Creator Kit Episode 04: Incubateme's Alice Zhang on Creator Financial Management

Creator Kit
Creator Kit
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Cover Image for Creator Kit Episode 04:  Incubateme's Alice Zhang on Creator Financial Management

In this week's episode, we talk with the founder of Incubateme and learn how creators can grow faster by streamlining back office bookkeeping.

Each episode of Creator Kit is a deep dive on a particular tool or service that can help you take your creator business to the next level. Creator Kit is presented by HiBeam: we solve comment and DM overload for creators; follow HiBeam on Twitter and subscribe on YouTube for more great content.

This Episode of Creator Kit is also available in video form on YouTube. You can also subscribe on iTunes, stream on Spotify, or plug our RSS feed in your player of choice.

Alice is the founder of Incubateme, which offers tech powered business concierge services to e-commerce builders, freelancers, early stage startup founders, and... you guessed it: creators.

On today's episode, we learn about Incubateme's MyPocketCFO product and why financial management is such a pain for many small businesses, including creators.

Here are some of our favorite takeaways from the conversation:

1. The secret to growth is in the numbers

Alice points out that for creators using multiple monetization methods, financial data can help creators determine how to grow - but only if it’s easily accessed and digestible.

We can help creators to build their own systems at an affordable price, not at a prohibitive cost. So they can build their system, and they can take advantage of the system to make all their data flow like a flywheel, right? I think it's important to build a flywheel to let your data flow to educate you and to present opportunities to you. This is one opportunity for creators to create a system for themselves, and then basically take advantage of that to take their business to the next level.

2. The financial management burden tends to increase as creators grow

Back office work is more than just keeping track of revenue and expenses - especially as creators get big enough to hire a team.

In my view, especially from data perspective, there is much overlap between financial data and HR data. Especially when you start, hiring part-time helpers (1099), but then gradually you may need to hire full-time people to help you out. So when you start building up your team, HR data will become an integral part of the financial data as well. There's much overlap.

3. We are entering a third stage of creator monetization

The new way to earn an income online takes place in a world that values individual personalities and digital creations related to them.  

The other force driving creator economy is the proliferation of things that can be monetized, together with the types of monetization tools or even the currencies you can use. Like eBay might be the earliest, we started monetizing our physical collections, and then, you know, Etsy enabled us to monetize our physical creativity. And then we moved to digital creation monetization. We use YouTube, TikTok, right? Substack… all those tools to monetize our digital creations. Now we're moving into a new era where we can actually monetize access or status, like NFTs. We can monetize the uniqueness of any creation, especially digital creations.


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Jesse: Alice, thanks so much for coming on Creator Kit.

Alice: Thanks for having me.

Jesse: Absolutely. How are you?

Alice: I'm really good. I'm pumped for this show.

Jesse: Amazing, amazing. We're really excited to have you on, this is going to be an interesting one because as you know, we're in the earlier stages for the show, so we've already had a good variety of different companies on… and what I'm really excited about is we've had a nice mix of what I would call like, “center stage companies”, vs. “back office companies”, “center stage companies” being products that are visible to the end users of creators and back office companies being like, you know, products that help creators, to do all the, less, uh, exciting, but necessary and probably really, really important components of their business. And so in having you on to talk about MyPocketCFO, um, of course falls in the latter category. So thank you for coming on. And maybe let's start with a brief summary of MyPocketCFO and then I'd like to ask you a little bit about your background and how you got into a building this amazing product.

Alice: Happy to. So MyPocketCFO is, I would say in a nutshell, a virtual financial management team for creators and how I, started building this tool is actually from the community I was building - as you know, Incubateme, I built Incubateme as a community for small business builders.

And of course creators are actually a big part of the small business, as you and I call creators other new small businesses. I am passionate about the creator economy. I myself, I run my newsletter, so I consider myself as a creator as well.

So in building that community, actually many small business founders, i.e. creators come up to me expressing their pain points, managing their back office. Especially because I have many years of running back office for small businesses, mainly startups, but it's basically the same for a running back offices for small businesses.

