Gilad Uziely - Serial Entrepreneur & Startup Advisor | The Brutal Truth About Why 90% of Startups Fail

I just don't have the motivation working for someone else. I can't find the drive to do it and to do it well. And if I don't do it well, I prefer not to do it. When you have an ideal, and then you start building, you slowly, slowly, sometimes quickly, falling in love with what you are building, instead of falling in love with the object. You're moving away from the tooth, which is the only important thing that you need to chase as a founder, and this is the most dangerous thing that can happen. Elad Uzieli, he left Jerusalem with a suitcase full of ideas, built a travel startup in Italy, ran the innovation lab for one of the world's fastest growing tech hubs, and then he went broke, burned through years of savings, all to chase one problem. Why does solo entrepreneur struggle to control their own money? That obsession led to sequence of financial operating system for creators, freelancers, and anyone with more than one bank account. It sounds simple, but what they're building, it could rewrite the rules of money management, and what he shares in this episode might just change how you manage your money forever. If you're focused on the right matrix, opinions doesn't play part anymore. You need to know what you're tracking, you need to know how success looks like, you don't have to know it from day zero. Sometimes it takes time. I have all my life tried to build communities, and my take is that community product fit is much harder than product market fit. And if you have a community, and you see like your early signs of community being created, you have to do whatever you can in order to cultivate. And that's what we've done, very successful. The most important resource that we have obviously is our time. You have a limited time here. Make sure that you're putting your efforts and your energy in a place that makes sense. Good lad. I'm very excited to chat. This is going to be a really honest and brutal startup story, and I just want to frame it for the listeners. So we're going to be mostly speaking about sequence today, but your last company lands. So you raised eight million. You grew to 30,000 users. You realized you were essentially lighting money on fire with every customer due to fraud. And instead of sugarcoating it, you spoke to your investors, and there's a story that are really important story for entrepreneurs. So explain to me the good and the bad of entrepreneurship, because I think we speak about the good too often, but you've experienced some not so great experiences. Yeah, I mean, everybody celebrates, you know, the huge success, the massive acts, it's the IPOs, and somebody like, you know, just watching from the sidelines, it seems like everything is smooth. But the truth is that it's a mess. For all people that I know, and I assume most entrepreneurs, there's a lot of pain involving all along the journey. Sometimes as founders, we sometimes founders are very lonely, and shit hits the fan, you know. And when the shit hits the fan, you know, you are left many times alone and just trying to figure stuff out. You have employees, you have partners and co-founders, you have investors, you have clients, people are actually using something that maybe you've built. So it's a very hard place to be. I think that we over glorify entrepreneurship, and we make it seem like it's all fun and all good, and it's hard work, but I don't think we really dive into what happens if it goes wrong. And also to your point, it's very lonely. So if it does go wrong, which everybody who I know who's built something significant, there's been a point where it's gone very wrong, how do you deal with it, because a lot of people don't understand what you're going through. So let's even back up, because I want to understand why you chose to be an entrepreneur. What kind of delusion made you want to go build something? Because that's also interesting, and I don't believe that 99% of people on this planet should be entrepreneurs, because it does take a certain way of thinking, and it takes somebody who maybe is a little bit delusional. But back me way up, was Lance your first company ever? No, no, no, I'm almost 45 now, and I had like a W2 for maybe two years of my life. I've always built stuff, and not necessarily startups. I've started actually my first steps as an entrepreneur, as an adult, as an adult, where we've built a two operator, we've dealt with tourism, we've done a few cool stuff there. But I just, to be honest, I don't have the motivation working for someone else. I can't find the drive to do it and to do it well, and if I don't do it well, I prefer not to do it. So this startup story with Lance, so Lance wasn't your first company, it wasn't your last excuse me, I mean like now you're building sequence. But with Lance, what was the thing that went wrong? I think this is like a great lesson for people. Well a few things went wrong, but I think that the core problem with Lance was the fact that we've made a few core assumptions that were just wrong. So the basis of the business were not built for success. And in our specific case, what we've done with we've tried to build a finance company or a financial company using embedded finance tools. And what happens is when I say embedded finance tools, so banking is a service, so you're not actually the bank, but you're acting as a bank. And so if you started really early or have a lot of resources, so companies like China, they did obviously very well. But for somebody who came in the second, third or even fourth round of near banking, the unit economy just never ended up. Because you can't operate like a bank, you can't land against your balance sheet and you can't really make money like banks. And on the other side, you get all the downside of fraud, chargebacks, disputes, and by far the biggest problem for us was fraud. So at a certain point in time, we've just looked at the numbers and we've understood that with every customer that you bring on, you're basically shortening the life of your company. Because what happened is you would get like a cohort, like a past cohort, and you thought that your personal acquisition cost was like $100 or whatever. And then as time goes by, you start to understand that 20, 30, 40 percent of those customers are accounts that you actually have to close. So the crack is not 100 anymore, it goes up. And sometimes for certain costs, it even doubled itself. So you're sitting here, crack is growing up, the baby period or the TRY keeps getting longer and longer. And you basically understand the trajectory that you're diving to off a cliff, basically. So this is something that makes sense to me. But for somebody who's first starting out, this is a little bit scary. Because I think the lesson here is that it doesn't matter how many times you do this. It's not like the next time is guaranteed success. And I think that sometimes, I think that sometimes investors even think that we can talk about that as well. That's sort of the other side of entrepreneurship. They always bet on people that have had past successes or serial entrepreneurs as opposed to the first time entrepreneur. Because they think, well, if they've done it before, then they can do it again. But explain to me, how does a serial entrepreneur who's done this many times, how do you get some of these core business assumptions wrong? Like what was the