How would you differenciate yourself if you were to compete with online accounting software?


E-conomic is online accounting software, which enables you to write invoices to customers using web forms, track inventory etc.

I am considering to start a company, which would compete with this company head on. We have core competences in terms of the operation of the company, which would enable us to have a competitive advantage, but I need input on how we could differenciate our business in order to make the competition less direct. I know the general theory of differenciating in terms of business model, product/target market, pricing/quality, so what I am after is specific strategies.

Strategy Competition Strategic Management

asked Apr 10 '11 at 18:37
1,567 points
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  • interesting thought David, you are not the only one I can tell you. :o) – Berggreen Dk 13 years ago
  • @BerggreenDK. Do you have a specific plan or just generally interested? Do you have money to invest, given that we create the perfect plan? – David 13 years ago
  • @David lets just say I've been developing systems for some years now and I have spend a lot of time thinking out how I could do it better myself. – Berggreen Dk 13 years ago
  • @David but dont take me wrong, I think the market has plenty of room for more solutions. There are quite a few solutions out there though. E-conomic isnt the best among them. – Berggreen Dk 13 years ago
  • @BerggreenDK Which ones are the best? – David 13 years ago
  • @David hard to point out a single top of the line, as I guess you already know. But the E-conomic interface isnt "state of the art", its rather "old and clumsy". – Berggreen Dk 13 years ago
  • @David a quick search on Google gave me this overview which you might want for further research? Dk 13 years ago
  • @David a few links too: | ... but do go on and have fun Dk 13 years ago
  • It's for you to figure this out, based on what you can do, who you can sell to, and what they would like to use. For example, if you can afford to sell it for a dollar per year, you can probably sell to a lot of people who wouldn't pay for your competitors' stuff, but you will have to sell it to a lot of people. – Marcin 13 years ago

9 Answers


Differentiate on ease of use and support.

First, make your app as incredibly easy to use as possible. Bring in people from your target segment and have them use the application. Use a service like and have all your developers watch every minute of the video.

Second, put as many short and clear "how to" videos on your site as you can.

Third, offer responsive chat and e-mail support for free.

Fourth, offer a premium option through which users can speak with a knowledgeable expert and get help as needed.

Take a look at Apple's end to end customer care processes for a great example. Good web site combined with awesome & smart customer care reps all backed up by some outstanding end to end business processes integrated across the web, phone, and the stores.

answered Apr 10 '11 at 21:04
Warren E. Hart
2,181 points
  • Excellent answer Warren! – David 13 years ago


For me to adopt it will have to be about integration. Will it work with my other "best-of-class" solutions that I have chosen.

Recommendation I would make my "differentiation" recommendation around this comment:

We have core competences in terms of
the operation of the company,

There is a wide diversity of companies markets, industries, segments and sizes to have expertise in the operations. Your first step in differentiating is to narrow your market to focus on one -- do it right and expand. By showing a deep understanding other unique challenge my company faces in my industry and my market -- speaking my language -- and meeting the unique pain of my company's current experience.

For me All of the features in the world mean nothing it I can integrate, connect and link it with the other programs I am using.

Online customer invoicing needs to connect with my CRM and my accounting software. Depending on the industry/market it may also need to connect with my EDI and shipping solutions. For inventory tracking it needs to integrate with my suppliers databases.

Without integration it is another stand alone -- and in todays world that is a luxury no matter how sweet I simply can not afford.

answered Apr 11 '11 at 13:29
Joseph Barisonzi
12,141 points
  • I completely agree with you. Integration is very important! I also take your point of focusing in the beginning. – David 13 years ago


I am not an expert on accounting software but this is how I see the industry:

  • Extremely competitive
  • Therefore, low margins
  • Overcrowded

  • Easy to adapt and replicate improvements (so even if you come up with a "better" software, whatever that means, this being a software business your competitors could VERY QUICKLY copy your features).

David I am sure you have a solid product, but I hope you understand who you are up against here. Some of your competitors are extremely well capitalized (you may be too, I don't know) and as soon as they see another fish in the pond they are gonna try to get rid of it. Let's say that you come up with a better software. What do you think they are going to do as you soon as your software gains some traction and gains some attention? I'll tell you what they're gonna do.

1- They are gonna copy your improvements.

2- They are gonna cut down their prices to kick you out. And believe me, many of these companies can afford to lose money for months before they feel any pain. Can you do that? Plus, being software, a reduction in price doesn't kill you immediately since the product is already created.

3- If you are really really good. They may try to buy you.

Have you thought about these scenarios?

Finally, this is my suggestion. Forget about trying to come up with a user friendly, or friendly user software, or some of those feel-good characteristics that some people are throwing around here. This is what you need: FOCUS.

Again, I may be wrong, but the only way I see a product like this taking off in an overcrowded market is by offering a very specific product for a very specific group of users.

There are dozens of accounting software for the general public. Why not tweaking yours to target specific users? SMEs that import or export quite a lot. Maybe service companies, instead of manufacturing companies,... I don't know.

You may think your vanilla yoghurt is better than Danone's, but I'll tell you what, most users will see just a vanilla yoghurt. Why not try to segment the market?