So I thought, well, maybe I can extract my skill sets or experience and leverage technology to build a scalable tool so that a creator could use it to manage their finances cheaper, better and faster.

So that's how I started building MyPocketCFO.  

Jesse: Super cool. It’s really fun to find an example where a community builder has found value and purpose from the community that you serve, and I know that running communities is really important to you. I know that you also run… is it WAFFA, the Wharton Founders & Female Funders group?

Alice: You're right. So I'm also a co-founder of a community, actually it's a nonprofit organization, it's called Wharton Alumnae Founders & Funders Association, so abbreviates as WAFFA. That community serves to foster creating an ecosystem for women founders and funders, and we have over 5k subscribers so far, it's a very active group supporting women entrepreneurs to start a company and get funded.

Yeah, I'm a very passionate about community. I think community would be a very bread and butter part of the creator economy. Because as individuals can do more and more, it's really important you have a support system, where I think community can play a big role.

Jesse: Yeah, totally. So in terms of learnings from the Incubateme experience and, and your work in talking to many different types of entrepreneurs, micro entrepreneurs, founders, creators… I know it's a wide swath of different, business owners; what's a typical problem that a SMB of the size of like a creator that is just getting started might run into when it comes to accounting and financial stuff…and all of the things that you guys solve for?

Alice: So I would say currently the creators or small business founders, they really don't have much choice in terms of utilizing a good tool to manage their financials. Let's say QuickBooks. QuickBooks Online are really built for accountants, not for founders, from my experience, actually, like I hate to use QuickBooks. It's super complicated and it's very rigid. So I would assume creators like me… I definitely don't want to touch QuickBooks. But I do want to know more about my financials. I also want to know my financials quicker faster, almost real time. Which requires, I would say, more robust data integration, data reconciliation, which are lacking today as well.

So that's where MyPocketCFO comes in to fill the gap. MyPocketCFO could serve as the one-stop tool, not only for professional accountants to do the general ledger bookkeeping, but it can really be a tool for founders to log into the system and instantly see all the data as well as, you know, even a founder, if you want to do some self-help bookkeeping or, you do a little bit of accounting work you can do that. It's a very friendly and simple interface to use.

So that will be one gap where we're filling. The other gap, I think our capability lies a lot about real-time data aggregation, real-time data reconciliation, which takes a lot of manual hours if you hire accountant to do that. So we can save a lot of money and save a lot of, a lot of time for the type of data access and data aggregation

Jesse: Got it. And so simplifying it to very like functional terms for a small business or a creator… is this for making sure that entrepreneurs know the direction that their business is heading and what to expect in terms of earnings forecast, or is it more about taxes and making sure that, you know, anyone that's needing to do their own withholding is properly doing so, like what's the mix really simplified use cases?

Alice: I would say, on a very fundamental or basic level, we can do the simple housekeeping tasks, as bookkeeping and in doing the bookkeeping, we can, automate 70% to 80% of the bookkeeping by automatically integrating across the bank and the accounting system.

So, and then on top of that, we can enable you to track a personalized set of matrix. So if you want to track weekly sales numbers and compare and do growth rates, and see any trends, we actually personalize a operation matrix performance page for you.

We can also do analysis. We actually utilize some of the AI technology to be able can help you to predict your performance based on that. So the second layer of our service is more, I would call it, financial analysis and planning part.

So that will be the second piece we do. On top of the second layer, what we are building, this might be a little bit down the road, it's more of a strategic finance, I call “CFO services”. That's where you know, either creators or let's say e-commerce brand builders or influencers, if you want to scale up your business, and if you want to talk to either to a bank lender for let's say working capital financing, or if you want to talk to even like an angel or some early stage investor for equity investment, or about a merger acquisition.

So those more strategic finance parts, we can actually do that based on the basic financial statements, based on the financial analysis, and based on forecasting model, we build in the first and two layers of the tasks.

