#408 - How Stan Markuze refused the me-too game and made buying a no-brainer

Ton Dobbe: You're a SaaS founder. You've built something solid, but growth still feels harder than it should. Most SaaS companies don't fail because of bad tech. They fail because they've never become a must have to the right customer. This podcast is here to change that. I'm Tondover and this is the remarkable SaaS podcast. Every week I talk to founders in the trenches, facing friction, making bold moves and building companies that last. We dig into real choices around focus positioning, customer pool, team alignment. The things that separate forgettable software from the ones that people can't live without. No hype, no hacks, just honest conversations to help you build something that people would miss if it was gone. If your SaaS should be indispensable but isn't yet, this is your podcast. Let's get into it. The guest on my podcast this week is Stan Marcuse, CEO at Balance, we

Stan Markuze: turn the business model upside down, which is like usually you pay an annual SaaS fee for a Treasury management product. Right? What we do is we actually, um, if people sweep cash through our platform, for those who sweep, uh, a certain threshold, we would actually give them the treasury management system, um, at no cost because we're able to monetize the automatic sweeps.

Ton Dobbe: This is Dan. We dig into how he walked into a crowded treasury market where everyone was selling the same thing and refused to follow. You'll hear why he stopped competing on the features everyone else was fighting over and what he choose to be measured on. Um, instead. What got me was simple. When buying stops being in debate and becomes a no brainer, everything changes. How fast you sell, who says yes, and how they talk about you. Well, hi Stan, thank you for making the time available today and being the guest on the podcast.

Stan Markuze: Thank you for having me.

Ton Dobbe: Pleasure. Um, yeah, I mean we're just having a little bit of a chit chat about um, the origin of how this all started. Today we're going to talk about your business balance and how it triggered me with my history. But to start what drives you, what gives you energy as an entrepreneur?

Stan Markuze: Uh, I think uh, two things. Uh, one part of it is just uh, the creation process. So uh, creating something that doesn't exist but uh, should exist, or I think it should exist. Right. Um, so that's the first part of it and then the second part of it is putting the product or service in front of customers and solving a big problem for them. Right. Um, so it's creating it and also getting the reaction of the end user, um, because you're solving a significant Challenge that they're experiencing.

Ton Dobbe: I love how you put that by the way, getting that reaction. I mean you don't hear that enough. I mean if people build their roadmaps and they, they create yeah. New functionality and release it, how often is it measured by their reaction? It's interesting but I, I uh, I mean that's the right, the right angle to have solve a big problem, get their reaction. And the whole creation process is where the fun starts like that. So while getting bridging that to your company balance, ah, what's the big idea behind it? What was that problem that you wanted to solve and get a reaction for sure.

Stan Markuze: So um, Balance essentially is a, it's a, it's a treasury management system. So at its core you know we, we do three things. Number one we, we go to businesses, we connect to all their banks. So we unify uh, their visibility of their banking data across all of their banks. So if they use 10, 20, 40 banks, thousands of accounts, we can show everything in a single interface. So that's number one connectivity. Number two is uh, visualization and management. So it's the ability to make sense of all that financial data. Right. To organize it and create meaningful reports, charts, tables. So that's number two. Right. So management and number three, large uh, uh, mid market and enterprise companies typically have excess cash. So they have like operating cash reserves and those reserves are notoriously hard to put to work. So usually they earn 0% somewhere in a, you know, in a checking account, a business checking account. And so the third part is to make it seamless to put that money to work and earn market interest rates without having to go outside of the platform.

Ton Dobbe: Okay. So the big problem was at the end that so many companies have that non working cash and you make it, you give them a way to, to do that without changing everything underneath there because you're sitting on top of banks etc. Etc.

Stan Markuze: Yeah, right. So that's how we're different from, yeah from a lot of other organizations that generate yield is that we're not a bank, we're not a NEO bank and we don't intend to be a bank. We, we sit on top of the existing banking infrastructure.

Ton Dobbe: Yeah, yeah. And I can imagine that in certain industries this is uh, this is big money and the uh, value proposition becomes a uh. Yeah, an easy one to um, to decide upon. So what conversation started it? Because I see that you have been starting or been founding or the CEO of four companies before. Balance, Joyride, Parts Market, Amalgamated Logistics and then last but not least Universal Pacific Properties. Uh, what got it started?

