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This is your destination for feeling empowered in building your business.
These are the real, raw stories of entrepreneurs and business owners who have built their businesses through the messy middle of $1-20 Million, hosted by serial entrepreneur Matt Tait.
Matt knows what it’s like to scale past the first million, and on this show he’ll be bringing on other serial entrepreneurs and business owners who have been there, done that (or, are currently in it) to share what’s worked, what hasn’t, and what’s next.
Sasha Orloff [00:00:00]:
The importance of accounting is provable accuracy, whether it's AI or not. You want to have confidence in numbers, because if you're making business decisions based upon garbage in, you're going to get garbage out 100%. And that is the thing we're solving, is confidence in decision making for your most important critical decisions. That's the part where as an accountant, whereas a tax advisor, that's the the highest level of value, and people are willing to pay more for that amount of value.
Matt Tait [00:00:32]:
Hi, I'm Matt Tate, founder of Decimal and host of after the First Million podcast. And like you, I've taken the lead not just to start a business, but to scale and grow it. I've hustled from zero to that first million, and now I'm building for the next 50. I know firsthand what the messy middle looks like. And we need more than just numbers. We need strategy, we need community, and we need real conversations about what growth takes. In our line of work, scaling beyond a million means going beyond the spreadsheet. This is where you learn how to grow.
Matt Tait [00:01:08]:
This is after the first million. All right, I'm Matt Tate, CEO of Decimal, and if you've been following our journey lately, you know that we just took a huge leap forward. Decimal has officially partnered with Puzzle to transition hundreds of our clients onto an AI native Ledger. The move officially, I think, makes Decimal the largest user of an AI native accounting software in the world. But it's not just about adopting a tool for us. It's fundamentally about changing how bookkeeping and accounting firms operate and how we partner with tech companies. So we believe the future of accounting isn't just tech driven, it's partnerships. So today I couldn't be more excited to talk to Sasha Orloff, CEO and founder of Puzzle, about the industry, scaling firms, AI, all that scary stuff.
Matt Tait [00:02:00]:
Sasha, welcome to the show.
Sasha Orloff [00:02:02]:
Hi, Matt. Thanks for having me. Let's do this.
Matt Tait [00:02:06]:
Well, before we get started, I would love to have you tell everybody a little bit more about your background and quite frankly, how you ended up hooked on accounting.
Sasha Orloff [00:02:17]:
Well, I'm gonna start off by saying something a little spicy and controversial, which is like, I love accounting. I'm not an accountant.
Matt Tait [00:02:25]:
Me too.
Sasha Orloff [00:02:26]:
Not an accountant by training. I did an arguably more sexier degree. It's called mathematics in there. But actually, like, accounting is a lot of mathematics. It's a lot of arithmetic. It's there. I love math applied to real world situations. And so accounting was always kind of a natural fascination.
Sasha Orloff [00:02:43]:
I come from a family of doctors and nurses, and I'm the sort of rogue, you know, child over on the side doing this other stuff called business. But effectively financial health is accounting. It's like the coast is equivalent. And so I just always was fascinated. I like numbers, I like sort of measuring health, I like making decisions. So that's it. I had a degree in math. My first job was in Silicon Valley for a venture backed startup.
Sasha Orloff [00:03:09]:
And I just sort of fell in love with the concept of, of the Internet. This was the first Web 1.0. And it was just this exciting place where you could create stuff that doesn't exist, you could solve problems. And that was just the foundation that framed my entire career. Then moved to Honduras, Mexico for three years in a sort of somewhat like a Peace Corps volunteering.
Matt Tait [00:03:34]:
Oh that's awesome.
Sasha Orloff [00:03:35]:
Basically helping poor women in rural areas start and grow businesses so they could feed their family, which was a little bit of lending plus accounting and financial education together. And you saw that these two things together statistically made businesses better and that framed it. And then I went to business school at Georgetown and then moved to New York and worked for Citigroup on sort of mass consumer modeling and lending and risk analysis. Started a company that was the first mobile lender in the US Started the first venture back credit card company. Those both grew to size and scale and was thinking about what was the thing that really was different about running a business at the small scale and running the business at the big scale and at a large scale you could afford these like really incredible finance teams. And those were my most fun conversations. It was the discussion about what's the financial health of the company and what should we do to make it better. And effectively that was led to these fascinating conversations with our accountants because they were the experts in our financial health.
Sasha Orloff [00:04:32]:
And it made me have this just amazing appreciation for the discipline of accounting, the work of accounting. But the part that I really appreciated was the, the thought leadership of like okay, this is what it says, what should we do about it? And that was happening at the 25th, 28th of the month. And I was like well can we bring the level of financial rigor and insights and expertise from all these large companies that could afford huge world class teams. Could we bring that to every entrepreneur in the world? And that, that was the day that I started puzzle why now?
Matt Tait [00:05:07]:
What? What were the industry and technology forces that made this a why now?
Sasha Orloff [00:05:15]:
The core of it was this fairly unknown at the time, angel investor in my last company who was one of our sort of company mentors, this guy at the Time that almost nobody knew of unless you were in Silicon Valley. His name was Sam Altman. At the time he had just quit, was one of the most iconic jobs in all the valley. Everybody in Venture wanted to run this accelerator called Y Combinator and he was running it and he quit to join this little nonprofit called OpenAI. And we were like, all right, well what's going on? And so we've known each other for a long time. My brother is even closer friends with them. And so we reached out and he's like, oh, this is, this is going to be a thing. And so we thought about where are the places where we could work.
Sasha Orloff [00:05:57]:
And so this passion of mine, this sort of coincidence of like really loving the thought of accounting, really wanting to have these engaging conversations about understanding my business and the financial health and understanding changes like that's a place where AI actually can come have a meaningful difference. It also solves three of the largest cost structures out of an accounting firm, which is historical books. Clean up this last mile of chasing down these like annoying business owners of like what is this thing? And you didn't upload a receipt and there's no context and how does this work? And then at the same time this really proliferation of these amazing new best in class tools like the ramps and the ripplings and the gustos and the striped and the Mercurys and the Brexes and these new generation of tools that allow you to understand because you have more context, data. All these things came together and said, I think there's an opportunity right now to create this thing that I always wanted that helped me make my business better. And so it was puzzled because it's sort of the last missing piece of the modern stack.
