B (2:46)

Before we talk business, let's talk about music.

A (2:50)

Yeah, yeah.

B (2:51)

It's important to your life. There's also some interesting stories, and we'll get to your jazz stories. But why is music important for you both, I guess, professionally and personally?

A (3:04)

Well, at the highest level, I find music very meditative, relaxing. And so it is one of the things I use to stay fresh. I really. When I sit and listen to music, I really try to listen to the artists. I mean, not all the time. I mean, sometimes background, but I do spend time with albums, listening to the whole album the way it was intended and then really focusing on the creative experience that the artist was intending at that point. So I like it from that perspective. I'd say, personally, I played the trumpet for a lot of years. My dad was fairly talented as a jazz musician, though never. He did make money at it before he got into business. More kind of piano bar type playing, stuff like that. But he was like, you could just feel his soul when he played. And so for me, the transcending of what it is that we have to do, which is actually why I like jazz so much, is like, it's where soul comes out. And so he would be anywhere. And if you hunt him a song, he could just play it and it would be his version of that song. It would be his creativity and a little bit more. On my dad, he. He was born with a birth defect, so he had only six fingers, four in his left hand and two on his right. Nobody wanted to teach him piano. He learned piano originally when he was maybe five or six, and within three months, the piano instructor was like, he's going to be done with anything. I can't teach in classical because he doesn't have enough fingers on his right hand to play. And so then he switched to trumpet. And then he got to high school and he's like, I want to play piano. So for his 16th birthday, he asked his parents to buy him a piano. So that one summer he taught himself to play piano. Nobody would teach him, and he would play so much every day that his fingers would bleed. So it was like eight hours a day. And he got really, really good. If I played you some of his music, you'd be like, how the hell does he play that with only six fingers? He learned how to use the pedal so he'd be creative, so he could let the left hand cord stay while he would then fill in with the left hand. And anyways, just seeing that and growing up with that and just him being able to just express himself is I think part of my attachment to music is just the creativity that sits inside of music and using that as a way to relax, to meditate, to enjoy the presence of excellence. One of the things I love about music is going to smaller, if you will, chamber concerts, whether it's a small jazz combo, three to five, or a quartet, like something small and intimate. I feel. And this is going to sound spiritual, I'm not that religious. Maybe it sounds spiritual more than religious. I feel closer to God when I see other people's excellence. And it's a reminder of what we can all do when we focus on the gifts that we've been given. Because you see these musicians and I'm always blown away and I know enough about music, like how the hell did they do that? And it's just a reminder that if you focus, and this goes back to Malcolm Gradwell's 10,000 hours, and if you talk to any musician, they will quickly get to 60, 80, 100,000 hours of practice that they've done. But when you focus, that persistence, that grit and that love of what you do, you get pretty good at it. And when you're that close to how we're, I think, intended to be, it's a reminder of what each of us can do every day. So lots of reasons and you know, that's a long answer, but music is a super important part of my life and very grateful for it.

B (6:31)

Nietzsche would say, without music, life would be a mistake.

A (6:34)

Yeah, 100% agree.

B (6:35)

I also grew up playing the piano. Not. I was never too good. I had a friend who was missing, I believe, three fingers, a combination of both, both hands. And then he became a professional piano player. He better than most.

A (6:52)

Yeah, right.

B (6:54)

And I remember that very, very well. Just. And I wasn't that good. So I was like, if, you know, if he can play that well and I can't, and I have all of my abilities, you know, I got to let him continue. And maybe also I Learned that a 14 year old was practicing 10 hours a day.

A (7:11)

Wow.

B (7:11)

Whereas I was getting tired after an hour and a half. So that's amazing.

A (7:16)

I would do one to two hours a day. So the hour and a half. And I was good on the trumpet. But I remember one time, it was about the time. And one of your local legends is Wynton Marsalis. Right. He came out of New Orleans and has the Lincoln Jazz Center. And I remember one time I was in Winter Haven, Florida, small town. I had read about him in Newsweek and so I loved him and I had somehow gotten a recording and I was saying to my dad, one day, maybe if I just practice really hard, someday I could be as good as Wynton. And my dad was very. My dad should have been a musician for a living. He had many musicians that end up being world famous say that, have told me that he was better musician than they were. He said to me, he looked in the rearview mirror, he's like, son, I love you, but you don't have Wynton's capabilities. Right? Like, be real. He said it much nicer than that. And I told him that later, and he apologized. I never should have said that to you. He's like, you absolutely should have. Like, I was good and I should do it because I loved it. But you have to know where your passions can actually really come out. And I think that's what I. My point about music is, like, it's a reminder that when the passion meets the grit, that that excellence is that closeness to God or spirituality, whatever you want to call it, that closeness to what the universe is intending for all of us. That's a reminder. And that's why I like these small, intimate performances, because you really get a feeling for it.

B (8:45)

How was playing with Stan Getz?