Stan Markuze: Yeah, so, um, so I graduated from business school in 2010 and my first job out of business school was in private equity. Uh, like ah, private equity finance. And during that time the housing market in the US hit rock bottom because of the finance, the foreclosure crisis. And so uh, a friend and I, a friend from college, we started buying foreclosed houses and then later multifamily right in California. And um, you know, in 2013 I wanted to get into the tech industry. Uh, tech was growing and so I started two tech companies, both of them in the automotive space. One of them I started in 2013, sold it in 2019, another one started in 2020 and that was acquired in 2022. And then after that experience I really wanted to get back into finance, get back into real estate, which I had been doing on the side for over a decade before that. Um, and so I thought I'd combine my real estate experience with a pain point that I had experienced in real estate, uh, which is number one being able to see what's going on with all the bank accounts of all the different properties that we had invested in. And number two, when the cash balances of those properties exceeded reasonable thresholds, put, uh, that money to work. Now I had tried to put that money to work by opening high yield accounts at different banks. Uh, it was just very, very difficult and high friction. And so I thought there must be a better way to unify visibility and to put the money to work without, you know, without opening different bank accounts, switching banking providers, etc.

Ton Dobbe: So you leave the problem yourself. What better way to start a company? That, and so I see that there's sort of a couple of things mixing in there. There's the creation of software companies and then using that knowledge how to do that combined with something that you've been doing at the end for, for well over 16 years now. Because I mean I, I, I read them in a certain order, but I realize right now that indeed you started uh, the property business already in 2010. Interesting. Okay, um, yeah, I mean talking about then the business that you started, balanced 2023, AI was of course already coming, I mean from all the learnings from the three previous software companies and then combining that into the problem that you had with the property business, what was the thing that you now see as a fundamental decision that is, yeah, helping you now with where you take the company?

Stan Markuze: Yeah, you know, I, I think um, there are a lot of decisions that are, that transcend industries and transcend business models. Right. And so for instance, like um, like the people who you start the company with, your partners, the types of customers who you're serving, et cetera. Um, but actually I want to, you know, when, when we sold our second software, ah, business in 2022, um, I knew I wanted to get back into real estate finance, um, build some sort of software product. And really the, the decision for me came down to three factors and actually after selling the second business I made a, a criteria, like a one page list of criteria of uh, you know, these are going to be the um, the criteria for the next business I start. I was able to distill that down into three things. Okay. The first thing was work uh, with people who you like. Right. So uh, so in, in businesses and startups, uh, it's, there are a lot of ups and downs and the uh, the destination is unpredictable. Right? So you can't control for where you're going to be in five years or 10 years, but you can control for your everyday experience. Right. And so I thought, you know what, I'm going to control for what I can't control for and work with people who I like. That's number one. Number two, um, another thing that you can control for is what you learn along the way. Right? So the second piece of criteria is keep learning and learn things that are interesting and valuable to you. Uh, either valuable to you personally or valuable to you in the future of your career. Right. So that's number two. And then number three is a very, it's a very basic one, but one that I think is often overlooked, which is uh, sell products or services to people who have money and are willing to pay for them. Because uh, when you're selling to people who either don't have the money or aren't willing to spend the money or expect to get something for free, then that's a very, that's a very high friction path when starting a business.

Ton Dobbe: Exactly. I call it pricing power.

Stan Markuze: Yeah, exactly.

Ton Dobbe: Yeah. It's uh, I mean a lot of people can buy a product but if it's nice to have, they're not willing to pay. Maybe if you bend their arm twice. But if, if they, if, if it's so real that they almost pull it out of your hands and that's maybe overrated, then, then you're on the right way. I want to dig into that a little bit, a little bit later. Um, so I like how you're those early decisions. I mean it's almost like first principles, three first principles to, to Start running a company. What uh, has that brought you right now? Is that, I mean is, is there one concrete example where you say hey, this is how they work together in a way I couldn't expect.

