Approximately five years ago, my CEO asked me to model out a 15% monthly burn (expense) rate reduction by the following day. As the company was in high-growth mode, with 100 or so employees and $4M in revenue, cutting $150k of our $1M burn was not going to be a 24-hour long task. So, I set out to find a solution.
I had been building financial/budget models for years, and already grew tired of creating them from scratch, maintaining them in spreadsheets, along with mounds of human error, and the fact that this unsecured file would be stored on my local laptop, with no CFO to give us detailed insights into our finances, made me realize that my team and I were battling a lack of innovation (and finance acumen).
The small-to-medium business sector had been long neglected in terms of operations and finance tooling. Larger companies had enjoyed the luxury of their grand ERPS; SAP, Oracle, NetSuite etc., and the mid-market saw growth in platform’s like Anaplan’s. Still though, SMBs have been suffering for far too long.
I set out to find the elusive better mouse trap…and found one! Without naming names, it was a SaaS platform purpose-built for our exact use case. What went wrong? The platform was run by a one man show, former CFO, without much experience with software engineering or UX/UI design. Unfortunately, the platform was nearly impossible to navigate, and folded shortly thereafter. I was, of course, devastated at the thought of having to continue to build and maintain my models manually.
Fast forward to October of 2019. My wife and I had just gotten back from our honeymoon in Asia, having just escaped the Hong Kong riots and the birth of COVID-19. My best friend and business partner, Scott, and I were on a road trip, discussing some of the trials and tribulations of our day-to-day lives at work, and the eureka moment hit! We were both suffering from the same lack of tooling. We looked at each other and said, “Let’s do this!”.
I had spent many years in the venture ecosystem, having helped raise over $250M for a variety of businesses, including an IPO to the OTCBB, and an up-list to the NYSE. I had just gotten married, and it was the holiday season. Scott was an accomplished project manager, and had just closed the deal of a lifetime, which brought him geographically closer to myself, and the world’s business epicenter. All of the stars had aligned and euphoria set in – we were going to do this.
My next post will pick up from where this one leaves off, discussing the peaks and valleys of startup life. Thanks for making it this far, and here’s to an amazing 2022!