A (8:47)

Oh, my God. So that was, again, so changed. Stan Getz changed my life. And probably one way that it's not about playing with them, but it was the Stanford Jazz Camp, the second annual Stanford Jazz Camp. I get a flyer at school saying, go play with Stan Getz. And so I wanted to go play with Stan Getz. So I went to the Stanford Jazz Camp. And what changed my life was just being out on the west coast and experiencing the freedom of expression and all the things that you would think of in Northern California. But I did get to play with Stan Getz for a few minutes. And I tell you, like, it was amazing. Every student that came to Jazz Camp got to play with him. And each, like, we sat in the auditorium, we all got to hear the feedback for everybody. And he was very specific. And for me, he talked about my breathing and he talked about my phrasing and to really pause and to think. And I was better because of it. Right? So it's something that I probably carry to this day and all the public speaking, thinking about the phrasing and stuff like that. So Stan was amazing. Very, I think, comfortable with his excellence and very comfortable with feedback, which not everybody is.

B (9:52)

So let's talk a little bit about your professional career. The way I understand that you've been building products for SMBs your entire career. There's nothing else you've done.

A (10:06)

Yeah. I mean, I worked at Pricewaterhouse as an auditor, so. But again, that was for SMBs. So, I mean, oddly enough. And you can't make this stuff up. The night I was born, my mom was sorting punch cards for a payroll AP GL job sourced by the largest accounting firm in D.C. for the largest defense contractor in D.C. at the time. That was 1967. And now you fast forward 58 years, and what am I doing? I'm building. Not payroll anymore, because that sold that company, didn't do it. Building payables, receivables, spend expense solutions that we sell to the top 9,300 accounting firms in the country, which have some of the best businesses across the land here. So, like, I've been doing this and growing up around it my whole life, and I feel very fortunate that I actually love it. Right. Like, you know, sometimes you see actors have kids that become actors, and sometimes it rubs off on you. And I think what rubbed off on me was how important small businesses are to communities. And so my parents and grandparents had multiple businesses. They always were for other small businesses, all of them since the 60s. And everything that I saw was that the community was centered on other businesses in the community and the employees in the company. And I think the reason we admire SMBs is because of something bigger that we don't always talk about, which is because they are the glue of the community. They actually make a community separate, distinct, unique. Whether it's the jazz clubs in New York or the coffee shops here. It's not the chains. I mean, yes, we will all go to the chains, and all of the small local ones want to become chains, but it's those intimate experiences like this studio, that's the community, that's part of this location that really matters. And then they employ people, and that becomes part of the community. And every company has its own ethos around how they employ people and how they engage. And I would say most of the ones that I know that are good, it always feels like a family of sorts. It might not be the family that you grew up in, but people care. And so if you think about SMBs and how important they are, they create this identity for all of us, whether it's because we're served by them or because we work in them or work with them. That identity is something that should be celebrated. It is something that creates a differentiation in our society. It's something that creates authenticity in our society. I think it creates freedom of expression in our society. All these things extend to all facets of everything that we love about being a U.S. citizen. And it's something that is, I think, uniquely American that we have so much of it here. So for me, serving SMBs is a life's passion because I saw it as a kid, I've experienced it, I've worked with them. And as we get to work with all of our customers, you just get reminded of all the things they do every day to make the world better. And that's exciting, right? When you can have an impact that way.

B (13:05)

So I used to be a banker for mega banks, right? So I remember serving the Fortune 100 and bringing some deals that were, you know, outside of a target zone and they were always shut down, although they would have been more profitable, but it just wasn't the focus. That's a story that repeats itself across many banks. Fintechs have started to change that. I work with a lot of fintechs that service and be. I've interviewed many. It's very tough, right? Maybe you share. Why is it really so hard to serve?

A (13:45)

Yeah, I mean I think it goes back to really understanding an SMB. They, their mind share is totally fragmented. If you think about, you know, what an SMB is they are having to wear. It depends on whether you're male or female. But the Jack and Jill of all trades, when you start the company, you do everything and you have to do all facets of it. You have to do the accounting, you have to do the cleaning, you have to do the product, you have to do the sales, you have to do people, you have to do all these things. I think to be successful as to me you have to be somewhat comfortable with switching. Some people might call that add, but you have to be comfortable with switching back and forth. But that also means that it's hard to reach them because their mind is always going into different facets. They're also uniquely segmented in ways that make it very hard to reach them as a conglomerate, so to speak. Consumers take up everything. Enterprise is obvious because you just put salespeople on it. They're hard to reach. For us, One of the things that was really important, it's just an acknowledgement because I worked with them for so long that I needed to have a multi pronged distribution strategy. So we went direct. So we do buy obviously keywords and drive demand in lots of different ways. But then we go to accountants because accountants reach many other SMBs. Then we go through partnerships and whether that's financial institutions or recently we just announced netsuite, Paychex and Acumatica. And then we go through our network, we have a two sided B2B network. All of our customers pay or get paid through a network of 8 million. The opportunity to reach SMBs means you have to be where they are. You have to acknowledge that they're fragmented, that their brain is having to jump from task to task to task. You got to catch them when you can catch them. That means being where they are. And so I think that's why it's hard. I think it's something that we've focused on at Bill and been able to build that competency, I think through the multi prong distribution strategy that we have.

