Ethan Peyton: Hey everybody and welcome to the Startup Savant podcast. I'm your host, Ethan, and this show is about the stories, challenges, and triumphs of fast scaling startups and the founders who run them. Our guest on the show today is Chen Amit. Chen is the founder and CEO of Tipalti, a global fintech company that aims to create a modern, holistic, and powerful payable solution that scales with your changing business needs.
Tipalti was started in 2010 for small and mid-sized companies who simply did not have the financial management tools of larger enterprises for making overseas transactions. To give you an idea of the scale of the company now, in 2021 Tipalti automated more than $36 billion across 200 countries and is used by big names such as Twitter, Canva, and Twitch.
And I'm really excited to get into this conversation with Chen, but before I do that, I wanna remind you that Startup Savant’s on a mission to get 100 reviews by episode 100. So if you're enjoying the show, you can help us reach our goal simply by heading over to Apple Podcasts on your iPhone or desktop and leaving a rating. It just takes a minute or two and it really helps us out. All right, let's get into what we all came here for today. A chat with Chen Amit. Chen, how's the day treating you so far?
Chen Amit: Looking good. Sunny outside here. Gorgeous day, so enjoying it so far.
Ethan Peyton: Awesome, I'm stoked you're having a good day. We are gonna get right into it. Could you tell us a little bit more detail on what Tipalti is?
Chen Amit: Tipalti automates financial operations for high growth and mid-market companies, that would be companies, let's say up to around a thousand, maybe a few thousand employees. And what's challenging with these finance leaders in these companies is that they already know the complexities of running a successful finance function, they know what great execution looks like, but in these, you know, 200, 400, 500 companies, 1000 even, resources go towards everything but the back office, everything but managing suppliers. It's all about the product, the growth, the market, the go-to market, the brand, the employees, the partners, everything but. So you're left with a finance leader that has relatively complex needs but low ability to execute. And therefore, when you solve for the needs of those finance leaders, you need to solve for the many functions that make finance operations.
In our case it's everything from supplier onboarding, supplier vetting, requirement, invoice processing, PO matching, currency management, reconciliation, expense management, credit card management, just a very broad set of challenges. You have to manage to do all of that but it's not just scratching the surface. The product needs to have a certain depth because these companies already start having a level of complexity. So you need the breadth, you need the depth. Usually breadth and depth comes with long implementation and an integrator and a couple of years and many hundreds of thousands of spend. This is not available for our customers. You need breadth, depth and simplicity all in one package and that's what makes us unique. We do have that breadth. We've started in 2010 and have created the depth over the years and have made it very simple and I think we're gaining the success we do thanks to that.
Ethan Peyton: So you mentioned you started in 2010. Obviously this is a much different company than it was back then. You've got hundreds, if not thousands of employees. I have it written down here somewhere, but I'm not gonna try to reference it. Can you tell us what the initial problem that Tipalti was trying to solve was? Back in 2010, what was your first goal to solve the problem for a user?
Chen Amit: Yeah, so just before Tipalti, I sold, I was the CEO of another company and sold it right before the 2008 crash, tried to do some of my own initiatives, got bored with not finding anything that was worth investing my time, reached out to a friend, my co-founder in Tipalti, Oren Ziv, and asked him if he sees anything interesting from his portfolio or deal generation, Deal Flow let me know. And a few months later, he calls me and one of his portfolio companies, an online ad network called InfoLinks, the founder of that company was complaining about the challenges of paying publishers around the world.
