Neil Patel

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Sasha Orloff built his first two companies at the same time. Now he’s helping other founders figure out the financial puzzle they face on the startup journey. His latest venture, Puzzle Financial, has raised funding from top-tier investors like Gokul Rajaram, FOG Ventures, General Catalyst, and Ayo Omojola.

In this episode, you will learn:

  • Decision-making and failing fast
  • Hiring and empowering your team
  • Debt versus equity financing
  • How Puzzle Financial is empowering entrepreneurs at all levels


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About Sasha Orloff:

Sasha Orloff is an entrepreneur, advisor, and board member based in San Francisco, CA. He is currently the Founder and CEO of a well-funded stealth startup. Prior to this, He was CEO and Co-founder of LendUp and the co-founder, and an Advisor to Mission Lane, the credit card division that started and spun out of LendUp in 2019.

Orloff focused on expanding financial services to new segments or markets and finding ways to harness new technology to improve lives. Ten years ago, after reading Banker to the Poor by Nobel Peace Prize winner Muhammad Yunus, Sasha was inspired to go move to one of the poorest countries in the world, Honduras, where he worked for The Grameen Foundation.

What started as a six-month internship, turned into years of service in Honduras because he found the work so inspiring. Prior to launching LendUp in San Francisco in October of 2012, Sasha worked at The Grameen Foundation’s technology team, The World Bank’s Consultative Group to Assist the Poor, and most recently, Citigroup.

Sasha has a B.S. in Applied Math and Economics and a minor in Behavioral Psychology from the University of California, San Diego, and an M.B.A. from Georgetown University

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Connect with Sasha Orloff:

Read the Full Transcription of the Interview:

Alejandro Cremades: All righty hello everyone and welcome to the deal maker show. So today we have a very exciting founder. You know I think that we’re gonna be learning quite a bit on building scaling. You know all the above that we like to hear so I guess we thou further do let’s welcome our guest today Sasha Orlo welcome to the show.

Sasha Orlo: Thank you, Let’s go.

Alejandro Cremades: So so give us a little of our walk through memory lane Sasha How was life growing up.

Sasha Orloff: Yeah, yeah, it’s I would say it’s been ah, a fun journey so far and it feels like I’m just getting started in my ability to be a successful founder and and and create value. So. It’s been fun. Um I grew up. Ah. All over the place but mostly here in California I’ve had the fortune of growing up in the bay area when I was younger and so you’re just surrounded by all the new technology waves and everything lived in San Diego for a bit I went to college and and had a couple jobs and here I am.

Alejandro Cremades: So what? what got you into math out of all things Sasha.

Sasha Orloff: And yeah, you know I fought it a lot as a child I thought math was embarrassing I knew I didn’t want to be a teacher or professor but it was one of those things that I aced the math on the sats ah went in and took my general education undergrad and got. A’s on all my math classes. Ah I Just found it kind of boring and ah, not really relevant to the rest of life and then I found applied math where you could actually take math and apply it towards real world business situations and then all of a sudden I fell in love.

Alejandro Cremades: Now in your case I mean you’ve um, you know you traveled the world quite a bit you know and then you know you’ve studied in Cambridge in also in San Savastian I mean you, you’ve been you know quite around you know so I guess having that exposure to the rest of the world. How do you think that opened. The way that you think about things.

Sasha Orloff: Yeah, it’s one of those things where when you I think when you grow up you live your own life and you think that’s the experiences that everybody has ah and when you live in the Bay Area you’re probably insulated in even more of a bubble than the rest of the world. So you start traveling around the world and seeing how different people. Live and operate so studied in cambridge university because I wanted to see the core of where economics was founded and studied in San Cebastian because I wanted to see art and the culture of europe I lived in ah central american Honduras and Mexico for 3 years working on. Rural poverty then lived in Dc and New York and San Diego and ah, ah Oakland and San Francisco you just get a different perspective I think all of that just helps you open your eyes to bigger and bigger opportunities as an entrepreneur.

