CHAPTERS
Sphere today: AI-powered platform for global indirect tax compliance
Nick explains what Sphere does: end-to-end indirect tax compliance across jurisdictions, from registrations to calculations, filings, and remittance. He also shares the context of the $21M Series A and the ambition to scale into a large global opportunity.
- •Sphere focuses on indirect tax: US sales tax, EU VAT, GST in countries like India/Australia
- •Core workflows: register with tax authorities, calculate tax at checkout, file returns, remit payments
- •Customers include fast-growing AI/SaaS companies (e.g., Lovable, ElevenLabs, Replit)
- •Series A ($21M) used to double down on global expansion and product depth
From finance to YC: the first startup and why it looked like it was working
Nick walks through his finance background and the edtech marketplace he built that got into YC. Despite meaningful early traction and revenue, the underlying model had scaling issues that made it unattractive as a long-term company.
- •Background: PwC and Macquarie; left finance to build a company
- •Built an edtech marketplace for live courses run by industry experts
- •YC traction: ~1.5M GMV, ~20% take rate, ~300K ARR
- •Initial momentum masked structural scalability problems in the model
Shutting down the edtech business: the false assumption that broke scalability
Nick explains the core assumption that failed: instructors couldn’t reliably create high-quality courses without heavy involvement. The business drifted toward a media/services model and, combined with edtech market difficulty, led to a deliberate shutdown.
- •Assumption failed: creators would productize course creation themselves
- •Quality issues required the team to get deeply involved in content creation
- •Result: became a media-like business that didn’t scale cleanly
- •Market reality: few edtech peers were building very large revenue outcomes
- •Decision: shut it down rather than spend 10 years on a capped outcome
“Pivot hell”: chasing what’s hot and why learnings didn’t compound
Without a clear next idea, Nick and his co-founder cycled through trendy AI concepts. He describes how pursuing unfamiliar customers and problem spaces caused constant resets, preventing accumulation of insight and progress.
- •No immediate new idea after shutdown; entered pivot hell
- •Tried trend-driven concepts (e.g., AI sales agents, AI-generated integrations)
- •Problems: weak customer understanding and low domain context
- •Learnings didn’t compound; each attempt felt like starting over
- •Turning point: realizing the need to anchor in a domain he knew deeply
Lowest point: co-founder leaves, personal finances collapse, and family crisis
Nick recounts an extremely turbulent period: loss of co-founder, support network, and personal financial security—alongside a high-risk twin pregnancy with insurance refusing coverage. He continued building while relocating to the UK for medical care, under intense pressure.
- •Co-founder left; most prior believers disappeared
- •Very limited personal savings; had to keep investors confident
- •High-risk twin pregnancy; US insurance refused coverage; repeated $10K bills
- •Relocated to the UK; lived in a hospital charity house while continuing to build
- •Motivation: proving doubters wrong and having “no choice” but to fight through
Finding the real wedge: global cross-border compliance, discovered via CFO interviews
Nick returns to finance and systematically interviews CFOs to identify recurring pain when companies expand internationally. Tax emerged as the consistent pattern, leading him to iterate from broad thesis to specific product direction.
- •Re-centered on what he knew: finance; focused outreach to CFOs
- •Personal experience: his prior marketplace suffered acute VAT/GST/sales tax pain
- •Stage 1: ~20 discovery calls to map international expansion challenges
- •Tax repeatedly surfaced as a high-severity, cross-company problem
- •Noted vendor gap: incumbents weak internationally, often outsourcing to services
Prototype-driven validation: Figma iterations, LOIs, and early conviction
Nick describes a structured approach: moving from discovery to prototype feedback to selling. High-fidelity Figma demos enabled rapid iteration, ultimately producing LOIs that increased confidence before building the full product.
