Jake Aaron Villarreal: Welcome to our podcast, Born in Silicon Valley, where we interview startup founders exploring their journeys, their success, challenges, and lessons learned. We hope you'd be inspired in discovering what it takes to build a thriving startup. I'm your host, Jake Aaron Villarreal, and here with us today, we have Anna Berger, co-founder and CEO of Trayd. Anna, welcome to the show.
Anna Berger: Thank you so much for having me.
Jake Aaron Villarreal: Well, a little bit about Anna. Um she is the co-founder and CEO of Trayd, a construction payroll platform designed for same day pay. Born into a construction family and has saw back office inefficiencies firsthand. As a result, Trayd was developed to be the single back office operating system for construction designed with payments at its core. Trayd is backed by Y Combinator and the team is based in New York City. Anna, before we dive in here, where you, where you calling in from today?
Anna Berger: I am calling in from our New York City office. We are located right in Soho.
Jake Aaron Villarreal: Love that town. We talked about this already that I lived a little bit in New York City as well. I spent five years there and h I miss the energy, the innovation, everything that it has to offer, the food. And so I'm jealous, but at the same time excited to, to learn more about how you kind of got into your company, and we'll ask some questions about that. Um, are you originally from New York?
Anna Berger: I am. I am. New York is home. So, I'm totally addicted to the momentum of this city. I think even on your laziest days, New York doesn't even let you be lazy. Uh, and I think that that is something that as a startup founder, it's, it totally fuels me.
Jake Aaron Villarreal: Yeah. You know, it's the speed of that town, too. It seems like things go faster than other cities and, and lifestyles. I'll just share a quick story before we dive in here. When I first moved out to New York, I was working for Oracle. I got promoted, hired to sell to billion-dollar companies. And I was like, "Ah, this is going to be a great experience." My taxi ride from JFK into the city was, you know, an older man, gray-haired, asked me a few questions: Where you come from? Where you staying? How long you going to be here? Told him I just got a job, and I'm excited to see what the lifestyle in New York's going to be. And he asked where I was from. I told him, "Cal-." He said, "I'm from California, too. I came out here to spend a couple years, and you know, I didn't really check my calendar. It's been 25 years. So, make sure when you live here that you're clear on when you want to leave because if not, you'll probably stay here forever." Planning to see the back of my head, and I stayed. I was supposed to be there a year and a half. It ended up being five. And uh it moves quick. Is also a town of innovation.
Um so, let's talk a little bit about your company. But before we do that, give us the background of you. Did you start off younger in your years as an entrepreneur? Did you have the lemonade stand, the paper routes? Like, walk us through a little bit about you before we talk about your company.
Anna Berger: It's so funny that you asked this question because my mom just brought this up last weekend where you know I didn't study entrepreneurship in college and I went into corporate America for the first six years of my career. And you know, when I turned 26, 27 was when I started moving into startups and have now spent five plus years doing so. And I never thought... I, I didn't consider myself an entrepreneur or like a founder energy. And the other weekend my mom was like, "You did a lemonade stand every single weekend. You were like the president of every club." Like she was reminding me of all the things I did as a kid that I guess to her was like, you know, writing on the wall. Whereas for me, I just, I didn't, I didn't think that this was going to happen. So, I kind of let life take over.
But yeah, I um I went to the University of Michigan and I studied business, psychology and writing. Um and so no entrepreneurship there, right? No, no "Here's like how to build a business 101." I think you just, you, you learn by like trial by fire. And so, um, you know, as I just said, like I, I worked in New York City for the first few years of my career at different ad agencies before I went in-house to Marriott International where I was on the global marketing team. What an incredible company. I mean, first of all, I love travel. I love hospitality. So to marry those two and do marketing which is what I love so much, like it was, it was a dream. Um but I was a fish in a very big ocean, right? And I think turning 26, 27 I started having these thoughts of like, "I want to, I want to be more of a decision maker. I want to push more and build more my own." And that's really where I started getting my founder itch. So I guess that lemonade stand Anna came back around.
