When Do You Know You're Onto Something? - David Wyle

It sounds obvious, but I've had people make comments to me that like, you know, with AI, we're not gonna need the Excel spreadsheets anymore. We won't even need to review because, you know, the AI will be so cracked. My point question is like, if AI can do everything so perfectly, that there's nothing, no work left that you have to do in a spreadsheet and you don't need to review it. What are you gonna do? What's the purpose for a CPA at all in that case? David, how are you doing today? Doing great. Hi, thanks for having me. Thank you so much. We have one of the original entrepreneurs off the accounting tap world who's like done sold money companies and has had a big impact in not only audit but also tax and he's we're really happy for you to join us today. Before we get into like everything, David, this is how I like to begin off by conversations with everyone. It's like, what made you want to go in accounting? Like, what was that initial step that pushed you like, okay, this is the career I want to be in? I was an econ major and as part of being an econ major, you know, I took introductory accounting and so my freshman year, I was in the class and people were complaining about how hard it was and it's not like I loved it or anything but it wasn't that hard for me. And then some seniors came in and talked about how they had just gotten jobs with big six firms and they were pretty well-paying jobs and it was a path to to be a partner and you know, I don't think anyone grows up with a dream of becoming an accountant. I think my dreams were much more practical and simple. It was how do I finish college and know that I have a job lined up and a job that can lead to, you know, a life where I can earn an amount of money that I can afford a lifestyle that was familiar to how I grew up and my parents were aerospace engineers. So being a partner at an accounting firm was probably better than that economically. And so it just seemed like it was something that was, you know, there was a clear path that was set out that I could follow that could provide a good living and I didn't think a whole lot about whether I'd enjoy accounting. I thought a lot about how I'd enjoy graduating from college and having that path set up. So most people, when they take economics, especially like at the UC systems, right, because accounting is on a major, you have to minor in accounting and that's how you get through. Economics major mostly like tend towards like PE or IB or like consulting. And did you, were some of those paths you considered or you're like, okay, accounting, I'm really good at it. I have this competitive unfair advantage as I call it. Is that what like lean you in? Well, I saw, as you mentioned, I had a minor in accounting and I say, I kind of knew that I wanted to come out of college and just start being an independent adult. I didn't want to go to grad school and that type of thing. I didn't grow up knowing anyone that was in, I mean, I didn't refer to it. I mean, you know, until I was running Sherbroford and I'd heard of investment banks. I didn't know anyone that did that. So I just never considered those things and it seemed like, you know, a path that was available immediately after graduating. And so, like I said, it was really kind of convenience, prioritality, you know, not what are my big dreams or anything like that. Okay, so then you start off there at Cooper's library, which is now called PWC over there. You pick audit over tax, but back then there were also like, made you do both audit and tax you had to do. How was that first year like, were you just like, is that what you were expecting when you went in? What kind of projects were you working on? What aspects of auditing, what are you doing? Were you doing inventory, cash, revenue? So I started out an audit, which in California, you need to get audit hours to get your CPAs. So you always want to start them audit. And I pretty quickly realized that it wasn't something that I was going to enjoy. Hey, an inventory count at the craft warehouse once, craft food and the majority of the valuing, you know, like over 90% of the value of the warehouse of the inventory was in the freezer. So the person who designed, who planned the audit decided that the entire inventory count would be in the freezer. The freezer had six stacks of 10 foot palace, so 60 feet high. You need to go up in a, in a scissor lift, you had to wear a complete outfit, you know, that went over your face, because it was so cold in there. You could only be in there about 15 minutes before you had to take the scissor lift into the refrigerator to warm up. And so, you know, I'd be in there doing inventory counts and they had, it was kind of interesting. They had boxes of red lobster and of Wendy's hamburger patties and of Tony Romas Riz. I never realized, craft made all those things for, for those restaurants. So that aspect of it was interesting to me, but not the actual doing the work. And there was another time that I was at a client's office in Orange County and they were showing me, they made corrugated boxes and they showed me how they would take some cardboard and it would go into a table that looked like an air hockey table, but the holes in the table were on reverse. It's such the concrete down. And then a laser like designed where the corrugations would be and then, you know, they annihilated and I was used to create a prototype. And I remember feeling so interested in the business itself. And when the tour ended and we went back to the room at that time, you know, you, you did all your auditing on-site with the client because you'd have to walk down to the controller's office or the CFO's office and ask for documents and they'd give them to you on paper, the work portals or