Smithink’s founding director told Accountants Daily late last year he’s concerned by a general lack of awareness that the “overwhelming” number of small accounting software packages — like apps — often don’t make it past start-up phase.
Mr Lesh said he’s often surprised by what accountants are willing to put their money into when it comes to apps and add-ons.
“It's all based on volumes, it’s all based on take ups,” Mr Lesh told Accountants Daily.
“Certainly, a lot of add-ons have gone broke. The better ones have survived. It's hard to know who's great and who isn't great until you really see what the take up is. I look at some of the things people are doing and I think — is anyone actually going to buy that?” he said.
“In the end, if you're not a profitable business, you don't survive. We all know that. The question is how long is that failure rate? In the IT area, well it can be very quick, because you might get a first round of funding… but then nobody wants it. The venture capitalists run away, and it falls over,” he said.
For the full interview with Ron Lesh, tune in to our podcast below.