Founders in Focus: Alex Lee, CEO @ Truewind (YC '23)

From airplanes and VC to AI and Y-Combinator, 2X founder & Columbia MBA graduate, Alex Lee shares his advice for future MBA founders.

By James Saulsky, Investment Partner at MBA Ventures

Alex Lee is a second-time founder who has successfully brought two companies through the prestigious Y-Combinator accelerator program. But his journey into entrepreneurship didn’t follow a straight path. 

There’s a popular expression that running a startup is a lot like trying to build a plane while flying it. For Alex that may especially ring true since his first work experience involved building actual planes. After graduating from USC, Alex began his career as a Boeing engineer working on the 777X line of aircraft. After several years, he returned to school and earned his MBA from Columbia Business School. Alex used his time at Columbia to pivot from engineering to venture capital, where he spent three years investing in mobility and robotics startups before taking the leap into entrepreneurship himself.

His new venture, Truewind, uses AI to create reliable financial models and accurate accounting documents for startups. In this interview, we met up with Alex to talk about the long-term plan for Truewind, his path into entrepreneurship, and advice he would share for future founders in MBA programs.

Thanks for meeting with us Alex, to get started, what’s your elevator pitch for Truewind?

Truewind is an AI-powered bookkeeping and finance solution. So what is that?

You'd like to think we've figured out accounting by now. If accounting is a set of rules and we've had rules-based software for more than 25 years then clearly we should have been able to solve this. And yet, at this point, accounting remains slow, error-prone, and confusing.

The reason is because accounting is not only numbers—it’s also context. A very simple example would be buying a new coffee cup at a venture fund. If you buy a cup for your fund, that's classified as an office expense. But, if I work at your neighborhood Starbucks or Blue Bottle Coffee and I buy that same cup with the intention to sell it, then it’s classified as cost of goods sold. It's one transaction with two different outcomes. It’s one-to-many-outcome, it is an algebra problem that you can't solve without one more input,  which is “what does my business do?”

The answer to that question, “what is the purpose of this purchase?” is stored in natural language and we haven't had the means to capture that at scale until today with large language models. So, at Truewind, we're using LLMs to capture business context and truly put accounting on autopilot. I would say that's what makes us truly unique in the market.

Our customers include business owners as well as head of finances, depending on the stage of the company. At the earliest stage, call it a seed or series A, that’s usually a founder CEO who manages all the finances. As the company matures to series B and beyond, they then hire an in-house finance manager or head of strategic finance. 

How did you decide to work on the problem of accounting?

When I was in VC I spent the majority of my time investing, but I would also parachute into the portfolio companies and work with the management team and finance manager. I’d help make sure the books were clean, that the financial model was solid, and look into budget variance analysis. It was through that experience that I first saw how broken the finance and accounting organization is from a technology lens. 

But there’s another component of why I'm excited to solve this problem—starting with how fragmented and broken private market investing is. When you look at the public market, it's really quite a phenomenal thing that I can click a button on my mobile app, money leaves my bank account, and then the ownership of a share is automatically transferred to me. Whereas in the private market, you spend $25,000 in legal fees and get a stack of papers you have to review.

If we were to take a step back and look at the big picture this problem becomes even bigger. Take a company like Uber, which created around 80 billion dollars of value in the eight years it was private. But in the four years since it's gone public, it's only lost value, which means retail investors that want to participate in Uber have only lost money and the people who benefited were the accredited investors who, by definition, are already rich. So this fragmentation continues to drive the separation between the haves and have-nots. It's because of the discrepancies in information disclosure in different markets. There's this infrastructure that requires public companies to disclose information on a regular basis in quarterly reports, annual meetings, etc. Whereas, in private markets, the SEC doesn't have that kind of oversight and doesn't have the resources allocated to it, which creates private data rooms and closed back-door deals that exclude the majority of people who may want to participate.

So then we ask ourselves, could we build something better with technology? Could we use technology to create the public market infrastructure in the private market? That’s the long-term goal of what I want to build. To play a role in resolving this big asymmetry in the presentation and communication of financial data. And, by building this solution with AI-powered bookkeeping we’re creating something that really gives people a complete grasp of financial data, which can then reduce the friction to sharing that information with banks, investors, or whoever. That's the big horizon of why I want to solve this problem. 

Are there any skills you’ve had to develop to be an effective founder?

One thing I’ll say is, the skills of a VC do not immediately translate to being an effective startup founder. VCs are really good at thinking about markets and macro trends, to think in the abstract. As a startup founder, you spend far more time thinking about the details. 

I need to be thinking, what should this interface look like? And if you click this button, what happens next and why? It's very much, nitty dirty in the details of thinking about the user experience, and that's a skill set that I was not wired to do.

But if there's one thing that the VC job does prep you for it’s sales, because, at the end of the day, as much as VC meet with a lot of companies and they say a lot of “no’s”,  the part of the job that really hits is when you find a good deal and everybody wants in and you need to sell your fund to get that company to take your money. That's a skill you really do develop. And, a lot of being an early-stage founder is sales. I think there's a lot of innate determination and resiliency that you need to have as a founder because you're gonna get a lot of people saying “no,” and it's not personal, but you always feel like it's personal because this thing, this company, it’s your baby. 

