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.
[00:00:00] Aleksander Koenig: stay super focused, double down on what's working, triple down on what's working. Don't get distracted by these cool opportunities that you could be doing.
[00:00:08] Aleksander Koenig: at some point you'll become big enough scale where you could probably divert 5% of your resources into like this next big bet. And take that. But like keep 95% of the company on the core thing.
[00:00:58] Matt Tait: Alright. Welcome to this week's episode of After The First Million. I'm Matt Tate, your host, and I could be more excited to talk about technology. I. Building businesses and accounting with my friend Alec Kig, CEO, and founder of Settle. Now Settle is one of the great tools that Decimal not only uses, but partners with, Alec.
[00:01:18] Matt Tait: I don't know. I think we've been partners for almost five years.
[00:01:21] Aleksander Koenig: Good to see you, man. It's been \a while.
[00:01:23] Matt Tait: Well, I appreciate you joining and I want to pick your brain about a lot of different things today. To start, tell everybody a little bit more about you and your journey.
[00:01:33] Aleksander Koenig: my journey definitely started at a bank Capital One. Spent six years there, different business lines from doing auto loans to personal loans to retail bank accounts. I got, uh, really infatuated with startups. probably just being very frustrated working at a big company, how everything is just so slow.
[00:01:53] Aleksander Koenig: So I joined a startup out in LA in 2013. did that for about a year and a half. And from then on I, I knew I only wanted to work at small companies where you could have a lot of impact, make decisions quickly, and really, you know, see the. Fruit, take shape from that. so, uh, found my way to affirm the e-commerce lender, back in 2015.
[00:02:17] Aleksander Koenig: joined there when it was about 50 people, and, uh, stuck around there for four years as long as they would have me. so I got to really see like a meteoric rise in a company. And really learned like how to build a culture, how to build a startup, and I always knew I wanted to start my own company one day.
[00:02:35] Aleksander Koenig: and I thought that would probably be the perfect timing. You know, pre kids, pre-marriage, have learned a few things. so ended up starting subtle in late 2019. you know, recruited a small team to join on the journey with me. and now we're five years in, we work with a lot of CPG brands, trying to become their operating system, try to help them manage their cash flows.
[00:02:58] Aleksander Koenig: that was the insight I think that we stumbled upon, that a lot of these businesses, cash flow is king. so any way we could help to help them manage that from. Bill pay to purchase orders, to inventory management, to financing. we're able to really like, accelerate these businesses. So I think a lot of softwares have a promise of, Hey, we'll save you a few hours a week.
[00:03:20] Aleksander Koenig: Our promises we're gonna grow you, pretty dramatically while doing that as well. that's where we're at right now. five years in.
[00:03:27] Matt Tait: somebody on the service provider side and you on the kind of tool technology side, it's rare that two startups, you know, we started early 2020. You started late 2019. believe the first emails that came between you and Jacob were at some point, like mid 2020.
[00:03:46] Matt Tait: that's a long time for companies like us to kind of partner together.
[00:03:51] Aleksander Koenig: Same with the brands though. Uh, like a lot of these brands start around the same time. a bunch of brands that started in 2023, and it's nice to see that we can both grow together, you know, like we've matured over time, they've matured over time. you know, hopefully we get better every day that passes on.
[00:04:07] Aleksander Koenig: that's kind of one of the promises of technology, right? definitely in the early days, I think one of the mistakes we make and probably a lot of companies make is that you think you're the hottest since sliced bread.
[00:04:16] Aleksander Koenig: And the reality is like, what you built is just not there. but it is definitely been great to work with you guys and, you know, try to help each other out.
[00:04:24] Matt Tait: I can totally empathize with that sentiment because, uh, when we started Decimal, it was two non-accountants that were selling accounting services. we sold services before we actually had the ability to do them, and we had to sell a few. Then we hired, and luckily we made an amazing first hire in Katie Lamb and she's still with decimal. I think she's in her like 80th role 'cause you know, we've grown like crazy. But you kind of fake it to make it a little bit hope. You get across that chasm and, and then
[00:04:53] Aleksander Koenig: When you do, it feels good.
[00:04:55] Aleksander Koenig: you know, what I've definitely learned over time is the people is what the company is really, the people make it work. And when you actually hire people.
[00:05:05] Aleksander Koenig: They just move mountains, like they're just indispensable to the company.
[00:05:09] Matt Tait: you mentioned that you learned how to build a culture and kind of learned how to build a company. Talk to me more about what that was and how you've applied it at Settle, because I, I
[00:05:18] Matt Tait: think culture is unintentional so.
[00:05:21] Matt Tait: often, but when it's intentionally done, it's better.
[00:05:25] Aleksander Koenig: think, the first like 10 hires you have, or maybe 20 hires you have really set the culture for the future. So it's like, how do we operate? You know, what flies, what doesn't fly? what's the work ethic? do we help each other out? Or are we more like just staying in our lane? So I think those things matter the most.
