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With Scott Orn

A Startup Podcast by Kruze Consulting

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Scott Orn

Scott Orn, CFA

Routable focuses on helping companies scale their payment solutions, and Omri Mor, Co-founder and CEO, explains how the company developed its platform for sending B2B payments worldwide

Posted on: 02/12/2023

Omri Mor

Omri Mor

Co-founder and CEO - Routable

Omri Mor of Routable - Podcast Summary

Routable focuses on helping businesses scale their payment solutions, and Omri Mor, Co-founder and CEO, explains how the company developed its platform for sending B2B payments worldwide, helping businesses automate their accounts payable processes from vendor onboarding to final payment.

Omri Mor of Routable - Podcast Transcript

Scott: Welcome to Founders and Friends podcast before we get to our guests, special shout out to Kruze Consulting. We do all your startup accounting, startup taxes, and tons of consulting work, kind of whatever comes up, like financial models, budget, actuals, maybe some state registration, sales tax, VC due diligence support. Whatever comes up for your company, we’re there for you. 750 clients strong now. 10 billion in capital raise by our clients. I can’t believe it. 2 billion this year. It’s been a crazy awesome year. So, check us out at kruzeconsulting.com. And now, onto our guest.
Singer: (Singing) Founders and Friends with you host, Scotty Orn.
Scott: Welcome to Founder Friends podcast with Scott Orn at Cruise Consulting. And today, my very special guest is Omri Mor of Routable. Welcome, Omri.
Omri: Thanks for having me. I appreciate it.
Scott: My pleasure. We’ve known each other for a long time. We actually… I think you were two floors above us in the WeWork in San Francisco.
Omri: Yes, we were neighbors.
Scott: We’ve known Routable for a long time and had a lot of happy customers using ratable, and so we want to have you on the podcast, tell the story.
Omri: Thanks for having me. I appreciate it. It’s good. Instead of having this conversation at a WeWork booth, we’re having it now on the podcast. This is good.
Scott: Yes, exactly. And everyone can listen. Well, maybe you can start by retracing your career and telling everyone how you had the idea for Routable.
Omri: Sure. So, I’ve worked at startups for a long time, since I was about 18. This is my third company. And Routable came as a thought process when reviewing what I did wrong in my previous company. So, my previous company was a marketplace for creators, so artisans, creators, very much Etsy for its worth. And I built a lot of the internal infrastructures for making payments to sellers. When you build a marketplace, you really focus on payments to sellers, payments to sellers. Do they love me? Are we going to retain them? We had to build internal integration to QuickBooks. We had to use different processors to pay them. Paying sellers on time matters. And I think that it’s funny, but sellers-
Scott: They have working capital issues in their business. They usually have inventory or they’re building something, or… Yeah, it totally makes it. And that’s probably one of the things that made it sticky.
Omri: Yeah. So, we had a lot of importance, but then we also had accounting on our own. We had to report how we’re paying these people and so forth. I always knew that we did it wrong because we built it in house, right? Building your own integration, sending data to QuickBooks is one of the hardest things to do. And I kind of validated that when I talked to my co-founder, now co-founder, Tom. We were not planning to build this company. We were just eating hummus in Tel Aviv a long time ago. And we were just shooting the shit and I sort of got… We were going to hang out for 30 minutes. We stayed for three hours just complaining about building infrastructures for ping sellers and making finance and operations and engineering, basically everyone happy on making the money go from one end to the other side. And I thik you know this, but when we say sellers, your customers at Cruise, they think about vendors, right? So, same word, sellers, vendors. And we’re like, “Okay, cool.” So, at two different companies, my co-founder also built a marketplace. His was the food to everyone. So, he’s thinking about paying restaurants. I was thinking about paying sellers. And we both built internal, really crappy tools that took way too much of our team’s times.
Scott: All right, interesting.
Omri: Then we embarked in this journey of nine months interviewing as many controllers, CFOs, AP clerks, you name it, treasurers, and saying, “Hey, if I have more than 500 or a thousand people to pay per month, what is the best way to do?” And we spent literally nine months just talking to folks, going to offices. This is pre the pandemic, so you could actually go and talk to people and sit down and take notes. And we had found this gap in the market that basically said there are a lot of solution for SMBs, and specifically mom and pop if you’re paying 10, 20, 30 bill payments per month. But once you started crossing 500, a thousand, and once you started maturing your finance team, having a lot of approvals or approvers, it got hairy and-
Scott: Yeah, it does. It does. Yeah.