Stan Markuze: So I guess it's all uh, because starting businesses is very difficult. I think the one thread that they all have in common is uh, removing friction. Right. So fundamentally starting any business is high in friction, right? But all three of the things that I mentioned, if you work with people who you like, that's less friction in your day to day work, right? If um, your customers are happy and willing to pay for your product, your product is easier to sell, that removes friction, right? If um, if you're learning things and you have a big task and a big topic that you need to research, um, but you're excited to do it because you want to learn more about that, that particular topic, then that removes friction. So that's really the common thread. The common thread is startups are hard, there's a lot of friction you can't control. That's inherent in any starting any business. So let's remove all the things that we can control um, to make the day to day experience more um, more pleasant and efficient in starting the business.

Ton Dobbe: That's, yeah, that's a good way to look at it in my book the Remarkable Effect. I've written it about it in a slightly different way. I mean trade number one is acknowledge you remarkable. Uh, software companies acknowledge they cannot please everyone. And I want to dig into that a little bit because you just said if you pick the right customers and you, and you solve the right problem for those customers in, yeah, in what they experience, life will be easier as well because there's, there's less friction you build for what they actually expect. Uh, you also said something about getting their reaction about in terms of solving a particular problem. And I realized a lot of companies say yeah, we solve a particular, particular problem. Everybody that had that has the problem can use it. But in a lot of cases yes, you might have the problem, but not for everybody. It's as vicious or as critical to solve it. Uh, and as a consequence how you then build it is going to be reacted to in different ways. And what I saw is that your solution at the end you can call it's a Treasury solution, it's cash management solution. So technically a lot of companies can use it. But you decided to go niche real estate. Um, why that decision? What's behind that? Is that exactly the friction again?

Stan Markuze: Yeah, so, so I think it was driven by a Few different things. So firstly I had experience, like inside experience from my real estate investments. So I understood why the challenge was ah, particularly acute in the real estate space. So that was number one. Number, um, two, uh, it's a, it's even though real estate is only one vertical, um, it's actually a huge niche, right? So even if you just think about uh, the different categories of real estate, right, there's single family homes, multi family homes, retail, self storage, light industrial, heavy industrial logistics, senior housing, student housing, you know, and that's probably only like half of the categories. Um, so, so it's actually, it's, it's one vertical that has numerous sub verticals that you could go after. Right? Um, and the third thing is that you know, when you're going after one vertical, um, there are a lot of other players and software companies in that ecosystem and you might have to interface or integrate with those other players, uh, in the industry. And if you're sticking to one industry, you know who the players are and you know how to connect to them. And, and so um, so, so like we don't have to connect to any like healthcare erps, right? We don't have to connect to any education erps because we're not in those industries. We know what the real estate erps are, we know how they work and we can interface with them. So there's a, there's efficiency there. One other thing I'll add is that there's a huge reputational advantage, right? So let's say, for example, um, let's say there's a, a customer I really want to sign up in New York, right? And it's a real estate customer. And I already have five real estate customers in New York who are using us, who people know about because it's a community, right? That makes it much, much easier to sign up the sixth customer than if there's five real estate customers. And I'm trying to sign up a, um, health care customer, right? Because the health care customer knows nothing about the real estate guys. It's irrelevant for, for that organization. So, so there's definitely like a, beyond, you know, the domain expertise, beyond the technical integrations. There's also like a, a reputational flywheel that starts to work once you've built critical mass within a certain domain, uh, or um, industry.

Ton Dobbe: Yeah, flywheel is a very important word here. It's what everybody's calling traction, everybody's hoping for. What I also like is whereby people might have already thought, okay, real estate, just real estate. I mean, isn't that market, uh, far too small. And then you start to say, okay, well, real estate consists of so many sub vertical is true as well.

Stan Markuze: Uh, and then there's also like construction and there's, you know, there's real estate finance companies. There's so many of these and they all kind of, uh, don't know each other. Right. They know who you know. So there's a benefit there.

Ton Dobbe: Exactly.

Stan Markuze: Yeah.

Ton Dobbe: The, the moment you start focusing on it, you start seeing market that others don't see anymore, which I like as well. So you niche down. Have you got, also have you specifically chosen particular sub verticals where the product fits better than in others?

Stan Markuze: So, so because we're a cash management product, we, you know, we look for sub verticals that have cash reserves. Right. Um, but really, uh, I think about 60 or 65% of the real estate industry in the US is residential, which makes sense. Right. Everyone needs a place to live. And so we were disproportionately weighted in that sub vertical just because it's, it's so large relative to the others. Um, and so we're well known within that, you know, within that domain.