blinder that stopped you from seeing this when you started last? Well, I think that, you know, when you when you have an idea and you start building, you slowly, slowly, sometimes quickly falling in love with what you are building. Instead of falling in love with the problem, right? You've been something, you, and you start telling yourself stories, you start, you start basically lying to yourself, right? You say, if only we've built this, and this is the only thing that is missing and something maybe one parameter looks really good because we go fast. We've opened a lot of accounts, like we are like tens of thousands of accounts. And so you say, this is working and then you start to ignore the bad stuff and you start lying to yourself. And I mean, like it's like your baby, right? And everyone sees that he's baby, it's like the most beautiful and perfect thing in the world. But there are babies that are not perfect, right? And then you start lying to yourself, you're moving away from the truth, which is the only important thing that you need to chase as a as a as a founder. And it's something very natural, right? It's like it's a difference mechanism that we all have. And this is the most dangerous thing that can happen. It can happen to anyone. We'll talk about how you're navigated because this, I mean, this is something that you have to deal with. You raise investors, but how do you how do you remove yourself and remove your emotion and ego and attachment to the company so that you can make objectively good decisions? And it's what's what's difficult about Lance is because you had like unit economics and economic issues and fraud. It's not about like a pivot sometimes. I think it's a Kevin O'Leary line, right? Where you have to take it out behind the barn and shoot it. And I think that that's a very difficult thing for entrepreneurs to do, especially when they've raised money. So how do you how did you in Lance sort of say, okay, this is really not working. I need to find a way to have really hard conversations and kill this business. What was the thing that woke you up? Just the numbers, just the numbers. If you're focused on the right metrics, it doesn't it that opinions doesn't play play part anymore. All right, you need to know what you are tracking. You need to know what you're measuring. You need to know how success looks like and sometimes it will take a little bit longer and sometimes you and you just need to see that you are you don't have to you don't have to net from day zero, right? It's sometimes it takes time. Usually it takes time, but you need to see that you are tracking towards what the important things. And with with Lance the problem that we should we should have killed it a year before we before we have that's the truth. Was there, I mean, just curious, I mean, like hindsight's 2020, but technically, do you think that if you would found a way to mitigate the fraud and explain to me like what fraud is in like the banking sense for people that are listening like what fraud is not, fraud is not like somebody on your team committing fraud, fraud is like the customers are committing fraud. But was there, if you didn't found a way to mitigate that, what would it have been a successful business model or is that just a hypothetical, there's no point in even figuring that piece out. So that's first of all figuring that out would have been huge and could have created a huge company that has nothing to do with with a neo bank because fraud is a problem across the board. So to your first question, the fraud came from customers not from employees at all. And it was anything you can imagine anything from money laundering to people, you know, copying up the account that we spent going to Vegas for a crazy weekend and calling on Monday saying that the car was stolen, my wallet was stolen, it wasn't me. So even if you can prove that it was them, you still have to pay like heavy fees to resign and the other providers. People that are just using your platform to get like a like like referral fees and stuff like that, which is not actually fraud, but that's not why you've built the product and they'll just be customers like you can't make money off those kinds of customers. So it was a costable, we were called to the sheriff's office in New York and like all anything from like crazy money laundering chains to just like people like to, you know, to steal 5K or something. Okay, so it's not working. You raised the money for this company. So you raised, did you raise 8 million or how much would you raise for this? The standard rate median, yeah. You raise 8 million. Okay, so then what happens when you realize that the company's not working? So to be honest, it's very stressful. Like we remember me, my co-founder was going into a room and saying like we don't know, we don't know how to save this. We have obviously fiduciary responsibility to our investors and we understood that with every new client, we are basically, you know, like it's, you know, it's like we had to stop and it wasn't, it wasn't responsible of our side to continue. And we said, okay, first let's stop bringing on new customers. We still had thousands of people using the product. So it's like, you know, it's a banking app. You can't, you can't just close at one day, right? And so we continued supporting them. We off-boarded them and sold the customers that were, you know, that other companies were interested in and went back and then we said, okay, what are we doing now? Like we either give money back to other investors or we think of a pivot. At this point, I'm not, I'm still not talking to my, to my investors, it was like, you know, it was, it was a few days later. You're just having a conversation with your co-founder thinking like, what the hell are we doing? Yes, yes. We understood that we had to stop and so to not to stop onboarding new customers and we did that. And then we went into a room and said, okay, what can we do here? We either close or we pivot. And we decided to try and pivot to save the company. That was the, that's what we wanted to do. And when we started, you know, like flying ideas around, but then after like a few days we said, okay, guys, we've just proved that our ideas are not that great. That's what it was just proven. And so we said instead of thinking about ideas, let's think about core principles that will guide our pivot. And it came down to two things really. One, we were all over 40 and we want to make sure that we are investing the next 10, 15, even 20 years of our life in something meaningful with chances of succeeding. And for that, we wanted to get to conviction. So the first important thing was get to high, high, high conviction. That was the first thing. And the second thing was that after trying to build a bank and competing with Bank of America, Chase, you know, all those like huge players, we said no more red oceans. We are looking for a place for a blue ocean, low, low competition. Because for, like, and that's, and that's very, very important. And that's when we started working with a framework that I actually really like because it's very simple. And it's like, you need to look for stuff that are non-consensus and right. And basically, it's very simple. Like consensus, non-consensus, right and wrong. If you are wrong, you are wrong. Nothing you can do about it. If you are right and consensus, that lands, right? Everyone that I talk to told me, yes, of course, freelancers