[00:05:43] Aleksander Koenig: So just like. Finding the right people that kind of fit within that culture that you're trying to build is important. And then you have to like constantly, you know, show people like how to operate,what gets rewarded, what doesn't, type of thing. and I think, you know, if you don't focus on that and you're 50 people in and now you wanna build a culture was like, you can't, like whatever it exists today is the culture.
[00:06:05] Matt Tait: at early days of a firm, like people that are like performing, but like, just weren't part of the culture would get let go.
[00:06:12] Aleksander Koenig: we let this person go because they weren't jiving with the engineers I don't know if you watched friends, but that episode where like Monica Fires Joey from the restaurant that kind of changed the culture of the restaurant.
[00:06:22] Aleksander Koenig: So I think that's, you know, there's something in there.
[00:06:25] Aleksander Koenig: you know, one of the other things that you touched on,
[00:06:27] Matt Tait: that as I talk to businesses,
[00:06:30] Matt Tait: I think a lot
[00:06:31] Matt Tait: of people that start their first company struggle with the balance between, I need to plan, but then I.
[00:06:37] Matt Tait: just need to do, both of us kind of rolled out with a solution that was planned.
[00:06:42] Matt Tait: It's
[00:06:42] Matt Tait: not like we didn't take the time to plan it.
[00:06:44] Matt Tait: but it also wasn't fully,
[00:06:46] Matt Tait: baked,
[00:06:47] Matt Tait: I've just found that your best learnings are just doing things. And so
[00:06:52] Matt Tait: so many
[00:06:53] Matt Tait: first time entrepreneurs, first time companies, first time
[00:06:56] Matt Tait: accountants, they overplan and then it's
[00:06:59] Matt Tait: paralysis by analysis
[00:07:00] Matt Tait: How did you kind of balance that planning versus
[00:07:04] Matt Tait: just getting something out.
[00:07:05] Matt Tait: there and doing, and starting settle?
[00:07:08] Aleksander Koenig: For better or worse, I'm definitely anti-planning
[00:07:11] Aleksander Koenig: ours changes all the time. So I think you need to have like a long-term vision of where you want to go to, like, inspire the people and kind of give direction.
[00:07:19] Aleksander Koenig: Like, Hey, this is like generally what we want to do, but like the nitty gritty will be figured out along the way. Probably not by you, but by everyone else. so I think that's important. but like from a roadmap perspective, you know, we kind of need to see where our customers are at, what do they need?
[00:07:34] Aleksander Koenig: we gotta make them happy, we gotta make them advocates of the business. And, you know, I think everyone wants organic growth and the only way to do that is to have your customers be raving about your product and what you're doing. So like, we need to actually like. Meet their needs. I actually launched, a few products that no longer exist.
[00:07:53] Aleksander Koenig: 'cause I was like, I don't know what's gonna stick here. Like, Hey, I'm gonna give you this. I'm gonna give you this or give you this. And we caught fire with two of the products and the third one we just killed. It was like, we can't do everything at once. at least well. and then every opportunity I had, I would talk to customers like, Hey, what's your
[00:08:09] Aleksander Koenig: biggest pain point? What can we solve for you? And if that kind of fit within the broader vision, and it's like, Hey, that's what we should do. They're telling us what to do. just like you mentioned how, you know, you guys, you weren't accountants but you're a billing and accounting firm, in the same way, you know, like I haven't experienced the pain points that these customers have that we're trying to solve.
[00:08:28] Aleksander Koenig: So I need them to tell us what the pain points are. I could, you know, have ideas and whatnot, but unless you're like in the mud with them, you're just not gonna know.
[00:08:37] Matt Tait: You guys
[00:08:38] Matt Tait: are
[00:08:39] Matt Tait: vastly bigger and
[00:08:40] Matt Tait: different.
[00:08:41] Matt Tait: Than what you
[00:08:42] Matt Tait: were when you first started
[00:08:43] Matt Tait: and the original kind of at least beginning
[00:08:46] Matt Tait: thesis that you put out there. Talk.
[00:08:48] Matt Tait: about what pain point you initially set out to solve and, and walk us through how you expanded that.
[00:08:54] Matt Tait: Because I think
[00:08:55] Matt Tait: Business owners and, and a lot of the people that listen on this podcast are accountants, and accounting.
[00:09:00] Matt Tait: firm owners.
[00:09:01] Matt Tait: They think I've got to do everything all the time. And yet
[00:09:06] Matt Tait: So
[00:09:06] Matt Tait: much power comes from doing a few things really well and then testing, and then adding a few more testing adding a few more. And that seems like how,
[00:09:15] Matt Tait: you all have built Settle too.
[00:09:17] Aleksander Koenig: yeah. I think we started off with a very broad like.
