Dan Zitting Spent a Week in the Dark with AI. Then He Made It Nitrogen's Superpower.

Cold open

Dan Zitting: How can we take AI and remove the work? So we say, you know, we really rely heavily on AI to first do the work for you. Let’s get rid of the filling out forms and the busy work. AI, do the work for you. And then, hey, can we use it to connect dots that we weren’t otherwise seeing before? AI being able to use our software, remove the work to getting there, and ending with a great human-to-human, supported by a digital experience, all in one place. That’s super cool.

Intro

Aaron Klein: Welcome to Beyond the Meeting, the show about what happens after the room clears, where what gets said turns into what gets done.

I’m Aaron Klein. I run a company called Contio, which means I spend most of my life thinking about how AI can amplify human relationships instead of replacing them.

Today’s guest is Dan Zitting, the CEO of Nitrogen. That’s the Risk Number that a lot of financial advisors put in front of their clients. And I should tell you up front that this is one episode where I am compromised. I ran that company for twelve and a half years, back when it was called Riskalyze. Then I handed Dan the keys, and I’ve been watching from a board seat ever since. Which means that some of what he’s about to critique, I built. He does critique it. Cheerfully. And he’s right.

Dan’s path to the CEO seat at Nitrogen is strange and worth knowing. He was an auditor who watched a material misstatement get past his own team. He went off and built software for accountants because he couldn’t afford anybody else’s, and then he ended up running the company that acquired his.

So stick around to the end. I’ll be back with my three takeaways.

The decision no one was watching

Aaron Klein: Welcome, Dan. I am super excited to have this conversation, because I’ve had a front-row seat to the most recent chapter of your leadership journey, and I want to dig into the moments when expertise wasn’t enough and you had to build a better system, or make a harder decision, or change the story. I’ll start by asking: what is a decision that you made when no one was watching that truly defined you as a leader?

Dan Zitting: That’s a really good question. Well, hey, AK, thanks for having me. This is great.

A decision when nobody was looking that defines me as a leader. My personal values are authenticity, vulnerability, and responsibility. I like to think of those three. So I would say my big thing is: when a complicated decision comes up, the right thing to do is actually the right thing to do. So just pick the right thing.

I’ve had a number of situations where, say, sensitive employee issues have come up over the years. When something like that comes up, the immediate decision is an investigation, or in some cases immediate termination. Just pick the hard course fast and avoid it being harder still later, even if you’re going to have to deal with an authentic and vulnerable moment having taken that course.

Aaron Klein: And of course, when that kind of thing happens, it very rarely is someone the decision is not painful about. Usually it’s somebody who’s doing a really good job. That’s just how the world works. And yet there’s this other issue, where they have potentially made a serious mistake. Those are the hardest decisions. And yet, make exceptions because somebody is a high performer, and you’re in for not only a world of trouble but a world of cultural rot inside your organization.

Dan Zitting: Totally.

The misstatement that got past the auditors

Aaron Klein: Speaking of ethics and integrity, we’re going back early in your career now. You watched a major financial misstatement get past auditors. Tell us that story, and what was it that made smart people miss what was right in front of them?

Dan Zitting: Funny you remember that story. I worked for one of the big audit firms at the time, and a material financial misstatement got past us. The reason it did, I think, and I believe the statute of limitations has passed at this point, is that some of the decisions we made as an engagement team were for the purposes of serving our audit methodology and the time it takes to get done, rather than serving the purpose of maximizing our chances of finding the misstatement.

What happened was, it was an organization that was call-center oriented, so they billed their clients based on time on the phone. There’s a very complex set of systems in between where a call comes in and hits the phone switch, through a whole bunch of data warehouses and manipulation routines, all the way into an ERP where it hits a bill. Not to be overly technical for the non-accountants, but we basically traced one phone call through that entire sequence. And then we said, oh, because they’re good at managing IT systems, we’ve proved that this application control works.

Well, it turns out it worked for the one phone call we picked. But amongst millions and millions of others, it was substantially overbilling their clients. So in effect, revenue ended up overstated.

