Puzzle CEO on Real-Time General Ledger Automation Platform

ever you think is the most fun, let's do it.

Okay, we are on. Hi Sasha, welcome to Venture with Grace.

Hi, we are live live with Grace.

Yeah, of course. My Instagram is like having a public meltdown right now because uh for some reason I didn't connect but I'll fix that later. So, I want to give a shout out to our amazing sponsor. This episode is brought to you by Nabius, the ultimate claw for AI innovators. Nabius provides AI infrastructure. You can count down. Combining reliability and speed with flexibility and engineering support on matched by hyperscolars. AI leaders like Meta, Shopify, and Hicksfield already partnered with Debas to run their AI workloads. Plus, Winterback startup can save up to 150K on compute costs when they apply for access. Visit navies.com or navies.com/startup to learn more.

Also, one of the best billboards in all of the 101 on the side of the freeway.

Yes. You know, I track these, but I was like actually the Navius one is like the most stand out because screen and then also like the thing is like AI runs better on NASA. I love it. Okay.

Yeah, it's simple. It's great. Cool design. Simple to understand.

Yes.

Sasha, honestly, I've listened to your podcast before like you know you're the OG of like the CFO suite people and uh you talk to a lot of like amazing like fintech leaders. Um I want to start with like you know your journey into the startup land and obviously you're amazing podcast host yourself. Um let's start with uh puzzle and then like how do you kind of like stumble up on the problem and we can dabble about podcast all day but

I I think that's the most polite way of saying uh you're kind of old. OG is like a a much more polite way of saying you're old. You've been doing this in the valley since the 90s when there was a dot bubble. Oh yeah. my first job out of college as a founder.

I wouldn't assume. I mean, you look very young, so just in case. I mean,

I know. I got to just got to Thank you for the filters. Whatever Grace's pre filters are on this, this is this is great. No, my first my first job out of college in 99 was right a block away in downtown San Francisco, right on First and Market. We were the first online payment processor, the largest online payment processor when the internet was just in its budding days of commerce. Uh, I've been here off and on. Then we had the cloud boom and the mobile boom. Now we're having the AI boom and uh and it's fun. All right, that's a long-winded intro to All right, Grace, let's let's actually answer your question. Let's make this podcast interesting for for everybody. Um, so so what's I think interesting this time. So my last company, we ended up splitting my last company into three separate companies. And when I I took time off as a founder to kind of think about what was the thing that I wanted to do next. Did I want to work somewhere? Did I want to start another company? And I took a bunch of time off. In fact, actually, I was having dinner with somebody at First Round, and they actually wrote a really interesting article about founders who have built something and are thinking about what are the next steps. Um, it took me about six to 10 months to kind of decompress and rethink. And one of the things that I like because I'm I'm not smart, like I can't invent something that doesn't exist. That's not my thing. Not like Apple or even like Perplexity or Instagram, Twitter, like people that think of a new idea. I'm more of a type of founder that takes current changes in technology that are going to make big shifts in the market and applies them to build a better product and hopefully a better go to market. So when I was thinking about ideas of what I wanted to do next, I came down to three ideas. And this one seemed uh building a modern accounting software as an alternative to QuickBooks.

Every YC batch for 10 years, for 15 years, venture founders every year, this has been a theme. We're going to take on QuickBooks. We're going to build something bigger and better. And none of them ever succeeded. Um, and so it felt like one of those really big bets that uh there was a lot of reasons why something didn't exist. And um I there are and we could talk about them, but I thought all right, what what's the m big shift happening in technology now? Um it's AI uh or it was going to be AI. We didn't know what an LM or agent was going to be at that point, but something around artificial intelligence. Um, we had a whole new set of really popular tools Ramp Stripe Rex Mercury Gusto, Rippling deal, etc., etc. And they all just kind of funneled into this 35year-old piece of software called QuickBooks. Um, and AI was going to have a big impact on I think the biggest unsolved part of accounting, which is the long tail. So, the way they sort of think about it is the first 80% of accounting is pretty easy to build. That's where most startups naively over the past 15 years have gone in and tried. The last 80% is the hard part. And so I thought AI was going to build a big shift along with this API access and more data from all these great new fintech winners. And so I threw my hat in the ring and said let's build puzzle

for sure. Um I want to give you a quick surprise because honestly you know we stream onto six different platform. Normally it's like you know LinkedIn, Twitter people comment and then whenever a Facebook person loves your status you have to give them a shout out. Okay like hi Edwin thank you for liking this and um you know what that's like a huge win today like that. Um, so Sasha, I want to ask like okay, so I really like what you said about like you know historically there's like um this is like a longtail problem like like I I think a lot of the accounting software are like made for like big businesses because like actually SMBs are like very I wouldn't say ignored but like it's like a harder problem to solve because it's so fragmented like how do you really get this done and then also it's like taking like you know the um small consumers they may not have enough money to like you know pay bigger amount and then you have to like really attract a thousand people instead of like five clients to get to like $100 million AR and maybe we could talk about like you know your thought process on like you know which part of the piece I want to solve and then how do you even get started since like I feel like SMB is like probably no offense but like the worst group of people to for in past land.

Yeah, I mean there's I'm really glad you asked that. Um and it's something important I think for a lot of founders considering businesses uh and building a venture in in in what segment of the market you serve and how you serve them. It's not discussed enough um because just building a better product theoretically uh is not a way to build a a massive company. You have to have a better product and a better distribution. And and so two insights here that I think got me excited for this um and and I don't talk about enough so I really appreciate the question. One is um I had the fortune of scaling two companies before and the difference in the software you get as a small business or an early stage startup and the software that you get as a later stage startup or a growing scaling startup is very different. But also the talent that you can acquire and afford when you're a big company like my first company was doing 100 million of revenue. two and a half years. We're one of the fastest growing companies of all time. We spun it out. The company now in another division is doing a billion of revenue. Um so the the amount of people that you can attract of like that are really good and really experienced is very different.

Um and so that kind of sucks actually if you're a small business and you're an early stage startup like you don't get the people who are kind of the worldclass people um to help you build your startup. And so you do what you can. got great people, hardworking people. Um, but not there's not that many people that have seen the journey um and seen what the differences are in each stage. Okay, so that's the setup for what if we could bring like great financial software to every small business? What would the implications be and to every startup? And the benefit for finance is you have this unbiased opinion of your business. Not opinion, you have an unbiased facts of your business. And so much of startup life and early business life is like us just as founders or business owners just like busting through walls getting punched again and again and again in the face. And the ability to have that and I think this is what better software and AI is really going to do. We're going to increase the chances of success because I think it's very hard to build an enduring business and it's very hard to be customer focused if you literally don't understand if what you're doing is good or bad. And there's opinions. Part of building a company is part art and part science. And we're bringing the science. We're bringing the facts and the math and the health of your business to everybody. I think that's really great. That's point one. Point two is about serving the small business in this segment. It is another like rocky moment meaning just getting punched in the face. Why? Because small business owners and early stage startups have two things in common. They're very price sensitive and they are very demanding. Um and and and it's sort of so so you actually have to build something 10x better and cheaper meaning you have to what's the thing that breaks most small businesses is like you just can't reach enough of them in a cost-effective way to be profitable. It's a higher threshold to be great and you have to have a distribution that can work. So, one of the reasons why it's been very hard for people to challenge QuickBooks is it's very hard to build a better product and they don't really spend that much money on marketing b