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Ran Harpaz is the founder and CEO of Lettuce Financial. He is a serial entrepreneur and experienced executive with a proven track record building and leading tech organizations from start-up to scale. Ran credits his business training to his tenure at McKinsey & PayPal. Throughout his career, Ran has led three Unicorn technology companies through high-growth stages: Hippo Insurance, Globality, and Noname Security. His experience ranges from early-stage startups to Fortune 500 companies and covers many industries and domains (FinTech, mobile, consumer apps, cybersecurity, B2B, AI, and NLP).
He was honored as one of the Top 25 Financial Technology CTOs of 2021, featured as a ‘FinTech Luminary’ and won two “CIO of the Year” awards. He has an MBA and Economics degrees, cum laude, as well as a Law degree.
Below is our recent interview with Ran Harpaz, CEO of Lettuce Financial:
Q: Can you provide a brief overview of Lettuce Financial?
A: Lettuce is the first financial system purpose-built for solos = business-of-one.
It’s a complete system to run the back-office of your business, so it’s easy to keep more of what you earn.
Solopreneurs want to save money on their tax filings but are typically anxious about the risk and liability of getting it wrong. Lettuce is the trusted solution that leverages deep domain expertise, automation and AI to provide opinionated decisions on how to manage and optimize solopreneurs workers’ taxes. Lettuce manages each individual’s tax dollars on a daily basis, actively recalculating and reallocating funds.
We believe this solution has multiple benefits over alternatives:
- A product / software solution offers lower cost and at the same time – able to offer consistent decisioning and communication unlike offline (human-based) solutions.
- Lettuce is more convenient as taxes are withheld from income so that users can access what they have left after subtracting taxes without the worry of managing their tax position.
- We offer a “Lettuce-Back Guarantee” that removes the stress for solopreneurs, offering a full refund of costs and fees if Lettuce is found to have made erroneous filings or if the customer doesn’t save on taxes.
Q: What inspired you to found Lettuce?
A: We believe that the future is independent and that most people would want to work for themselves over the next decade(s). According to Upwork Research Institute’s 2023 Freelance Forward survey, 38% of the U.S. workforce, or 64 million Americans, performed freelance work in the past year, an increase of four million total professionals from the previous year. This was an all-time high.
The study also found that American freelancers contributed approximately $1.27 trillion in annual earnings to the U.S. economy. This was a 78% increase from the estimated $715 billion to the economy in 2014, the first year of the study. Further, MBO’s State of Independence in America (2024) Report found that after several years of extraordinary growth, the number of independent workers was 72.7 million in 2024, from 38.2 million in 2020. This market is here to stay and an important part of the economy.
I have been on both sides of the Solo journey and realized that right now is the moment to harness technology to make it easier for solopreneurs and more accessible to everyone else.
To enable that, we want to build the “business-of-you operating system”; a SoloOS that unlocks everyone’s potential to build their own business-of-one successfully.
At its core, Lettuce is a technology-based, full-stack CFO for businesses-of-one. The platform simplifies and automates the process for self-employed workers to get paid and manage, file and pay their taxes.
This is a business built on the core tenet of trust, reflected in the mantra “With Lettuce, you can stop stressing out about managing your finances. Let us take care of it for you, all year long”. We believe this provides a superior customer experience and the peace of mind people desire. If a customer has questions, or is being audited, Lettuce has the answers, and when needed – stands between the customer and the IRS for an audit.
Q: How does Lettuce help self-employed business owners with the complexity of tax obligations?
A: Every single business has income and expenses and therefore has to take care of taxes (and as Benjamin Franklin so famously penned in a letter, “…in this world nothing can be said to be certain, except death and taxes”).
Taxes are such an omnipresent part of any business (and individual), and moreover – it’s the single biggest expense of everyone (yes, it is!) so solving it well seems like a great reason to get started.
We identified that the benefits of S-Corps offer a great differentiation into high-income solos, so we chose it as our initial focus for our strategy. S Corporations were designed by the IRS to incentivize small businesses and accelerate the economy. But, like most things coming from the government, it has a lot of nuance, complexity, compliance requirements (read about Reasonable Compensation, as an example) and are hard for individuals to grasp. That’s what Lettuce does. It puts back $10,000-15,000 or more into the solo business-of-one, without any of the hard work often expected.