anything. So, you know, once they brought us back into the, into the conference room where us auditors were sitting and we started doing our work, I remember just kind of my heart sinking into my stomach thinking like, like, the business was interesting, but now I have to do the work. So I started to realize that auditing wasn't for me. And so maybe tax was better. So I said, can you move me over to tax after I got my auditors? And that's our, what the tax? And then in tax, were you doing federal, state, were you specializing in an industry? I was doing a lot of business returns and provisions. So, so tax return, you know, that's for CFO, our partnership tax returns and the related provisions for the audits. I did a lot of that. And this was also a time when everything was paper-based. So we had these paper binders and we would print something that we didn't excel out and we would, we had eight and a half by 14 sheets in the binder. So I'd have to take one of these eight and a half by 14 sheets, put these round reinforcers on the holes so that it wouldn't tear off and put it in the binder. I'd have to use one colored pencil to put in the work paper index number. I'd have to staple the printed Excel pages onto that, you know, numbers and sub-numbers and using, and I'd have to use tape. And I remember, like, feeling like, is this gender garden life colored pencils that take the staplers and then you make a change to the spreadsheet and you have to redo that all, you know, rip out the old one, print out the new one, redo all the work. So, you know, I pretty quickly realized that tax wasn't going to be my calling either. And there was a time when I felt a little despondent because I said, okay, I graduated college. I got the job that I precisely tried to get. And now I'm in that job and I realize I don't like it and I don't know what I want to do. And then I thought, well, at least I know one thing I don't want to do. So, you know, by order of exclusion, I at least have one thing I can knock off the list, but I didn't know what I wanted to do for a while. And until I met a person who, he became my mentor and he was an entrepreneur. And like so many people who say, I have an idea for this side or the other, I told him that and he said, why did you write a business plan and raise some money and start a company? So, okay, yeah. So let's go back. Let's talk about like EPIS, right? It's 97. Accounting tech is not that big category of investment as it is today. How was that initial phase of like, what was the first Ureq moment? You're like, I want to focus on this. And then how was that trying to gather feedback for the product? Because right now it's really easy. You can DM thousands of people online and reach out back then. It wasn't that easy. You probably had to go to your connections to ask for feedback and your building software. So, what were those initial days like? Yeah. They were tough because, you know, to get kind of those initial sites that are going to give you the feedback and initially be your first test sites, first of all, I had to cold call them. They had to literally open the phone, but can keep calling people and leaving voicemails until I got a few firms that were willing to meet with me. Then I met with them and, you know, said, here, I'm going to build this and you'll be able to use it for free for a certain amount of time and give us your feedback as to how it should work. So it'll be customized for you. And in the end, if you like what we've done, then you can buy it at a discount. And so I found three firms in the area and then at 1.1 firm in Bellevue, Washington, that were willing to do this. And so I started off with these four firms developing ePACE and having them tested and three of them ended up going with and one of them who specialized in government audits didn't, they had some more specialized needs. So over there, you guys had like this really interesting approach in the beginning where you integrated directly into Word and Excel, right? Over there was that a deliberate decision or did you come across it from like some initial interactions or was that to cut the time of the distribution for the firm? Yeah, there was really the kind of two things that we were anchored to at ePACE. One was a paperless engagement. So being able to, because we remember, like I said, while I was doing both audit and tax, this was all paper-based binders to go out to the client and bring the binders with you, which meant somebody in the office didn't have access to them. So one of it was paperless engagement. The other thing was I started ePACE in 1997, and office 97 was the first version of office that had VBA visual-basic for applications, which would allow you to write custom software that worked within Word and Excel in their own toolbars. And so, you know, one thing I noticed was that even though there was at the time what they called just trial balance software, it wasn't like a binder software. It was literally kind of like a spreadsheet grid that did have some kind of financial statement generation reporting component, but it was very inflexible. You couldn't do all the formulas that you can do in Excel. It didn't have all the formats and layouts that Word and Excel do in terms of fonts and, you know, the rich formatting. And as a result, you know, and they were hard to use. So as a result, I couldn't find almost any accounting firms that automated their financial statement prep with those applications. They preferred to enter everything manually into Word and Excel, because that gave them the most control over how the financial statements of work papers were formatted. And so the idea was, why don't we allow them to keep using what they're using Word and Excel, but then connect it with trial balance automation through the Office 97 VBA