S8 E15: Alex Louisy, Upflow

There's not really any tool to do what we do right now. When you talk to people, usually what they do is that they use as credit. What I do in a spreadsheet is actually putting the list of invoices, trying to get the larger invoice outstanding and trying to randomly hit customers that haven't paid me on time and try to figure out the process out of it. What was interesting is that we somehow, in the first iteration of the product, I think we got it wrong. In the sense of like we focused a lot of efforts on pains that we thought were like the massive pain, but it wasn't in the end. My name is Alex Ruzzi, I'm the co-founder and CEO at Upflow. This is Coat Story, a podcast bringing you interviews with tech visionaries. It's six months moonlighting. It's the last time I've been back home. Who share what it takes to change an industry? I don't know exactly what it takes to get. It took many goes to get right. Who built the teams that have their back. The company is its people. The teams help each other achieve. Those proud of her team. Keeping scalability top of mind. Well, that infrastructure was a pain in fighting it as it occurred. Total waste of time. The stories you don't read in the headlines. That's not an easy thing to achieve, my friend. To get some shell, if you can just do it off and try to begin. To ride the ups and downs of the startup line. To really want it not just about technology. All this and more on Coat Story. I'm your host, Noah Labhart. And today, how Alex Luise built the platform for next level finance leaders. With cutting edge, AR technology. Alex Luise is 37 years old and came from a non-tech family. In the past, he worked in investment banking and then a small telco company. But he was always drawn to tech entrepreneurship and eventually he stepped into the possibilities in this world. Outside of tech, he's married with two kids and enjoys being outside, gardening and hiking through the forest outside of his small house. Alex spent many years in investment banking, financing large companies. He set out to try to provide B2B lending and discovered that most people needed to borrow money because they weren't getting paid on time. Dean is team decided to focus on this very simple problem which uncovered huge opportunity. This is the creation story of Upflow. Upflow is a software company that aims at helping B2B companies to manage their cash collection. So it's basically the process by which you turn your revenues and all these ads and invoices into cash collected on your bank account. And it seems like a very boring and simple topic in some ways. But this is actually one of the topics that is a significant issue for a lot of B2B companies and one of the spaces and payments that hasn't changed in the last 50 years. If you think about it, B2B companies are very much about sending out an invoice, waiting for two or three or four weeks and then getting a check in the mailbox, sometimes a wire transfer, sometimes nothing. So the way we look at it from a no-flow perspective is to bring really technology. We are really interested in looking at this problem as a technical problem. None of the silly problem of people or problem of bad payers. But we really want to bring the tech that enable business teams to regain control over those processes around cash collection. And it's not only about optimizing the process, so having good analytics, organising the right workflows. But also helping changing the process in the sense of bringing modern payment methods. Or it's about really thinking about how do I get rid of checks, how do I get rid of offline, manual wire transfers, and how do I move to online payments and things that makes it easier for everyone. Which seems like kind of easy, but it's actually really hard when you have thousands of employees, thousands of customers. And that's what we provide. So I did a mess or a big year in a mess or a finance, and I've always been really interested about financing for BGB companies. I spent my four years in investment making, financing, very large companies, and this was the beginning of the US, but like companies starting to lend money on a more dynamic basis for BGB businesses. Where we started the company, so we started the company in Europe. And we wanted to work on financing for BGB companies, right? We were just like, hey, let's make something simpler. We don't need to go to a bank, do some paperwork for like ages, wait for three weeks to get a line of credit and stuff. We wanted to do something that was like simpler and faster. And when we started working in a company interviewing people, the one thing that was super interesting is that when you actually ask people like, what would you need to borrow some money in a short term? Most of the finance folks who are talking to you in CEO's where they're saying, well, we want to borrow money because we just can't get paid from time by our customers. This is the number one reason why we would want to borrow money. And at that time, I was like, hey, how is that that? I used to work for companies that never got paid on time. After this was a problem with the finance scenes of the process. Most of the people around me also had this problem. And we were just like, how about we before financing those companies, how about we focus on this very basic problem, which is about helping them getting paid on time, which seems quite of an easy ask, but in reality, became a much more complex problem as we started like D&D and do this and actually very few companies have managed to make something in the space. And that's how we started by saying, well, before financing someone, which is going to help them get paid on time. And then we'll see how we can have payments, modern payments on this and on top of this, how we can add financing, but it's really in this order and starting with something that was a simple answer to a apparently a simple problem. Tell me about the MVP, so that first version of the product you