An exclusive Tech Tribune Q&A with David Joseph, the co-founder of DAVO Technologies, which was honored in our:
Tell us the origin story of DAVO Technologies – what problem were you trying to solve and why?
I was in the restaurant business for almost 18 years and sales tax was often the bane of my existence. We did 4 renovations over the lifetime of the restaurant and each time it cost more and took longer than expected. Several thousand dollars of sales tax revenue in our account each month was a convenient source of extra cash. I would use it to complete the renovation and eventually we would pay back the state.
One day after one of the renovations, a state auditor dropped off an estimated sales tax bill for $70,000. I walked out of the kitchen and asked my manager: “Why can’t someone do our sales tax the way ADP does our payroll?”.
To solve the problem, my manager bought a cash box and kept the key to herself. She instructed the other managers to put the sales tax collected in an envelope and she would then deposit the money in the cash box at the end of each shift. From that day on, we were never late on our sales tax payments.
During this time, I knew there was some sort of automated solution in the credit card terminal. I shared my ideas of automating sales tax with a restaurant customer and eventually, we became partners. We applied for, and received, a patent on my idea of automatically impounding sales tax daily and seamlessly paying it to the state when due. That was the beginning of DAVO.
What was the biggest hurdle you encountered in your journey?
The single biggest hurdle has been convincing merchants, reseller partners, investors, and states that we have developed a better and more efficient way to manage sales tax in real-time. But as our customer base grows, the conversations get easier and easier.
What does the future hold for DAVO Technologies?
The growth of e-commerce has put sales tax in the news over the past few years as states have lost tax revenue to online purchases. This has been good for us as some states are now starting to talk about real-time sales tax collection, which is exactly what DAVO does.
The recent COVID events have really hit state budgets hard. They will be looking for more efficient ways to collect sales tax, which opens up numerous opportunities for DAVO. We have patent protection for our process, and a sales tax collection tool that is ready to go, so we are in an ideal position to help boost state budgets quickly.
What are your thoughts on the local tech startup scene in Westbrook?
The vibrant creative technology startup space in and around the greater Portland area never ceases to amaze me. Some of the anchor payments companies based here such as WEX and Cashstar have done a good job of nurturing individuals who possess the entrepreneurial spirit to strike out on their own. Resources like MCED’s Top Gun Program, Maine Technology Institute, Maine Venture Fund, Greenlight Maine, and the Maine Seed Capital Credit have helped drive funding and guidance to grow the local tech community. It’s a great time to be a startup in Maine.
What’s your best advice for aspiring entrepreneurs?
If you are the smartest person in the room, you are in the wrong room. Surround yourself with smart people who have the expertise to help see your ideas through, provide new ones, and grow your company.
David Joseph is the co-founder of DAVO Technologies (davosalestax.com) and a former restaurant owner. DAVO Automated Sales Tax integrates with many popular POS systems such as Clover, Square, and Toast to set aside sales tax daily and file and pay it when it’s due, on-time and in-full. Put your sales tax on autopilot and never worry about it again. David can be reached at [email protected] or (888) 659-8432.