Aaron Klein: I don’t know about you, but I found that the hardest failures are the ones where the process looks like it’s working. I’m sure that experience taught you a lot about what to distrust.

Dan Zitting: It does. You’re supposed to be able to do that as an auditor anyway. But it’s the combination of “it looks like the process works” and then, what really is our objective, and quite frankly our incentive? Is it to get the audit done, or is it to actually find incorrect financial statements? Sometimes, as leaders, and even as frontline employees, we can lose sight of whether we’ve mis-incentivized ourselves, or whether we’re actually focused on the correct objective.

Building the software he couldn’t afford

Aaron Klein: So you’re in this audit firm. What was the last straw that made you say, I’m not waiting for a vendor anymore, I’m just going to start writing some software to fix this myself?

Dan Zitting: I left one of those big audit firms, ironically, to start my own small audit firm, which a partner and I did together. What broke the back for me was, one, just too many ideas and nowhere to go inside a big audit shop. But in particular, I ended up working several times for a leader where, nothing wrong with her, we were just oil and water. We didn’t fit well together. And for me it was, life is too short.

So I started an entrepreneurial journey that way, and got into software because it was the early days of cloud. To have the kind of software that accountants and auditors and consultants like us used, you’d spend $20,000 for a software application that needed to be on a server.

Aaron Klein: With clients and servers and all that good stuff.

Dan Zitting: We didn’t have an office to put the server in. So it was just through necessity that we ended up writing our own tools, and customers got interested. This would have been 2007, 2008.

Aaron Klein: The word “cloud” hadn’t been invented yet. Working inside big enterprise companies, the technologies were kind of there, but I remember terms in that era like “web-based software,” because we had no idea how to explain the idea of the cloud to anybody.

Dan Zitting: A hundred percent. I will openly tell you, the company 37signals that makes Basecamp was a huge inspiration to me at the time. It was like, wow, this web-based application is so much easier than servers and installing stuff. And so it started out pretty simple for me: why don’t people who do what I do have a Basecamp for us? That was where my software journey started.

Aaron Klein: What do you think living inside that workflow let you see that wasn’t visible from the outside? Was it just architecture, this ought not to be client-server, it ought to be cloud? Or I’m betting there were things about the workflow that you could see that other people couldn’t.

Dan Zitting: That’s right. That software ultimately became what today is a very large enterprise application, tens of thousands of companies using it. And what led it there, I always called our secret sauce the domain model underneath it. The underlying design of the workflow. Way back in the day there was a great book called Domain-Driven Design, and when I read it, my mind started to operate in objects and the relationships between objects. Suddenly it was obvious: if you use it all the time, it’s obvious how to build a better tool. I’ve got to think your journey with Nitrogen, or Riskalyze at the time, was kind of the same way.

Aaron Klein: Yeah, absolutely. So this company was called Workpapers, workpapers.com. And then you sold that company to Galvanize. I don’t want to paper over that journey, but it’s kind of a cool story. You sold it to Galvanize, you really helped to rebuild that company, and then in the process of going out to raise more capital, you end up running Galvanize and getting acquired by Diligent, which is a huge PE-backed firm. Walk me through that journey, and how that decision about capital changed into the acquisition, and what you really believed that scale could make possible.

Dan Zitting: If you rewind to when I sold workpapers.com, it would have been 2011. Back then, it was becoming hot and trendy to get VC money. And it became apparent to me that I’d built a pretty good product. We had about a hundred customers on it. They liked it. I clearly did not know what I was doing, as a former accountant, in all things go-to-market, like sales and marketing.

So as I started to think about whether I could raise some money to hire somebody to help me run sales and marketing, I ran into this company that ultimately became Galvanize. It was a 25-year-old software business. The product was old and broken. The culture was broken. It was kind of going sideways. But it had a stellar customer list, exactly the customers where I wanted my software to be. So I spent the next ten years working there after I sold it.

I’ve always preached to startup entrepreneurs after that: VC money isn’t the only way to make your entrepreneurial dream come true. Even today, we so much treat it as an outcome. The more VC money you’ve raised, the better business you are. Which is totally not true, and often it’s the inverse.

