A Conversation with Alex Oxford, CEO, and Growth Lead at TaxValet: Part 1
Hosts & Guests
Alex Oxford, CMI, Founder & CEO of TaxValet
Meredith Smith, State and Local Tax Senior Manager
Judy Vordran, Leader, Educator, Advocate, J.D., CPA
Topics Discussed in this Episode:
- TaxValet’s core purpose and approach to sales tax
- Building a client experience tailored to their individual needs
- Creating psychological safety in the workplace and in client relationships
What You Will Discover:
- [02:07] Exploring the need for professional services in the SMB Market
- [06:26] Streamlining tax solutions for E-commerce and software businesses
- [15:40] Creating a culture of safety and transparency in the workplace
- Our purpose as a company is to transform negative emotions into something positive for our clients, our partners, and our employees. We are looking at sales tax not just being about the numbers, but understanding our clients are stressed out and overwhelmed and that is the problem we are solving.” – Alex Oxford [04:37]
- “We know that as a company if we are there to support you as an employee you will be there to support the business later on. Focusing on trust and creating psychological safety so that people feel safe to talk about things and will challenge each other.” – Alex Oxford [16:32]
- “I’m a big believer in honesty, transparency and taking care of the people that work with you and are a part of your family.” – Judy Vorndran [17:20]
- “As leaders we owe it to our team to be the best leaders we can be, to show up as servant leaders and help them grow, develop, and realize what they are fully capable of.” – Alex Oxford [17:26]
Meredith Smith: All right, Alex, thank you so much for joining us today. It's a pleasure to have you on the podcast and speak with you.
Alex Oxford: Yeah, thanks so much for having me. Super excited for this talk.
Meredith Smith: So you've built Tax Valet from Scratch. What was the impetus for the company, it's purpose, and what are you trying to accomplish?
Alex Oxford: Oh, there's so much there. First I would say I certainly didn't build at all from scratch It. I've used the help from a lot of people, a lot of really gracious mentors, advisors, vendors. And then most importantly, the Tax Valet team. The company just wouldn't be here today if it weren't for the people that have been involved from the beginning.
And I've got a number on my team and on my leadership team that have been with me. Since the first few months, and it's just been a wonderful ride and journey ever since. So I think there are a couple parts to that question. The first one was, what was the impetus for starting the company? Is that right? I mean, just being totally honest, life's messy and life gets weird, right? So my background was in product marketing at a sales tax software company called Sovos Compliance. And so I was working there.
I was overseeing the product team, working with the product management, product development, and then also the sales and marketing team. And I kept running into the same problem over and over again, which is businesses were coming, they wanted to get rid of all their sales tax problems. Businesses would purchase the software thinking it would magically take care of everything and then realize they were not getting a solution that was going to take care of everything for them, right? They didn’t know what they needed. There's so many questions, right? Like, where do I have Nexus? Or, I know where I have Nexus, I need to get permits, or, okay, you can calculate the tax, but how do I set up my platform in order to do it? Sure.
All these various problems. And so I was working with the leadership team saying, we've got to go find someone that we can partner with that can fill in all of these gaps. I set out for a year trying to find a partner, you know, talked with a variety of companies, some of them, you know, we both know, and couldn't find anyone that could do it consistently at an affordable rate for the Sovos market.
So then I started asking, Can we create a professional services division? Because what the market really needs, what these business owners need is just to note that their problems are being taken care of, every aspect of it, and the software alone is just never going to do that. And we see that happen all the time with software companies sort of selling the moon and then nothing ever really happened. So, I was pushing and pushing and leadership was just saying like, no, we're not going to do that. And then politely, an executive kind of told me like, well, if you think it's such a great idea, why don't you go start your own company? And you know, I said life's messy, you know, like it is.
I was sort of frustrated with that. I was also recovering from my second brain surgery, so I'm a brain cancer survivor and also a thyroid cancer survivor. So I went and changed my life up and went and ran marketing for a startup out in San Diego. Did that for a little over a year. Super fun experience that crashed and burned magnificently, and then I was out of a job.
I was like, well, what do I do now? So I started applying for jobs in the software space and then I said, well, I'm also going to try to start this company because I know there's a need. And I also knew that the Wayfair case was working its way up through the courts. If everything was happening just as planned, then I could get this business going six months before Wayfair.
And the timing would've been impeccable. And I told my partner at the time, if I get a client before I get a job, I'm just going to run with this business. And that's exactly what happened. And the rest is history. I think I missed another part of your question. There's so much in that juicy first question. Right.
Meredith Smith: What do you define as the core purpose of Tax Valet? 4.10
Alex Oxford: Well, our core purpose as a company is a little bit different than I think other sales tax companies. Our purpose as a business, and certainly this is true for my own life, as transforming negative emotions.