and the self-employed needs a better banking experience. But there you meet the banks of America, right? There also, there's a bank, right? And when you find something that is non-consensus right, that's when you have like a vision into the future, right? That's where you can build something that is truly unique. And it's very hard because then when you go to talk to people, many will tell you, dude, I don't understand what you're even talking about. Why would anyone use that? It's, you are stupid, basically. Explain to me because you spoke about sort of first principles thinking, but you also spoke about non-consensus, but correct. So how can you figure out which first principles apply to a non-consensus, but correct idea? Because this is what you've really done with sequence. So we've used that framework to hit what was important for us and that's a blue ocean. That's how we looked at it. And then to find the non-consensus and right idea, my best suggestion is be lucky. That's the most important thing. If you think about the most important narrative or principle that you had to change when you started Lance, I mean, there's probably many, but what was the main one that allowed sequence to be successful when Lance wasn't? And you've danced around it with, again, non-consensus, but still correct, but there was one main idea that you would have had to have changed. I think that a few things. I think that first and maybe the most important one is that we've really shifted from talking to our customers or our potential customers to listening to them. And there's a huge difference there, right? So before actually starting Lance, if we were not just talking to customers, but also listening to them, we maybe have built sequence four years ago. Because before Lance, we've built a bunch of tools for freelancers and self-employed to just see all the money and the tax status and everything. And they told us, wow, this is great. I love this dashboard. And that was like a kind of like a mint experience or monochrome experience. And they said, I really like it. I want to touch the screen and move money around. And then if we were smart back then, or we were just actually like digging in and understanding what those people want, maybe we would have built sequence again and not Lance. But then we said, okay, they want to move the money. We need to be a bank. And there's a very famous saying by Bill Gates who said, the world doesn't need more banks. It needs better banking. So listen to Bill Gates, that's another tip. He knows what he's talking about. So dealing with investors is not easy. I know that you had how many investors total? Because you raised 8 million, but it wasn't from just a small group. There was 83 total investors. Yeah, we had to collect 83 signatures from anyone employees, accelerate those in programs we went through. And then everyone who ever wrote a check into sequence. And we've raised a bunch of money for my friends and families of small checks. Those guys were never the problem. So it sounds like it kind of sounds like to be honest, like start up hell, like going through because this is so now, okay, so just to frame it for people, if Lance isn't working, you have hard conversation with your co-founder. Okay, we got to go in a different direction. You got to get 83 signatures. It took you eight months to get 83 signatures. I know that there was some people that were problems or at least they gave you a hard time. So during that time, I mean, you're stressed out. I don't think that you're really, you're not making a ton of money yourself personally. And life still goes on as well. So you have to figure out what you're going to do in terms of like, you know, I don't know your whole financial situation. But when this is happening, you're not drawing massive salaries while you're telling your investors that there's a chance that they've lost their money and you have to renegotiate exactly what you're going to build. So talk to me about this restructure because dealing with investors, I even sometimes recommend that if founders, there's reasons for raising money and there's reasons for not raising money. Obviously, if you want to grow fast, you can raise equity. You can also raise debt doesn't have to be equity in different ways to raise money. But what you went through is probably one of the most difficult things somebody would ever have to go through if they are raising money outside of literally just telling your investors, I'm sorry, we've, you know, we've lit your money on fire. You're not getting it back. So you have this, but so tell the story. You've had this conversation with your co-founder. What's the next step? We went into it. If I didn't know what I was working into, I didn't know how painful it's going to be. And what we did was we were in the room and said, okay, let's save the company. Like we still think that we have something that we can do. Let's let's try. And with the two, the core principles of pivoting, we went and started talking to lenses good users. And we asked them, guys, what are you doing here? And it was very, like, I don't want to say unanimous, but it was very common for them to tell us, I really love this mini-zappier experience for my money. I wish I could connect my, and then everybody like my husband account, my wife account, my business partner, my 401k, my student loan, my credit cards, my mortgage. So they wanted like a bunch of stuff. And then all my co-founder and the CEO came back and said like yeah, I think that what these guys are actually looking for is actually a router for their money. They need a better way to route their money between all those different accounts. And then we start with okay, that's interesting. But again, we just took a massive beating. So we wanted to optimize for conviction. And so then we went and started talking to people who never heard about lens, not necessarily freelancers, anyone who was willing to talk to us. And we carried them and said, hey, we're going to build this router for money. It's an example for money. And then out of every 10 people that we talked to, six, seven would go like you guys are idiots. I don't understand what you're even talking about. And three four would go where have you been all my life? Look at what I've built. Check out my excel sheet. You know, so it was this is this is non-consensus right or wrong. We don't know yet. But it was definitely non-consensus and very confusing, right? And you don't know what to think. And then we said, okay, optimizing for conviction. Let's be brave. Let's build a landing page and let's charge and let's charge a relatively high amount for just for the concept. And we've built a bunch of landing pages. And we've built actually one landing page and a bunch of ads. And just describing the product, we call it money route money, which is like a shitty name. And we told people, if you want to get a lifetime access for this product, pay $200 today. And I told my co funders, you guys are crazy. Nobody's going to give you that that amount of money. So, but we launched that. And I was extremely happy to be wrong because in five days, 100 people paid the $200 for the lifetime access. For you know, we didn't have the product, obviously. And started talking about it all over the internet. So they opened the Discord server for us. They started talking about it on Reddit. And people came knocking on the door. And then we said, OK, like the $200 is off the