[00:09:20] Aleksander Koenig: Like, We're gonna do payments, record every payment into their accounting ledger. Uh, we're gonna do financing and kind of create this like huge B2B payments network was the idea. but as we found strong product market fit and these CPG companies, businesses that are really dealing with inventory,We can actually go deeper, in solving their unique pain points. And like, I think in the world where there's a lot of horizontal players, I think Bill Pay has become quite hot overall. between, you know, so many different players now launching their own products. we're a small company, we're not gonna be able to compete with 2000 employee businesses that are fast growing, doing the same thing.
[00:10:00] Aleksander Koenig: So our view is like, okay, let's actually go deeper on their pain points. So that's led us into. connecting into their catalog of goods, helping them generate purchase orders as easily as possible. Doing two-way matching, three-way matching with their warehouse, management software. going like super deep into their pain points.
[00:10:18] Aleksander Koenig: the more insight and value we could provide to those businesses, you know, I think that's gonna pay dividends to us in the long term.
[00:10:25] Matt Tait: Well, and you mentioned earlier the word operating system.
[00:10:28] Matt Tait: Talk about what that really means for a business, because I think in the world of professional services people misconstrue that what I find
[00:10:39] Matt Tait: is a lot of accountants view an operating system as the ledger and everything around accounting. The reality is
[00:10:44] Matt Tait: that's not actually,
[00:10:45] Matt Tait: the case, is it?
[00:10:47] Aleksander Koenig: I view that as, you know, a historical snapshot of what my business did. but to make decisions on the field, I think you need like a more real time. Like, Hey, what the, what the hell is going on with my business? and like, what levers can I pull? So that's how we view ourselves is by connecting.
[00:11:06] Aleksander Koenig: and I think taking a step back, you know, people have access to many different softwares. This software does x, this software goes y None of them actually speak to each other. So like, what's real, do I need to reconcile this? and what it all ends up is people create some master Excel sheet, type in a bunch of stuff in all the time.
[00:11:25] Aleksander Koenig: Let's do a weekly meeting, see what's going on. our view is let's become the operating system where people have all the information from a finance and operation standpoint at least, like, we're not gonna help you, market customers or something.
[00:11:38] Aleksander Koenig: But from our perspective, have all the information come into one source so you can make the best decisions from there. every new feature or product that we're releasing is really within that vein of helping, you know, build out this operating system for these brands.
[00:11:51] Matt Tait: Well, we
[00:11:52] Matt Tait: talk a lot about at Decimal, the importance of establishing
[00:11:55] Matt Tait: and
[00:11:56] Matt Tait: continuing to improve expertise,
[00:11:59] Matt Tait: it's been interesting to watch you guys build from afar because you have gone the full vertical
[00:12:05] Matt Tait: Decision on, we are just gonna pick this expertise, pick this vertical in cpg and we're gonna become everything, you know, we're gonna do all of it.
[00:12:16] Matt Tait: Versus
[00:12:17] Matt Tait: at various times you could have, like
[00:12:19] Matt Tait: you mentioned done bill pay for everybody
[00:12:21] Matt Tait: or lending for more, or
[00:12:24] Matt Tait: like
[00:12:24] Matt Tait: you had.
[00:12:24] Matt Tait: so many opportunities to kind of get distracted. the bet and I, it seems to be working really well for you all is really getting a deep
[00:12:33] Matt Tait: Expertise. How did you make that
[00:12:36] Matt Tait: decision and not
[00:12:37] Matt Tait: get distracted by all of the other opportunities?
[00:12:40] Matt Tait: that were out there?
[00:12:41] Aleksander Koenig: I think the reality is we did get distracted a few times and that's definitely on me where I would see this shiny object and I'd be like, oh man, that could be a $20 billion business. Let's do that as well. but then when you take a step back and you see like, we're kind of half-assing this product, half-assing this product, we don't have resources for it all.
[00:13:01] Aleksander Koenig: So like, what are we doing? so we ended up shuttering stuff and you know, I think that was one of the biggest lessons I had and what I would kind of relate to people, coming up is like stay super focused, double down on what's working, triple down on what's working. Don't get distracted by these cool opportunities that you could be doing.
[00:13:19] Aleksander Koenig: at some point you'll become big enough scale where you could probably divert 5% of your resources into like this next big bet. And take that. But like keep 95% of the company on the core thing. so I think we learned through, you know, making mistakes that I definitely, take on the chin,
[00:13:34] Aleksander Koenig: we could have been working with a lot of marketplaces for distribution, have like an embedded lending product, but then it's like, well that doesn't really impact the core product. So it's more of a distraction now. So that's how we learned. By actually making the mistakes.
[00:13:46] Aleksander Koenig: but it was a definitely a good lesson for me to know. when we could drive value to our customers and they tell us immediately like, Hey, this makes sense. This is actually helping us. that fortify is that we made the right decision there and can continue down that path.