Alejandro Cremades: Now for you I mean you, you kept coming back I mean you you you went back there to San Francisco so what do you think you know I kept you coming back there and and and why so.

Sasha Orloff: 1 of my favorite things about the bay area is it’s a constant focus on tomorrow. What could be There’s just a sense walking around the streets and talking with venture capitalists going to coffee shops and seeing entrepreneurs pitching vcs all over There’s just an energy and excitement that makes you feel like it’s possible and being a founder as you know and everybody else I think it’s a kind of a mix of confidence and imposter syndromes and so how do you make that balance feel like an enabling factor and I think part of the magic of San Francisco is this feeling of possibility. Ah, and what what can you do tomorrow which which is just energizing.

Alejandro Cremades: So I mean for you, it took um it took a little bit you know to to go at it. You know with a company of your own you know I mean you you were working a little bit for other companies and as you were saying you were trying traveling to anduras and. But it took a little bit to really you know, get into the whole Yc and starting your own thing you know type of stuff. So so what do you think push you over the edge.

Sasha Orloff: I you know I think I if we take ah a bit of a step back I read ah but after 9 11 ah, which and living here in the bay area was devastating everywhere but but it makes you really kind of rethink priorities around the same time I read a book called banker to the poor. By Mohammed Yunus who would later go win the nobel peace prize and he started this idea of microfinance. So. It’s small loans and savings and education as a tool to fight rural poverty and you really get to see the possibility of. Ah, how these overlapping things can help empower somebody to to be even more successful and then I was ah went to the world bank to work for the consative group to assist the poor while I was getting my Nba Georgetown and then went to New York to work in a rotational program at Citigroup that ended up being in the venture capital team. So city started the first. Venture capital group in the first bank sort of strategic investing arm in Palo Alto and so I had an opportunity to come back to the bay area as part of the rotational program and you just see how exciting it is to be an entrepreneur because my job was to find great ideas and fund entrepreneurs. They’re the passion. And the capitals of the fuel and it was just is exciting but at the same time you meet a bunch of people who are just everyday people. There’s always a sort of lore of Ceos and entrepreneurs that there’s something really magical about them and and there is to some degree. Ah, it’s a bit of lunacy and craziness.

Sasha Orloff: But at the same time It’s just exciting and you you see. Ah, it’s possible and then when you see it’s possible. Ah, it can’t get you more excited to kind of look for look for ideas I got really excited by an idea that I couldn’t find the right combination of product and entrepreneur and I ended up. Randomly on a on a just kind of a whim on my way to the airport stopping by my brother’s house opening up a computer and applying to y combinator and we ended up getting in ah and it was a really exciting time to be able to build 1 of the first core underwriting and um. Sort of financial services experiences on the mobile phone when the smartphones first came out and we created a couple companies off of that technology and the hit product market fit. We raised a bunch of capital and it just sort of shows you? What’s possible.

Alejandro Cremades: And what is that process like because I mean typically the people that come on the show. You know they develop like 1 platform or a product and you know developing a technology and applying it to different you know channels or different products is not the typical thing that they. Folks here on the show you know have to share in terms of a journey you know with with a company that that they’ve done in the past. So I guess how is that possible. How do you go about first building a technology and then once you are clear on what that looks like how do you you know come to the decision hey you know maybe we apply this to multiple things at the same time because I mean doing a startup. On its own is already difficult. You know doing doing it twice at the same time is absolutely nuts. So how do you go about doing that.