table. This offer is off the table. But if I still remember exactly the wording, we told them, if you want, you can lock in a discounted subscription for life. And we actually had people paying subscription for a product that not only wasn't ready, we haven't even started building. And that's conviction, right? And then with that, we've only started creating like a waiting list. So it like, we had like a very, very initial traction. And we've actually like already like, you know, got like around 20 K or even more before even writing one line of code. And this is very rare. Many people can say that that's what they want to do. But they actually do it. It's much harder. And you know, it's like, it's like a lean startup 101. But it's much easier said than done. And in this stage, I went back to to to lenses investors. We had like around I think two million dollars in the in the bank. And I told them there's something here. There's something here. Let's give us some more money. At this stage, we've done one price round and two saves one on top of the other, which is also a huge mistake. We can, we can, you know, talk about it if you want. And and it was just, it was like 2022 when nobody was doing anything. It was just after Covid. It was the shitiest market. And all my investors told me we are not investing. And so I went and started pitching to everyone who was willing to talk to me. Anyone from this is to angels to who, like, anyone. And I've pitched an account that I think it's around 160 investors, which is crazy. It's not it's not a small thing to do, but I was like, you know, I had nothing, nothing else to do. Most of them told me now, some of them took the time to explain to me why what I'm building doesn't make sense. A few looked at it seriously, but then saw the cap table and like, well, I'm not touching this. It's too much. And when I got two term sheets. And when you're building something that is non-consensus site or non-consensus list, it's very, it's how to find investors. Because all of them, like, most investors with, like, we are, we are investing in the outliers. We are looking for something different, but actually very few do that. And I was lucky to get term sheets from Alev, which is one of the top Israeli vices and emerged, which is another, like, awesome, great VC. And they, they eventually, Alev led around and emerged, participated and they did around. But before the round happened, there was seven to eight months of restructuring. Because the term sheet, the term sheet, which was, you know, at the end, a good thing. But again, I was, I had no idea what I was walking into. And they required us to collect 95% of the signatures in order to start a new company, to buy assets from the old company for equity in the new company. That suite is a success story partner. 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Plus, with indeed sponsor jobs, there's no monthly subscription, no long-term contracts. You only pay for results. There's no need to wait any longer. Speed up your hiring right now. With indeed, and listeners of this show will get a $75 sponsor job credit to get your jobs more visibility. Just go to indeed.com slash Clary right now and support our show by saying you heard about indeed on this podcast. Indeed.com slash Clary, terms and conditions apply if you're hiring. Indeed is all you need. What would be the advice that you tell a founder who's going through something similar right now? Like, how did you? Okay, so this is obviously on the on the on the very opposite end of the spectrum. But I know founders that go through really bad business situations and something like, I mean, there's been stories of founders like committing suicide and like just very, very depressed or you know, getting sick or destroying the relationships or like a variety of different things because of business stress. So what's the advice on how to navigate something like this and keep your head and keep your relationships and keep your health? So now I'm going to do as I say not as I do because I did a pretty like lousy job in managing my own mental health at that point. When I think that if I had someone that I could talk to, either professional or maybe like sometimes the people understand you the most are founders that are like two or three steps ahead of you in the journey. So I have this net and so now I'm even like building it even further and deeper. But my personal feeling, I'm not sure how really it was right, but that was my feeling. I felt alone and you know, I have an amazing wife and a lot of friends and I have great team and co-founders. But I think that they put myself in a situation in which I could have done a better job. I didn't take care of myself and I'm still and I'm still still paying the price even though it finished like 18 months ago. And by the way, if somebody is going through this kind of pay-to-play restructuring, I'm happy to talk to people who are going through that. And this is the kind of difficulty that I felt. I'm happy to share my experience. So if somebody like people can feel free to, you know, we can leave my email. Yeah, I appreciate it because I think that these are so tough conversations, you know, it's so cliche, but it's very true. Like everything you want is on the other side of a tough conversation. And these are all, these are all pretty standard motivational ideas. And if you listen to enough podcasts or read enough books, you're going to hear these. But when you're actually going through it, it doesn't matter what you know or what you've read or what you've heard or even what you've been advised to do by your friend or your peer or your mentor. It's just very difficult. Like sometimes it's just and you have to you have to build the courage to have difficult conversations. Now you were somewhat forced to, but I think that you know, even to your point, you probably could have had these conversations earlier. And it probably would have made things a little bit easier. You probably could have had a tough conversation with your co-founder. And I'm just making assumptions. But you probably could have tough conversations with the co-founder, which would have led to tough conversations with your investors. Even earlier, which would have ironically made it a little bit easier. But the longer you dried out, the more difficult it's going to get. Yeah, I think this is a good advice for almost anything. Don't sit on things. And for me, the conversation with my co-founder wasn't tough. The situation was tough for us. And I mean, our first reaction was like, let's save the company. So the lenses investors were not willing to continue to do their own adventure building, which is to invest. And so that lead to a lot of friction and a lot of pain for everybody. Now, I also understand how they felt. Going through this experience, what would be the advice that you give when it comes to how to raise money that maybe you would have done differently knowing that, say, this is a potential, not ideal, but potential outcome. So this is again a place where you know that it's much easier said than done. And people tell you, find the right investor for you. It's like finding a wife or husband or whatever. You need to see the world in the same way. But when things aren't amazing and you still believe in what you're doing and you have this conviction, you'll take money from whoever is willing to give it to you. And I think that going back, we've raised