Rose Punkunus talks about Sudozi, a new startup that streamlines workflows relating to vendor contracts and budgets

Rose Punkunus of Sudozi - Podcast Transcript

Scott:	Hey, it’s Scott Orn of Kruze Consulting, and thanks for joining us on Founders and Friends for another awesome podcast. Let’s give a quick shout out to the Kruze Consulting accounting team. We’re very fortunate. We have a ton of people at Kruze who work on the monthly books for our clients and get them all set up, due-diligence ready, rocking every month, answering all the clients’ questions, making all those adjustments.
Scott:	There’s no better moment for a founder and for us, really, when founder says, “Hey, I think I’m going to get a term sheet. Are my books ready for diligence?”
Scott:	And we get to say, “Yes, they are. Fire away. Send them over, give them access.” That is a great feeling. It’s the feeling that lets us know we’ve done a job very well done, and nothing is better than watching that cash hit the bank account. So, if you are a venture-backed startup, you’re going out to fundraise, maybe check us out. Check us at Kruzeconsulting.com. We love what we do. At taping here, I think we have 575 clients. Clients raised over a billion dollars this year, so we know what we’re doing and hopefully, we can help you be successful in your fundraise. All right, let’s get to the podcast. Thanks.
Singer:	(Singing) So when your troubles are mounting in tax or accounting, you go to Kruze and Founders and Friends. It’s Kruze Consulting, Founders and Friends with your host, Scotty Orn.
Scott:	Welcome to Founders and Friends podcast with Scott Orn at Kruze consulting, and today my very special guest is Rose Punkunus of Sudozi. Welcome, Rose.
Rose:	Hi Scott. Thanks for having me.
Scott:	My pleasure. We’ve known each other for a couple years and you are a total finance nerd like myself.
Rose:	Yes.
Scott:	And you saw a really cool opportunity in where tech meets finance and you jumped on it, and I’m super excited to have you on the podcast to talk about it.
Rose:	Yeah, thanks Scott. I think we met through Operators Guild back in 2017 or something like that.
Scott:	We did. Yeah.
Rose:	Yeah. Small [crosstalk 00:01:53]-
Scott:	Is it 2017? Oh my God.
Rose:	Yeah.
Scott:	Oh my God.
Rose:	Been a few years.
Scott:	That’s that’s dog years.
Rose:	Yes.
Scott:	Well, maybe you can retrace your career a little bit and tell everyone what you’re working on and how you had the idea for it.
Rose:	Sure, sure. Growing up, my parents… My dad’s a pathologist and my mom’s a registered nurse, so I had almost zero exposure to technology, business, all of this startup world. I’ve always been interested in data, a general… And then, also my community. I think those are the three themes that have run consistent in my career. Out of college… I went to college on the East Coast, majored in economics, and I always knew there was something going on on the West Coast, so I decided to take a research fellowship out in Stanford. I moved over myself. My apartment, by the way, was 500 bucks a month in Palo Alto back in the day.
Scott:	What year is that? What year?
Rose:	It was 2008. I’ll reveal myself. 2008.
Scott:	Oh, so you got… I graduated business school in 2007 and when I came back to San Francisco, I got a one bedroom in San Francisco with parking for 1,250 bucks-
Rose:	Oh, okay. Yeah.
Scott:	… because it was the downturn, and there was so much vacancies in San Francisco and Palo Alto. Yeah. Those were the good old days.
Rose:	Yeah. It was actually, the rent was $550, but because I didn’t have a car and I biked everywhere, the landlord reduced it to $500.
Scott:	So Awesome.
Rose:	Yeah.
Scott:	Amazing.
Rose:	Yeah. So, came out, wanted to see what was going on in the Bay Area. I came out for a research fellowship and I quickly discovered that I am not fit to do a PhD and do research for the rest of my life. I’m much more operational. I like to get into all sorts of aspects of the business. So, wound up going to business school, had the opportunity to work at Apple, so one of the first analysts on the Apple TV team there.
Scott:	Oh, amazing. That’s one of my favorite products, actually, now. I use my watch and I exercise, and I do the Apple Fitness and it puts the metrics on the screen. It’s amazing. It’s actually super addictive and cool.
Rose:	Yeah.
