Podcast Episode 3

Two Tech Founders who ReImagined an Archaic Accounting and Finance Industry

In this podcast, Naren speaks with Connect CPA co-founders Mike Pinkus and Lior Zehtser. They discuss their journey from their initial meeting in 2016 to establishing a thriving cloud accounting and finance company. Their mission revolves around offering scalable businesses an external finance and accounting solution powered by integrated technology for real-time decision-making.

They emphasize their commitment to enhancing the customer experience through AI and other tech innovations tailored to fast-growing firms. Key metrics like Net Promoter Score (NPS), net revenue retention, growth rates, and gross margin are highlighted. They also underscore the growing importance of work-life balance, particularly in the post-COVID-19 work culture, as a pivotal factor in attracting and retaining top talent.

Listen to the Episode Now


Naren: I’m excited to interview Mike and Lior, founders of Connect CPA. Today’s topic concerns two tech founders who reimagine an archaic accounting and finance industry. Looking back, when I first met them in 2016, I never really thought they would be sitting here with me today and doing this podcast because they were doing something that most people with any common sense would have said, “No, you can’t do it.” So today, I have Mike Pinkus with me. Mike is a co-founder of Connect CPA, and I also have Lior Zehtser with me. Lior is also a co-founder of Connect CPA. Welcome, Mike, and welcome Lior.

Mike: Thanks for having us.

Lior: Thanks for having us.

Background of Connect CPA:

Naren: Before we jump in, I want to focus today’s episode on your story and your journey because everyone listening is a founder of a tech company, and most of us disrupt something. Most of us find an industry, find an in, in a situation where things are in a certain way, and we don’t like it, and we go and change it. We go through the fire, we break through walls, and then somehow some of us come to the other side, and Mike and Lior are two such people who have done that, paid the price, and have all the burns and the scars to show for. And today, they are sitting with me six years later.

Transition to Cloud Accounting:

Naren: So how would you describe CPA as the largest or, if not one of the largest cloud accounting and finance companies in Canada and soon to be one of the leading cloud accounting and finance companies in North America? How would you guys describe Connect CPA?

Mike: We’re an external finance and accounting solution for scaling businesses. The main pain point we’ve embarked on solving was that accounting and finance are non-core competencies to many founders. Yet, it’s the pulse of the business. All decision-making within an organization is centered on some data point around the finance function. We wanted to make it more accessible in real-time and integrate technology to help lead to more real-time information to make those decisions. And we’ve been working on that for the last decade.

Leveraging Technology:

Naren: The way I look at it, I’m your client. I still remember the first time I met Mike; he came to my house. He was, he’s like in this partnership, they are co-founders and run the business together. The way I see Mike is, he’s the front man. He’s a charming, visionary person. He’s probably like a heartthrob. But anyway, I am still determining what your high school life was like.

Mike: Don’t tell my wife; they did a little bit.

Naren: And then Lior is the technical detail-oriented systems person who’s always thinking about improving the function of accounting and finance. How do we provide real-time data? How do we make our lives easier? How do we make our clients’ lives easier? And then, more importantly, how do we do it consistently? So that’s Mike, and that’s Leo. And how I look at Connect CPA is like an external finance function, right? I run my business. I’m a marketing company and must dig deep and become extremely good at marketing. I don’t have the time or energy to hire someone and make sure this person knows what they’re doing because I don’t know anything about finance. I don’t know anything about accounting. By the way, Mike and Leo are CPAs. So definitely they are qualified, they are certified, they know everything.

Challenges in the Industry:

Naren: So, that’s the way I look at it. Is that a good way to think about your company? Like an external finance function?

Lior: Yeah, 100%. We’re problem solvers, and that’s part of what we do daily: external finance department for scaling companies.

The Journey and Innovation:

Naren: Now, let’s talk about the fun stuff. Right? I mean, we are all tech entrepreneurs; we all want to know about the journey. So, Leo, you mentioned not too long ago when we had dinner about this dinner you and Mike had; of course, you only had a little money back then. You guys are young and hungry. You know, people who wanted to do something differently, and you and Mike met at a Boston pizza. If I’m correct, Mike shared a story with you. So maybe Mike, you should tell us the story like you were running something tech business back then. What was that?

Mike: Oh, you’re trying to, at least, so yeah, Leo and I met in university before we started our careers, and we ended up working at Price Waterhouse together back in 2007 and right before we started CPA, and it’s been ten years now. I think you’re alluding to the story that we went for a drink at Boston Pizza. At the time, I was trying to start a tech company with nothing to do with accounting. I had this novel idea, and maybe it was because I had fallen in love. I was about to get married. It was 2014, which was the year I did get married. And I had this idea that we would connect vendors in different areas using APIs to allow you to book a venue with all these different vendors, get them all together, make a deposit, schedule it because weddings are a big expenditure for a family. Brides love to lock in the date. It’s so important to get everybody connected in one day. And so I was working on this tech company. At the time, Leo was working in the accounting space, which led to the genesis of Connect CPA because it was Leo who had discovered something called cloud accounting or the coin term cloud accounting. And it piqued my interest through that beer we had at Boston Pizza, and things went from there.