money from all kinds of people. Some of them turn out to be amazing, like the best. And sometimes we'll be not that amazing. But if you take me back, if I wouldn't take that money, I wouldn't be able to find the opportunity and to learn about the amazing opportunity that we now have with sequence. So if you can take the best investors, you know, but you can't, you know, it's like, so my real advice here is to talk to people who raised money from those people, and the companies didn't succeed. And then maybe you will be able to learn. Would you take a different decision? I had to be honest, I don't know, because you said, okay, I just need this 500K and then I can start building more forwards. So it's really easy to say and very hard to do. I was more curious to take a step deeper, even more technically, because you mentioned you raised two safes. Why was that a bad idea? Like from a raising perspective? Because when you have to do a down-round or when you have to do, when there's like a pay-to-play or when you have to do restructuring, the people with the safes have much better terms than all other investors. That's create inequality between the investors and also towards the founders, because basically with the safe or with the convertible note, they are there. You owe them, right? They are like debtors of the company. And so I'm not saying don't do safes at all, but try to avoid them as much as you can, especially if you've already done one price round. Because then you're basically you're basically putting in the new investors in a much better conditions or a much more favorable down-round. In position when a down-round comes and you really need a great experienced patient and smart lawyer. Yeah, of course. They've been through a couple of those. Don't use your friend's cousin or your neighbor's daughter. Find somebody, find somebody who's done that and be ready to pay, but it's worth it because without our lawyer, I don't think that we could have done that. Those people that made that were making your life miserable because they didn't want to accept the new terms. What was the final strategy? You mentioned you're not a good negotiator, but you got the deal done. So what eventually moved them over the finish line? I think that they got to a point in which they understood that this is the best outcome. There is no better outcome here. They almost killed the deal. They made the delete investor very anxious and nervous and even I talked about it before in previous podcasts, but he pulled the township. I woke up one day and the investor who's like super smart and an amazing investor, I wake up, I say like, I'm sorry, but I see that your current investors are not the best interest of the company and I'm putting the township. And I was like, that's it, we're fucked. The point investor, nobody's doing anything, but he actually did it because he wanted to help me. Unfortunately, he didn't tell me. Oh, I understand. So he was saying that if he pulls the term sheet, then that means that those investors are shit out of luck, they have nothing going forward and they're going to lose their money. But he didn't tell you this, but he knew in his head this was like a psychological negotiating strategy. He said, I'm pulling the township, the township is pulled. And then I went, and obviously, I like, you know, I just remember like waking up in the morning, seeing the the email and then I said, fuck, what I'm going to tell my co-founder. That was the first thing that I was like, but then we went back to the, I just took a screenshot sent to investors and told them, I think that they can still save this, but you have to play along. Or else we are all getting zero. That's smart. It's smart on his part. So things move forward. You have this non-consensus, but correct idea with sequence. So talk to me about just frame the problem, but how did you validate? How did you, how did you get, what was the word like radical conviction that sequence was a correct non-consensus problem that actually could turn into a business? I mean, we try to come to this, and it's something that is sometimes very hard for men to do, but we try to come as a humble as possible. We came with like one of the important things that we told ourselves, we know nothing. Let's see how people are, how people are actually reacting to what we are building. So it started with the landing page and the ads and ended up with the 100 or 100 and the few more that were with the page. Only once we got to that point, we started building because we've had a lot of experience with lands. We started building fairly quickly. We knew exactly what we were doing in terms of the infrastructure. And I think very quickly, we've launched, you can't really call it an MVP, because like in Fintech, when you move money around, you can't have something not working and you also need to get a put on the bank. So you have to have the FDIC in place, you know, so everybody needs to give you like the stamp. So you can call it an MVP, but it was our first product to the market, and it was closed just for the people who paid $200. And that was maybe Q3, Q4 of 2023, when we launched the very first version. Then we said, okay, we know nothing. So once we felt ready, the product was stable enough, we said, let's open to anyone who was willing to pay and then we moved from optimizing to conviction, to optimizing to learning, and also optimizing for learning means that you need to increase friction. So we said, no free tier, no free trial, no free nothing. You want to use sequence, you pay. And it's still the case today. Taking a few steps back in LANS, when we asked people to pay for what we were doing, nobody was willing to pay, we said, okay, let's drop, let's give it for free. And that's because I died, you know, it's like a bank, nobody is willing to pay for banks. So let's give it for free, which is always the wrong thing to do, because basically what they told us is we don't see value in what you've built, so we are not willing to pay. So we've learned the lesson, and for sequence, we said you have to pay. And we opened as wide as we could. We got anyone from pure W2s, all the way to like small, but like medium sized businesses, and anything in between. Startups, micro businesses, freelancers, gig workers, side hustlers, anyone that was willing to pay. We've spent Q1 and Q2 just like, you know, getting people on boarded. And once we did like around five, four, six hundred paying customers, which was, yeah, exactly mid 2024, we started looking at the data, and it was very, very clear that the by far best users are small business owners. And when I say small, I mean like one to ten employees. We still didn't really understand why, but we saw we saw the data. And then we shifted our marketing and really zoomed in on those people. And then we went from like two hundred thousand dollars in a yard, or we've seven hexed in like eight or nine months. In the market, mint, is that the, is that the main competitor? Or I guess like sort of like a comparable, because mint, they have millions of users, but they've never figured out how to really make money move automatically. And that's what sequence is doing. So it's interesting. What is the actual problem that people have that you're solving that, for example, mint doesn't solve, because mint again, like millions and millions. So that would be like the incumbent that you're trying to displace to a degree. Well, well, no, there