Jake Warner + Zak Boca

Jake Warner: [00:00:14] Hello and welcome to the 10th episode of Cycle's podcast. Today we have a special guest of Zak Boca. He's the CEO of a growing fintech company, and I've known Zak since 2008. In fact, Zak was actually the first boss that I ever had and the only boss that I've ever had. And so, so very excited to have Zak on the podcast today. He's building a really cool fintech company. And it'd be really cool, to be really fun to dive into his story. And so without further ado, Zak, nice to have you here.

Zak Boca: [00:00:54] Awesome. Thanks, Jake. I'm glad to be here. So I think when, as your first boss, one of the first things you said during the interview was that I'm not going to be an employee for long and I'm probably not going to be a very good employee. But, but we, we I, I share that with you. You know, I also, you know, out of necessity, became an entrepreneur because I'm not a terrific employee, as I've learned over the years. But anyway, my name is Zak. I live in Edwards, Colorado, just outside of Vail. Moved out here by way of Nashville and Chicago. I had several startups that were, you know, spent 16 years there and with our family, you know, growing family of two young kids. We my wife and I were just looking to get to the mountains. Covid hit allowed that to be possible and allowed things to be remote and as they are. But I, you know, I've been an entrepreneur for a long time since I was I think my first company was when I was I started when I was 15. And since then, I've had you know, I've mainly focused in, I started in advertising, online advertising, and then I quickly moved to web hosting and infrastructure. And more recently, well, it's now been three years sold Single Hop, which is where, of course, we met.

Jake Warner: [00:02:28] Yep. And I like that you bring up that initial conversation that we had. I remember. So I was I think I was 18 or 19 at the time. And like I told it was you and you and Dan. Dan Ushman. And, uh, we were talking and I was like, well, you know, I got out of high school. I'd already been programming for five or six years at that point, right? So, so it was like, you know, first job. But it was also a first job working for someone that other than myself, because I had been building I was a contractor for other companies for a number of years at that point. Right. But I remember telling I figured if it was either you or Dan, but it was one of you were like, All right, I'll be here for two years. I'll give you 110% for two years. But after that, I'm gone. And I'm like thinking back as like a CEO now I'm like, man, that's kind of weird to hire someone who's like, hey, I'm out in two years because, like, you spend so much time getting someone involved in the culture and everything. But I mean, it ended up working out well and, you know, like there's a lot.

Zak Boca: [00:03:30] Of I, I feel like the way you were a client, I think. Right. Yes. A really discerning client who found all of the things right or wrong. And and I think it sort of started like I think I basically just said, listen, you have such a long list of things that we're doing wrong. Why don't you just come in and fix them? Like, why don't you you know, let's let's team up here and you're like, okay, fine, I'll do that. And you, you I think you rewrote a bunch of anyway, I won't brag on you too much, but it, it definitely you know what you came in and did really quickly dovetailed into probably, you know, why we invested why I invested in Cycle it was a good chance to, you know, to kind of see how you work, the madness, you know, the pace that you work at and and kind of put us in a better spot at the time.

Jake Warner: [00:04:33] And one of the things that I really appreciated about you and Dan was again, it was my first job. I didn't know, like what my skills were worth at the time. And so I remember during the first conversation with I think this one was with Dan, but we were chatting and the question Dan asked a question like, Hey, what are you looking for salary-wise. And, I was like, I don't know. Like I've never worked for like, I mean, you have that imposter syndrome where you're like, Do I really know what I know? Or is it just like, do I think I know more than I actually know? And so I remember telling them I was like, I have no idea. And I was like, how about I start at about 30,000? And Dan's like, he's like, There's zero chance that you're worth less. You're like, You're worth more than that. And so I remember him saying, I think it was him, or maybe it was you, but one of you said, Let's get you started at 45 and then in 90 days we'll reevaluate. And so I was like, Great. Like, good. Because I, you know, I had no idea what my skills are worth at that point. And so I remember we started it, and I think the first two weeks I was working on the LEAP Project and then like two weeks in, I was like, We're going to rebuild this. And everyone's like, Why? Why should we rebuild this? I was like, well, because like, there's so many things wrong. Let's rebuild it. And I remember that we were going out to Cloud Expo, we were going out the Cloud Expo West, I think was the name of the conference. It was like three months later. Zak Boca: [00:05:54] Yeah, the business was doing really well. It was a good, you know, a good time to start the company. We were one of the first, I would say, focused on automating deployment of infrastructure, one of the first few, and Amazon hadn't latched on and really beat up the space and owned it. But we, you know, we threw this big at Cloud Expo. We had billboards all around Santa Clara and we had this big venue rented where we were having this night party, and we're all sitting there in the lobby. We're just basically watching Jake just like, finish it. Like, all right, Jake, we launch this thing in 3 hours. We have dancers, we have like DJs, we have 300 people coming. Are we going to be done? No pressure. But, you know, it's funny you say imposter syndrome, though, not to kind of step away from this imposter syndrome with entrepreneurs is so real. You know, I even you know, I've now sold four companies, but I still find that that you know, you're always sort of measuring against someone else's LinkedIn or what someone else has done. And it's not, it's not always like a an accurate reflection of you know, it's like it's an interesting mental thing to deal with as an entrepreneur. But how has that been for you as you've grown Cycle and changed and raised rounds and grown the business and all of that.

