#174 Investrio: QuickBooks for the People

Josh: Welcome to The Pitch, where startup founders raise millions and listeners can invest. I’m Josh Muccio.

Lisa: And I’m Lisa Muccio. And before we get to the pitch…we’re doing a live show!

~~We’re doing a live show!~~

Josh: In Brooklyn on December 4th. There will be pitches, your favorite VCs, Charles Hudson and Jesse Middleton are signed on. Tickets just went on sale, grab yours at pitch.show/live

Lisa: On the show today we have Investrio, an AI bookkeeper for solopreneurs. And they’re raising $1 million.

Josh: I love this company and I have from the very beginning. 

Lisa: From the beginning You have been all in on Investrio. 

Josh: And I think it stems from my hatred, my profound and utter disgust with QuickBooks.

Lisa: Why do you hate Quickbooks so much? 

Josh: Oh god I mean have you ever logged into the product? 

Lisa: No because you’re the finance guy.

Josh: Yeah, well, just take one look and you’ll be like… ew

Lisa: Yeah, I think what is awesome about this product is that you can track both your personal and your business expenses in the same product. It's literally like switch a tab over. The thing with Investrio is they are super early. 

Josh: They went live with the product just five weeks ago, but you know me, the earlier the better. 

Lisa: Oh my gosh. 

Josh: I'd much rather bring on a company earlier than late

Lisa: Well, we’ll see how it goes.

Josh: You’re always the pessimist, why are you always the pessimist! You don’t like marketplaces, you don’t like early companies, you really are starting to sound like a VC Lisa

Lisa: Ah! Rude

Josh: The Pitch for Investrio is coming up after this.

BREAK

Welcome back to The Pitch for Investrio. Let’s meet the investors.

Charles Hudson with Precursor Ventures
Sometimes a business is what it is, not what you want it to be.

Elizabeth Yin with Hustle Fund

Can I ask you a very direct question?

Jesse Middleton with Flybridge

I am so sick of people that are building stuff for building stuff's sake.

And a new investor to the show, Dawn Dobras with Capital F

Do not grow one more inch until you improve this brand

Jesse: You would think Josh and I have known each other for like our whole lives, the way that we bicker like children 

Dawn: It does-

Josh: Jesse doesn't even like this show. He just likes hanging out with people.

Jesse: I come to hang out with Josh. That's right.

Josh: Investrio [clap] 

Charles: I liked it when we got to do that. That was fun 

Josh: Oh, you wanna do it next time? 

Jesse: The next one. You do it. 

Charles: We've, we've moved on from there. 

Jesse: No, no. We have four more pitches. 

Dawn: I'm not gonna lie. I would like to do it

Charles: We should let Dawn do it 'cause she- 

Dawn: Hi

Joyce: I’m Joyce

Dawn: I'm Dawn. 

Joyce: Nice to meet you. 

Charles: Hey, I'm Charles. Nice to meet you Joyce. 

Joyce: Charles, nice to meet you. 

Dawn: I like that branded swag

Elizabeth: Hi, Joyce. Elizabeth. Nice to meet you. 

Joyce: Well, thanks for having me here. I'm super excited. I'm Joyce, co-founder and CEO of Investrio. I'll take you back to last summer when I'm meeting with Lena. She's an incredible photographer. She's booked out for months and she's even bringing in over $100,000 in revenue. But when I ask her about her numbers, her face just drops. She has receipts everywhere. No real way of tracking expenses. She barely even knows about the $100,000. And the truth is she's also in a bit of credit card debt. Lena's not alone. She's one of 42 million solopreneurs out there facing the same reality. Because tools were built for accountants, not solopreneurs. It’s something I'm familiar with. I grew up in a single parent household. Went to college, got the college debt experience, ended up working on Wall Street for a decade. And learned the tools and tricks to manage money, and that's how I actually became a business coach for women. Through working with Lena and hundreds of others, we helped clear out a million dollars of credit card debt, built a debt tool, went to Techstars only to get there and be like, oh my God, we built the entirely wrong product. 

Jesse: Hm

Joyce: That was when Investrio was truly born. We wanted to build the financial team for a solopreneur they could only dream of. Something that's affordable, easy to use, beautiful and supportive. I'd love to show you. 

Elizabeth: Yeah. 

Charles: Cool. 

Jesse: Awesome. 

Joyce: So I have it in desktop mode and I have it in app mode. 