Sasha Orloff: Yeah I think it’s a combination It’s a good question easier probably to evaluate in hindsight now. Ah in thinking about it than going forward I think it’s it’s there’s 3 things that I think stand out one is. When you start to become so obsessed with an idea you try and battle test it and you try and share it with as many people as possible and you try and poke holes. What is the way that this could work and what what is the way this wouldn’t work and and then the second is you have to have an incredible team that can pull this off. And so hiring is really important. So can you recruit a couple people and get them excited enough that they’re willing to quit their jobs work for no money or very little money for an indefinite period of time in the hope of building something and then the third is can you not every business. Some businesses you you should sell funds some you should bootstrap and some you should raise money from venture capitalists in this case can you reasonably understand a path in which this could generate 100000000 of revenue or a billion of revenue along the way and when you can’t think of a reason why all of those things don’t exist to me that was the reason it should exist. That’s probably again my bath background like thinking about risk is ah if I can’t find a way to say no and I get so excited about the yes I feel like I I don’t have a choice I have to do it. So.

Alejandro Cremades: So then what was the technology and then how do you guys? think about you know, implementing it to 2 the 2 to those 2 those 2 different companies that you guys end up you know, building up. Yeah.

Sasha Orloff: In a last I think there’s a lot of themes actually between what we built with lend up and mission lane and what we’re doing here with puzzle is one of the most amazing things. Well I guess we take a step back I think first there’s kind of 2 mindsets of an entrepreneur. There’s this creative genius entrepreneur that can create something that doesn’t exist. Maybe that’s the Steve Jobs or the Jack Dorsey’s of the world people that can create something that doesn’t exist and then there’s other entrepreneurs who just see this opportunity. Can you apply this technology to this industry. And if you have kind of an understanding of those 2 things together then can you build a big business. Can it be defensible. Can you find a market entry are people willing to pay you for it. I’m the latter I’m definitely not sort of this visionary I can create something that doesn’t exist. So if we think about the place where my skillset relies. Its um. I’ve had ah ah a big diverse set of experience startups multinationals banks government ah nonprofits and so that helped give me a pretty broad perspective as you mentioned across a lot of different countries a lot of different industries and then sitting here in silicon valley is like what are the new technologies that are emerging. But if we take that back to. 2010 what was happening. We had 3 big inflection points that were happening one was we had the subprime mortgage crisis which meant the government was going to completely change the laws to how banks could operate and effectively what’s going to happen is they were going to exclude about half of the country from core financial services for some period of time.

Sasha Orloff: Second which is hard to think about now is we were just kind of commercializing the cloud. The cloud was a big thing. You could actually do massive processing like machine learning like not on a computer and smartphones and I still think that when I look back one of the biggest arguments was is everybody going to have a smartphone or is it just going to be for super wealthy people. Along the way it’s hard to think about the cloud and smartphones being a thing back then but you have all those 3 trends happening the same time and so we thought well god if we had a smartphone we could reach everybody if we could process in the cloud we could do machine learning and we could use more data to help underwrite people and we had half of the country was going to be excluded from financial services. And so we decided could we build like a fraud and underwriting technology on a mobile phone that took advantage of some of the native features of a smartphone and then we just tried to apply that towards a lot of different industries and that ended up working really well I still think it’s a major competitive advantage. Um as banks sort of still are slow to invested in technology.

Alejandro Cremades: So then talk to us about talk to us about then lend up and miche lane I mean we’ll we’ll get into puzzle just in a little bit but I want to talk about you know those 2 companies you know what? what were the business models. How how did the business model you know, ended up shaping up. You know how were you guys you know making money on each.

Sasha Orloff: Um.

Alejandro Cremades: Ah, in day and obviously you know like how did you go about building the teams around them.

Sasha Orloff: Yeah, the first concept was the simplest version. We kind of took what was one of the most hated financial products on the market payday lending and how do we reinvent it and turn it into a force for good and so we thought how do we design a product that can help people have an opportunity to build their credit score. To learn about better financial education and to save money teach them the behaviors that make them have ah a basically a higher credit score or a lower risk and then use that to lower costs and save them money over time and so we did that so we built the Linda ladder and it hit product market fit. really really quickly it was the first place you could ever borrow money on a mobile phone. You could borrow it instantly in just a matter of seconds. It put you on a path to improving your credit score and over time we just empirically demonstrated each of these things was was correct. Um, that’s a small market. You know I think it was thirty five billion at the time. Ah. But then how did we apply that towards an even bigger market. The credit card market ah, which is where I spent some time at citigroup and so we built mission lane and that became and I think still is the fastest growing credit card company. Ah it applies you you do it directly on mobile phone. It was the first place you could ever turn a credit card on and off with your mobile phone. Now. It’s broadly available but we were the first to bring that technology to market and it had education built into it I think it was just again took off It’s so much better on every aspect of the product against anything else in the market because the technology enabled that to happen. Um, and then they tried the the manager team then after I left.

