I had the opportunity to catch up with the joint CEO’s of the SME digital market place, Proquo – Carl Spurling, from NAB and Ricky Lam from Telstra, to discuss the development of the platform and their future plans.
Proquo was formally launched a couple of months ago, following research in 2015 with SME’s from NAB’s SME Village and Telstra’s Gurrowa Labs. It uses a custom built software platform to enable SME’s to build a network of contacts and to trade with each other, for cash or in kind. Proquo say they are well on their way to acquiring their target of 2,000 customers in the first six months, from across the country.
We discussed the motivation for the launch of the business. Both NAB and Telstra have strong interest in the SME sector, and recognise the importance of getting SME’s digitally enabled. They cited research showing that 40% of SME’s were not online at all. They said they had identified a real need to provide an onramp for SME’s, and so spotted the opportunity to create the marketplace.
Now Proquo offers small business owners and accounting experts access to a range of services from other providers. Users can create briefs for the work they need, provide quotes, manage payments and publish reviews, all on the one platform. Micro and small business owners, as well as experts in the accounting industry are invited to register for free to take advantage of this tool to aid networking and help their business thrive. The services offered under the accounting umbrella include: Budgeting, Book keeping, Xero, tax and many more.
They want to focus, rightly, on getting the core platform running smoothly, and acquiring new customers. However, we discussed some of the potential extension strategies which might be considered later.
First, the data which is being captured in the system has the potential to be used for many purposes. For example, individual SME’s could be rated, just like other digital marketplaces, as part of building a network of trusted contacts. They have no firm plans to offer loans, but with the NAB connection, it is certainly an option for later.
Another angle could be the consolidation of purchases, via ecommerce, thus enabling individual businesses to gain group discounts. Again, for now, group buying is not enabled, but could be in the future.
We also discussed the thorny tax issues around offering services in kind. The ATO of course says that barter transactions will have a tax implication. So it will be important to track and manage this aspect. Whilst Proquo can generate a range of documents, they will not be offering tax advice. That said, within the network there could be Accountants who could help. We think there is an opportunity for Proquo to embed this type of tax reporting in the system.
Finally, today the platform is web based, and optimised for mobile, tablet and PC. Down the track, they may well consider a dedicated app, but only once the core functionality has been bedded down.
For now, Proquo is focussing on getting established with a high-quality portfolio of businesses. They will measure success by how successful customers on the platform will be, and how much value SME’s gain from it. Whilst it is a for-profit business in the long term, their initial focus is on building momentum and value for their customers.
We think this is an excellent example of digital innovation, and has the potential to assist many SME’s, who in the early years especially find building a network of customer’s hard work, and funding difficult. In fact, half will fail in their first five years in business. Proquo looks like a good catalyst and the SME sector should welcome the innovation it represents.
