Consistency is Key with David Leary

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Hello and welcome to the Big 4 Transparency podcast. I'm joined today by David Leary, someone who's probably not as used to being on the other side of the kind of podcast interview thing. He's the co-founder of Earmark and the co-host of the Accounting Podcast. Welcome to the pod, David. Thanks for having me today, Dominic. Appreciate it. Yeah, my pleasure. I've been wanting to have kind of you and Blake on just because I'm, you know, I'm genuinely curious about both of your kind of backgrounds, your journeys so far. You're kind of like the OGs of accounting podcasting. Maybe a little bit. Definitely old. I don't know about OGs, but... No, I mean, you've been doing, so you've been doing the podcast, the Accounting Podcast, formerly the Cloud Accounting Podcast for like almost seven years now by the looks of it. Yeah, so it'd be April of 2018. Yeah. And Blake did about four or five episodes on his own. He was doing it kind of like a webinar that he's publishing as a podcast on his blog site. And he and I met almost a year and a half before that. And I think we were at Expensacon, you know, you're drinking, like, we should do a podcast together. You know, a year and a half later, I finally am a guest on his podcast, kind of like this, just interview. As soon as I was done, I was like, let's just do this every week. And then we just started doing it every week since. And we have not missed a week, sick, vacation, what have you, we record the podcast every single week. Yeah. We're now at 417 episodes. If you count the bonus episodes, definitely above 500 episodes now, over a million downloads. So it's just, it's that success is just showing up week after week after week. Most people after eight weeks, like, this is a lot of work, let's just stop doing it. You know, a lot of people don't want to push through that, you know, and now it's like, it's just in our DNA, like, you record every week, you just record, it's just a thing to do now. Yeah. I mean, you guys have great kind of co-host chemistry, which I'm sure kind of comes with the years and all that. But did you say you guys just met at a conference? Like you weren't like friends beforehand, necessarily? Social media friends. Like I knew him from Twitter. Then I think I met Blake at like the 40 Under 40. We were both on that conference from CPA Practice Advisor. I met him there. Then I met him in a couple of conferences, but like, I really didn't know Blake. I never worked with him. I never, he was always in the zero world. I was always in the QuickBooks world. So I knew of him, right. I knew he, you know, I knew him on social media, things like that, but I didn't know Blake. And then I really didn't know Blake until we really started doing the show together. Then he really gets going. Right. Yeah. Yeah. There's a, there's a cool kind of like social media friendship sphere in the accounting world. Like, you know, when I went to Bridging the Gap, it was like, oh, these are like all my internet friends. Like, this is cool. Yeah. I always felt like Twitter is for the people you want to know. You want to meet LinkedIn's for the people you've worked with and Facebook's for people that you, you know, you'd have over for dinner, right. Or been to your house. It's kind of, but Twitter has always been that place of like, here's people I'm interested in and maybe one day I'll meet them. And you just, and that's where, I mean, even I think we came across you was probably through social media, maybe LinkedIn, but it was still probably, yeah, probably LinkedIn or maybe Reddit. Those are kind of like my, my spheres of where, where I, where I operate a lot. And so like, what's been the key to like so much longevity for you guys to like, just keep doing the pod week after week after week? I think age and maturity, I don't know if that's the proper way to say it. Like Blake, I'm, I'm, I just turned 50, so I'm a little bit older. Blake's a millennial and Blake at one week, he wanted to skip. And he says that like, this was like a pivotal moment because I said, well, if we skip recording this week, we'll skip next week. You skip two weeks, skip three, the whole thing's dead. And then we didn't skip. And I think that's the, some of that is just maybe if we were both millennials, we'd be like, yeah, let's forget it. Let's go have drinks tonight or something and not record. And then next, you know, the, the whole thing dies. And so I think just that age and maturity of like, we have to keep doing it. It's just recognizing my own ability to just like, ah, we'll skip and then we'll skip next week. And the whole thing's dead. Cause that's all it takes. You stop doing it for three weeks. The thing's dead. You're not in a habit. Listeners don't tune anymore. And the whole thing's dead. So I think it was just the conscious decision not to skip when the opportunity was there. And then we just have never skipped since. Now we'll delay a lot. We'll be like, I'm a little behind today. Let's, let's push it and record tomorrow. Like we do a lot of that dance sometimes, but we don't, we won't just skip an episode and just not do it at all. Yeah. Yeah. I agree so far in my journey on that where like I had one week where I had COVID really bad and like no get like my guests flaked and I was like, well, recording a solo episode with COVID, like it is what it is. And yeah, I'm at almost a full year of kind of every single week. I skipped Christmas, but I was like, that's more an account of like, that feels unfair to the guest. Nobody's going to listen. So no, no skipped weeks other than that. But I don't think it's, if this applies to just, you know, podcasting in general, like I'll talk to a lot of accountants and you'll see them and they're, Hey, I'm going to do, I'm going to go into a niche. I'm going to do bars and restaurants. And then you see them six months later at a different, and they're like, Oh no, I'm doing dentist six months later. I'm doing bike shops. Nobody wants to do anything for 18 months. It takes 18 months to get good at anything. Like you have to do it for 18 months and people just don't want to put in that work because they want, they want that success. It feels like everything's instant success, right? And you watch Instagram and all this stuff and nobody understands like the work that's been behind that. Arguably all my success in this industry is because I took five years of tech support calls. Nobody's going to, no 22 year old is going to take five years of tech support calls in this current day and age we live in. Nobody is going to do it. It's a drudgery. It's not the funnest job, but you learn so much and it's really like everything I've done since in my career is tied to back to that tech support stuff and understanding when you talk to thousands and thousands and thousands and thousands of small business owners and accountants, you get a real feel of what's going on in their businesses, right? What they're looking to do, what the