[00:14:02] Aleksander Koenig: but you know, we've definitely, I. Shoot away a bunch of potential customers because of that as well, which is always hard.
[00:14:08] Matt Tait: for us, we turning away business is very hard. And the smaller and younger you are as business, the harder it is. the reality is, I think when you start, you accept anybody that will pay you.
[00:14:20] Matt Tait: And then gradually over time you understand the difference between the good revenue and the bad.
[00:14:24] Matt Tait: And you make the decisions on, I now have replacement costs, so I'm going to actually cut the bad revenue and replace it with good revenue.
[00:14:32] Matt Tait: In our business, one of the shiny objects that you kind of run into when you start to get big. And now with about a thousand clients, like we have scale in size, but you start to compete in the wrong locations and directions. And for us, like for a long time, we said, should we be competing with bench and pilot? And some of these really like hyper VC-backed and we are too, but VC-backed technology services businesses. That have artificially low pricing and poor margins, but they view growth as the biggest tool, and it becomes like a race to the bottom.
[00:15:09] Matt Tait: And then you look and you're like, number one, these are not good clients. These are extremely low margin, bad types of businesses For us to work with, the repayment on sales cost is just astronomically impossible. And you just can't build a good business and you stop chasing it.
[00:15:27] Matt Tait: And we probably chased it for too long as we looked at growth and we had salespeople in that will always argue on price. Price has to be there and price has to be that. What we found is when we stopped chasing price as a definitive marker, all of a sudden we now have some of the highest ACVs in the marketplace we're growing every month, we're growing every quarter, and it was because we stopped chasing the wrong. Target and it cost us a lot of money. you look at it and you're like, wow, it cost you a lot of money. It cost you a lot of time. And I'm glad we learned it, but it was, it was a failure on my part because I come from the sales side. So like for me, it's like any sale's a good sale. And I've learned over time that that's not the case.
[00:16:11] Matt Tait: And I'm now not allowed to price things. I'm allowed to sell. I'm not allowed to price.
[00:16:16] Matt Tait: I'm the CEO of the company and I have no control.
[00:16:19] Aleksander Koenig: Could we pay you a licensing fee to also have MTDs?
[00:16:22] Matt Tait: you can absolutely. Instead of, uh, blaming other people, just call 'em tds
[00:16:26] Matt Tait: we'll make it a viral terminology on, uh. Over promise and under price.
[00:16:32] Aleksander Koenig: I think you bring up a good point though, on the competition side. that always kind of leads me back to the Peter Thiel quote of like, competition for losers. if you're gonna just get into like a big pond with a bunch of fish and do the same thing, and it's like, where are you gonna actually end up?
[00:16:47] Aleksander Koenig: And I think that kind of leads us to trying to be very differentiated and different. One that's gonna help on the customer acquisition side, but two's like, you're no longer competing, you're just offering a different product. And that's how we kind of view the world where like what we're offering is doesn't actually exist elsewhere.
[00:17:04] Aleksander Koenig: Now it doesn't mean it won't exist at some point, but it helps us, I think, not have to compete head on, doing exactly what else someone does. So, and I think, you know, that's where the value will accrue over time.
[00:17:16] Matt Tait: you've hit on a really good point that's so hard is figuring out what your own identity is. Leaning into that. It's not just what you offer. It's not just who you serve, but like businesses have. Identities, just like people and deeply understanding what your identity is and leaning into that is I think the true value of that quote is really understanding, Hey, I'm not competing against anybody else. I'm gonna adhere to who we are as a business, where we're going as a company, and what other people are doing Only slightly matters. Like it's somewhat influential, but it's not determinative.
[00:17:55] Aleksander Koenig: just go straight to the customer. what do you need? And then take it from there.
[00:17:59] Matt Tait: it's really understanding how to accomplish the overall mission. And how to think outside the box sometimes in doing that.
[00:18:08] Matt Tait: And really also, I think it's probably part of what you guys learned in, in your honing in on the future, and the vision is also understanding where your core competencies as a team are
[00:18:18] Matt Tait: and leaning into that. Because some of your change and direction comes from customers, but some of it also comes from, Hey, our team is really good at this specific thing. And this is what we need to lean into instead of,
[00:18:33] Matt Tait: One of the things that I think is, is really cool about how Settle has, gone about things and it's, it's been a focus for Decimal since we started, is really looking at partnerships as an avenue of growth. it's not something I see in a ton of businesses and a ton of accounting firms and a ton of tech companies is that basic initial of, I'm firm in my own identity. I'm firm in what we do. Let's do this together. Let's find great partners. What led to that kind of mentality and direction for Settle, and why has it continued the entire scope of business?
[00:19:11] Aleksander Koenig: For us, the accountant or the bookkeeper or the controller or the CFO, they become such integral user within the software. we could pitch the founder, but if their outsource controller isn't on board, then we're not going to drive the exact value that we need for this business.