built, how long it takes you to build and what sort of tools were used to bring it to life? I spent a lot of time talking to users in the first place and we spent a lot of time on wire friends. When you talk to people, usually what they do is that they use a spreadsheet. We really started with by trying to understand what were the pain points around the entire process, so that's what we call the quote to cash process, so that's which we processed by which you actually collect your money. We were trying to understand what is the problem, what is it start, what is the most difficult problem to solve. What was interesting is that we somehow, in the first iteration of the product, I think we got it wrong in the sense of like we focused a lot of efforts on pains that we thought were the massive pain, but it wasn't in the end, so typically to give you an example, one of the key problems that you have when you change and pay new invoices is that you first need to know who paid you and who hasn't paid you. This process is called the cash application process, so it's basically understanding that you got a wire on your bank account or check and it corresponds to this outstanding invoices. This is from most finance teams out there in the VGB space. This is a manual process today. We spent a lot of energy trying to solve that issue about the reconciliation piece. Once we actually realized when we started putting the product in the hands of the users, that most of the pain that they had was more around organising the workflows, chaining and paying invoices rather than this reconciliation piece that was in the end like time consuming but the new one that they were kind of okay to do. So there was a lot of iterations on like where are we going to focus the first part of the product, this MVP and by doing this on the wire friends and user interviews, we actually nail the failure that like we would focus the first part of the product on we need like this kind of what we now call the cash collection engine which is basically like organising those workflows and that's how we started with a very simple version that we there after like an enhanced and grew into much much wider value for the position that we have today. If you've decided on what you're going to build using wire friends, you're doing user interviews, you've made your decisions there. How did you progress the product from there, probably other than doing the development, but how did you go about building your roadmap and how did you go about deciding okay, this is the next most important thing to build for upflow. Followed back is a kind of a mix between what you want to achieve and what the potential customers or users are asking and I think it's particularly hard when you're trying to create your category and someone is like replacing a spreadsheet because people have a very openated idea of what they want to see because they are trying to replicate what they do in the spreadsheet, when actually what you sometimes want to do is actually changing this overall process right. From the first ten users, it was very much about like sitting down with them seeing how they used the product, seeing what were the most important issues that they had and then iterating around that and once we've found like a couple of like power users that we're happy with the product, we use them to expand the value to position of the time. But I think one of the biggest challenge we had was moving from what the users want to, what is the vision we had for that and making sure that like we didn't burn everything into just answering the request and not making progress towards where we wanted to go. And I'll vividly remember, I mean this moment where we said well we need to turn this as a pain product, you know we're selling B2B SaaS so there was no real reasons for this to be a free product forever and I always remember this kind of switch from suddenly you see people that are really in interest, there were a lot of people staying around using the product, running a lot of feedback and selling them when we told them like when we told them like hey you know I've got to have to pay, the discussion we had was very different, the feedback they gave us was very different. Some power users, we thought we were power users, just left some others stayed and became the new power users. But I think it was a turning moment in terms of and something that highly encouraged like other founders when they are in our space to try to monetize as early as possible because I think you get a very different feedback from paying users, complying to free users and so on. Let's switch to team then. So how did you go about building your team and what did you look for in those people to indicate that they were the winning horses to join you? I wish I could tell you that like we only had the winning horses as you said, I think so is a challenge when you build a company to have the right people and I think one thing that is interesting is that you need to have the right people for the right things you're doing at the right time. Maybe I'll start with my co-founder I think when I met my co-founder and like I had this idea we were working on this company for financing then switching to this company focused on AR. I think there was something that was really interesting in terms of what is the philosophy you want for your company you cannot long term and I think one thing that I found really great with one of the my co-founder when I met with them was the fact that like we were both like extremely focused on being a product driven organization and there was an idea of bringing this kind of like BGC experience that you have for payments to the BGB world but I think it was very important that we align on that especially when you selling BGB software and you know sometimes like the product is not necessarily like the most important thing like you could a lot of invest in some sales or other things. Then I would say that like for the first hire I would