Just my two cents. I wish you all the best in this adventure.


answered Apr 14 '11 at 05:43
A. Garcia
1,601 points


Great question David!
I would like to add 1 more thing: plan the integration (model and semantics XML-based, clear import and export processes) with leading accounting software.

answered Apr 10 '11 at 23:01
281 points
  • This is very important. I would also add, adding the capability to import/export to leading tax software like Turbo Tax and TaxCut. Accounting and taxes are very much tied together. – Zuly Gonzalez 13 years ago
  • Oh yeah, definitely, this is a must if you'd like to attract those who already use other solutions. Not having a clear, clean and easy data migration will 99% eliminate your chances of getting people to switch. – Ron M. 13 years ago


It's not about features as no one uses everything. It's not about price, you can't force someone to leave the software he uses or prefers for a $15 discount on something else.

It's about having a "Friendly User " experience, Not "User Friendly". This what makes people prefer one software to another. As an example, picture managers existed before Picasa for instance. It's not as fully featured as other packages with seemingly more "professional" solutions. So why is it so popular? even when compared to other free tools?

User Friendly is obsolete. It's so 80's. We all have cool buttons, with colors, texts, help screens and instructions in large friendly letters. Forget "User Friendly", think "Friendly User" - The ability to make the user a FAN of your application. make the user LOVE it, NEED IT, and have FUN doing his job with it. That is what "friendly user" means. It's the reason that makes iPhone/iPad such a success. People just the user experience and they don't care if there's an Android device with a faster CPU. They trust Apple to match it in the next release, but what they really care about is what the machine does for them-- the user experience.

Don't think of your solution as "software". Think of it more of a companion to a person. It needs to take his loads of work off of him. It needs to anticipate his needs. It needs to remove every little bit of repetitive work he has to perform and it must be an eye candy while doing all that. If you can achieve that, you're already a winner. Few software packages on earth do all that. If you can encapsulate all the above mentioned in a reasonable price and have good marketing, you have a very good chance to be a leader.

Design your software from the user experience toward the technicalities, not the other way around like most vendors do (e.g. "I have only Java talent on board, so my app will have a Java applet look and feel"). Forget technology, forget platforms. Now think about a user, a mouse, keyboard and monitor. How do you deliver such a pampering experience for him, be an eye candy, and still be efficient to get the work done. You got it? you're already half way there.

answered Apr 12 '11 at 23:47
Ron M.
4,224 points


There are a lot of good points raised here - integration, UX, fanatical support (hang on that's another company)... these things should come as standard.

Global understanding Lacking at the moment is a financials package out there that understands how business/taxation/etc works globally. Now this is a big ask, but if you can come up with an online accounting package that would support multiple offices around the world with each office being able to use the software out-of-the-box (or cloud) without horrible customisation that would certainly be one viable strategy.

answered Apr 14 '11 at 00:39
2,333 points


Take the approach.

Focus on:

  • ease
  • save people time
  • integration/API

And I agree with Aurelio. But, I'll offer you a differentiator to focus on.

If it were me, I would try and tackle is web ordering tied directly to the accounting system for SMBs... but... EASY.

There are many easy to use shopping carts, but almost none that tie directly into an accounting system. Focus on the benefits of easy and the time savings.

answered Apr 15 '11 at 05:00
Chris Kluis
1,225 points


Ok as a software developer who has a range of products that all produce invoices etc.

Integration is the key element ... in-fact if you could provide a white labelled, integrated solution basically the API and calculations, updated tax tables etc.

If we could integrate and make it seamless with our application that would be perfect. By seemless I mean several "layers":

  • Basic: I provide graphics and colour scheme ... I can change the CSS values but not structure.
  • API: A raw set of secure SOAP services, with good documentation and examples, that we can write our UI over the top of. It will need to accept our UIDs so we can match our world to yours.
  • Hybrid: Majority of Basic with API for key functions that are more part of our workflow than the usual (like make / send invoice) the rest is just basic.

Also, if you can hide the difference between Australian tax rules, US state tax rules and any other countries rules you can fit in (UK, Canada, Primary EU countries ... you get the idea, less work we have to do to deal with the variances the better).

Let me know when you have a version to test against, I might have a good beta for you.

... and for the direct human users ... "make it easy to use" means a few versions:

  • SOHO. Not in accountant speak for the basic version of the UI, I'm a home / small office user, I bill, I sell, I pay ...
  • Specialist. Have a version starts off asking "are you a software development house" and I can say "yes" ... it qualifies a few points, like I do support and project based work ... go through yellow pages, find a candidate in each one ... ask lots of questions. I don't care about double entry accounting ... I run a custom software development company.
  • Bookkeeper. I can sign up customers (me) who are on your service or setup a new company. I can do the entry rapidly and accurately and it makes sure I get it right, my clients will never leave me.
  • Accountant. (in Australia at least) "I have the power to sign off and hand to the government", there is a checklist of stuff I have to qualify before I do ... the faster I can do this the better. My clients can nominate me through their system (i can invite them to) and I can tick the boxes and press "go" ... I can also have a look at some nice reports which helps me consult to my clients so they think I'm awesome.
  • Financial institution ... hmmm not sure ... somehow clients / accountants can ask me for quotes ... I get to analyse their approved data in order to give my quote.

Again ... let me know.

answered Apr 15 '11 at 21:11
Robin Vessey
8,394 points


I think the key things are to target each country very specifically and have a killer U/I. The set of features between tools is reasonable standard, you just need them all :).

The software I use for my company, FreeAgent, is entirely UK centric. Any US-based solution wouldn't feel like they understand my market and accounting law correctly. The U/I is also extremely good.

It does exactly what I need, and now they have me in their grasp, there's simply no way another solution could tempt me away.

answered Apr 14 '11 at 06:12
David Benson
2,166 points

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