Transition to Cloud Accounting:

Lior: Yeah, I was on my own, and I was frustrated with just what we were talking about earlier, but just the archaic way of accounting. And through a colleague, I heard about cloud accounting, and it wasn’t happening; it wasn’t present in Canada at all. It was happening in Australia and New Zealand. And I was pitching Mike on this whole story, and that’s kind of what this Boston pizza meeting was all about, just kind of talking to him about what I heard about and how it’s a subscription model, how it’s completely different than anything that’s being done in Canada at the moment. And we went on from there. We kept meeting afterward, but that was the initial introduction to cloud accounting.

Serving Tech and E-commerce Clients:

Naren: If I understand it correctly, what you’re saying is you were serving some e-commerce clients. Like you were the accountant for some e-commerce companies or tech companies, and then one day you came across this term cloud accounting, and you’re like, wait a second, this changes everything. And then you and Mike got together, had that meeting at Boston Pizza, and you said, Hey, Mike, I got this idea. And then you’re like, okay, let’s do it. And then you guys start this company called Connect CPA. Is that how it happened?

Lior: Pretty much. Yeah. There’s a lot of, a lot more to it.

Mike: You know, we were running our business at the time. I had a staffing company, which I had started with Leo, who had a tech consulting firm, and I had a staffing company. I was doing tech recruiting at the time and noticed a market for this. There was a need for this in the tech space, e-commerce. And the other accounting firms just couldn’t provide the required level of service, and we were getting in there. It was Leo’s idea, but I brought to the table that we’re getting in there and finding what the clients need and then building a system around that.

Embracing Technology and AI:

Naren: So you guys saw an opportunity in a market that no one was addressing in a way that was even close to how it should have been. You said, Hey, we can bring technology cloud accounting to this market. And then you and Leo started this business. And when I hear this story, I think these guys must have been super technical, like super engineers, but you’re CPAs. So, how did you learn all this tech stuff? How did you become a technology person?

Lior: Yeah, that’s a good question. So, to be honest, I’ve always been a tech geek. I love all the new software and everything that comes out. I’m the first one to check it out, understand how it works, and see if it will fit with what we’re doing. At the time of cloud accounting, you don’t need to be a techie but understand how the system works. And so it’s just a matter of jumping in and understanding how the software works. We went with zero then, and it’s just playing around with the software. There are also resources available that you can learn from, but at the end of the day, it’s just jumping in and trying it out.

Challenges of Fast-Growing Clients:

Naren: Yeah. And then the challenge you probably had is that you guys had a lot of fast-growing clients, high-velocity tech, and e-commerce companies. That means a lot of transactions. So you can only do manual entries for some things because it doesn’t work. It needs to be more scalable. So, did you guys start building technology around it? What did you guys do?

Mike: Yeah, I mean, if you can’t deliver, that’s a big challenge. And with technology in the tech space, it’s just you can’t. You’ll get left behind if you’re not keeping up with it. And there were some amazing technologies coming out. And Leo and I were open to bringing on and leveraging that technology. We ended up building out our solution in the end called ConnectBooks. We brought on some development partners and built that out, which automates a lot of the work for the finance team and a lot of the work for the CPA team. So when you’re trying to do 100, 200, 300,000 transactions, like, you can’t manually do that. It’s just not feasible. And you won’t get any quality work if you try to do it that way. And that’s what we found was that if you just go with the same old ways, you won’t get anywhere. So you have to take a chance, bring on new technology, and innovate in the space.

Metrics-Driven Approach:

Naren: What metrics do you focus on to measure the success of your business? How do you ensure a great client experience?

Mike: Client experience is crucial for us. We use metrics like Net Promoter Score (NPS) to gather client feedback. We also look at metrics like Monthly Recurring Revenue (MRR) and Lifetime Value of a Client, but NPS trumps everything.

Lior: Client experience is our top priority because we know it impacts everything else. We send surveys to our clients to understand how we’re doing and where we can improve.

The Future of Accounting:

Naren: Looking ahead, what do you envision as the future of accounting and finance, especially in the context of technology and AI?

Mike: We believe desktop software will disappear, and almost everyone will move to cloud accounting platforms. AI will play a significant role in automating many bookkeeping tasks. Real-time data will become the norm, and businesses will operate with more agility.

Lior: Conversational AI will likely allow users to retrieve financial data effortlessly, and we’ll continue to see a shift toward automation in the industry.

Retaining Quality Team Members:

Naren: In a competitive job market, how do you attract and retain top-quality team members, especially in the tech and finance sectors?

Mike: Work-life balance is essential. We offer flexibility, time off, and a strong culture. Trust is also crucial. Team members need to trust that their leaders have their backs.

Lior: Aligning values with your team is vital. Our core values include going above and beyond, and we emphasize this in our culture. Trust, respect, and opportunities for growth keep our team engaged.

Closing Thoughts and Founder’s Advice:

Naren: Before we wrap up, do you have any final thoughts or advice for founders and entrepreneurs on their journey?

Mike: Scaling a business is challenging, and you need a strong foundation. Surround yourself with the right people and be prepared to adapt as you grow.

Lior: Hard work outweighs talent. Stay gritty, persevere, and never give up. Ensure your values align with your co-founders and trust each other.

Naren: Thank you for sharing your incredible journey and insights into reimagining the accounting and finance industry. We look forward to having you back to delve deeper into specific topics.

Mike: Thanks for having us.

Lior: Thanks for having us.

About Our Host and Guest

Director of Marketing – Ekwa.Tech & Ekwa Marketing
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