Scott:	That’s amazing you worked on Apple TV. That’s a great product.
Rose:	Yeah. Super interesting experience. They’re just thinking about how do you stand up a new product line from music? All they had was music at the time and both the data structure, business model, physical products to get the videos out on… So, went there and wound up actually doing a lot on pricing. Because Apple at the time didn’t produce any content by itself, our group consulted with all the video… the studios. Fox, Warner, et cetera, and we were helping them with pricing strategy and their digital strategy. So, how do you distribute content digitally? How do you price it? Because suddenly, you don’t have to print boxes, you don’t have to print DVDs, and you can make a margin on this stuff.
Scott:	That’s really cool. That’s a great experience. What years, that was post-business school for you?
Rose:	Yeah, so that was… I started there in 2011 and then I ended in 2013, before I went to Uber. Through that pricing experience, I actually got, through my network, got a referral into Uber. They were looking for a pricing manager as they were starting to branch out beyond Uber Black Car and getting into UberX and thinking about, how do you… This is even slightly pre-surge pricing. How do you even price UberX? This peer-to-peer model, someone brings a car onto the platform. What do you need to pay them? All that stuff.
Scott:	The Uber evolution in those early years was… It must have been really fun to be there because, “Oh, Black Car… Oh wait, we can do this mass market. Oh wait, we have to worry about surge pricing. How do we figure that out?”
Scott:	That must have been just so fast moving and so interesting.
Rose:	Yeah. We can do a followup podcast just on that, to the extent I’m allowed to talk about it. Fast is… Fun is absolutely one word I would use to describe it. Other words as well. I’ll let you think about [crosstalk 00:05:40].
Scott:	Exhausting. Tough. Yeah. Yeah.
Rose:	Yeah, et cetera. Within Uber, they didn’t really know where to put me, so I was running pricing and I reported to the CFO, essentially. That’s the first time I got exposure to month-end close, all the accounting processes, all of the financial operations that happens. You can’t just say, “I’m going to distribute a million dollars in promotions,” and boom, it happens.
Rose:	There have to be data pipelines built. The app has to surface that, and how do you settle those promotions and the whole workflow?
Scott:	Yep.
Rose:	That’s kind of how I started to get into finance, and really just loved the bookkeeping aspect, all the way through the strategy and new pricing, new model, new business models, et cetera.
Scott:	Just saying, some people think that stuff is boring, but I actually find it… That’s why I work at Kruze. I found it incredibly interesting, and then the ability to make changes or introduce automation or better reporting or just sharing the results of people. I’m sure you… Uber was probably going so fast that all of a sudden, you had different stakeholders, or different groups were spinning up, and you had to really keep an eye on things as the company was growing. I always heard crazy stories of Uber. I think we had an accountant at Kruze that used to work at Uber, and you guys were using bill.com for the payments, but bill.com was breaking because you had 50,000 vendors you were paying. You were breaking bill.com, which blew our mind, but that was the scale that Uber was at. It was a crazy, amazing scale.
Rose:	Yeah, and QuickBooks, too. So, imagine being on QuickBooks.
Scott:	Oh, were you guys running QuickBooks that late?
Rose:	Way, way back. Yeah. When I joined, we were on QuickBooks.
Scott:	Oh God.
Rose:	But yeah, to your point, a lot of people think audit, all of these things are not that interesting, but I remember one of my most interesting experiences was trying to explain the surge pricing algorithm to our auditors, and how the price gets calculated, and the data pipelines and the systems that it goes through to surface onto your app and to the driver’s app of what the price is. But I guess fast forward, I ran pricing, which also included promotions and driver incentives, and one of the things that we had to… We ran our business weekly during a period of time, and we would be signing off on tens of millions of dollars every week on requests approval. Imagine purchase requisitions being sent for promotions in a certain city and driver incentives in a certain city.
Scott:	Yeah. Yeah.
Rose:	We wound up building custom software in house to manage that because at that volume, it didn’t make sense to go through email and Google Forms, and other systems that most companies have set up to do these approvals.
Scott:	That’s crazy. That’s a lot of money to be spending on just promotions, but at that time, it was a race to get the drivers. That was what it was all about, and then the riders will come, so that makes total sense.