capability. And that was novel. I think we were the first people to do it. I mean, that was a big part of us winning that market. So when when was that first feeling of product market fit for you? Like, when did you actually felt like, okay, this is like something this is a product people want? I think when we got to the end of the pilots and, you know, three of the four said, we're going to keep using this. We're going to move forward with it. And these were substantial firms, meaning they were each firms with 50 or more people in them, 50 to 100 people. And they said, we're going to keep using it. Then that was, I think, the first indication that we're actually onto something. It didn't go too far because, you know, the whole life of the company was three years. We were selling products for maybe the last year and a half of that. And very quickly, CCH came, they had a they had a trial balance software that was called the audit vision at the time. Once again, not a people's engagement, just kind of a grid, you know, that you can import a trial balance to and they made an offer that in hindsight, I think I sold it too quickly. And I should have kept it going, but I was a 28 year old young person at the time. And it seemed like a lot of money to me. And it was. And it also kind of, it allowed me to get comfortable. And it created a track record that allowed me to start a surprime much more easily than when I started the pace. So let's go back. 28 CCH comes giant in the space. And then like, Hey, I want to buy a software. Like, is your full structure like, are you kidding me? Or is this like, like, well, I need to raise more money anyways, because we weren't profitable yet. And so, you know, the whole situation was pretty stressful for me. I had friends and family that had put in money and I was worried about losing my money. So I was like, wow, this is going to be amazing. At the same time, I knew it wasn't enough money for me to never work again. Yeah. But I, I, that was okay. I did buy a beautiful home and a new port beach overlooking the ocean and have enough to start surprime. So, so it wasn't, you know, insubstantial either. But, but I knew I had to do something else. And I was okay with that because it, you know, was a game changer. But I was talking to other entrepreneurs right now after having done that. And, and by the way, the, the person who I mentioned that was my mentor and he also was one of the first investors in the shareholders. He was a wealthy entrepreneur. He said, I don't think you should do it, because this company has so much, you know, this product can go so much further. But I realized you're in a different financial position than me. So I leave it up to you. So I did it. He saw that we shouldn't. And I would tell any, you know, entrepreneur right now that if you get to that stage where you've got a product built in customer saying, yes, you're through the hardest part. And stick with it. Don't, don't, don't get out to make a few bucks, you know, stick with it longer. Okay. So then you go over there and EPS is still now still used by like CCHs, right. It has the access over there. It's still used like all of those years later. But you were only there for a year. And most engagements when you sell, you have to like go on work and transition over the team and they have like a three out of three. Usually like one to three years over there. You spend one year and now you're jumping to shore prep, which is tax and it is individual tax. So what was the story behind that? Because you, as you said, you had business tax expeditions before this. Yeah. And I had some individual tax, but there was more business tax. So I read an article that EY had started an office in India to prepare tax returns. And this was, you know, towards the end of the year that CCHs didn't really utilize me. I was kind of for almost that entire year. I was, you know, had had nothing to do. The CEO changed to midterm and I met with the new CEO on his first or second day and told him that I wasn't doing anything. And if he wanted a company, Lucy could and they said, no, just hang on in case we need you. So they knew I wasn't doing anything and they weren't trying to get anything from me. So I had time to think of new ideas. And so I saw that EY had opened an office to outsource returns to India. It's of their own returns. So offshore them. And I thought, you know, of course, everything else is manufactured offshore. Why shouldn't tax returns be? And, you know, the big four firms have the scale to set up something like that in India or wherever. But most firms won't and we should create a shared service. So the rest of the market can do what the big four do. And that was the initial idea. And so we started off as an outsourcing company. And it started off really strong. And you know, I think we started in August. And for our first tax season, that following January, we did over $500,000 in business. And this was a 2000. The tax season that started in 2003. So I mean, it was and then the next year we did over two million. So we quadrupled. We said, my god, we just we just hit this and it's starting off gangbusters. And we said, well, if we want to continue to grow if we want to double the returns, we don't want to have to double the amount of people. We should automate that with technology. So we started researching how OCR technology could automate the business. That's how we got into the technology side. And then we started using that internally and it was helping us. And all of a sudden, the IRS passed the section 70 to 16 that requires consent. It's during a presidential election year when outsourcing was considered a bad word. And no customers, none of our customers wanted to ask for that consent from their clients. And immediately in one year, we lost two thirds of our