Charles: Okay. 

Elizabeth: So sorry, and maybe your product will clarify this, but when you say you built the wrong product, the initial product you told us about, about clearing out debt, is that the current product or the old product? 

Joyce: That's the old product. In speaking with hundreds of women solopreneurs, we saw the debt continuously over and over and over and over again. We started talking to them and understanding, what is it that got you there And then we realized like, this isn't a debt problem, this is an accounting issue.

Elizabeth: I see. 

Joyce: And so we pivoted the business to work on the accounting. 

Elizabeth: Got it. 

Joyce: But yeah, I'll show you what it looks like. 

Jesse: Cool. 

Joyce: So this is the desktop mode. It looks the same on the app. and you can connect your business and personal finances because that's the reality of a solopreneur. Everything is commingled. We also have Vestie. She's your financial bestie. She helps you with funding, finding deductions, understanding your taxes. Eventually we want her to be your CFO. She's trained like a financial advisor and more. So down here you get all of your insights on your business, and then you get to see all the invoices too. And then if you go to transactions, we already did the bookkeeping for the user automatically based on the connections that they're putting in. we'll do the first layer. 

Charles: Is that just with like plaid or whatever

Joyce: Correct. Yeah. Plaid. And then on top of it, our own proprietary algorithm. If you click on “in and out,” you'll see that, is it a business expense? Is it with a team or is it with a client? Therefore, you'll learn that it's a deductible at 50% or a hundred You'll get to see details on budget, you'll get to see your invoices, so there's a way to get paid through it. This helps users get all of their finances in one place, but when tax time comes down to, you know, it's April 14th, you can download all your receipts and file your taxes really simple because it's all already connected. You download your P&Ls and you have a high level overview of everything that's going on. 

Charles: Cool. 

Dawn: Great. 

Elizabeth: Thank you. 

Dawn: Yeah, thanks so much. 

Elizabeth: And, uh, so right now, what are these solopreneurs using? Are they using QuickBooks or- 

Joyce: Yeah

Elizabeth: Nothing?

Joyce: Um, so in building the product and in pivoting, we built a massive community of women solopreneurs. The majority of them were not using anything. Those tools are built for accountants. And a lot of the new incoming products are built for tech founders, or other founders who are already making over a hundred thousand dollars. And so the tools that are coming out are not really fit for the solopreneur, who's maybe a photographer, a therapist, an artist. So back to Lena, one of the reasons she got into so much trouble was she doesn't even know how to use Excel. So it's not like she's sitting there and, and doing all of her finances like maybe all of us would do. and then the tools that are existing aren't really fit or easy to use. 

Charles: And they're not using consumer tools like You Need A Budget or Monarch or Origin. They're not using any of those either. 'cause those can do a decent job of like pulling in and categorizing expenses. 

Joyce: We've seen some of them, we've seen them using Rocket Money or long live Mint. Um, and, uh, when some of those tools either don't really facilitate on their business side it no longer becomes applicable. So when we built Investrio, we put six tools in one. So from the budgeting tools, from the business tools, the accounting tools, the invoice tools, the reporting tools, everything is in one place. And then it just looks different because it has that agentic flavor and Vestie's trained as a CFO. 

Jesse: You mentioned this cutoff, many of the tools are built for the tech founder set, they're maybe for the people that make a hundred thousand dollars a year or more. Can you name a few of the differences between those? If it was, you know, if I looked at a startup that's out there that solves for the accounting for more of the tech small businesses. What, what sort of is the difference there? 

Joyce: Yeah, so I'll start with the obvious, which is price. So some of the new incumbents are coming in and they're supporting the higher end solopreneur who's already making over a hundred thousand dollars. But their reality is they're making $65,000 on average, a solopreneur. And so they can't afford $200 a month. 

Jesse: Yeah. 

Joyce: For a tool that acts like a bookkeeper and a CFO. Investrio comes in at $20 a month, so we’re, we're building this for the greater majority. 

Dawn: So Joyce, I think it's a great problem, and just the gap in financial literacy with female entrepreneurs versus just regular entrepreneurs is, there's a market. Talk to me about customer traction right now. Like, what's working, what's not? Like how did you even get those customers? 

Joyce: Yeah. I started building Investrio in public on social media. Sharing my own personal finance journey, how I got out of student loan debt, started investing. That's how I started attracting the business owners as customers. 