problems they have, what they're trying to solve. And none of it, none of it's much different today than it was 20 years ago. You know, instead of floppy diskettes, it's on the network or it's in the cloud, but it's the same data problems, the same issues they're facing. Nothing's different. It's just the, the medium that a lot of this happens over is different, but the same problems exist for a small business owner that existed 30 years ago. Yeah. Yeah. And when you talk about doing all the work, like where do you go for, for your research, for your pod? Because for me, you guys are kind of like the news. Like you're like, that's where I kind of figure out, stay on top of everything that's going on. Um, and, and yeah, you're consistently on it and, and, you know, I stay pretty on top of things, but you're bringing up often a lot of things that I would have never come across otherwise. So I use a product called Feedly. At one time I think Google bought them and then tried to kill it and then brought them and they spun up back on their own, but essentially it's an RSS reader for anybody that's really old school internet. Think about your Facebook feed or a Twitter feed. Every blog post or every news site would have its own feed and you would just subscribe to those and you'd get these articles. So I'd probably get about 1500 articles a week via Feedly that comes in. And some of it's search terms, some of it's things I've subscribed to, and then just kind of plow through it and you know, see what makes the cut. Then we just jump onto record. We don't have a huge production meeting ahead of time. And then it's like jazz musicians, like, all right, this story makes sense to talk about. This one doesn't. Based on what Blake just said, maybe this is the next story I bring up. And then what makes the show makes the show and what doesn't obviously wasn't important to make the show. But we probably start and Blake probably plows through 1200 to 1500 articles a week too. So it starts out with, it's high volume and then what naturally makes the show makes the show. Wow. There's just a lot of junk though. There's so much junk articles out there. There's paid content, there's really bad opinion pieces that are, you know, very agenda driven, you know, by maybe it's an app vendor, you know, maybe it's somebody at a firm and it's agenda driven type stuff because they're paying for that space and it's not a real article or real news. And so you have to, in a way that's the service we provide, like we're plowing through all this junk so you don't have to, as a listener, you could just, whatever, whatever makes it to our show is usually kind of important. All the other junk has been filtered through now. Like that's the service we're providing. We're just curating tens of thousands of articles. You don't have to have all these news articles coming in your inbox that every vendor wants to send you. Right. It's overwhelming. Right. If you tried to like keep track of all this. Yeah. And I think that's just getting worse and worse with AI, which is its own topic. But yeah, the noise just becomes even noisier because now there's like a near zero cost to producing it. But staying on kind of the podcast train. So in the time that you've done this, I think that podcasts have kind of like really risen in like their degree of influence. Right. A lot of people were talking about this kind of U.S. election and how a lot of people were saying that they think that this kind of U.S. election, the result was influenced heavily by some of these podcast appearances and whatnot. And I think you guys have had some kind of influential positions that you've taken in the accounting industry. So like the 150 hour rule, for example. And like, do you do you see, you know, the influence of your podcast and some of the other major ones kind of growing in terms of like, you know, the actual accounting regulations? Well, I think if like just in general in podcasting, this has always attracted me to it is. It's not the typical old school media format where there's A slot, B slot, C slot. You better. And then there's commercials they have to run in the news is like structured that way because they have to fit their commercials in. Right. And podcasts can be as long as you want. We can go as long as we want, as short as we want, and as deep as we want. And so we, the world in the previous elections in a way are, have always been won and lost by soundbites. Yeah. Right. Like somebody does a speech for two hours, it's 38 seconds on the news. And then there's no long form digesting or conversations with candidates if you think about that. Right. And that's the beauty of podcasting because there's the expense to do a long form conversation like we're having now is not, there's really no expense. It's cost nothing. Yeah. It's pennies, dollar, dollar 50 for us to do this conversation. But to do this in the old school media, this would be a $30,000 interview happening and people just can't afford that per minute to do that without interrupting it six times and running an ad. And then when it's all done, you can't air this, broadcast this out. You can only broadcast 38 seconds of it. And so you get a lot of out of context positions and people's opinions are formed on these out of context positions. But the beauty of podcasting is, you know, and this, we saw this issue with candidates, they're able to go out there and speak on a podcast for an hour and a half, two hours, three hours, you know, I think Trump went on Rogan, right? Three hours and you get to like hear people logically make their case, maybe illogically depending on your point of view, but, but they can put it out there and it's not just a soundbite. Somebody else determined what you should or shouldn't hear. You can go directly to the source in a way that's the beauty of the internet in general, right? You can get to the source and digest it yourself and you don't have to have it now. Yes. Are we filtering news out? When people listen to our podcast, yes, we are filtering out a lot of news, but you know, I think the interviews though from the election specifically, a hundred percent, yes, it's influenced it because it's long form deep interviews. And I think we've had an influence on like the 150 hour rule. I know for a fact, people at state societies listen to our podcast. I think, um, people at NASBA and at AICPA listen to our podcast. We know that this is happening and they're hearing us when we talk about the 150 hour rule. But I've always said this about our podcast. What's coming out of my mouth on the podcast many times is not me saying something for the first time. It's usually water cooler talk at conferences, back channel Slack conversations in with other accountants in the industry. We're just amplifying the vibe that's on the street, right? We're really just bringing it up to the attention level it might need on the show. It's not our opinion on the 150 hour rule. We'll just bring up everybody else's opinions of it, just broadcasting it. Yeah. Yeah. And