So our core purpose as a company is to transform negative emotions into something positive for our clients, our partners, and our employees. So it's really looking at all of the work we do, and this is what I tell our new employees. It doesn't matter if we're doing sales tax, if we're picking up dog poop, if we're cleaning cars, whatever, fundamentally, drives me as a human being is transforming all of that bad stuff into good stuff, right?
Yeah. So if you think about a lotus flower, the Lotus flowers grow native to Thailand and they're in these lakes and they grow from the bottom of the lake all the way up to the top. And a lotus flour is a really good representation of what we're trying to do at tax Valet because if you think about the lotus flowers growing at the bottom of the lake with all the fish poop and the mud and the gunk, and it's like really gross, nasty stuff.
And then it creates this really long stem up to the top, and then on top of the lake it's this beautiful flower and it's really transforming all of that gunk into a positive experience, right? For, for humans to enjoy. And that's kind of what we're trying to do within the sales tax space. So we're looking at sales tax as being not just about the numbers and returns and calculations and product taxability and audits. Is all of that important? Yes, it is. However, when we're working with our clients, we understand that they are stressed out, they're anxious, they're overwhelmed, and that's the problem that we're solving.
So how do we pull that into our new client onboarding, into our interactions, into all of the systems and processes that we have into our employee training for support so that they're constantly thinking about it.
Judy Vorndran: I don't like to lead with the negative part. I want to try to make it fun. And don't you want to do the right thing? You'll feel better, you'll sleep better, but you don't know how to do it. But if you could do it, then you would just know you had a system in place and this is easy enough to have a new state, and then you could just turn on the nexus and file. And just figure things out. You don't know. Like that's stressful too. And it is a little bit of insurance in a business. Not to mention the fact that you're just supposed to do it. It's the law. But a lot of people don't know every law in America, fascinating. And that you're unique as Tax Valet. Like what's your special thing that you think has distinguished you in the market to other vendors? Because you've gotten a lot of traction in the last few years?
Alex Oxford: When we started the company, we were pretty typical in our approach in that we were letting the clients come to us and tell us what they wanted or needed, a nexus study or permits. I need help setting up the tax cap. We're using a sort of typical approach of billable hours or fixed rate for the individual project.
But what we were noticing is that clients were wanting to cut costs and skip steps and say like, well I already know where I have Nexus, or I already know what the start date is, or I just want you to do this piece, but then I'm going to save money and try to set it up myself. But as we know, there's so many bits and pieces that go into sales tax. They're not saving money, they're making it more difficult for themselves, and ultimately it's going to come back and bite us in the butt later on when they have a problem and say, well, why didn't you warn me about this? Right?
Sort of looking at it the same way that Bill Gates and Steve Jobs were looking at building a computer. So Steve Jobs philosophy was, there is a best way to do this and there's only one best way and we are in pursuit of the best way. And only the best way. Bill Gates was all about customization, flexibility, a need for one group is not necessarily going to be the need for another group. I sort of aligned myself with the Steve Jobs approach and said, we are going to create an offering that is the best and only offering for a particular market size. So that's going to be one to $50 million a year selling e-commerce or software products. We've narrowed down what we sell, and we only sell one service.
We believe there's only one way to do it the right way, and the right way is constantly evolving as the landscape changes. Regulations change as we just learn more about our clients, but we've got one system and one process and one market, and so that allows our marketing to be streamlined, our sales process to be streamlined and onboarding process to be streamlined, our data to be streamlined. Everything is streamlined for this market, which really allows for scalability. So, when I started the company, I said, what is this going to look like five years from now? If we have a couple hundred clients, which we do, how is this going to work?
What documentation needs to be in place? What systems need to be in place? What's the data going to look like? Because we need to make sure that we have the proper foundation today, that later on we're not going to be in total chaos. I mean don't get me wrong, there's a little bit of chaos in Tax Valet. There always has been and there always will be. But we've got a lot of really good systems and so now we're setting our sites on when we have a thousand clients or 2,000 clients. What's the infrastructure that we're going to need then? Because if we don't think about it now, we're never going to have it.
Judy Vorndran: It's tough to rip and replace. It's tough to build scale. All challenging. But then also your focus on e-commerce and SaaS or software. There’s manufacturers, airlines, hospitality, traditional retail, e-commerce, right? You've got plumbing, HVAC. There's a lot of businesses that need tax help, right? But you need to focus.
Alex Oxford: There's a lot there, Judy, and the sky really is the limit. We talked about the core purpose, but I want to share what our BAG is. That's out big, audacious goal. When we look out 20, 30, 40 years into the future, what is tax value really up to you? What are we about? Our big, audacious goal is to completely eliminate the hassle and stress of businesses dealing with tax worldwide. And so right now we're focused on sales tax for the e-commerce software industry within the United States. Can you imagine decades into the future, we're talking about sales tax, we're talking about income tax, property tax, transfer pricing, VAT. One of the projects for a few years in the future is how are we going to expand into VAT for EU countries, Australia, Canada, to sell to our existing client base?