very much look for two main qualities when we were hiring whether this was like you know engineers business operation sales like you know and even it was a very very small team for the first two years it was really around like I would say intelligence what we call mastering our craft today out of flow which is basically like this ability to go really deep in the topics and being really passionate about like what should you always like trying to understand more going deeper into the topics and you know as any area like things seems really easy like from the outside but when you start the you need to account and come to when you want to become an expert to finance people it becomes really complex. That was one of the things that was really important and then I would also look for creativity and adaptability. I could tell you like all the people that we've made moving from France to the US moving different markets changing our integration strategies going through way commentators like I can tell you that like the reason why our number one employee is still still around today is because he's been able to adapt to this crazy environment and that's probably like one of the key. There's all the things we look at obviously but like that's probably the two main things we will be looking at especially in the early days of the company. So let's talk about scalability and this will be interesting you know given you landed on one component I believe it was cash collection in the very beginning was that built to scale or with scale in mind from the beginning or have you been fighting this as you grow and gain traction? We 100% been fighting around that and it's actually quite interesting because one of the first people that we made was around we had built something that worked but wouldn't scale. For a software like upload to be efficient we need to ingest the entirety of like the financial data from our users right? So we import all the voices, all transactions and all payments. You need that to just get started right? It's what we call a field product in a sense of like you don't start from a blank sheet and you can fill up your product with other things it's like upload cannot work if you don't have this entirety of data right? There's multiple ways of addressing this problem one of them was to build big pipelines so that people can send us entirety of their invoices and we can like maintain those pipelines with the time and stuff and that worked when we started with a few users with small companies with a few companies as well because obviously like at the beginning you only have a few and then we started having 10, 20, 100 customers using upload they became bigger and bigger and which is to be like you know one or two percent error in our pipelines to ingest that that time became like a nightmare right? And at that point in time we were just like hey we need to kind of move to something that is more scalable and that was actually like a big shift that we did in terms of instead of adding the spot lines where users would send us the entirety of that data we would actually connect natively to their systems and from there maintain like what we know call a native integration with the systems so that we can normally like make that a real time but also make the checks so that we should and the data is 100% accurate etc etc. It didn't only have an impact on like the type but it also had an impact on our go-to-market strategy because suddenly we started building like some native integration with financial software such as QuickBooks and that's it that you probably know about and these people started to build some kind of distribution partnership with us and that was mostly a UX right? And basically when you think about this but I just described is me like one of the lessons of like building something that scale is that you really want to make sure that like you put your company in a way especially if that's a startup right? If you're interested into adding a global impact maybe you don't do this if you want to do this on the on the few users but if you want building something that is going to become the household then for your category right? You really want to start and having like this scale in mind. If it doesn't scale then you're probably going to have a problem later on the road and you just want to make sure that like this is not happening like this. So I think this is one of the example on the product but I think if you can't less example of like how we built the company with scale in mind and these are things that are super important in how we operate as a business out of play today. So as you step out on the balcony and you look across all that you've built what are you most proud of? You know if I have to say something around what are the things that I'm proud of I would say that like still being alive as a non-organization is something that I'm quite proud of. That seems like quite basic but in our environment when you you know you raise a lot of money to grow really fast and so if you take a lot of risks and I think I'm very happy that like we manage to establish like this company as a as a viable business and something that is seems kind of obvious but to see like a real achievement still being around like four years ago for four years later and hopefully for many more years right. That might be like a little bit stupid but or you know kind of basic as well but I would say that like the people working with are you know kind of like the one thing that makes me like not necessarily proud but very happy. I think when you start your company part of the reason why I start the company is normally to sort like a problem about unpaved invoices and kind of things like this. It's also about like having this ability to make a dent in like how you run an organization and being also like hopefully like an example for other organization and I'm trying to spend more time now I spent a lot of time learning from others talking to peers when we