🚨 How The IRS Spending $57 billion, Quitting and Founder-led Sales Hacks
Four Insights #9: How the IRS is Spending and Knowing When To Quit
Welcome to the Four Insights Newsletter! This edition aims to ignite your entrepreneurial spirit by offering four key insights on performance, strategy, sales, and fundraising tactics. Our discussions will center around the thought leadership from some of the top Substackers I am reading right now. We intend to go beyond traditional venture capital discourse and provide practical advice and inspiration from a diverse range of fields.
A small ask: If you liked this piece, I’d be grateful if you’d consider tapping the ❤️ above! It helps us understand which pieces you like best and supports our growth. Thank you!
🎆 Celebrate Freedom from Financial Stress this 4th of July! 🎆
Exciting news for small business owners! Get 70% off QuickBooks Online for 3 months. Streamline your finances and focus on what truly matters - growing your business.
Don't let this explosive deal fizzle out. Act now and declare your independence from financial headaches!
Who Does the Books On The Largest Financial Institution In the World?
Ever wondered who keeps tabs on the the largest financial institution in the world and confirmed it did $4.7 trillion in 2023 revenue? Welcome to the fascinating world of IRS oversight! For the past few months, I've had a unique obsession: devouring TIGTA reports like a thriller novel. These aren't just dry audits – they're a window into the inner workings of one of America's most powerful agencies. And trust me, it's more riveting than you'd think.
Why am I so invested? Well, my startup, ModernTax, is taking a moonshot crack at fundamentally changing how businesses interact with tax data. Currently, we are working on an AI assistant that helps companies simplify tax return verification, uncover hidden income, and expand their customer base. It's a field where innovation meets bureaucracy, and every TIGTA report could hint at the next big opportunity – or challenge.
Right now, The TIGTA tax tech gold rush, thanks to President Biden's unprecedented $57.3 billion investment in the IRS through the Inflation Reduction Act. This cash influx is reshaping the landscape faster than you can say "audit"!
This report is not only impacting taxpayers but it has a drastic impact on startups, like Moderntax, and the growing area of companies that are coming to define the new age of AI-assisted services. I wrote a bit about it in April and has only seemingly gotten more intense as companies like PwC making a $1 billion investment into core AI services, and Reuters doubling down with $8 billion committed. These massive commercial adoptions underscore a seismic shift in how businesses approach data management and decision-making. Meanwhile, the IRS appears to be playing catch-up, with most of its newfound funding still allocated to operational support (see chart above) – namely, human resources. However, the appointment of the innovative Dan Werfel as commissioner signals a potential pivot. Even with the looming possibility of a leadership change in Washington come 2025, the momentum behind AI adoption seems unstoppable.
At ModernTax, we're positioned at the forefront of this transformation, leveraging AI to simplify tax return verification and uncover new opportunities for our clients. As we navigate this rapidly evolving landscape, one thing is clear: the future of tax tech is AI-driven, and it's reshaping the industry faster than anyone anticipated.
Apollo's "Outbound Sales" book drops June 25th! Insights from 500,000+ users & 50+ experts 30+ templates, 6 checklists, and cutting-edge practices Revolutionize your sales strategy
The Entrepreneurial Dilemma
Over the past few weeks, I have been plowing through Annie Duke's Quit: The Power of Knowing When to Walk Away. It offers a refreshing perspective on many topics, particularly the entrepreneur's dilemma.
In a world that glorifies persistence, Duke argues that knowing when to fold is equally crucial. In a world that glorifies persistence, Duke argues that knowing when to fold is equally crucial. But how do we know when to quit? This decision could apply to a company, a product, a team member, or even an idea.
My biggest takeaway so far is an idea she presents called 'kill criteria.' These are mental models designed to help you know when to cut your losses. One area this plays out for me, and many founder-led sales startups is dealing with enterprise sales.
Duke provides practical examples of how to apply kill criteria in various scenarios:
You can set kill criteria before you accept a position at a company, or before you decide on your major or what college you’re going to, or the house that you want to buy, or the place that you want to live. When you’re shelling out money for a concert ticket, you can think about what the weather conditions would have to be for you to eat the cost and stay home…. At any point, no matter whether it comes to someone you are dating a house you already own an investment you are in, or a college you are attending, you can think about some time frame in the future, imagine you are unhappy with your situation, and identify the benchmarks you will have missed or the signals you will be seeing that will tell you that you ought to walk away.
Duke provides three key signals to help structure your kill criteria, particularly relevant for enterprise sales:
1) Never had an executive in the meeting: This indicates a lack of decision-making power and by meeting two you should be asking why it is not happening. This is also relevant with investor meetings, it is OK to chat with a principal or associate over Zoom, but if you are moving through the process the partner should be present, if not it is a bad signal.
2) The request was written with a competitor in mind: This suggests you're not the primary choice and can also happen for startups as more and more venture funds create content and want to be robust in their market maps.
3) The prospect went directly to pricing: This is potentially a red flag as often the prospect is undervaluing your unique offering.
This framework is more crucial than ever, considering the tightening areas of venture capital, enterprise software sales, and the bottleneck of AI offerings. How can founders and CEOs apply this to their current challenges?
Stay Connected & Grow with Us!
Tomorrow: The new podcast episode drops
Coming Soon: Exclusive course launch for Founders
Daily: Catch my latest tips on TikTok, X, and Linkedin
Don't miss out on these opportunities to learn, grow, and connect! Click the links above to join me on this exciting journey.
See you next time!
Matt