So we met, Oren, myself and the founder met in a coffee shop here in Tel Aviv, and he described the problem. At first the problem looked too basic, like paying people around the world in 2010, isn't that solved like whatever, ages ago? So I wasn't sure that there is a real problem. I thought, you know what, I'm bored enough, let me find the right solution that already exists out there just help this guy. So I sat with him, I shadowed him for a couple of days, seeing what exactly the problem he was having. It was more than payments. It was actually much broader than that. It was about onboarding those publishers that came from many countries around the world and one wanted to get paid with PayPal, one wanted to get paid with wire, and the regulator in that country wanted this piece of information,
The regulator in that country wanted that piece of information and the bank rejected the payment because of this and the tax form was not, no, just a mess. It was really a messy process. So I understood the problem and said okay and then I met another founder, a CFO founder of another company who said yeah I share the same problem, another ad network, but then I met another dozen other CFOs who told me opposite, not interesting, don't touch it, no problem, I solved it, nothing for you to do here. So, I was kind of stuck with two people who are saying, please solve it for us, and then a dozen saying, don't build a company around it. Not coming from the field, I wasn't sure what to do. I knew that if I wanted, or I wanted to invest, my co-founder wanted to invest in the company, but I knew that taking money, like proper vc money, comes with the obligation to sign up for high growth and funding and building and all of that. I wasn't sure that that problem deserved that treatment. And I thought maybe it's just a project for these two people, two Israeli ad networks. Maybe it's just a problem of a couple of Israeli ad networks. So I set out to do it myself. I decided I'll build it. I was a programmer in past life.
I hadn’t programmed in 17 years at that time in 2010. So the last time, yeah, I was actually programming was 17 years earlier, but I really liked programming. I said, you know what, that'll be interesting. Let's do that. I'll build a product or solution or whatever for these two companies and see how that works. And that's what I did for the first year. By the end of the year, I had four customers. I had some interesting experiences that showed me that we're onto something.
Ethan Peyton: Wow.
Chen Amit: And yeah, for the first year I was the developer, I was the integrator, I was the support, the marketing, the sales, created the website, you know, there was a phone number that you could call and you pressed one for sales, two for marketing, three for support, it all went to me. So you know, I did what I had to do at the time. And after a year, I figured that yeah, there's something here.
And I doubled the company and went global. I added one more person and hired him in Los Angeles. So achieved both milestones to help me see if there's a need in North America as well. And shortly after he joined, we started signing up customers in the US and the rest is history.
Ethan Peyton: So you had two people that said, “hey, this is a problem, I'd like you to solve it for me.” And 12 that said, you know what, this isn't a problem, we've got it figured out. What was the push that made you move forward with building this company? Or did you know that you were going to solve this problem, but if you thought that more people would have signed up, you would have put more human power behind it than maybe just yourself?
Chen Amit: I've seen, if there was more traction when I was evaluating the problem, if there is a real problem here, if there was more traction, I would have taken funding or wanted to fund it and started hiring and building a company. But I wasn't sure. There was an alternative that was attractive to me, which was to build a solution for maybe a handful of customers and just be a one-man show and be done with it and just do that and have a little business for myself. That was an attractive proposition for me. I was happy with that proposition and I didn't want to tarnish it with some likelihood that it's not a startup VC funding viable company. So there was a question mark here and there was something attractive there so I decided to go with the option that I'll start it myself and see how it develops. That was the reason.
Ethan Peyton: So I know this question might be asking you to kind of like speculate in the rear view mirror, but do you think that that first year, those first couple of years before you took funding, before you started to bring on a large team, do you think, or I guess rather, what do you think the differences in the company that you own now are compared to if you were to have started your company with a larger team, with VC funds. What differences do you think would be between those two?
Chen Amit: There were many points. I am kind of a person who likes to self doubt myself and look back and question the decisions I've made and Oren is the opposite. Oren just no no you know we did that was the right that was the right decision you know move back in time we'll do the same decision again and I think he's right but but to your specific question, I think that this company started in slow cooking mode. We kind of slowly built more and more, understood more and more what the problem was, tackled big complex problems. And there is a benefit. I think the difference between a one-person company and a 10-person company, it's debatable whether a 10-person company moves faster than a one-person company to some extent. So I was able to move fast, to learn a lot. How would the company have looked? I think we gained a lot by this slow cooking mode. Yeah, it's a hard question to answer, I'm not sure.