Matt Tait [00:06:58]:
Well, I think that's interesting. You and I, we have a lot of things that we fundamentally agree on, one of which is AI is all the ways that it is going to and is impacting lives. And accounting today is fundamentally adding to the lives of accountants rather than removing them from the equation. It's not designed to replace the accountant, but it's designed to enhance their lives and let them do more better. Right.
Sasha Orloff [00:07:27]:
There might be some segment of the market who just truly doesn't care about their health, their financial health, doesn't really care where their business is.
Matt Tait [00:07:34]:
Right.
Sasha Orloff [00:07:34]:
Maybe they're never going to get audited, they're never going to take out a deadline, they're never going to have a shareholder, they're going to self fund a small bootstrap business by themselves. The likelihood of getting audited is fairly low. They feel very aggressively wanting to just like take whatever the lowest cost option is. They don't care, they don't see the value in it. There might be a case in which there is a segment of the market that truly doesn't care about their financial health, just like there's a segment market who just doesn't care about their physical health. But the overwhelming majority of people don't want some AI software generating something that has all this personal liability associated. I don't see that as a thing. And we've been surveying people for years and I'm okay with it doing a little bit of preparation work or a little bit of financial insights work but like I'm not filing taxes or send submitting financials to a shareholder investor, a banker, a debt, an acquirer that don't have this review.
Sasha Orloff [00:08:30]:
It's too important. You're always going to want a human for reassurance and confidence. So I think the nature of the work could change. But accountants aren't going away. In fact I'm like I'm trying to get out. I'm so busy to get out published. I think 2025 is going to be the most exciting year in accounting in the history of my almost 50 years on this since 14, what is it, 1482 or whatever. When Luca Pacioli wrote Mathematica back in Venice, it's like I am going to define this that I think this is the next big inflection point of excitement in the world of accounting.
Matt Tait [00:09:01]:
I agree. I mean I think there's so many market forces that are all coming together and you kind of hit on them with the new tools. The point solutions with AI layers that can be added in pulling this into how does it affect accountants. There's a nuance that I want to dive into really quickly and I think it's important because it's important in how it affects puzzle versus some legacy softwares like a QuickBooks or a Zero. So pulling it into that talk about what it means to truly be AI native and why that's important.
Sasha Orloff [00:09:39]:
There's a couple different ways I think to think about it. The market is still kind of defining what it means but if we take the analogy of sort of like mobile native, it just means you're investing in this platform shift and you're going to take the best capabilities that's platform enabled. If mobile was a side project, you never would invest in making this a first principles part of your offering. And so when we think AI native, there's one definition of it which is just. It is built and designed to take advantage of the capabilities of this shift in the market, which is AI. I think the second piece of it is AI is going to make mistakes. AI will always make mistakes. Humans always make mistakes.
Sasha Orloff [00:10:26]:
We're fallible. There's kind of a sexy word for mistakes in AI, it's called hallucinations. But like, effectively it's just like a human error. It's machine error. It's going to happen. And so the way that you design a system to make it so that a human doesn't make a mistake, you would design workflows and error messages and tools to prompt a user to nudge them. So it's through pixels on a screen where if you're building something to be AI native, meaning you don't want AI to hallucinate, you would document it a little bit more, you would make it clearer, you could add all this extra context so that you can make it work really well for computers to do it. But the most important thing is, which actually a lot of accountants appreciate too, is we build a traceability for every single step along the way, every transformation, so you can effectively configure it and let the software run.
Sasha Orloff [00:11:21]:
You want to have a high bar for quality and the way you can use software and AI to create a higher bar of quality because you could have systems running and reviewing everything. You don't have to have it change anything, but it can review and point out in a detailed way that just makes everything better and provably accurate. That's an important part about AI is you want to make it provably accurate. It's not just some magical AI black box did a thing. It's I did a thing. I explained the thing, I showed you how to do the thing. I can trace all the steps along the way. And if it makes a mistake, just like if a human makes a mistake, you want to be able to figure out where that mistake was and quick fix it really quickly.
Sasha Orloff [00:11:59]:
And then the third thing is I think a little bit more about the vision of puzzle. You're in an industry, we call it advisory hours, but really at the end of the day, as a business owner, it's I want that partner that's going to help me make my business better. I need these insights. And so currently I think we think of AI a bit as like, or a flux analysis. Like, I can show you really quickly the difference between number A and number, like last month and this month. And like, that's great. That's like a cursory Level of variance analysis or flux analysis. But if I can't tell you the why or I can't understand how your business is operating, then it's only helpful to be like hey, this changed.
Sasha Orloff [00:12:38]:
Well, why did it change? And this is the part about getting these insights that help change this end of month, end close delivery from like here's a report, do you know how to read it? Where is it going well? Where's it not going well? Where do you think it's paying off? Where it's not paying off. And just have one of those really strategic discussions about how to make the business better. And so that's how we think about it.
Matt Tait [00:12:59]:
2025 I think is the year where we start flipping from accounting as and bookkeeping as just doing to becoming advisors to becoming part of the business of helping all of our clients to do better rather than just accomplish work that has to be accomplished.
Sasha Orloff [00:13:18]:
If you think about some of the originations of why accounting has been so important, one, just like it's the core business health metric in the US like we had a regulation and SEC for public companies said you have to do this in this way and we're going to hold you accountable to it if, if you want to raise money and raise capital from, from shareholders, public investors along the way. I think the shift that was most noticeable to me as an industry trend thinking about it from an investment level is almost all CFOs and finance organizations used to be run by accounting and that's not the case anymore. It's now run by non accounting people. And so if we start to think a little bit about why that is and is that a good thing, the expectations of the ability to understand the health of a business and improve it, almost like preventative care instead of reactive care is the value of. I'm not just generating this report but actually I'm trying to understand the health of the business. What's changing and are the things that we think we're accomplishing the things that are actually happening. Accountants are the facts of a business. It's the truth of a business.
