Rene Lacerte of Bill.com: Powerful Business Payments Made Easy

Rene Lacerte of Bill.com - Podcast Transcript

Scott:	Welcome to Founders & Friends podcast with Scott Orn at Kruze Consulting, and my very special guest is Rene Lacerte from Bill.com. Welcome, Rene.
Rene:	Thank you, Scott, it’s great to be here and I just love supporting our partners that are successful out there, so congrats on all your success.
Scott:	Thank you. So Bill.com is one of our favorite tools at Kruze Consulting, every client goes on it, we’re in love with it, it’s my favorite tool; so this is a nerdy kind of honor here, to be meeting Rene the man who created Bill.com. What was your initial inspiration, how did you have this idea?
Rene:	There’s a long version and a short version. But the combination is I’m a fourth generation entrepreneur, so great-grandfather had a couple of businesses, granddad had seven, dad had five, and so at the dinner table on a Saturday night when we get together with mom and dad and grandma and granddad, they would talk about the business, and invariably it was always “cash is king” right, and when you get talking about cash is king, stretch out the payables upon the receivables. And so, as a twelve year old, fourteen year old kid growing up around the house I heard this, and when I left to start PayCycle in 1999, it was interesting because I had started adding to it the bill payment products that they had for consumers. And so, I was well aware of consumer bill payment products, I was well aware of the technology that our competitors had, and when I got into managing the day to day of PayCycle, I kept feeling like I can’t do what dad was trying to teach me, it’s really hard to stretch out the payables with technology, and the process I had was a manual process, I had a stack of checks come with the invoices attached every Friday, invariably, we were smaller with fifteen or twenty payments a week, then it grew to fifty payments a week or whatever. And I would be running around the office saying, “Hey Martin, what did you think of that”, “Tanya what do you think of that, why are we paying this, can I see the contract”, and then we were looking at the receivables, be the same thing, “why hasn’t the customer paid us”, and all of that was just busy work that kept me from actually thinking about the business, and using the cash flow as a strategy. And then I realized, because PayCycle we started at 1999, so around 2003, the internet was much broader than what we thought it was when it first came out, and we didn’t call it the cloud back then, we didn’t call it SAAS back then, but it became clear that there was an opportunity to leverage a central database with a central UX and UI that could be customized by user, whether that user was a software package like all the integrations we do whether it’s QuickBooks or any of the banking integrations that we do, or an employee, or a vendor, or a customer, but it’s one database. And all that clicked one night- when I can’t sleep at night, when I’m thinking about the problems here, I think about some other things I want to go solve, because problem-solving is what I love and that actually makes me relax when I do that, and so this became the problem de jour that I would solve when PayCycle had challenges, and I just kept coming back to invention like this is really big I need to do that, and that’s when I decided to bring in a CEO for a PayCycle and moved on to develop Bill.com.
Scott:	I’m glad you did it because it makes our lives so much easier. I was actually growing up in a family business too, it’s really cool to hear that story, because, my mom owned a retail store in Danville, and we talked about the same stuff and it was like, do you feel like you learned through osmosis, it’s like Harvard business school at the dinner table.
Rene:	Dinner table MBA, best MBA you can get, right. And strategy is important, you learn a lot you know, in business school from those types of classes, but ultimately, running a business comes down to people and your gut instincts about how to manage cash flow and people and your strategy, and if you’re going to go start a company, you have to have that and understanding when to listen to the gut, when to go look for help, and that is lots of growth right, as leaders we all have to grow in order to stay in front of the business. But that dinner table MBA was just great. Just seeing your parents happy doing what they do, right, like there’s no better lesson than that.
Scott:	And sometimes some of my friends have angst, sometimes I feel some women have angst because they traditionally spend more time with children or something like that, but my mom was a kick-ass entrepreneur and that was the best role model I could ever have. So I always tell women, and of course, I married a woman who is an awesome entrepreneur, too.
Rene:	The night the night that I was born, my parents had a business in DC, the general ledger payroll business in DC back in the sixties, and so they had the biggest defense contractor in DC through one of the biggest accounting firms in DC that needed to get the GL done. It was two and a half weeks earlier, and my mom didn’t really feel that well, I was number two, and she didn’t think it was a labor, she was like I think I’m just going to go home, and my dad said like I’ll stay here with you, let’s get it done, and you can take the weekend off. So they finished, she was like a hundred and ten pounds, carrying fifty-pound trays of punch cards all over the place, he’s helping her, they get home at 1.30 I was born at 3.30.
