[00:00:28] Jay: Hi everyone. Welcome to the First Customer Podcast. My name's Jay Aigner. Today joined by Dori Yona. He is the CEO at Simple Closure. we were just talking that he's unfortunately, a 49 ERs fan, and I'm an Eagles fan, so that's okay. Dori.

Hello my friend. How are you? Thanks for hopping on.

[00:00:41] Dori: Thanks for having me. We'll be back. The Niners will be back, I'm sure. Yeah.

[00:00:46] Jay: Ridiculously talented team and a great organization. So I, you know, I'm not worried about you guys. you're based in Santa Monica right now, right? I think you were saying.

[00:00:54] Dori: Correct. Santa Monica. I've been here for about nine years,

[00:00:57] Jay: Where did you grow up and did that have any impact on you being an entrepreneur?

[00:01:02] Dori: I guess. So, I mean, Silicon Valley is the core of entrepreneur. So I was born in Tel Aviv, Israel, and then when I was eight months old. My family moved to the Bay Area and then we lived in the Bay Sunnyvale to be specific. And so I grew up in Silicon Valley. and then when I was 13, we moved back to Israel and then I went to high school and military service there.

So I definitely think that, you know, growing up in the Silicon Valley had its influence. Yeah.

[00:01:30] Jay: your parents entrepreneurs at all? Did you have any like, kind of close to you or was it just tangentially kind of in the

[00:01:35] Dori: my parents were actually entrepreneurs. they sold their, so, we actually moved, my dad was being relocated for a job. He was like in the semiconductor space, like hardcore Silicon Valley chips and semiconductors and things like that. And after three years of his, relocation, him and my mom decided to open their own company, 

and they ran the company for about 10 years. At the end of the 10 years they sold the business. And so as a kid, like. My parents were co kind of call it, I don't know, co-founders, co-CEOs,running a business. They grew it, they had a successful exit. So, yeah, I mean, I'm sure that influenced me to some extent.

[00:02:10] Jay: I'm sure it had something to do, even if it wasn't, you know, tangible. I'm sure

[00:02:14] Dori: Yeah.

[00:02:15] Jay: being around it. all right. So what was the first business you tried to start?

[00:02:19] Dori: Actually, the first one was a dating app. first company was a dating app, 2014, I wanna say. So about a decade ago. that was literally the first company. it was pretty short lived. we built it out of Israel, move to the US to launch it. We kind of did an approach of like across campuses, so across universities where we launched the product, because you needed density when it comes to dating.

and we actually pivoted pretty quickly within a year to what ended up being Earny. Yeah. But that was,

[00:02:47] Jay: me about Earny. I love the logo, by the way, for Earny, it looks

[00:02:49] Dori: yeah. if you download the app, actually the logo, the eyes move all the time. Because it's always searching for a better price. so yeah. Earny? sure. So, Earny was consumer FinTech.

we built a product, that helped streamline and automate, the price protection policy. For consumers. So I don't know if you're aware, but almost all major retailers and credit card companies have a policy called price protection. It means if you buy an item online or even in store and the price drops typically within 30 to 90 days of that purchase, you're actually able to refund for the difference.

So imagine you go to Best Buy, you buy TV for a thousand bucks, a week later it goes on sale, it goes down 800. You're actually able to refund for the difference. a price adjustment for the difference, the delta of 200. But no one knows about it. No one has the time to check prices. No one actually like, typically checks the price item after they bought it, and then no one wants to deal with the fine print, and all the process of submitting a claim.

so we built a product that automated the entire process, raised multiple rounds of funding, scaled the business to three and a half million consumers in the US, and ultimately sold the business about three years ago.

[00:03:55] Jay: that's a pretty cool story. where did the idea come from?

[00:03:59] Dori: so we were working, I told you on the dating app before that. and we built the product out in Israel and then we said, okay, like there's no point in launch a dating app in Israel. The market is really small. we need to go to the US. So we actually moved to the US literally. Packed a few bags and I'm like, we're gonna, go build this huge company in America.

so, the true entrepreneurship, dream. anyways, we moved, literally one of the first weekends we were there. we got invited to a fancy kind of investor gala. the dress code was like suits. coming from Israel and being like poor entrepreneurs. We didn't have any suits or jackets or anything.