I mean, kudos on that. And I'm happy, I'm happy that, you know, to see that the people with the very large platform, I tend to generally agree with a lot of what you've got to say. And it's very kind of pro, you know, the young talent and, and kind of making accounting better for people. So, um, you know, I'm really supportive of your guys's influence growing. Absolutely. Because I think that you're, you're using it responsibly, you're using it in the right place. So that's, that's good. We're trying. And like when these state societies are listening and, and all that, does that typically become like a, like a back and forth conversation? Or is it usually just kind of one way, like, you know, that they're active listeners and, and then you kind of see the outcome? Well, a lot of times though, we'll get emails from somebody that says, Hey, this is happening or so-and-so listen to this, you know, it's almost like a sideline cheerleader, like, Hey, keep it up. You know, this is helping me make an argument I tried to make today in a director's meeting or whatever it might be. And so, so it's a little, we're getting, you know, we don't disclose who's sending us those emails or who's saying this, but we get, we do get those types of emails from people that are at the societies. So it's in a way like they're cheerleaders because they're kind of saying, keep it up. So they're hearing it, but they're not publicly, you know, nobody at state society is publicly taking something we said and resharing it on social media, right. But they're definitely hearing it. And it's good to hear from people at the state societies that every state society has, you know, a little champion for making change. And usually those are the person that's either listening to our podcast or a fan. And that's usually the person reaching out and it's just like everything else. It's just slow and takes time. Yeah. Well, I'm happy to hear. And then going more into kind of maybe your own story with all of this, like how did you end up in the accounting space? Because I think your background is more like an engineering type background, right? Ish. I mean, when I went to college, I did go for accounting. I always had like interest in like personal finance, but also computers, right? So I, I always had this like, not, not a direct plan, but I remember when Quicken came out, you know, and the personal computer started coming out and then the first QuickBooks came out and I used to work at a software store selling boxed, I sold QuickBooks in the box when it first came out for QuickBooks to us, like sold it like at the mall, right. And always into that, right. Into the software, but also like into accounting as well. And so I didn't have the best college career, if you want to call it that, did not finish and did not get a degree. I'm not an accountant, but I did take a job doing tech support at QuickBooks. And so I was doing tech support for QuickBooks, so that got me into really that overlap, which was my interest. It was software and accounting. So it really got me into the, at that level. And then I did lots of tech support calls that led into doing quality assurance, because it's kind of a natural follow on. And then that got me into doing some automated testing, which really led to more engineering type work. And then, so I've done some engineering, I've done some code work. It's really poor. You don't want me to write code, done marketing, kind of every role, but commissioned sales when I was at Intuit. And I was there for almost 22 years. And I think if, probably like a lot of accountants, I have an engineer brain, right. Even Blake, my co-host and business partner, Blake has an engineer brain. He doesn't have the context, you know, that, you know, you have to write code and C sharp, C sharp, C plus plus, whatever you need to, that was always a part that slowed me down with coding. It's like, you have to write it the right way and put the parentheses and the bracket in the right spot. And that was all the stuff that was difficult for writing code. But I think a lot of accountants have engineer brains because they build things in Excel. And Excel is essentially, you're coding Excel. When you write formulas and connect things, you're just writing code. And so a lot of accountants have engineer brains, they're just not writing software code directly in the traditional sense, but they technically speak it in their brain, they're doing it. And that's what's interesting about AI in the future. If AI can write the code for you, accountants are going to be able to communicate very clearly what the requirements would be and get that context. Hopefully the AI will write the context you need, right. And put the brackets in where you need and all that stuff. So you can execute the code on a minute, compile it properly. Yeah. Yeah, no, I find that's interesting. Like SQL being not full blown coding, but like in my last job, I was very much kind of the bridge between like finance accounting and like the data team. And we had this thing and it was kind of almost like a SQL builder. And they were like, oh, like, you're really like, you're catching on to this incredibly quick. And I was like, oh, yeah, like, this is all just basically like the same functions as like a pivot table. And like, you know, like all of the things you're, you're like, oh, you can kind of relay this back to Excel. And then there's some things that you can't where it's like, you know, return me everything where the third character is an S and like, it gets a little bit beyond that. But like, yeah, it was it was the same logic. So it is interesting. You hear kind of to hear you talk about like the comparison between accounting and engineer thing. Well, it's logical, and it's somewhat linear. And it's if this then this, which is bookkeeping and accounting. It's the same brain, it's just different training, like you spend time, maybe a lot of accounts spend time memorizing some tax law, possibly, instead of memorizing, you know, all the hot keys in the syntax you need to do to write code in a compiler, C++ or something. Interesting. And then so in the early days, like, did you build like the first iterations of earmark? Or did you kind of like have no, I did not write any code for earmark at all, Blake, actually in the early days. So we're kind of on parallel tracks. We were doing our podcast together. But at that time, when I left, I left into it, and I was ready to go into do more podcasting stuff. I wanted to do like a podcast network and produce a couple different shows. So I started going down that path. And at the same time, Blake was, he, I think, just left Flowcast, and he was at draft. And so he was really deeply in draft, and he's like, I can't, I'm got too much focus on draft right now. And so when he was at draft, at that time, I was like itching to do my thing. And then when he was ready to get out of draft and start doing earmark more, I was like, sorry, that's at that time, I was heavily involved in Emilio, like, sorry, it's not good