Rose:	Yeah. I wound up running large chunks of the P&L including the US and Canada P&L, for a number of years. The company got really big, so I wanted to do the startup thing again, so I went to Fundbox, which is how we met through Operators Guild.
Scott:	Oh yeah.
Rose:	Fundbox is a B2B technology company that uses data science to help make lending decisions to SMBs. I was VP of finance there reporting to the CFO, or sorry, CEO. While we didn’t have these promotions and all these crazy volume of money that Uber was spending, we did have very similar challenges, like the CTO or the head of data wanted to buy… Needed certain vendors, needed certain software. They needed additional seats on some sort of softwares that they had.
Rose:	We actually stood up internal processes to manage that. We were way too young for Coupa or anything else at that point, but we did need something to manage those requests. Ultimately, in general, I mean, you probably see it. The industry is changing where finance and accounting is, they’re not just reporting on data in the past. They’re really starting to partner with the CEO in the business to think about, “Well, where is the next best investment? Where should we spend our money and get the highest ROI moving forward?”
Rose:	That’s the shift that I saw happening, at least in my world there.
Scott:	And it is. It’s getting more real time, it’s getting more… The hooks are getting in everywhere instead of just being a reporting thing. It’s an operational thing, which is cool.
Rose:	Yeah, absolutely.
Scott:	Which is really cool for folks like us. Then also, there’s the whole, are we making smart decisions? Do we have all the info? Not just the financial info, but contractual info. How long is this relationship going to run for?
Rose:	Yeah.
Scott:	All that. I think that’s where you’re going, but you need that kind of stuff, not just numbers in QuickBooks, to make a good decision nowadays.
Rose:	Yeah.
Scott:	And I think that’s what’s really exciting about what you’re doing.
Rose:	Yeah. No, QuickBooks is great-
Scott:	But I don’t want to steal your thunder, keep going. Keep going.
Rose:	No, this is exactly what we’re building for. We’re building for finance leaders like yourself and others at companies where today, it’s not sufficient to just look at, “Well, what does my charter [inaudible 00:10:54] accounts say for this last month?”
Rose:	That’s absolutely necessary. You need to have your right historical data, but really supplementing that information, particularly for vendors, head count as well. Well, what’s the relationship with this vendor? How many years did we sign this contract for? What’s our commitment for the next 24 months? Can we even wind this down if we need to do some cost cutting? So, having your vendor database connected with your QuickBooks and having that budget tracking all on one system, that’s what we’re building here at Sudozi.
Scott:	I love it, and maybe my favorite part is that contractual information.
Rose:	Yeah.
Scott:	And terms of service. That, to me, is what… When you told me, because I’ve been very fortunate. I’ve actually been in the loop on this, maybe since almost day one for you. Maybe two years ago. I can’t remember exactly what it was.
Rose:	Day negative 30.
Scott:	Yeah, but you were like, “Hey, I have a crazy idea. I’m thinking about this. What do you think?”
Scott:	Even just before we turned on the mics here, I was telling you that we put a lot of our vendor contracts in Box. We use Box, but it’s not tied to anything. It’s not tied to the charges, or it’s not tied to QuickBooks, so I can’t look and see what’s actually happening. Or, when does our renewal come up on stuff?
Rose:	Right.
Scott:	Or get a renewal alert three months in advance so I can start negotiating a better fee with that vendor. There’s a lot of leverage and a lot of information. What I think is cool about Sudozi is, you’re putting it in one place and you’re hooking it up into the accounting system.
Rose:	Yeah.
Scott:	Which, to me, is really, really powerful and really cool.
Rose:	Exactly. You’ve just shared a very common use case of our customers, where you have this Box folder. It’s well organized, but still you don’t have a digital layer of the information in there. Can you chart your renewal dates for the 30, 40, 50 contracts you have in there? If you were in a large organization, if you got a purchase request coming your way, do you know how much that department is off from their BBA, and what contracts they’ve already signed for the next year? So, having all that all in one place… I’m sure as a COO, you get asked, “Hey, can I buy this stuff?”
Rose:	And you’re like, “Well, what’s the first thing you try to find out? How much have you spent so far?”
Scott:	Oh, totally. And you made the point of… Well, ours is well organized now, but that was because we did a giant spring cleaning three years ago.