Ethan Peyton: Do you feel like you retained more personal ownership and not just ownership on paper, but leadership, the control of the company because you went those first couple years without taking funds?
Chen Amit: Both, both actual shareholding, I think because we moved slowly and were able to accumulate material assets like both in terms of the product and the customer base. By the end of the second year, we had probably two dozen customers and it was a meaningful business and we're processing meaningful amounts of money and doing that with a bare bones team. So yeah.
I am still a major shareholder in the company 12 years later and I think that's part of it. But definitely the fact that I was the developer and the integrator and working with the banks and working with the customers and doing implementations and the sales and the sales calls and doing the booths and events and all the conferences and all of that, that created, that allows me to be very knowledgeable about everything in the company today.
And in my leadership style, it comes from content, right? It's not like a big personality type that rah-rah’s around the corridors. I come with the knowledge and with the experience that helped me on leading the company until this day.
Ethan Peyton: All right, I wanna talk about risk taking. And something interesting came up when we were doing research, and that was between entrepreneurial gigs, I'm gonna quote there, between entrepreneurial gigs, you played poker to make a modest living. Can you tell us a little about this poker career?
Chen Amit: Yeah, so there were two periods of poker. The one you’re referring to… so I just got into poker earlier in… I forget exactly what year. So, in these two periods, 2008 and 2010, I decided to play poker, I'll call it professionally, semi-professionally, like it was making a living, I couldn't sustain myself with that living only. I have friends who are now professional poker players. I believe I could have become a professional poker player, I think my career is better, and poker is a hard way to make an easy living, they say.
So yeah, I loved poker. I love the multifaceted aspects of poker. There's psychology, there's logic, there's reading the room, there's statistics, there's guts, there's a lot going into poker that, by the way, there's some analogies in business life as well of just reading your cards properly and playing… and reading the other player’s cards even without seeing them, understanding the other players cards, making sure that you do not play the stance that they play in front of you, but you actually play the cards. This is really important. It actually happened to me in life where I had to do that in tough negotiations. I called the bluff on some people a few times. So yeah, that was a fun period of time but when Tipalti drew me, it sucked me all in, and that was all that I was doing.
Ethan Peyton: So you jumped into my next question there on, I was going to ask you what skills transferred from your poker game to your role as a startup founder and you knocked it out. Do you feel like there's one skill that if somebody could say, “okay, I play poker, I'm good at poker,” of all of the skills that they have to learn, what's the one that you think translates to being a startup founder the most?
Chen Amit: I’ll give you two answers, one directly and one important for poker players and for founders as well I think. Yeah, the one that translates the best is during negotiations, just playing your cards correctly, not overplaying, not underplaying, not going all-in when you don't have a good story behind going all-in and not being bluffed easily by a bluffer that doesn't have a good story behind the way they play the card. So play your cards, read your party, your counterparty. Poker is a zero-sum game, so usually in business, you don't go into zero-sum game situations, but in the few events that you do, that's important. The other skill that is really important in poker is called bankroll management. It's just making sure that you place bets within your ability to absorb losses. You will, the randomness of poker and the randomness and volatility in poker and volatility in life, right? Will throw curve balls at you. And if you didn't play your bankroll correctly, you will go bust and you won't be able to continue in the game. I think in the current environment where, every year you have one in a decade event, right? Or one in a hundred years event, you have COVID, it’s one in a hundred years event.
And then you have war in Russia, it's one in a decade maybe. And then there's recession, which is one decade as well. Every year there's one decade, maybe at least one or two, one in a banking industry collapsing, collapsing the banking industry. So I think you need to be ready for the… for this never heard of before events, and you need to bankroll for these never heard of events. And be able to absorb the hits and recover from them and continue. Almost guaranteed by now after the several years we've been through it's almost guaranteed that something
Ethan Peyton: Yeah, I think it's smart to plan for something. It's hard to know what, because the chances of any one of those specific things happening is very low, but the chances of something happening, whether it's any of those or something else, is always on the horizon. So planning for that, yeah.