Ton Dobbe: I can understand that now, um, does this niching down real estate subverticals also, um, help with expanding your edge, your moat, your differentiation?

Stan Markuze: Yeah, I mean, I think whenever, whenever you work with a lot of different operators within the same sub vertical, um, you can kind of understand their, their workflows and adapt your product to their workflows. So if somebody comes along, let's say somebody is doing what we're doing, but they're doing it in health care. Right. And they say, hey, real estate looks good. I'm going to expand from health care into real estate. Well, they're not going to have those, uh, those nuances figured out that we do. And so our product will become more, uh, more competitive for those customers. And not to mention, we'll also have a reputational advantage. Because a real estate operator, are they going to use a company that's built a mode in education? Are they going to, you know, go for a company that's done the same thing in real. Of course they're going to go to the real estate one because the real estate people speak their language, they're, they understand their, their challenges and their workflows, etc.

Ton Dobbe: Yeah, exactly. Yeah, true. Yeah. I mean like you say, the, the flywheel on reputation is, is a big one and it takes us from there. Um, so company started beginning of 2023, so this now, um, three and a half, three and a half years down the road. Uh, yep. I mean, talking about those first two years, what has been your, the, the, the hardest nut to correct where it comes to getting traction going?

Stan Markuze: Yeah, so, so when we started this business, there were, there were a handful of established companies who are already doing what we're doing, so a handful of incumbents. And there were also, you know, three or four startups in a similar stage as us who are also doing what we're doing. Um, kind of just, um, you know, traditional treasury management, which means connecting to the banks and then translating that raw data into charts, tables, reports. Right. And so, so I think the biggest challenge for us is, well, we don't want to be one of seven companies that's selling the same thing. Right. And so then it just becomes kind of like a matter of, well, who's better at sales and who, um, you know, and maybe like some pricing, some pricing competition. Right. So we don't really want to be in that game. We wanted to have something that was unique to us that the other companies weren't doing. And so in the middle of 2024 we decided, well, the thing that we're going to do that nobody else is doing is we're not just going to show people how much money they have and where that money is located. We're going to put that money to work and help them earn interest on it. And so that's, uh, that's really the, you know, an inflection for us. Right. We went from a traditional generic treasury management model to more of a, uh, a nuanced like cash. And by the way, some companies have chosen to focus on reconciliation, some companies have chosen to focus on payments. So like, a lot of companies end up getting very good at one thing. The one thing that we decided that we're going to get good at is, uh, yield optimization. And we did that because nobody else was doing it at that time. And I don't think anyone is still doing it in the way that we're doing it.

Ton Dobbe: Let me make a small interruption here. Stan just said something that sets his approach apart from his whole category. You are staring at a market with seven companies selling exactly the same thing. And instead of trying to outsell or to out price them, you asked a better question. What is the one thing none of them are willing to do? Then he built a company around that answer and changed what this whole team get measured on. And this is what remarkable software companies do. They acknowledge they cannot please everyone. They aim to be different, not just better. And they turn customers into fans want to master these traits as well. Simply read my book. I've made the electronic version available for free. Just visit theremarkableeffect.com to grab your copy and inspiration will spark within 10 minutes. Back to the interview. Isn't it funny? Yeah, because, I mean, if you look at all the things that they do, they give you a report, they give you the visibility, they say, okay. We also take some of the manual work out of your hands, the reconciliation, um, the payments maybe. And the only thing they want from the report is to get an idea about, okay, how we're doing and what should we do with that next?

Stan Markuze: Yeah.

Ton Dobbe: Which is about the making, the making money part. And no one is jumping into that because the making money part there is where people start paying a premium for you. Otherwise, it's just the cost of doing business.