So those have been many challenges, but my best advice is to get used to hearing no and recognize that you believe in what you're doing, not everyone else does, and that's okay. You're constantly trying to put yourself out there at the risk of people ignoring or rejecting you. You're always sending out cold emails to try to drive new customers. You're always launching new things that may or may not work. 

What excites you the most about working on Truewind?

What's most exciting for me is the combination of our customers and my team. We have a team of six people who are all A+ players. When I wake up in the morning, people are already moving things forward and I'm going through 10+ Slack messages just to get caught up. All of that happens throughout the night when there are all these ideas and people saying “ I want to work on this.”

And this is where the discipline is on me to make sure I communicate: What are the objectives? What are we looking to accomplish? At the same time, I have my own projects within Truewind and it's just so much fun working alongside this team. 

And the other part of it is when we deliver something to our customers. When you're an accounting solution, it's always a little funny because I think there's typically little happiness from the customers. There’s an expectation for software to work, and if it doesn't work they're unhappy and if it works they're just flat. But when we can create some happiness that’s really a great thing. When someone says “I don't have to stress about accounting with Truewind” that trust is really the greatest compliment that our customers can pay us.

What resources have been the most helpful along the way?

Number one are our neighbors here in the office. Truewind shares a co-working space with six other Y-Combinator startups and we all hold each other accountable to our goals and share ideas of what's working and what's not. We socialize together and realize that, as hard as the journey is, we are having so much fun, not just by what we're doing but also because of the people we work with.

Number two is having highly intelligent and effective advisors. I used to be bearish on advisors because I think there are just too many people who want to be advisors to fluff their resumes or because it seems important. And that means those advisors aren’t truly aligned with the companies they’re working with. But, my YC group partners, as well as a sales coach I work with, have changed how I approach certain problems and changed how I think about advisors. I think it's because I'm starting to meet founders who have seen and done the things that I haven't yet and know exactly how to deal with those issues. 

You can find this kind of network at school, but I think it’s hard. Most of the people who are hyper-deep into a space are practitioners, so you’re more likely to find them out in the field. 

Ok, let’s talk about Alex! What drove you to pursue founding a startup?

The first time around it was because of the people I want to work with. I wasn't thinking about starting a startup at the time, I was just doing research and learning as much as I could. But, I met these two phenomenal potential founders who I wanted to work with and the only way to do that was to start a business together.

The second time around it was as much about the problem space as it was about building a product to serve our customers. I actually had an MVP and paying customers before I met my current co-founder, Tennison.

I don't think there's a right or wrong way to do it and all of the above works. I think the important thing is that you want to start a startup and you have to determination to go through all the pain and challenges to get there.

That’s a great transition, how did you and Tennison, your co-founder, meet?

We actually met through Y-Combinator’s co-founder matching platform, although we took completely different approaches to the process. 

I had left my previous startup Bluelight in May and, even though it was amicable, co-founder separations are never easy. So, admittedly, I was a little bit apprehensive to finding another co-founder, but I also knew I needed to think about 10-15 years ahead where having a strong co-founder would be immensely beneficial. So, although reluctantly, I put some of my time into meeting founders. On the other hand, Tennison took the opposite approach. He knew he wanted to find a co-founder and he spent all of his time meeting potential co-founders. I met six or seven people, I think he met 70. 

During that process, Tennison was even doing trial projects with some people, but he and I really hit it off. I think the part that really sealed the deal was I invited him to spend the Christmas holidays with me and my family in Seattle. We spent seven days together, 24 hours a day, all day and you really get to know somebody when you're around them like that for seven days straight. That’s why now we’re able to say what's on our mind and have a debate but not take it personally. We know we're just trying to find what’s best for the business and separate the good ideas from the bad ideas. Because we can have those debates we figure out what's good or what's bad really quickly.

You received your MBA from Columbia University, what role, if any, did your MBA play in your entrepreneurial journey?

The MBA didn’t really factor into Truwind. I spent most of my MBA working at an early-stage seed fund who invested in supply chain technologies. I immersed myself in research about supply chains and learned the art of investing during that time at Columbia. So my MBA experience was a stepping stone into venture capital.

What advice would you share with an aspiring or active founder who is currently pursuing their MBA or who recently graduated from a program?

Go build a product yourself. There’s no reason not to, and just because you're not a software developer is not an excuse. There are many businesses that you can build, especially if you're building an operations business like an e-commerce business. There are a bunch of off-the-shelf tools you can use, like Shopify, to get started. These businesses also require a very high degree of discipline and I think that's where a team of MBA founders can really make sense. 

If you're building a technology company, a team of MBAs is probably overkill. In the early stages, you probably only need one MBA. What's important in any business is that you can go build something. If you want to do everything except build the product then you defeat the whole purpose of what you're doing at a startup. There are enough no-code solutions out there, like Bubble, where you can build entire web applications without having to know any code. 

Your product will probably be far from perfect, it may even barely work, but that’s your MVP. It’s only going to get better from there. Having an MVP is actually what made the co-founder matching experience so much more enjoyable for me the second time around. When Tennison and I met we weren’t talking at each other. We were looking at the MVP and talking about the product and riffing and iterating on all the ways that we could make it better.

So to any aspiring founder who's pursuing an MBA I’d say start by building the product yourself. And I know only 10% of people actually go do this, but nothing else even comes close. Making the product forces you to think about user experience, forces you to think about product designs, and forces you to think about functionality. You need to intimately know the product before you can sell it, before you can hire for it, and before you can do anything else.