Omri: And then there was the North Star, which was the enterprise solutions. Those enterprise solutions had more features, but they couldn’t handle more transactions per se. So, there was this thing where, okay, you can grow and pay more money for more features, but you couldn’t push more money per second through those larger ERP integrations. So, we said, “Okay, that’s actually really interesting,” and we came up with a plan and basically said, hey, for companies that are SMBs and we’ll eventually, in the next 18 months, grow into the mid-market. And for mid-market customers, that will eventually become small enterprise. That’s a sweet zone of what we want to go solve.
Scott: Practically speaking too, you get to grow with those companies, right? That’s the whole thing, right? Ride with them. And so, it’s not only you give them a great solution, but if you can scale your solution, then you grow with them and stay embedded for 10 years.
Omri: Yeah. Well, the thing is… So, that’s what we want. We wanted to build. It takes a lot of time to build that. So, that’s what we have built and that’s where we are right now. There’s a lot of more room for improvements and growth, but I think one of the most interesting things is that I have underestimated how much work it takes to build these platforms and how much work you have to put in to make people in finance thrilled. And I think that’s a good thing. One of th biggest things that I look for when I build a company is a market that is big enough, a pain point that people are willing paying money for, but most importantly is customers to serve. And one of the most consistent things that we did in our nine months of customer development interview was finance always got the short end of the stick. They always had to do the manual work. And they have a 30-day close. They’re always in a rush. So, we found a subset of humans that, regardless of what company it was, whether it was a startup or an established enterprise company or three people working together, finance always got screwed somehow. So, it gave us a good motivation.
Scott: I’m going to make that into a t-shirt. That sounds awesome.
Omri: Yeah, we’ll come out with swag after this episode.
Scott: Yeah.
Omri: Well, actually, one of the things that we did for our conferences last year was we have a t-shirt that says, “I got 1099 problems, but a bill ain’t one.” And we got every single accountant to just come and rip those out of our hands. But point being is that’s how we got to Routable. We got to Routable by listening, finding a gap in the market, and then just being persistent.
Scott: It’s the way to do it. And you not only got into the market, but you’ve built a flourishing company and you’re stable and growing. And people like Routable. We hear about it all the time. Talk about what’s the good… What is the core kind of markets or types of customers that work really well for Routable.?
Omri: Yeah. Where we really see the benefit is… And we’ve had to get a little bit more stringent with who we accept to use Routable recently, but basically if you’re moving over half a million dollars in AP per month, you’re actually getting towards a point where things are interesting. And when I say things are interesting, more approvals, more compliance, more requirements for tax filings, et cetera, and we want to solve that pain point. Where we’ve kind of walked away from, it’s like, “Hey, do you need to spend management? You want to manage a credit card?” We don’t do that. There’re so many great solutions. We know the founders. We can refer you. Do you have five bills per month? Are you doing 10K in bill volume? That’s okay. There’s actually seven different solutions that you can go explore. So, one of the biggest things, obviously this economy too, is helping us stay laser focused, which is really important. I think that as a company, as you grow, you want to please everyone. We just talked about that. But for us right now-
Scott: Before we turn on the mics, we were talking about the challenge of being disciplined and saying no to some companies or clients that aren’t quite in your sweet spot. But then sometimes those clients surprise you and they take you somewhere where we need to go. So, there’s always this… For folks like a Omri, it’s a challenge. It’s hard. You got to make some really difficult decisions.
Omri: But the nice thing is, so we started identifying about half a million dollars in AP volume a month, and that’s when those pain points start to bubble up. And the pain points between someone that’s doing maybe 5 million in AP volume a month and 50 million, they’re not that much different, and also 500 million. So, what we’ve been doing is trying to figure out what are the departments that work together. A lot of time it’s finance, fin ops and operations. Sometimes there’s treasury and engineering. But as we iterate, we think about a multiplayer mode where, as finance always get the short end on stick, how can we iterate with them and the departments that they work with to build a more stable future? Because if you’re doing half a million in AP volume today, you’re probably going to do a million sometime in 2023. Maybe not. Maybe it’s not going to stay stable, but in the off event that it does, we want to make sure that we can scale with you.
Scott: Yeah. It’s not just the volume though too. You touched on this, but there’s the approval flows and multiple approvals and making sure there’s no fraud, because it’s much easier to have fraud when things get bigger and little payments can sneak through.