Aaron Klein: Often the inverse. No offense to our friends who are VCs.

Dan Zitting: I have a number of close friends who have gotten trapped underneath their VC money. The business needed to become something much bigger. It could have been a great business, but because of that VC money, it needed to be gigantic, and it just wasn’t that kind of business. So they lost it, as opposed to having a cool business.

Anyway, the magic for me was getting in there and finding a great partner, the operator CEO who joined that business at the same time I did. Between me focusing on the product and the customer, and her being an operator and teaching me how to run the business of a software business, it was a great journey. It went eight and a half years. We raised $75 million of growth equity along the way. Then we were going to do a PE buyout type exercise and a leadership transition between her and me, but we got acquired right around the same time. So I did end up the CEO of that business, but only for a year before we integrated it into the bigger business we sold it to.

The rebrand: early looked exactly like wrong

Aaron Klein: It was quite the journey for me leading Riskalyze for twelve and a half years. Near the tail end, just a few months before I passed the baton to you, we rebranded to Nitrogen. That was honestly really hard for me. My wife said it was a little bit like renaming our fourth kid. Something about it didn’t feel perfect, but I kind of went with it because that was the strategy and we were headed toward this transition anyway. And then you said something this past year that really hit the nail on the head, and I absolutely loved it. You said, “I think we got a little bit ahead of ourselves there. We rebranded before the product told a broader story.” Take us into that.

Dan Zitting: For what it’s worth, I’m sure it did feel like renaming your fourth kid, AK. But when your workpapers.com gets bought by ACL, rebrands to Galvanize, by your fourth or fifth time rebranding, it gets much easier.

Aaron Klein: Good to know.

Dan Zitting: I kid. Having been through that a few times, I did it once before where it really was a success, because the market misunderstood what the company was and what the product was based on our legacy brand. In all candor, I think at Riskalyze we just got a little bit ahead of that. We rebranded when we knew we wanted to be something more in the market, but we weren’t quite yet.

I definitely learned from this one that it’s important to do the work first. Make sure that whatever the reason that would compel a change like that is already in place and has value, so that when the new brand or the new story hits, it immediately resonates. In all candor, I think our customers spent a couple of years asking us why we rebranded, until relatively recently, when they’re seeing a much broader product story. All good. We became Nitrogen. This year at our Fearless Investing Summit, when we did a big new product launch, we recharacterized it as: this was the moment that Nitrogen became Nitrogen.

Aaron Klein: It really felt that way. I obviously had the chance to be in the room and watch that moment, and it was fascinating to me because it felt like it had a ton of authenticity behind it. Not just because of the soul of what you and others said on that stage, but because of the product announcements and everything that was coming out to impact customers. I still talk to lots of advisors. You can’t work in this industry for long without picking up tens of thousands of friends along the way. And I think that really resonated with them. It felt like Nitrogen became Nitrogen in a really powerful way in that moment.

Dan Zitting: I appreciate that, especially given the history you have with the business. But even more so, I’ve heard a lot of the same from customers. It used to be that when we did a net promoter score survey, about a third of the responses would come back: I don’t understand why you rebranded to Nitrogen. Those comments are finally gone from our net promoter results.

Aaron Klein: You got it down from, I think it was 80% when I was there. So you got it down to a third, and it’s dropping even further.

Dan Zitting: I think we’re down to close to zero now.

A week in the dark: getting the company on AI

Aaron Klein: Let’s talk about what the AI revolution is changing with Nitrogen, because there are two aspects to unpack that are really interesting. We can talk about the product, and maybe we’ll go there next. But let’s first talk about the company. It’s super interesting to me, sitting in the board member seat and watching a lot of what you’re doing with the business and the people. It feels like an entirely different, new company in terms of its energy. It’s the same people, the same values, but it’s got different energy and different velocity than it had before.

Dan Zitting: It does. I think we found a moment in time. Obviously the generative AI tools flood onto the scene, and everybody’s wondering what’s going on. Great news when you’re in the software engineering business and the job that is disrupted the most is literally software engineering. You get a front-row seat.