- •Stage 2: ~20 calls showing a high-fidelity Figma prototype; nightly iteration
- •Stage 3: ~20 sales-oriented calls to pursue LOIs (especially beyond YC network)
- •Outcome: 5 LOIs that created strong conviction to proceed
- •Key learning: staying in one domain made insights cumulative and reusable
- •Method: treat it like a funnel—pattern match, refine, then sell
Selling before building: landing the first 10 contracts and de-risking with modularity
With no technical co-founder, Nick prioritized selling first and used the prototype to close real contracts. He explains why large customers were willing to bet on Sphere and how a modular, land-and-expand approach reduced perceived risk.
- •Sold first to validate demand before hiring/building engineering
- •Closed first 10 binding contracts off a Figma prototype (until credibility limits hit)
- •Differentiation: international tax compliance vs. “pen and paper” workflows
- •Spoke CFO language: rational, numbers-driven buyers expect polish and balance
- •Modular adoption: start with regions/features (e.g., registration + filing) then expand and replace incumbents/advisors
Trust as the core GTM lever: moving upmarket and shifting to inbound
As Sphere moved upmarket, trust requirements increased beyond early founder credibility. Nick outlines the operational trust signals needed for bigger customers and shares how Sphere’s reputation shifted acquisition from outbound-heavy to inbound-led.
- •Upmarket selling increases trust “checkboxes”: security, scale proof, references
- •Reference customers and referrals become a deliberate sales asset
- •Early sales relied on betting on the founder; later sales rely on institutional credibility
- •GTM shift: from 100% outbound to ~70% inbound as market awareness grew
- •Trust remains central even as product matures and adoption broadens
Why global indirect tax is uniquely hard: authorities, variability, and manual outsourcing
Nick explains the complexity that makes global tax compliance painful: fragmentation across jurisdictions and the lack of true end-to-end automation among incumbents. He positions Sphere’s approach against service-heavy outsourcing that inflates cost and friction.
- •Compliance is fragmented across many tax authorities and changing rules
- •Incumbents often outsource international work to local advisors
- •Outsourcing creates manual back-and-forth and poor customer experience
- •Service-heavy approaches can cost 3–4x more
- •Opportunity: build true automation across registration, calculation, filing, and remittance
From stealth to Series A: building integrations across 100+ tax authorities
Nick shares that Sphere spent 18 months in stealth building deep integrations with tax authorities to automate workflows end-to-end. This foundation, paired with early design partners, helped create defensibility and supported the leap to a major Series A.
- •18 months in stealth with initial design partners
- •Built integrations into 100+ tax authorities (US and global)
- •Goal: end-to-end automation rather than partial tooling plus services
- •Positioning: no other vendor delivers the same degree of direct automation
- •Series A used to scale this global platform opportunity further
Building an AI-native tax engine (TRAM): codifying and monitoring tax law globally
Nick describes Sphere’s key technical differentiator: an AI-native tax engine designed to collect, codify, and monitor tax law changes worldwide. He contrasts this with superficial “AI features” and frames it as rebuilding the core engine of tax determination.
- •AI-native engine applies correct tax treatment for any product in any jurisdiction
- •Continuously collects/codifies/monitors global tax law updates
- •Contrasts with competitors using AI for ancillary tasks (e.g., correspondence categorization)
- •TRAM (tax review and assessment model) as proprietary foundation
- •Enables accurate point-of-transaction tax decisions at global scale
The bigger vision + founder advice: expand beyond indirect tax and endure the mental game
Nick outlines Sphere’s expansion path into adjacent compliance areas and positions the company as a broader revenue-based cross-border compliance engine. He closes with advice for founders in pivot hell: persistence, focus on what you know, and treating it as a mental battle.
- •Adjacencies: withholding tax, input tax (expenses), tariffs, and more
- •Vision: “Deel for revenue-based compliance,” not just indirect tax tooling
- •AI-native foundation designed to expand quickly across compliance categories
- •Advice: pivoting is a mental game; many will rationalize quitting
- •Focus on domains you know and persist through the hardest phase