Jake Warner: [00:07:28] Yeah. I mean, so it was really interesting because, like, I think I used to suffer from imposter syndrome a lot more than I do now. And I think there was a point probably maybe early last year where I was like, okay no one else has any idea how to do this either. Everyone else, because like, I mean, we have 34 angels invested in our company. And out of those 34 angels, 29 of them are either current or former operators and many of them serial founders where they're you know building new companies. And every single time, like people who have had home runs sold companies for hundreds of millions of dollars, you know, they're starting out. Like we have one. Well, we've kind of a quick detour story. We have one angel who has been very, very, We have a number of angels who've been very successful. But we have one angel in particular who's been wildly successful, one of our super angels. And I a week ago, maybe two weeks at this point, he reached out to me. He's like, hey, I like that you get your thoughts on lead gen. I'm like, dude, you sold a company for almost half, almost $1,000,000,000. Why are you talking to me about lead gen? And but, but it's, it's nice because when you realize that even other people who are really successful in this, everyone's always kind of bouncing ideas because at the same time, like, I mean, as you very well know, the, the way you do marketing is constantly changing. The way that people did SEO five years ago is not the way people do SEO today. And so it's always nice that you even if you've done well. Or whether you've done well or whether you're a first time founder being in that position where you just kind of always figuring it out and knowing that other people are doing the same things helps mitigate a lot of that imposter syndrome. A lot, I think. But it takes sometimes it takes a while for people to kind of for it to click to the point of where it's like everyone else is just figuring this out. Because like one of the other things that's always really frustrating is you always hear about it's an overnight success. You always hear about like how a company went from nothing to this massive growth. I mean, even Docker, right? Docker turned down it was like a $3 Billion acquisition offer at one point, which was completely dumb of them. But everyone was like, Hey, you know, this company, Docker, they were two years old. They went from nothing to a potential $3 Billion acquisition in two years. But everyone forgets that they were a company called Dot Cloud for five years before. And the same thing with Snapchat. Snapchat was Peekaboo and then with Slack everyone's like, oh, Slack was this overnight success, But Slack was a game development company before they became chat. And so when when you start to remember that all these companies that are reaching this big milestone of becoming unicorns. So much of it was, you know, kind of hidden. And no one ever tells the story of the companies when they're in that grind mode that they're just doing their thing. And so it's always kind of important to remember too. Yeah.

Zak Boca: [00:10:22] Yeah, absolutely. Yeah. When you're looking in on a story and a press release, it's all been formatted in such a way and the story is told to, to really kind of see the just the, you know, the high points and the instant success and they nailed the message and, and all of that. But, but yeah, I would agree. I mean, it's all it's all we're in this stage now with the with my existing company where it's firefighting like it's pain you know it's a lot of integrations and firefighting and figuring it out and yeah and I you know everyone has a different opinion and you know and you just kind of have to take all the data that you can and, you know, continue to improve. But yeah it's a, it is funny looking back on success and you know and how it later seems easy but during it, it's all about iterating and change.

Jake Warner: [00:11:22] It is and I think so much of it comes down to luck, knowing the right people at the right time. Yeah. I think that like and that's the thing with like, I've always had confidence in my technical abilities. Well, maybe not always, but Single Hop helped with that. But there's so many other things that go into building a company. It's not just can you write code? And I think that's one of the biggest things that I've had to learn over the last two years. Like, I mean, for the first five years of Cycle, I was writing code every single day and now I write code maybe 10 to 15% of the time. It's all marketing and sales and team growing and things like that that make up most of my day now. And so it's just, it's just that transition that has to happen with, with anyone building a company.

Zak Boca: [00:12:04] Yeah, you know, I'm curious because I'm going to I'm going to kind of turn this around on you because you've had a different, a bit of a different view than I. We've talked about this before. The companies that I've started have have been really just like, go, go, go, go, go, go, go. There's a market opportunity. Hit it fast, hit it hard. And what I've admired about Cycle and I'm curious where you kind of land on this now. But what I've admired about Cycle is that you've been able to kind of think this broader, longer term vision and think that the world's going to look more like what we're doing. And so we'll be more methodical. We'll develop the right customer experience, which, by the way, we're now a customer, as you know, and the experience is like it's really solid. But that took time and that was like a lot of iterating. And that was more patience than we had at our prior companies. We were we were definitely more marketing, sales, go to market oriented where tech was maybe 25%. But I'm curious where you kind of draw inspiration from for that for that patience because it's it's been a big part of Cycle's story.