Sasha Orloff [00:14:24]:
Whether you like it or not. It's the truth is okay, there's different ways to measure health. You can measure health on a cash basis. You can measure health on an accrual basis. You can measure health on a class and departments basis. These are not one or the other. You should want to see all of them. But the extra work to do.
Sasha Orloff [00:14:40]:
All of this stuff is like hard and time consuming and a lot of times the clients don't want to pay for that. But what if we could help you deliver in less than the time it takes to just generate normal cash books all of these different types of views of a business. Well, these different views of the business tell different types of stories, which we all know. Like, this is not surprising information. It's just, how do you sell all that extra value? The value of preparation is important, but what do we do about it? That is the part that is the most valuable. So our entire goal right now, and working with decimal, is making it such that advisory isn't about trying to upsell accruals, which is like kind of a big bucket of how we think about advisory. It's the meaning of why this view is different. What's the difference between cash and your accrual view? What are these things? Are we performing as well as we could? And that is where we're really excited to not have to have you make a choice anymore, but to be able to have a meaningful conversation about what these different views, the stories that these views tell.
Matt Tait [00:15:42]:
Well, and I think that's so powerful from a, like, where are things going and how do you provide more value? The thing that I'm interested in and pulling this back to the AI native tooling and just tooling in general, it's been a hot topic today. I was talking with some other tech companies in the space this morning and they said, well, what's the difference between using an AI native tool, like a puzzle, versus just putting an AI tool on top of QuickBooks? What's the difference?
Sasha Orloff [00:16:12]:
I think what I like about this is it's a way to start feeling comfortable with AI. If you're afraid of AI, you can have these tools automate one little piece of it. You can have these tools do a little more. The difference between adding AI on top of a different system and having an AI native comes in three places. One, it comes with the volume of hallucinations. So, hey, you know what? I'm excited about the drafting of my cash reconciliation and I'm going to have this agent go draft my bank reconciliation. Every once in a while it's going to be wrong. Just like we'll probably make mistakes too.
Sasha Orloff [00:16:59]:
When we do our cash resistor, it takes a long time. And then when it goes wrong, where did it go wrong? Did it go wrong? Because QuickBooks is designed for pixel workflows, like on a screen clicking through stuff. And this agent is like trying to mimic a human clicking on a system. But at the end of the day, AI is designed to give you an answer and so it's going to give you an answer right or wrong. When it gives you a wrong answer, now you have to figure out and review it. And having an AI native ledger means inside of the system from the core data. You see the raw data, you see all of the transformations, the journal entries and the recreations and the calculations, and then you see the end. And then it reviews it and says this matches your bank, reconciliation is done.
Sasha Orloff [00:17:43]:
And I haven't found errors or I have found errors, but you can go through and trace and see every step of the way. And so what that means is when something goes wrong, a connection goes down, they miscalculated something. Having something AI native means you can see and trace everything natively inside of the system. The other part is just ease of use, like who's writing the prompt and who is reviewing the prompt and who is sharing the reasoning and who's iterating. So if you just have a tool out there, like you don't know the reliability, is that written and reviewed by CPAs? Is it reviewed and written by people who like understand the implications of GAAP? The other pieces, we are built and run by CPAs on our engineering team, on our product team, on our design team. They think and understand and have worked in the industry. And we review it and train it with our team like decimal to say, yeah, this works or this doesn't work and let's make it better. So those are some of the things it's about reliability.
Sasha Orloff [00:18:46]:
But I think the AI agents independent are like a great way for people to do it. The question then becomes at the end, if you're like, man, this sounds like it works really well, but it doesn't work really well yet. That's the difference between an independent agent company, a ledger that builds AI into their workflows.
Matt Tait [00:19:04]:
So I really like that because it is a good way to get people started and comfortable. And 2025 should be the year where people at the very least get started and comfortable. But if you're ready to really integrate it, if you're ready to really make it a part of your day to day in your future, then you want to find the security and the general confidence of knowing that when errors are made and errors are going to be made, just like with people that you can track it down and you can double click into how and where and then solve any underlying problems so the how and where doesn't happen again. Right.
Sasha Orloff [00:19:47]:
It's like stitching together a bunch of different tools is always going to introduce more inconsistency and unreliability. Right? It's like that. I don't know if you've ever seen that old Spider man meme where it's like a bunch of spider mans. Who's which is the real Spider Man? It's like, who's the evil? And they're all pointing at each other and they all look the same. It's like, whose fault is it? Is it QuickBooks or Zero's fault? Did they like intentionally jack the user experience, mess with these independent tools because they don't really want them building on top of it? Did they do it through the API? Did their system go down? Did ChatGPT go down? Like you don't know where to blame. The benefit of us is if something goes wrong, you just right away, you talk to us on Slack through the channel, you call us, you talk to us. We can find it, we can fix it and we can resolve it. If there's ever an issue, there's one person who's on your side who's building for you one place to call, one place to blame.
Sasha Orloff [00:20:42]:
It's me. It's Puzzle. Call me.
Matt Tait [00:20:44]:
Well, one of the things that I think is so important here and, and one of the things I've really liked about working with, with your team and with Puzzle is you admit and are honest about the fact that mistakes are going to be made. Now, any accountant, anybody like me that's running a bookkeeping or accounting firm has to also be able to admit that mistakes are being made. Today, without AI, we have people that are making mistakes all the time, so that's just par for the course. But with a truly AI native tool, you have the confidence that you can track that down, understand where the errors are and improve them. And it's also so different because I see so many people in accounting, they worry about partnering with and using new technology because companies aren't open and honest. They're always talking about the promises of what's to come and where we will be versus where we are today. What has brought you guys to being so different about being honest about the fact that your AI isn't going to be 100% perfect? I, I saw a competitor of yours post the other day on LinkedIn and they said our AI closed the books and it was 100% accurate. It's going to be 100% accurate.
Matt Tait [00:22:02]:
And I'm just like, wow, now I'm not using you. That's not believable for me in the future. What made you guys really want to be different in that? Because I think it builds trust in an industry that has been burned before.
