Company: 1099reporter helps businesses file their 1099-MISC forms correctly with a simple interface and low cost.
Solution: 1099reporter goes one step further by providing recipients with e-delivery – a secure electronic delivery system.
Timeline: Jan 2008 - Apr 2010
1099reporter allows the business managers to correctly file their 1099-MISC forms with a simple interface and low cost. Over 160M 1099-MISC forms are filed every year of which 20M are filed on paper. This creates huge inefficiencies for the employers, government and recipients.
1099reporter electronically files with the IRS and delivers to the recipient—via print/mail or e-deliver! In short, purchase and forget about it. 1099reporter takes care of everything else.
- Team management
- SSNiF identification. This process was developed by Philip Haine to help focus designs by forcing every feature to be explained with a stakeholder and situation that informs the need (Stakeholder, Situation, Need, Feature). Ultimately, the needs become the primary focus of the design.
- Visual design
- Development (CakePHP, CSS2, XHTML, Prototype/Scriptaculous)
Example Problem: Existing solutions didn’t consider the entire need
Providing electronic deliver to the IRS only partially solves the 1099-MISC paper problem. Millions of these forms are printed and mailed to recipients every year. In fact, two copies of each 1099-MISC must be delivered to each recipient. This process is expensive and susceptible to error. For instance, a few years ago a large company (that shall go unnamed) had a printing error on one of their presses. Because the forms were printed by address, the slip lead to tens of thousands of people getting one copy of their own 1099-MISC and one of copy of their neighbor’s!
Example Solution: Submit and forget solution that ensures forms are filed correctly on time
1099reporter goes one step further by providing recipients with the option of e-delivery—a secure electronic delivery system. E-delivery is instantaneous, so recipients can retrieve the forms as soon as the employer files them. E-delivery decreases costs, risks and creates an entirely green filing solution. 1099reporter also provides feedback to the employer as the process moves forward (e.g., notification when a recipient accepts e-delivery, the IRS accepts the form, etc.). In short, 1099reporter provides a solution that manages the entire 1099-MISC filing process with a single click.
- Simple interface designed for small batches (eventually emulated by Intuit and other 1099-MISC filing providers)
- Secure, automatic electronic filing with IRS
- E-delivery for recipients that opt-in
- Print and mail vendor service to physically deliver to recipients (only if e-delivery not accepted)
Released in 2008. There were a few hundred paying customers in the first season. Despite a few hick-ups in our payment gateway, we had many customers rave about the service. Unfortunately, we didn’t have funding for major marketing and ultimately weren’t able to grow the customer base large enough to sustain the company.
The product ultimately failed for three reasons.
- Difficulty in marketing to a fragmented customer base with extremely limited funds. This was a completely bootstrapped operation, and we underestimated the cost and effort needed to market to small businesses likely to need a few 1099-MISC forms filed.
- Overly ambitious MVP that added a lot of cost. We could have (and considered) a version of the product without the print vendor. In retrospect, that would have been less expensive to build and given us more time to focus on marketing.
- Incomplete MVP. Although we did complete the solution for 1099-MISCs, we decided to push the W-9 component to v2. The W-9 is a simple form with demographic information that a contractor gives an employer, so the employer has information needed to file the 1099-MISC at the end of the year. Had we pursued this side of the equation instead of the print vendor, we would have been able to push the product 12 months a year from the contractor side… instead of being limited to about 4 weeks of viable marketing time in late December and early January.
Today, it may succeed more easily through the Microsoft and Apple app stores. The app stores present a marketing channel that wasn’t available in 2008, but may be effective.