Jake Warner: [00:13:21] Yeah. I mean, so the first thing is the long term bet that we were making was so when we started Cycle, it was the idea that Kubernetes, Docker are growing, you know, those are where the hype is. But along with the hype, is also following the same trend of OpenStack. And it was back when I was at Single Hop that everyone was talking about, Hey, if you're not using OpenStack, you're doing it wrong. No one cares about OpenStack anymore, no one's talking about it, right? And so the idea with Cycle was that, well, you know, Kubernetes and Docker are going to run that same lifecycle. It's the, there's a lot of pros to OpenSource software but tthere's a number of cons as well. And one of those big cons is when you have all these companies pulling your product or your open source solution in their own approach. Sorry, when you have all these companies pulling an open source solution into the direction that you want it to be, as opposed to kind of like a centralized, very clean approach, you end up with this offering that's harder to manage. And so our long term bet was that, hey, we expect Kubernetes to grow to to achieve that peak hype, but at some point it's going to not be that way anymore. And that's kind of like the Crossing the Chasm book that I have behind me, right? There's that chasm where at some point people decide, I don't want to do it the hard way anymore. I don't care about getting into the weeds.

Jake Warner: [00:14:40] I don't care about customizing everything. I just want it to work. And if it works and it's stable and it's a clean experience, that's what I care more about than changing every dial a knob. And so our bet was that Kubernetes would go up. But then at some point, as it starts going down, Cycle would have enough awareness to be in that good position at that moment in time. So to your question, a lot of it has been, hey, we've been early and our story is really, really started to resonate a lot over the last probably eight months. We've had I had three more meetings this morning with potential customers and we're getting in front of bigger companies now that are saying, hey, we tried the Kubernetes approach and we spent a million and a half dollars on it over the last X number of years, and it hasn't made us a better company. How can we move forward more effectively? And so we're finding that spot now. But it's you're right, it took a lot of patience to get there and it took a lot of being able to tell that story to investors and saying, hey, like the tech is solid. We have great adoption. We have very, very, very low churn. This is a timing thing. And we need to be in the market at the right time. But it takes years of development to be at that spot at the right time. And so that's one of the interesting things that happened. And it's why for at least for the first six years of the company, why we've only raised from angels, because we knew that if in year one we went out to a VC and said, Hey, we're going to build this from the ground up, and we don't expect to make really meaningful money for a couple of years, I don't know if a single VC would have backed that. But at the same time we had angels that were like, hey, I believe in that. Like, I've bootstrapped companies before. I understand the grind. I understand the process. Let's do it. And because of that and because of the network with angels that we built up, it's allowed us to do that. Now, you asked, has my perspective of that changed over the years? And it has a little. I wish we had started marketing probably a year to a year and a half earlier. I mean, I think that we're in a good spot today. We have a new head of growth starting, you know, actually next week. And so it'll be nice to have someone who's been there done that in terms of having that on our team, which is which is really exciting. But I mean, as you know, marketing is a long term game. It's no matter how much money you dump into it, it's still going to take some time to have that credibility and awareness. And so, yeah, I'm very happy with how we we built our tech. We did it the right way. We didn't sacrifice on quality. We kept lean. But I do wish that we had started marketing probably a year to a year and a half earlier. Zak Boca: [00:17:13] Yeah, Yeah. You know what I've learned? Because I've had different companies sort of work at different paces, and I've also invested in companies that work at different paces. And, you know, kind of back to the comment earlier that no one really knows anything or like, no, you know, it's just like it can all be done so differently. And I think we're in this environment where it's all about MVP, it's all about getting to market fast. It's all about early traction. It's all about these things that don't quite allow to be at this intersection as users are moving from, for example, Docker, Kubernetes and adopting more container services. And it's and it's really the same as with [00:17:57] AltExchange [00:17:57] what's happening in our space. So so can I give you a little bit of background on AltExchange?

Jake Warner: [00:18:05] Yes. Yes.