The big moment for us, though, was drawing a line in the sand after we’d gone through that for nine months or whatever it was, and saying: look, I’ve got news for you, everyone. We’ve seen our software engineers go through it, but guess who else’s job is going to go through it? Everyone’s. Everybody. So we might as well get on board with that now and find the value rather than get cornered.

I don’t mean to make it about me, but I felt like, as CEO, it was my job first to live into that. So it was: just sit there with the tools for a week in the dark until I’m running my job with them and running my day with them. Then I went back to the company and said, here’s how I’m using them, here’s what I’ve learned. We created this goofy internal maturity model thing, and: hey, if I can be on level four and I’m an idiot, the rest of you definitely can get there.

I think it just gave people the creative space to pick these tools up and think differently about their job. It went from being very scary, about what it means for employment, to feeling like something new. A superpower to sink your teeth into.

Aaron Klein: It was super interesting for me to watch you lead that from the CEO’s desk while I was watching from the board member seat. There’s this stereotype that AI just produces a lot of slop. Of course AI can produce a lot of slop. For a lot of people it’s garbage in, garbage out, and a lot of people who aren’t actually putting thought into their work, yeah, you’ll get a lot of slop out the other side.

What was interesting to me is that one of the things I quickly noticed was, oh, this is kind of cool. I am getting more, in terms of volume of thought, from Dan. It’s all Dan’s thoughts. We would have gotten this in the meeting, and I’m getting it a little more in advance, because the tools are helping you get it on paper.

Dan Zitting: Because Dan’s too lazy to write it down early and be prepared.

Aaron Klein: No, no. It’s about time and capacity. We’ve sat in the same chair, so you have a lot of demands on time, and you have to make choices. Every single thing you shared in that format, I read, and not a single bit of it felt AI-sloppy. Every bit of it, I’m like, this is Dan’s thinking, and he’s able to give us insight into his thinking in a way that just wasn’t possible before. He’d have to wait, come to the meeting, and do it verbally.

Dan Zitting: It’s a little bit of that Jevons paradox. You’re producing more, and it’s a super-high-quality more, but it’s possible because of these tools. I totally agree with that. But I also agree with your earlier point: the tools don’t do it on their own.

Coaching agents instead of people

Dan Zitting: I think learning how to be a coach, even if you’re coaching agents instead of people, is sort of baseline skill number one in turning these things into really useful weapons.

Aaron Klein: If you think you’re going to get your AI to generate your strategy for you, by definition, it’s a large language model. It’s supposed to find the average token that comes next. You’re going to have a very average strategy. And great businesses are not built on average strategies.

Dan Zitting: That’s for darn sure.

Minutes in product is going away

Aaron Klein: Let’s think about the product side. I look at how you’ve now started to enable our customers at Nitrogen to benefit from the AI revolution. That’s got to get you so excited about what you’ve been delivering at this incredibly fast velocity with Nucleus and everything else.

Dan Zitting: I’m so glad to be going through this particular time at Nitrogen, because of the kind of software we make. Our software is meant to be seen, if I can put it that way. A lot of software, most of the software we use in our day-to-day job, if we could just never see it, we’d be happier.

What I’ve loved about building high-impact AI tooling into our software is this. We used to measure minutes in product. That was a good thing. The more time people spent in the product, the better we were doing, the more engaged the user was. And now it’s being able to say: good news, minutes in product is going away, because that sucks. Let’s get them out of the product.

So how can we take AI and remove the work? We rely heavily on AI to first do the work for you. Let’s get rid of the filling out forms, the busy work. AI, do the work for you. And then, can we use it to connect dots we weren’t otherwise seeing before? In our case at Nitrogen, that’s connecting dots between not only what’s going on in your portfolio from a return and risk perspective, but what does that mean for income in retirement? What does it mean for your tax situation? Connecting the dots intelligently between things you might not otherwise have seen.

And then we continue to do the part in our core software that’s high impact, the part you put in front of the end client. That should be seen. I think it’s really impactful for our business, because we still deliver all the value Nitrogen has always delivered, and I’m extraordinarily confident that doesn’t get replaced by AI. But AI being able to use our software, remove the work to getting there, and end with a great human-to-human, supported by a digital experience, all in one place, is super cool.