Sasha Orloff [00:22:15]:
I've seen a couple venture backed startups in the space say our AI is 100% and you're like, I don't know, maybe I'm just like a dense math person. Like there's nothing is 100%. I think part of it is just I'm building a company and there's no reason to trust me. Over time, hopefully like people grow and trust that we're doing this for the right reasons. We're here to build something successful. I built two companies that grew quite quickly and you have to establish trust. Everything is working against us as a startup and trust is my primary currency. And so we do some things really well and we don't do other things well yet and some things we don't do at all.
Sasha Orloff [00:23:04]:
And if we don't, if we mislead people, everybody gets frustrated. Like somebody might not like the product, they might think it does something, it doesn't do something else. But we speak specifically to accounting firms and working with accounting firms is you have to be provably accurate. Trust my AI, Trust like whatever else. Like we designed it specifically so that you should not and you do not have to believe us. So when you start with puzzle, for example, no AI is turned on by default. So you could have it be very manual, just like QuickBooks. You want to have a very manual general ledger that you do everything by yourself.
Sasha Orloff [00:23:45]:
You totally can, that's the default and you can ease your way into it little by little. I could do one transaction at a time. I create rules to have transactions happen automatically. I can create rules to have my accounts payable, my revrec, my fixed assets, my prepaids, all be automated. I can opt into having AI review my books for accuracy line by line, like review my bank recs, review my variance reports, review my vendor reports, review for duplicate transactions. You don't have to do any of it. You can have it be very manual just like QuickBooks. You can spend all time doing everything with your fingers.
Sasha Orloff [00:24:21]:
But if you don't want, you don't want any insights at the end of the month, that's totally okay. You do you. And that is because the importance of accounting is provable accuracy whether it's AI or not. You want to have confidence in numbers because if you're making business decisions based upon garbage in, you're going to get garbage out. And that is the thing we're solving is confidence in decision making for your most important critical decisions. That's the part where as an accountant or as a tax advisor, that's the highest level of value and people are willing to pay more for that amount of value. We're at a stage right now in 2025 where whether we like it or not, the hard truth is people are frustrated. Paying humans to do work that feels like even they're not right, feels like software should be doing it, even if that's not justified.
Sasha Orloff [00:25:15]:
And it's complicated. And there's just a mismatched perception which is almost all business owners think accounting is super easy and straightforward. There's a reason why it takes so many years to become a cpa. It's complicated, hard stuff that is a mix of rules and subjectivity. You can't just read a blog post and become an accountant or a bookkeeper. That's just like not how the world works. Almost everybody tries it at some point or another and then they go for it.
Matt Tait [00:25:36]:
What I loved about what you said, because it's true, but it's not recognized all the time by founders is trust is your currency. And us in the accounting and bookkeeping world, it's the same thing. Trust is our currency. So we have to believe and trust you so that our clients can believe and trust us. So following that thread of trust, we're at a period where AI is just to me, it's beyond the conceptual and it's into the. It's time to start implementing and using it. That's a tough thing for accountants. You guys have worked with hundreds of firms.
Matt Tait [00:26:13]:
What's the number one mistake that you're starting to see with accounting teams as they try to modernize with AI?
Sasha Orloff [00:26:20]:
I want to also add one comment I think to my last answer, which was like, we didn't get this right out of the gates. We thought everybody would just love the automation and go. And so we designed what we now internally refer to as we design step 1, 2 and 9 and 10. And we didn't expose step 3, 4, 5, 6, 7 because we're like, who cares? Like the software is just doing it as calculated. But it turns out that like nobody liked that. We had this like insight all of a sudden. We've been doing this for five years, iterating on the design and iteration to make it. And what people liked at the end was I do like automation, but it has to be transparent and flexible the whole way through.
Sasha Orloff [00:27:00]:
Which turned a four step design process into a ten step design process. Which means it takes longer for us to build a bunch of these automations. But the way you can control it, you can control when to use it. You can control to use it entirely. Controls not to use it. You can configure it and let it run automatically. That was not the original, like, design pattern. And actually we had to spend a whole year redesigning all of our workflows.
Matt Tait [00:27:23]:
Real quick, I want to hop in because you said something that I think is also a key. I talked to a few accounting firms this week already, and they were like, this is the first I've heard of Puzzle. And I was like, no, they've been around for five years. Like, this is not a new company. They've been building very intelligently for five years. Like, you guys are not a startup. You've been around for five years.
Sasha Orloff [00:27:43]:
I'm starting to do more, but I don't do a lot. We haven't gone to any conferences yet. I'm just. I'm a product person at heart and I wanted to know that people loved the product. I didn't want to come out and sell this, like, future vision and almost all of our time with our users understanding as they close the books or they want insights. Is this working for you? Where could it get better? What's missing? What else are you doing manually? This year we'll come out a little bit more in our reputation because we're feeling good about the product. But, I mean, in my mind, I have five more years, clearly in my mind of all these things that I want to build. And that's not even including feedback from people on your team that are like, hey, can you also build this, like, along the way? And, like, we're doing it.
Sasha Orloff [00:28:27]:
The things I see directly are fear. And it's hard to argue with fear. It's reasonable. There's a narrative out there in a lot of academia and venture and blog posts that, like, AI is going to take your job. Why would you lean into something that there's a narrative that it's going to take your job? And so the way that I think about it, or where Puzzle can play a role is in this is we should shape the future that we want. We shouldn't let the future happen to our industry. We should shape the future and design the system that we want in the future. AI is just a program that is customized to execute against a thing.
Sasha Orloff [00:29:10]:
Let's create the world that we want. And so that's why we love partnering with your team, because you provide us very concrete, sometimes very direct feedback, which is great. And we love it on, like, where can we get better? I know we're probably a vendor to you. But I view this as a partnership where the thing that I want the most, obviously after more customers, is your feedback of where, where can we get better, how can we design a system that works really well for, for your firm and, and for you. The second is that my job is the value that I create as a bookkeeper or as an accountant is categorizing or drafting bank reconciliations. I think the alternative view is, you know, if your job was when a bank feed was created, was to download your statement and upload it, or download a CSV and upload it like, okay, great, but you should dream bigger. Like you're an expert in the financial health of a company and you have a much bigger role to play in the success of a company. And so I think the people who really got into accounting because they loved it, they wanted a stable job, they wanted a good paying job and they wanted to be there to help support a company.