Scott:	Oh my God, two hours later. Well, that is a big day for them, it’s incredible. That’s the kind of things you do when you own your own business. You just figure it out.
Rene:	Exactly, you just figure it out, and then, she’s back to work on Monday.
Scott:	Oh my God, really?
Rene:	Yeah, she worked I think four to six hour days then, so it was nice to get out, and we had a sitter take care of the kids.
Scott:	There is something else you said when you were describing kind of the problem which was that kind of one database that could aggregate everything, and when you’re talking about moving around and trying talk to your own people, the one thing that I think bill.com or many things it does well, but you bring transparency to this process, and that is one of the things we tell our clients constantly, it’s like we can look up invoices, we can look up the payments, that search functionality is actually super duper important.
Rene:	Yeah, I can’t tell you, I can give you a personal example. I’ll give you the most recent personal example, right, we put some blinds in the house and the remote control device for these blinds is really all right, so the remote control device said “sunlight”, and somehow- somebody in the house was playing with it, and all of a sudden the blinds are off, right, so we got some blinds up, some blinds down, and I needed to reprogram it, so I go to google and I am searching for sunlight and then I’m up in the ceiling with the twelve foot ladder, trying to reprogram this thing-
Scott:	Trying not to kill yourself.
Rene:	And an hour later, like it wasn’t working, everything was even worse, right. And then I thought you know what, I’ll go into bill.com and I’ll just type blinds, so I searched blinds up, came the invoice because I hadn’t been home, Joyce had actually managed it, up came the invoice with the word blinds on it, I found out it wasn’t sunlight, they happened to make two types of blinds, one was called moonlight, one was called sunlight, and remote control works for both but moonlight had a different program interface; five minutes later we programmed it done. So yes it helps manage the cash flow, but like being able to find that context, like it could have been a vendor relationship that I was trying to understand more about, so it’s definitely that ability to search the transparency around the transactions, and the invoices in the payments, and the work that you do with your suppliers and customers.
Scott:	It’s huge, I mean in the early days there were vendors who think they didn’t get paid right, or whatever, and you can, I can literally solve a problem within five minutes, that would have taken a week before, it’s so much better. You also mentioned it, one of the things that are so amazing bill.com is the integration with QuickBooks, and we’re huge QuickBooks online shop, that’s what we recommend; how did you go about getting, you obviously knew people there, but when you came to them after building bill.com, how did you get that integration, like what was the pitch?
Rene:	They probably started thinking about their API strategy, well they had an API for QuickBooks desktop, it didn’t have everything in it, but they started really thinking about it, about the same time that I started bill.com I think it was 2006, 2007, they realized that data was going to be different than it was. And so, it was like you said, I mean I knew enough players there, we said look we want to this better, we actually want to create a better integration sync for our customers; you guys want partners that actually you can learn from, and so in that sense, it was a match made in heaven, so we’ve continued to develop and cross-partner I guess, across both companies to help them build better APIs and help us get better integration for our customer, which is great.
Scott:	It helps both companies so much because we can, we know bill.com is going to work really well QuickBooks and vice versa, we can say like QuickBooks actually does work with their partners really well, it’s an awesome strategy. One other question I have as you know we always say Bill.com is the tool that every bank should have built themselves, right, that’s what I think actually convinces our clients to use it in the first place. How did you go to the banks, how did you- because there’s so much money moving around through bill.com, what was your pitch to them, how did you get them?
Rene:	The core pitch that we go, as we’ve grown it becomes easier, but the core pitch is let’s talk about how many business customers are really using your applications today, and compare that to their consumer adoption, and then we compare that to the joint customers between us and the bank that are using our solution. So we can go into a top five bank, and say we have thousands, thousands of your customers are choosing to do all their bill payment through Bill.com, and not the set that you’ve built. And sometimes, it dwarfs the dollar amounts all that set dwarf the transaction level dwarfs what they’re able to see, in their own products today on a per cost basis and then that gets them pretty excited. I think as we think about how the cloud and SAAS are just kind of moving and the open strategy and transparency that everybody wants and looks for in technology, our ability to kind of be that platform of choice is something that we see more and more. More and more bank partners, the partnership that we announce with [10:16 indiscernible] last fall it, more and more there is just this opportunity where people kind of say well okay those guys have millions of entities in the network that use them to paying, get paid, tens of billions of dollars every year.
Scott:	I mean, it feels like you’ve gone to the point where the network effect has just fully kicked in it you have to opt-in, you’d be crazy not to opt in.