Chen Amit: All is guaranteed. By now, after the several years we’ve been through it’s almost guaranteed that something, some curve ball will be thrown at you in the next, whatever, 12 months.
Ethan Peyton: So when something like this comes up on your plate and you feel like you need to make a decision, whether it's a medium or high stakes business decision, is there some sort of framework that you feel like you fall back to in order to make those decisions?
Chen Amit: I think that naturally in crisis mode, I get the most relaxed and I get the most concentrated and kind of go back to basics and I'm able to... There's a story, when my CFO joined us just over four years ago. One of the first events was an offsite that the executive team held.
And during that offsite we had some data breach or suspected data breach. And we kind of all paused and said, okay, let's pull the disaster recovery manual and how do you do that? And it was all very calm. And a few hours in, she said, you know what? I thought it was a practice run. I didn't believe that. I thought you were just practicing disaster recovery and forgot to tell me, but if this is how you manage disasters, then yeah, I’m all in with this team. And so I think we go to basics. You will get your crisis, you know, once in a couple of years that you need to handle. You go to basics, you evaluate it properly. The critical aspect is just acting very, very fast. I think what we've been good at is identifying the reality quickly and acting very quickly. I think that's the critical thing, skipping the denial phase as much as possible or going through denial very quickly and then moving on to accepting the new reality and acting with the new reality. As much as it hurts you, as much as it disrupts your dreams, your aspirations, what you were planning for the year, just accept the new reality and act quickly. I think that's the key to going through those successfully.
Ethan Peyton: I feel like you're kinda giving me a buffet of directions that I could go in here. So first off, thank you for that. You're making my job real easy. I wanna talk about speed for just a second. Since you brought it up, this seems like in multiple different places that I read, again, when we were doing research for this, I kept finding speed and agility as something that you personally talk about. What do you find that speed is the most important thing in startup culture or do you think that it is secondary to something else?
Chen Amit: Good question. You know, I started and said we're slow cooking in the beginning, so that's the counter to speed, right? So I really appreciated the first few years where we were not in a hurry-up mode. And I think it was, again, it's about objectively assessing the situation and making clear-headed objective decisions.
No one was chasing us, we had a great idea, we were working on it, we're developing it. The risk of someone eating our lunch was low at the time and we had the luxury so we used that and we used that to our advantage that we are benefiting from today. And in that period of time we also took some really critical strategic decisions that we took them intentionally in a slow pace. So in 2012, Oren and myself had a discussion about whether we need to become a licensed entity, a licensed money transmitter. It's not the same scrutiny of banks, but it's a tier below banks. It's really disruptive, it's really costly. And there were strategically important reasons to do that. Nothing tactically, nothing immediate, all long-term strategy. So we started with that but took it in a paced mode until crisis hit. It's sometime late in 2013, a certain crisis hit and then we moved and that's an example of when you need to move very quickly. We stopped everything in the company.
Everyone was focused on that crisis for the next nine months. We went from a non-licensed mode to a licensed mode. It was a defining moment for the company and we're able to do that in COVID. We took action very, very early and I think it was both to close shop but and stop hiring and just pause for a moment. But we also went back to hiring and growing very quickly. So I think it depends. Sometimes you need to move very fast. Sometimes you need to move at pace, or in a paced way. It depends on the situation. Yeah, it's situational.
Ethan Peyton: All right, so there were a ton of startups formed in 2010. And today, I mean, statistically, just so many of them no longer exist. And some of the ones that are still around are great companies making respectable numbers and employing lots of people. But some of these startups became big. They scaled. They figured out something that's allowed them to grow exponentially. And Tipalti is clearly one of these companies. So tell me why. What was it that made Tipalti so different from the rest of the companies that were formed around the same time that didn't have the same outcomes?