Dawn: Are you a TikTok star? 

Joyce: I'm not a TikTok star. 

Dawn: Just checking. 

Joyce: I'm a millennial. 

Jesse: So Instagram. 

Joyce: So Instagram. I mean, we have 10,000 followers across platforms and you know, we're building this in public and sharing our journeys as founders as well, because we see a lot of cross connection with the women that are watching us and using the platform. And through that we ran this experiment once in New York City when we were mid pivot. Laura puts out on Threads, hey, any women entrepreneurs, solopreneurs wanna hang out and get coffee. And we get a hundred women to respond. And so we started hosting coffee meetups in New York City. So we organically started building a community in real life for the women entrepreneurs. Building this community has helped us get, our first few clients, we launched the app about five weeks ago and we're just close to 500 users. And now we're starting to see them converting into paying users. So we're just about to reach $5,000 in ARR. We're seeing the community that we've nurtured, supported, They're also coming back and, and showing us the support. And it's awesome. 

Dawn: So it sounds like five weeks, and I know that's really early, and I assume you had some beta testers. What are you seeing with those customers? Like how often are they checking in? Like what are they engaging with? What's the killer piece of the stack? 

Joyce: Yeah, so we're seeing that the bookkeeping tool actually is so quick and efficient and it's getting better. 

Joyce: We built such trust with our users. Because they're connecting all of their finances, personal business, mixed credit cards, you name it, like on average, two to three cards. And we're seeing that it's enhancing the model, it's making it better, but we're seeing that translate to clear analytics and stats to them. and they can make data driven decisions.

Charles: I was gonna ask you a similar question, just like what separates in the early days, the people who get it and engage and the people who are like, I'd imagine a lot of people aspirationally are like, oh, I need this. And then they sign up and don't, do you have a sense of like, what, what are the, the characteristics of the people for whom it really does lead to behavior change? 

Joyce: Yeah. So there are a lot of wantrepreneurs who are just getting started.

Charles: We meet them!

Joyce: And we get it like, come on in, join our coffee meetups, see what it's like. We're happy to entertain your ideas, talk about it, support you in however we can. And then there are those who are actually making money. There's taxes at the end of the year. 

Charles: Yeah

Joyce: You have to file your taxes, right? You have to keep your books clean and organized. 

Jesse: And, and just pulling thread on those users, the 5,000 users to what are roughly 20 paid users is what it sounds like with 5,000 an ARR

Dawn: 500.

Jesse: 500. Oh So it's roughly 20 paid users? 

Joyce: Correct. 25. 

Jesse: What are, what are they? Yes. Your math is better than mine. The, um, the, uh, I'm curious about what makes them a paid user? What, what has driven the 500 to 25 people that have converted over. 

Joyce: Yeah. We've been playing with the paywall for two weeks. 

Jesse: Yeah. 

Joyce: So we changed it from a very aggressive

Jesse: You must be an expert in it already. 

Joyce: Uh, we have cool tools. Uh, so we, we changed it from very aggressive, like once you land, get the paywall. Cause it, you didn't get to see the experience to like now within the tools, and you see the tool and you're like, 10 things need to be categorized. You click on it, paywall. Okay, well I guess I'll do it. Seven day trial for free, and then $20, two, no-brainer. Right, because it comes with this community access to funding access to Vestie, which is the chatbot, and the entrepreneurs who get it get it

Jesse: Yeah.

Joyce: They need it. 

Joyce: And, and they see Laura and I, my co-founder, I hope you get to meet her outside, like we look like them. 

Elizabeth: Can you talk a little bit about your team? I guess that's a good segue. 

Joyce: Sure. Mm-hmm. 

Elizabeth: How do you and Laura know each other? What's her background? 

Joyce: Yeah. 

Elizabeth: Stuff like that. 

Joyce: So we met online on Tinder for co-founders, also known as the YC Co-Founder Match

Dawn: Tinder for co-founders. I haven't heard that. 

Joyce: And Laura was living in London at the time. She was actually a VC. She also had a business on the side. She was a solopreneur. And she had a cactus handbag company and she kept seeing the same kind of people getting invested on, and ideas, et cetera. And she was like, I want to, I wanna be part of something cooler. And I had to put my profile out there and I was like, Hey, I'm all about empowering minorities, Latinos, women, like whoever wants to join me on this mission, I'm already doing it, blah, blah, blah. And so we matched and she came to meet me. And long story short, she quit her job, moved to New York, and we became roommates. 

