Tribe Clarke & Co. Founder and CEO Is Bringing a New Approach to the Quickly Evolving Accounting Industry while Staying True to What Has Made the Industry Work for over 245 Years.
- Tribe, Clarke & Co.
- Mar 27
- 11 min read
Rob J. Colón has lived the ups and downs of an entrepreneur's life. Those life lessons have led him to understand that great businesses are built by surrounding yourself with great people. He believes that you can't command or own great people. Great people are volunteers. They volunteer to come to work with you, partner with you, help your mission, and serve your customers. They are a company's biggest asset, and that asset gets into the elevator every evening to go home, and it's up to them if they want to get back on that elevator tomorrow morning. It's on you as a leader to make it so they want to.
Creating a business that energizes team members to enthusiastically come to work is proving challenging in the current landscape of the Accounting industry. That challenge has led Rob to founding Tribe Clarke & Co., a decentralized, perpetual owner that empowers small and medium-sized accounting firms.
Where does the Tribe Clarke & Co. story begin for you?
As early as high school, I had been interested in value investing and business. When going to college, I had no idea what I wanted to study. In my Catholic school upbringing, there was some implicit pressure to study something noble that could be used in the service of others, like medicine. There was a sentiment, at least among some of my professors, that business was dirty and selfish. So, I was conflicted about declaring any major in business. When at university, I was a psychology major at first with a business minor, but I had this nagging feeling that I was called to be doing business. After reflecting on it, it hit me that business (at least in a truly free market where the customer votes with their dollars) is a vehicle that puts you in the ultimate service of others. You have to constantly get out of your head, stop focusing on what is good for you, and focus ultimately on what is good for those you serve. Those who serve their customers and employees best ultimately win the game. I had always heard that accounting was the language of business, so I switched to business school and majored in accounting.
I started my career after college as a CPA with Alvarez & Marsal's (A&M) tax practice and eventually made my way to their Transaction Advisory and Process Improvement teams. I would say that was one of the most formative periods of my life. For me, it was like a business boot camp; I got exposed to situations requiring a steep learning curve and had team members and mentors who were way, way smarter than me and who I was able to constantly learn from. It's also where one of my dearest values took root, and I have continued cherishing it for years. Formally, it went something like "Like What You Do, and Who You Do It With." Informally, they called it the "No A*hole" rule. We don't accept a*holes as team members or clients. I have carried that with me throughout my business life. At Tribe Clarke & Co., it's embodied in our value of "Be the Ideal Partner."
I know that you also spent a few years after A&M growing and running a few businesses. Were those in accounting and consulting, as well?
After 3 years at A&M, I worked for a few years in investment banking before being recruited as Chief Operating Officer for one of our clients, BoxyCharm, a consumer brands retailer in the beauty space. That was a lot of fun. It was exhausting, but it was exhilarating. The team there was great. We were all in the trenches together from early in the morning to late in the evening. But you wouldn't even feel the time going by. We were seeing the impact of the work we were doing almost immediately. There was just this great energy, and we were able to grow the business by 20x in about 12 months. Eventually we sold the business to a private equity group that ultimately sold the business to a competitor in the space. It was one of the first times I was able to witness firsthand the magic that happens when you get the people formula right.
After that, I used the capital from the sale to acquire another consumer brand retailer in the craft space. We grew the business steadily from 2016 to the end of 2019, landing on the Inc. 5000 2 years in a row. Unfortunately, when COVID hit, it really hurt the business. 90% of the business consisted of a monthly subscription service, so our inventory model was just-in-time. We didn't carry a big stock of inventory. When the pandemic hit, the mills that supplied us closed for months at a time, leaving us without supply for good swaths of 2020. The year after, the supply chains around the world were backed up, and we couldn't get any inventory delivered on time, leading to a continued horrible customer experience. Because of all these shipping delays, our customer service tickets shot up by 10 times, and we didn't have enough manpower to get through all those customer requests on time, which led to an even worse customer experience. It was brutal. I had liquidated all my personal assets to reinvest in the business to try and make it through, but it was impossible. We ultimately had to close the company down at the end of 2022.