business. And we had to figure out what we're going to do. And we said, you know, no one wants outsourcing anymore, but everyone wants technology automation. Maybe we can sell the OCR stuff that we created to automate our outsourcing, but just sell it as a technology solution. And it wasn't easy to change from being a service provider to a technology provider. But ultimately, it did transform the company. And for example, you know, in our initial vision, big four firms were never going to be a part of our market because they were going to have their own indie operations. And then by the time I sold your products, really, the big four were customers because they were using our software in their indie offices. So so yeah, that was it went through that change. But okay, so at one point, you guys also had the people that were working in this offshore side, nobody could have phone at the desk. There was a camera that could utilize that. Is that after 7 to 7 to 16 was issued, or did you guys knew this would be like a one of the bigger concerns for privacy and data regulation and data security for your customers? When what because it was like this is way ahead of its time, right? And that issues like metrics that you guys introduced. So how did you guys decide upon that? One thing to be clear on is that 7 to 16 to me seemed to be political. It had nothing to do with data security. For example, you know, if you have your clients data on a server in your office in the US, but you don't maintain good security and that that server can be hacked to by people anywhere in the world, that seems to me to be a pretty big potential problem. But that didn't, you know, that was never addressed. Another example is it was just, you know, you would need this consent for anyone looking at it outside of the United States. So if you are a US partner and a US tax prep firm and you're traveling to Europe on vacation and you want to log in to look at some work while you're there, technically you would be violating 7 to 16 if you didn't first have a 7 to 6 because you're a person outside of the United States. So it wasn't well thought through. There, it's not secure to have papers laying out on a desk where janitors are walking behind and no one knows who's looking at anything. So this had nothing to do with security. I think sure, I've always was cognizant of security and privacy and we address those issues with with our customers. 7 to 16 did not address privacy or security. It addressed a political issue of wanting to try to curb offshore outsourcing. And the firms who this and they didn't want against a consent sign, it wasn't because they thought it was not secure. Because I think I thought that they wouldn't have signed up with us in the first place, some of them quit. They didn't go forward, they didn't get the consent sign 'cause they were afraid that their customers would have a negative reaction to offshore assets from a political standpoint. - But okay, here's where I get a little confused. I'm like, if they were trying to curb outsourcing and the compliance piece is the most labor-intensive and like where the margins are the least, wouldn't it be beneficial for an affirms interest to outsource, outsource, automate that part so you can like go into the high value margin work which is the advisory side. - The firms were interested, we lost two thirds of our clients and we went from 500,000 to 2 million in one year, they were very interested. It was only once the IRS said to continue with this practice, you have to get the 72, 16 consent sign. It has to be these exact words, you can't change it at all and it has to be on 12 point fun on an eight and a half by 11 sheet of paper and the very first sentence says federal law requires me to get your consent before I share your information with anyone for any reason other than the purpose of preparation. So right there, it makes it sound like you're sharing it for some reason other than the preparation. When the only reason why you'd be sharing with your friend is for the purpose of the preparation, we went to the IRS and we said this sentence is misleading 'cause our clients are only sharing it to us, we need to change that sentence and they said, "Oh, you're right, it does is misleading "but it is what it is, that's how it's worth it." And now we're going to the same issue, I hear every single day from users, they're like, okay, what about 70 to 16 if I do AI tax prep or AI tax research? And then I ended up creating these guidelines where like, okay, which bucket does it fall into and where do you need consent or not? To like help to like better drive those because there's those three buckets where you're like, okay, it's this disclosure or like you need to consent or not. - You know, 70 to 16 helps nothing or nobody and the firms have enough on the line with their own reputation. I mean, if they are not careful and there's a data privacy issue and that becomes known, that is as much incentive as any firm means. - And so, okay, so then at your prep, this is the first you got your private equity investment coming in at the company, at your prep. How, what made you want to reach out? What has been like your experience by getting private equity investment compared to like venture capital investment into the company? - You know, I never got venture capital investment. I started off with EPS, it was a very small group of friends and family and then when I did Sure Prep, I was able to put some of some of that money in myself and my previous investor group wanted to put in more money than I was asking for, it was over subscribed. So, you know, that's how we kind of got started. And Sure Prep number took more than seven, in the first five years, we took $7 million and from that investor group over that two years of start and then two