Zak Boca: [00:18:07] And let's dive in. Okay. So here's the broad kind of big picture. Alternative assets, as many people know today, are anything that sort of fits outside of equities and bonds. And so ten years ago, if you were to put together a portfolio, you would more than likely allocate somewhere along the lines of 60% to equities, 40% to bonds. Family offices and institutions, sovereign wealth funds. The Yale. Yale Endowment. Yale Endowment has a 4% allocation to equities. All family offices on average are allocating 50% to alternatives. They have really pretty small allocations to equities. And so an alternative asset is just an alternative to traditional asset classes. And so what AltExchange does is much like what Schwab does for your equities. It gives you a place to log in so that you can see it, you can download statements, you can see documents, you can understand the performance. You can. If you have an advisor that looks over your account at Schwab, they can also see the same information. If you die, there's a log in where all of this exists there. There are tax documents that all live here. There's sort of like if you were to broadly look at it, there's it's efficient. It's an efficient way of investing. You log into your Schwab account, you make an investment. You know how it performs. Alternative assets do not work this way. And what's happening is that alts are coming down market which is great. Regulations have kept up after the depression, you know the SEC and regulatory bodies basically said let's not allow alternative assets to fit in smaller investors portfolio which was right for the time but really today I mean options are important, alternatives are really important.

Zak Boca: [00:20:20] You can't, you know, a small investor investing in bonds is getting effectively a zero today. So we need alternatives. And so regulations have caught up. It's just that the smaller investor isn't prepared the way that Yale is. They're not resourced the way that, the way their family offices or sovereign wealth fund. And so that's where AltExchange comes in. We consolidate all of your alternative investments. We have to do lots of things. It's a very paper-based PDF-based environment where you get tons of statements, but none of them actually tell you how they're performing. And so it would sort of like being, it would be like being invested in Amazon and just having financials to read and go, I think that's okay. We actually did a survey. Less than a third of investors in alts understand how their alts are performing, which is ludicrous. It's crazy. So, we're the platform, the ecosystem, this tool where you can aggregate all of your alts, see their performance, meet capital calls, do things like run reports on net cash flow, all of the things that you would sort of expect in your Schwab account. We want to bring that and make it far more efficient for the average investor through AltExchange.

Jake Warner: [00:21:50] And it makes a lot of sense. And you and I have talked about this in a lot of extent over what has been a couple of years now that you've been working on this. Yeah, but I mean, it's an obvious problem. But one thing that I've always been curious of with, with Alt and stuff is the is kind of the makeup of what that looks like. You know, I guess so with the platform that you've built and that you're continuing to build as well, is there a asset class of alternatives that most people seem to like? If let me rephrase this, if people are creating an account on AltExchange and they're starting to add things, do you have enough data yet to figure out like, hey, are most people investing in real estate? Like, is that the main thing that people are tracking within AltExchange or is it some other class?

Zak Boca: [00:22:50] Well, I think that's a good, it's a good question. I think that it's all become more accessible, whether it's collectibles. Think about, kind of, this isn't quite your question, but think about this. When, you know, let's just say that you're investing in a mutual fund that you feel has low correlation to overall equities. It will still likely have some correlation, like you're taking a bit of a gamble or a bit of a bat. The interesting thing about alts is that you could have a Porsche collection. You could invest in a fund that invests in classic cars. You can invest in wine which has no correlation to stock market. But it has, it has a higher correlation to the weather and, or you can invest in apartment buildings or... But generally I think that investors make their way through crypto. Crypto has been massive for alts, through owning real estate direct so owning single family houses and then eventually deciding that's too much work or you want to take on more of it and scale up your business. In my case, I started as an operator of businesses. I thought, you know, the fact that I can get on the phone with a fund manager, talk to them about their strategy, understand what they're doing is really appealing to me. And at the time when tweets would get sent, you know, that's when I started investing and they would have a massive impact on the market.

Zak Boca: [00:24:37] I just found that to be ludicrous. And I just, that's not what I, that's not the type of portfolio that I want. So for me, I gravitate toward private equity funds. Those may invest in companies like yours or mine or they may be later stage and invest in pre IPO shares or secondaries. I gravitate to private or to venture funds or some more early stage real estate funds. But here's here's the importance of this. Companies are staying private for longer. Real estate, as liquidity increases and private markets, companies can stay private for longer. And as that happens, REITs aren't as competitive in buying real estate that can just be purchased in private markets. And so there's less appreciation that's being captured in public markets and more that's being captured in private markets. And that's why you've seen higher risk adjusted returns and private markets than you have in publics. I mean, look at Stripe, Airbnb, like these guys are massive and there's a tremendous amount of private, you know, appreciation that that has happened in private markets before they go public. And so really, it's just a way, like it was really encouraging about the last five or six years, that smaller investors can access these things.

Jake Warner: [00:26:14] And as you as you've been building AltExchange and you've been, I imagine, correct me if I'm wrong, but I imagine one of the biggest issues that you're having to deal with is, you know, it's really easy to track a stock price. You can connect to a data feed and you can just track that. But as you're starting to aggregate, I can just imagine this is me wearing the developer hat. I can imagine that if I'm tracking the estimated value of a real estate property versus the value of a piece of artwork or something. Tracking those two things is a very different mindset and so would love to hear as much as you can share about how you're able to track that.

