Founder Friday: Julia Tolmachyov & Michelle Liao, Co-Founders of DayZero 📊
Founder Friday: Julia Tolmachyov & Michelle Liao, Co-Founders of DayZero 📊
Issue #49
Founder Friday is a content series from SuperAngel.Fund that highlights companies across our portfolio and the inspiring founders behind them.
In our 49th edition we are featuring Julia Tolmachyov and Michelle Liao, co-founders of DayZero, an AI-powered financial operating system for eCommerce, CPG & omnichannel merchants.
Julia and Michelle know a thing or two about finance. The pair first met at The Wharton School of the University of Pennsylvania, where both earned degrees in Economics, Finance & Accounting. Julia spent the next five years as a public credit and equity investor covering software and retail, while Michelle worked in investment banking and private equity before joining an eCommerce aggregator as Head of Finance. After performing due diligence on hundreds of eCommerce brands and operating over a dozen more, Michelle identified a major hole in the market when it came to managing finances.
In September 2023 the two founded DayZero, a vertical software platform purpose-built for eCommerce and omnichannel sellers. The company launched its first product a few months ago, an automated accounting general ledger to tackle all the most critical bookkeeping and accounting functions on behalf of its customers. Unlike a costly CPA or other legacy solutions on the market, DayZero pulls in real time data 24/7 and uses proprietary AI for mapping and categorizing transactions. This provides more accurate financial statements which get updated and reconciled 5x / day vs. once a month in Quickbooks. By leveraging its platform, business owners and their finance teams can spend more time on more strategic analysis, not manual data entry, offering a smarter, modern Quickbooks replacement.
As many already know, Quickbooks lacks the features specifically necessary for eCommerce sellers, such as well-built Shopify and Amazon integrations, and methods for cost accounting SKUs. As such, sellers generally have to use 3+ tools to manage their financial functions leading to data loss, human errors and delays in getting insights. This last bit is especially important for merchants who face high transaction volumes and require real time insights for accurate inventory replenishment and ad buying. Quickbooks is simply not tailored to handle the high transaction volumes or to give the daily visibility that sellers need.
The market for DayZero’s solution is massive and growing, with over 1,000,000 Shopify sellers in North America, and millions more across Amazon, WooCommerce, Squarespace and other platforms. The number of Shopify merchants tripled during COVID and continues to grow, however, with approximately 95% of these businesses generating < $1mm in revenue, most lack a dedicated finance team which is causing them to be itching for an all-in-one solution.
Thankfully, that solution is finally here. Brand owners or accounting firms can click here to learn more. For talented engineers looking for a career change within a high growth company, please reach out to julia@ondayzero.com. And, of course, check out our Q&A with the DayZero founders below 👇
Describe your company in 5 words or less?
Julia: Automated accounting for e-commerce sellers.
Michelle: Quickbooks killer.
What was your primary motivation for starting your business?
Julia: I believe the way small businesses receive their financial information today is super antiquated. The traditional accounting process, where financial statements are prepared and reviewed monthly, was designed to give deference to the hours of manual work needed to gather and reconcile financial information from a business’s receipts and papers. But in 2024, we have the ability to track, gather and analyze data immediately. It’s crazy to me that most founders and business owners still only receive their financial information once a month.
Michelle: Numerous personal frustrations with Quickbooks; it was unusable for me, clunky, slow and the integrations with e-commerce platforms were subpar. At the e-commerce aggregator I worked at previously, I closed the books for all of our brands monthly and it was always a huge headache. And when I was looking at brands to acquire, I’d have to go in and redo all of their financials by hand, because everyone was calculating things like net sales and COGS differently. Plus many times, brand financials would be stale and not updated for months. Standardizing reporting across brands seemed beneficial not only for the brands themselves to have access to real time data, but for buyers, underwriters and investors into the brands.
What new product/feature are you most excited about and why?
Julia: We’re launching our working capital financing solution shortly, which I’m super excited about. eCommerce is notoriously capital intensive, as brands have a ton of cash outlay for inventory and marketing before making any revenue. They also require a lot of capital to scale effectively. A lot of brands we speak to are in a cash crunch, and we’re excited to be able to offer financing options for them. Given the real time financial data in our platform, we make for a great underwriting partner.
Michelle: I love our collaboration feature that we just launched. It makes it super easy for accountants to tag business owners and vice versa in transactions to ask questions and make edits. No more going back and forth in email.
What piece of advice would you give an entrepreneur starting a business today?
Julia: Don’t try to do everything yourself, even though you are going to want to. Ask for help, and outsource certain tasks that others can do better and faster. Your time is incredibly valuable.
Michelle: Make sure you have intimate knowledge of the pain point and the problem you’re trying to solve. And take all customer feedback seriously, even if it doesn’t validate your original thesis. Try not to have biases!
What do you love to do in your free time?
Julia: Michelle and I both try to be active as a way to destress from DayZero. I love a good Barry’s class, Michelle loves anything outdoors like biking or skiing.
Michelle: Training for a triathlon!
What is the most interesting place you’ve visited recently and why?
Julia: Hiking in Patagonia. It was breathtaking.
Michelle: I went to Brazil over New Year’s and absolutely loved it. The food, the culture and the weather was unbeatable - can’t wait to go back.
What is your favorite app or tool in your work life and in your personal life?
Julia: Dripify (work). Peloton App (personal).
Michelle: Superhuman (work) and Strava (personal) .
What do you believe is the most important skill or attribute of a successful founder?
Julia: Being able to distinguish between high value and low value tasks and being able to make fast decisions with imperfect information.
Michelle: Resilience and thick skin. You’re going to hear “no” a lot - from investors, customers and potential employees. You’ve got to have the grit to keep going through setbacks.
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