Sasha Orloff: Ah, tried to open up one of the first savings account micro savings accounts on a mobile phone. Um as well called the head financials.

Alejandro Cremades: So let’s talk about optimizing for time because I mean building 2 companies in parallel. How did you go about? you know, really surrounding yourself by the right people and then also enabling you know those teams to make sure that they were successful and and you were not in in in the weeds you know, sort of speak. Yeah.

Sasha Orloff: Yeah, it was one of the mistakes I think I made as a first -time entrepreneur is thinking I had to do everything myself and then you start hiring incredibly smart, talented people and you realize the product gets better faster. The product is able to scale faster. You’re able to scale yourself faster. And then as a founder or ceo. There’s some things that are just unique that only that role can do and so it allows you to have more time to do the things that are unique to a founder or ceo whether it’s continuing to hire or raise money or help manage the board set strategy and alignment communication and so. I learned probably the hard way. Ah but hiring incredible people. There’s nothing better at increasing your chance of success than hiring great people and then getting out of their way and letting them letting them do their thing.

Alejandro Cremades: So Then in this case, you know talking about also getting the right people and um, um, let’s talk about investments because for both companies you raise money and and money is not just about the money. It’s about the value that comes with the money. So How did you think about. Financing both companies. How was that fundraising journey and you had to do it twice. So I mean that’s pretty unbelievable.

Sasha Orloff: Yeah, a lot of capital to sort of take on ambitious ideas and I think part of it is the preparation of it. Um, fundraising is hard. You have to tell the story your finances have to align towards the story. The people in your team have to align to the story. And I view my job as the ceo ultimately as the arbiter of of resources of capital allocation and resource allocation across the company. The 2 biggest resources that we have are our money and our our team our people over time as you grow your customers become a huge asset as well. But ah, how do you sort of manage and of all the time. So like I said when you hire great people. It gives you time to do the things that you’re uniquely suited to do as a founder one of which is fundraising and so the preparation time. Ah, all starts with a vision that is compelling. And so what’s your take on the market that is compelling is defensible and is exciting and can can energize people. So with the last 2 companies. It was how do you turn the concept of a predatory financial product into an opportunity to help people. That’s just something that resonates everybody has had some struggle in their life. Everybody is needed a hand and when our financial system was designed such that they make more money when their customers get further into trouble. It’s easy to see a vision in which if you can demonstrate you can make money and.

Sasha Orloff: Enable and empower people. It’s ah it’s a compelling vision I think that attracts a lot of people with domain expertise and a lot of people from outside the industry to bring fresh perspectives.

Alejandro Cremades: Because how much did you raise in total for lend up and how much did you raise in total for Mission lane.

Sasha Orloff: Um I don’t know the exact number but it was in the hundreds of millions for each each company.

Alejandro Cremades: Got it I mean I think that they you know based on on what we can see online you know Mission lane is around 675,000,000 I’m sure that there was like some depth you know versus equity ratio in there and then lend up about 361,000,000 and probablyly the the same you know with that. They. Debt versus equity a ratio. How do you think about debt versus equity ratio. You know in an operation like that. How does that work.

