# A nearly $1M tax business still wasn’t venture scale

Markdown copy of https://realalpha.app/s/a-nearly-1m-tax-business-still-wasnt-venture-scale/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Jean-Denis Greze](https://realalpha.app/builders/jean-denis-greze/) · Jean-Denis Greze is founder and CEO of Town. · Led Plaid’s EPD from $10M to $300M+ in ARR, then co-founded Town, an AI assistant for everyday work.
- Host: [Erik Torenberg](https://realalpha.app/people/erik-torenberg/) · General partner, Andreessen Horowitz · Helped build Product Hunt; founded On Deck, Village Global and Turpentine.
- Show: a16z Podcast
- Episode: [Why a $1M Startup Wasn’t Worth Building in the Age of AI](https://realalpha.app/v/o_5f4N6Nq80/), Oct 19, 2026
- Moment: 3:04 to 10:20 of the episode (7 min), playing on https://realalpha.app/s/a-nearly-1m-tax-business-still-wasnt-venture-scale/; the episode from there: https://realalpha.app/v/o_5f4N6Nq80/?t=184

## Quote

> “But post-AI, this was **not going to be** a venture-scale company.”
> — [Jean-Denis Greze](https://realalpha.app/builders/jean-denis-greze/) at [4:53](https://realalpha.app/v/o_5f4N6Nq80/?t=293) · a16z Podcast

## Takeaways

1. Tax customers buy only once a year, limiting word of mouth.
2. Incumbents could automate tax prep for existing customers faster.
3. A seasonal business gave the founders a short pivot window.

## About this segment

Jean-Denis Greze explains why tax’s slow sales cycle and incumbents’ distribution made a growing business hard to scale. A narrow annual window forced the founders to decide whether to pivot.

From “Why a $1M Startup Wasn’t Worth Building in the Age of AI”, Oct 19, 2026. [Watch the full episode](https://realalpha.app/v/o_5f4N6Nq80/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[3:10](https://realalpha.app/v/o_5f4N6Nq80/?t=190) It's like you left Plaid, you started doing SMB tax, kind of walk us through the founder's journey from there to here. I left Plaid. I took a few months off with family because I knew that if I was going to be a founder, I was going to have no more time off for a while. Yeah, and then started exploring in the very B2B way what would be interesting markets where AI could really change the product experience.

[3:33](https://realalpha.app/v/o_5f4N6Nq80/?t=213) And for a variety of reasons, tax made a lot of sense. There's a lot of text in tax, and LLMs are very good at text. You deal with a lot of structured formats as inputs. like financials and lease documents. And it just felt like a medium where we could take this process of putting together a business tax return, which is pretty different from a personal tax return, and automate it. And I did what engineers do, which is we did technical due diligence to prove to ourselves that it could be done.

[4:03](https://realalpha.app/v/o_5f4N6Nq80/?t=243) And the feeling was like, yes, within the next two years, the process for a small to medium-sized business of going from your financials and a bunch of documents about your business and a finished tax return that could be automated. with AI. And we spent a year building that. And I think there's a nice day in it, but it worked from a product perspective, but not from a go-to-market perspective. Meaning even though I have no doubt that tax prep will be automated, how do you reach millions of businesses efficiently and sell that product? That had a lot more question marks than we anticipated.

[4:37](https://realalpha.app/v/o_5f4N6Nq80/?t=277) And basically after one year, we had what I would describe as a good business pre-AI. That is, if I showed you the revenue number and the revenue growth in our first year, like a little bit below a million, and if I showed you what I thought we could do in year two, we thought we could get to like two and a half to three million in revenue, I think pre-AI you would have been like, that makes a ton of sense.

[4:59](https://realalpha.app/v/o_5f4N6Nq80/?t=299) But post-AI, this was not going to be a venture-scale company. And also, I think even more importantly, we realized that the incumbents were going to be able to use the technology to automate tax prep for their existing customers faster than we could grab market share. And that's a key thing if you're a founder. You have to think about your advantage if you're a new entrant is you're faster moving.

[5:21](https://realalpha.app/v/o_5f4N6Nq80/?t=321) You can build a different product. You can use different go-to-market approaches, but there's a ticking clock on the wall, which is how quickly can you get real word-of-mouth network effects and market penetration before the incumbents have other advantages. They have distribution advantages, for example, before they can catch up and copy what you're doing effectively enough. And it felt for tax, like, we wouldn't be able to get to hundreds of millions of revenue before our competitors, the incumbents, could, because you can only sell tax once a year.