Omri: And international domestic and speeds [inaudible 00:09:52]
Scott: International domestic is a huge one. That’s a really great point. Yeah. And I’ve always thought of you folks, you’re able to automate quite a bit of that. So, you’re talking about finance getting the short end of the stick, but often finance is impacted from a people perspective. A lot of people don’t want to have a robust… They don’t want to add headcount in finance, even though it would make their organization so much better. It’s not the right way to run a business in my perspective, but people make their own decisions. But if you can take three hours a week or five hours a week out of some tasks, that really goes a long way that helps people a lot. And so it’s not just making sure things are approved or preventing fraud, but also giving people time back.
Omri: Yeah. And scale is a thing that only improves long term, right? So, if I can save you three hours today, it’ll probably save you 30 hours tomorrow, right?
Scott: Wow, that’s amazing.
Omri: I’ll give you an example. So, when we build features, one of the biggest things is we try to understand what’s the worst of this. So, I’ll give you an example. Let’s say we build… We really focus on our bulk approvers feature. So, let’s say you have 37 bills to approve and they need to go out right now. How can we make you confident that it was coded the right way, that the right people preapproved it, that you can release 37 bill payments to be released right now? 37 is easy. What about 37,000?
Scott: That’s a lot. And there’s probably… How much average, 20 grand or something like that? That’s a lot of money too.
Omri: But 37, to me, is a low amount. We are thinking about what do you do if you have 37,000? How do you slice and dice that?
Scott: Oh wow, that’s amazing.
Omri: And we have customers that are growing to that trajectory, right? And I think that for me, that’s what we think about. If you look at your AP workflow and do it one at a time, it will never end as your company grows. So, what we have to do is make sure that the one at a time experience is awesome, but the one too many experiences are even better. And it gives you that same level of controls and gotchas.
Scott: When you’re doing AP volume at that level, are you talking about marketplace companies or what’s-
Omri: Hey man, I’ve seen all variations
Scott: [inaudible 00:12:04]
Omri: Yeah.
Scott: Yeah.
Omri: So, we’ve seen real estate get to that volume. We’ve seen marketplace get to that volume. We’ve seen insurance get to that volume. But we also see traditional services, businesses, advertising businesses, et cetera. So, I’ll put it this way, volume is really a function of who you’re paying and the frequency of paying them, right? So, we do have some businesses that might deploy $50 million across 10 payments, and other businesses might deploy 50 million across $10,000 payments.
Scott: How do you as Routable keep track, or is there enough in common with the insurance company, the advertising company, the marketplace? How do you build software for all these different use cases?
Omri: You look for patterns. I think that’s it. Reliably, you look for patterns and you try to solve for a subset of industries at a time. And then as you expand your industries, you say, what’s different? For example, manufacturing. PO matching is a really, really big thing, right? So, what we’re trying to figure out is how do you do match one at a time at many at a time? That’s kind of the thesis of our company, right? Credit memos, one at a time, many at a time? If you break down the supply chain of accounts payable into all these different events that someone in finance might do or want to report on at any given moment, if you actually look at it at one at a time or many at a time, it’s twice the work to build it and twice the work to think through it, but you’re going to save that person so much more time. So, for us, it might be two x effort,
Scott: The credit memo one really, or just a memo in the vendor payment of being able… Say you’re making 10,000 your marketplace and paying out 10,000, being able… To me as an accountant, we look at that stuff because it helps us categorize or helps us make sure things are reconciled correctly. And so being able to automate that and not be sitting there typing someone’s name 10,000 times is a big, big deal. Hey, it’s Scott Orn at Kruze Consulting, taking a quick pit stop to give some of the groups at Kruze a big shout out. First up, is our tax team, amazing. They can do your federal and state income tax returns, R&D tax credits, sales tax help, anything you need for state registrations. They do it all, and we’re so grateful for all their awesome work. Also, our finance team is doing amazing work now. They build financial models, budget actuals, and help your company navigate the VC due diligence process. I guess our tax team does that too on the tax side, but the finance team is doing great work. And then I think everyone kind of knows our accounting team is pretty awesome, but want to give them a shout out too. Thanks, and back to the guest.