Chen Amit: It’s hard for me to compare, I would need examples of those startups to really compare and tell you what worked well for us throughout the years. So first we hit product market fit from the get-go. There's a big big caveat there but when we launched and the product we launched is pretty much the same product or part of the same product or one of the products we offer today and it had a great product market fit.
The reason we were able to, I think one of the critical reasons for being able to reach product market fit very cleanly, was because I knew nothing about payments and nothing about online advertising which was the first few customers, were the first few customers, and nothing about banking, money transmission, regulation. I was a clean slate. I came from a completely different domain, telecommunications and information security and business intelligence. So when I solved the problem, I really sat with these few, you know, couple leaders and listened to them and formed what I believed was the right answer for the problems they presented to me. It gets tricky because when I presented the solution to one of the company InfoLinks, the head of engineering there told me, “oh, we would like that version of like the way you want the product to be is not I recommend highly against it it's not how it will work it's not a good way to work,” and when I analyzed what he told me I understood that if I followed his advice it'll become a way more complex for customers to use the product he came from an engineering perspective.
I hadn’t programmed for 17 years, so I wasn't up to speed with the best and brightest of development, and he wanted to use the most sophisticated and advanced technologies, which were not a good fit for what we did. And that's also something that you need to learn. Sometimes you need to say no to your customers, and even if it was before the launch of version number 0.1, right?
It was pre-launch and you're one of the two customers you're engaging with saying, “no, don't do that this way, you need to do it another way.” Sometimes you need to follow your logic, you need to follow your analysis, you need to follow your guts, and that's what I did there, and again, it serves us until this day. And having the personal backbone, the product backbone, just have a clear strategy, a clear vision of what you're trying to achieve, served us and led us in this journey. Again, I gave the example of that critical time in 2012 for applying for the licenses, having a clear strategy again served us well. And then the next pivotal moment was when one of our customers told us, you know, you're doing all this great job helping me pay thousands of publishers around the world.
But then when I pay my groceries and my rent and for buying laptops, I spend half a day, spend 15 minutes paying thousands of publishers and half a day paying a couple dozen others. Can you do your magic on those? And that was in 2013-14. So we started with that. We started with embarking on what is now our accounts payable solution, which is the largest part of our addressable is now classical accounts payable, the ad network business is about a third, and the classical accounts payable is two thirds. And then we've expanded from there. So, you need to know when to listen to customers and when not to listen to customers, when to push back and when to stand on your grounds. And it's a tricky game.
Ethan Peyton: So as you're growing through a company and you're going through time and you are growing through growth, obviously you are changing your products over time, you're matching things, how do you balance as the leader of a company, how do you balance keeping your head down and being focused on what you're doing while also keeping your head up and understanding what's on the horizon and how to be proactive when you need to be proactive and reactive in situations where you need to be reactive?
Chen Amit: You know, I understand what I'm better at and what I'm not the best person in the team. By now, I'm probably not the best at anything in the team. But there are areas where I know there are others who have done more and know more than I do. I can add a lot of value to them but I need help.
And areas where I know not only am I good at, but also I like to focus my time on. So obviously strategy and vision and culture are now critical aspects and policy in the company are critical aspects of the size we are at. But I always knew that, or not only knew, I was blessed with marketing leaders and sales leaders which were way more capable than I was in those domains.
And I gave them a lot of latitude and that played great for me. So the president of Tipalti was hired as the Chief Marketing Officer out of NetSuite eight years ago, if I'm not mistaken. And he's been with me for that period of time. And he's the best B2B marketeer on the planet. So I was blessed, you know, he would consult with me, mostly on branding and positioning and messaging and things that kind of that be, you know, my gut understanding the product from my gut helps refine, but he drives that machine and the sales leaders that the sales leader that they have is built organizations. I've never done that and it's a complex and demanding task. So, I naturally learn toward the product, engineering, and vision and yeah, so it was natural for me.
Ethan Peyton: So you obviously lean on your leadership team, especially in the areas where you aren't the world's number one expert. Do you have any general advice on not just creating a high quality leadership team with A players, but creating the right leadership team?