[00:19:34] Aleksander Koenig: that's what really led us going deeper into partnerships with Decimal and others, where it's like we actually need to like have them become the supporter, the key supporter. We need to educate them on what we could do. and that has led us into the benefit of getting a lot of referrals at effectively Low CACsit's become one of our biggest channels of growth. now we have a different, persona that we need to build for. we have a lot of features that actually are built just for accounting firms that the actual customer, the brand doesn't see. that was like, one of the big learnings we had maybe two and a half years in, is just like, oh, we're acquiring this customer but we're not really getting them on all the software.
[00:20:18] Aleksander Koenig: Why is that It was Because, they're using an outsource firm doesn't really know us, we haven't even talked to them. that led us into a big push into actually creating the accounting firm as an important channel to our growth. and the other thing is they're able to teach us on like, Hey, this is wrong.
[00:20:35] Aleksander Koenig: This doesn't make any sense. Do this, do this. we created a whole customer advisory board just with accountants. they give us the best feedback in the world.
[00:20:44] Aleksander Koenig: then it morphed into, our biggest channel. so it's where we're doubling down on tripling down on. and if we can make the accountants heroes of the business, then we think, that's going to lead into future growth for settle as well.
[00:20:58] Matt Tait: it's the second time I've heard the thought around making accountants the hero of the business. I don't think many people graduate college and with an accounting degree and think they're getting a cape,
[00:21:08] Matt Tait: it's an interesting mentality of just understanding. The role of various people in the business life cycle when you look at other companies in the space, and there are some big ones, I mean, QuickBooks has got one of the largest market shares of any tech company in any space. you have, bill is another one. You've got a lot of businesses. When you look at who's built a good partnership ecosystem that you want to emulate. What are some of the ones that you look at as, these are good examples of how we wanna do it and, improve and iterate on it, but how do you look at that?
[00:21:45] Aleksander Koenig: Yeah, I think Bill has done an amazing job. but that's 20 years in the making really. I think if we could emulate that, but probably we have to take a different approach. Right. Because they've, dominated the market. you know, they have their tentacles in everywhere, so you can't just crack in.
[00:22:00] Aleksander Koenig: I think you have to do something unique. They break apart. but I think that's one to emulate. And, you know, they work with banks, accounting firms, groups of accountants and you know, I'm sure they spent tons of marketing, tons of events. that's one to emulate, but we're a much smaller company, so we have to be very strategic on how we do that.
[00:22:21] Aleksander Koenig: we can't just roll out, here's $20 million to spend. definitely one that's inspired us and I think, kudos to them for building a very strong, durable channel, for growth.
[00:22:33] Matt Tait: what's on the roadmap for Settle and how do you want to continue to improve the product, improve relationships and partnerships? where are you guys going over the course of the next year or so?
[00:22:44] Aleksander Koenig: definitely. Improving our current products, like, you know, purchase orders, inventory management. Uh, there's a lot of different types of businesses within CPG, so making sure, we're fine tuned to be the best in class for those. definitely still innovating on the financial product side. growth capital, the ability to purchase inventory.
[00:23:07] Aleksander Koenig: Before you get paid. is just so key in helping these businesses grow, especially when they have something that works. So we'll definitely continue, down there. the third aspect that will be getting into this year's, the accounts receivable side. we're definitely, exploring now getting ready to build, products there.
[00:23:28] Aleksander Koenig: And I think, for a lot of these businesses that are omnichannel. Which most of them actually are. the accounts receivable component becomes very key and we want to make sure we're very fine tuned for their type of business. So this isn't just like Stripe invoicing that we're trying to build.
[00:23:43] Aleksander Koenig: This is much better, much fine tuned for our businesses. but you know, these businesses pretty well. Do you think that's the right approach? what do you think kind of we should be doing?
[00:23:53] Matt Tait: we'll go back to the term operating system that you mentioned earlier. I think it's so important to embed yourself more in the day to day of a business. had to give a talk to a group of accountants, a college course,
[00:24:07] Matt Tait: I was talking to them and I said, one of the fallacies that a lot of accountants have and a lot of bookkeepers is that they are the most important thing. And the reality is that operating system is more important. And I used a very simple example of, Toast in restaurants. A restaurant provider that uses Toast and has an accountant will pick Toast over the account. Toast is embedded in their ordering, their payroll, their ability to accept money. That is more important than the look back, the ability to file taxes, the P&L side of the business. And you have to understand where you are in that hierarchy. And I think what settle and what other tech companies have the ability to become is that operating system, if you control the cash. If you control the day-to-day operations and you control the cash in and out, you have embedded yourself into a business and you've become almost impossible to rip out. And to me, that's where a settle wants to go. And when you're an accountant, understanding your place in the hierarchy, which is also deeply then understanding which verticals you work well in. So that you can fit into that hierarchy Well, I think is really, really important.