Jesse: So there's like, basically two ways to look at the different services that a creator (or any customer would use) for you guys. One cut would be like, "what is the complexity of your business"? And if you look at that from a creator standpoint, to really simplify it, it would be like… just getting started; then, like in "growth mode" where you're potentially starting to hire an operating team or have people working part-time to support your growth. And then on the highest level of complexity, it would be like, all right... "my needs are actually much more like an enterprise than anything else" where you now have third parties involved in the business.

There was another way to slice it, which was around type of business that might use MyPocketCFO and one of the ones that you had mentioned when we had caught up previously was on the e-commerce side, which is really interesting because as you know we tend to refer to creators as creators, but many of them consider themselves e-commerce businesses with you know, the forward-facing creator job being a top of funnel way to drive sales.

Anything you can share about how your platform enables the e-commerce side?

Alice: Sure. Yeah. So the essence of MyPocketCFO is utilizing, I would say digitized data and open APIs. So. Basically, if you use any of the digital commerce platform or digital payment platforms, for example, many e-commerce builders or creators, they are on the Shopify platform. They are on the Amazon platform. And many of those, they also use payment systems like Stripe or Square.

Of course, many of them use accounting systems, like QBO, QuickBooks Online. Right? So our tool, what our tool does is because all of those platforms are digitized systems, we use API technology to instantly aggregate and consolidate data across all those systems; across your e-commerce, let's say Shopify, Amazon; across your payment system, like Stripe and Square; and then reconcile those data into the accounting, QuickBooks Online. So that we make sure, as you know, your accounting it really relies on the data quality, so garbage in, garbage out. Right? Make sure it's good quality data and it's consistent. Typically it will take a lot of manual hours to do that, what we do is automate the process and we make sure it gets into your accounting system, whatever it spits out, are with good data quality.

Jesse: Super cool that we have, we have a theme that we are working on writing some blog posts at HiBeam about how creators can to employ “system mindsets” in order to be able to scale their growth, which historically has been sort of…startup type jargon to talk about systems mindsets, but this is really applicable to creators because in some cases they're growing as fast, if not faster than valley startup.

And that's really, really exciting. Essentially a systems mindset, for the audience, is investing time upfront to set up your systems, whether that's software or your daily schedule, or really anything that you can choose to handle in one way or the other upfront…in order to save yourself time down the line. What you were describing, Alice, about this need to constantly farm your data from a financial standpoint so that you don't get surprised or you don't get down the line when, when the tax man comes calling or, you know, when you need to pay a bill is an example in my eyes of this kind of systems, mindset at work.

Alice: I totally agree. I think typically, you know, startups are at a better advantage because they have investors money, you know, fully staff a financial or back office team to do a lot of data crunching. But that's the purpose of tools like my MyPocketCFO; I do think the tools are out there. If we can utilize those tools actually we can help creators to build their own systems. I would say at an affordable price, not, you know, not at a prohibitive cost. So they can build their system and they can take advantage of the system to make all their data flow like a, you know, we talk about flywheel right, I think it's important to build a flywheel to let your data flow to educate you and, to present opportunities to you. This is one opportunity for creators to create a system for themselves, and then basically take advantage of that to take their business to the next level.

Jesse: Love it. One of my favorite sayings from an old boss of mine at Facebook was, or I should say former boss, he wasn't old, but he was a former boss at Facebook... he would always say, “Hey, the best time to patch the roof is when it's not raining”. For creators, this equates to setting up your systems, especially your financial systems, in a way that you know, solves future problems before they even exist.

And that's really cool. I think that platforms like yours are going to become increasingly relevant because of the number of monetization sources and platforms that creators are benefiting from. And we often talk about like, “Hey, isn't it amazing that you, as a creator have more and more things to select to put onto your tool belt, to help you grow.” And sometimes we don't talk about some of the problems that can come out of it. If you're a creator and you started with using one source of monetization, it's really easy to keep track of. But when you have four or five and money is starting to flow in, being able to see everything in one place is probably a huge benefit.