Jake Aaron Villarreal: I love that. Yeah. Um, you know, you, you, you, you built the company you have today. Give us a little background on what inspired you to get into the niche you're in. Construction. And really what was the, the problem that you saw that you felt like you wanted to help solve?
Anna Berger: Yeah, this is totally personal to me. So, I'm from a New York City construction family. And the first thought of Trayd really came from looking at my dad's company and wanting to fix it. I- some would say I'm Type A, but I was looking around at what he, how he was running his day-to-day and I saw some inefficiencies, right? He was using seven different software to manage his back office. And it was all kind of non-vertical software. And he was jumping from tool to tool and those tools didn't speak to each other. So, it just led to so much redundancy in his day-to-day. And so really my first thought about like innovating within construction tech came from right under my nose, right? It was wanting to help my dad manage his back office better. But that was a really wide net, right? Like when you think about construction tech, which is totally undergoing a renaissance right now, so many people are trying to get involved and find their wedge. And so when I looked at like, "Okay, I'm just going to fix the back office," it seemed like an impossible task.
Um, and then towards the end of 2021, I had, I was out to lunch with my dad and one of his subcontractors. And in the same breath, this subcontractor is telling us that like ADP had messed up his last few payrolls and it was an absolute nightmare related to like job costing and certified payroll and all the things that go into construction. And in the same breath, he basically says that he's lost eight workers in under two months because they want to get paid faster. And so they're going to drive for Uber. So these workers are leaving a like a career in the trades to go work for the gig economy, right? Which is not a career, it's a gig, it's a job. And he said this in like a, a minute, under a minute, both things. So, I'm thinking, "All right, so you're telling me payroll is broken for construction, and at the same time, there's this labor shortage and like the shift away from payroll, from construction because of payroll, because people want money faster." And I was just like, "Okay, there's something here." Um, and that was really like the first moment that Trayd came into like my sphere, um was "let me kind of crack into this and see what we can do."
Um and so lo and behold, it's a much bigger problem than just one subcontractor. This is like systematic, right? 600,000 construction workers have left the industry to go pursue jobs in the gig economy. For every seven workers that retire, one new worker is entering the field. We're talking about like a labor shortage that can't really be overlooked. And so, what is this industry doing from a macro level to address that? Um until now, not much. So that's really where Trayd comes in.
Jake Aaron Villarreal: So if you're a company out there that's, you know, uh a home builder or you're in construction and you have subcontractors and, and, and people working for you on whatever project it is, um where does your technology come in for the owner of that construction outfit? And do they need to replace technology? Is it an embedded integration of your technology on top of what they already use for payroll or back office systems? Um, where's the, where is the niche problem you're solving within the systems perspective?
Anna Berger: We're selling right into the subcontractors. So, the people doing the work. So, we sell into like it can be a specialty subcontractor, someone who focuses on electrical, plumbing, HVAC, flooring, like whatever that niche is, we would, we would target that business. And so, that business would be ripping out whatever payroll they're on right now: ADP, QuickBooks, Paychex, Paylocity, and put in Trayd instead. And so, it's an all-in-one operating system. Not only are they like replacing their payroll, but they're replacing likely their time and attendance software. They're replacing their people management software, their reporting software. Um, it's, we're, we're entering in on a platform, not on a pointed solution.
Jake Aaron Villarreal: Got it. And for the, the older generation of construction owners that are on pencils and paper and, and maybe they have an admin that's working with a Paychex or ADP and, you know, they're not really changing their ways. How do you reach them? What's working for you so far to, to really get those first customers?
Anna Berger: Great question. This has been one of my biggest learnings is finding them when they want to talk to you. There are you know these, my audience, they are literally dealing with like houses on fire and roofs leaking and you know walls crumbling. Like we're not talking, this isn't like you know ad sales, right? Like this is like the, this is construction. And so a commercial grade, like big scale projects. And so I can't just call up a subcontractor in the middle of his day, right? I have to find him when he wants to have a conversation, when he's open and he has like the mental space for it. And so oftentimes that's after work uh whether it's at an event or a dinner. Um and so that's really been what's working so far.