[00:25:31] Aleksander Koenig: Yeah, if Toast goes down for a day, the business is legitimately screwed.
[00:25:36] Matt Tait: one of the things that I love about how you guys have built things and I think it's important, so many people when building services, businesses give lip service to build to a vertical, and to them they think that means that, Hey, I just need to find a vertical to sell into and that'll be my vertical. That's not the right approach. It's part of it. You need to find that vertical, but then you need to, like you all have deeply understand that vertical. Build your operations to deeply
[00:26:05] Matt Tait: Operate that vertical well and become the best, at all facets, and that's when you've actually
[00:26:12] Matt Tait: verticalized. It's not just saying that you have a vertical or selling into one,
[00:26:16] Matt Tait: But it's that deep understanding of the customer
[00:26:18] Matt Tait: or the client like you've been talking
[00:26:20] Matt Tait: about, that I think a lot.
[00:26:22] Matt Tait: of people miss, you can't give lip service, you will fail.
[00:26:25] Matt Tait: You have to go deep into that vertical. And I think that's so important to, building that expertise and building towards success,
[00:26:35] Aleksander Koenig: other businesses that won't name names, uh, you'll definitely see like a toggle at the top saying like, for this vertical, for this vertical, for this vertical, right? In reality, the product's exactly the same. with the landing page that's like fine tuned for some keywords, to pop up in the SEO.
[00:26:48] Aleksander Koenig: You know, we'll take on businesses that aren't in our vertical and be like, yeah, you could use it. Probably not gonna build for you, if this fits your bill, go for it. we're actually trying to solve pain points for within our ICP.
[00:27:00] Matt Tait: it's hard for people to do and conceptualize.
[00:27:03] Matt Tait: but it's so important to actually, I think, really, really
[00:27:07] Matt Tait: Figure out
[00:27:09] Matt Tait: One
[00:27:09] Matt Tait: of the things that I'm interested you mentioned how
[00:27:11] Matt Tait: Partnerships with. Accounting
[00:27:13] Matt Tait: have been
[00:27:14] Matt Tait: one of
[00:27:15] Matt Tait: your biggest lead gen deal flow, creators. I'm sure you've had to kiss a lot of
[00:27:20] Matt Tait: toads to find the good partners.
[00:27:23] Matt Tait: Give me the
[00:27:24] Matt Tait: Profile of a good accounting firm partner.
[00:27:28] Matt Tait: for settle.
[00:27:29] Aleksander Koenig: something that you mentioned is kind of like the age of the firm too. I think that kind of goes into it like, hey, they're on the same trajectory as us. They want to grow. We want to grow. We definitely signed a bunch of leads back to accounting firms as well.
[00:27:42] Aleksander Koenig: hopefully they view us as a channel of,you know, it's the people that want to scale that are hungry, kind of in the startup startupy phase. Where we kind of see a lot of success. You know, someone's been at it for 30 years, it's very difficult to get them to think about the world differently.
[00:27:59] Aleksander Koenig: those are probably the things that we look for. if someone has a hundred clients and we could send them five, that's a lot of growth for them. at the end of the day, even the accounting firms, what, what do they want? They want to grow too. so anyway, we could kind of help That is how we think about it.
[00:28:14] Aleksander Koenig: But you know, if we send five clients to someone that has 30,000 firms, like they might not actually notice. companies are on a kind of similar trajectory to us. are, I've definitely been like the best fits.
[00:28:24] Matt Tait: Would you also throw in a, you know, vertical focus? On CPG too, or is it Hey, anybody?
[00:28:31] Aleksander Koenig: Well, I mean, they definitely, I think, need some clients within that. What I think we find is there's kind of these two buckets. There's people that are like fully centric on it, which is great for us. but then a lot of firms just have like, Hey, I have like 10% of my books kind of within this vertical, or 20% of my book is within this vertical.
[00:28:48] Aleksander Koenig: we kind of see it all across the board from that perspective. any way we could kind of help them,Be better access to their customers than I think at the end of the day, you know, we all win.
[00:28:59] Matt Tait: I think that's awesome and it's, it's also been cool to watch you guys actually like build out a team specifically focused towards this too. and that shows the, you know, not just deep verticalized focus on your end user customer ICP, but also a deep verticalized focus on partnerships in the space too.
[00:29:16] Aleksander Koenig: what advice would you give to other tech companies that might be wanting, you know, to crack into. Your customer base.
[00:29:23] Matt Tait: what we're looking for is multifaceted. Number one, we wanna make sure that we're providing our clients with the best solution possible. Period. Like, hard stop. I'll never forget when we started Decimal, Jacob and I, we did a tour of some people that we had heard were some of the best in the cloud.
[00:29:41] Matt Tait: Accounting was the term. Then space.
[00:29:44] Matt Tait: We just kind of interviewed them around building and decision making and, and there was one person, That had this huge network and marketplace for helping people start Cloud first. One of the most well-known people in the space, and we were specifically talking to him about what he chose for payroll, and we still have always partnered with Gusto.