million of start and then another five million over the next five years. And so after that $7 million, we never took any primary capital. Back in 2019, we brought on a private equity partner at Brigal Sage Mount and it was entirely secondary, meaning they bought a 30% interest in the business, but just from existing shareholders and it was a way to allow people who had been investors for 15 years to get the ability to cash out. I took some of my chips off the table and some other key people did too, but it was only a 30% interest we sold. We kept most of our chips on the table. It probably depends who you get as your partner. Brigal Sage Mount was a great partner to us. They, when we didn't agree with one of their suggestions, they respected that in our knowledge of the business, but then they brought a lot of suggestions that we didn't take and that helped improve sales and marketing and even adoption of AI and things like that. - So they were a value add partner. - And then what was like something you took away from your e-pays into short prep in terms of your leadership styles? And look, because the first time building a company is a lot different than the second time, it's a lot of skillset you learn. So what did you think you brought in from e-pays into short prep that helped it scale to the level that it got? - I think a few things. I mean, first of all, I was a bit older and that gave me a little bit more confidence because at e-pays, I remember I was 24 when I started it and I was interviewing people to work. I mean, that was 40 plus. And I was raised as to respect your elderly and it felt awkward to me to have people so much older than I was hoarding to me. And so that part of it was a awkward for me. Just being older and having the success under my belt, I think made me feel a little bit more comfortable in that seat managing others. And then also I learned some things from my mentor in the first business with e-pays that definitely carried on. For example, when you started new business in your first time person and you desperately wanted to succeed and sometimes that desperation might lead you to do things that ultimately aren't helpful. So for example, my first instinct was to tell these core firms that we're doing the pilot testing that they could have it for free as long as they pilot tested. And my mentor said, you know, a deal for nothing is worth nothing. And how are you going to show investors or anyone else, you know, what it's worth if you don't convince anybody to pay for it. I mean, you can give them a discount for a couple of years if they decide to go with it. You have to show that someone's willing to pay for it. You have people that come to you all the time and say, what, you want to charge this? So when else is try, you know, CCH or, you know, Thompson Reuters or Intuit or whoever the big player is that they're dealing with, is it wants to charge me much less? And you know, my mentor really taught me about, you know, not getting sucked into that and to sell based on differentiating your value. And, you know, he told me something called a chicken story which a lady goes into a butcher and says, how much for a pound of chicken? And he says, it's a quarter. And she says a quarter across the streets, it's a nickel. It's a nickel. He says, why didn't you go over there? She says, well, they're out of chicken. And he says, well, lady, whenever I'm out of chicken, you can have it for a nickel too. I mean, you're like, they don't have what we have. And I would tell firms on it to listen, you know, it's true and not the cheapest, but we're the most, we provide the most value and I don't need to explain that to you because are you the cheapest firm in your market? And they say, no, I'm like, so it's that belief in your product in your team that we can like actually do things, right? Because it's like for us, even I was like, all the founders who are coming into this space, we mocked them really low and then we tried to like sell it at a discount just to get users in the pace. Right. And so, so, you know, like having the confidence to say, no, this, you know, we need a charge for it and it's worth it and here's wine. Here's why you can't compare it to the other things. That was something I learned to do deep pace and then, you know, that served, served me well going forward. - So then, Thomson Raura comes in, was that the first time somebody came in to acquire short prep? - No, no, CCH came in early on. Maybe when I was like four years into it and there was this younger ladies CEO of Thomson Reuters at the time of the tax and accounting division and she, you know, said that she was interested in we were talking about a number in like the high 20s in terms of 20 million. And once again, I thought, you know, this isn't really going to be enough for me to live on for the rest of my life but it's after only four years and maybe I'll do it again. And the bottom line is, you know, she, she backed out, we didn't get you too far, we weren't in due diligence or we'd never had an accepted offer but she found some reason, you know, why she decided that it wasn't the right time for her to move forward. And so like a lot of times what you achieve in life is going to beat through a lot. Like I was very lucky that that didn't pin out. Like I owe her a big thanks for backing out because we ended up selling for over 500 million. Yes, you know, and we took a tens of millions out and profits before that. So thing goodness that they'll never one through. - So there, how does that Thomson Reuter deal come in? They call you, they're trying to like pose you, they're trying to get you in. And then also what's your take on like the new strategies by form of doing these Aqua Hires, where this one, if you just saw Meta just invested a billion dollars to Aqua Hire