timing for me now to go down that next path. And so it took a little while for our paths to kind of cross and we just wound up just combining everything to where we now have earmark media, which is the production company where we produce podcasts and create accounting related media, and then we have the app company, which is earmark. And so we crossed, we kind of collided two separate marches that were very overlapping into one unified march, essentially. Okay. And you recently closed a round of funding for earmark, right? Yeah. So we did a raise, we raised about $500,000 for earmark to build it out bigger. So the first three years, four years here, we've pretty much proved the concept. We have an app. We rebuilt the app last April already once because we were only Google Play, so Android and Apple. It was just two mobile apps only, and you couldn't use it on the web. So we rebuilt the whole app, so now you can use it on the web or your mobile devices. Rebuilt the backend, a new database, and in theory, now we could scale to millions of customers. So we rebuilt the app last April, and now we're on that next step because now we have paying customers, we have lots of users using the app for free. What's the next step? So over the next 12 to 18 months, we're going to obviously lean into marketing a little bit more. We're going to build out other features we need. Hiring engineers is expensive, so you need that money to build the app more because I'm not going to code it. That's for sure. So we have to hire engineers that know how to write code and build out the app features that we need. And so you're going to see for us the expansion of teams. Like right now, if you have an accounting firm and you want to put your team on earmark, it's a lot of emails back and forth. We want to make that all self-serve in the app so you can just add the seats you need for your team and move on with your life and not do this dance back and forth with us. So I think that's the next steps is building out more scalability and user friendliness to the app than we already have. And that was the first iteration that was in April. We rolled out a new backend database and the new front end for the web. Okay, well, congrats on all the progress there. And it's cool seeing the different visions. I've worked with LumiQ in the past as well, and now I'm kind of dabbling in earmark as well and doing all of that. Either way, I truly believe in the vision of having CPE through podcasts. I go to conferences now and I'm not thinking about, oh, I need to earn my ethics hours. I need to do this. I need to do that. I'm just like, send me the certificate or don't, I'm covered. And so I think that that's tremendous. It's cool seeing the two very opposite sides being built where they're all about very enterprisey and you guys have been very all about the quick sign-on, individual user type growth and now maybe exploring different avenues as well. But it was funny, I haven't talked about this publicly, but when I did my fundraise, I spoke to you guys and I spoke to LumiQ as well. And I got completely opposing advice from both sides based off of the way you were each building. And I was like, oh, that's actually really funny to me. And it's cool seeing actually both sides are successful. And so anyways, I thought that that was very, very interesting to me. But I love what you guys are doing at earmark and I'm always staying tuned and kind of what's new in that. And it's not just a podcast, like anything with a play button, we could basically turn into a course on our app. So if it's a YouTube video, maybe somebody recorded a webinar and they put it up on their website. And they do lunch and learns, we can take that lunch and learn, put it into our machine and at the end, there's a CP course. So anybody attending that lunch and learn can come and take a quiz, prove their knowledge, get their CPE. And that's the taking the quiz part's been interesting for me as we've gone through this journey because you would think at one level, like, oh, listen to podcasts, that's not like a real way to get educated. And it's actually probably the best way we're starting to find out because you have to prove knowledge. If you think about different ways to get CP, you said conferences, you go to a conference, you scan your badge at the door, you fall asleep in the chair, you get a CPE. You don't have to learn anything. You get the CPE even if you're sleeping, it doesn't matter. And then you think about live webinars, a lot of those are just attendance based. You just hit a button three times to say you're there, I'm here, I'm here, I'm here. You could be checking email. You don't actually have to pay attention to anything going on in the webinar. You just have to hit that button three times. And sometimes it's a polling question, but you're basically hitting a button that says I'm here, I'm here, I'm here three times and you get your CP credit. But what's interesting about podcasts, people are walking their dog, they're washing their car, they're doing their laundry, they're actually listening and digesting. And then they have to prove knowledge that they learned something. And the quizzes are somewhat difficult. And I know this because I have yet to just open up a quiz and guess the answers and pass the quiz. Even for my own podcast, I'll go in and I'm like, all right, so I try to demo the app and I try to show people what it looks like to successfully get a certificate. And I can't do it. You actually have to listen and digest the content. And people are, and they're truly learning on the platform, which is really the amazing thing. You would think it would be the opposite. You'd actually think in person would be the best way to learn, but it's probably not because you're just, as long as you have a pulse and a body and you came to the room and they scanned your badge, you get credit. It doesn't, you don't have to prove that you paid attention or learn anything. Yeah. Also, like for me, I'm super attentive when I'm walking or at the gym or whatever, and stuff goes in really well. Like at a conference, like, you know, full disclosure, I'm hungover and I'm thinking, oh, I need to go talk to that person because I know, you know, whatever his firm needs comp data or whatever. Right. So it is, it is pretty different. And the things do actually kind of sink in a little bit more that way. And how impactful has it been to have kind of both platforms? Like I find like with the accounting podcast, I imagine kind of a lot of the things that you're starting, you're already kind of starting on second base, right? Well, the reason the earmark even got created was because listeners of the accounting podcast started asking if they could get CP for listening to our podcast and Blake opened his mouth on one of our episodes and made a commitment. He's like, I'm going to figure out how to make this happen. Yes. You'll be able to do this. And this was 20 going into 2022, I think, and he figured out how to make it happen. And that would mean, but it