[00:30:05] Matt Tait: We love that. Gusto involves the least amount of work for us.
[00:30:09] Matt Tait: Payroll is a net loser.
[00:30:12] Matt Tait: Yeah, it's a great product, great client services, good partnerships, but it also has the least amount of work. So no matter what the price is, and at the time the price was competitive and it still is with everybody, but it was the least amount of work in an area that you cannot make up good margin.
[00:30:28] Matt Tait: Like payroll's a net loser for most companies or firms. So we asked, we're like, do you guys partner with Gusto? They said, no, we partner with this company much bigger in the space. I said, why? And they go, well, they give us back, 30% revenue on top.
[00:30:41] Matt Tait: I'm doing the math. And I'm
[00:30:42] Matt Tait: like, 30% per seat. I'm looking at the numbers and I'm like, maybe you have a thousand clients. And they're like, no, we only have 500. And I'm like, okay, well I'm doing the math. And I'm like, that's like a couple hundred bucks a month. isn't it more work for you to use that partner? It's like, yeah, but they cut us back 30% a month. Jacob and I hopped in the car and we're just like, that is the most asinine and ridiculous thought process behind why you made a technology choice. You've. Specifically chosen a worst product for your end client and one that is more work and harder for your team because it cuts you back 30% of a very low dollar amount.
[00:31:19] Matt Tait: and so like for us, partnership number one is making sure that we are making a good choice for our end user. Client Number two is making sure that we are making a good choice for my end user team. Then third is finding people that want to actually grow together and where we can have a give and take relationship. I'd rather have partners people that look at it from that perspective. And look, I think accountants have really struggled in adopting tech and being bad partners, and I think you're starting to see that change with a new generation of firm owners and accountants. I think tech, and like you and I have spent enough time around tech, like a lot of tech entrepreneurs know it all and they know everything, and that doesn't play well with accountants. And so having some openness to, learning the space and partnering, I think is, is really crucial. And so those are the three elements that we kind of look at is experience for end user, client experience for my end user team, and then the ability to create an actual true partnership.
[00:32:25] Aleksander Koenig: I love that. That's a blog post right there.
[00:32:27] Matt Tait: one of the things that you had mentioned, and I'm gonna call you out here 'cause you said when you left a firm wanted to start your own company, you wanted to start your own small company and have the ability to impact a team. You guys aren't small anymore. How have you kind of evolved over time?
[00:32:43] Aleksander Koenig: my job changes every six months. I have to become a completely different person. when it was four of us, it was different. When it was 15 of us it was different. 30, 50. It was like all these different points where I kinda need to grow with the business and hopefully I deserve the job.
[00:33:02] Aleksander Koenig: and hopefully, you know, I can kind of keep up with what the company needs me to be. so it's definitely like continuously evolving. You just have to take a step back and look just like, Hey, where is my time best suited to help this company? in what capacity is that? So, you know, if it's like taking over a function or if it's just inspiring the team, setting the vision, working on some big partnerships where maybe I have some extra leverage,
[00:33:26] Aleksander Koenig: We've hired a great product person, so I'm mostly, you know, letting them, take the reins of, where we need to go, as long as it fits within that bigger vision. so that's been great to see. but you know, in the early days you have to be a completely different person. in the beginning it was like.
[00:33:45] Aleksander Koenig: Myself and seven engineers. So I was doing, all the business function, sales, marketing, ops, uh, risk, customer success. Uh, customer success. I was the best multitasker of all time, and no one even knew about it. now, you know, that's not the case. you have to give away your Legos.
[00:34:00] Aleksander Koenig: Hire people that are better than you at that one thing. give them the space to operate and trust to operate. and I think that's the key part. And, you know, we've built out a great executive team now to really manage every function individually. hopefully I could just, push them in the right direction, uh, where we need to go.
[00:34:17] Aleksander Koenig: I want people to feel ownership and empowered to do the right thing.
[00:34:20] Aleksander Koenig: I found that as my job changes every three or six months, I learn more what I suck at than what I'm good at. And occasionally I'll latch onto something. I'm like, gosh, I'm really good here.
[00:34:29] Matt Tait: I'm diving in. But more often than not, I realized I need other people to do way more than I initially thought
[00:34:37] Aleksander Koenig: I think you kind of have to experience the pain to know what to look for when you hire that person. Yeah. Because like if you don't actually know the job to be done, then like you're kind of just,
[00:34:47] Matt Tait: You're guessing.
[00:34:48] Aleksander Koenig: I think that was a very key thing for me by doing all those jobs. I kind of know like, okay, well I need the person to be excellent at this 'cause that's what the job entails.
[00:34:58] Aleksander Koenig: And if I just hired people before I actually knew what the pain points were, then like it probably would've worked
[00:35:04] Matt Tait: Well, and you
[00:35:05] Matt Tait: hit on it too.