Sasha Orloff: Yeah I Think if you’re specifically doing a capital markets business like a lending business. Ah the more that you can leverage debt the better and one of the advantages you have is when you can build outsize returns because your fraud and your credit underwriting is better. Then you can attract more capital at a lower cost with a higher advance rate. Um, and so that just makes it much more capital efficient than otherwise if you’re building ah a revenue financing business or you’re taking on debt as another startup I think it’s as with all debt. You want to really have confidence that in good times and bad. You’re going to have a means to pay it back because debt can wipe out all equity investors. It can wipe out all the returns for founders and for employees and so you really want to make sure you have that So I’m a big fan of some of the innovations in revenue financing that we’re seeing these days. Ah. Slightly less so of just raising debt for Debt state just to advance equity just because it can. It can be dangerous, especially when we’re thinking about shareholder returns.

Alejandro Cremades: I mean I’m sure that during this time where you were raising efforts you know, raising money you know with those capital racing efforts for both companies at the same time you know all those millions I mean that’s a lot of money you know to raise I guess what would you say. And I’m sure that there’s a lot of people that are listening. You know to us you know that are wondering hey you know I I wonder if I can you know, get some insights here from Sasha what? What are the top 3 lessons you know around fundraising that you’ve learned.

Sasha Orloff: Um, well I think if we just first address the equity versus debt I think when it’s a very different mindset which I I learned after years and ah, many many pitches other way the equity investors want to capture upside they’re making money. Because you’re turning that equity into a multiple of that equity the mindset of a debt investor is I don’t want to lose a penny. Um, and so those are very different messages and stories that you have to tell I’m never going to lose your money and here’s how we structure a deal so I’m never going to lose your money or I’m going to make you a lot of money. And sometimes those things are aligned and sometimes those things are in conflict and so I think from a debt versus equity that that’s a big lesson I think at the last that the the thing that I still take to heart about fundraising is everything creates a compelling. He has to all anchor towards a compelling vision. Ah, the first sentence that you say is the thing that is going to frame everything else from that point forward. So you really have to get that right? Um, and the the second is you’re the the third I guess on this point is you want everything to align. Part of fundraising isn’t about telling your whole story. It’s about telling the parts that get people the most excited and 1 of the things I am still prone to that I think almost every founder that I’ve talked to is is they overexplain they go into too much detail and so get help early get that first sentence.

Sasha Orloff: Get this story right? and then practice with friends practice in the mirror. Ah to a point where you’re not trying to tell everything you’re trying to tell the exciting part that gets people interested in all of those rich details.

Alejandro Cremades: Now. Ah, and and I love that by the way I think that simplicity is everything less is more as they would say I guess I guess you know one thing that is very interesting here is that for both companies I mean you were for about 6 years what do you think you know after you had built you know those 2 companies you know after all this success. Or the triggering point for you to say hey maybe there’s something else for me to explore and actually you know that perhaps you know that that push you to to to get 1 year off I mean 1 year off I’m sure that was pretty boring for you because I mean after running 2 companies you know I’m sure that you you were like. Used to the constant you know, racing in your own head with the ad as with what to do with the fires to put out I mean what? why? Why did you like you know turn chapter and take 1 year oh what what? what the hell sasha.

Sasha Orloff: Yeah, we were working. We had the fortune of hitting product market fit really fast and so I basically worked seven days a week for 8 years in a row. Ah and that was just exhausting and I needed to take some time off and so. It was a perfect time for the businesses to be split into individual entities to be able to be capitalized separately for us to hire ceos to run both of those businesses and then afterwards it just we needed to take some time to ah decompress and figure out what to do next I had quite a few interesting opportunities. But I also had two little kids and they didn’t know my name and I wanted them to know who their father was and spend time with them and decompress and so I I took some time off I thought it would be a couple months it ended up being almost almost a year.

Alejandro Cremades: So what what? what happened during that year I mean obviously I’m sure that you had the opportunity of spending more time with the family but you know how were you thinking about then entrepreneurship building companies. You know I’m sure that taking 1 year off and. And you know taking a step back and and seeing what mattered you know, obviously the family but what happened there you know what? where are you incubating because obviously you know as a result of that you came back and and now now you’re you’re at it again with puzzle. But. What was that incubation process of thinking you know what was going to be the next thing and and why pasa was the next thing for.