Rose:	Yeah. Yeah.
Scott:	Because it wasn’t well organized for about four years, and I would venture, because we organized some of that stuff for our clients, I know most of our clients are not super well organized on that stuff, too. So, that’s a big assumption. But the other thing is, and I thought this was really interesting because you had a really good anecdote, I think it maybe was it ScaleFactor when you went there… Maybe tell that anecdote, because I think it really encapsulates the Sudozi system and how it could be useful, because you didn’t have the system when you went to ScaleFactor and were running finance at ScaleFactor, right?
Rose:	Yeah, that’s right. I was a CFO at ScaleFactor for a number of months, and unfortunately the company wound down during COVID. But while I was there, we were trying to figure out, if we were to cut X dollar amount from our burn every month, where would we go? One of the places we actually saw was, “Hey, we’re not coming into the office so we can reduce our lunch cater.”
Rose:	Unfortunately, the lunch caterer had auto renewed, the person who was responsible for it. Great person, but again, the contract was in a folder, there was no digital component of that date. There were no workflows that were triggered based on it. And yeah, maybe you have a good relationship with that vendor and you can negotiate some things after the date, but it’s always… You’re in a better position if you go ahead of time. That’s what we’re trying to help our customers get, and our customers have, even if you just catch one or two renewals, it’s a positive ROI on the software already.
Scott:	Oh, for sure. Also, when you were explaining that anecdote, you also don’t want to spend a lot of time looking for the contract and trying to find it and parsing through the contract, and all stuff that’s not really value add.
Rose:	Right.
Scott:	That’s why I think hooking it into the accounting system is so powerful, because it’s right there. It’s in your vendors, just look at it.
Rose:	Yeah.
Scott:	I don’t know. That really hit home with me. Anyways, I’m really glad you built this. Maybe talk to everyone about the product, the use case.
Rose:	Yeah.
Scott:	Then, you said my… I don’t want to overly focus on the contractual aspect and how it’s linked in because that’s my… I totally latched onto that, but maybe explain some of the use cases other people have, too.
Rose:	Yeah, absolutely. We’re giving finance leaders three key capabilities. One is transparency of their data, so you have the data in Box or QuickBooks and it’s there. You have access to it, but it’s not consolidated in a finance HQ, if you will. So, giving transparency for the data you already have. The second part is a collaboration. As a finance leader, you are really building relationships with your VP of engineering, your marketing leader, all the different departments in the team that you have, so having a tool where they can access their sliver of the data that the permissions already set, that helps with the collaboration between those teams. The third one is really speed to make decisions. So, you have the data there, you have the right collaboration, you’re able to have higher confidence in the decisions you’re making and be able to make those decisions faster.
Rose:	We work, I would say primarily right now, with venture back startups, but we have some customers that are in oil and gas and in nonprofits.
Scott:	Interesting.
Rose:	How does a nonprofit run their back office? Well, they have email and they have invoices and they have vendor contracts. So, if we can make those organizations more efficient, then their donor dollars go a longer way, so there are a number of organizations that this can be applicable for.
Scott:	Hey, it’s Scott Orn, and we’re going to take a quick break from the podcast to give a shout out to the Kruze tax team. Gosh, it’s so nice to have an in-house tax team. I can’t even tell you. We have some really amazing professionals on team. It’s over, I think it’s 13 people now, and we do everything from your federal and state income tax return, state franchise tax filings, R&D tax credits. Those are pretty popular these days. And guess what? They’re there for you when you go through diligence. A lot of people don’t know this, but you actually go through tax diligence, not just operational financial diligence, but you do go through tax diligence, so it’s nice to have Vanessa Kruze on the phone with your VCs and with the accounting firm they hire to diligence all your stuff, and the law firm they hire to diligence all your stuff.
Scott:	Vanessa knows what she’s doing. She’s done this a million times and it’s not just Vanessa. We have a really great team of tax professionals that will do those calls, too. It’s sometimes the difference between getting around close, or having it take another two weeks because something was disorganized and the tax compliance wasn’t done correctly. We hear those horror stories from clients that come to us. So, if you want Kruze’s tax team on your side, we’re here for you. Check us out kruzeconsulting.com. Thanks.