Sasha Orloff [00:30:24]:
Those people are going to thrive faster. They will make two to three times their salary that they're making today for the same amount of work in another 18 months. It's a reshifting of a mindset of what's possible and what you're capable of doing. And so the somewhat punitive way is saying accounting today is a bunch of wasted potential and it's because of software that has held it back. We're like not the savior here, but we're going to help you unlock your value in a way that just every other industry has, except for accounting. Because we've designed this whole world around QuickBooks workflow. And QuickBooks is not designed to help make you a better accountant. They're eating your pie every quarter, little by little, they're raising rates and they're not shipping new features.
Sasha Orloff [00:31:12]:
They're launching their own tax practice. They're launching a national campaign saying, like, fire decimal and higher. QuickBooks, like, the pie is not fixed and they shouldn't be taking more of it. The pie is growing and you should own more of it. And so that's, I think the mindset shift is happening now not because of puzzles, just happening because of AI. But that is, that's the future we see.
Matt Tait [00:31:35]:
There are a couple of things that threads I want to pull on here. One is we are all beholden to the market share that is QuickBooks and TurboTax and Intuit and, and all of that. But it doesn't feel good in our space when the companies that we try to partner with also start to compete with us. You see it coming out of y Combinator 2 with new tech companies that are also doing automated bookkeeping. And is it really automated or kind of what's there? And it doesn't feel good. But one of the things that I think that, that you and I have a passion for changing is I cannot tell you how much I fundamentally hate the word vendor. I hate the word. I hate the connotation.
Matt Tait [00:32:20]:
QuickBooks is a vendor to us because they want to be that vendor relationship. What I think you and I seem to have a shared passion for and where I think the industry is going is the true partnership of tech companies, people providing the great tools and the accounting and bookkeeping firms that are doing the work and providing the great client experience and putting that on equal ground removes the vendor relationship, which is. It's a pejorative term. No one feels good using that term. And I want to remove that from the parlance of the industry. And there are certain companies and QuickBooks is one where that will just exist, period. But I think the partnership too, and as AI is taking in more of the replacing the work that shouldn't be done, like you say, wasted potential. Providing the opportunity for the industry and for accountants and bookkeepers to truly reach their potential.
Matt Tait [00:33:21]:
That feels to me more like a partnership that feels to me like the type of thing that can go further. My kids love the, the new Lion King movie, Mufasa. And one of the songs in there is, you know, we Go Further Together. That's what goes through my mind with this new generation of companies like Puzzle that are coming out to be a true partner. Isn't that kind of how you're feeling in the, the industry too?
Sasha Orloff [00:33:49]:
Yeah, there's a couple things that I think are important to call out. Let's talk about maybe QuickBooks just for a second. So they built one of literally one of the most incredibly profitable businesses for longer than anybody else. Like, from a business perspective, it's incredible. And I think the original version of QuickBooks, like the desktop's obviously a killer product. And the original leadership, Scott Cook built like an incredible vision, very passion aligned. They've had a series of successors since then, and it feels a little bit more like a private equity. Like, how do I squeeze more margin out of it? I can launch my own firm.
Sasha Orloff [00:34:24]:
And we talked to the product manager that loved that. And I was like, you know, how do you think about 35 years of this partnership with bookkeeping firms, like, destroyed as soon as you launched your own firm? Like, that's a misalignment of incentives. And he's like the only way we have to grow is bookkeeper hours. What's we going to do? There's nothing else to go and international. And then there's the next thing is like we're going to now launch our own like tax firm and like use our technology for our own disadvantage and undercut the pricing. We run the market. The old what Charlie Munger quote. Like show me an incentive and I'll show you an outcome.
Sasha Orloff [00:34:54]:
You know, like if your incentive is I got to eke as much out as possible as fast as possible under any circumstances possible, the only place to go is firm cut. The other way is to say well let's grow the pie together. We both win when we grow the pie together. And the value of the bookkeeping is kind of going down due to the market concentrating so much power in the single hands of a player on the hope and promise that they would have your best interest at heart and they just don't anymore. That's one thing is the incentive structures. What's the motivation? Our motivation is to uplevel accounting and by nature you need to make more money. For us to make more money. Businesses need to be more successful for us to make more money.
Sasha Orloff [00:35:36]:
So we're aligned in this future success of the business's success which makes the bookkeeping firms and the accounting firms, the tax firms make more money. We make money when companies stay in business longer and they become bigger and more complicated. That's where we make money. So we, we've aligned our incentives to the incentives of the it's not feature gated, it's it's alignment. The second is what are the incentives of like a venture backed bookkeeping firm that does something. And we saw the demise of bench and scale factor as like grow, grow, grow, grow, grow. And like you have to do it. And when you have a firm like a human professional services business, it's called professional services for reason.
Sasha Orloff [00:36:14]:
These are professionals who have a set of unique knowledge that is invaluable and software. Each of these things becomes constrained when you put them together and the margin structure doesn't work well. It wouldn't be surprising that they didn't make money and they couldn't afford cash flow because the margin structure of each of these things doesn't work together. That's a capital markets thing. But these in businesses independently are beautiful and that's why we don't have services business. We only partner and we take feedback. Listen, it would have been way easier to like build our own firm and like hire our own bookkeepers. In house and say use our technology from a structure, but that's not who we are and that's not what we're trying to build.
Sasha Orloff [00:36:55]:
And, and so the next is what's the goal and the vision of the company and who are they aligned to? And if you have that pressure there. We knew from day one we were building ledger. We were building it for the benefit of the market. We were never going to launch services. And that is the stance it always has been. We've published it, we've talked about it, that's not changing. And then the third is where do you value, whose feedback are you taking when you're building? And so we, we spent intentionally a year understanding what does the business owner want? What are the insights and the things outside of accounting that they wanted. And then we went in, we built the general ledger.
Sasha Orloff [00:37:30]:
Who do we build the general ledger with? With accountants and bookkeepers and with partners like Decimal and others that are giving us feedback on the things they want. We prioritize based upon what you ask us to build and that's how we do it. What's the biggest impact we can have towards the vision of providing intelligence to the business owner to help them build bigger, more enduring companies?