[5:50](https://realalpha.app/v/o_5f4N6Nq80/?t=350) And that's like a, you know. And not only sell it once a year, it's like the interaction. It's not like a, it just fundamentally cannot be a DAU tool. That's right. And it also doesn't have a ton of word of mouth because it's rare for people to brag about their tax prep situation. And when they do, again, they can only do it once a year. after they've done the tax return is when you brag about how good your tax prep experience is, usually it's also not the time when people are purchasing or looking for a new tax preparer account. And so they're going to forget in the next year. That's right. Those discontinuity make it really difficult to hyperscale. And so that's why it was not a great idea as a business. And it's funny, one of my best friends has built like a successful ed tech company. And one of the things

[6:30](https://realalpha.app/v/o_5f4N6Nq80/?t=390) you always complain about with ed tech, it's the same thing. You can only sell in that tech twice a year. You can sell in the summer for the fall, and then you have a short window where you can sell at the end of the fall and winter season before the new year. Those are the only two times where you can really sell software to schools and to school districts. And he was like, that really limited my ability to hyperscale. And I chose to forget that when we were doing tax. Yeah, so we built tax. And after one year, after the first tax season, my co-founder and I, we went for a lot of walks with a lot of coffee for a week and really pondered the meaning of life and entrepreneurship and capitalism and decided we should do something else.

[7:07](https://realalpha.app/v/o_5f4N6Nq80/?t=427) We need to find a more fruitful market to play. If we want to impact millions of people, there are better ways to get at that goal. That was a pretty brave thing to do. Most people probably wouldn't do that, especially because it wasn't not working. In the moment, it felt like failure, like we were failing. But I think, what are your core motivations for building a business? As a founder, there are these moments, they happen more often than you wish they did, but you really ask yourself the question, why am I doing this?

[7:32](https://realalpha.app/v/o_5f4N6Nq80/?t=452) and for us it was like impact in the world was really really important we really wanted to build something that mattered and help people so we stopped believing that we could have as much impact in the world as we ought to have because we didn't feel like we could scale the business quickly enough and the second reason why I think you build a company for us was really enjoy working with our team but everyone on our team has an opportunity cost they could be working at town or they could be working at a lot of other great companies in the valley.

[8:04](https://realalpha.app/v/o_5f4N6Nq80/?t=484) And so if you stop believing that you can have a great outcome, then it's really hard to come into the office every day and look at people in the eye. When they tell you like, hey, I'm having a hard time with this or when you're trying to convince a candidate to come join your company and they have an offer from someone else that's liquid and you're like, oh, well, who am I as a human being? I know you're a fan. I was there.

[8:24](https://realalpha.app/v/o_5f4N6Nq80/?t=504) So there's a few things that we looked at and we were like, well, we got to make the decision. The counter on the other side is maybe we would have figured a way. And there's always this thing, you never know for sure, right? And we're very resourceful humans, so you can always try something else. But it just felt we didn't have the idea in our brain to make it a really breakthrough business. And the hard part of it is admitting to other people that you failed.

[8:48](https://realalpha.app/v/o_5f4N6Nq80/?t=528) And to some of your employees, maybe our tax team wasn't going to have a future at their company for when I'm going to do tax. And you face that and you're like, first of all, who cares what other people think of you? My friends will still be my friends regardless of whether I succeed or fail. For employees, we can help them find their next gig. We can treat them really well in terms of severance and other things and make it okay.

[9:09](https://realalpha.app/v/o_5f4N6Nq80/?t=549) And then you realize it's not as hard a decision as you might have emotionally reacted to initially. And it's the right decision. You start to get that conviction and then you just do it. One last little bit is, because tax is annual, I think making the decision at that point in time it was the only time we could make the decision. You can't pivot like April 16th after you've told a bunch of people that you're going to do their tax return.

[9:32](https://realalpha.app/v/o_5f4N6Nq80/?t=572) You can't pivot in January after you've signed half of your partners, right? We had a window between, let's say, right around October 15th of probably a month where we could live in both universes. The universe where we kept doing tax and the universe where we couldn't. And after that, the door was closing. And so I think that time pressure helped us make the decision more efficiently than otherwise.

[9:54](https://realalpha.app/v/o_5f4N6Nq80/?t=594) I think if you're not in a cyclical business, I think you can always tell yourself, well, let me try the next idea for a month. Let me try the next thing for the next three weeks. Maybe that'll work. Maybe this will work. We had a short window, right, where we could change the direction potentially. And once the window was gone, it was like, hey, we have to decide right now. Otherwise, we're going to be here a year from now.

[10:12](https://realalpha.app/v/o_5f4N6Nq80/?t=612) And a year from now, we won't have the capital to make the change.