Stan Markuze: And then one other thing we did is we, we turned the business model upside down, which is like, usually you pay an annual SaaS fee for a Treasury management product. Right. What we do is we actually, um, we, if people sweep cash to our platform, for those who sweep, uh, certain threshold, we would actually give them the treasury management system at no cost because we're able to monetize the, the automatic sweeps. And we actually prefer to do that. That's, uh, it's a better, it's better for the customer because we're sending them money instead of them sending us money. And it's better for us as a company because if you're a SaaS business, every year you have to send an invoice to the customer. Every year the customer is going to debate, well, is there a price increase? How much is the price increase? Is it reasonable? How many people are using the platform? Is it worth the money that we're paying? Should we be looking at competitors? Right, so these are all, when you renew a subscription product, these are all, like, factors that you might take into consideration. Whereas if you're just using us and earning money, uh, and nobody else is competing for that, Right. Like it's, you know, we don't have to send you an invoice. We paying you, and then everybody's happy. Right? Because we're making, we're making our piece on the, on the sweeps and you're getting a monthly check for, um, for the yield that you're generating.

Ton Dobbe: What has that done to, yeah, your position in the market in terms of when it, when it was competitive? I mean, has it changed sales cycles? Has it increased deal value? Has it increased win rates? What has been the effect of that that decision?

Stan Markuze: Yeah, all those things. I mean, the, the sales cycle people, um, organizations sign up for our, our product like on the first call. Right.

Ton Dobbe: Um, because it's a no brainer.

Stan Markuze: So that's a no brainer. Sales cycles are very short, um, much easier to sell, much faster. I mean, it's, it's, it's, uh, it's really done tremendous things to our business compared to the traditional SaaS model.

Ton Dobbe: And it all comes down to measuring your success by the impact you help your customers create. That's the whole thing in a nutshell. Uh, remarkable. I mean, so many companies think about it and will never do it because they say, hey, why should they give customers money? But it becomes a flywheel and you're proving it here. And it's about an outcome that they desire, which is trait number two in my book. Um, offer something valuable and desirable.

Stan Markuze: One. One other thing that I'll mention is that, um, you know, oftentimes when customers are buying a SaaS product, uh, the ROI is very intangible, right? It's like, well, we're going to make your Treasury Department more efficient, right? So we're going to save you 10 hours a week and an hour's worth a hundred dollars to you, right? So that's like a thousand dollars a week times maybe you're working 48 weeks. So we're saving you $48,000, right? And so it's like very intangible, right? Well, am I actually spending 10 hours a week? Are those hours actually 100 an hour? Maybe. I have a team overseas that's doing some of the work, right? So, so the roi, their calculation there is very, like, you know, fuzzy with, with our product. The ROI is very clear, right? Like, you know, you're sweeping $10 million, you're earning 4% on $10 million. That's, uh, $400,000 a year. Like that's the ROI. There's no, there's no. Okay. Interest rates change, right? It might, it might fluctuate between three and a half and four and a half, right? So maybe there's some fluctuation there, but like it's, it's real and it's concrete and it's tied to the market, right. It's not, it's not something where, uh, you have to like, make an estimate based on a bunch of assumptions that may or may not be true.

Ton Dobbe: Yeah. What has this done to, uh, the rest of your company? Because what I've heard, I've interviewed a couple of entrepreneurs in various stages of the podcast, uh, whereby Sort of guaranteeing an outcome became the thing. And for them, it made the whole company sharper. Is everybody in the business, how, uh, do they react to this? Are they challenging what you can do to create an even bigger outcome? Are they challenging, uh, what's being built in order to live up to that? I mean, how does that go?

Stan Markuze: Yeah, I mean, it just makes it, you know, from sales all the way to engineering. Um, you know, like we, our company, we earn our revenue by the, you know, the amount of cash that we sweep times the, you know, the AUM fee that we charge on the cash. And so, um, the metrics are very obvious, right? Like, the more, you know, the more customers we have, the more cash each customer is sweeping, the more the company sweeps, the more that we earn that, you know, that AUM fee. And so it's just like a, uh, it's very, very crystal clear focus. Like, how do we get more customers? Right? How do we incentivize them to sweep more money? Right? So these are, these are like the very, very simple, um, like levers that move our outcomes. And so, you know, so, so those are things like, okay, well, you know, maybe we offer additional funds, for example, that customers want to invest in to sweep their money. Right. So they're like very concrete little dials that you can turn to achieve, you know, to achieve the outcome that we want.

Ton Dobbe: Exactly. But also in a way that, uh, that your customers are going to appreciate rather than say, hey, I'm being tricked here. Now, one of the things you said in the beginning, like, you love the creation, you love to solve a big problem, you want to get a dereaction. Um, and one of the traits you highlighted is one of your favorites was create fans, not just customers. Um, what is for you the distinction between, okay, we added another customer versus it became a fan. Do you measure that, for example?