I found myself starting over from zero. Well, not from zero. I had my friends and family, my health, and some amazing lessons from the experience. One of the most humbling experiences for any business owner is having to announce that you are closing a business. You feel like you let everyone down, including your clients, your team, your family, and your investors. In my mind, I had hit rock bottom. My first call, after telling my team, was to the largest investor in the company. I wanted to let the team and all of the investors know first before I made a public announcement. His reaction floored me. He didn't want to talk about the money. He wanted to make sure I was ok emotionally and mentally. And he wrapped it up with, "When you decide what you want to do next, call me. I will do this again with you. I'm not letting this get between our friendship, and you shouldn't either." And that sentiment was pretty much shared across all the investors. My team, whom I had become close with over the years, especially in the toughest moments, are still my friends to this day. I was floored. I was extended grace unexpectedly when I most needed it, and I try to carry that with me when I encounter others in a tough situation.
The last three years prior to founding Tribe Clarke have been filled with some amazing opportunities. Most recently, a good friend of mine, who runs a holding company with various businesses, had a business unit of 11 CPA firms with 100 employees across the US. The group as a whole was underperforming; and he asked me to come in and help turn it around, with the ultimate goal of spinning it off to another buyer. It took a little over a year, but we ultimately managed to turn the performance around and sold it to a private equity group that wanted to get into the space.
How did Tribe Clarke come into the picture, and why did you decide to focus on the accounting industry?
There is a lot happening in the accounting industry right now. Recruiting the right talent is difficult. Keeping it is even more so. Employees are getting poached all the time now by recruiters or competing firms because there is such a scarcity of accountants. Succession planning has become difficult. AI and technology are changing at lightning speed. Private Equity groups are gobbling up every piece of the industry they can get their hands on with the promise that they can come in and solve all these problems, but I feel like a lot of CPAs are rightfully skeptical of the panacea of private equity. It's kind of nuts out there.
There are some very respectable private equity firms out there, but they all suffer from the same albatross. They have a three to five-year time horizon to "exit" their investment. They will layer on a ton of debt to make the return on their investment look better. When you combine those two elements, it leaves your business with a very narrow path to follow. And it's why most private equity playbooks look the same: increase prices indiscriminately to market rates (whatever that means to them), eliminate redundancies (fire "redundant" staff after a period of three to six months), and cross-sell financial products from other companies they own (ex. If they own a wealth management company, you will have a new offering for your clients). Then, after three to five years of going through that, they are going to turn around and sell you. ALL OVER AGAIN. They have to because that is the only way they get their money back. You will then end up under the "stewardship" of another private equity group, being taken public, or who knows what. Hopefully, your stock options or phantom stock units are actually worth something because those options are only worth anything if the private equity group manages to sell your firm for more than the preferred return they promised their own investors. And if the economy sneezes the wrong way, debt markets dry up, or M&A slows down… I mean, best of luck cashing anything out.
And looking at all that, I just thought to myself, "Man, there has to be a better way."
And that better way is Tribe Clarke?
For the right CPA and partner, yeah, definitely. I have been in their shoes before, and I think building Tribe Clarke with that in mind is a big differentiator. I have had to deal with what they deal with: hiring and managing people, making the hard decision of letting someone go, investing in this technology or piece of equipment, and delivering value to clients. I have had good years and bad years. Most of these private equity guys think business is run from an excel spreadsheet. But anyone who has actually run a business knows how far apart theory and practice are.
If I were a partner at an accounting firm, and I was considering retiring and selling my practice… or if I were a young accounting partner who was looking to scale and grow my practice with the right partner… I would want my firm to land somewhere that will respect what I have built so far. Where they will honor their word, treat my team right, care for my customers as I did, and continue expanding on what I have built.
And that right there is what we have built at Tribe Clarke: a permanent home, a safe haven, for your accounting firm. We are perpetual owners for firms, meaning we don't sell what we buy. We don't have this short term pressure to financially engineer success with the goal to flip your firm for a profit down the road. We care about sustainable cash flow over the next 20 to 30 to 50 years, and sustainability comes from keeping your team and clients happy and engaged.