Sasha Orloff: Yeah I feel like building. A company is is also somewhat traumatic. So maybe there was a little post-traumatic stress disorder happening. It took me about three months to just relax have a resting heart rate I spent time ah trying to learn some new skills I read a lot I didn’t. Carry my phone with me anymore for three months which was kind of crazy I just left it at home I spent 1 hour a day on my phone and the rest was just being really present ah exercising a lot meditating just decompressing then I started carrying around a little notebook. Ah the one that I wrote with ah with pencil and paper pen and I just started writing down ideas. Ideas that I thought were good for the world ideas that I just problems that I saw and big ambitious ideas I thought that I was uniquely suited to tackle and I just kept writing them down for a couple months after about the 6 month Mark um I started talking with other founders and venture capitalists about ideas and started narrowing them down from. Ah, hundred and twenty ideas I think to 20 ideas to 10 ideas to 5 ideas to 3 ideas to puzzle.

Alejandro Cremades: So what? But why pass or out of the top 3

Sasha Orloff: I think the story is easier told in hindsight I realized I’d been thinking about these I had 3 ideas one was fairly similar to the idea that I just stepped away from just applying it towards another industry. Um, another one I thought was sort of another missing idea in the market. Ah, that I think would be still. They would be great, but this idea had been thinking about for about a decade since my days at city ventures and and it came back from a lot of my experiences to date which is. When it combine the experience of being able to scale a company to hundreds of employees and millions of customers and raising hundreds of millions and ah, how do you use those tools to enable something to exist that is different and more valuable in the world. The world of accounting just felt like kind of a natural fit. Yeah, we talked about I’m a math major accounting at its core is is numbers if we think about it as the numbers are the core truth of a business and if we can understand the numbers then we understand how our business works and if we understand how our business works we can make better decisions so we combine a bit of math. A bit of my history. It grameen like helping company like ah basic entrepreneurs in the rural parts of developing countries understand how to build a business with loan and education together and then this third step where I had the fortune of scaling a business I had an incredible executive team.

Sasha Orloff: But I would look around my table and I could ask product and Hr and people and ah engineering and um, ah our credit team and finance team everybody could open up their computer and answer any question that we asked them for the most part except the finance team. It took them days to figure out how to calculate errors was all mostly done manually and when you start looking at that and you start investigating like what’s happening here. We were hiring consultants and we were pulling engineers off of things and we were asking how confident people were in the answers. It turns out that that wasn’t a failure of accounting teams. It’s a failure of accounting software and that was the part that sort of really kind of struck it. It was a bit of what am I good at what was kind of a history of a fresh take because of my perspective and what was a big big market problem that needed addressing.

Alejandro Cremades: Got it now. 1 thing that is very interesting here is that to just create the minimum viable product of something like this. It takes a lot of money you know I understand there’s twenty million bucks so how I mean. Obviously you’re a rocktar you know at this point you know when it comes to because I mean any other like average Joe Schmo you know on the street. You know that is like a first time founder Twenty million bucks to just get going with something you know it’s kind of like kind of like crazy so so I mean they I mean the barrier to entry is like absolutely ridiculous. So. So why 20000000? and then how do you convince someone to just say hand you that money to just put together an mpp.

Sasha Orloff: Yeah, ah, that’s the fun. That’s why ah, that’s why these podcasts are so exciting because you get to hear a bit of the story behind the scenes that doesn’t get published in other places usually because people don’t ask this? Um so I I think there’s 3 themes that can lead up to something unique happening in the world. So back I guess in my training as a venture capitalist I was thinking about what are major trends that are happening in the industry right now big trends that we’re going to create big winners and big losers and there’s 4 trends happening right now in I believe in the world of accounting one is gap is no longer sufficient for valuing a company. Ah, you listen to investor calls and they’re not asking about traditional p and l and balance sheet metrics. They’re asking about new customers and existing customers and they’re asking about new product lines they’re asking about growth. All of these things are not in the details of your financial in the financial statement summary. They’re in the details behind it second is. Startups have style aligned towards a modern set of tools that all have apis think the stripe gusto ripplings brex ramp mercuries of the world. These modern toolset that all have data available in real-time and api the profile of a Cfo changed I the majority used to be come from the counting background and now the majority. Ah, of cfos come from strategic finance or investment banking or operational cfos and then fourth the profile of a founder has changed when a founder used to raise money they used to raise a series a and they would put a Ceo in a cfo um on like to run the company. But now there’s capital for founders to go on scale which is great.