Zak Boca: [00:26:59] Yeah, so, it's, this is the whole, this is where we add value. You can be turned off by something that seemingly doesn't seem scalable or you can look at it as an opportunity. And Paul Graham talks a lot about this from Y Combinator that you know, if you can really make the seemingly unscalable scalable then that's where you've added tremendous value. Right. And so when we looked at this, everyone ignores this space from a portfolio aggregation perspective like Plaid and Personal Capital, no one's aggregating your investments from these private sources because it's not structured. It takes, it's not pretty. It's messy. It's you know, it's kind of firefighting is what it is. But the where we start is, where we've started is with professionally managed funds. And it's gotten far easier for people to set up SPVs and funds and to have a GPLP type structure where you issue distributions and all of that. There are those funds are typically audited on a quarterly basis. So if you have a real estate fund, you're going to ascribe a value to the overall real estate portfolio every quarter and you'll send out what's called a capital account statement. The capital account statement helps us understand the valuation change to the underlying assets. And so we have focused the last we've been we've been building AltExchange for 15 months now. And we've been really focused on just how well this can scale. You introduced us to one of your clients, a venture studio inventives who have who have really helped us begin to solve this problem.

Zak Boca: [00:28:58] But it's... we're basically, to answer your question, we're not starting with the hey, I have a rare Porsche or I have a couple of bottles of wine, what are they worth? That's sort of low value add and we'll get there at some point. Where we're starting, though, is you're an investor in private equity, you're an investor in venture funds. Instead of buying muni bonds, you decided that you're going to invest into a lending fund which pays ten or 11%. And that's stuff's actually, when you get the system down, it's pretty easy. It's what's the, how much have you contributed to the investment? How much have you gotten back and distributions. And then what's the value at the end of the quarter? And so we take all of that data which typically lives in a PDF, we extract what we need and then we turn it into transactions which make its way into AltExchange. The experience that we're coming out with and aiming to continue to improve is a Plaid like experience for your alternative investments. And so you should be able to search for Carta, for Fundrise, Yieldstreet, for a KKR fund or a Carlyle Group fund. You should be able to search for these things. Authenticate, we'll consolidate all of your documents. We'll process the ones that we need to. We'll sync it every day so that we have your tax documents when they come in, you don't have to log in to 42 places, and we'll show you historical performance in a way that's from a real source of truth. It's from actual statements and transactions versus kind of the narrative the fund gives you.

Jake Warner: [00:30:51] And so you mentioned something a minute ago or so that stood out, which is the PDFs. And again, this is my developer hat because like, I mean, obviously, I think there's a huge amount of value in what you're building. It makes a lot of sense. But at the same time, as you're as you're describing these, I'm also thinking like, how would I, how would I build that? Like, how would this be structured? And so, as you mentioned, these reports that you're getting that are PDFs, I'm guessing these aren't standardized PDFs. Like, I'm guessing that every fund might have a variation to their PDF, like they might have the same information, but it's not the same template. Or am I wrong?

Zak Boca: [00:31:28] No, no, you're exactly right. What? So we have, we're using natural language processing and different abilities to read to extract from the PDF what we need. You know, there are really three documents that matter. There's a distribution notice, there's a capital call notice. Those are both very easy. Those are exceptionally easy. You can say it 42 different ways, but at the end of the day, each one has a date and each one has a value. And so those are fairly easy. The capital account statement, those can be really tricky. And so what we're focused on - we want this to be part, if you have any alternative investment, we want this to be the platform that you... Our go to market is that we have, we're effectively free up to $10 Million in assets. So you can manage $10 Million in assets for completely free. And so we see a lot of data, we're going to see a ton of these statements. And, so if you think about it, as we train our system, we're training far more up front. But we expect after six months or so, you know, we're pretty well, you know, we're not seeing massive variations in terms of how data is formatted. And, we also much like [00:32:58] Ment, [00:32:58] we're giving customers the ability to say, here's the document that's not quite right. And this is what the number should have been. And so as we scale the business, we get this improvement to how well we recognize data because of our customers' input.

Jake Warner: [00:33:15] And that's I think from a technical side, that's the thing that I completely love about what you're building is you're solving something that if we rewind ten years and someone was to build this company, they'd be like, alright, let's go and hire 20 contractors who are just going to just index and scan through these documents and just type up the numbers. But you're solving a very complex problem, but you're doing it in a modern way where, as you said, as you continue to train that machine learning model, you'll be able to be in a position where you will only get more accurate over time. And that's just a very scalable approach, which is something that is is really fascinating. And so as you're growing your company, have you gotten to a position yet where you found the have you decided on like a pricing model or as you as you're bringing on your early customers, what does that look like?