Aaron Klein: The power of Nitrogen’s suite of advisor tools, I would argue, has always stemmed from the impact it made on the client: to see it and understand the things that financial advisor had been telling them for years that they still hadn’t grasped. Now they can see it. Now they can grasp it. And what you’ve been able to execute, particularly over the last year or two, is: back in the old days, to get that incredible Nitrogen output, you had to do a hundred pounds of work. Now, with what you and the team have delivered, you get the same output and only do ten pounds of work. That’s incredibly powerful, and it’s absolutely transformative for financial advisors.

Fifteen minutes with his dad

Dan Zitting: I think it is. Every summer I go home. I’m originally from Colorado, a small town, and I go back every year. This summer I finally got my dad to sit down and I did the Nitrogen thing with him, with Nucleus, the AI engine behind our product. A brokerage statement and a tax return, and he fills out a questionnaire. The whole process took us ten minutes, and he had the full proposal: a specific Risk Number, all those things, and a snapshot of these tax insights. Just like everybody else, he’s over-risked. And it connected the dots to tax and said, we can fix this, but you need to fix it slowly or you’re going to pay a ton of tax. The whole thing, beginning to end, was fifteen minutes. It’s the closest thing my dad’s ever had to a proper financial planning conversation.

Aaron Klein: Wow. What a cool story.

The one value

Aaron Klein: Last question for me. When all the meetings are over, what’s the one value that you most want your leadership to be remembered for?

Dan Zitting: I saw that question. It’s such an excellent question. It comes back to those three values I mentioned earlier. Those are personal for me, and I think the reason I fit at Nitrogen is because they fit well with the Nitrogen company values. But when all the meetings are done one day, and my name ever comes up anywhere, “hey, Dan worked here once,” if I did stuff that was dumb, fine. But I hope I did it for authentic reasons that were understandable, and that I was a big enough person to say when I was wrong and take responsibility for the actions.

Aaron Klein: I love it. Authenticity. Thank you, Dan.

Dan Zitting: Thanks, AK. This was fun.

Aaron’s three takeaways

Aaron Klein: I hope you liked that. Dan is one of my favorite people to think out loud with, and he was more generous about my mistakes than he needed to be. But three takeaways.

First, and I’m going to eat this one myself: don’t rebrand until the work has earned it. Dan’s line was, we rebranded when we knew we wanted to be something more in the market, but we weren’t quite yet. When I was still there, something like 80% of our net promoter survey responses came back asking why we had changed the name. Dan says it took a couple of years and a genuinely new product story before that finally went to zero. It was the strategy, but the product had to catch up. Dan’s point is, the product needs to get there first, and then do it. It’s not that we were wrong about the name. We were just a little bit early. And for about two years, early looks exactly like wrong.

Second. If you want your team to adopt something hard, you’ve got to go first, quietly, and then show your work. I love how he talked about sitting with the AI tools for a week in the dark until he was running his own day on them, and then going back to the company and saying, here’s how I’m using them, here’s what I learned. He built this internal maturity model with levels on it, and his pitch was, if I can get to level four and I’m an idiot, then the rest of you definitely can. For the average employee at a company, that takes a nine-month scary thing and turns it into something people actually want to try. Mandates don’t do that. Modeling the behavior does. Steal that.

Third, and this is the line I keep thinking about. Dan said the baseline skill of this era is learning how to be a coach. And then he added, even if you’re coaching agents instead of people. The tools don’t do it on their own. I’d put it even more bluntly: if you’re waiting for the AI to hand you a strategy, remember what AI is. It is a large language model. It is built to find the average next token. If that’s what you’re trying to do, you’re just going to get an average strategy. Great businesses are not built on average strategies.

And here’s the moment that stayed with me. Dan went home to his small town in Colorado this summer. He finally got his dad to sit down and run through Nitrogen with him. Fifteen minutes, start to finish. And he said it was the closest thing his dad has ever had to a real financial planning conversation. That’s the whole argument for how I’m thinking about Contio: take the rote work out so that the human part can happen.

The second half of the work starts now. See you next time.