Alice: Totally. you know, I was just talking to a few friends earlier and in terms of looking into the future, I think there are two forces driving the creator economy in terms of future acceleration of growth. I think you touched upon some of them. So one is, we're moving towards more of a direct relationship, you know, from more of an intermediary, advertiser driven relationship between creator and consumer (or customers). So in a direct relationship, you can manage directly was your customer, transactions or leads or a conversion rate. It's the proliferation of things that can be monetized together with the other force driving creator economy is the proliferation of things that can be monetized; together with the types of monetization tools or even the currencies you can use. Right. We started monetizing, like eBay might be the earliest, we start monetizing our collections, physical collections, and then, you know, Etsy enabled us to monetize our physical creativity. You know if I have a neat product I can sell it.

And then we, we moved to more of digital creation monetization. We use YouTube, TikTok, right? Substack… all those tools to monetize our digital creation. Now we're moving into a new era where we can actually monetize access or status, like NFTs right? We can monetize the uniqueness of any creation, especially digital creation. My vision is, I hope MyPocketCFO or tools like MyPocketCFO can really serve to help creators to manage this proliferation; I hope this can also evolve to a one-stop really simple interface for creators to have visibility, have good data quality, so I feel like that could be really powerful enabler for creators, for them to grow and not get lost in all those proliferation of possibilities.

Jesse: Sure. It reminds me of the analogy of the gold rush, where, you know, everyone's focused on the folks out there panning for gold, but some of the most critical players during that time period were the people that ran the local, you know, picks and shovels store enabling all of this opportunity.

Alice: I used to manage the whole back office for smaller startup companies. In my view, especially from data perspective, there is much overlap, you know, between finances, data and HR data. Especially when you start hiring, part-time helpers (1099), but then gradually you may need to hire full-time people to help you out.

So when you start building up your team HR data will become an integral part of the financial data as well. There's much overlap. And then legal data. So it is my hope and also my vision to provide this 360-degree back office, virtual assistant concept. As in the future, you can use the same tool or the same platform to cover also your HR needs, back office needs, or legal back office needs…and really the concept is that you don't need to worry about it, knowing that you have a virtual assistant covering all those back office aspects.

Jesse: Awesome. I love it. I have a pop question for you; or actually, I have two. The first one I ask of every guest, which is who is your favorite creator these days?

Alice: You know, there are so many creators these days. I tend to think of creators as not like one single favorite, but in different aspects, in different, let's say domains, I have a few. One name came up to my mind is this Ocean Spray guy during the pandemic, everyone was so stressed and it was really authentic and very, very natural in January to see that TikTok video. So I would, I would nominate him

Jesse: I think that's a great choice. I think if I remember correctly, it ended up driving Fleetwood Mac back to the top of the singles charts here in the US.

Alice: Yeah. Totally.

Jesse: So cool.

Any wild and crazy predictions for the creator economy or small businesses?

Alice: You know, thinking about what I just mentioned about those two big trends, driving the creator economy, one is increasing the direct relationship with a customer. The other one is you can monetize everything and anything. Yeah. So my, my prediction, you know, I very much look forward to the day where I have a direct relationship with anything and everything I use.

You know, like if I have a cat, I buy a cat food. I wish I know, like, who created that formula? Maybe what I can learn a few secret sources, or get a few advices from the creator of my cat food brand, for example. So I look forward to having a much richer and deeper relationship with the many creators today.

Jesse: Yeah that's such an interesting point. It brings to mind for me the extreme efforts that many big corporate brands have made to give their brands personality and a feeling of personal connection with their consumers. And it looks like, actually the ultimate, version of this is when individual creators are the new brands.

It's been amazing chatting with you. Thank you so much for coming on Creator Kit.

I would love to have you on again sometime.

Alice: Well, thank you. I'm so honored to be one of your earliest guests. I would say, I would love to talk to creators in your community. I know back office is a real need they have, and they don't have many choices. So anyone, if they are interested in just even talking to me, I'd be very open.

You can find me on Twitter @alice4zhang. Also. I have  Incubateme Twitter , or you can just go to MyPocketCFO.com basically you can click “contact us” and I will make sure I read every user contact request. I would love to help.

Jesse: We will link out to all that stuff in the show notes. So if anyone's interested in, in talking to Alice, you should go for it. Hope you have a great rest of your week and talk to you soon.


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