We use technology to help customers get all the benefits of S Corps without any of the work required. The large set of jobs to be done for any business of one, can be alleviated by relying on automation and AI as a mechanism to achieve consistent, reliable, repeatable delivery of those tasks. As examples, we built automation to take care of company formation & registration, compliance filing (e.g., BOIR and state renewals), state-by-state tax employment registration, payroll calculation, tax estimation, automated withholding, transaction classification, bookkeeping, accounting and reporting.
Starting with the tax-saving value proposition, we train our automation system on a subject matter that is highly complex for humans but perfectly designed for automated systems – lots of rules, highly documented regulations, large knowledge base across state jurisdictions, all converging into a set of calculations – mathematical outcomes that can be tested and perfected.
We are adding generative AI language capabilities, from form filling to explainable tax logic, towards a rich experience that is both numerical and textual.
Partnering with our customers, we can then look at bank transactions, classifications of income/expense categories, matching of invoicing on the platform, benchmarking their hourly and retainer rates, tax strategies, business profitability metrics, and even household retirement savings preferences – helping our customers drive better results.
Q: What are the unique challenges faced by self-employed business owners?
A: Solos, freelancers and self-employed business owners are humans, they need a community of support, and they are the ones shouldering the weight of running a business. That duality is a lot. We want to make solopreneurship financially safe.
Beyond the core financial capabilities, there are two additional aspects that every business owner wants: first is their own personal (and financial) well-being — healthcare, retirement, benefits; second is business management tools – customer relationship management, legal templates, time tracking, hiring and outsourcing work. We would like the SoloOS platform to offer those capabilities via an ecosystem of partners.
In our journey to make solopreneurship financially safe, we want to bring along communities (like Freelancing Females, Fractionals United, Enterpreunista, and many more); as well as other ecosystem partners (like Upwork, Next Insurance, A.Team and others) – so that we all stand together in their service. This is a big mission, and it requires this collaboration to make the future of work materialize here, now.
Q: You recently published a study on taxes and solopreneurs, what findings stood out?
A: There’s a lot of misinformation about freelancing, taxes and even specifically S Corps, and it’s keeping many from making the right decisions. Being a ‘Pro’ and running a business as an S Corp is easier than most people think. Many solopreneurs are already eligible but don’t know where to start.
- Of the 33.3 million small businesses in the U.S., approximately 80% or 27.1 million are solo-owned ventures without employees (source Forbes). These nonemployer firms contribute about $1.74 trillion to US GDP annually. Despite their economic impact, 66% of small businesses face financial challenges.
- Solopreneurs are playing the wrong tax game: most default to sole proprietorships (69%) or LLCs (26%), which are not tax-advantaged. They chase business meal deductions and follow online advice on car write-offs. Nearly 37% of solopreneurs cite business unpredictability as their biggest financial challenge (fluctuating income and seasonal revenue) yet still overlook the stability that smarter tax structures, like an S Corp, can provide.
- Most Solopreneurs are overpaying their taxes, giving away Billions each year. Despite 5 million U.S. solopreneurs earning over $100K annually, only a small percentage have made the switch to an S Corp, leaving $50 billion in potential tax savings on the table each year. Those earning over $100K could save $10,000 annually by correctly restructuring their business. That extra money could be reinvested into their businesses or used to support their families.
- S Corp confusion is the blunder Solopreneurs can’t afford. More than 20% of solopreneurs don’t fully understand S Corps, and 8% believe they’re too expensive to set up—even though the tax savings quickly outweigh the costs. Even among those who have an S Corp, 11% are still leaving money on the table simply because they don’t realize the full extent of their tax benefits.
- Solopreneurs are stuck in a tax maze: a third (34%) of solopreneurs say they need a better tax strategy but feel stuck and unsure where to start. Tax strategy begins with proper systems – automated, recorded, always-available. Accountants can help, so can do-it-yourself software. An integrated all-in-one system for solopreneurs will likely unlock more than a manual alternative.
Q: What is one tip that you would give to someone starting a business today?
A: Think of yourself, and your business, like a ‘Pro’ from day one. Give it a name, incorporate it, give it the legal protection it needs, and the tax strategy it deserves. Nurture it, grow it, focus mostly on your customers. Join a community, find solutions that free up your time. Focus your energy on building the business and spending every available hour on your customers. Let automation take care of your systems. You should be the face of the business, the back-office should run on its own.
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