Rene:	It probably depends on geography definitely in the bay area, we feel that more and more, but it happens across, I have friends on the East coast that this year sent me an e-mail saying you know the guy who ploughs my snow for me just asked me to join bill.com, so we’re definitely starting to see that around, and I think that being the platform of choice, of how business is paying, get paid, that’s kind of our focus and in helping all the processes around making those payment decisions, is kind of really where we want to be at.
Scott:	And also, for small businesses we love it, we love it for our clients because it simplifies everything for them and it makes us more efficient working for clients, as it brings their cost down working with us, so it’s awesome. But, as a small business ourselves, it makes our collections so much easier, like that network search ide, boom, we get paid, there are no checks lost in the mail, we just get paid electronically; it’s amazing. I mean you have no idea how much you’ve made our collections- you talk about stretching cash flow, and things like that and now we get paid a week or two after invoice.
Rene:	Technology is really important too, right, so if you’re not getting paid that’s important because now you know which customer- you don’t have to worry, if you just have a small dashboard to look at, and say, oh when I see that customer I’m going to say hey you are going to pay me, right, that changes instead of having to worry about all your customers, if you got hundreds of customers I don’t worry about them, I just want to worry about the four or five that are having a hard time remembering to pay me.
Scott:	Totally, and what we actually did, my wife is so smart, we did a thirty-day auto pay with bill.com and now we don’t have to worry about anything, it’s amazing. So you’ve built an amazing product. On the other side of working with bill.com is your customer support, it’s just phenomenal, shut out to [12:21 indiscernible] who is as the best support person on earth. How did you- I’m sure this took a lot of thought and it’s also a cultural thing, like how did you think about building your customer support group?
Rene:	The advantage of, back to the dinner table MBA, one of the advantages of growing up in a business is that it was always about, for dad granddad, it was always about customers and employees; making it a great place to work, if people love doing their job and making sure customers are happy. And if you did those two things, everything else took care of themselves. And so, you had to have the right strategy to begin with, that customers want to buy something, but you got to have a strategy and nothing else would matter, if you didn’t make it a great place for people to work and if you didn’t have a great customer experience- and so one of the reasons I ended up working at into it when I joined, was because there was an article talking about help in their day right, customer support was core to everybody’s experience who worked there, you used to have to go beyond the phones once a month right, and it was a great way to really get in touch with the customer. So we do that differently here, I mean using chat as a primary method, we were able to actually get all those chat conversations out to employees, so they can kind of read them and understand what’s going on, we’re able to kind of highlight different scenarios quickly. But it gets back to your core belief like, one of our values is we’re dedicated to each other and to our customers. We are very focused on doing what’s right for the customer, and if we’re finding out that we’re not, then we go and fix it. No business is perfect, we’ve had times when we’ve grown faster than we were able to keep up, and then we addressed it and we fixed it, but if you don’t get that right, if you don’t take care of the customer, to me it’s like a core philosophical approach about treating others the way you want to be treated.
Scott:	It’s the way you live life.
Rene:	It’s the way you live life, and it’s the way that you make it a good place, is that we support all of the customers, support professionals so that they feel we have their back. And then when they feel that way, they can do their best work and its customers can feel like they’re getting their best work, and I think all too often, people think of customer support as a cost center, and they don’t think of it as a learning center. This is our best ambassador to the world, and it is a learning center for what is working, what isn’t working, and sharing that back to how the company is something that we can always do better, it’s something that we value and cherish.
Scott:	I think it’s amazing you share the chats, I’m sure your technical team is like pouring over those and trying to figure out ways they can build better software, it’s amazing to hear that feedback loop.
Rene:	Yeah, and that was one of the reasons I opted for chat, because PayCycle was mostly phone, and chat was just coming out and I thought, the most important part about chat probably is that the reps actually have, there’s two things about it- the reps are able to document what the customer is asking, if I asked you to what your problem is today, you might go on a soliloquy for a long time; if I ask you to write it down you’d think a little bit harder you would actually be more specific about your problem. That helps to rep actually solve it; then when the rep does solve it, now that person, the customer has a history, and they get it back and they can kind of see okay the next time I need to go do that sync with QuickBooks online, and I have this job costing issue, that’s where I need to go to. If you had a phone call, nobody has a record on it. The next level is that all of our managers’ support can now actually and do review all those chats to say, you’re getting it right, you’re getting it wrong, I want you to talk to [15:54 indiscernible] because he knows how to do that, and you could go learn from that right. And so, that is something that we always feel is important is that that learning cycle is just transparent for both customers and for the reps.