started the company and I'm still doing it a lot but I'm also spending more time now like trying to give back and showing like how we are proud because I'm quite proud about like few things we do and these are the things that make me really happy and also help me like you know still find the energy between the two kids the zillion problems you have on a daily basis to just keep on going and you know how to wake up every morning and be excited about you know continuing the journey that would be the two things quite obvious it's still worth mentioning I'd say. Let's flip the script a little bit so tell me about a mistake you made and how you and your team responded to it. I think those moments and realization are actually probably the most important one in the life of an organization and how you react to them are actually saying like if you're going to be a successful organization or not right we all make mistakes. What we've learned by all the mistakes that we made is that it's really important that like you are faster at identifying them next time and fixing them as soon as possible. I would say that the biggest mistake that we've done at OPLU was a GTM mistake when we started the company. The problem with solving is very widespread and it's not really like an American or a French or a Chinese problem right in every single country which the companies can't get paid. When we started one of the biggest mistakes we made was only focusing on our users just talking to them and the product that we actually solved those issues right. The one thing that we didn't really think about was GTM how would we bring that product to the market and my number one advice to funders when they come to me and say like I'm thinking about this idea and usually inside here it's about the product. I'm always asking them like how are you going to bring that product to the market? What is going to your sales motion like is that going to be like a low touch model, a high touch model and obviously like there are not things you think about in the early days but you need to make sure that you have an idea of like where you're going because it's very different to build a product that is supposed to be a self-sort product to compare to building an enterprise product. There was something that felt a little bit wrong about like the price point, the team we had around the people we needed to support this entire organization and I will be forever thankful to the YCominator that we attended in 2021. It was two years after we started the company which was kind of odd but we were pivoting to the US and we thought that it would be a great idea to get there and we always remember the first office hour without partner Louton and just looking at a few KPI's you didn't know us right. We just had an interview you know the 10 minute interview from YCominator that is a little bit of a disturbing moment because you think that like you know it's a really important moment but it's only last 10 minutes. The first office hour, Louton telling us well I don't really know what you guys are doing but I think you just got it wrong right. The unity kind of makes just don't work and at that time we were just like what is he telling us like we don't know that guy how can you say that and it was interesting because it was just looking at like a few unity kind of makes the price point how we were selling and particularly like we were selling heavily album because we were selling CFOs and the price point was way too low for what we needed to achieve and it said guys you need to either sell Louton or increase your pricing like big time because otherwise it's not going to work. You're never going to get anywhere with this and I'm really grateful about not only that mistake but also like that piece of advice because during in only two or three months we've been able to increase prices significantly refine our GCM paper etc so that we could get to where we are right now which is working really fine and that was like one of the biggest mistakes we've ever done at O'Claude like not thinking forward how we're going to bring that product to the market. So we'll move forward let's talk about something a little more fun. So what does the future look like for the product and for your team? I'm excited first for the future. I love that sentence from from strive around being like you know micro pessimist but micro optimist. I'm a big micro optimist on the flu and I think like we haven't scratched the surface of like the prime we're trying to solve. If I think about you know the kind of like vision we have for the product we really want to make sure that like we're not only optimizing a process which is already really hard and really valuable for this company but really like changing the process right. We want to make sure that like this entire process that we are optimizing at the moment can become something that is really modernized right. What I mean by that is that currently this is a bad bit of workflows, better collaboration more efficiency in terms of you know time spent on those tasks that no one wants to perform. I want to get to a point where upload is the platform that brings modern payments such as you know instant payments or to pay and type of services that we know in the consumer space should be to be world right. And we haven't even started this point into the payment and then there's another big step that we would want to provide on top of that which is a wrong financing right. You know like probably the affirm and the clana of the world in terms of vinyl pay later they're very obvious in the consumer world there's no reason why like we wouldn't have the same and the click of a button into the between space that's what we want to bring. So if you think about like those three steps and thinking that we've spent already four years only on the first one I'm quite excited about like you know this roadmap moving to the future. Now if I think about the team it's quite interesting because I got the