was basically customers asking for it and we're just delivering what the end users want. And this is part of my, I said, I don't have a degree, but I have a PhD from Intuit. I know product and customers and I know how to figure out what customers want and how do we build it. And that's basically what Blake did. He listened to customers asking for CP for our podcast and that created earmark and then said, well, then we could do this for other podcasts too. It doesn't just have to be our podcast to do this. Nice. Yeah, I had explored that at one point could could be one day in the future. Not not just yet. But yeah, I really like what you guys do in terms of like taking in other podcasts to and making them like CP eligible and stuff like that. I think that's really cool. Well, yeah, I love hearing about your journey. I think I would be kind of remiss to not talk about some of the news because like I mentioned, that's what I that's what I really go to you and Blake for is to stay on top of everything that's happening. So yeah, to kick us off. Yeah, Citroen Cooperman deal just got announced a few days ago from when we're recording this. And basically New Mountain Capital selling either their full stake or a portion of their stake to Blackstone. And I crunched some of the numbers here on at least the EBITDA multiple. So it went from an 11x to a 15x EBITDA multiple. And then when you factor in the revenue growth times the EBITDA multiple changes, you end up at 3.7x returns in just under three years. So like a 270% gain in basically two and three quarter years. Now, I think this like sets the tone in a pretty major way for PE in accounting going forward. I'm curious for kind of your take on what you think this all means for the accounting industry. So we just recorded our latest episode Monday morning. So three days ago before today's Thursday. So four days ago, we kind of put out our 2025 predictions. And one of my predictions was that a lot of these experiments we've seen over the last three, four or five years in the accounting industry are going to start playing out in 2025. We're going to see finish lines. And one of them I specifically talked about is like we're going to see a concrete example of this PE experiment because arguably PE in accounting has been an experiment for the last five years. Nobody knows what it means. And one of the things is, are we going to see like a firm being resold for a profit? Is there going to be a flip? Are firms going to buckle from the pressure of the PE, like squeezing the juice too much and causing a firm to fold? Like we're just going to see a finish line. I didn't know three days later we'd be talking about the flip has happened. There's a PE finish line now. But I think you're right. If that's the numbers they're looking for, other PE firms are going to look at what they did and like, can we squeeze it the same way and get an exit like that? So I don't think PE is really buying this for the long run. They're not investing like VCs where it's to the moon and they want this fast return. But they also, they want a three to five year return, right? They want to flip these firms. So who's going to buy? There's been so much PE going into accounting firms. They're going to want an exit in five years. Like who's going to buy these in five years? But you're right. That's a pretty good return, I think, for the Citrin-Cooperman deal. Yeah, I mean, that seems tremendous. And like, what you hear a lot of from kind of these funds is like, yeah, it's a lot harder to make that type of return on a $500 million deal than it is on a $5 million deal, right? Or whatever, like, the kind of the larger the scale, the harder it is to kind of get that type of outcome on your way in. And so yeah, that's like truly very, very impressive that that was achieved. And I've had a lot of conversations about this recently, and quite recently with Daniel Hood and Seth Feinberg, who have very strong opinions, or not even strong opinions, but very informed opinions on this type of stuff. And one of the things they were talking about is that this maybe even becomes a more attractive purchase for PE on the second turn, because they're now buying a firm that is accustomed to being owned by private equity. And so they're probably very good about all of the type of reporting needs that they want internally. They probably have some experience in how to kind of like balance that type of relationship. So yeah, I find that find that very interesting, for sure. And if the firm, the had business model problems, etc, it's been quote, unquote, fixed. Yeah, I mean, allegedly, but they polished it up a little bit. Yeah. Yeah, I'm gonna be creating a report again on this. But like last year, you guys actually talked about it on your pod, where I had done like, oh, here are the best firms by job satisfaction. And here's some of the best firms. And then Blake, I think it was immediately emailed me and said, like, dot, dot, dot, what are the worst ones? And I think Citroen was kind of on the low end of like job satisfaction for employees reported on big for transparency. I'm gonna have to do some digging again and see where kind of they ended up and where they moved from last year to this year and see if there's any kind of change there. Yeah. Now, how is when a firm's resold? How's this going to affect compensation? Because I think a lot of the P deals going on the first round ones is because partners are trying to cash out. There's not an option to sell the firm. How do we cash out? How do I retire now? How do I get out of this game? And obviously, a lot of middle tiered employees are getting hurt by that, because they're not getting their closure on their own equity, or maybe they're not even being invited to have an equity position yet. So when this gets flipped the second time, how do you see that's going to affect, you know, the compensation across the board for for partners down to entry level? I mean, with this being so new, it's kind of hard to say I've done a lot of like digging on what we're seeing in PE versus non PE. And it was actually not as bad as I thought. Earmark was actually the sponsor of that, like it was like three newsletter series. And like part of the reasoning being like, hey, I think I really want to work with earmark on these is because you guys are very open, you speak your mind. And you're not like, you know, you're not beholden to these other organizations, which I think is a large part of what makes your podcast so great. But I was like, I think this might be a bloodbath. I think this might be a three newsletter series of me saying, things are going so poorly. And then I actually dug into the data. And I was like, oh, huh. So like in terms of salary growth year over year at PE backed firms, the average was 5.3%. Between 2022 and 2024 versus non PE backed firms was 3.9%. So salaries are growing faster. So that was compensation. A little bit less meaningful was the growth in bonuses. On average bonuses at PE backed firms were 5.5% higher than non PE