Scott:	I totally agree. And one other thing on that, money is like this really emotional thing for people, and we are constantly telling our team that, this is people’s money, they really especially start-ups, the burns are going and you got certain amount of months left, and do you give them like special kind of emotional training, or do you talk about- how do you make your team kind of more sensitive to the fact that we’re talking about money versus maybe someone did support an e-commerce company before they came here, or something like that?
Rene:	Well, I mean we always train people on our values, right, so we’re passionate, we’re fun, we’re humble, we’re dedicated, we’re authentic, right, so if you take the humble, the dedication, the authenticity that actually is how you want people to treat you about your money, right, you want somebody to not be flashing their money in their face with you, you want them to be authentic, pay you, right. You want them to be dedicated to doing right, and so, I think those values in that training and giving people the support, and then we just have expertise built in, so like the answers and the knowledge base we kind of talk about in there how you talk to customer about this, and sometimes there are other folks that are better at it than others so we make sure they get on the phone.
Scott:	I love the humbleness, I agree completely with that, and now that I am just meeting you in person I can tell that’s kind of who you are, and it’s done. But yeah, you guys are one of the largest, you’re a huge company, and you’re not showing up on the front page of TechCrunch because someone did something weird or anything like that. I can tell it’s a core value for you guys. One other thing is, maybe kind of the final big thing- where are you guys going as a company, what are some of the new features or new products are releasing, where is the direction of the company?
Rene:	The core vision of the company has not changed, and won’t change. There is a massive problem when it comes to how people pay and get paid, it’s not easy, because there’s a core process that every business has, they figured out on their own, because everybody’s business is a little bit different, and technology hasn’t been applied to that problem, we’re applying technology, hence you’re having a good experience. But that creates that opportunity for folks to be more in control, more efficient, more thoughtful, more strategic about how they manage their back office, their bills coming and going. And so, the core vision doesn’t change, but what we see changing is if you think about kind of that typical or standard graph that people will draw with crossing the chasm, there is a bell-shaped curve and there’s this chasm right, before that first massive upswing and, what we see in my belief, is that those visionaries as early adopters that are at that first short tail if you will, those folks they don’t need ease of use particularly.
Scott:	They’re willing to spend some time and elbow grease and figure it out.
Rene:	Yes, and so I think you guys have been the customers for a long time, and you’re probably more in this early doctor visionary stage where any of the things that we didn’t get quite right, you guys didn’t even notice because we got so much other stuff right. Well, when you move to that early majority/ late majority guess what- they can’t even do their job in the same way, because they get stuck, they don’t have that in their own intuitive sense about what’s the workaround to actually work with my process, right, they have a process and they need to work around, and they don’t think of it on their own; I’m sure you and your wife have lots of workarounds to get things done that you want to get down with Bill.com, so we are spending a lot of time thinking about what is that experience so that those types of customers can also opt-in, if you really get about it. I think another angle on that would be the distribution opportunity, so working and partnering with banks, leveraging our network right, everybody comes into network needs to have a really easy experience to actually interact with other people on the network. I think we will probably do more on mobile, if folks aren’t using the mobile app yet, they should be. We’ll do more on kind of digitizing and automating a lot of the stuff that’s in the product. But the core features, they will improve, it won’t be that we’re adding massive new features, because the core fundamentals it’s already there.
Scott:	Are you guys going to do anything internationally anytime soon? Because that is actually one a huge request we get all the time?
Rene:	Yeah, so international is on our list, we’re focusing on kind of the user experience that I just talked about first, but international is on the list and I don’t expect that if there is a big product need that hasn’t been done yet, that’s the first one that we’re going to do. There are a few others, but that’s the first one.
Scott:	It’s actually amazing listening to you talk because I can tell you, you’re thinking you’re still kind of early in adoption, but in my world, you are like fully adopted the product is super smooth, so a complaint to you as a CEO. The product is awesome.
Rene:	Ultimately, to create some scale on this, it’s tens of billions today that we move through our platform. Ultimately it will be trillions. And so, that is the picture like we could get another couple billion on international payment today, which will be nice and be nice revenue for us and for you, but the ultimate goal is how do we make it so that every business has a platform to do business on.
Scott:	Rene, thank you so much for your time I really appreciate it.
Rene:	I appreciate your time too, Scott.
Scott:	I’ll let you get back to the board meeting, or board meeting prep, excuse me. Thank you for having us, I appreciate it.
Rene:	You bet, thank you.

Rene Lacerte of Bill.com - Powerful Business Payments Made Easy

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