Matt Tait [00:37:54]:
Well, I think that's awesome. And one thing I want to get straight is Decimal agrees with you that we fundamentally don't want to be the only advisor or partner that you work with. It benefits us and you when hundreds of more firms get on puzzle and start using puzzle, that improves the software, it improves the use cases, improves all of this. Two points I want to make to comments you just made. One is I've personally seen how software and services don't work together. When we made the acquisition of KPMG Spark, we saw firsthand how hard it was to serve two masters. And we ultimately did what we knew we were going to do the whole time. It became only services and we leveraged the sparkledger.
Matt Tait [00:38:38]:
It was an amazing tool at the time. We leverage that into something else to be services Only when you look at these tech companies like a bench or, or other tech companies that are building software, when they start with services, you've dealt with investors, I've dealt with investors. They get hooked on the revenue that comes from services. They always want margin, but you get hooked on revenue. And so when you start both together, at some point you have to make a decision to cut one or the other and say, all right, I'm not going to focus on the 90% gross margin software business. We'll be good with 70 or I have to do the software only and cut the revenue. And that's hard to make for an investor and for a board because you get hooked on both. You put yourself between a rock and a hard place that you think you'll always be able to get out of.
Matt Tait [00:39:33]:
But we've not seen anybody get out of it yet.
Sasha Orloff [00:39:36]:
Yeah. And I've met the founders of both Bench and Scale Factor and I think they're both very impressive, incredibly smart people who were passionate about.
Matt Tait [00:39:45]:
Agreed.
Sasha Orloff [00:39:45]:
It's just the General Ledger is a very complicated piece of software that almost everybody grossly underestimates. How much it takes to build that and the workflows to solve every edge case and every scenario that always is going to happen every month and all of the things around it. In such a high stakes piece of software, the challenge is as a venture investor, that's just not how most software works. Most software, you can just MVP and iterate. You can put out something like very bottom. But it's similar to SpaceX. I can't sell 50% of the way to Mars. I got to sell 100% of the way to Mars.
Sasha Orloff [00:40:23]:
And in all of the edge cases, I can't just be like, well, sometimes the thrusters blow up and you're all going to die. Sometimes it happens to take off and sometimes it just happens in mid flight. Like, what? No, that's not. You can't sell that. It is a complicated piece of software just by itself. And service is a whole different type of sales motion and business and billing. And these two things together are very complicated to do by themselves, let alone independently. But together just creates a very hard.
Sasha Orloff [00:40:51]:
And then it's hard to ever undo the focus on software. I can't build the best accounting software if I have to manage all these other types of business lines. I can do it if I'm getting feedback from the 400 to 500 bookkeepers that are on the firm on the product that are giving me feedback. I love it the most when they say, I really love this feature, but I also love it almost as much. It stings a little bit, but almost as much when they're like, this sucks, go fix this thing. And you're like, cool. You care enough to tell me where to fix and my team's going to go do that. We care and we want to make it really great.
Matt Tait [00:41:25]:
It's like the second greatest answer in sales is no. You always want a yes, but at least getting a no, you can move on. I joke with our sales team. The second best answer you can get is no. And a bunch of apathy doesn't help the process. One of the things that I think it's hard for accountants right now is, and I'm interested in your thoughts on this, and I certainly have some too, they're wondering what it's going to be like. Help me paint a picture of 2030, what the best bookkeeping firms look like. How do they look different? What do they look like? You've touched on it in a variety of answers, but let's try to make this really tangible for the accountants and bookkeepers that'll listen to this.
Matt Tait [00:42:11]:
What does their life and their firm look like in 2030 and in just five years?
Sasha Orloff [00:42:16]:
I'm going to answer this from the point of view of what I wanted as a business owner. And what are thousands of thousands of customers that we ask every single month? They don't always tell us what is the thing that you want the most? And accounting is caught in between two worlds. It's caught between this future world of compliance. I gotta file taxes quarterly, I gotta file taxes annually, I gotta file state taxes, whatever depends on the business and like the stage, et cetera. But I have this future compliance problem and I have a today, what does my business look like today problem. And those things have been a little bit in conflict. And we've actually put them a bit into two different roles and departments. All of the underlying data is the same, all of the workflows to get to the output are the same.
Sasha Orloff [00:43:06]:
It's just that we've somehow decided that different humans are going to do these different things that are all on the same sort of level of information I think AI is going to do. And companies like Puzzle and others in the industry will hopefully work towards is this future where we have two choices that we're making instead of future. And today we're making a choice of do we want to take on more clients? Because we can, because the amount of work to get to the valuable part is less and I get all these extra benefits, or do I want to take on the same amount of clients and just work less hours? Both of those are the same. Function of the software is I have my a hundred clients. What if I could do the work for those a hundred clients in a couple hours and then I could spend more time with my kids or with my family or just doing stuff I like. The other option is there's going to be some ambitious companies out there who are like, you know what? I want to make more money and I'm going to make more money in two ways. I'm going to take on more clients and I'm going to create a differentiated experience that isn't sending a PDF or an Excel file at the end of the month of something that the end user might or might not even understand. It is a view for the IRS and a view for shareholders that we've somehow dictated into doing.
Sasha Orloff [00:44:23]:
Accounting. Isn't how you manage and run your business a slight tweak on it could be. And so I think that the people who are going to make the most money and the firms that are going to be the best are the ones that are spending more time providing different views with different insights to the business. And just like I don't think of myself as a vendor, to you, I'm a partner, even though technically I'm a vendor. Similarly, this is what you're going to be doing with your clients. You are going to be their partner. You're not going to be their vendor or their, like, outsourced firm. You're going to feel like part of their team that is helping them make their business better.
Sasha Orloff [00:44:59]:
And we, when that happens, we all win. Like the company wins, the shareholders, when the employees win, they have a company that's going to be around, has a higher likelihood of helping out. You are the experts of financial health. You know the business probably better than the founder knows the business, probably better than the business owner knows the business. But that isn't coming across in an email of like, here's my, here's your financial statements. It's coming across when you're having those discussions. When the interest rates change, when the market change, when debt becomes available, when you have an opportunity to acquire another company, when the market changes, when a competitor moves in next door, what do you do? Not the, the math part of business building a business. It's the art part of building a business.
