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The Future of Communication Technology: Avalara’s Steve Lacoff On How Their Technological Innovation Will Shake Up How We Connect and Communicate With Each Other

An Interview With David Liu

The telephone totally revolutionized the way we could communicate with people all over the world. But then came email and took it to the next level. And then came text messaging. And then came video calls. And so on…What’s next? What’s just around the corner?

In this interview series, called ‘The Future Of Communication Technology’ we are interviewing leaders of tech or telecom companies who are helping to develop emerging communication technologies and the next generation of how we communicate and connect with each other.

As a part of this series, I had the pleasure of interviewing Steve Lacoff, GM of Avalara for Communications. He previously served as Senior Director of Product Marketing for Avalara’s Strategic Initiatives Group. With a focus on data, VoIP, and video streaming, Steve has spent more than 15 years in various GM, product, and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives overall business unit strategy and regularly provides thought leadership on today’s changing industry landscape and associated tax impacts.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started? Can you share the most interesting story that happened to you since you began your career?

Well, technically, my career began when I was 10. I grew up in a small town in rural Georgia, and my father owned a small dry-goods store. Our store sold everything from clothing to candy to wrapping paper.

In 1985, the first Air Jordan’s were released, and our store had only been carrying and selling Nike shoes for a year or two. I walked in on the middle of my Dad meeting with his Nike salesperson, who was working hard to convince my Dad to put in a larger than normal order for these shoes. As a huge Michael Jordan fan, I was enthusiastic, but my Dad was far more sanguine.

I recall him telling his salesperson, “I hate to say this, but these are honestly the ugliest shoes I’ve ever seen. I just don’t think they will sell.” Our Nike rep simply responded with, “Mr. Lacoff, I’m not going to let you make this mistake. If there are any Jordan’s you don’t sell, I’ll commit to buying back.”

My Dad was clearly not locked into the coming Jordan brand zeitgeist and, without this guidance from his Nike rep, would have missed the boat of what became his top-selling item for years. This brief occurrence drilled into me the long-term value of being a true partner for your customer and how that almost always hinges on finding “win-win” dealings.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Early in my career, I read Nelson Mandela’s autobiography “A Long Walk to Freedom.” The book had an early and enduring impression on me and my outlook. I have been in awe of Mandela’s life story, his contributions to society, and his profound personal examples of leadership.

One simple quote that has informed my personal and professional lives is, “A good head and a good heart is a formidable combination.” In my career, I’ve worked with lots of leaders with formidable intellects. People who are crazy smart, have an exhaustive working knowledge of an industry, enabling technologies and competitive landscapes, and have a strong intuitive sense of where to take a business. What I’ve found to be rarer, though, are leaders who can couple and balance their business intellect with real empathy and an ability to truly connect with and inspire their teams, allowing them to translate, harness, and scale their vision.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I’ve always placed a premium on relationships throughout my career and was lucky to have a number of really good mentors. However, the person who has had the most singular impact on my career would be my father-in-law, Lanty Smith. He was raised on a farm in Ohio, had no running water until he was in high-school, and was the first from his family to attend college. He started as a successful corporate attorney, but over the course of his professional life, he reimagined his career several times to follow his interests to run a Fortune 500 textile business, then as an entrepreneur and as a private equity investor — all across a wide range of industries.

It’s hard for me to pick a single story here as Lanty has been my business “rabbi” for 20 years, and I’ve tapped him for guidance for all my consequential career decisions. Through the course of my career, I’ve made a number of non-conventional decisions with respect to my career. At each of those junctures, Lanty has consistently encouraged and emphasized the importance of moving out of a comfort zone, taking risks, and having the courage to bet on yourself.

How have you used your success to bring goodness to the world?

As mentioned, I’ve always placed a premium on relationships and have always sought to make real investments in developing people. Throughout my career, I’ve sought ways to serve as a formal and informal mentor. On numerous occasions, I’ve guided members of my teams to pursue paths that often resulted in folks pursuing new roles in different areas of the company. While in the near term, this resulted in my “losing” key contributors, it’s allowed them to amplify their contributions and helped to retain talent over the long-term.

Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell us about the cutting-edge communication tech that you are working on? How do you think that will help people?

Avalara for Communications is definitely serving a growing, changing industry, which includes streaming media and unified communication companies. We provide solutions that allow communications and media companies to automate and simplify their tax compliance needs and processes. If you’re following the mergers and acquisitions news stories in this industry, those events become trigger points for companies to suddenly become liable for new types of tax types, specifically communications tax. We automate this complex, often highly manual aspect of a customer’s business — tax determination, calculation, returns, reporting, and remittance — and allow them to focus their resources and people on their innovations and deliver on their own customer experiences. And in the process, we hollow out cost and risk for the customer.