are a bunch of like PFM's, right, personal finance management tools, like rocket money, wine, nap, till now, mint is obviously the biggest and most famous one, which does like I mean, they close that. But we actually start where they finish. I am not into financial planning. I'm into execution. We see people take those tools, bring them to sequence and execute, right. And so I'm actually not competing with them, because budgeting is again, I don't know how to 10X anything down. We've built something that is different and sits in a different place. We are an execution tool. And I like to think of sequences like a fitness app that goes to the gym for you. Right. You set it up. And we do the execution. We always put you in control. You know what's going on. You know where the money is going. You see how you build, whatever it is that you want to build. Either you know how to repaint that, start saving, start investing. Yeah. So explain, I guess explain, just explain the super layman's terms, like how the automations actually work, because I was I was listening to some of your past content. And you said that the average American has 15 different financial accounts. So like super fragmented. So what is the actual problem? Like what is the workflow that I mean, obviously different customers, different workflows. But when somebody, the average, pick the average, pick the most common customer, what are they actually doing with this? So maybe, maybe just the opportunity is a great question. I mean, what we came to understand through working with our audience is that our financial stack, both as consumers and smaller micro business owners went through a massive unbundling. Right. The average American holds 15 different holds money in 15 different places. And if you're a small business owner, it's even more than that. And it's very hard to follow where all that money is. It's even harder to manage. And it's almost impossible to make smart financial decisions in context. And the and it's getting worse. The gap between the consumers and small business owners and all the different places in which their money keeps going. Because of open banking, banking, the service, embedded finance, all of that, there are more and more services, more and more products, more and more apps, which are all great. And what we do, our strategy is to lean into the fragmentation. And we don't bundle, we don't unbundle. We just make sense of at all. We bring everything into one place. We help our users harness all those amazing offerings. I mean, you can really build wealth through that. But we also bring everything to one place and we put them in control. And the combination of just a little bit of intent, some guidance and a lot of automation can change the trajectory of your life seriously. We are seeing that. I think that I think this is very useful because I even noticed like sometimes I'll find and I don't know this is like the perfect example, but I'll find like a PayPal account over here that has a couple thousand dollars that I forgot even existed. Or as other, I mean, you know, like maybe I'm also Canadian too. So I have Canadian accounts and I have American accounts and I have investment accounts in Canada and I'm investment accounts in the US and I have a Canadian crypto account in the US crypto account and I have two Canadian banks to America. It's like it's all over the place. It's actually chaotic. It's absolutely chaotic. So this is this is the solution for all of this. Absolutely. It's not only the solution to not lose 2K on PayPal, but it's actually a way for you to make sure that every dollar that you have is put to the best use, right? And it helps you achieve your goals on autopilot. I mean, we are seeing people that are I mean, one of the things that I'm really passionate about is helping people get out of that and something that many many of our users do. That doesn't mean that you are you know that you are I don't know that you don't have money at all. Some people that are high earners will still have student loans and a bunch of things like that. And so credit card or stuff like that, we we help them to automate and optimize the debt repayment, which means that very quickly they're moving from repaying debt into saving towards important for them or investing and making sure that they're making sure that they are you know that they are taking care of their kids future of whatever whatever whatever is important for them. They're they're older parents you know or just living a life the the life that they want to live. 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It's not just the great keynotes. You're going to dive into breakout sessions where you can immediately implement what you learn. And plus San Francisco's legendary startup ecosystem provides the perfect backdrop for networking with all these great entrepreneurs, decision makers, industry leaders, peers who are actively shaping the future of business. From September 3rd to 5th at the Moscone Center, you're going to be surrounded by forward thinking professionals who turn insights and ideas into breakthroughs. Don't just watch the future unfold. Be part of creating it. Visit inbound.com slash register to get your ticket today. Walk me through. Give me tell me a story about a customer and what sequence or automation they've set as a people and start to realize like how this could actually impact somebody's life. So I think a good example would be we have a I think that maybe the best example to start with is describing our high CP or our ideal customer. So our ideal customer is a small business owner, right? And I say small business owners are not a small business because those people manage they were many hats, right? They manage both their business finances and their personal finances on sequence. And we have a guy that has an amazing business of short-term rentals. And he has a family of three kids and that's and that is business that's that's you know that's that's he's family like family business his wife is working with him as well. And they manage between 30 and 40 apartments and they register their apartments on all platforms from booking Airbnb. Those apartments are not theirs, right? Most apartments belong to other people. And they're the ones who just fill in. Yeah. Yeah. There's a lot of money movement is coming from different platforms for different apartments for different owners. There's the cleaners, the security deposits. They need to make sure that they are saving enough money and putting stuff into marketing and paying themselves and taking care of their kids' future and saving towards the vacation. So it's not rocket science, right? But there's a lot of money moving and you need to be you can't you know you can't not pay an owner, right? So before sequence they used Excel sheets and I think that the guy told us that he was spending between three to five days a month just making sure that all the money is moving into the right place. The right owner was coming from the right from from the right platforms putting aside for security deposits paying back the security deposits. You know that so it's a mess, right? And with sequence we bought it down to like an hour. And which which is which is which is amazing because it gives him all time to take on more apartments, gross business is taking care of you know all of these like you know it takes like the 529 for his kids. He started investing and we're actually