It didn't fit into the luggage. so, my co-founder and I needed to buy,suits for the, or blazers, or jackets for the event. we ended up gonna, Zara. To buy it. The night before the event, I ended up buying a blazer for $130. My co-founder thought it was a bit expensive to buy for that one evening.

He borrowed one from a friend. We went to the event, everything was great. two months later, my co-founder was shopping online, saw the exact blazer I bought for half the price for 65 bucks. Showed it to me and said, Hey, I just got your blazer for half the price. we're super competitive. So I was obviously very pissed and I said like, this makes no sense to me.

But I had to remember that someone had told me about these policies. So I said to myself, okay, I'm gonna try to get this price adjustment. Like, I've never tried it, but let's try. and after a few weeks of back and forth and faxes and phone calls with my credit card company, bottom line, like, we got a check for 65 bucks, or I gotta check for 65 bucks like a few weeks later.

And then we're like, holy shit. Like that's. Insane. That's an example of one product that by chance, we track the price. What happens if we could do it on every product and every purchase across every consumer in America. So that's kind of what sparked the whole,creation of Earny. yeah.

[00:05:44] Jay: Wow. How did you guys, what was the process of selling it? Like did you solicit people? were people offering you, like, what was the

[00:05:51] Dori: Yeah, it was, a long and, long process, long and painful process. we had offers to acquire through multiple periods of time throughout the company. there were times where, literally it was inbound and. I would say some of the largest buy now pay later consumer companies out there, gave us term sheets and offers to buy the company.

We ended up not selling to them. Then we went through a process with some banks, financial institutions that wanted to offer like these types of products to the consumers, that didn't. Materialize in the end, I think like also Covid started, so that changed the whole m and a landscape. and then eventually, we ended up launching, consumer Insight Business off of the,insights that we had,from consumer purchases.

And,we had multiple customers and actually two of our customers, gave us, office for acquisition and we ended up going with one of them. but it was like. Start to finish multi-year process. It wasn't like it happened overnight. Ultimately when the partners decide the consumer insight, you know, I think that was a pretty quick process.

It was like probably like a 90 day process, but when we first had the initial discussions with like banks and buy now, pay later companies and things like that was years earlier. So, yeah.

[00:07:07] Jay: has a SaaS product that they're trying to sell, I mean, what, are they supposed to do? What is like the first step? Like if somebody's never done it before, like what do you, what would you suggest they do or avoid doing? you may have learned in that I.

[00:07:18] Dori: Yeah. Look, I think one of the problems around acquisitions, in general and like, especially in tech, or not only in tech, across the board, it's a very fragmented market. it's actually like, it's one of the things that I care deeply about, that there's I. This value that you've created, a business, a SaaS product, whatever that is, and there's someone out there that will, that does and will find value in what you've created.

But being able to scour the internet or scour the market and like, you know, the billions of people that are on this planet and find the ones that are interested in buying you are very, very hard. I think it's very hard to connect between a seller and a buyer, especially when you're like. Stress on time to sell a company.

I think that there's some platforms out there that have tried to start to kind of condense it and create a platform around it. Like there's companies like acquire.com, if you've heard. So if like, if it's a very small SaaS company, I think like that could be, or e-commerce or SaaS. there's a few platforms out there that, are good for that.

So I would suggest like listing it there. I've heard mixed reviews on that. I've heard founders that like, It doesn't work. I put it there. I, you know, it's been there for months. I haven't even gotten one request. and so if you actually wanna sell, like what I would recommend is one of two things.

One, look at your competitors and go reach out to your competitors, and see if they're interested in acquiring it. Because if they're competing with you, they're in the space, they understand the value of what you're doing, and they might want to continue growing their business. And the second thing I'd suggest is, again, depends kind of like on the size and the revenue of where you're at with the company.