Stan Markuze: Yeah. So someone, someone who's a customer, someone who just signs up for the platform and, and then just like, goes about their daily life and you never hear from them again. Right? So, for example, like, you know, there are a lot of, um, platforms that you use that are just like, not very exciting, but you just use them because, you know, like, for example, some, some accounting systems, right? Like, you use them, they're. They're great, they do their job, but they're not like, like exciting, right? You're not, you're not going to lunch and telling your friends, like, oh, I just signed up for XYZ accounting system for my business, Right. It's kind of like, you know, It's a. It's a necessary thing, even though it might be a great product. Um, so for the reason why we want fans is because the best way to sell a product is when one of our customers goes to a real estate conference or a. Or a talk or something, and then they. They meet their friends there and they say, hey, I just signed up for this thing. It's awesome. You should reach out to these guys and you should get. You should do it too. Right? So that's. That's the distinction for me. Right. Like, the distinction for me is someone who uses it and is relatively happy, but it's not. But they're not like, you know, as soon as they signed up, they've kind of forgotten about it. Right. That's like a regular customer. A fan is someone who wants to, like, share it with their network, which then creates, uh, a sales pipeline for us, you know, which is very valuable.

Ton Dobbe: Yeah, exactly. Do you see that number increase?

Stan Markuze: Yeah, I mean, there's someone in particular who I'm thinking of right now. And so, um, yeah, it's a remarkable thing because the funny thing is that we tried to sign, uh, someone up on our platform probably about six months ago, and that person, you know, they never. The conversation kind of like went. Went cold. And then that person's friend signed up, and then the friend told the person that the system works really well. And now that person is back. The person who went cold is now back, and hopefully we'll get him signed up this week. Right. So that's like a. That's a fan. Right. He said, hey, I want to share this platform with my buddy. And his buddy was someone who was already on our radar from before. Right. So a fan can really, uh, enhance the conversion rate from, you know, from a cold prospect to. It's like, yeah, getting, getting that warmth, that warm introduction, that positive reference. Uh, really the impact is on the conversion rate of the organization to be a customer.

Ton Dobbe: Exactly. Yeah. That's invaluable. And like you say, it's also. It's because people know each other in the real estate industry and in the sub verticals, this is also way easier to, to multiply or to. To get going because they know each other. Um, if you, if you would build, I mean, now what, you know, right now, three and a half years down the road, if you would rebuild the company from scratch, would you do anything different in terms of how you position it or how you would go about this, uh, creating the traction you have today?

Stan Markuze: You know, I think, um, I think with A lot of companies, the, the original company that they start is not exactly the piece of it that ends up gaining traction. And there's some very famous examples of that. Like Slack. I think Slack was originally like a video game, ah, company. Um, and even, even some of the, Even like if you look at Facebook, it was like a college, you know, it was literally the Facebook of college on the Internet. Right. Which is very different from what it is now. Um, so I think there's, there's just like this, um, there's a necessary sequence of, uh, experimentation that you have to do once you start building a company. And some companies die before they, before they hit that kernel that turns out to be, um, particularly appealing to the customer. But I think it's necessary to go through like this experimentation phase to figure out what is it that you're doing that, that is really like a hit. A friend of mine calls it gravity. Like, what, what piece of your business has gravity? Right.

Ton Dobbe: Yeah.

Stan Markuze: And I don't think you can just like do anything. Part of it is just time speaking with customers, experimentation to identify that piece that has gravity. So I don't, I can't think of anything I would have done differently really.

Ton Dobbe: Okay, what was that pivotal moment where you realized, hey, there is now something that takes on. And this is. It was anything specific or was it a particular release or uh, maybe a moment in the market or something shifted in the market?

