Video
Case Study - TaxScouts
In conversation with Tram Abramov
Hi, I’m Tram, and I’m the co-founder of TaxScouts. TaxScouts is a platform that sorts people’s taxes online for a low flat fee by certified accountants.
As for what I did before starting TaxScouts, well for most of my career I’ve been working in technology companies, most of them better known than others. For example, I was at Skype in the early days; I was also at TransferWise, which was a money transfer service.
Most of my work in the past has been working in companies that are solving people’s problems; that make their lives a little bit better. Either communicating with them online, like Skype, or making it easier to send money back, etc. I’d say I am a technology guy.
Inspiration
The idea for TaxScouts came from me having to do my own taxes for the first time in the UK. I’d been living here for 15 years, and a year before I started TaxScouts, I had to do my taxes. I hadn’t done them before, and I had no idea how these get done.
I assumed it was online and just a couple of clicks. But it wasn’t, I had to find an accountant. I was charged quite a bit, and I just couldn’t help but think there must be a simpler way of getting it done without being charged an arm and a leg. This is what motivated me to look into the entire space to begin with.
As a result, what TaxScouts does is two things: 1 – for people who needs to get their taxes done, we make it super easy and cheap to get their taxes done online by certified accountants; 2 – we are effectively an automation platform for accountants, and a lot is going on beneath the surface.
Most of our work is about automating the work of accountants; the admin they hate doing, our automation platform does it for them. As a result, we are able to offer our services at a much lower price to our customers than we would otherwise be able to.
I think the main motivation for me to go into business was twofold – I’ve always known that I wanted to do something by myself and build something from scratch.
I have been fortunate to work in a couple of great companies that I have seen have become big successes, and I’ve always had an itch that I wanted to do this myself and see how far I could take it. So, it was more about proving myself, if that makes sense, on the side of personal motivation.
On the other hand, I also wanted to find something where I could actually make a dent – if we do this, this will make a genuine difference. And when I had an idea for TaxScouts and I felt that this is a genuine problem for a lot of people, I mean people hate doing taxes – it’s a cliché. If we can solve this problem for just a fraction of a percentage of the people in Europe, then we’d already have improved millions of people’s lives, just by doing that.
Also, maybe a little bit of ego – in a sense feeling that something I start can have an impact on millions of people’s lives. I’m not ashamed to admit, one was an itch that I needed to scratch, and the second was ego – can I do this?
The journey
We started TaxScouts in 2018. We launched and put the website out and wanted to see how it worked out. It has been a crazy journey. When we started out there was no office, just 3 guys, us doing this thing from home, finding partners to work with, etc. Then fast forward 5 years – we’re an international company, we have offices in 3 countries – the UK, Spain and Estonia.
We have 50 staff, we are working with hundreds of accountants and we have tens of thousands of customers. In that sense, the difference between day one and today – it’s quite crazy to be honest. It has been a rollercoaster. Where we have come to is pretty far, but on the other hand, it has never been a direct line from here to there, it’s always been ups, downs, bends to the left, bends to the right. It has been quite a journey.
The growth curve
TaxScouts has pretty much doubled every year over the last 4 years – long it may continue. We want to keep doing that. As to how we have achieved that, it boils down to three things:
- Getting the right people on the team – nothing really happens without making sure you have the right person doing the right thing.
- Figuring things out. It’s not about making a plan for five years and saying ‘this is where we will be’. Reality always throws something in your way, and you need to be able to react. We had to react a lot. Initially when we launched, we thought the first market we would launch outside of the UK would be Australia – it ended up being Spain instead. We had to adapt a lot.
- Luck – We are in some ways lucky that technology has evolved to a level where our platform is viable today. It would have not been possible 15 years ago, as a lot of the technologies did not exist.
Challenges
We’ve had countless months of challenges over the last five years. If I would have to pick one or two that come to the top of my mind, I’d say the first one was Covid in 2020. When it hit, we had to adapt overnight in terms of not working from the office, etc. But I think that was probably not the biggest challenge.
The biggest challenge was that was the year when we decided to launch our services in Spain, so we had to set up an entire business, hire a team, find partners conscious of our service, in a foreign country, during a time when you couldn’t travel or meet people face to face, and it basically had to be done from our living rooms.
That was quite a challenge, just making sure we got the right people on board, and we dealt with the authorities and government in Spain. That was hugely challenging for us to get right, but again, mostly because we got the right people to do the job, we managed to do it successfully, and instead of something that could have been a really big stumbling block for us, it actually ended up being a great success, because we ended up spending significantly less than we thought, and were online there much earlier than anticipated. We realised we can do things in a much leaner way. It was one of our biggest challenges but also one of our biggest learnings.
Highlights
One is that we are still around. Five years ago, we weren’t sure if it would work, if it was a good idea, would the technology be right, would we get customers, things like that. The fact that we’re still doing what we’re doing five years later, and doing it in many markets with tens of thousands of customers and with hundreds of accountants – that’s the most obvious thing to be proud of.