Chen Amit: I think that the leadership team that we've created in tip-alty just shares the core core core values and that in a way, it's a diverse team, but very similar at the same time. So we're all I like to call it simple to work with, no big egos, no big personalities.
And no one, no, we don't think of ourselves too much. And it helps in the interaction a lot. Very execution oriented. So we're all with a tendency to move forward and to drive forward and it helps that. And then we're very analytical. The three together creates a very collaborative team because you know, you don't have the ego. So obviously you'll want to help the other person and you want to move forward, you know, that they will help you and so on and so forth.
So I think, yeah, paying attention to the values that these people come with and how they will fit you yourself as a leader and the rest of the team. And correcting when you make a mistake. I've made my share of mistakes in hiring as well. And again, that's an example where you need to act very quickly. If you identify that you made a mistake, it's painful. You've spent so… every hire on the executive team takes six months, you’ve spent six months or nine months hiring a person only to learn that you know it's not really what what you thought you were you're signing up for so correct it quickly it's not in the it's in the best interest of the company and of the other person not to drag it and to correct quickly and to pay the price for no accept the price of the mistake and just correct it and and yeah so these are two things to focus on.
Ethan Peyton: It sounds like you have a lot of confidence in your ability to lead. And I'm assuming that that is, that has, you've probably always had some of that confidence but I'm assuming that more has been built over time. What do you feel like the kind of evolutions are that you've gone through as a leader? Not necessarily just within Tipalti but with the company or companies before Tipalti, what do you feel like the leveling up that you have done has been?
Chen Amit: Yeah, so I was a fairly senior manager at a very young age, and I was not trained for that function. So I was absolutely out of my skis in the early parts of my career. And the part that was missing was what we just discussed, just really refining how you hire well, how you retain well, and how you fire well. It's the muscle that I just was never in that early part of the career in the 1990s, I never…
It was a company that never fired anyone, so it was just unnatural to do that. And I had the situation where I needed to fire someone and I didn't, and it hurts me until this day to think about that situation. It was better for both of us if I had and I didn't. So yeah, you develop muscles. Ideally, you get trained. Like we try to train our managers in all the basic and more than basic skills of management. I lacked some of it. I was educated in business school but real life is different than business school. So that was one part.
Yeah, I think I was good at product strategy and vision from early in my career. Having more, yeah, the next education came later in my career when I understood that I made mistakes with investors. So one thing is hiring leadership, C-level leaders, the other is when you sign up with investors or when you get married with investors so to speak you cannot get divorced from investors. It's very hard, it's not impossible. I actually learned of someone who was able to fire an investor, force them to sell but that's a very very you know a problematic situation and throughout Tipalti we've said no several times to brand name, big name investors.
There's actually a case study that my business school in said did on that exactly on one event in 2017 that we walked away not from a term sheet, we walked away from a signing of a definitive agreement that was like, you know life-changing for the company because we found out that the investor was not what we thought it would be it would be and we walked away So I think these are…
And then the last piece that I think I learned later in my career is just the importance of company culture and company values, that they really matter. It was something that took me a while to understand the real importance of company culture and that it's there, it's real, it exists. So yeah, managing your executive team, hiring, promoting, retaining, but if you need to also firing.
And managing investors is really critical, really, really critical. It's not natural, it's hard. Sometimes you have to say no when you don't have many alternatives. And then just the importance at our scale, we're about, we're a thousand employees at our scale. Culture means a lot. It's real. You need to hire for the culture, you need to promote for the culture, you need to celebrate the culture. You need to make sure that the culture is alive and kicking. And yeah, these are some of the developments I made.
Ethan Peyton: So going back to that funding, I know you've got a ton of experience with it. I mean, the last round you all raised was your series F, which is much further along in the alphabet than most of the conversations that I have. What, if you could share that investor that you walked away from, that it just wasn't right, what was it about it and what kind of tipped you off to the fact that this wasn't right and it wasn’t going to be a good decision?