Scott:	There’s another aspect of this. It integrates with QuickBooks. You’re working on NetSuite right now, I believe, but this is a little bit of a rite of passage type of solution. As you start scale… It’s good for everybody probably, but as the company starts getting more and more complex and different people start coming in the company… Because that’s what people sometimes underestimate, is when a company’s really scaling, they’ll bring in a VP of finance and they’ll bring in an accounting coordinator or manager, and then they’ll bring in some staff accountants, and having this already organized in one place, especially as you make a transition from QuickBooks to NetSuite, say.
Rose:	Yeah.
Scott:	The very common transition in a scaling company to do that, to have this in Sudozi where it’s already there, settled, and then you can make that connection, to me, this is a really amazing system for the growing finance team or growing… Whether it’s a startup or just a more mature industry company that just needs this visibility, it’s pretty exciting to me.
Rose:	Yeah. Thanks, Scott. Part of the workflow that we provide is an approval chain, so you can actually customize your approval chain, but what we’ve actually found is people are partly using it for approval and audit reasons. But half the use case is actually just visibility. So, if you want your AP manager to see the approvals, they don’t need to click approved, but they can see, “Oh, Scott said approved, but only pay this invoice if X happens.”
Rose:	So, that context there is so important to having your growing finance team feel included and being part of the team. You don’t want them to just operate in isolation and be paying bills all day.
Scott:	Yeah, or they don’t have a… you’re right about the context, because something happened the other day where one of our finance person approved a tax software bill, but without really knowing what was really going on. I was like, “Oh, if you go back six months ago, we already paid a portion of this.”
Rose:	Yeah. Yep, yep.
Scott:	I know that vendor’s billing practices are really poor and we were constantly reconciling and fixing stuff that they mess up. But she didn’t know that, and so I had… You’re exactly right. That context would’ve… Because she was actually running the group at that time. I just made the payment.
Rose:	Yeah.
Scott:	So, you’re right. That’s a really good use case of… I remembered it because I made that payment, but it would’ve been helpful for her if she would’ve been copied on the original emails from December.
Rose:	Yeah, so if you could digitize those emails and store them in our vendor page… You can also, because we have that integration with QuickBooks, you can actually see the prior transactions with that vendor as well. You get more of a fuller picture before you make a decision, or have higher confidence on your decision.
Scott:	That’s really cool. You said it’s some oil and gas and some nonprofits and not just startups, is there a size that you’re having a lot of success with? I tend to talk in terms of, because I’m a startup person, series A, series B, series C.
Rose:	Mm-hmm (affirmative). Yeah.
Scott:	I would think it’d be a series B, series C companies that would be right up your alley.
Rose:	Yeah. As all things, it kind of depends, but you’re right. Series B through D, you’re getting to that point, several, low hundreds of people in the company, you don’t know everyone. You may not even know everyone in the finance and accounting team anymore, and you’re trying to have a lightweight process to manage all of this. I will caveat and say, we do have some much younger companies that have more physical inventory or other assets that they want to keep track of, whether they have multiple vendors in different markets or things like that. So, it’s a little bit more proportional to vendor size as well, vendor and headcount complexity, but overall, your typical series B through D company trying to keep things in check as they grow fast.
Scott:	Makes total sense, and it’s a SaaS subscription model, right? People sign up for a year or something like that.
Rose:	Yeah, that’s right.
Scott:	Pay monthly kind of thing?
Rose:	We have an annual payment. Annual upfront, so a typical SaaS upfront payment, but happy to chat through different use cases, especially for nonprofits and whatnot out there.
Scott:	I don’t know how much of this you disclosed, but you actually have raised some pretty serious seed financing. Is that okay to talk about?
Rose:	Yeah, we can definitely talk about it. We’ve been fortunate to partner with Pear VC, so we’ve raised 4.3 million between Pear S3 ventures. They’re the largest VC in Texas, along with Mischief and a number of really amazing angel investors as well.
Scott:	Yeah, I actually love Pear because I used to go down there five years ago, maybe more, when I first joined Kruze, and I would do little talks… I don’t know if they’re still at the same building, but it almost like a converted house or office or something like that. It was the real incubator kind of thing before everything got really cool and over hyped and all that kind of stuff, so that’s a really great fund to have behind you. Probably the best thing, if you’re a customer listening to this podcast, is Rose is a finance professional. You’re kind of a finance professional first, and I think that’s probably reflected in the product, and probably reflected in where you’re going. If I was a potential customer thinking about this, I’d actually draw a lot of comfort from that.