Charles: Wow

Dawn: You living together 

Jesse: That's awesome. 

Elizabeth: Cool. 

Joyce: So we lived together half a year. We also wear matching colors a lot. 

Dawn: Can you talk about your product roadmap? 

Joyce: Sure. So today the product is still very lean. I do see opportunities for us to get into embedded financial products. So we've gotten the question of, can I get paid through the app? And today is, yes, we connect with Zelle, Stripe, PayPal, Venmo, any of the platforms, but there are better ways to do that. we're also seeing demand for potentially loans. But big picture is, we want to support the solopreneur to grow. And so I think there's multiple ways to go there, whether it's through financing them, whether it's through building this system of record for the solopreneur so that they can go to the bank and get a loan. The reason we saw so many of the women getting in credit card debt was 'cause they were putting it all in their personal cards. 29% APR. Right. And now you get into this financial trouble because you didn't know you had to build business credit to get a credit card, to get, you know, the cameras or, or the supplies, the mics or whatever you need. And so it's about building that system of record that supports them on their financial journey to being a better business owner. 

Charles: Are there any business types that don't work in Investrio

Joyce: Yeah, so we have the demand for CPG and we have the demand for tech founders. That is a different level of accounting and support, like connecting to Shopify and connecting to e-commerce. We're also seeing incredible demand from bookkeepers and accountants. So it just so happens that a lot of bookkeepers are women And they see this as a way to bring their customers into a tool they actually like that is easy for them to use. And they have asked us, can you build us something to support us? Because everybody's getting an upgrade, right? Like the bookkeeper becomes an advisor in a way. And so we've built a little prototype there, but that's something that we see as a huge opportunity for growth in the future. 

Elizabeth: Mm-hmm. How do you think about customer acquisition at scale, especially given your price point? And I know you'll be experimenting to figure out what works, but just like directionally.

Joyce: Yeah, I think the community is the, essentially, first part that we've been able to experiment. and the fact that we've done it all organically with zero marketing budget is essentially a way to prove that yes, we can get the eyes, then we can get them to come in, continue to build that trust. And they essentially, they become customers. once we have budget, we'd love to create more campaigns, actually invest in the marketing. And I think there are other ways, like the B2B is a huge opportunity. On average, a bookkeeper has 10 to 20 customers. And so by building this B2B partnership we're leveraging their trust into the platform 

Elizabeth: Actually talk to me about that. 'cause I imagine the accountants are using accountant type tools. 

Elizabeth: How do they feel about this? Do they end up using QuickBooks and this, like, how, how does this kind of fit in with their, their workflow? 

Joyce: You wouldn't need QuickBooks 

A world without Quickbooks … ah, beautiful place. That’s coming up after this.

Elizabeth: How do they feel about this? Do they end up using QuickBooks and this, like, how, how does this kind of fit in with their, their workflow? 

Joyce: You wouldn't need QuickBooks if we built this B2B platform alongside the accountant and the bookkeeper. Which is how we're doing it anyways. and it becomes an affordable replacement. we've been building this alongside the bookkeepers and accountants to make sure, like, is this the tool and the platform that can support your business growth as well? And also your user enjoys using it. So at the end of the day, if they don't use it, then you still end up with messy books. 

Dawn: Can I circle back on your go-to market? So I heard D2C and potentially B2B, with this use of funds, like where are you gonna lean in? 

Joyce: The direct to consumer is where we focus primarily on.

Dawn: Okay. 

Joyce: Because that's what we could afford and, and ultimately was working organically. And so we want to continue that path. So we're raising to get to our first 10,000 paying customers. 

Dawn: Have either you or your co-founder had any direct to consumer experience? 

Joyce: Between her fashion product that ended up in major retailers in the UK, that's her experience. My experience in the past is, I used to work at a FinTech called Quantitative Brokers. I was the head of marketing there, and growth, and we built trading algorithms for fixed income. So my background was in trading at Goldman Sachs. Then, went to automate my job at Quantitative Brokers. Ended up growing that company all the way to acquisition by Deutsche Borsa Group. 

Joyce: So my experience is in B2B traditional marketing. And growth and sales. And Laura brings that direct to consumer retail experience. So in a way no. But also, yes. 

Charles: Back to the product. even with your categorization and tagging, like how much effort is required by the end user to get to a good outcome? 