Chen Amit: Yeah, so I hope we have the time to describe the situation. It was 2017, we went out to the market to fundraise, we got three term sheets, and at the same time we got an acquisition proposal. And I was generally against M&A or being bought, but one of the investors said, “you need to explore it at least.” I went and explored it and after a few months decided to walk away.
It wasn't a good fit. Went back to these three term sheets and had to choose one. And we chose, Oren and myself, we chose a person that actually felt right for us. Of the three term sheets, he actually felt the most compatible with the company. A few months into, now there was immediately after, the day after signing the term sheet, the first red flag was raised.
It was technical, he wanted something that you should have, not only you should have asked before the term sheet, but I asked him explicitly and Oren asked him explicitly, are you clear with that? Is it only legal and financial due diligence? He said yes. And the day after he said, oh, I need more business due diligence, which was kind of disappointing. But we are, you know, one of the metrics, we haven't discussed it, but one of the metrics in the company is 1% gross annual churn. Customers stay with us forever. So they love us. Yeah, of course. Speak with customers, whoever you want.
So it didn't matter to me. But about, I think, a month or six weeks into the process of the definitive agreement, I got two calls from people who care about me and said, we've heard that you're working or fundraising from this investor. Be careful. He has a reputation. I spoke with Oren. Oren said, you know what? We really need the money. Maybe it's not that bad.
Let's evaluate it or something. Then he got a couple of calls as well. And then we decided to confront the investor and tell him what we've heard. And long story short, we said, you know what? We'll craft the agreement in a way that protects us. Let's have an agreement that is very restrictive and hopefully he’s a great partner, but if not, we'll have the agreement that protects us. And the investor agreed and we moved on. And then really the last moment, of the day of signing the definitive agreement. There was a small thing I wanted to change.
There were two closes. There was a first close, immediate, and then a second close. And the second close was 30 days out, and it was a very complex year for me. I didn't want to go directly to raising the second close or working on the second close. I asked to extend it to 60 days. Who cares? 30 days first close, 60 days first close.
Asked my lawyer and he said, I asked him if I need approval from the investor. He said, you know, technically you don't need to, but it's common practice, you know, it'll be the right thing to do, so do that. And then I said, you know what, it's actually a good opportunity. Let's do that. Let's ask him and see how he responds. If his reputation that we've learned of will show up somehow in that. I spoke to Oren. Oren said, come on, it's too easy.
No one fails this test. If he fails this test, then it's done. Of course, I asked the investor, I want to extend the second clause from 30 days to 60 days. And he blew up, he became very aggressive, completely inappropriate language, just all around unacceptable. And we decided to walk away. I have to credit Oren that provided me with a backup…
Ethan Peyton: Wow.
Chen Amit: …because we changed our plans. We didn't raise as much as we wanted. There were some changes to the plan, but the changes were worth it to avoid this investor. This was actually the final red line. We were ready to sign and walked away. At the time, it was a huge round for us. It was $30 million. The previous round was, I think, eight. So it was a major, major round. We were also running on fumes because it was that year…
Ethan Peyton: Yeah.
Chen Amit: …So yeah, it was one of those defining moments in the life of a company.
Ethan Peyton: Thank you for sharing that. I know that situations like that are definitely not easy and they're not always the easiest to share. Quick question on that, do you feel like if this was your first round, if this was your round A, do you feel like you would have had to have gone through with this? Or was this just a situation where this just was not going to happen no matter what?
Chen Amit: No, I think I would have taken the money not knowing what I knew. Because in life, at a certain point in my career, I took a company relatively late and sold it. I didn't contribute to the company much, but sold it, that company that I sold in 2008. I was there for a very short time. But investors had a full, let's say that, I've seen investors not perform ideally and that experience was important for this decision now. Earlier in my career, I probably or there is highly likelihood that I would not have even considered you know making this test and trying the investor or anything like that or maybe if you pushed back hard maybe I would have said you know what okay let's do 30 days no matter yeah I'll do that but yeah I think it took it took the experience that I've had and the experience working with investors. And again, understanding what’s behind his behavior and that was critical for me to make the decision I made.