Similarly, how do we expand to other verticals within the United States? There are some industries I just don't want to touch, like telecom. But what about excise tax for psilocybin mushrooms in Oregon or marijuana or alcohol? Or professional services or hotel industry or restaurants?
There's just so much here and ultimately it's good for business, but fundamentally it's painful for people, right? It shouldn't be this challenging to have to deal with tax. But the bigger the pain, the more opportunity there is to transform their lives, at least a little.
Meredith Smith: So I think that kind of transformation of bad stuff into good stuff, the negative emotions and that lotus flower is really kind of like a beautiful metaphor. How does that manifest into your day-to-day interactions with like the employees and the clients and all of that? How do you really keep that as like your driver and make sure that that's kind of like that core piece of your business?
Alex Oxford: Oh, that's such a great question. A couple of examples come to mind. When we, for example, do an nexus analysis and we're looking at the exposure in the various states, and we have a script that we go through where, before we even show them the states and the numbers, we talk to them about.
Here are some common emotional reactions to have. We don't want you to panic. We're going to be walking through this, right? We're going to be talking through all the options. So we prep them when before we send back filing. So like late sales tax returns, we're going to send them a summary, but even before that, I think our threshold's like a thousand dollars or something like that.
If it's over a thousand dollars, then we include a little video that Christine, our head of client operations created where she talks about the emotions that are really common. They feel overwhelmed. If you have any questions about this, if you think that anything's wrong, pick up the phone. Don't hesitate to call. We're here to support you. So those are some examples with the clients. And then we're constantly, especially with our newer employees, training them like try to try to tease out when a client is saying this or asking for this help. Really, what's going on? Because as we know, sales tax is complicated. Clients ask for one thing, but they really need something else. But then there's the emotional underpinning. However, it's important to note that just taking care of someone's emotions and doing stuff to make them feel good isn't always what they need. Sometimes they do need the hard truth and they do need to hear what's going on because that's what's going to create real psychological safety for them, is having the truth.
So those are a couple examples with clients, with employees. Gosh. Oh, there's so much there. I mean, just how we've designed our interview process to make it lively and engaging and entertaining. What are you doing? I, for both parties interviewed.
Judy Vorndran: I want to know what you're doing. I want an interview. Oh my gosh.
Alex Oxford: Interview process. Oh, well, you know, it's funny, we looked at the metrics and we were like, wow. Our intake process is more selective than Harvard, Stanford, MIT. Just like any of the top universities in the country, just based on how many applicants we get. But in our interview process, we've got a skills assessment. So, we look at a whole variety of personality traits, and we have a behavioral psychologist that we have on the team. Every single candidate meets with us is part of the interview process. We have just two rounds of interviews, but we are digging deep into their psychology and how are they thinking about things?
In hiring, we're looking at what are their core values as a person. Are they aligned with us? Are they BSing us? How would they handle these tricky sales tax ethical dilemmas when there's no real right answer? And what would you say and what would you not say?
Tell us a little bit about the hiring. Every single week for every single team, we have a weekly team meeting and we have various scorecard metrics, but we're just looking at like the raw facts of like what's being delivered, what's the output? But before we get into that, we ask everyone to rate on a scale of one to 10, how are you feeling and why?
So, are you a seven this week? Are you a three? Are you a 10? Is there something great that's happening in your life that we can help celebrate? Is there something going on in your work life or in your personal life? How can we provide support for you? I mean, geez, we kind of get into a lot more as a business in our employee's personal lives than I think most people would expect.
If there's something crazy going on in your life, we know that if we're there to support you, you're going to be able to be there for the business later on as well. So really focusing on the trust that we have with each other, especially as the management team with the, the rest of the staff, and really focusing on psychological safety.
Does the team feel safe to talk about things, bring up new ideas, challenge each other? Because if we have a whole bunch of people who are afraid of conflict, then we're never really going to move forward. We clash sometimes, and sometimes we break a dish, and then we get the hot glue and we put it back together. And that's just life.
Judy Vorndran: That's what I think. I have that same philosophy. In fact, I say bring it on. I'd rather know where everybody stood than try to guess and make up my assumptions. And people always know where I stand, maybe a little more than they want to know, but I'm a big believer in that honesty and transparency and really taking care of people because they work with you.
They're your fam. I call it a firmily. It's our firmly,
Alex Oxford: I love that. Firmily. Well, as leaders, we owe it to our team to be the highest and best leaders that we can be -- to show up and to be servant leaders and to help them grow and develop and to try to realize what they're fully capable of. I mean, that's, that's what I'm about at least.
Judy Vorndran: A hundred percent.
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