How to build a company you’ll run forever | Zack Kanter (Founder and CEO of Stedi)

Zack Kanter is the founder and CEO of Stedi, an API-first healthcare clearinghouse. After bootstrapping a wildly profitable auto-parts business, he sold it to tackle "the most complicated problem" he'd ever encountered: business-to-business transaction exchange. He spent years building EDI infrastructure, threw away the entire codebase eight times, and found extraordinary traction in healthcare. Stedi recently raised a $70M Series B co-led by Stripe and Addition. In this conversation, Brett and Zack discuss why venture capital means "going pro," why execution is never actually a moat, and how "eating glass" became Stedi's competitive advantage. In today’s episode, we discuss: • How 16-year-old Zack turned $2,500 into a wholesale empire • Why bootstrapping means being "constrained by capital" and how VC removes that ceiling • Why Zack rebuilt their EDI product eight times before launch • The snake swallowing a deer: what extreme product-market fit really looks like • What software companies can learn from discount retail and Toyota • Why Stedi’s new hires are told "everything’s your fault now" • And much more Where to find Zack: • LinkedIn: https://www.linkedin.com/in/zkanter • Twitter/X: https://x.com/zackkanter Where to find Brett: • LinkedIn: https://www.linkedin.com/in/brett-berson-9986094/ • Twitter/X: https://twitter.com/brettberson Where to find First Round Capital: • Website: https://firstround.com/ • First Round Review: https://review.firstround.com/ • Twitter/X: https://twitter.com/firstround • YouTube: https://www.youtube.com/@FirstRoundCapital • This podcast on all platforms: https://review.firstround.com/podcast References: • Aetna: https://www.aetna.com/ • Amazon: https://www.amazon.com/ • AWS: https://aws.amazon.com/ • Blue Cross Blue Shield: https://www.bcbs.com/ • Change Healthcare: https://www.changehealthcare.com/ • Cigna: https://www.cigna.com/ • Clay: https://www.clay.com/ • Costco: https://www.costco.com/ • Ford Motor Company: https://www.ford.com/ • GM: https://www.gm.com/ • HIPAA overview (HHS): https://www.hhs.gov/hipaa/index.html • Jeff Bezos: https://x.com/JeffBezos • Kanban / TPS (Toyota): https://global.toyota/en/company/vision-and-philosophy/production-system • Microsoft Teams: https://www.microsoft.com/microsoft-teams • NetSuite: https://www.netsuite.com/ • O’Reilly Auto Parts: https://www.oreillyauto.com/ • Peter Thiel: https://x.com/peterthiel • Porter’s five forces: https://www.isc.hbs.edu/strategy/pages/the-five-forces.aspx • "Reality has a surprising amount of detail": https://johnsalvatier.org/blog/2017/reality-has-a-surprising-amount-of-detail • Slack: https://slack.com/ • Stedi: https://www.stedi.com/ • Summit Racing: https://www.summitracing.com/ • Target: https://www.target.com/ • Walmart: https://www.walmart.com/ • Zapier: https://zapier.com/ Timestamps: (01:24) Zack’s first business (08:54) Why the first customer is tricky (10:12) The downside of bootstrapping (11:42) Why venture capital is like “going pro” (14:20) The confusion between ownership vs. control (16:08) Building a company you don’t want to leave (20:46) Do things better than other people (24:49) Stedi’s early years (31:43) Physical vs. digital product-market fit (34:41) How Stedi scaled decision-making (40:08) Stedi’s journey to product-market fit (45:22) Finding founder-approach fit (50:42) “All software is a cascade of miracles” (52:52) The surprising lessons from discount retail (57:50) How the Toyota production system influences software (1:01:31) What it means to be a high-agency person (1:03:09) The core trait Zack looks for when hiring (1:02:57) Maintaining conviction in unconventional practice (1:14:19) When should you start to hire managers? (1:17:42) “Reality has a surprising amount of detail”