Omri: But that’s the mentality. So, the way I look at it is we always invest twice the effort to make sure it’s one at a time is good and many at a time is good. And then in return, we give more than two X the return back to our customers. So, if you think about it, we could probably sell you 10X of your time over a long period of time if we do the work right in the beginning. And that’s the work every day. And I got to tell you, the more you talk to folks in finance, the more you understand the rigidity of their workflows. And I think that’s actually a good thing. I think about finance folks, like coaches, they have their playbooks and they have their whiteboard. They’d be like, “Hey, that previous play, you went there, you needed to go there, and then everything was [inaudible 00:15:31]. They’re very efficient, strategic, and consistent, and they just need to make sure that the other teams play it the same way, right?
Scott: Yeah.
Omri: So, when someone in marketing is like, “Hey Scott, I paid for something, but I’ll tell you about it tomorrow,” you’d be like, “No.”
Scott: The marketing approvals are big, a big one.
Omri: I’m a big fan of our marketing department. I just wanted to throw an example.
Scott: They’ll tell you, and they just spent the money. And then you’re like, “Wait a second. What just happened?”
Omri: Exactly.
Scott: That’s great. And so, do the rundown. What is the kind of key features Routable? And I know that you guys integrate into the QuickBooks, but what ERP systems or journal ledger systems do you integrate into all that stuff?
Omri: My marketing team just drills this into my head. So, first of all, our integrations. So, the quality of our ERP and two-way sync integrations, with QuickBooks zero, NetSuite, and Sage Intacct, really, really big there. We have worked our tails off to remove sync errors. I’ll accept a bug, but a sync error doesn’t make sense. Does that make sense? You know what I mean? To me, if we build something wrong or something went wrong during the deploy and we can quickly fix it within a day or two, all good. But by default, you should know that Routable syncs data all the time. That’s number one. Number two, it’s scale for multiple types of vendors. So, as you think about vendors, there’s individuals and there’s businesses and there are domestic and international. And we talked about some departments and some businesses grow vendors time over time. So, we’ve seen people onboard 10,000 vendors in a day, right?
Scott: Oh my God, are you kidding me?
Omri: It’s a lot of work, but we want to make that possible. And you don’t know… As Routable, we don’t know if they’re going to be domestic, international, what kind of payment method do they want, what delivery speed they want, and so forth. So, that’s really critical. So, that’s scale in transactions, and the types of locations is really important. And then three, I think it’s the whole function of security and compliance, right? So, if we can make this sync good, and we can make this scale good, it’s about making sure that you’re feeling confident about having the right permissions, access controls, approval rules, SSO, all those things to continue to deploy more cash with our ecosystem.
Scott: SSO is a nice one. People don’t dwell on that. But as you get bigger, that’s really, really helpful. I mean, sometimes the security features are forgotten, but that’s great that you guys put an emphasis on that. I’m sure for the mid-market super scaling companies, they really care about that, but good for you guys for building that.
Omri: And I think one of the interesting things is SSO, most of the time people charge extra for that. We don’t. Well, let me rephrase that. A lot of SaaS products will make you pay enterprise rates to get really good security.
Scott: Yeah.
Omri: Right.
Scott: I’m aware.
Omri: Yeah, me too. I pay for it as well. But I think that by default, if a user is willing to invest in their security, it actually makes our platform better and more secure. So, I like it.
Scott: And then you’ve got multiple… Talk about the domestic and international for a second because there’s a lot of complexity not going through the old school, Hey, I’ll fire off a bank wire and it’ll go pay someone in India or Ukraine, South Africa, Argentina, whatever, you guys can handle that seamlessly. I’m sure that was a lot of tech to build there too.
Omri: Yeah. So, if you think about it, when you’re talking about domestic international, you have two parties. You have the sending party, which is our users, the controllers, finance, AP, and for them, they care about how they book the currency and what are the rates that they’re paying. They’re very… How is this going to show up in QuickBooks or NetSuite, et cetera. And then you have the vendor. And ideally, you don’t make the sending party think too much about the vendor. You should be able to send a vendor a link or form or just get their data and say, “Hey, we want to pay you and be like, Great, I’m in Argentina,” or “Lovely, I’m in China and I want to receive this payment in dollars, or yen.” You know what I mean?
Scott: Yeah, or it’s converted by the bank, by their bank, or there’s a lot of complexity there.
Omri: Well, “I’m an individual and I would like to receive the payment right now, or “I’m okay, I’m a business, I don’t have to pay extra. I can receive my payment in a few days too.
Scott: Yeah.