How do you think this might change the world?

As hinted at above, we power the needs for a really diverse set of customers in the industry, ranging from ISPs, VoIP, IoT, Streaming Media, VPaaS, and SDN providers — companies whose products and services are dramatically changing how businesses communicate, transact and process information. The game-changing aspect of what Avalara does is to allow these customers to focus resources on their core business-building efforts and accelerate their innovation cycles rather than devote time and resources on an ongoing basis to onerous compliance tasks. We like to think of our solutions as helping to raise the tide for all the ships in the industry.

Keeping “Black Mirror” in mind can you see any potential drawbacks about this technology that people should think more deeply about?

My insights on the future of compliance technology would tend much less toward worry and focus more on encouraging trend awareness. The global shift in tax compliance is around digitization — real-time collection and remittance of tax. Governments in countries like Brazil and Poland use technology to have a birds-eye view into a company’s general ledger and the ability to collect and remit tax at the time of transaction. Businesses should consider potential impacts once this trend is adopted, even incrementally, by a U.S. state (keep an eye on Massachusetts). Because what taxing authority doesn’t want to collect tax revenue faster and more accurately?

Was there a “tipping point” that led you to this breakthrough? Can you tell us that story?

Avalara’s key insight was to transition tax compliance software from an expensive, laborious, on-premises solution for enterprise business into a cloud-based application, first for SMB companies and then to businesses of all sizes — from emerging small businesses to enterprise. By doing this, we’ve allowed customers to fully outsource the management of these solutions while providing higher uptimes, accuracy, and security.

What do you need to lead this technology to widespread adoption?

Ease of integration is a key driver for our business, which requires partnerships and pre-built integrations into the ERP, accounting, billing, subscription management, and payment platforms that our customers utilize. Avalara is a partner-centric company, with over 1000 integrations into business applications — we’ve made significant investments in partnerships and acquisitions.

Another key dimension is content. By content, we mean having an exhaustive library of the tax rates, rules, and forms for the communications services our customers sell. The communications sector has gone through a rapid phase of innovation, and the scope of services sold by our customers has expanded dramatically and will continue at a rapid pace. So, we invest heavily in content to ensure that we can support the portfolio of services our customers sell today and what they will sell tomorrow.

Fantastic. Here is the main question of our interview. What are your “5 Things I Wish Someone Told Me Before I Started” and why? (Please share a story or example for each.)

  1. Embrace failure. It’s inevitable — accept that you’ll make mistakes and be prepared to learn, pivot, and move on. Ultimately, you’ll learn more from failures than you do your successes, and letting perfect get in the way of possible is often a recipe for failure.
  2. Don’t boil the ocean but consider the impact of ripples. Don’t underestimate the upstream and/or downstream implications of isolated decisions. For example, isolated pricing changes could have big impacts on partners, an existing base of customers, and potentially sales compensation plans.
  3. Don’t underestimate the importance of focus. More businesses die of indigestion (trying to do too much) than starvation (not having enough good ideas or things to sell). In my role at Avalara for Communications, we’ve placed a strong focus on identifying the core initiatives that will really move the needle for our customers and our business and knocking those out of the park versus chasing every green shoot diluting our focus.
  4. Over-index on delegating. You develop talent and allow leaders to focus on strategic needs that are most impactful. It’s the most important work that’s the most difficult to let go of. By requiring all decisions to run through me on these initiatives, I’ve found that while I may add some value — it’s more likely I create bottlenecks and stifle my teams’ development.
  5. Hire more people. Our business is growing rapidly, and finding the right talent in our industry is a challenge, requiring concerted effort. You simply can’t invest enough time in finding and convincing enough rock-stars to join in on your mission.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I believe there is simply no better investment than education. It serves to raise the tide for all ships and is a force-multiplier for any society. As I mentioned, I grew up in a very small community where very few people pursued education after graduating high school. Of my graduating class, I’d guess that no more than fifteen percent went on to some form of college. I think there needs to be a lot of thought, money, and time put towards creating more access to education, not only through traditional 4-year programs but also in more flexible options to ensure anyone, irrespective of their means or background, can tap into these resources.

How can our readers further follow your work online?

Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.

About The Interviewer: David Liu is the founder and CEO of Deltapath, an award-winning unified communications company that liberates organizations from the barriers of effective communication. Liu is known for his visionary leadership, organic growth strategies, and future-forward technology. Liu is highly committed to achieving a greater purpose with technology. Liu’s business insights are regularly featured in Forbes, Entrepreneur Magazine, Tech Crunch, and more.



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David Liu

David is the founder and CEO of Deltapath, a unified communications company that liberates organizations from the barriers of effective communication