But the other thing is if you had competitors and they were acquired by other companies, meaning like. I don't know. Your company was acquired by a buy now, pay later, I don't know. Call it, affirm, right? Acquired your company. I would, one, consider going to Affirm, but also consider going to all affirm's competitors like Klarna, like, Afterpay, all those other companies because if they bought your competitor, then their competitors might be interested in you.

And so I would approach it that way. And also I think, like you never say to someone, Hey, I wanna sell. because in a sense I think you're like, you're just selling yourself short and then it actually, like, you don't have any leverage. so typically there's like language around how you position it and how you reach out to these companies.

It's more about like, Hey, let's talk about strategic opportunities or things like that. But you don't wanna outright, I think, usually say, I wanna sell.

[00:09:33] Jay: Yeah, no, that makes sense. I mean, it's like gonna buy a car, right? Like, you don't tell 'em that you have a trade in until you've already got the price of the next car, right? I mean, that's like, yeah. very good. advice though,I love the looking at the competitors, who didn't get to buy. Or you know, the funding companies that didn't get to buy your competitor, right? 'cause they were obviously maybe interested and that's a great idea. let's move on to Simple Closure. Where did that come from? what spawned that idea and, you know, what was the genesis of the company?

[00:09:59] Dori: Yeah, so, The honest truth is because I went through the experience and it sucked. It was one of the most horrible. Bureaucratic manual, emotional moments in, my career, in my life. I ended up sharing like the ultimate, like we ended up, the happy path was we ended up, you know, or the happy outcome is we ended up selling, Earny about a few years ago, but about a year and a half before the sale, things weren't going well.

we weren't growing, we were running outta capital. I was presenting financials at a board meeting and one of our board members says, Hey Dori, the numbers don't look good. we're not gonna invest any further capital in the business, and we don't think you can raise additional capital. I think it's time to talk about a plan B of potentially shutting down the business.

And, it's something I never thought about. It's something I wasn't prepared for. as a founder, as an entrepreneur, you don't think about failure. You think about like all your, all that's driving you is like, how do I succeed? How do I grow in revenue? How do I grow faster? You know, how do I launch this new product?

How do I sign this new partnership that, like, that's what you're focused on. so never, it kind of never dawned or occurred to me. I asked the board member what specifically, like they'd like to see. They said they'd like to see a shutdown down analysis for the business. I said, I have no idea what that means.

And they're like, listen, we'd like to understand like what are the costs? What are the liabilities? What are the timelines? Do we owe severance package to employees? Do we have contracts that we can't get out of? Do we owe money to an office or lease? They flooded me with a ton of questions. I didn't have answers to anything.

and then I actually went through that journey of figuring out what needs to be done to shut down a company. I. Went to Google, couldn't find any information online. tried to look for founders in my network. No one wanted to talk about it because it's like a taboo topic and founders are ashamed of it.

I literally went to our lawyers and our accountants. They didn't wanna help us. They hate dealing with shutdowns. They're like. Sorry. We're happy to refer you elsewhere. and so I ended up like rolling up my sleeves, digging into the world of shutting down. Spoke to a ton of industry experts, you know, understanding the difference between an A, B, C and a wind down, and a bankruptcy, and a shutdown, and a dissolution.

ended up putting a playbook together. for Earny at the time. Presented the board. The board kind of signed off. And then fast forward to Simple Closure. about a year and a half ago, almost two years ago, I decided I wanna go back to building. And I'm like, what do I want to build? and you know, you wanna build something that you're passionate about.

And this problem that I had was bubbling in me ever since Earny. I kept saying like, fuck that sucked. Like it was really horrible. Like there's no way like that everyone like has goes through this experience. Right. and I even asked myself when I was going through the experience like.

Maybe not a lot of companies shut down. Like maybe I'm pretty unique and like, that's why it's so difficult. so I actually started diving into the numbers. I looked at the numbers. Turns out that in the startup world, 93% of startups fail. That is like the data over the last 20 years. if you look at absolute volumes of companies.

Between 700,000 and a million companies shut down every year in the US And that was like a holy shit moment for me. I'm like, oh, I'm not alone. Like a million other founders, entrepreneurs go through this every year. so that was kind of my takeaway there. And then I just started eventually finding founders that have gone through the process and I was interviewing them, spending time asking them like, how did you do it?