Sasha Orloff [00:45:42]:
And you take the experts of the health, the math part, and you bring them into the art part, and that's where the magic is going to happen.
Matt Tait [00:45:50]:
And I think this actually gets to a fundamental change in how people need to start thinking about AI. Every accountant I talk to is like, AI is going to do work for me, it's going to do work for me. Agreed. It is. What it's giving you the ability to do, though, is to use that untapped potential and to become the advisor, to become the helper, to become the person that helps these businesses survive, thrive, get better, improve, and not just accomplish paying the bills, getting paid and tracking it all. It allows you to grow into that. Now, part of it is allowing AI, allowing automation, allowing the good software tools that exist in the ecosystem to do as much work as possible to open that up. But then the other side is designing out what the lifestyle that you're looking for is and saying, hey, do I want to make X amount of money and spend Y amount of time with my family or with whatever stuff I do outside of work? And now I can look at that equation and I can build myself to that much easier and maybe even much better.
Matt Tait [00:47:01]:
And I think that's the true power because so many, so many accountants today are burnout like you. And I look at the industry with massive hope and potential right now. But there are others in the industry that look at it with burnout. I'm working too hard. I've got massive hours. We're in tax season. I'm working 80 hours a week. Our first ever hire at Decimal told us this story.
Matt Tait [00:47:23]:
Katie that her last tax season, she had twins at home. She was working 100 hour weeks. She walked downstairs one day on the way to work and she looked in, her kitchen's full of dirty dishes and she just realized she had no time to clean them up. And she calls her mom and she goes, can you help? And she puts them all into a laundry basket. Imagine loading your dishes into a laundry basket, dropping it at your mom's house. Because with twins at home and a tax season job, like that was her life. And when we brought her onto Decimal, our change in mentality, we made her take a vacation during tax season and post pictures on LinkedIn. But she could now do that all the time and we can now give her that job, that lifestyle, and we can now also give it to more bookkeeping owners and we can help them achieve the outcome, the desire that they want without having to be in the hamster wheel exhausted all the time.
Sasha Orloff [00:48:19]:
You get to choose what you do. There will be room in the future for, for every step. You know, some people, my wife loves baking bread and she wants to do it from home. And she finds the value making the bread is like a bit meditative. She likes it, she does it along the way. You know what I like doing? I like eating the bread. I like fresh bread.
Matt Tait [00:48:39]:
I would agree with that.
Sasha Orloff [00:48:40]:
I love it when she makes it at home. But if my choices are like, she does it at home or like we get it from the local bakery that makes it fresh also and has it consistent, like we're enjoying the bread together. Sometimes she wants to make bread and sometimes she just wants me to like, go down to Noe Valley Bakery and pick it up. And like, that's totally okay in either way because we're breaking bread together. And she can choose. And I think AI and how we design Puzzle is similarly to, you can choose. You can choose the way that you want to work. You want to do it all manually or meditate in this, like, categorization exercise and the reconciliation exercise.
Sasha Orloff [00:49:15]:
That's totally okay. Sampling and reviewing. You can do it. We're not taking that away from you. And maybe sometimes you just want to, like, can you just do this for me? And you want to click a button. And then maybe sometimes you're just like, hey, I, I have so much client demand right now. I can't take this on. I don't want to give up revenue.
Sasha Orloff [00:49:30]:
I need to adopt automation again. Software should work for you, whether it's Puzzle or somebody else. Like, it doesn't really matter, but we design it in a way that allows you to have the flexibility of, of making your bread, of buying your bread or sending your kid off to go get the bread for you and just taking advantage of that time and making out in the sofa.
Matt Tait [00:49:50]:
Don't lie though. You like it when she cooks the bread because that also is, is nice. Like when you walk into a house and it's fresh cooked bread, like, that's just totally. It's awesome.
Sasha Orloff [00:49:59]:
There is a joy, you know, every once in a while. I love going through a deep dive of our books and I love going through every line item and knowing it gives me comfort and assurance and a confidence. Do I want to do that all the time? No. And do I need to do like an in depth review with our accountant over all the changes and that? No. Some months, just like the business is going, it is performing just as expected, but on the moments that it's not. And you want to dive in, you want to have that option available to you. And you as an accountant, you want to take advantage. Those are the value adds.
Sasha Orloff [00:50:32]:
Those are the things that earn your loyalty. It earns you that value add. It's the trusted advisor versus the service provider. And that trusted advisor is there when you need it to help you through the moments that matter. It should work for you. It should create the way that you, you want to work. Sometimes I like writing. Sometimes I like chatgpt doing my writing for me.
Sasha Orloff [00:50:53]:
I enjoy the creativity of writing, even though I'm terrible at it. But sometimes I just need to crank out a blog post, you know what I mean?
Matt Tait [00:50:59]:
One of the last things I wanted to hit on is because I think it was pretty cool you and your team put out a basis of AI, I would say, movement and campaign. What's behind that? What are you guys trying to do with that? Because I think it's a really cool thing.
Sasha Orloff [00:51:15]:
In some of our interviews with accountants and bookkeepers, there were a couple different themes that came out of it. One was fear. That's the easy one to understand. Some is just, I've been doing it this way for so long, I don't think I can change. And the other one is who is using AI? Like, I read talks about it, I hear podcasts. I'm listening right now to you guys talk about AI and accounting. It's this other niche thing in Silicon Valley or New York or whoever it is. And so we tried to help people understand and have this moment where they could see themselves as part of the future.
Sasha Orloff [00:51:58]:
They didn't feel like the future was happening to them. They felt like they could be part of the future. And so we came up with this idea of the faces of AI to just sort of help show that it's people. It's not just the young accountants, it's people of all ages, all over the world, all over the country. We have, I think, almost 500 bookkeepers on the platform today. We have 6,000 business owners on the platform today. It's farms, it's professional services, it's E commerce, it's software, it's payments, it's local businesses, it's a hardware manufacturer. Now.
Matt Tait [00:52:33]:
It works.