now working on a series of of case studies that we're going to that we're going to share soon. But it's pretty amazing to hear the stories and what people are actually achieving. Yeah, no, it gives your life back and as a as an entrepreneur myself, finance is one of the most annoying parts of a business. It's it's just I mean I'm not like a everybody's a numbers person to some extent but not most people don't enjoy it. I think there's a certain kind of crazy person who enjoys numbers and they all become accountants but the rest of the world hates it. It's boring, it's tedious, it's not fun, right? And there's a lot of people feel nervous about it you know. It makes you nervous and yeah I just the other day spoke with the guy who has like a franchise business and he has like a few like smoothies stalls like you know like six or seven and he said like like you guys have been so much time and and giving me so much peace of mind because I know that I'm always back my employees on time that I have enough money in each sub account and it's just for me as as some as one of the people who build this product it just makes you happy you know you wake up in the morning and you're you're saying I'm building something that has a positive impact on the world and that's and that's that's what I always wanted to build on my life. Now the very obvious question I think that if somebody's listening to this it's important that you answer this because you're you're moving people's money around based on an algorithm. So what's the safeguard so that something doesn't go off or something doesn't get transferred because then if it's all automatic if if somebody is using this properly that means that they're trusting sort of their financial management completely and that's stressful I mean I'm sure you have these conversations all the time. Yes so first of all the for many years people talked about the self-driving money and and I can tell you that people like with 100% confidence people don't want self-driving money and they want help they want some automation but they really are not they're not ready to hand you everything and say I'm not I'm not going to look at it and there's a famous saying that the three most important things for for people is the health their family and their money but it's not necessarily in that order. I mean we are saying that people even when everything moves 100% without them having to do anything they come back two three times a week to see what's going on right and so you can you can you can configure the system in a way that some things you have to do manually so it won't go like automatically just need to press a button and until you get more and more confident. Besides that again we are we have a custodial bank that is FDAC insured and regulated and we are regulated by proxy right so everything is like 100% legit the way that it works is that we as a sequence we are not a bank so we can't touch the money the money is in in in in thread bank our our partner our custodial bank that they have they are you know heavily regulated like like any other bank and so money can't get lost and then when when people are building the rules there are a lot of ways to make sure that that stuff like one like that you did nothing that you don't want will happen so you can build the guardrails in the in the softwares you can say I want to always pay the full outstanding credit card balance but never pay more than a thousand dollars or ten thousand dollars so you can always build those those guardrails and we have if somebody is interested in seeing how sequence works so obviously YouTube but we have a crazy active community of amazing people on discord and any question some some people in the community knows the product better than I do to be honest some of them are extremely smart and like just great people and that we feel lucky to build with and for that's a smart play as a founder to building a community that's very smart that's such an underrated that's such an underrated asset that you've built I think the more founders should try to do that and I mean like we always talk about audience we talk about audience build audience not build community I can go on and on and on about it it's one of the things that I'm most passionate about I have all my life tried to build communities around things I was like I had some few like minor successes here with sequence and that was the very first thing that I that I immediately understood that can be like can become like a mob can become like a mob around the business and my take is that community product fit is much harder than product market fit and if and if you have a community and you see like an early signs of community being created you have to do whatever you can in order to cultivate it and that's what we've done very successfully if we look at if we look at sequence and already what it's enabling but we look at the future of bookkeeping and finance I'm assuming that you're already understanding how AI is going to impact this and how AI is going to so like realistically how far are we away from bookkeepers not being relevant anymore CFOs I mean CFOs to a certain degree I mean CFOs can play a bigger role if you're like going public or at that later stage maybe people want the experience but say like a very tactical CFO or very tactical bookkeeper or an accountant with sequence plus I'm assuming AI that you will eventually roll out what is the future of finance bookkeeping small business finance look like so bookkeeping I think is I mean the more like hand like you know like tedious work that you need to do the easier it is to to replace you right and so bookkeepers would definitely be worried and I think that it's the matter of like it's it's we are not far from there and CPAs and accountants and CFOs can become strategic right so that's a different story and depends what kind of of an accountant or or CFO you are and because those those people can become very strategic and that's far from replacing them but they will be able to do way more with much smaller teams right because all the like you know like putting numbers in and making sure that you that you reconcile stuff that's going to that's going to be solved very soon you've already you've actually already almost solved it even without AI to a degree yes yes the the problem there is with the with the long day right so you need AI and you need good AI to understand what was that payment where that money went where how to categorize it so we are no it's it's get it's very close but it's not one it's not bulletproof yet but again if I don't 10 years ago you needed a 10 a team of 10 people now one person can do it right and yeah so so so that's that and I think that I'm our place in the world or sequence is placing the world is to become the connective tissue of of all those things we don't want to replace no player and we don't want we don't want to give loans we don't want to give credit cards we don't want to compete on interest rates we we are the connective tissue we are connecting our users to the best offer for them and we are using AI already now to analyze the customers to be able to give them the best offer specifically for them I can tell you high score I see that you have this AMX card if you move to discover you can you will be able to pay less of vice-versa y'all and so really always on our mission to improve people's life through their financial well being and there's a lot