Stan Markuze: Yeah, I mean, I think I was personally, I was the first user of the product, right. So I was personally very excited about it. I recognize that. You know, I had uh, one of my. An entity that I own, control from before. One of my previous businesses had a, uh, pretty high deposit, right. In a, uh, in a major bank and was earning nothing forever. And then I hooked it up to our automatic sweeps and I started earning like 5, $600 a month passively doing nothing. Right. And it was exciting. And I kind of felt like, well, you know, this is, this is something that doesn't exist, that feels great, and that should have applicability in across many different use cases. So I think there was like a feeling that's like, wow, this is like something, this is something like unique and really satisfying. Um, and then of course, like, as we started signing up customers, the pace at which we signed up customers was faster than, way faster than anything we'd ever experienced in our previous, you know, traditional treasury management business. So like, it appealed to a wider range of customers, more business models, um, within the real estate industry. Right. So, um, so part of it was Like a personal feeling of like, wow, this thing is awesome. And part of it was just like once we went out to sell was just so much easier to sell to people because it's a, it's a, it's a no brainer as many people say.

Ton Dobbe: Exactly. And treasury management is not a no brainer, it's a. Yeah, it's a cost of doing business. But the other side of it is. And uh, that's where, where the magic happens. Um, talking about like you've run four, five businesses um, over time. I mean every business of course runs on particular metrics. You know, it's revenue or its profit, uh, it's cash flow, whatever. What is a metric that you have stopped tracking that you thought was crucial and what did it turn into? What are you tracking today?

Stan Markuze: So what we're tracking today is the easiest one which is um, a M. It's just the, the raw dollars that are flowing through, through balance. So that's like, it's one metric, it's one number, it's easy to track. Um, you know, and there are a lot of vanity metrics like uh, like users and organizations. Right. Like there's um, there are a lot of companies that have come and gone that have had like a lot of users. Right. That have generated a lot of hype, a lot of signups. Um, whereas where we specifically we want fewer users who are using our platform to its fullest as opposed to many users who are sort of just like experimenting. Because every user takes time to some amount of time. Even though it might be very, very low. Every user has a cost of being on the platform. And so that's. If they're not generating aum, they're not helping us meet our goals, which is, which are financial goals. So that's like a metric that's like less important now, right. Like the number of users. So you know, it'd be better to have like a thousand users that had really high a, um, um per user than to have a million users that had like very, very low a, um. Per user.

Ton Dobbe: Exactly. Yeah, true. Is it also how you qualify companies? Do you sense that from, from uh, an early, in an early way?

Stan Markuze: Yeah, typically. And we also, we also, the way that we uh, do sales and marketing, we target companies of a certain size. So that um, you know, like our platform is not really intended for like small businesses, uh, or for you know, you know, people who have like home run businesses. It's not for that. Right. It's really for mid market enterprise, institutional type of funds.

Ton Dobbe: So the size of the funds matter.

Stan Markuze: Yeah, yeah. So, so those are the people that we go. Now we have some funds that are like smaller. Right. Which is, which is fine. But, um, but yeah, we've, we've tried to stay away from like this small business category.

Ton Dobbe: Gotcha. For good reasons. I mean, it's, uh, it makes sense because it's always about. That goes back to the earlier conversation. Ah, the pricing power. You might be able to solve a problem for them and they get some value from it. But what you really do that the others get excited about, that become fan about is never going to make them a fan because. Yeah, it's just not, not impactful enough.

Stan Markuze: Exactly, exactly.

Ton Dobbe: Let me see, two more questions. Um, from the four ventures that you've done before, what is a lesson that you've learned that you still benefit from today? Is there any thing that you say, hey, uh, so glad I learned that?

Stan Markuze: Yeah, I mean, I learned that, you know, broadly speaking, no matter business, which business that you're in, if you're working with people who you like and people who you enjoy spending time with, then, uh, then it's worth it. You know, it's, ah, then it's a, it's an enjoyable experience and it has a higher likelihood of success, I think.

Ton Dobbe: Yeah.

Stan Markuze: Um, so that's, that's a broad lesson to take away from all these different businesses I've started.

Ton Dobbe: Um, it goes back to the friction story that we touched upon in the beginning.

Stan Markuze: Yeah, exactly.

Ton Dobbe: Yeah.

Stan Markuze: Um, and then, you know, the other lesson of course is, um, businesses where you're selling to people who have money or that's. Those are also, um, less friction, more enjoyable to operate those businesses.