Scott:	You’re not an engineer, because I don’t know if this happens to you, but a lot of times, people will know Kruze and they’re like, “Okay, I want Kruze to sell this to their client base.”
Scott:	It’ll be someone who hasn’t really lived some of these pain points. They’re more 100% engineer person, and there’s room for that, too. There’s people like that have built great products, but they have a hard time speaking our language sometimes, or understanding how it fits into the monthly close, or why it’s only half the solution or things like that. So, I think that’s actually bodes very well for you, because you are subject matter expert, and as the product grows, there’s going to be a lot more stuff that you fill in from your experience and from your conversations with the finance professionals who are actually using it.
Rose:	Yeah, Scott, I’ll nerd out all weekend on accruals and allocations and justifications for different things, and how the P&L should be structured. I’ve literally spent weekends forking different Excel sheets so that the CTO has one version of it and the marketing leader has another version of it, and just living through all the shortcuts on Excel and Google Sheets now. Also, we discussed, but I have a one and three year old, and so I wouldn’t be crazy enough to do this if I didn’t see something in this data world happening on the finance side.
Scott:	Yeah. There’s something here for sure. Is there any things that are coming down the pipeline? Any cool new features? You don’t have to break any news here, so if you want to keep it close to the chest, that’s okay.
Rose:	Yeah, well-
Scott:	But is there any events that people should be looking for, or subscribing to your LinkedIn feed or Twitter feed or something like that to keep an eye out?
Rose:	Yeah. We have a absolutely fantastic product and engineering team. We have a number of new features coming out. I’ll say, obviously live with QuickBooks, our NetSuite is in beta, so if you are on NetSuite, definitely interested in chatting and partnering with you in our real time budget tracking feature. One of the things I’ll say is, if you are thinking about having a finance HQ, it doesn’t make sense to just submit requests for vendors. You want to partner with your department leaders on any sort of spend request they have, whether it be new headcount, equity, one-off bonuses, vendors, contractors, the whole spectrum of spend. Why does it matter if it’s a W2 employee versus a contractor that’s costing 200,000? It’s still 200,000 of investment that the company needs to make and having that all in one platform. So, that’s the general direction we’re going and we’ll have tons of new features. You can find me on LinkedIn. Actually, I’m using my maiden name there, so Rose ZHONG. Z-H-O-N-G. And of course sudozi.com, S-U-D-O-Z-I dot com.
Scott:	I love it. And S-U-D-O-Z-I dot… Is it dot com? You got the dot com?
Rose:	Yeah. I got the dot com. Yeah. Sudozi accounting is [crosstalk 00:26:55].
Scott:	Is the Sudozi, is this like Sudoku puzzle? Is that how it’s related, or how’d you come with that name?
Rose:	No. Well, I’ve abbreviated it a little bit, but it’s actually Shù dòuzi. That’s counting beans in Chinese, so it’s a spin on the bean counter situation.
Scott:	Oh, I love it. I love it. Well, this is awesome, and thank you for including me as part of your journey. I was very flattered when you reached out a couple years ago with the idea, and it’s really cool to see how far you come. The flip side of that, being a finance professional and knowing the market is, it is hard to execute on building technology. It’s really hard, and I’ve been super impressed with how fast you got this to market, how nice the product looks. It’s really amazing on your QuickBooks integration, and NetSuite’s coming, so kudos to you. You’re doing a really good job, and I’m excited to see where you take the company.
Rose:	Thank you, Scott. Really great to work with you and just get your feedback along the way. Appreciate it.
Scott:	My pleasure. Thank you so much. You know where to find Rose and check out sudozi.com. All right, Rose. Thank you so much.
Rose:	All right. Have a good one.
Singer:	(Singing) So when your troubles are mounting in tax or accounting, you go to Kruze and Founders and Friends. It’s Kruze Consulting, Founders and Friends with your host, Scotty Orn.

Rose Punkunus talks about Sudozi, a new startup that streamlines workflows relating to vendor contracts and budgets

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