Jake Aaron Villarreal: You know, we've had a number of calls and interviews and guests about uh how do you take a business-to-business type of company and how do you get traction? You know, how do you get into the market? How do you uh get your marketing messages across? What we're hearing from a lot of them is picking up the phone, making outreach, cold outreach on email, uh on LinkedIn. Um there's really no silver bullet that like just gets you those first thousand customers. It's founder-led in a big way and um takes energy. It takes focus. It takes gumption to get up every day. What are the things that keep you positive when you're trying to open up doors and get deals done?
Anna Berger: I'm motivated by every conversation I have. I think we, we spent a year and a half listening to customer feedback and building a product. And so it's exciting for me to share it and get their live feedback on something that now exists. I think a year ago I was like, "Imagine this. We're going to have this, this, and this." And I was asking them to visualize something that didn't exist yet. Now I get to walk into these meetings and be like, "Here is our fully built out platform that you could use tomorrow." You know, and I get to see them look at me and say, "Wait, this is for construction only?" Like, "You made this for construction?" And like the answer is yes. And I think that's been so staggering to hear is like this industry has been overlooked for so long in terms of vertical software. They're used to people calling them and convincing them that their software is for their industry when it hasn't been historically. And so it's like a breath of fresh air for these guys and for me too to like see that Trayd is landing in a way that's so positively received.
Jake Aaron Villarreal: Well, I know it's a huge part of the um the capital environments in the US, which is real estate, construction, building homes, building commercial buildings. It's massive. What's the, what's the spend look like on the technology side within that niche from like a, from our company perspective or like across the...
Anna Berger: Yeah.
Jake Aaron Villarreal: When you, when you kind of went out and said, you know, "here's the market opportunity."
Anna Berger: Yeah.
Jake Aaron Villarreal: "Here's where we think we can carve out a piece." What's, what's the market opportunity look like from your thesis?
Anna Berger: Yeah. Construction payroll specifically is a $6 billion market opportunity in North America. Um which is a good number to start with. And that's not adding on people management, right? That's not adding on time and attendance software, which also has its own piece in the market. This is specifically payroll and that's a pretty big opportunity.
Jake Aaron Villarreal: Yeah, it's a huge opportunity. That's really exciting. When you started this you know, one of the questions always becomes: do you want to build something on your own and hire people to build what you, what your idea and vision is, or do you bring in co-founders to help you on the journey? What was your decision and how did you get your co-founder on board?
Anna Berger: I would be nowhere without my co-founder, to be very clear. So like, there would be no Trayd without her. Um her name is Cara and she is actually my friend for over 21 years. We grew up together. She and I had very different career paths. I, as I said, like I was in New York jumping around from between corporate and startups. And Cara was at LinkedIn for nine years. Um, climbing the ladder all the way up to senior staff when she left. It's always been a dream of mine to work with her. I think as this, like me, I'm more of like the dreamer. I kind of like to see what doesn't exist and like push the bounds. And she's very like, "this is what's possible today, tomorrow, next year." And so I think I've always seen her brain and been like, "I want to work with that. Like I want her on my team uh and, and on my side."
And our timing worked out. Um I, I took a big swing trying to get her on board and pull her away from Big Tech. Um and you know, it's, it's been better than we could have ever expected. So it's like taking the relationship from like you know totally friendship and a solid friendship, like so close. We've been through all of like life's highs and lows, to now this. It's like a new dimension for us and it's, it's incredible. So, she's, she's built this entire thing. She's taken like my, like dream and made it a reality. It's unreal.
Jake Aaron Villarreal: I want to just go back to when you said you took a big swing to get her on. Do you remember the specific conversation that you had and a few value points that you can recall that you felt you really meant and you know that helped you get her on board?
Anna Berger: Totally. I mean, she'll tell this story one day and she's like, it's one of our kind of famous stories between the two of us is that we were on vacation together in Italy, summer of 2022. And I was already tinkering on Trayd. That was like when I was like in like the idea was there and I was in customer discovery mode. And we were planning on this vacation and in her mind it was like solely a friendship trip that we were like going on vacation together. For me, I was like, "This is 10 days for me to convince her to do this startup with me." Like I, total ambush moment.