this guy to run the WhatsApp department. So what's your take on like these new strategies coming into play? - I think that that makes potentially more sense than you know, some other things that firms are doing. So, you know, for example, you see things now of like if you heard this Kingmaker strategy, where VC firms will just put in a hundred million dollars until like a seed round or 75 million into a seed round, before you really even know what the product is or you know, you're burning through all this money while you're still trying to figure out what the product is. And maybe it works sometime, but I've always been under the feeling that you should spend as little money as possible until you really understand what the product is. And then once you understand that you've got something, then you put the money in. You know, in the world of programming, they have something called a 10Xer like a programmer that can output 10 times what other people can do. And so in the world of technology, you know, having the right approach can mean the entire difference. So if you really have a single person that can do that, then I think it makes more sense than just dumping 100 million on a seed ground so that you can put a, you know, a stake in the ground to flag and say we're going to be number one as evidenced by putting 100 million. I've been seeing that, especially if you can see the ERP space, there's like three big new entrants in this space, each with massive rounds coming in. And we don't know who's going to be the winner in this, right? And what I believe my thinking is like, nobody wants to miss out and they want to like just back a company, they can like do it, right? And then that's basically the king made with strategies. But one thing I keep hearing about the accounting tech space is people come in, they understand it's going to be like the model at SAS going to work the same way here, but they realize working with accounting firms takes a longer time to acquire than on board does have this relationships and it's a very slow case process. Have you seen that being implemented, is that what you see people who want to come in with massive rounds and they're feeling that and seeing that now? 100% and I think what I've seen when I started my companies, the people who started companies in this space used to come from accounting firms. I mean, they were people who understood the business and the workflow and the work being done. And now I see a lot of people coming in and, you know, they maybe had, they were in a technology company and some other space or they came from a VC firm and they've heard that AI is going to displace professional services like Titus and accounting and because they know VC firms are looking to invest in that space, they say, I'm going to start a company in that space, but they don't really have any original ideas. So they say, I'm going to create the next surprepper, the next safe center or something like that, but it's going to be on a on and and and those companies are for sure facing a very hard time getting firms to switch because here's the thing. I mean, let's say tax prep was this and surprepper brought it to that, you know, and surprepper is now tightly woven into the firm's fabric, they've used the APIs to connect it to their document management system and their client portal and their billing system and so on. And now someone's coming to them and say, oh, I got a replacement and it's better because it's AI and it'll take your time down from here to here, you'll have to rip out everything and rip out your workflow and, you know, and the truth of the matter is when you've got something that people have been pretty happy with that's connected to the rest of the ecosystem, good enough becomes hard to beat and I think that that's what they're finding. And you know, my advice would be don't come into this face to just try to replace an established product category that is, you know, that that you have very well entrenched and integrated legacy players and hope that people will make a quick rip and replace decision because accounting firms won't do that. If you want a quick decision, be more creative, address something where that's not addressed, that's being done manually, something that they can add to their current workflow to gain efficiency, not have to go through a rip and replace to gain some marginal benefit. And then, so you saw a show prep becomes part of like Thomson routers big suite of tools and over there, I was a big user of Thomson router tools when I was in Y, you know, the GM at Thomson routers, what does that role look like? What are you doing there and you stay there for a while compared to like your time at CCH? What made you want to stay at Thomson routers over there, what was your old exact? It wasn't really the plan to stay there when I sold, they had told me that their plan was to integrate short prep into Thomson routers, meaning it wouldn't be a separate company and so there'd be no, you know, CEO type position. And I had committed to helping them integrate it and that's what I had done and about, you know, I would say seven or eight months after the acquisition, that was, that integration was done and there wasn't much for me to do and I saw that my work days were over and they came and said, you know, we know about your pass with e-pays. We have not a business that, you know, was, was pretty sizable, I think when I started, it was about 230 million in revenue and they said, you know, we, we sent it, could do much better and would you leave that as general manager. Took a look around and I realized that so many firms are still on a really old technology stack. They're still on CCH engagement. The product I created or case where desktop, there's a lot of room to bring improvement to that market. I