AI vs. Paperwork – Interview with Mike McCarthy, co-founder of cloudsquid

Last November, cloudsquid announced the closing of its pre-seed funding round led by HTGF. The startup is taking aim at paperwork, using AI agents to help operations teams automate document-heavy workflows. Early customers are transforming critical workflows in accounting, insurance claims and supply chain operations. We sat down with co-founder Mike to talk about the diverse team, their motivation, lessons learned and what’s next for the company.

Your team comes from different backgrounds – what is your common motivation and how do you complement each other?

Mike McCarthy: Our diversity is our strength. I moved to Berlin from the USA, Filip from Poland, and Sang from South Korea. We span Millennial and Gen Z perspectives. This blend helps us approach problems from multiple angles and think differently. I think our shared value is passion and intensity, we’re very lucky to have this opportunity to come together and build this company right now at such an exciting time in technology. We’ve all experienced the challenges of assimilation, building grit and flexibility that’s essential for entrepreneurship.

You have recently launched your product. What was the biggest ‘light bulb moment’ along the way?

Mike McCarthy: Our biggest realisation was about AI adoption in enterprises. Despite the hype, most traditional and Enterprise companies use generative AI superficially. Many vendors force new systems on companies not ready for rapid change. Our approach of solving document workflows between existing systems while letting enterprises maintain familiar processes and tools offers a more realistic path to adoption. Enormous efficiency is lost in these system gaps, it creates the perfect opportunity for AI workflows that weren’t possible before huge gains reasoning and intelligence capabilities.

What are you currently looking for? How can the HTGF network support?

After working selectively with early partners, we’re ready to scale. We would love to speak with companies in the network who are ready to tackle these problems. We’re targeting painful document workflows that were impossible to solve pre-LLMs. For example, extracting data from 150-page PDFs with countless line items in accounts payable processes, where every customer uses different templates. This tedious cross-referencing costs companies millions and no human wants to do it. These are exactly the workflows we’re excited to tackle.

What hurdles did you have to overcome in building cloudsquid that you hadn’t anticipated?

Mike McCarthy: Building on rapidly evolving AI models forces constant reassessment. You must repeatedly question what’s possible and be prepared to pivot overnight. This pushes us to build for the future and think differently. It also challenges conventional wisdom about customer-driven feature development. While customer feedback matters, clients don’t fully grasp AI capabilities today, let alone six months from now. We need to imagine that future for them.

In the pre-seed phase, every decision is important. Which of your early steps proved to be the most valuable?

Mike McCarthy: Our journey included one major pivot and several smaller ones to refine our focus. Pre-seed demands an experimental mindset, testing ideas and gathering market feedback. The worst mistake is committing to an idea that lacks conviction from you or the market. When you find the right problem, customer interactions take on a different energy. 

What led to your pivot?

Mike McCarthy: We followed common advice to pre-sell an idea and build a paid MVP just one month after forming. We spent four months delivering on this project before realising it wasn’t our path forward. For us, this was counterproductive because it limited our flexibility to follow our instincts and the feedback the market gave us. We were locked into delivering on a paid contract. We honoured our commitment but quickly changed direction. The experience did teach us valuable lessons about building AI-first products.

What is your best tip for founders currently in the pre-seed phase?

Mike McCarthy: Be passionate with strong conviction but check your ego when you’re wrong. Adaptability will determine success in this chaotic tech landscape. Fall in love with the problem, not your solution.

Thank you for your time and your insights!