realization as we started like you know getting building the team one of the objective was to make sure that we had a lot of people around us so that we could have a lot of impact right. And I think this changed over time and I think like I'm not in real nuts with my co-founder interested in necessarily like having a very large team but we want to have a really really performing team. One of the things we realize over the last couple of years is that managing people managing like a growing organization is extremely complex and there's kind of two ways of doing this you either hire a lot of people and spend like a lot of time trying to figure out how to make a very large organization work or trying to hire like really great people and probably like on a few of them. And I think like that's what I'm trying to achieve and what we're trying to achieve now and making sure that like in every single position of the organization we have an expert in the seat rather than hiring like a lot of people to do that. Okay Alex let's switch to you who influences the way that you work name a person or many persons or something you look up to and why. I have a lot of a lot of inspirations from a lot of funders and great professionals. I'm actually a big fan of like reading a lot of management books. My wife finally like decided that like I would get all my book out of our house because she was just upset about so many management books all over the place. So Adele like brought that to you to the office but a lot of people have been inspiring me. But if I had to mention one person recently in a funder that it's still like you know not someone from 50 years ago. Diak Helpman the CEO of Ladys has been a great source of inspiration for me and the reason for that is that it's not only because Ladys is one of our power users and you know like and they've been like you know this kind of users that you've been dreaming about in terms of providing great feedback like being a great advocate of your product. But really like Jack spent a lot of time helping me as a as a wastey fellow funder which is something that I really appreciate. And I think what I really like with this story is that it was really like a really something that you needed to create in the space right. It was not a software type of software that existed like 10 years ago. I've learned a lot from I think something that is very similar for us is that you need to educate the market on your product and why is a product like this something that people need because it's not a kind of a replacement play where you come in with a product that is better than something that already exists. You really need to make your points and think about like how are you going to convince people that this is better than spreadsheet right. I would guess that like a lot of people were running OK hours out of spreadsheets before that is and then certainly once you've been using that is for OK hours and like this can do many many other things. You start to realize it's like it's a little game changer but it's a long process to get there. And I think Jack has been like really like helping us and leading the way not only personally but also as an organization building that business where they started with a very narrow value position and then enriched it into something that is much wider and that's really like a source of inspiration for me in terms of a great founder that I look up to. So yeah, it would be the one. OK so last question. You're getting on a plane and you're sitting next to a young entrepreneur who's built the next big thing. They're jazzed about it. They can't wait to show it off to the world and can't wait to show it off to you right there on the plane. What advice do you give that person having gone down this road a bit? I'd say don't give up. That would be my mind. I'm going to go on advice. I think when you start and when you are this very exciting moment where you know you're having a drink with your friends and you are telling them about the great product that you're going to be on, the great team that you're going to assemble and overall this great journey you are embarking on. You're always super excited. And then you realize that it's 10x, 100x, a million x harder than what you felt right. And I think the difference between successful founders and people that just don't make it. It's just that you just give up and you give up in your mind at some point and I'm not saying that you shouldn't but it's really like a discipline to keep on iterating and that's also something that I've learned at the way combinator. I think this idea that there's no right or wrong, there's just things that need to be tested and move faster, faster to the next one until you find the thing that works is probably the right methodology. So when I say don't give up, it's not like stay on your lane and just do the same thing for the next three years until you just exist. Then until you burnt out, it's more about don't give up and having this energy to always try something new, keep the faith, keep your head up in terms of what do we want to achieve, what's the vision. And it's really hot. I think that's the biggest challenge you have as you start your organization and that would really be my number one advice for like a young founder and I wish I had that advice when we started because I think we sometimes stayed for too long on some of the kind of bed and we were in where we should have just carried it and just moved to the next thing. Just in the end it went well but it's important to keep that in mind when you start your company. Well Alex thank you for being on the show today and thank you for telling the creation story of Upflow. And this concludes another chapter of Code Story. Code Story is hosted and produced by Noah Laphart. Be sure to subscribe on Apple Podcasts, Spotify or the podcasting app at your choice. And when you get a chance leave us a review, both things help us out tremendously. And thanks again for listening.