to be done there and there's also a lot of money that you can make of course well because okay so I was going to say like so we have open banking and better finance banking as a service there's all this unbundling you're doing the rebundling you're doing you're being the connective network of all of these so I but I'm not bundling right sorry connecting you're connecting different yes correct there's the famous like you can either bundle or hand bundle and we disagree we think that there's now or at least where we play and we are leaning into the fermentation we are leaning into the hand bundling but we make sense of at all I don't want bundling means that I will give you the cards I will give you the the loan I will give you the insurance I don't want to give you anything I want to make sure that you are getting the best offer out there because for me to compete against I don't know again with like chase as far as it doesn't make sense you said that Starbucks is one of the biggest banks in America because of stored value cards so what does this really tell us about where the future of banking is and I think that bank accounts as as an infrastructure is already a commodity and we are building on top of that that's where all the phintics come in so I think that it will I mean again like people have their money in Starbucks right it's a bank by definition and and that's just one example I mean there are like so many more and Uber is giving loans and like you know so we are starting to see more and more and more companies that their core offering isn't financial services offering financial services and it's something that we don't not only that we that we can't stop we don't want to stop right it's great people have way more opportunities more options competition is good right but there needs to be this connective tissue and that's what you're building if you look 10 years out what do you think what do you think the future holds for finance and banking traditional banks all these other sort of unbundled products where you are and all of this I think that the big banks are not going anywhere and they they have they have a brand and brand is that you know like one of the strongest things that you can have and I think that we'll need to find ways to to make to to give better service I think that the small and medium banks should be more worried and they will think of like strategies in order to stay relevant and into the future and yeah and I think that the problem of this massive implementation is going to grow and it's again it's an opportunity but also it also it also it also has its challenges and so so that that's why I think that the huge opportunity here we are very well positioned to to take advantage of it but maybe you know there will be other players that will come in if people want to connect with you if they want to learn more about sequence where should they go so my most active on LinkedIn your LinkedIn profile is fairly active and get sequence.io perfect that's our website you can see everything there I'm happy also to share our link to our discord community which is again very active you want to ask questions about sequence talk to people that are using it your more than welcome so we can share the link to that too so just a couple questions because again serial entrepreneur you failed publicly and then you succeeded but what is your framework or how do you think through extracting the maximum amount of learning from your failure so really thinking about what went wrong without letting it paralyze you that's that that's actually a great question for me the more pressure the more fear and the more anxiety makes me do stuff and I feel best when I have a plan and I know what I'm going to do and so for me being paralyzed was never an option and I think that just get out there and do stuff try stuff build stuff and even if you even if you think that you know if you believe in if you're really stressed and in a bad place with yourself just get out and do stuff do stuff that's the that's the best thing that you can do a lot of startup culture it celebrates a lot of optimism which I don't hate but you really advocate for brutal honesty and truth and almost like we're moving a lot of the delusion about how successful you really are because that's what led to all the stressful times you had with Lance so how do you maintain even your teams morale when this world of brutal honesty and truth and not optimism well I don't think that you can it's one or the other right I mean you need to be you need to you need to get close to the truth as much as possible sometimes the truth that you're doing good and sometimes that things of you know are going like you know like down the drain right and the the important thing the the most important resource that we have obviously is our time and if you are lying to yourself or faking stuff and then you know you're lying to yourself you're wasting your most important resource so try to think about it not like a sugarcoating another just like you have a limited time here make sure that you're putting your efforts and your energy in a place that makes sense and fake it till you make it is one of the things that I hate the most why do you hate it so much why is that wrong because it takes people into a journey in which they are 90% of the time faking it there's a mental toll that they are paying and when I say faking it I don't mean like it's if a customer asks you do you have that feature and then you say yes and you go and build it and ship it next week that's not faking it that's making it that's true and but yes all things are going and very we are caching it it's amazing when you are when you're obviously not and or when you are and when you're just like you say I have 5,000 customers but you actually have five and that's very dangerous and that's where things can become it so don't don't fake it right and I think that also for an entrepreneur I hate I also don't like fake it till you make it but for some reason that seems to be a prevalent idea in entrepreneurship and and I think that having that lack of alignment between where you are what you publicly state you are like how well you're doing publicly versus how well you know you're doing in your head I think that just destroys people especially if you do it for a long time I agree agree agree agree that's why I don't like it and and also like I mean if you're gonna tell bullshit at the end people will know it all right you can't hide everything all the time right if you think about some of the best advice because I'm sure you've had many mentors and just friends over the course of your career and many of your companies what would be some of the best advice that you've ever received take money charge if now if now is paying you're not building something valuable I think this is this is key and then I would say that the last thing that I love to ask because you have two daughters and obviously you want to leave them with the best possible advice and set them up for success in the future so if you could take all the life lessons and wisdom that you've experienced over your life and you could only pass on one lesson to them what would that lesson be don't be afraid don't be afraid and even even even even if you think that something happened it's the end of the world it's not it's not it's it's it's it's gonna be lay way less worse than you can you can take an imagine so don't be afraid go for it