backed firms. So not the most meaningful, especially when you talk about a bonus being maybe around 10% of comp 5.5% of 10% it's not crazy. There was a big jump. However, in the year that the PE deal occurred, bonuses were 16 and a half percent higher on average than the year prior. So I would expect that to maybe happen with this turn. And then senior manager bonuses saw a huge jump 43% in that year. But that's probably because they just potentially had the equity partner track yanked from them. And then on the job satisfaction side of things, 6.75 out of 10 for PE backed versus 6.9. So a little bit lower, not huge, but that was a real story of like winners and losers. Some were pretty steady and some job satisfaction tanked. And then hours PE firms self-reported hours were 2% higher than non PE backed firms. So not like totally crazy. And so seeing the second turn, I think we might see less of a huge jump in like bonuses, especially for senior managers, because their structure and their possibility of the equity partner track hasn't really changed necessarily. I would hope to see maybe this being a big bonus here. And if they were going to leave, they would have left after the first PE investment. I've done this before, I might as well say it's not that big of a deal. Yeah. So I could see this being like a big bonus year for members of that firm, especially if there wasn't like a strong ESOP plan in place. If there was an ESOP plan in place, then that kind of handles itself, right? Because even if you're like a manager and you have 15 grand of equity, well, that's probably grown by three and a half or by yeah, three and a half times. So that has now become like $50,000. And so that kind of handles itself, but I'm very, very curious to see what happens with compensation. So with these PE firms, when they make an acquisition of a firm, do they allow you to get equity into the entire PE organization or just into the firm you work at? Do you know after treating it that way? Because now you're part of a much bigger company in a way, and you'd want to have equity in the whole thing, which is a lot less risky than having just equity in the firm you work in. For these kind of mega deals, I'm a little bit less sure. I've spoken with Tim Petri a lot. I think what he talked about with HD Growth when they got acquired by Ascend, I think he kind of got a bunch of equity in the overall Ascend platform, which was like him and 10 or 11 additional firms. And so it does become a little bit de-risked. But in the case of like a Citrin-Cooperman size deal, because New Mountain Capital, I believe is also the investor in the Grant Thornton deal. So I'm not totally sure how that works, but it does sound like oftentimes when these deals happen, there's like an option of like you can just take all your chips off the table and kind of retire, which is great for like maybe the older partner. Or you can kind of roll this back into equity into, again, either the fund where your firm was acquired through, or again, maybe some kind of carve out of the performance of your own firm. Yeah, because I think you'd want to, from a risk perspective, you'd want some equity in Blackstone now. Yeah, I mean, that's probably great. It really spreads it out. All your eggs aren't in one bucket anymore. Yeah. I would love to see with ESOP plans, this becoming the case and a lot of accountants now having equity in these diversified kind of type of accounting portfolios. I think that that's a way to make this work and to continue to make this attractive. I think the presence of PE deals, I do think will ultimately probably drive salaries a little bit higher, if anything. But there is that question of the quality of life working at those firms has to be maintained to a certain level. And the assumptions were incredibly bad versus the data that I'm looking at is just kind of like, eh, people are a little bit less happy and they're working a little bit more, but they are kind of being paid for the differential. So yeah, no, I'm incredibly curious to see. And if entry level employees can see this as like, Hey, this is a way for me to cash in possibly on the future in the accounting industry or joining a firm instead of going to work for a tech startup that could have an exit, they could view this as an exit. And you're right. This can, you can pass that equity down a little bit. Somebody has a vested interest in the next flip. It could encourage more people to go into accounting, right? If they see like, Oh, look, if you go into accounting, you have a chance of hitting it big. If you get in the right situation, just like you, every startup could fail, but you could still hit it big with the right startup if it goes public or gets acquired. Um, so that's, what's interesting to me is where you're rolling up. Do you get a piece of that action as it rolls up or are you just only getting compensation, like straight up salary compensation? Yeah, no, I'll have to, I'll have to pick around and see what I can find out on that. But like, for me moving into tech from accounting, like that was a thing. It's like, Hey, it takes one right pick of an employer to like, maybe not completely uphold and change your life. Like it might not be like, you know, NVIDIA type returns where you could do three and have none of it happen. That's another option too. Yeah. Yeah. But like for me, like had I joined the last startup I was at three months earlier than I did before they did their series B in 2021, which kind of ballooned valuations, like I'd be looking at probably a guarantee, not guaranteed, but you know what I mean? Like I would already probably be three X up on my equity there. Um, and I think with an accounting firm, although like the upside is a little bit less, like you're not really going to see any like 20 X returns on your equity. I think you have a far greater level of certainty of a two or three X return if you're there for like many, many years. Right. So no, it's all a, it's all very, very interesting. And I also look forward to hearing the, uh, the accounting podcast episode on this and hearing some of the discussion on that. Yeah. Cause I, this is the first time it really came up just now this morning. I've not seen the news on it. I haven't read about it a lot or digested it much, but it's, it's interesting that, you know, we're nine days into 2025 and we're already seeing this first P experiment flip happen. Yeah. Yeah. And it's cool. Like, uh, you know, right before podcast with, with someone who's kind of talking about the industry so much, I was like, Oh, what am I going to talk about? And it was, uh, it was a pretty obvious one. So yeah. Thank you for kind of doing the back and forth with me on this. You know, I'm not, I'm not Blake. I hope he doesn't feel too jealous of, of me getting to have this conversation with you first, but, uh, yeah, I really appreciate it. No, it's, it's, it's news. I mean, this is the kind of stuff we go through, right? This, this is news. That's it's some say it's, it's giving closure on a