Zak Boca: [00:34:10] Yeah. Well, so so I've written a bit about this and it's really a concept of David Sacks from Kraft Ventures. But it's our goal is to enable multiplayer mode as quickly as possible. And so you can take a guess at what multiplayer mode is. I mean if you think Slack and many other tools, it's we want to be effectively free for the average user, for the average investor. At some point when you start looking like a family office or a really sophisticated user and you need more, maybe you need someone in accounting at AltExchange to make sure that entries are correct and you need to be able to add other users to your team. Then, we'll monetize like there's a fee at that point. But, really when we talk about multiplayer mode, we want you to invite your financial advisor and your tax advisor and that's who we want to monetize in our early days. So we really want to see a lot of data. We want to get high numbers of users into this, into this system that we're building to be very scalable. And then the metrics that we will track are how many of our users have enabled multiplayer mode, how many users have invited their advisor and invited their tax advisor. For financial advisors, it's interesting, a lot of these guys avoid financial advisors because they, advisors don't have the tools, they don't have the resources to see how their clients are investing in alts.

Zak Boca: [00:35:53] And so a lot of the time you sit down with your advisor and it's basically let's talk about what you have here at our particular bank. But if it's outside of a product we've sold you, we really can't help you. And, wealthier clients are demanding, demanding access to alts and they're demanding that their advisor, you know, better understand how they're investing in the financial advisory world is called knowing your customer and so we believe that this tool, the platform we call it Advisor View, gives advisors a strong way to differentiate, differentiate with wealthier clients and with their clients overall as they adopt more alternatives to better manage, to give a better experience to their clients. And then with tax advisors, you know, at the end of the year they're spending a third of their time just collecting K1, getting K1s. It's a real problem for theseguys. So so initially we're targeting through content, SEO, social in different, you know pretty low cost ways. We're targeting investors who then come in, enable multiplayer mode, invite their advisors that's really our go to market and our pricing strategy.

Jake Warner: [00:37:26] Got it. And so as you're diving into, bringing on your your earlier customers, is there a certain niche that you found works really well to date?

Zak Boca: [00:37:38] Well, what we're finding right now is that - well, let me let me say this. As we build the product in these early days, we're really focused on this on this like building for a highly complex customer. You know, it's a lot like what Airbnb did as they, you know, they they wanted to build this experience so you could effectively live this personal and local experience. And maybe you don't have to have a home. You could live on the road and experience these different cultures. And that's not how the majority of their customers use their service. Right? We take a vacation, but we but we still get the benefits of getting a personal experience and a more local connection to the host. And so our highly complex customer is someone who has many different investments in alts. They have few resources. They're not a family office. They have few resources. They need us to give them this tool to manage their private equity investments, to manage capital calls, to manage a lot of these things. And, and so, so we want to save them a tremendous amount of time as we kind of get further out, our sort of the 80% of our business probably won't look entirely like that.

Zak Boca: [00:39:08] But that's but that's who we're building for right now. So the founder of iCapital just invested in the company and came on as an advisor. iCapital is a recently valued public 6 billion or the one of the largest feeder fund business for alternative investments. And so they feed out their products, their investing. They set up these big feeder funds into different asset managers. They feed them out through RIAs. The founder of iCapital, Dan Vene, reached out and he said, you know, listen, I want to talk about what you're doing because like, I have this problem and, you know, I basically run the biggest alternative investment shop. I don't have a family office. I have these time constraints. I don't know how these funds are performing. So we're really targeting at the moment these types of folks, you know, highly complex, but they don't have a family office.

Jake Warner: [00:40:12] Well, and I think that's it's I mean, obviously there's a lot of differences between our two companies, you know, from what industry they're in to our target customer, like just completely different things. But the fact that I like that in common is you and I both had a problem that we needed to solve personally. I think there's some entrepreneurs out there where it's like, hey, they have the entrepreneurial bug, but their goal is just to go out and build something because they just want to build something, right? I think when deep down you're solving a problem that is like a huge annoyance to you. Like, I mean, Cycle is built because, you know, between Single Hop and building Cycle, we were a dev shop for three years and we kept building projects and projects and projects for other companies. And every single time we started another project, it was, oh, we have to redeploy all this stuff, to rebuild that foundation. Then it was just incredibly annoying. So that's kind of how it started, leading to let's build Cycle. And so it's always nice to have other entrepreneurs that are like, hey, you know, in your case as in managing all these alternative investments, it's been such an annoyance to me, there has to be an easier way. Oh, there isn't. Let me build it.