Who helped you? What were the biggest pain points you dealt with? Like, tell me about that experience. And every single call, I just heard, the sheer pain. In entrepreneur's voices, like it was the most horrific thing they did. People were in tears on these calls, like beyond the like bureaucratic nightmare.

They were getting fines and penalties months and years later, people were getting liens on their personal property. They were moving back to live with their parents because they didn't have salary like I. All that together. and they had to deal with the shutdown, right? and so the combination of those two things, realizing how big the market was and how real the pain was, eventually was like, okay, we need to solve this.

And we started Simple Closure.

[00:13:43] Jay: Who was the first customer?

[00:13:45] Dori: So. The first customer. So what started happening was I was doing, I was telling you these founder interviews where I'm like, I wanna talk to anyone that's shut down a company in the process of shutting down a company or thinking about shutting down a company. I just want to interview them and ask them questions about how they're going through and dealing with it.

So I started doing these calls and I started, you know, call after call by call number. I don't know, a 5, 6, 7, A founders would be like, Hey, Dori, like, I'm happy to answer these questions, but it sounds like you have a lot of knowledge as I was getting, you know. On more calls, I was understanding space better,and the different use cases.

Founder, a founder said, Hey, can I pay you? Like, it sounds like you have a lot of knowledge. Can I just pay you to like console us on how to shut down a company? Like to just help us, like no one can help me and like my lawyers suck and like, I just need help. I'm willing to pay you. And I'm like, my first answer was no.

Like, we're just, I'm just interviewing. Like I don't have a product. I don't have anything. and so, I brushed it off and then I got on another call or two and it happened again. And then they're like, can we just pay you? And then I said to myself. Like, there's no better way to prove the point than actually like having a paying customer and having like, you know, customers go through and I said, you know what?

Actually our alpha's gonna be live in two weeks. I can bring you on as our first customer for our alpha. And so, I literally at that point stopped taking customer calls. I was heads down. I took the playbook that we had built. I took all the learnings, and literally for like two weeks I was building the V1 of our product or the V 0.1, and reached out to the customer.

Two weeks later I'm like, Hey, it's ready, you know, send you an invoice. He's like, of course, please do. We're ready. and brought him on the platform as our first customer.

[00:15:20] Jay: I love that. The first kind of thing that jumps out we talked about a little bit, I think on the first time we met is like, any services based agency like, I run, we want long-term clients. I mean, I think everybody wants long-term clients, right? I mean, it just, this life of client is kind of a thing because then you have less time spent prospecting lead generation and all the fun things that you have to do to get the next batch of clients. Is it kind of baked into your model that they're gonna be these kind of shorter one time, or maybe they're not, I mean, you can correct me if I'm wrong, but like, you know, you close the company and you hopefully, I would assume you kind of wipe your hands and then, you know, they walk away. So there needs to be this consistent.

And you said there's a million businesses, so the TAM is there, but is it kind of baked into your process that it's gonna be these one time or one, you know, these engagements that you chip off and you go into the next one?

[00:16:12] Dori: No, great question. Look, I think it's one of the things that we think a lot about at the company. the recurring revenue, not, you know, both from a user acquisition perspective and also from like a multiple perspective and valuation of a business. I think about it in a few different directions.

First of all,it doesn't directly answer your question, but I think what we have is a very unique market, which is something called a recurring market. Unlike any other industry where like. There's like, you know, like there's very few industries that have this level of volume and this level of recurring this.

I actually had a really interesting conversation with the founder and CEO of LegalZoom and asked him like, Hey, how did you guys deal? Because LegalZoom does in corporations, right? That's their corpus system. I'm like, Hey, how do you guys deal with this question around like, I. You know, recurring revenue and repeatability and like, it's a transactional thing.

