April’s Distribution Moat: How an Enterprise Partnership Strategy Cracked Open the Tax Software Market
Customer acquisition in tax software seems like an impossible game for startups. TurboTax’s marketing dominance means direct-to-consumer strategies are prohibitively expensive. In a recent episode of Category Visionaries, April co-founder Ben Borodach revealed how they’re bypassing this barrier entirely through an innovative B2B2C distribution strategy.
The Distribution Innovation
“You’ve got to come with a business innovation that allows you to get distribution in a different way,” Ben explains. “Because to it is just so dominant that they’re going to outspend anybody that’s out there.”
Instead of competing for consumer attention, April positioned themselves as the infrastructure provider for fintech platforms. This wasn’t just a tactical choice – it stemmed from deep analysis of how financial services are evolving.
“We’re entering the age where most of financial services are going to be increasingly delivered online,” Ben notes. “And that means that consumers will increasingly expect that what they’re seeing is completely contextual to them.”
Strategic Partner Selection
April identified three key verticals where tax integration creates clear value:
- Banking and credit platforms focused on liquidity management
- Investment apps handling life events with tax implications
- Payroll providers dealing with withholdings and compliance
“We’re seeing a wide array of adoption across different finance apps,” Ben shares. Their recent launch with Gusto demonstrates the strategy in action: “We’ve recently launched a very exciting product with Gusto that actually allows an employee on their platform to constantly track their tax situation in real time based on their Gusto payroll data.”
Building Trust and Credibility
To secure enterprise partnerships, April needed to establish immediate credibility. Their approach? Strategic investor selection. “We’ve surrounded ourselves with great cap table of investors from teammate and treasury and QED and Nica and others,” Ben explains. “And so we leveraged my network, the network that we put around the table, in order to build trust and relationships over time.”
This trust-building extends to their positioning. Rather than competing with partners’ interests, April presents themselves as “that independent player that’s a true infrastructure provider and in return, get distribution for a product that would otherwise be extremely expensive to market.”
Enabling Partner Differentiation
The B2B2C model enables April’s partners to differentiate their offerings. Ben notes: “It allows them to offer a service to their customers that they couldn’t previously offer… Because tax is the largest expense item that most american families have on par with housing.”
This creates a win-win: platforms enhance their value proposition while April gains distribution without direct marketing costs.
Early Results and Validation
The strategy is working. April has attracted “dozens of companies on the platform” with “hundreds of thousands of users.” Perhaps more tellingly, they’re seeing NPS scores “in the high fifties and sixties” – remarkable for tax software.
Lessons for B2B Founders
April’s distribution strategy offers key insights for founders facing similar challenges:
- Look for distribution innovation, not just product innovation
- Build credibility through strategic investor selection
- Target verticals where your integration creates clear workflow improvements
- Position yourself as an enabler rather than a potential competitor
The broader lesson? Sometimes the path to disrupting an entrenched market isn’t through better technology or marketing – it’s through fundamentally reimagining how your solution reaches end users. April’s story shows how deep understanding of market evolution can unlock innovative distribution strategies that turn seemingly insurmountable barriers into strategic advantages.
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