Zak Boca: [00:41:22] Yeah. No, it's a complete different experience to building a product and to having, you know, into, you know, into really having kind of your, you know, whether or not you're successful. But even but even whether or not you burn out on the project, there's there's not a lot of longevity to build, like this is this is really hard, right? I mean, we all know this It's it's really challenging. You you make sacrifices in the time that you spend with you know, with your family and different things. And and it's hard if it's not a problem that really keeps you kind of awake at night and, you know and also it keeps you energized at fixing. So I would agree 100% and that's for me, that's been a nice transition. We had a lot of things to, you know, that we were figuring out first at Single Hop. And there was a lot of fun to that. But when I look at what I'm doing now, I want to see, I have this problem. And so I've been able to kind of have this built in passion for for solving it for myself. But then, but then it's nice to be able to say alts are coming down market if you sort of backtrae. So you fast forward ten years. I really do believe that the allocation, the traditional allocations that we've that we've had 60/40, I think that looks massively different. And so I believe that smaller investors will get to the point to where it makes total sense for a smaller investor who just has crypto and they have a single family house and they've invested in a startup. We'll get to the point to where it makes sense for you to be on a platform like this for a variety of reasons. And so it's fun developing a project that stems from kind of a passion you have and you know where you see the space going. It helps you see where the space is going.

Jake Warner: [00:43:24] Yeah, well, I think that kind of brings everything full circle, because that takes us to the start of the podcast where we were talking about patience. And I think if I was in terms like the question was, how have you had patience building Cycle? And I think there's three things that it comes down to, which is a lot of it has to do with this current conversation, which is, one, you know, if I go out today into the market and say, hey, if I wasn't going to use Cycle to solve this, how would I do it with other products? And it's still super complex and hard and like, no one is solving it this way. No one is making it actually making it easy. And so that keeps me going. Number two is when you give those demos of your product and I'm sure it's the same for you, but when you give those demos and you have that magic moment where the person on the other end of that call is saying, wow, you can make this easy, I didn't realize it could be this easy. I spent so long doing it the hard way, I didn't realize it could actually be easier. That magic moment is and seeing that reaction from people during demos is super motivating. And then, three, just as we were just talking about, when it's a problem that you have to solve or when it's a problem that you have personally, obviously me being a developer, containers are very fundamental to that. I think it's those three things together that help that patientce and for a founder to be able to say, hey, I'm in this for the long term, I'm willing to take the risk, I'm willing to deal with the time commitments that this is going to take. And I understand that I'm going to be on a roller coaster for a number of years. I think if you have those three things, that's how you can keep moving through that. Even during the times where things feel like they might not be working.

Zak Boca: [00:45:06] Yeah, totally. Now, it's funny you say that. I, I believe that I, I recall when you found that when, when I, like, brought up to you at one point, something Single Hop was doing, and you were like, yeah-yeah-yeah, but that's not that's not what the future looks like. Like the future is like this. This thing, you know, like it fixes everything and on and on. But yeah, no, you, it's a different level of passion that you get when you, you know, when it's a real problem that you're dealing with. Yeah, totally.

Jake Warner: [00:45:39] That's one of the things that we've learned recently. And you know, sorry to derail, but it's very applicable. So for the last two years, we've been so, I mean, we've only really ramped up our sales team in like the last five months. Five, six months ago, we had never had a sales person in the company. Now we have well, we have one and we have the second one starting next week. And then we have a head of growth starting next week, too. So it's seeing that transition from a development-focused company into still being a technical company, but growing the other side of the business as well. But like I was saying, if over the last X number of years of growing the company, we've been mainly selling to CTOs. And it was always really interesting because like you're harping on your messaging people via LinkedIn or however you're reaching out and you're saying, hey, you know, I have this easy way to do things. And some of these CTOs are saying, Oh, that's neat, I want a demo. Others are like, I don't really care. And it was weird. Like, it took a lot of effort to get in front of the CTOs to get them to see a demo Cycle. Well, recently as we're working on growing a development team, I've been connecting with lead developers and senior developers just because I would like to hire more senior developers. And it's really interesting because I'm reaching out to these people on LinkedIn with the idea of hiring them into the company and the response that I'm getting back before I even send the message like, Hey, we're looking to grow the team.

Jake Warner: [00:47:04] The response I'm getting back from them is, Hey, I'm currently working at X Company and I have this problem and I think Cycle can solve it. And so it's like over the last two and a half weeks now, it's been like. Damn. Or have we been selling to the wrong people? And that's kind of the point of when we're realizing that we can't sell to the people at the top, we need to sell to the people that are living and breathing the same problems that I was encountering when I built Cycle because those people where like, to a CTO, Cycle is, I don't want to say it's a nice have because there are some really important and powerful things in Cycle. But when you're not when you're not writing code and solving these issues every day, it can be a nice half, right? Because I mean, if your engineers are dealing with it and at the end of the day you're just like, well, that's that's the dumb problem. And as long as it doesn't cost a huge amount of money, they can keep solving it. But for them who are living and breathing these issues, it's just game changing. And so we started to realize, like as we move forward, our marketing and sales strategy needs to not be who's the CTO, it needs to be who is the most senior person at the company that's writing code.