wasn't really sure how else I wanted to spend my time to be honest. I still had one child at home, so I, it's not like I could just travel everywhere. So, so I took that position and it was great. It's a highly matrix for organization. So as general manager, you have basically the sales team report to you, which was about a hundred people, product and engineering, all are their own organizations and you have people that support your business, but they don't report to you. And I went to Elizabeth Beastrum, who still is the, the president of that business, the tax accounting business and I said, you know, I'm used to being CEO and I'm not sure how I will work in this type of structure. And she said, just keep act like you are a CEO and, you know, that will work. She said, I have the same issue, just act like you are a CEO and that will work. And she was right and, you know, that's, I just ran it like I was CEO and in the product and engineering and marketing people seemed to kind of respect that and it, it worked out well and we accomplished some very nice growth in the two years I was there, which is what I had agreed to, to go on for. So then I always asked my guest discussion is like, what would you do when you're done the tax and accounting and like this profession? So what did you focus on when you were finally done, but like sold to companies and now you're an advisor, what's one hobby you picked up or what one thing you always wanted to do and be like, I'll do it when I'm done. So, you know, I play golf as much as I can. I keep saying I'm going to pick up piano again, but I, but I haven't really done that one yet. But I stayed pretty busy with the tax and accounting space. So I've done several investments. Crenchify was one of them and I joined the Crenchify board. We've done a couple others involved in some more startup type organizations and providing some counsel there. So I, you know, I still stay really busy because I enjoy it and I think this is an exciting time to be innovating in this industry. If you have an original idea, not just like saying I'm going to, you know, recreate something that everyone already uses and is fine with. Yeah. So why Crenchify I'm interested like, why that's specific to lease accounting sector? I remember taking the class and intermediate accounting and I'm like, why are there two types of leases and how they change it and now it's just basically all capital leases. Well, Crenchify built a very nice business pretty quickly with their business plan of selling the companies that have, you know, that have to account for leases through the CPA firms creating a very nice CPA firm channel and relationships with, you know, hundreds of hundreds of CPA firms, but as you might have seen, they joined the Thomson Reuters PPC methodology automation platform as a partner. And so part of that is taking technology to help automate parts of the PPC audit plan. And so they do, so audit something that I've been, you know, involved with for the last few years and it's something that I've become, you know, updated on in terms of how technology impacts it and I took a look at their business plan on how they plan to expand beyond leases into, into automating more parts of the audit and I, I thought it made sense. I like the leadership team and the, and the private equity firm that backs a mock line. And so that that's why I made that investment. And so right now, do you ever want to let go to college, teach is that one of your, they are going to speaking circuit tour because I feel like you have such a unique experience as like being an entrepreneur who was also an auditor and people could learn about it. Have you ever thought about like doing that in this phase? I do like mentoring and helping people, but I think more on a smaller setting versus versus something like what you describe one thing to just go back on crunchified, but just in general, they've taken a approach to building a business where, you know, they're building a business in a profitable way. And I see so many companies now that throw that out the window and once again, sometimes that works, but when it doesn't work, it can be very painful. And so I, I prefer to, to partner with people who share that value, building a real business that includes profit. And yeah, they agree with that. You should see like the kind of discussions we have before we buy any pro plan for any Gmail's we had to do for the first like, first year of our company. The amount of time we went back and forth of like paying seven dollars a month for user. Right. Yeah. So now you're over there. I saw this article you wrote in 2025 talking about the issues in accounting and you talk about like complexity is a problem. And do you want to expand more upon what you mean by that? Because I also see at the same time, there is a pipeline problem still there, even though accounting recruitment is up back now, there is like, do you think we as a profession could do more or where could we do better to fix both the pipeline and the complexity problem that AI is trying to solve? If you're trying to move this profession forward in the AI world, how do we use AI that not only pushes the AI forward, but there's this big issue of one out in the profession where people just leave and they start like completely different careers. And this profession is vital to like financial statements are vital tax return advisors, vital to the economy. like you can see where economies do. not has good accounting system-backed infrastructures, how holy their economies do compare to, like where the US has a very robust system. - Yeah, I think that, first of all, we have to realize that AI is here to assist humans and not to replace them. - And, you know, it sounds obvious, but I've had people make comments to me that like, you know, with