Joyce: So when you download the app, you pick two colors. A personal and a business color. Super simple. You connect the accounts and you connect as personal business or mixed because that's the reality. And once we are able to take that data in, we do the first pass of the algorithm. Today, it's around 92% accurate. And we aim to improve that. With our initial cohort of users, we're already over a hundred thousand rows of data. So we're able to build a model upon that. 

Jesse: What's the history on fundraising? So Techstars, was there any other dollars raised and then now? 

Joyce: Yeah, so we took the Techstars deal, and we raised $75,000 from angels and we bootstrapped, So very lean. 

Dawn: And so what are you trying to raise now? And at what terms? 

Joyce: Yes. So we're raising a million dollars and we'd like to open this round here today. and I'd be open to the conversation on the terms. 

Elizabeth: I do have this question around higher end, lower end in price. we've seen, you know, companies like Mint come and go and plenty in that space. I get it. It's so expensive to use some of these tools. At the same time, the business has to work and at the $20 a month it doesn't leave you very much wiggle room to acquire. I actually don't think organic is free 'cause you still need to post and that costs money, whether it's your time or somebody else's time. That is money. So I guess like how do you think about making this lower price point work when so many other companies in and around the space have gone the wayside I would say in large part because of price. 

Joyce: Right. No, I completely acknowledge it, and I think part of it is we can start at $20 a month and this is what's working today and I see the opportunity to file taxes or talking to a CPA, that should be at an additional cost. And I think those are additional services that solopreneurs are willing to pay for. and I agree organic content is not free. We take a lot of time to edit and create. It's worked so far and it has helped us build this community. And I think the community element is a huge part of the go-to-market. It's, it's really how we would build trust. 

Elizabeth: Mm-hmm. 

Charles: To Elizabeth's point though, like what, given sort of some of the things you mentioned about like, there being some kind of ceiling on what these folks can pay based, just based on what they make, how should we think about like the ceiling on what you could generate from these folks on an annualized basis? 'cause the 240, if they subscribe for the whole year, you get the 240, but is the ceiling double that? Is it an order of magnitude higher? How, how much do you think they can afford to put to work with you? 

Joyce: The answer is, I'm not sure.

Charles: That's fair. 

Joyce: And I think that's something we need to continue to explore. we see them paying on average an accountant from lower end, 1200 to 2000 a year. To file the personal and business taxes together. that's what they're already paying, doesn't mean that's what they should be paying, or they continue to pay. 

Jesse: I, um, I have like scar tissue in this. I backed a company that was really focused for many years in trying to capture the freelancer market, solopreneur, kind of right in this window, trying to help them with that, you know, sourcing more clients, they were more focused on service providers. they really struggled on this acquisition front. I think it's hard. It seems like you care so much about this, and so I, I would echo the comment around the community led growth. It sounds like it's your superpower, and if you can do that and scale that up, that will be your differentiator. But I think I worry a bit too much about the acquisition here and you're still early and so maybe, maybe a year from now I'd feel different as you get through the, the early users. But I think for now I'm out 

Joyce: Thank you. 

Dawn: Joyce, I would say that who you're targeting deeply resonates with our fund and our fund thesis and me personally. so I love what you're doing. I think it's really authentic. I see some green shoots coming up that are interesting. But if I was forced to give an answer today, I would say out. because I can't quite feel the pull from the customers that you've landed on the features yet. 

Joyce: Okay. 

Dawn: But that's my opinion. 

Charles: I wonder if what, what for what you're building, if what we're really talking about here is like segmentation. like Jesse, I've invested in some companies that have targeted solopreneurs, and my takeaway has been that there are different groups of people. There are people who are making money through a side hustle. There are people who are making money through this as their primary occupation, but it's actually not viable. They're like the starving artists or they're on the up and comer. And then there's the people who are like, Hey, I'm a professional photographer. I make-

Jesse: I run a business 

Charles: And I run a business. I treat it like a business. And I wonder if there isn't a way for you to achieve your goal of making the product available for the people who are up and coming, actually, by charging more for the people who will pay more. Who actually acknowledge like, Hey, this is a business. The thing you said that really resonated with me is like, filing taxes is like the pointy end of the spear. And if you're serious and you're really running a business, you realize like, A, I want the deductions and B, I don't wanna get audited. 

Joyce: Exactly. 