Omri: So, when you think about empathy for both parties, you try to build a flow where one party can be confident in releasing their funds and log those funds being released the right way in their accounting software. And then you think about the vendor and say, okay, cool. How can we make the vendor have transparency? One of the things that we… This is overkill, but recently we released an improved version of batch payments and the now we have an interface. So, if you think about it, let’s say you… We built batch payments for big companies, so you can batch 100 plus bills into single payments and then the vendor can see each of those bills, and then every line [inaudible 00:20:57] per bill if they want to. So, they can [inaudible 00:21:01] revolve that information. I think a lot of the vendors needs are like, “Did I get paid on time for what I said, we agreed to. Yeah.
Scott: Yeah. But they also need to reconcile. The agreed to. Part of that’s really critical because they need to be able to reconcile that the right pos got paid or the right time periods or things like that. So that’s great that you folks can do that.
Omri: But that’s kind of thing. Going back to it, I think if we built batch payments for batching three bills at a time, there’s a limit to what the data says. But if we build batch payments for over a hundred bills at a time, then it starts to get interesting because finance team can control how they want to record stuff versus how they want to make vendors happy. Those things don’t need to depend on each other, in my opinion. You can be selfish as a finance team. It’s a good thing, right?
Scott: Yeah. Well, it’s also when they’re giving you… I mean, you probably got the idea for that product or that feature from a bunch of finance teams that were telling you how much it would make their life easier, or “Hey, my counterparty, this is going to make their life so much easier. Can you please build this?” Right? So, that’s one of the cool things about… You guys, Routable is such a… I can tell when we talk, in your bones, you guys are developers first and you want to put the work in to make a scalable service. And even what you’re saying earlier in the conversation where you’re like, “Do it right first time on it can save people 100X down the road. That’s cool about working with you guys, is you folks aren’t afraid to build something complex and save everybody a lot of time. Instead of making us poor accountants and finance professionals trudge through every day grinding through data entry. Well,
Omri: I’ll tell you this though, Scott. Transparently, we made assumptions one time when we launched the platform for the first time many, many months ago, I just remember being like, “What the fuck is this interface?” We made it cool and modern [inaudible 00:22:54] and all these things. And people are like, “Where are my spreadsheets? Where are my tables? I need to see data the way I want to.” So, we walked away from assuming. We talked to our customers and potential customers before we release every feature. Finance people know what they want.
Scott: I love it.
Omri: Straight up, they’re opinionated and they’re transparent, and we just got to build a really good relationship with them to deliver. That’s it.
Scott: Yeah. That’s amazing. You’re not just for… I think you probably in the early days had some small startup clients that, but like you said, you’re in the middle market, you’re for with complexity with a lot of volume or dollar volume, those different approval flows that come with having middle management layers and things like that. So, it’s fun. It’s fun to talk to you and catch up and also hear how well the company’s doing.
Omri: Yeah, I mean, look, at the end of the day though, I really, truly, truly believe this. A company that needs to approve things by dollar amount, and then needs to add seven more fields for their approval workflows, it’s an evolution. It doesn’t happen in one day. You go from one field to two fields to four fields to seven fields. It takes 18 to 24 months, but their mentality doesn’t change. So, when we think about scale, we think about scale over time, not just scale today.
Scott: I love it. This has been awesome. Maybe you can tell everyone how to find Routable, your target customers, how to reach out if they want to talk to you. At Cruise, we’ve had a lot of happy customers using Routable, so at highly recommend it.
Omri: So, number one, routable.com. Number two, we love talking to controllers. And if controllers need help from their engineering teams that they work with, we do have an API. If they need help from their operations teams, we do have more robust CSV like workflows. And we have live chat, you can email us, all these fun things, but I would start out with routable.com.
Scott: Love it. Omri, it’s been great knowing you for a long… The fun thing about the startup accounting world and technology is we all know each other and it’s a tight net group. So, it’s been fun to watch your development, and I’m so happy for you. And give our best of the Routable folks.
Omri: I’m just going to make them watch this.
Scott: But hopefully they’ll want to watch it, but yes, that’ll be great. All right, man, well, thank you for your time. Appreciate it. Thanks for being a great Cruise partner, and we’ll talk to you soon.
Omri: Thank you.
Singer: (singing) It’s Cruise Consulting Founders and Friends with your host, Scotty Orn.

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