Zak Boca: [00:48:11] No, yeah, that's a great observation for you guys that it's a much quicker sale and it's probably someone who is, is equally frustrated with the problem like that as you have been as you've built Cycle now that's a good it's a really good observation and it's probably, you know it's what has us focused equally on the investor instead of... I always like finding in business and in kind of go to market plans something that's more of a bottom up, like going to the very top is just, they're expensive, there are less people there. Sure they theoretically make the make the decision but you know how it is when back at Single Hop when you were like, we have to rewrite this, the last thing that I'm going to do or any of us are going to do is like, No, you must work on this thing that you say is terrible, a terrible environment to work in, and we're not going to let you improve how you like it. Just... It doesn't make sense. So the developer has so much control over their environment or they should, they definitely should at least. It's a good observation for you guys. I like that.

Jake Warner: [00:49:29] Well, as you talk about Single Hop like this is one of the things I was thinking about is over the last three weeks that this has been happening. I was like, okay, back when I was Single Hop, we never had Andy Pace, the CTO, when I was there. We never had Andy Pace come down to the development team and say, Hey, you're going to do X. It was, in terms of like what technology we should use. It was, Hey, we need as a company, we are moving in this direction, how do we get there? And then, yes, you know, Andy would have the final say on certain things, but it was a hey, here's a path A and here's a path B. It was never a dictation from the top. It was the developers figuring out what made the most sense and then saying, Hey, is this the right move, are you okay with us taking this approach? And so it's like all these different things kind of came together at one time that was like, wow, like, so it's clicking. I mean, just like how you were saying with I think the firm's name was iCapital or the organization's name was iCapital. How their founder had reached out and was like, Hey, this is a problem I'm dealing with. Like when you have people starting to reach out to you with the problem, it's like that, that it's just that perfect fit. And it's really energizing.

Zak Boca: [00:50:37] I think it's called product market fit. And I wouldn't say we're there, but you guys. But you guys definitely are. So it's yeah, so we'll have to kind of catch up, you know, again, as we move forward. We're closing. We're closing. So we so we've been at it 15 months now. We actually, much like you did at Single Hop, Naru and team, our CTO and brought in his development team maybe six weeks ago said, listen, we've learned a lot with the existing platform, but we need to rewrite it. And so it's, you know, to kind of illustrate your point, you don't say no to that. You go, okay, let's take the time and let's do that. But now we've built what we believe is really pretty scalable. And over the next few months especially we'll be bringing on users, listening really closely. We close our round Friday, which will be exciting and you know, we'll start to expand our team a bit and hopefully be at a point where we can like you guys really start ramping up sales and marketing. But, you know, it's been exciting. It's been really exciting watching Cycle grow and and figure out who your customer is, what your strongest offering and we've we actually, as you know, the studio, the venture studio is like, listen, we're going to be far more effective on Cycle and so we made that change early on so we didn't grow somewhere else that was going to be inefficient and more cost effective and, and all of that. We made that the change early.

Jake Warner: [00:52:25] And that shows the model, that shows the model of once you get developers introduced to Cycle how much time it saves them and what they need to do and the fact that they'll keep building projects on top of it. But as we begin to wrap up. You're talking about building your team. Are you currently hiring? If so, what positions? Who's a good fit for AltExchange? Like, are you fully remote? Anything that you can share with the audience for that?

Zak Boca: [00:52:54] Yeah. Yeah, we are. We are fully remote with occasional ski trips out to Vail, Colorado, But we we are remote and right now. So as I said, we're in this product market fit. What I what to do is I like to produce content pretty early and get on SEO. And so right now we're hiring for content to expand our team, our content team. So folks that stay on top of alternative investments, whether it's contributing to crypto or it's contributing to private equity or venture or anything, really. So we're hiring for content and PR and then in the next few months we'll expect to close another round. At that point, we'll be expanding our engineering and customer service team.

Jake Warner: [00:53:49] Excellent. And if anyone watching this who is an investor invested in many alts and things like that, if they want to get in contact with you or your team, what's the best way for them to do that?

Zak Boca: [00:54:03] Well, they can go to AltExchange.com , but then they can also email me direct at Zak@AltExchange.com. Reach out please if you invest in alts because we're really at this point developing, building the product for the investor in alt so we love all of the feedback that we that we can get right now.

Jake Warner: [00:54:30] Excellent. Excellent. Well, Zak, it was great to have you on the show, on the podcast. And although we've known each other for, again, 14 years now, which is insane. It's really exciting to see you build a company on top of Cycle and looking forward to growing our businesses together. And it's a fun time.

Zak Boca: [00:54:55] It is. Thanks so much, Jake. Appreciate it, man.