The second thing I am most proud of is that we haven’t really screwed anything up majorly. I know it is not the most obvious thing to be proud of, but 5 years is a long time; most businesses don’t stay around for that long, and it mostly boils down to luck and having the right product and service. But also, making sure that you avoid fatal mistakes. Learning and failing is OK, but failing in a way that won’t let you recover is not.
The fact that we haven’t done anything that would have basically made us stop the business is the second thing I am most proud of, even though it’s not an obvious thing to be proud of. I’m hoping for another five years like that, where we don’t screw anything up majorly.
I think the greatest thing about my job is the people. The amount of people I have met as colleagues, as partners who I have worked with, as investors, friends I’ve made – that’s by a country mile the best thing about my job and being in the role of the CEO – it is your job to be in front of people. It’s your job to meet people. It’s your job to be the face of the business, and I am an introvert by nature, so it has forced me out of my comfort zone, and I thought I would hate it, but over the last 5 years, what I have learned is that this is one of the parts of the job that I enjoy the most – meeting new people, making friends, making connections that you end up enjoying having – so that’s probably the most enjoyable part of my job.
The future
The future for TaxScouts is something I’ve been asking myself quite a lot over the last few years. When we started out with TaxScouts, our initial ambition was that we thought that anyone, anywhere in Europe, should be able to get their taxes sorted with a click of a finger, regardless of where they are – and that’s our mission. That’s what we’re striving for. As for how long that’s going to take – as to how many countries we are going to be operating in, in two, three, five years from now – as long as we know where the destination is, and that we have a clear understanding how we can get there, step by step by step, I’m happy with that.
So for me, in terms of what the future holds, I cannot tell you what it’s going to look like, let’s say two years or five years from now, because we learn, we adapt, we figure things out as we go – but if you ask me what I’m hoping or planning with TaxScouts – it’s that we would be the place where anyone can get their taxes sorted with just a couple of clicks for a fraction of the price, regardless of where they are – and that’s pretty much it.
Advice
I’m going to go with the slogan of Nike – ‘Just do it’. That’s the advice that propelled me to start TaxScouts. I remember I was sitting on some sort of panel in a conference, and the same question was asked from another founder – what advice would you give – and his advice was the same. He said that a lot of people are wondering ‘Should I start something or should I not?’ Even if they have elaborate plans in their head, it always ends up not being done for a simple reason – you are not starting it. His advice was – if you’re thinking about something, just do it. You can fail, but you will learn in the process.
The experience that you gain from just starting something, and not necessarily knowing where it’s heading, is worth so much more than not doing anything. So, for any aspiring entrepreneur who is wondering whether to start or not, or is just starting out, my biggest advice is just go for it – do it – and ask questions later.
Using 1st Formations
I actually had used 1st Formations before I started TaxScouts, with my co-founder Kaupo, who is based in Estonia. We ran a small business, an online invoicing platform, and at that time we needed something to start the business really quickly. We had no idea where to start, who to turn to, it all felt horribly complicated and expensive. I assumed a bunch of lawyers, accountants, dealing with the government and we really didn’t want to do that, so we ended up Googling ‘What’s the easiest way to get the business started’, and 1st Formations came up.
We had a really good experience – within minutes we had everything set up for us - here’s your business, here’s all the legal work stuff for you, here’s a business address, and we never looked back, we were super happy with the service.
Four years later, we decided to set up TaxScouts. Given we’d already had such a good experience with 1st Formations, it was a no-brainer. If something’s not broken, don’t fix it. We knew we were happy with the service, we knew we could get everything done online quickly, hassle-free, and that would allow us to focus on stuff that we really needed to focus on – which was starting up TaxScouts, the service itself, rather than the admin which is associated with setting up the business.
And that’s probably the main reason we ended up going for it – the lack of hassle and the simplicity of it, and having had a positive experience before with 1st Formations.
The company formation process
We actually ended up setting up TaxScouts because we had the experience of setting up a company with 1st Formations before. It was literally a matter of entering our credit card details. It was much easier than I expected it to be – I was afraid of how much work and effort it would be to set up a business.
When we did it for the first time with 1st Formations, we had no idea what would be involved. But it ended up being filling out a simple form and that’s pretty much it. It’s like – here’s everything you need to set up your business – we found it very easy.
1st Formations today
I’d say it’s two things.
It’s the hassle that we don’t have. For example, we’re growing quite fast, so we’re moving office every year or year and a half, and as a result, the post that we get ends up being sent to an old address, getting lost, etc., and for us having a Registered Office Address with 1st Formations in one place, where our post gets forwarded to our office is super helpful. We just don’t have to worry it’s going to be sent to the wrong office, we know it’ll be sent to 1st Formations and from there to us. So, this little practical thing is really helping us a lot.
And obviously of course, the small admin which comes with having a legal entity in the UK. I don’t even have to think about it now, it just gets done. I get an email every now and then from 1st Formations saying ‘this has been sorted’, ‘this is your reminder about x’ – I think these sort of things are great – not having to worry about the things that as a CEO you don’t want to have to worry about, you know it’ll be sorted.