Charles: And maybe if you're in the other two categories, it, it's a little more theoretical. So, I'm out on this one mostly 'cause I feel like there's a segmentation set of work I'd wanna see done here. And I, I think there might be a set of people who could pay you a lot more, even if they're not paying you directly, through these other services you mentioned, that would also enable you to keep the community energy and provide those people with like a valuable service while building something that adequately compensates you for the amount of like time and effort you're putting into the business.

Joyce: Thank you for the feedback. 

Elizabeth: I'm with Charles on this one. I mean, we invest in so many things that support entrepreneurs. We're in Collective, we're in Carrot, which is for influencers, fintech for influencers. And then, personally I'm in Carry and each of those, when I think about it like, their, their customer segmentation is a bit higher end for this reason. Collective is basically tech freelancers. Carrot is successful influencers, and Carry is, well, it's wealth management, so anybody with a lot of money. I just think it’s really hard to make it work for like, the person who's a wantrepreneur, doesn't have a viable business, is just starting out, is struggling, et cetera, like that isn't your problem, but it becomes your problem. And so I think I would encourage you to do the same segmentation exercise and cater your messaging to that and charge more because I just don't think the unit economics work at $20 a month. So unfortunately I'm out. Thank you. 

Joyce: Thank you for your feedback. Thank you for your time. 

Charles: Thank you. 

Jesse: Thank you. 

Charles: Thank you.

Dawn: Thank you Joyce

Elizabeth: Thank you Joyce

[applause]

Well… I knew they were early but that’s not how I expected that to go… 

After the break, the investors tell us how they really feel about Investrio. 

Charles: It's so hard to come in here like, and pitch a bunch of strangers on your life’s mission. It's not, it takes bravery and courage to do it. 

Josh: The question I have is like, can there be a new QuickBooks of the people for $20 a month? 'cause it's just a huge market of people like who's serving those people? Like, 'cause QuickBooks does suck.

Elizabeth: There's so many entrenched tech products that suck, Josh, that have been around for decades on end. And also the amount of lobbying some of these big companies do is tremendous. 

Charles: Also like I think part of the issue is like all of the people that you will interact with as a business owner, they all are comfortable with QuickBooks.

Elizabeth: Yes. 

Charles: So if you come with like, oh I have this new wangadoodle.com, like, that did my books. Where like, they're like, I don't know Wangadoodle, I know QuickBooks and I know QuickBooks online. And so sometimes like, product lock-in comes because the other people in the ecosystem understand the input.

Elizabeth: Yes. Years ago I worked for a company that made actually a really cool GUI interface that all the engineers could use to make their lives better. But you know what, it was really actually hard to sell because everybody was used to the old way of like actually coding stuff and nobody wanted to change their workflow. 

Josh: I use the QuickBooks comparison to establish the market size. But I actually think the people she's serving aren't on QuickBooks. They don't have an accounting tool yet. 

Dawn: And so I agree with you. For me, the takeaway was less on the product side and it was more on the customer side. So when she described the pull from customers, I wasn't convinced that it was a bookkeeping tool. She was describing events where they were helping each other and community and building. What I didn't hear was this is the one tool that brings us all together. and so I guess I don't have enough customer pull yet to really understand, is this a nice to have or a have to in that community. 

Jesse: The other problem I'd say is, there's a big movement towards the sort of business in a box solution, and part of the reason for that is being able to capture more economics.

Charles: Yeah. 

Elizabeth: Mm-hmm. 

Jesse: Like you have to do a lot more. 

Dawn: Right. 

Jesse: It's not accounting and bookkeeping. 

Josh: Sure. You talking about the Mercury and the Ramps? Like they own the whole financial stack? 

Jesse: Um, no, no. I'm saying beyond financial. I'm saying like, so I'm an investor in Squire, like Squire is their, their billing, their credit cards. They let you buy your products, let you do your accounting, let you pay your employees and let you do your customer service and marketing, all of it. That's not a part of her pitch today. I think if you're gonna go after a segment that spends less dollars because they have to spend less dollars. You have to do a significant amount more for that segment. Like, I would not have backed Squire if they said, what we do is let barbers figure out what their expenses are and do their bookkeeping. 

Elizabeth: It's the unit economics. Like how much can a customer be worth to you and how much will it cost you to serve the customer? And that, the numbers just don't, don't jive.