And so I remember she... I spent the first few days, as I do during customer discovery calls, collecting information, right? Like I was like, "What are you looking for in your next move? Like what's exciting to you? What, what motivates you? Like what do you want in this next decade?" And she alluded to wanting to build again. Like she was leading a team of 250 engineers. She hadn't coded in a minute, right? And so she was like, "I'm craving like to build a company, to build growth, like to build from the ground up." And I just knew that that was my way in.
And I, you know, she had kind of told a story how there was one project she was assigned to at LinkedIn that had like a three-year life cycle. And I was like, "Can you imagine like, like that? Like that's just..." In startup world, and I had already been working on startups for four years. I'm like, "You can build a company from zero to 100,000 like users in three years. Like that's what we could do." You know, and that was kind of my way in of like, "Imagine you call the shots, right? Like this is on you. Like you control the timeline, you control the vision, um, you know, and the future." And I think that that's really probably one of the reasons why she got excited. So it wasn't an easy sell.
Jake Aaron Villarreal: That's great. I didn't know she had that much clout at LinkedIn and leading a team of 250 and uh God what a, what a great win for, for, for your company. Um you know it's been challenging over the last 24, 36 months to raise capital to take an idea, get funded and go into the market. Give us a little bit of your perspective and your journey on the funding side and what really worked for you to start from nothing to go into presentation mode and to finally get you know that seed round.
Anna Berger: I will not sugarcoat how challenging it is to fundraise, and to layer on top how hard it is to fundraise as a female, right? Like women get 1.6% of total venture funding. And so I went into our fundraise last year knowing that it was an uphill battle, but one that I was excited for. I think we have a killer product and a killer team. And so I think the number one thing is confidence, right? And like knowing that like we will be okay and like we will raise the money one way or another. Um the first half of 2023 it was not pretty out there. I must have pitched over a hundred times to angels, to VCs, anyone. And the market was completely dry.
Um, fortunately for us, around May of 2023, we got into Y Combinator. And of all the no's, we got the most important yes. And I will be kind of grateful forever for our time in Y Combinator. Uh, it was transformative on a personal level, on a company level. And so, like, for anyone thinking of like, "Should I do YC? Do I take that leap?" Like, yes. Yes. Times a thousand. Um, and so that was really like where we started catching our momentum. Um, and from a fundraising perspective. Um, and so that's, you know, that was kind of the beginning of our fundraise and we were able to close shortly after the program ended in the fall.
Jake Aaron Villarreal: So when you got accepted to Y Combinator and you ended up joining, did you have to move to Y Combinator? Did you spend time in a different city? And when you got there, was your thesis different than when you left? Like, walk us through that experience.
Anna Berger: We p- packed our bags and moved to San Francisco for 3 months. Uh Cara and I were sharing a two-bedroom apartment and like sleeping with a sliding door in between us. It was like peak, peak startup founder life. And we, at that time we were so convicted on what we were building and we had our pilot customers lined up. It was really a matter of like needing capital to pay for the APIs needed to finish the product. And so getting into YC allowed us to go head down on the product and like finish what we started.
So we walked into YC with a like a, with a 50% completed product. And so we couldn't have launched first week of the program. Like they encourage you to launch as soon as you get into YC. And we were like, "We're a payroll tool. We can't really mess with people's wages. Like, we're going to just take a beat, get this really right, and launch when the product is ready." And that wasn't the norm, right? We were watching our peers launch left, right? And we started feeling the pressure like, "Are we, are we behind, right?" But we knew we would have our moment coming out of the program. So, we went heads down. We had our earliest like pilot users on the platform testing features, giving us constant feedback. We were in a constant feedback loop with them and basically launched to market in October.
Jake Aaron Villarreal: That's really cool. Talk to us about getting out of Y Combinator and then raising your next round. They give you a certain amount for [a] certain percentage of your company, and then you take that and you can parlay that into... how much, how much credibility did that help you with, and what was the timeframe to get your sort of next round after that?