story that's been open now for the last five years. We just keep seeing this P come in with no, like, why is it coming in? Like P companies usually have a reason. Yes. Accounting firms are attractive, but why? Oh, now we know why, because they think they can flip it. Yeah. But then what, what is, is Blackstone going to be, you know, I think Blackstone has like commercial real estate, like apartment buildings. I think they own more than anybody else or something ridiculous like that. Is that, this is going to become one company's going to own this over a hugely percentage of accounting firms. It's going to be weird, you know? Yeah. Yeah. I, I kind of hope not just because like competition kind of drives, you know, advances in the industry. Um, and then like the question is, I think Blackstone's like the, or one of the biggest kind of private equity funds out there. So it's like, okay, well, who's going to buy this from Blackstone for three X returns, you know, in three to five more years, or is the Avenue like an IPO? I'm always curious about that. It's like, are we 10 years away from seeing a ton of publicly traded accounting firms, or, you know, is this going to be owned by family office? Ultimately, I've had some conversations about that where they don't have those timelines. Like they don't have to return a fund in a certain number of years. They're just owning it for cashflow. Right. But, uh, yeah, it's, it's interesting for sure. And I remember what Blackstone pays to accounting firms because Blackstone has very complicated bookkeeping, I'm sure. And tax situations, and they own all these properties and they have all these businesses they own and they're probably spending a lot on accountants, accountants and accounting firms as it is, is this cheaper for them now just buy an accounting firm and just push everything into this one firm. It's very convenient, right? Like, Hey, we own our own accounting firm now, which if you can do that instead of laying out the money, why wouldn't you? Yeah. And I mean, there, you know, uh, other than all the independence issues, I'm sure they can't audit their own kind of owned companies, or I would hope not with audit quality already being kind of down the drain. But for all the other, lots of other services that are, they're paying for. Yeah, no, that'll be, it'll be interesting to see. And again, yeah. If Citroen just got now thousands of new clients for free out of this deal, like, yeah, that's could be worthwhile. And it could be a way that like the valuation jumps up just by them being owned by Blackstone. Right. So, yeah. And there's an interesting stat here on the CPA practice advisor on the article at the very more than 35% of the top 30 accounting firms in the U S by revenue of sold stakes to their firms, mostly usually a controlling stake to private equity investors. So this is going to happen again. It's just, it's a numbers game. There's just too many firms that have taken private equity that for this not to have another flip in 2025 would be very surprising. It's a math game at this point. And I mean, I've, I've been approached by private equity wanting to use my data to do market research, right? Like you can see firsthand, um, how like people are kind of really, really paying attention to this space. Now I get, I get emails from private equity all the time because, and also from other people that want to provide services. They think I'm an accounting firm. Yeah. That's a lot like they don't do good reach diligence and they send you messages. And I think, honestly, I think they think we're an accounting firm when they approached me about things. Yeah. I've been, I've been offered to be acquired as an accounting firm as well as part of a rollup, which is, uh, yeah, not, not the best impression, but anyways, do you do any due diligence? Like this is scary. Yeah. I should have just said yes. Uh, yeah. Well, um, thank you so much for coming on the pod, David. I appreciate it. It's been a long time coming and, uh, I love learning more about your story and kind of, uh, we'll continue to be an avid listener of, uh, of your and Blake's conversations on the accounting podcast. Yeah. Thanks for having me. And what's next? I mean, where are you, what's next for you? What's next for big, uh, big for transparency. Like continuing improvements, um, across a lot of the platforms. So right now I'm working on, um, like a big improvement for firms who are using the data. So I'm working on kind of pre-made bundles of cost of living cities. So people can just go, okay, I'm in a tier three city and you automatically get all kind of like the bundles for that. So that's coming out this month. Um, when I started working with firms, it was basically just sending them a spreadsheet with a bunch of pivot tables. Now it's like, okay, there's like actual like dashboards and like the, you know, all of that's kind of improving the ways to like splice the data and look at it's improving. Um, I'm kind of trying to build out a little bit of like a login enterprise suite, um, where it's going to look a lot more like the products that they're using. And then kind of on the side of, you know, who would be the listener and people who are using big for transparency for their own purposes. Um, I am looking to improve the mobile, uh, experience a lot. So databases in general are just not really meant to be used on mobile. Right. Yeah. Um, but before like it was unusable on your phone. So I was able to kind of scrap something together already. That's live. That is definitely a much better experience, but there's still a lot of juice to be squeezed there in terms of improving the experience. And I would love to like integrate some AI on like conversational, right? Like talk about your situation and then this database will help. That's something that's kind of hopefully on the horizon for me for 2025 as well. And then other than that, just more content, more, more creating things, you know, I'm going to keep the pod going. I got to hit, you know, at least a hundred episodes, uh, before I consider how this is going. And then, uh, you know, a lot more of the newsletter in the coming year. So just more of everything now that I'm kind of full-time on this. And is your data still all like self-reported employees of firms reporting up? You're not getting an HR department of firm giving you a dump of like, here's all our data for our employees. No. Yeah. I kind of want to keep it pure in that sense. Um, you know, I, I think once I start taking information for firms, it's a little bit harder for me to like openly share that on the internet. And that's kind of like my, um, that's kind of like my commitment to the user for transparency is like, listen, like this thing was built off of people willingly sharing their things with the community. I can't then go and like gate it from you and not let you look at it. Right. I can offer better ways to look at it, which are paid solutions to firms. But like at the end of the day, you're always going to be able to look at it