Jesse: Yeah. She can do more of the financial stack, but even that has a pretty limited amount of money that you're gonna spend. Like many of these solopreneurs do some of their business in cash. So even if they said, well, we do credit card processing, we do payments, great, but that's only a percentage of the revenue, which is a small dollar amount you can take. So it's just, you need to go broader in the business stack if you're gonna serve a customer who just can spend less money. 

Charles: You probably have to monetize those customers in ways that don't require them to actually pay you more money.

Elizabeth: Mm-hmm. 

Charles: You need to be able to take that customer base and market it to somebody else. 

Elizabeth: Mm-hmm. 

Charles: Like, I think the customer she's going after has a actually like a very hard capped amount of money they can actually pay. 

Jesse: This is mint.com, right? This is what, the only way that Mint really made money is they sold your data. Right. That was like the point, they found others that were willing to pay for the masses that don't have enough money to pay for financial advisory work. Right? That's what Mint was sort of promising. 

Charles: You want to make stock trading cheap. You sell order flow. So, I mean, there are lots of other alternative. 

Elizabeth: But I mean, we didn't even talk about retention. 

Charles: Yeah, yes

Dawn: Yeah

Elizabeth: The other issue is, small businesses that don't work, they go out business, and so then you're acquiring and then you're churning. So you don't even get the 240. You may get only the 20 because their business lasted a month or whatever. when times get tough, you, you dump expenses.

Josh: But you still have to file your taxes. 

Jesse: But they're doing that already. So all these solopreneurs are filing their taxes or they're going to jail. Right. So like, so they're already solving that problem. They're not getting all the deductions that they want today, but they're solving the tax problem

Elizabeth: Yeah. It's already being done. 

Charles: I also just think like the hard thing is like you look at the solopreneurs number. And you're like, it's so many people. And then you start to slice it like, oh, this is someone who takes family photos on the weekend for fun and makes 250 bucks a weekend taking photos of her friend's kids. This is somebody who like does events and weddings for fun and like- 

Jesse: This is my point. The person that makes 250 a weekend is not gonna pay 240 

Charles: No.

Jesse: To be able to get better deductions on their taxes, they're gonna take the standard deduction because they don't make enough money to deal with the deductions. Right. So that person is no longer a user. They're still filing their taxes, but they probably don't optimize their business.

Josh: So her pitch then fell apart when she said we're serving people making less than a hundred thousand a year.

Elizabeth: That certainly is not something that gets me excited. 

Dawn: Match, matched with what we perceive is a narrow offering. 

Charles: For me, it's more about like, the seriousness of the entrepreneur. There are people who are like, doing solopreneur stuff on the side, it comes and it goes and it's not a real business. It's not their primary vocation. They have some other way of supporting themselves, and those are people who are like, hey, I do whatever it is that I do, but it's my livelihood, it's my business. It makes $65,000 a year, but it's a real business to me. So for me, it was more about the spectrum of people that she was dealing with. I'm like, it's hard to get money from the casual people. And if you had a bunch of people who live in a place where $65,000 as part of a family income or a single income allows you to do what you need to do and you're serious about it. Like, I, I know those people even in the, in San Francisco, like, but they, they treat it like a business and they're willing to make investments in things that make the business better, in a way that casuals don't.

Elizabeth: So that's actually the main thing, which is, there are people who are willing to spend the money to further their business, and then there are people who are not. And my worry is that the less you make, the more likely you're, you're not gonna spend the money. You're going to save the money. It's like a very, it's, it is just a very tight kind of window for her to kind of make money in between the spread of how much she can make with this group of people at the 20 a month versus how much it costs to serve them, whether it's in customer acquisition and/or answering a customer support call or email, like then you're just not making any money. 

Josh: So she doesn't have the data to be able to say this specific smaller group of people

Charles: Yes.

Dawn: Yes.

Josh: Loves our product and the community itself isn't specific enough yet either. 

Elizabeth: Yes, it's too broad. So Carry, one of my investments, does the community piece really well. they have a repeatable process for creating content. They have a very strong understanding of their margins. In fact, in the beginning, they even charged for their content. And so they got this community of people who were serious about furthering their wealth. And they didn't have this in the beginning, but they've really honed in on who their ICP is.

Charles: Yes. 

