker Apps business, which has not been minor.

No, I can imagine. You go from here, you've got that, you've got the baseball diamond. Now you're hoping that people will come.

Failure is not an option for me, okay? I spending a lot of money of my resources every month and keeping this rolling. And right now with my group, my marketing group, we're going to get there. It's— if somebody sees it, it's irresistible. It's too good. It's the cream rises to the top. Just too good a piece of software.

Yeah, you're really proud. You're really proud of what you've done here.

I know what I've accomplished. I really do. Huh. It was first published in 1494 by Friar Luca Pacioli with his trusty assistant. I forgot his name. And it went unchanged for 540 years. It's been unchanged. It was done by hand. It's extremely tedious calculation. It was done by hand for hundreds of years. Hundreds of years. They mechanized it. But no one ever made an improvement on the actual mathematical calculation that was being done. And that just popped into my head one day because I was trying to get data out of QuickBooks for my other business and it was not available. Wow. So I engineered the system to do it.

What does CPA say about the platform?

My CPA loves it and it's good for CPAs because it produces a trial balance summary, which is the only report you need. Your CPA at the end of the year and he can complete your taxes for you.

Wow. So your CPA likes it. Have any other CPAs seen it or looked at it? No, no, no.

Nobody's seen it. That's the problem. Ah, although when I first started, I had it up on the app stores. I had app store optimization going on and I had over 6,000 downloads in beta testing.

Wow. That would tell you there's some interest.

It's the same thing that's up there now, but I had to shut that down because I didn't want these people in the database depending on me forever. Essentially, you understand that, right? Oh, absolutely. It's a completely symbiotic relationship, right?

You've got to have long-term institutional staying power. Correct. All your stuff is going up into the cloud and you got to trust that the cloud is going to be there. Correct. That's exactly right. And then, and that's a problem. Huh. Interesting.

So I figure a financial institution, and when you talk about owning the cloud, all you're talking about is your name being on an Oracle OCI account. Now you own the data. They should be happy to do that because all the money's in data. Actually, Listen to this. Can I tell you something very quickly that I also— I invented a routine that anonymizes the data for each client that has their books in the cloud, and it stores this anonymized set of books in a second cloud. So if I have 50,000 users, I have 50,000 anonymized set of books that I can analyze and project economic forecasting the likes of you've never seen before. So accurate because of the financial database that I've accumulated. And that's totally doable in the cloud. Totally. I've got that going on.

As long as, as long as you deal— you got a lot of privacy concerns you got to deal with there, but you have lawyers. Yeah, my—

with my anonymization algorithm, anybody could break into that second database. They couldn't link one name to one number no matter what. It's 100% anonymized, right? It wasn't that hard to do, but we did it.

So, um, looking at your website, you had a note, you had 4 or 5 different apps now, different functions. You got pay— they're modules. They're modules. So you have invoicing, payables. I saw the lawyer trust account module. What else do you have?

Basic accounting is banking where you're doing deposits and withdrawals. Okay. Accounts receivables where you're creating new money and invoices typically. Right. Accounts Payables, where you're paying bills. Right. Cost of Goods Sold. And this is my— this is a beautiful little module called Balance Sheet Tracker. And I've pulled the balance sheet portion of your accounting away from the other 3 modules because it's so much different thinking. And we've worked that out. It's really useful for a typical business person for creating a good balance sheet.

So you've got a balance sheet app module and what else?

Balance sheet, payables, receivables, and banking. And they all go together in one app called Business Tracker.

And same as QuickBooks, every function QuickBooks has, it would be, except that you have a richer data where your claim is. Okay. So where do you think you're going to be in 5 years?

I think I'm going to have a very successful software company and worth a lot of money.

Are you going to sell to somebody else?

No, I'm not going to sell. Oh, I'm going to get hundreds of thousands of users and I'm going to make $70 a month for every one of them in perpetuity. Wow. Which is going to be a lot of money. That's right. It's the same business plan as Bill Gates did with Windows. He doesn't manufacture phones. No, he doesn't talk to customers. He doesn't have to do anything. All he's got to do is keep up Windows. Same, same here. It's really beautiful.

Yeah, you're pretty excited about this. I guess you should be. Now, now if you just get over the last big hurdle. That's right. Go to market. That's right. That's the trick.

And this is going to help a lot because I've done my research on you and a lot of people—

oh, thanks. A lot of people— I know, I know exactly what you face. I, I'm an investor and a vice president of a small startup too. We're in a different kind of technology, but It's the product to market fit is really tough and getting people to pay attention is really tough. There's a lot of noise out there, so I wish you the best of luck. Thank you. Great product. Maybe my bank, Wells Fargo, will pick it up and I can subscribe to it.

Somebody's gonna be smart enough to figure it out. Yeah, because there, there's nothing to it to setting it up. It's all my work and it's just communication between the two. Exactly. At a level that's never really been done before.

Absolutely. Edward, I've really enjoyed meeting you and talking with you, and I wish you the best of luck in this product. It sounds phenomenal. It sounds like it's a real game changer. Thank you, Doug. And hopefully you will be, have all the success that you are dreaming of. Thank you. All right, my friend, take care.

Okay. Thank you so much.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.