Anna Berger: Yeah, we, we closed four weeks um after Y Combinator ended. So there's Demo Day in the beginning of September, which puts you kind of on a stage in front of a pool of investors who are deploying capital, right? And not just to the investors who want to learn about you and collect insight but then not invest. These, these investors are kind of waiting in the wings for like the next batch of "who's going to be the, the unicorn." And um you know the momentum from Demo Day and our presentation allowed us to close the round in just a, a few short weeks.
Jake Aaron Villarreal: God, what an unreal feeling. An- like, like a high that you can't really replicate. It's, it's pretty unreal.
Anna Berger: Yeah. So amazing.
Jake Aaron Villarreal: Your parents must be real proud of you.
Anna Berger: Thank you. They are.
Jake Aaron Villarreal: It's a great accomplishment. Um, how big is the company today? You got your co-founder, you and are you guys um where you at from a growth perspective? I know it's still early on, but uh making some big, big hires yet?
Anna Berger: We are welcoming our founding engineer to the team in just a couple of weeks. It's a hire that we are in desperate need of. I think at this point sales is a little bit ahead of tech, which is you know a position of privilege, but we now need to play catchup. And uh you know, get out there. So um you know, wanted to make the right hire for kind of like our first team member. Um and so he's awesome. We're excited to welcome him to the New York office. So um couple weeks away from that and that'll be great. And we do have a part-time designer on the UX/UI front who I work with on all things kind of app and web.
Jake Aaron Villarreal: Really cool. Congratulations. Sounds like you're making the right moves at the right time. Funding's in place and going to market. What uh, if you look at the platform today, um what are you excited about as you continue to add pieces to the functionality of the platform and as you get into market looking at 2024?
Anna Berger: Yeah, I think we, we spent so much time last year on building it that this year is all about like the 1% tweaks to get it like exactly perfect. I think we took a lot of like big, like big moves with our customers last year in like what they expect in a category. And this year is like "refine, refine, refine, perfect, grow, refine, refine, refine, perfect, grow." That will be what 2024 is because the foundation of this is there. And now we just have to kind of like layer on top. And I think beyond '24, it's like "how do we look at Trayd throughout the construction ecosystem?" Not just at the subcontract- contractor level, but how do we make Trayd relevant for every player in the ecosystem to allow for more kind of trust and visibility to flow?
Jake Aaron Villarreal: That sounds like, makes a lot of sense. What's the business model? I know it's B2B, so I'm assuming it's a subscription. Maybe there's some different caveats to that. What's that look like for the, for the end user?
Anna Berger: Exactly. You nailed it. So most payroll platforms operate off of a PEPM (per employee per month) model. Um and so we are operating in the same vein. So monthly installments for use of the payroll tool.
Jake Aaron Villarreal: I love the stickiness of the platform. I mean once you start payroll, the last thing you want to do is switch off of this platform. But if you find something that's better that you can bring in that's going to optimize how you operate and maybe retain your customers or your, rather your employees or contractors, uh there's no reason to leave if it does 10x your experience or more with how you operate your business. Um I think the thing that, that interests my- from my perspective, us being in the recruitment space and the people strategy space, is how do you get the bright people on board and how do you keep them on board? How do you retain them? And if paying them same day is one little area that most don't really think about, but maybe it is a big issue, um, it's good to understand what that is and being able to solve that in a fast and quick and easy way. So...
Anna Berger: Yeah, I, I just love the fact that it's really you're solving a people problem. You know, it's the experience, the human experience of doing a job, getting paid, but getting paid faster than you normally would and doing it maybe in a better user experience capacity.
Jake Aaron Villarreal: Is it also like a digital mobile product? Like are you getting paid and you see it like a notification hit your phone and "Oh great, I just got paid, it's Friday, I'm going to go out tonight."
Anna Berger: For the worker, it should feel like Venmo, right? They're clocking in, they're clocking out, they're cashing out, right? It's, it's one motion for them. Um, and you're, you're completely right. Like the, the focus on people is literally why we are different from everyone in this space. Like people... the construction tech is on fire. Like complete renaissance. But they're focusing on materials, the supply chain. Um they're focusing on like the GC level, owner level space. Like the issues right now are acutely in the labor space. And it's a, it's an exciting shift I think for this industry. I think it's a bit shocking for them. It's never happened before. So I'm excited to see like the continued effects.