Elizabeth: I don't know who the ICP is here. It's like saying

Jesse: 42 million people 

Elizabeth: All women who are solopreneurs. Like there's tons of segmentation you can do. And when I invest, I don't, I don't care about the revenue. I want my founders to have a very clear understanding of who they're serving and what is the problem they're solving. And I certainly didn't hear the who they're serving. It was too broad. And then, what are they solving? I, I kind of feel like there was still even some fuzziness there. 

Dawn: It’s a little squishy. 

Elizabeth: They honed it more. But then when she started talking about the B2B for acc- like- 

Josh: This is a different business

Elizabeth: Accountants, I was like, that is a very different business, selling into accountants.

Charles: Yeah. 

Elizabeth: Like, so I, the clarity on this for both of those fronts just wasn't there for me. 

Dawn: I mean in, in all reality. Like if this was outside of this little white couch, I would pull her into the watch pile.

Josh: Yeah. 

Dawn: And say like. You know, she's great. There's something interesting here. I can't quite get there yet. 

Josh: Yeah. 

Dawn: But customer data could convince me, but I don't see it yet. 

Charles: Cool. 

Josh: Cool. That was great. 

Charles: Thank you sir.

Jesse: Awesome. 

Elizabeth: Thank you. 

Josh: Lunchtime

Jesse: Lunch. Okay.

Josh: So…. Wangadoodle

Lisa: Oh my gosh. If you need a name for your startup, contact Charles at Precursor dot com.

Josh: Yeah, I feel like we have a lot to talk about here.

Lisa: Where do you want to start?

Josh: When Elizabeth was like … there are a lot of deeply entrenched products that suck, Josh, I was like… oh man, I feel like she’s like, teaching me right now. 

Lisa: Yes, yeah

Josh: I felt, not talked down to, but maybe.

Lisa: It’s, but it’s true, right?

Josh: Yeah. I like how VCs are always like, yes, you need to disrupt the competition. Change legacy industries. And then they hear a pitch and they’re like, nah. They’re too entrenched. You can’t take them on.

Lisa: That is a good point. 

Josh: I hope they can win. I like to root for the underdogs. 

Lisa: Such an underdog fan.

Josh: Take a chunk out of Quickbooks, and then the world will be a better place

Lisa: Well, they at least have one person who thinks they can

Josh: Oh, yeah

Unison: Yev!

Josh: Just known as Yev, we don’t actually speak his last name . He’s just Yev here at The Pitch. Um. Yeah, they got an angel check at the show from Yev, who was listening in and I think met them right after The Pitch Show

Yev: If you'll have me, I'll I'd love to go wire whenever you're ready. 

Joyce: Come on in! 

Josh: Yev invested 8 thousand bucks

Lisa: Thanks Yev

Josh: We’ll check in with Joyce and Laura in the season finale to see what progress they’ve been able to make since the show.

Lisa: No offer to invest in Investrio is being made to the listening audience on today's show, but you can become an LP in The Pitch Fund. Fund one is closed, but in Q1 of next year, we're doing our first close on Fund II. 

Josh: Fund II!

Lisa: To learn more, check out our new website… 

Josh: Is it still new?

Lisa: I know, can we stop saying new website?

Josh: It’s just a regular ol website now

Lisa: To learn more, check out our website at thepitch.fund.

Next week on The Pitch… a mad scientist walks in the pitch room with an armful of prototypes.

Matt: Design is cheap now. Firmware is cheap. All the things that made hardware expensive. It's not there anymore.

 Rohit: Wild, man. You did three devices in a few months. 

Matt: Yeah, I'm, I'm wild. 

Rohit: I can tell.

That’s next week! Subscribe to The Pitch on your favorite podcast player so you don’t miss future episodes. You can watch full length versions of every pitch over on our Patreon at The Pitch Uncut. 

And if you’re a founder and you want to be on season 15 of our show, apply now at pitch.show/apply.

Lisa: We’ll see you next Wednesday…

Josh: I’m not gonna take your bait

Lisa: Cmon!

Josh: We’ll see you next Wednesday [laughter] no! I’m not gonna do it

Lisa: In The Pitch Room

Josh: See ya in The Pitch Room

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, and Enoch Kim. With deal sourcing by Peter Liu, John Alvarez, and Phoebe Sun.

Music in this episode is by The Muse Maker, Breakmaster Cylinder, The Firmware Rebels, Marlon Gibbons, Joya, Land of Legs, and Peter Jean & The Runaway Queen.

The Pitch is made in partnership with the Vox Media Podcast Network.