Ethan Peyton: Thank you for sharing that. I think that's an extremely, extremely valuable story. And I know that our listeners are going to really appreciate hearing that. All right, let's move on. Is there anything that's going on with Tipalti over this next year that you'd like to announce or anything like that?
Chen Amit: Tipalti is blessed in that we are not experiencing the recession as much as we hear others are experiencing. So, you know, I like to rely on metrics and the two metrics that I think tell the story are one, sales cycles not prolonging.
We've had the same relatively short sales cycles from before the recession, through the recession, through price increases, and we're seeing very hard demand for the products when we are in front of a prospect, they see the value and they sign up for it. And the same is true for retention, the same retention before the recession or the economical condition changed and through now.
In that sense, we're blessed. We've added some important capabilities last year. We're adding important capabilities this year. The SVB developments exposed some of the value of Tipalti being we run on top of Citibank, JP Morgan Chase, and Wells Fargo. So I think our customers really benefit from that. And we saw some influx of customers who are running away from uncertainty to Tipalti. So yeah, we're continuing with our vision. The vision is to provide this broad, holistic, breadth, depth and simplicity for our customers. You will see more announcements, some major announcements throughout the year, but too early to announce them right now.
Ethan Peyton: All right, well we'll just keep our eyes open for those big things. All right, moving into my absolute favorite question, what is your number one piece of advice for early stage entrepreneurs?
Chen Amit: Number one advice for early stage entrepreneurs. Yeah, I think you need to be selective, to selectively listen to customers. You need to listen to customers. There's a ton of value that these first two customers provided me a ton. They crafted both parts of the product and parts of the legal agreements and other, other aspects of the business that were critical for me. But they also, some of the advice was not the correct advice.
So have your own backbone, don't take everything a customer says at face value. They don't know what you know. No one will ever be as an expert in the product as you will be. So yeah, have the product backbone. I think product market fit is the cornerstone of any success. It's going to take a long, long, long while. Eventually you need more than just product market fit, but if you haven’t found critical, clear, strong product market fit. Continue to iterate until you do because that's the basic infrastructure for any success.
Ethan Peyton: All right, excellent advice. And I know we went deep on some of that earlier in this episode, so folks go back and listen again because it's all right there. All right, Chen, last question. Where can people connect with you online and how can our listeners support Tipalti?
Chen Amit: You can connect me through LinkedIn of course, so look for Chen Amit and I'm at Tipalti so it's easy enough to find me. How you can support Tipalti? So the market, we are in a very nascent market, we're still in the phase of market education. If you are in a company that's within that range of you know 50 employees to a thousand employees and we can be of value to you, please reach out. Or if you know friends who can be of, we can be of value to please reach out. And yeah, appreciate all those who do.
Ethan Peyton: Alright, this has been awesome. Seriously, seriously good advice and really great stories. I'm so glad that we had you on. And folks, you can find all of everything we talked about today, all the links, the LinkedIn, all that good stuff over at the show notes. Those are gonna be at Startupsavant.com/podcast. And is there anything you'd like to say to sign us out?
Chen Amit: I really appreciate the time. It was fascinating for me to be part of that. Excellent questions, and I love those. And thank you so much for having me here.
Ethan Peyton:
Alright that’s going to be it for this week’s episode of the Startup Savant Podcast! Thanks for hanging out! Hey we hear that video is the next big thing! And that’s why we’ve put all of our full-length interviews on our YouTube channel.
So if you’re a fan of video, go check that out! Just open the YouTube app and type Startup Savant Podcast in the search bar. That’s where you’ll find us.
Next Wednesday morning! That’s when you’ll hear from us next! I can’t wait to hang out again.
And until then - go build something beautiful.