Sasha Orloff [00:52:34]:
Doesn't work. Amazing and automated in all these places, like, we still have a lot of room to grow, but there are people who are using it and they're like, this is part of the future. I just want to be part of the journey. And I like somebody that listens to my feedback and builds the things that help me make my business better. And so there's different people along the journey, some that work really well. Somewhere it works okay. And some are just like, listen, I'm. I'm on board for the ride no matter what.
Sasha Orloff [00:52:57]:
But it's people of all walks of life, of all ages, of all different backgrounds. And the faces really, I think, bring it to life. And when we started asking people, would you share your face or can we use your LinkedIn picture? And they were like, yeah, like, bring it on. It's trying to break down the barriers of, this isn't happening to you, it's all of us. And the more that people that join and the more people that want to be part of it, the better the future will be for you because you participating in creating the future that you want as opposed to sitting by the wayside till potentially the choice is taken away from you and you don't have a choice about the future anymore because it's already happened.
Matt Tait [00:53:35]:
Well, I love it. I've got my badge. It's all over my LinkedIn profile. Sasha, this has been awesome. I really appreciate it. If anybody's looking to learn more about Puzzle, where can they do it?
Sasha Orloff [00:53:46]:
Or you, you can play with a demo on Puzzle IO you can play around with it. You just click on create an account and click play with the demo. I think weekly or bi weekly trainings with our CPAs and customer success team that do demos. There's a whole host of videos on the bottom called Puzzle certification. You can become causal certified all by yourself. You don't have to talk to anybody if you don't want to. You can onboard a client. We'd love to help, we'd love to support.
Sasha Orloff [00:54:11]:
You can reach out to me on LinkedIn, on Twitter. I'm everywhere. Sashapuzzle IO let me know how we can help. Me or somebody on the team. Probably one of our accountants or bookkeepers on the team because they're, they're more versed. But bring it on. And if you want to just see a success story and you're a customer listening, you're not a booking firm, go Sign up@decimal.com and sign up. They're amazing.
Sasha Orloff [00:54:32]:
They're great people who really care about your success and I think they're building the experience of the future today.
Matt Tait [00:54:38]:
Well, I really appreciate the plug. The other thing I would say for, for accountants and accounting firms that are struggling with what the next step is and want to learn, I'm more than happy. The Decimal team is more than happy to tell you what we're doing, show you how we're using it. Not just Puzzle, but all of the other ways that we're implementing AI into our experiences and workflows. Email AI decimal.com or connect with me on LinkedIn or Sasha on LinkedIn. We're happy to help. This is a great time for all of us. It's a great time for the industry and we're happy to help anybody join.
Sasha Orloff [00:55:13]:
So you can also come to scaling new heights this summer and come meet us in person and tell us what you like and you don't like. Like we'll be there. My ears will be listening. I'm excited to meet you guys in a couple months in the nice temperate climate of Florida. In the summer, we're gonna be hot.
Matt Tait [00:55:30]:
All right, thanks again. You know what? Growth doesn't stop after that first milestone or that first million. It's about what comes next. Build your firm as if you've already passed that first million and you're still going. In every episode, I'm going to pull out a couple of takeaways and tidbits that I thought were really important for the after the first million mindset. Here's what stood out to me in my conversation with Sasha from Puzzle. It's a great conversation. First, the thing that really stood out to me was Sasha mentioned the untapped potential in the accounting industry and in the community, and I think he's totally right.
Matt Tait [00:56:11]:
Right now, so many people in accounting are stuck doing the work. What AI is going to help with is taking a lot of that work and giving accountants and bookkeepers the potential to become truly what they want to be, which is the advisors, the helpers, the strategic thinkers that are helping their clients and helping businesses truly understand where they stand today and how they're going to move forward. Well, we need to find more ways to create capacity and offload that work. And I thought it was really cool that Sasha really highlighted it. And I like the way that he labeled it as untapped potential. He's completely right. Second, I will not replace accountants, but it is going to help redefine their role. It's going to help redefine them as the strategic thinkers, the helpers, the movers forward.
Matt Tait [00:56:59]:
It's going to help elevate the industry into that untapped potential. And Sasha made a great case for that shift. AI is going to take the manual, repetitive tasks, but accountants will be able to move on. They'll have the capacity to take on a larger role and become the advisors that they want to be and they should be and that these businesses are asking them to be. And I think that's a really cool thing. Instead of just getting the books in order, we are going to move to, how do you help me understand my business? How do you help me move forward? And that's the role that accountants and the industry is made to do. Finally, the best firms, and this is all just one general theme, won't be the ones that do the work like they do today. They will redefine their role to become that strategic thinker.
Matt Tait [00:57:47]:
The other thing that AI is going to do is, is help make those insights easier, more approachable, more understandable. We need to think about as we generate capacity within ourselves, within our teams, within our firms. What do we do with that? How do we train people to take that higher level role and really start to become the strategic advisors? And that's one of the things that software like Puzzle and other AI software is doing is help pulling out that insight. Only humans people are the ones that generate trust. They're the ones that have accountability. They're the ones that can pull out that trusted insight. That's where we're going and I think it's a really cool time. 2025 is going to be a really big year for the accounting industry and for the community.
Matt Tait [00:58:34]:
I'm excited to watch how companies like Puzzle are not only integrating AI but but they're also truly redefining the relationship between accountants, bookkeepers and technology companies. Gone are the days of the vendor relationship. I've said it before, I hate that term. I want partners. Partnership though is a two way street. They will help improve us and how we do the work and we should be able to help improve their technology to make it more approachable. All of this is helping improve the client experience, which is the North Star for both the technology company and the accountant and bookkeeper. I can't wait to see these new wave of tech companies like Puzzle, like Sasha, other companies that are out there like Ramp, like Brex, that are really taking that partnership mentality.
Matt Tait [00:59:22]:
Gusto is another great example and really working on helping accounting firms improve. Software like Puzzle, built for AI isn't replacing accountants, it's empowering them. It is opening up that untapped potential and giving us all the ability to seek it out. Thanks so much for listening. After the first Million is presented by Decimal to listen to more episodes and find tips to help make running a business easier, visit decimal.com afm Want to join the conversation? Reach out to me on LinkedIn and let's explore the messy middle SA.