is kind of like where I stand. Um, and yeah, once I start taking in data from the firms becomes complicated and it's also a differentiator, right. Where I'm like, listen, I'm kind of the only solution where you're not going to lose two weeks of your HR team's time. It's actually like, it'll take you like two hours and you're going to see what you should be paying. So, um, yeah, so that's kind of where, where things are at right now, but yeah, I'm hoping to do a lot more conferences. I kind of missed the speaker window for a lot of them to try and apply to be a speaker, but I'm at least going to go to a lot of them this year and meet the people. That's you kind of have to, right. You have to talking to the two people is how you learn what to build. Yeah. Like you learn what they're thinking about. You learn what they care about. So many, and I've seen this with product managers and developers and people that just don't want to talk to the end users. Well, I'm busy and I can't, I don't want to give them my calendar. My third, third, the users of the product, you should take the, you should go out of your way to take phone calls from them and to have Zoom calls with them. It's the only way you're going to build the right thing and understand what their pains are. You can't just do it from this like, well, I'll send out a survey or this stepped back approach. You have to get in the weeds. Really, you know, Intuit was classic at this, you know, that fly on the wall, follow me homes. You go to the customer's business and you sit there and you watch what they do. And that's how you figure out what to build. And a lot of, a lot of product managers struggle with that and developers struggle with that and founders struggle with that, not feeling the pain. And then how do you solve it? Yeah. If you're not feeling the pain yourself. Yeah. I'm like a, this is probably like so bad for my mental health, but it's, it's equivalent to that person who keeps Googling themselves. Like I will keyword search big for transparency on so many platforms. And like every once in a while I open a forum where people are like, God, this thing's a piece of crap. Uh, you know, complaining. And it was often about the mobile experience being like, ah, this is so hard to use. And again, I'm like, you know, it's an easy cop-out to be like, dude, this is a database. Like this is not meant to be mobile. But then at the end of the day, like that's kind of the biggest thing people complain about. And so I'm like, all right, well, like I got to do something here. Right. So it's good when they complain because that means they care. Yeah. Like the. Yeah. If it's just silence, then I know I've kind of lost them for sure. So. Yeah. And you can learn from that when they, when they complain or they, you know. Yeah. You get that, the hate one-star review. They care. They're listening. It's, it's, you actually want that. You want some bad reviews. You want some people hating you a little bit because that means you're, you're doing something right. Cause every time somebody is hating you, there's hundreds of people that probably love you that are not. Yeah. No one-star reviews on this pod though. Uh, if you're still listening to this, maybe this episode, give it a review, but hopefully not a one-star. Yeah. But I am very open to the feedback. I have had a lot of people kind of email in being like, Oh, I wish you'd talk about this. And I'm like, this is a great, like, sure. I'm, I'm happy to. So yeah. Yeah. I guess you guys probably get a lot of outreach from like your, your community, like asking, Hey, more of this, less of this. Right. Well, not so much that we've, we've surveyed our listeners, um, but we get a lot of, and it's happened more and more and we'll, cause we live stream now on YouTube and we get a lot of just out of context. People want career advice. I'm going to major in accounting. Should I open my own firm? Should I take it? Should I, what should I do? And sometimes when I say it's out of context, we'll be talking about X on the podcast and they'll just put a comment in the YouTube feed, like out of the, just a random immediately. Can you tell, give me advice on this? And you see a lot of that and you see it in emails to people send us emails. So it's people are people they're missing this advice. And I mean, to some extent you're giving them advice on salary, some of that negotiation type stuff, but in general, people don't know what they want to do. Yeah. We, we get a lot of those types of questions and unfortunately, like I don't have all the answers either. I don't know if the details to be like, Oh, you should do this other than, you know, we know a lot of people that are starting cash practices relatively cheaply. You get a laptop, go to Starbucks. You can, this is the beauty of our industry. You can start a practice for relatively cheap and take clients anywhere in the world. And that's an option that I don't think is being presented in colleges to people or by big four. The path is get your degree, go become a CPA, take a job at big four. That's the, that's the only option they know. And they don't know there's this whole other amazing world that exists in accounting. They just don't, nobody tells them about it and they find, they figure it out years in and hopefully by the time they figure it out, they haven't quit accounting entirely. Yeah. That's the situation we get into is people, they get a bad experience with either big four or, you know, their early start of their career and then they leave accounting entirely. And that's not good. We want to keep them in accounting and that's why you could do Cass. It's great. Like learn, learn to run a business. And that's what Cass is essentially. You're doing true accounting. This is all the other stuff. Tax is just law, right? Like true accounting is Cass work, client accounting services. That's accounting. You know, you're doing accounting and bookkeeping. Debits and credits. And tax is scary to start. Like I had a book of business on the side after I left Deloitte. I kind of like kicked up a little like tax crypto thing and actually managed to sell it off this year. I didn't, I really didn't want to do it anymore. And it was just kind of like a small little side business, but you go like, Hey, like these numbers are getting kind of crazy. And like, I'm operating in like, you know, crypto, like not everything is as clear as it could be. And you're like, Oh my God. Like, am I like opening myself up to a ton of like legal liability here? You can't just kick up an audit practice. Like that makes no sense. And so like, yeah, I do feel like Cass is like a really good place to start for people for sure. Yeah. Anyways. Yeah. Thank you. Thank you so much for, for joining me on the pod, David. I, I really appreciate you taking the time. And like I said, I'm going to stay, stay tuned to. any new developments with earmark. And I hope, uh, I hope you all the best with that. Thanks for having me. I appreciate it. I really enjoyed it. Thanks, Tom. Thank you.