AI, we're not gonna need the Excel spreadsheets anymore, we won't even need to review, because, you know, AI will be so cracked. My question is like, if AI can do everything so perfectly, that there's nothing, no work left that you have to do in a spreadsheet, and you don't need to review it. - I've had, like, people who are CTOs of accounting firms say that they're hearing the argument and considering it maybe because some AI vendor told them that. So I think we need to realize that, you know, AI is here to assist us, human professionals, not to replace us in that. We should be thinking about AI to adopt, to adapt, to the firm and to the people of how they wanna do things. Not the other way around, not to say, you gotta change the way you're doing things in order to use AI, and you now need to, you know, change your workflows and take these templates that we're gonna provide you, and not working Excel anymore, but only a webpage and right now. Now, AI shouldn't be changing, and it's changing us. It should be adapting to the way we do things, and making the way we do things easier. For the longest time, with companies like Sherprap and many others, the idea was to create standardized workflows 'cause they were repeatable and consistent, and you can use it to accomplish efficiency levels that were consistent and quality levels that were consistent. But a lot of clients didn't fall into that, and so they either didn't use those clients with Sherprap or whatever, or they, you know, had to do a lot of supplemental work around it, I see now leading AI companies coming in and saying the same thing, that, you know, standardize your process using our software and you get super efficient, and I think it should be the opposite. I think that with AI, it gives us the ability to respect that clients are different, that engagements can be unique, and can't all fit into one standardized process, and we should be looking for AI that allows us to have more client-centered approaches, and not, you know, and still get the benefits of automation and improved quality, without, you know, highly standardized workflows. I think that, you know, we need to realize that the purpose of AI isn't to just extract more data for more documents, as some people seem to think it is, but rather to give us a work-quality product that's equivalent to like what an experienced preparer might be able to do today, which is a much harder problem than just recognizing more documents. I think we need to get away from this idea that AI is, you know, it's okay for it to be, like the black box and give us answers, and that you don't need a work paper to review it. I've had many people say, do we even need work papers anymore? You know, AI, I said, how are you gonna review it? Well, AI will tell us. I mean, AI, part of what it should do is not just give us the answer, but let us know how it came to that answer. So you're gonna still need work papers, right? One thing in common with the past, is it'll continue to do what technology is done, which push people to make higher-level judgements and decisions including pushing preparers to review our levels. But I think this is where we need to focus, you know, our AI efforts on. And I think that there's, as you can tell, a lot of AI companies not delivering this type of message and accounting firms not having these types of expectations, thinking it should be more of the same where we have to standardize and adapt our process to the technology. I think it should be the opposite now. With the technology adopts to the process, because now it's better to do that. Yeah, okay. I wanna jump in like a few final, like, personal questions. So I see your fan of history, and you think you're reading right now, and like what's your favorite historical period? You like going back to historically, I love books on the American Revolution, and in particular, how someone like George Washington, you know, could take a job that seemed impossible. And get it done. And even though he was so insecure on the inside, the letters showed that he was filled with self-doubt, but no one on the outside could see anything other than, you know, self-assuredness and confidence. So obviously, I think when you're trying to start a business, there are analogies there. I can go so far back as the Bible, and at one point Moses says to his father, "I don't know, I just wrote that." Everyone's coming to me with every problem, and I'm just overwhelmed. Like, you know, I can't take it all. And he says, "Well, you need to appoint chiefs, "and you need to appoint judges, "and you need to have each person be in charge "of a group of this and so on." So that's something that I think is highly analogous to starting a business. So I think you can find inspirations, you know, in kind of everything you come across. And then what was like one unreasonable purchase you did? After you sold your first either company. - Well, I did buy a nice house on the Dolph Burson in the desert in the Palm Springs area. - Target. - So the surpreths, named Thompson Rivers, it calls it Aurora. So we were a project in Aurora. We were always referred to as Aurora. And so we named our house on the desert, Costa Aurora. And is that where you spend some of the most of your lifetime, I think? - We spend a lot of time in the winter there. It's too high in the summer, but yeah, in November to May, we spend a lot of time there. And it's two hours away from our home in Newport Beach, son. - Okay, nice, okay, perfect. Yeah, I love Newport Beach. I go to Lido, blah, blah. But this has been amazing, thank you so much. I learned a lot, the users would love hearing this. And such a unique perspective. And thank you so much for having me coming on here. - Okay, thank you, Adam. - Thank you. (upbeat music) ♪ Yeah, Bruce ♪ ♪ I am ♪ ♪ Bruce ♪