He's like, the market is recurring. Anyone that doubts that, like, we had a lot of doubters of that in the early days and like we just kept growing and growing and we're seeing that same growth, like the momentum, like I wanna spend more time thinking about that. But the momentum. Is actually pulling us with like, just the general growth and velocity of the business.

but I think we're something we're in a unique place where we have a recurring market. Second of all, our go-to market motions are for the most part, B2B to C. What does that mean? We have partnerships with law firms, with accounting firms, with incorporation companies, with payroll providers, where in a sense we are embedded in their work streams and workflows.

And if I have a lawyer that knows about Simple Closure and is now working with us, I. Although their end customers, the one that's paying us and they are churning after they shut down, that lawyer in a pretty predictable fashion is sending us a company a month for a year. So in a sense, the recurring, this is coming from that relationship with, the businesses that are actually sending us clients.

so I saw that as well, And look, the third thing like entrepreneurs are repeat founders. Like I,actually, we have quite a few founders that first use us almost two years ago where we're early adopters. And literally, I had a customer reach out like this week and say, Hey, I have another business to shut down.

Can you help us? Like, and so, by nature entrepreneurs are repeat founders typically. They're also doing multiple businesses, sometimes in parallel. and so I think that also contributes to like the recurring ness of the process.

[00:18:16] Jay: Yeah, I love the recurring market concept and I think it's fair. I think especially, I think people can. convince themselves that they're in a recurring market, and they may not be, but I do think that your specific use case, obviously it's real and like, it is a recurring market and like, you know, you're gonna see some percentage of businesses close every year.

It just, it is gonna happen.

[00:18:39] Dori: Yeah.

[00:18:40] Jay: there, the TAM is there. So, very interesting. All right. I could probably talk to you all day, but I have one more question, non-business related. This is just Dori being Dori.

[00:18:48] Dori: Yeah,

[00:18:49] Jay: If you could do anything on Earth and you knew you wouldn't fail,

[00:18:53] Dori: if I could do anything on earth and what

[00:18:55] Jay: You knew you wouldn't fail.

[00:19:01] Dori: probably be an astronaut.

[00:19:03] Jay: Great answer.

[00:19:04] Dori: Yeah.

[00:19:05] Jay: I'm surprised how

[00:19:07] Dori: But.

[00:19:08] Jay: that answer is. Like that's the prob, like that's what I would do. But like,

[00:19:12] Dori: Well, it's hard to tie, like you knew you wouldn't fail. I think that if I wanted to be an astronaut, I could be an astronaut. That's the thing though. It's like, it's not a matter of like, I'm not doing it because I think I'm gonna fail. It's just like life pulled me in a different direction.

But I've always wanted to be an astronaut, like, since being a kid. And that hasn't changed. And you know, with like space exploration, there's still time.

[00:19:32] Jay: I love it. I

[00:19:33] Dori: Yeah.

[00:19:33] Jay: And well, I mean, the beauty of the question is that you don't have to worry about. You know, disintegrating on the way back in or like, you know, any sort of,

[00:19:43] Dori: We're dying.

[00:19:46] Jay: So that makes it, you know, a little more, interesting. I would probably lean more into that if I knew I wasn't gonna die.

all right. Well, I love the story, man. I love the continual, just like find the next thing, build the next thing you know. I. Put the playbook together, take the pieces from the different companies and kind of rinse and repeat. So, I, there's a lot of good stuff that I think people will get out of today's, episode.

if people wanna reach out, about Simple Closure or if they wanna reach out to you directly about anything they heard today, how do they do that?

[00:20:13] Dori: If they need, if they're considering shutting down a business or just want to figure out what that entails and how to plan for it, the best is Simple Closure.com and they could speak to our team and schedule time. If I can be helpful with anything. it's, you know, I'm on LinkedIn, I am on X, my email is dori@simpleclosure.com.

It's pretty straightforward. yeah, so happy to connect across all channels.

[00:20:34] Jay: Beautiful. have a great weekend. Thank you for being on. We'll stay in touch obviously, but you know, have a great weekend. Best of luck and we will, we'll stay in touch, buddy. I'll talk to you.

[00:20:44] Dori: Sounds good. Thanks Jay.

[00:20:45] Jay: Thanks man.

[00:20:46] Dori: Thanks. 

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