Sasha Orloff: But there’s this really important missing knowledge which is accounting and finance as a capacity so we have these big macro trends that are happening at the same time. This is a well understood problem. There’s plenty of vcs have posted around the the the lack of. Ah, modern, accounting software to enable this next generation of companies. Um, why it doesn’t exist was unique to the capital structure. So there’s a lot of smart entrepreneurs who have tried this There’s a lot of um, understanding of different. Go-to markets. There’s a lot of opportunity. But when we look back at the history of What what it took for any meaningful accounting software to be created. It was 3 to 5 years and part of that is accounting is just binary similar to like going to the moon 95% of the way to the moon doesn’t really matter or 95% of the way going to Mars doesn’t matter accounting is the same thing. It’s 100 % or nothing what that translates to is. It takes specialized knowledge from accountants and auditors and tax experts and cfos. It takes years to build for all of these different edge cases and the combination of like very specific expertise and a lot of time means you need a lot of capital to incubate something like this that means it’s not. Part of the normal traditional venture capital rat where you know maybe raise a couple million dollars from some angels or friends family and then you go raise a seed round and then you raise a series a series b I knew that if I was going to do this for real I couldn’t get distracted by building a dashboard or building an insights tool or building a charting tool I needed to have the core.

Sasha Orloff: General Ledger which is the backbone of accounting I needed to be able to focus on that it was going to take a long time and so I spent a couple months studying this and what that meant was I needed $20000000 what I estimated to build it validate it show growth and traction. Ah, in order to set up that next race I actually think it takes about $50000000 to build this for real $20000000 like you said is a big it doesn’t fit into a traditional venture capital structure and um so I I looked for very large funds that do seed to scale I looked for.

Sasha Orloff: Funds that had a history of incubating really big ambitious ideas and I looked for a partner that I thought would get it at the exact same time without my knowing Hammond from general catalyst was creating a creation fund which they now talk about publicly general catalyst big ambitious ideas. That don’t fit in traditional capital capital structure hemont was an early investor in stripe and gusto so he sort of really understood this next generation. He also has 2 main themes of his investing. It’s like physical health like human physical health and financial health and I think this vision. Falls squarely in line with both of those two. So I went in and I ah had ah had a meeting and we sat down in a conference room. We talked about what it sort of could look like we then went and he introduced me to a couple of his cfos portfolio cfos. We went around and talked with ah a bunch of people we validated the id in the market. We talked about what it would take and we both looked at each other and said I think I think this is it I think I think we can do this and so we we shook hands and here we are.

Alejandro Cremades: I Love it and now for the people that are listening to get it. You know what ended up being the business model of puzzle. How do you guys make money. Okay.

Sasha Orloff: And yeah, so I think there’s we think about this in sort of 3 phases ah of um, the lifecycle of a company. There is that entrepreneur who’s just starting off their business. Um, and that has a free tier to it. It’s the things that are the most important when you’re first starting your company you want to have a scalable system for tax compliance for investor and shareholder reporting but accounting in the early days is a little bit more of cash burn runway and financial insights. What am I spending money on what are the new things that I’m spending money on what are the things that are changing so our first tier is completely free for every brand new company. We want them to have a scalable ah formation a scalable system to to grow their company phase 2 is I’ve kind of now built a product and I want to. Be able to do a couple different things now I need to understand the complexities of my business I want to see revenue by customer I want to see revenue by product I want to see expenses by vendor I want to see expenses by new or recurring I want to see my runway I need I need to have full cash and accrual views because I want to save money on taxes. I need to fundraise but I also want to understand my business and budget forecast there. It’s a saas um a monthly fee. It’s completely voluntary the user opts in to a paid tier and then they get unlocked a lot more capabilities and features and then the third tier is I’m growing and scaling my business.