[00:35:05] Matt Tait: with the Giving Away Your Legos, which great article and
[00:35:10] Matt Tait: Concept,
[00:35:11] Matt Tait: if you Google it, if you haven't read it, but. The overall concept that I like to adhere to is it's my job to work myself out of a job.
[00:35:19] Matt Tait: It's the leaders, it's the people at decimal. It's their job to work themselves out of a job. And the better you do that other people fill in, it
[00:35:28] Matt Tait: Gives.
[00:35:28] Matt Tait: you the ability to do more. And
[00:35:30] Matt Tait: That's how
[00:35:31] Matt Tait: like true organic
[00:35:32] Matt Tait: growth within a company happens is
[00:35:35] Matt Tait: Having that humility and mindset of, it's my job to work myself,
[00:35:39] Matt Tait: out of a job.
[00:35:40] Aleksander Koenig: and I actually hope everyone else kind of thinks the same way if we could actually automate all this stuff. now you can focus on the bigger creative stuff and like, think strategically on how to change things.
[00:35:53] Aleksander Koenig: So, definitely true for us, but I hope everyone kind of at the company feels that way.
[00:35:58] Matt Tait: Well, Alec, I, I really
[00:36:00] Matt Tait: appreciate.
[00:36:00] Matt Tait: the time. If, if people wanna learn more about partnering with you, if people wanna learn more about Settle, how can they go about finding that?
[00:36:10] Aleksander Koenig: settle.com. We have the COM. check it out. you can always email me@alecatsettle.com,or find me on the socials, the LinkedIn, the Twitter's, whatever it is. The name's pretty unique, so, there's only one of me, baby.
[00:36:25] Matt Tait: I really appreciate the time and. This has been, uh, this week's episode of after the first million
[00:36:31] Aleksander Koenig: Cool. Great to see you.
[00:36:35] Matt Tait: All right. Today I'm gonna talk about my takeaways from my conversation with Alek Koenig As you all know, I firmly believe that growth doesn't stop at the first milestone or the first million. It's about what comes next. If you're building your firm, your business, you should build it as if you've already passed that first million and are still going in every episode.
[00:36:55] Matt Tait: I'm gonna step back and pull out key lessons to help you grow with that after the first million mindset. So here's what really stood out to me for my conversation with Alec. First, focus on what works and build a deep expertise. Second, culture is shaped by your first hires. And you finally, partnerships are a key to growth.
[00:37:18] Matt Tait: Alright, so going back to the first one, focus on what works and build a deep expertise, avoid distractions. Alek talked about this quite a bit, double down on what's working. We've all been distracted. I've done it at decimal. I have a million stories of trying too many things and failing. But Alec really talked about honing in on specific pain points for CPG brands.
[00:37:40] Matt Tait: And helping them manage cash flow and inventory and becoming that business operating system, I think that was so important. Master one area, then expand by going deep. Settle has become essential to their clients rather than spreading themselves too thin. So many people talk about the need for expertise and verticalization and it's just lip service.
[00:38:04] Matt Tait: Alec and Settle have really, really done that. And I think there's a huge lesson for people building in the accounting space to really understand that building for verticalization and expertise isn't just about what you sell, but it's about how you do it and how you internalize it. And to see a technology company and a partner do that is really cool and really special.
[00:38:23] Matt Tait: Second culture is shaped by your first hires. The first couple of people you hire are gonna set the tone for your company culture. It's really critical to make sure that you're hiring the right people with the right values and the right work ethic. Because how they work and how they work together is gonna impact who you hire next and how they fit in.
[00:38:44] Matt Tait: As you grow, continue to foster that culture by reinforcing it. Every new hire culture is the backbone for every firm and every company, and it's really important to focus on those first few hires as the foundation for what comes next. Finally, partnerships are a key to growth. Build strong partnerships.
[00:39:04] Matt Tait: Be open to working with other people, especially as accountants. Tap into your referral networks, help other people. Be open to it settles. Partnerships have driven significant growth, and as somebody in the space too, it's decimal partnerships have been a significant reason behind our growth. I can attest to this personally.
[00:39:24] Matt Tait: Also. Don't just focus on your clients. Empower your partners to succeed. Do things that help them create mutually beneficial relationships. It's always important whether you're talking partners or clients or team members. Align the incentives companies shifting to merely just offering solutions and those truly integrating client operation themselves into client operations, building partnerships, they're gonna be the ones that ultimately are gonna continue to be successful to drive growth and to stay on the front end of innovation.
[00:39:58] Matt Tait: And this to me, is the best time to be in accounting because you have so much opportunity. And there were so many other great takeaways from my interview with Alec. I hope you'll listen for more.
[00:40:08] Matt Tait: 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 slash AFM. Want to join the conversation? Reach out to me on LinkedIn and let's explore the messy middle.