Ton Dobbe: Yeah, exactly. Yeah. It's. Sometimes people keep, uh, chasing other people or chasing companies and it will never be a deal because the urgency is just not there. There might be something that you can do there, but if the urgency is not there, I talk about it as a triangle. In my book, it's, um, how valuable is the problem you solve, how critical is it? These two really are important together. And the last one is what is your ability to exceed expectations? Because if, if that's not the case, then you are like the other options they have and it's still going to be a battle, uh, and ending up in a discount, uh, race. One thing that actually come to mind, because you sold your business a couple of times. What is a big lesson that you've learned from that? Um, so possibly if you ever sell balance at some point in time, did you say, hey, I'm not going to make, make that mistake or I'm going to double down on that.

Stan Markuze: For example, without, without getting into details. I'd say like uh, when selling a business, the uh, um, especially tough financial buyer, right. Like ah, like a private equity or an investment firm or something like that. I would say that um, if you have earnouts or tiers or things like that, it's really important to optimize for the cash that you get up front rather than certain goals or earnouts or things that happen in the future. Cash today is more valuable than a promise of cash sometime in the future, depending on different conditions that the buyer uh, puts forth.

Ton Dobbe: Exactly. Yeah, I realize what you're saying here because very often the promises are big and it's going to be leveraged because your company, your product is going to be sold through a larger organization but at the end they end up killing it and the heart and soul of the product is going to go away and then you end up with uh, yeah, with nothing. So I get, I get that point. That brings me to the last question. Um, other founders listening to this, um, people that are, yeah, CEO of a software company. What would be a do and what would be a don't that you'd like to share with them from, from your own experience?

Stan Markuze: I do. From a SaaS software perspective is become very knowledgeable about a certain niche or industry or sub industry that you care about that you actually enjoy learning about. Right. Because, um, I think a lot, most people who start successful companies actually care about the subject matter of the company. Right. So if you care about a company where you want to start a business, just become an expert in that company before you even write any code or anything or if you are, or if you are already a subject expert, like you know, um, that's, that's a different, that's a bit of a different story. But just, that's the do. Um, okay, I'd say don't um, don't uh, chase the fads that are out there in the market. And the reason I say that is because if you're chasing a fad, the other people who are doing that thing have probably been doing it for a long time and have learned a lot of lessons that you haven't learned yet. And also they care about what they're building as opposed to just jumping on the bandwagon of um, you know, X, Y, Z is a crypto. Crypto is hot, right? So I'm going to build something in crypto. Well, there are people who've been doing crypto for like 10 years who love crypto. Right? So if you haven't been doing it for 10 years and you don't love it, like, you're at a disadvantage. So don't do that.

Ton Dobbe: Exactly. Completely agree. Very often the, the, the, the next hype is, um, is taking you in a completely different direction. I mean, how many companies have you heard the last couple of years say, I mean, I need to do something with AI. What can I use AI for? To do something? Well, it's starting with the wrong angle. You started with here's an industry that I know. This is what woke me up at night, in the middle of the night. This got me crazy. And I solve it. And then you start thinking about, yeah, um, first of all, is that coming back to the triangle again? Is it a problem that is worth solving? Is it highly valuable? Is it highly critical? And you, with your company and your knowledge, can you solve it in a way others cannot? If that is three times a yes, you can actually make it point based and it becomes like, if it's more than 500 points, go for it by all means. But, um, beyond that, no way. Thanks for this. Thanks for sharing all of this. Where can people go to find out more about balance or to say hi to you?

Stan Markuze: Just go to balancecash IO. Um, and then my email address is stanbalancecash IO. So if you, um, if you want to connect for a zoom call or something, uh, shoot me an email and we'll set up a time.

Ton Dobbe: Perfect. Well, thank you very much. Keep following you and uh, I love your approach. It's remarkable. Um, so, um, yeah, good luck in the next coming years.

Stan Markuze: Thank you. Thank you for having me. This is great.

Ton Dobbe: Perfect. And this wraps up my conversation with Stan Marcuse, CEO at Balance. If you got Value from this episode, please share it. If other SaaS founders who need to hear this as well. And if you got 10 seconds, a quick rating or review on Apple podcasts will help more people to find these conversations. Thank you for listening to the remarkable SaaS podcast. If you want more insights like this, subscribe to my daily email. Espresso with tor. It's a two minute shot of clarity for SaaS founders who want to create pull, not push. You can sign up along with getting my book@valueinspiration.com. see you in the next episode.

Stan Markuze: Sa.