Jake Aaron Villarreal: Yeah, that's cool. Well, we're going to switch gears here now. We're going to uh switch to a little bit more personal about you. Three questions, three simple answers. Um, when you want to get creative or you want to think big, have those vision thoughts, where do you go? What do you do for that to, to happen?
Anna Berger: A really long walk um through New York City. To be clear, I, anytime I like slack Cara with like a big idea or like a, a visualization, she'll be like, "Are you walking right now?" Like she knows that like when I am away from my screens and away from like being in the weeds, which I can tend to be, and I allow myself like the air and the space and the kind of visual surroundings to just like inspire me, that's when I do my best thinking.
Jake Aaron Villarreal: I love that. What do you do to stay positive, keep a good perspective in the up and down roller coaster of building a startup?
Anna Berger: Yeah, two things. The first is workout every single day. Even if I go to the gym just to stretch, like the motion of like starting my day in like a bo- like a body headspace focused way is so important um from like a mental health perspective. Um and then the second is reminding myself how much of a privilege this is. I get to like wake up every day and build a dream that I had. Um, so few people get that opportunity. Like this is, I'm lucky. And I think between those two things, it makes the headaches, which 100% happen every single day, like it's a roller coaster every time I step foot in the office, but it's so worth it.
Jake Aaron Villarreal: I love that. What's one thing you learned at Y Combinator that you learned from another founder, maybe a mentor, somebody that was there that you think is worth sharing that other founders that are trying to build their own startups can learn from?
Anna Berger: I think what sets the good founder from like the average founder is like the willingness to keep going. I think from everyone you speak to when you're in YC, every person that comes in who's built these like mega successful companies, like they at one point they were all down and out like pivoting three times, bank account in the negatives, like needing a bailout, right? Like, like, but they kept going. They like pushed 1% further. And I think what I learned is it is like lit- and it's cliche to say, but it's like the darkest right before it breaks. And the same has already been true like for me. Like I've already seen that cycle happen where it's like 100 plus no's fundraising in the spring and right when I was like "do we, do we call it," you know, then we like threw our hat in the ring for YC and we went one step further and pushed one- once more on that front and then like boom, YC happens. It's like you just got to keep going. And like grit and relentlessness I think is what will set, you know, the, the kind of creme de la creme apart.
Jake Aaron Villarreal: Yeah, it's inspiring. I'm getting goosebumps just hearing that. I uh I really liked uh I like your passion behind what you're building and love the solution you're creating. Uh if anybody wants to get in touch with you or find out more about Trayd, where do they go?
Anna Berger: Yeah. So, I try to share a lot of this journey on LinkedIn and Twitter. Um, so just Anna Berger across all channels and they could probably find me. Um, maybe I'll get into TikTok one of these days. I don't know. People are starting to ask for it, so we'll see. I might keep popping up. Who knows?
Jake Aaron Villarreal: I love it. Um, very cool. Well, as we wrap up here, um I just want to give you uh a huge shout out for spending your time with us and, and sharing your story. And for all the listeners that are listening, uh means the world to me that you spent your time with us today. Um my name is Jake Aaron Villarreal signing off for now, but can't wait to catch up with you all on the next episode. Until then, Anna, listeners, take care.
Anna Berger: Thank you!
Jake Aaron Villarreal: Before we wrap up, I want to give a big shout out to all the entrepreneurs that we join to make this podcast possible. And for all the listeners for listening, it means the world to me that you chose to spend your time with us today. I'm your host Jake Aaron Villarreal signing off for now. We can't wait to connect with you all soon on the next episode. Take care.
This show is sponsored by Match Relevant, a company that helps venture-backed startups find the best people in the market. And they do it in three simple steps. First, they sit down with founders to understand their story. Second, they tell their story into multiple candidate channels. And third, they schedule interviews within 48 hours. Find us at matchrelevant.com to learn more about how we do it.
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