Sasha Orloff: And I want to have a lot of automation and collaboration and learning built into the system because now my accounting is getting complicated I might have fixed assets and I don’t want to spend every single month writing a depreciation entry I just want to like list my assets and have the software take care of it I might have. Bunch of revenue and accrual automation I want to see my cash and my accruals at the same time and so I need to see all of these books but I don’t want to spend more time doing it so we’ve built a system that learns and gets better all the time and automates a lot of the tedious parts of accounting I mean so that’s that’s the third tier.

Alejandro Cremades: Now let me ask you this imagine if I was to um, give it the opportunity of going to sleep tonight and you wake up in a world where the vision of puzzle is fully realized what does that world look like.

Sasha Orloff: Um.

Sasha Orloff: I think that the part that I get the most excited about is when anybody regardless of their background can make confident decisions in their most important financial decisions they have the data they have the understanding. And they have the knowledge to be able to not guess to not have to make a political discussion. They can actually understand them for their most important financial decisions they have confidence making those they confidence making those decisions so that’s that’s a combination of Ux. It’s combination of data. Combination of machine learning ai. It’s a combination of accounting with finance.

Alejandro Cremades: I love that now we’re talking about the past here. So let’s talk about the um sorry we’re talking about the future. Let’s talk about the past with um with a lynch of reflection in there. So imagine you’re able to go back in time and you’re able to go back in time you know perhaps to that moment that the. You had you know, moved back to San Francisco you were in those coffee shops as you were saying and you were able to see the other founders pitching others and you were probably thinking hey I should be also one of them right? and and and imagine you know you were able to ah talk a chat with your younger self and be able to tell that younger Sasha. Or give that younger sasha 1 piece of advice before launching a business. What would that be and why given what you know now.

Sasha Orloff: Um, we touched on this a little bit before but I feel like it makes sense to reiterate is um, there’s there’s nothing in my opinion that will make a company more successful than proper capital allocation. And hiring the best people ever if and so sometimes that’s hard when you’re scaling because you need more capital and you need more people and so it’s tempting to either lower your bar or potentially pick the wrong investors or hire the wrong people or just hire people fast enough. And so the lesson I would learn is or lesson I would give back to my younger self is have a good vision of what success looks like um, empower your hire. The best people if you don’t know that they’re going to be a step function to your success. Just don’t don’t hire them. Don’t take the chance. It’s better just to work harder because the wrong people can make just catastrophic decisions when you hire the right people you have to empower them to be successful and that means that you need to have a common set of values of what does success look like How do we behave as an organization and sometimes you have to just let people make mistakes along the way you have to trust them and that’s the hardest part you got to bite the inside of your cheeks extra hard and my general advice that I give to people is we will try 10 ideas eight of them are going to be terrible.

Sasha Orloff: 1 ne’s going to be okay and 1 is going to be that game changer. So let’s get to that one as fast as possible.

Alejandro Cremades: I love that I love that Sasha so for the people that are listening. What is the best way for them to reach out and say hi.

Sasha Orloff: Well, if you’re starting a brand new company. You should of course use puzzle and then um, there’s a button that can connect with me right inside but it’s Sasha at puzzle io and I’m on Twitter I’m on Linkedin I’m everywhere so would love to hear ideas. Unfiltered feedback and what else we can build for the founder community.

Alejandro Cremades: Amazingson well hey Sasha thank you so much for being on the deal maker show today. It has been an un earth to have you with us.

Sasha Orloff: It’s been an honor to be here. Thank you so much.

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