Structurally, we are completely different too. We have a decentralized management model, leaving local autonomy and decision-making at the firm level. They aren't integrated into anything. They keep on managing the day-to-day operations and acting independently. They keep their firm name. Make the hiring and firing decisions.
We support the firms by taking the administrative burdens off their plates… things like payroll, HR, back-office accounting and finance, invoicing, recruiting, etc. This frees up a lot of time at the firms, which they can now use to serve their current clients better or bring in new ones. We give partners Big Firm resources without crippling their entrepreneurial spirit. We also provide firms with ample training and the Tribe Clarke Growth Playbook, which helps firms take a step back and work on their business for a bit (instead of just in their business).
But at the end of the day, the firms continue to run their own operations.
How else is Tribe Clarke different?
We keep the traditional partnership model in place. It has worked for over 245 years and has proven to stand the test of time. Keeping the partner track open for up-and-coming superstars at a firm is important for recruitment and retention. I cannot imagine being a senior manager at a firm, having spent close to 10 years being loyal to a firm with the hope of making partner… only to have some private equity group come in, buy 100% of the firm, and offer me stock options instead. My lights would just turn off.
We buy 51% of a firm, and the selling partners and junior partners keep the other 49%. It's important that the local managers continue to benefit from the firm's growth in cash flow every year. They actually continue to own the business and benefit from the annual distributions of cash. It's cash in their pocket every year. That's a tangible return they benefit from immediately. They don't have to wait for stock options to hopefully materialize in the future. What's neat is that the best practices in the Tribe Clarke Growth Playbook typically improve client retention and increase cash flow by 50 to 100%. The selling partners end up taking home the same amount of cash every year as before selling to Tribe Clarke, even though they sold 51% of the business. And because Tribe Clarke takes on all the back-office work, they are doing more of what they enjoy and less of what they don't.
Where did the name Tribe Clarke come from?
Tribe, Clarke & Co. was actually the name of the first chartered accounting firm in the world. It was founded by Josiah Wade in 1780 in Bristol, England. By choosing that name, we wanted to pay homage to the resilience of the accounting industry that has made up the backbone of commerce, free markets and society for so many generations.
Our logo is a bridge, which is a perfect motif for our mission and ethos in various ways. It is important to learn from history and carry those lessons to make more informed decisions about what you confront in the unknown future. At a grander level, we act as a bridge between the rich history of the accounting industry and the future, technology-driven evolution that we are experiencing today. For the CPAs partnering with Tribe Clarke, we are a bridge between them and the next generation who will lead the firm and continue their legacy.
We provide our partner firms with the modern resources of a national accounting firm, keep them up to date with the latest technology, and provide best practices to help them flourish. But we don't throw the baby out with the bath water. There is a lot of goodness in tradition, as well. For us, leveraging the traditional partnership model that has withstood the test of time and allowing entrepreneurial CPAs to keep their independence and benefit tangibly from their firm's growth while empowering them with the resources and best practices of a large national firm is the way across the bridge.
Tell us more about what makes this personal for you.
The industry today has a major people problem. Young professionals are not as excited to enter the field. Those who have been in the industry for a long time are still sacrificing time with family and friends and clocking in crazy hours to meet deadlines. This doesn't have to, and shouldn't, be this way. Team members, especially those just entering the profession, need to be able to see the transformations they drive for customers. That is what gives meaning and deep joy to the work one does. That is what makes one want to wake up in the morning and come to work. Clocking in, tracking hours down to 15 minutes, filing paperwork, and having a celebratory drink because you spent 5 weeks working until midnight to get taxes filed on time…. Well, that sounds like a really horrible version of the show, “The Office.” That isn't inspiring anyone. It also isn't the type of firm most CPAs set out to build. But it's where most end up because that's the way it's always been.
Our goal is to create an environment that inspires team members to be excited to come to work and deliver value to our customers… to be always learning… where the partners at the firm are focusing on building the team up and working with clients instead of chasing down invoices and reviewing WIP reports… where the incentives are structured so that everyone gets paid really well for delivering great customer transformations, but they aren't sacrificing time with their friends and family to do so. Where partners who decide to sell a part of their firm and partner with Tribe Clarke can look back 10 years down the road and feel a sense of relief and peace in knowing they made the right decision.