B (15:44)

But you didn't start building with Bill, you started previous company PayCycle. The one thing I'm interested about, PayCycle, which was more on the payroll front, right? Yes, it was in venture capital. People love investing in second time founders because the idea is that you learn a lot in your first company, maybe was successful, maybe not. But what matters is that you can avoid some of those costly mistakes. What were those for you from PayCycle and how did you apply them to Bill?

A (16:15)

I think there's a ton of learning in life, right? You have to be, I think to be an entrepreneur, you have to have a growth mindset. I think if you do not take every day as an opportunity to learn how to get better, then you will not still be the CEO 20 years into starting the company. For me, one of the learnings at PayCycle was just understanding the accountability in the future. The reason I say in the future is it's very easy to say this decision today. I can make that or I can let somebody else make it, but who's accountable for it five years from now? When you translate that accountability to be like, oh, ultimately that's me, that's my job. I'm going to have to be accountable because this is the company I started and if I'm doing a good job, I'll still be here. So I'll be the one that will have to absorb and take the glory or the criticism for any decisions that have been made in the past. And so understanding that accountability into the future forces intentionality today. And I think that's just one of those hard things to learn. Like everything we do today, you have to be present. You have to be present as a leader, you have to be present as a father, you have to be present. You have to smell the rose as you walk by it. You have to actually understand that if I make this decision today, the impact in the future could be X, Y and Z. I think at PayCycle, while that wasn't something I didn't understand, I just assumed, well, I can let you make that decision. I can make that decision and not think about, well, what are the ramifications? My job is to see how all of it plays out. That was a learning. I do take that intentionality very seriously today to make sure that as we're making decisions that I will look back in the future and saying, we made the best decision at the time. And by the way, many of these decisions aren't mine. This is me supporting my team to say, okay, what about this, this and that in the future? Is that going to actually bring back something that you feel good about? The decision at the time? So that was probably the biggest learning, thinking out in the future and bringing that back to today.

B (18:22)

When it comes to that intentionality, is it a matter of maybe not always rushing to make a decision, maybe taking a step back? Is it about forcing everyone to write a memo about the decision? Like, how does that look in practice?

A (18:39)

I think it's just being present actually. Like literally the reason I use the example of the flower, as you walk by, smell the rose, you can forget to do that and then that will be one less nice thing you did for yourself that day. And at the end of the day, you might be consumed by all the things you have to go do, but if you stop and smell the rose and looked at it and appreciate it, you can enjoy that. So for me, it's just being present to the decision and the consequences and the impact it can have in the future. And so to me, it's not making. We don't write different memos, we don't have different conversations other than to say, what is the impact of that long term for a decision? We understand the short term, but understand the impact. So we do ask that question. But I would say it's more in the moment asking people, okay, think about this. Is there anything about this that you would regret or that you don't understand? Like, let's talk about that.

B (19:27)

Going back to the early days of Bill. Every company starts with a focus. Maybe you aim at a specific industry or you build a specific product. Right. And you expand from there.

C (19:43)

Of course.

B (19:44)

Today, half a million customers, 9,000 accounting firms as your partners, I believe the vast majority of the top 100 of the kind of firms in the country, and the list goes on, I think a year, you process about 1% of GDP in payments of the U.S. big numbers, right? But going back to the first year. How did you find product market fit? I guess is what I'm trying to ask.

A (20:12)

Yeah, I think I was fortunate that I had been running a company and that I was in technology. And it was the late 90s, early 2000s, when I started PayCycle and I was seeing how all these things were changing. And so because of that I was able to see the opportunity that technology could bring to SMBs. And so the product market first started with me. Let me give you kind of the first example when I knew I was onto something. We were doing the Demo God conference in 2007. So the company was a year old and I had prepared a demo and I was home and I showed it to my dad and I had been telling my dad for a couple of years what I was going to go do next. And he had run half a dozen businesses in his life and he'd always, in this prior conversation, he'd be like, oh, that's interesting. And then when I showed him the demo at the end, it was like a 10 minute demo that had to be scripted and all that. I did the whole thing at the end. He said, holy shit, Rene, this is amazing. Like, this is everything I ever needed to actually run all the businesses I've ever done. I don't know how you thought of it, but Godspeed, you know. And so I knew, like, because my dad, I already told you the story about the trumpet playing. He was an honest person, he was always going to be honest. And so I knew, okay, I am onto something. Like if somebody who's done this much business can see the value in the first year of the demo that we've done, that's going to be real. So then you get to the next phase when we're actually going to get customers. I went to all the people I knew and many of them, not all the people, but let's say the first 10 or 20 people that were customers were people I knew. I went to them and I said, hey, I've got this thing, I want you to use it. Many of them had been customers of PayCycle. So they knew that we built good software. They react was like, I don't need that. I've got a way to manage my bills, I've got a way to manage my receivables. I said, look, can you just try it? I've worked hard. Okay, fine, we'll try it. Every one of them came back within 60 days saying that changed the game. I had no idea. This comes back to the Henry Ford statement. If you'd ask Customers what they wanted, they would say a faster horse. They didn't know they needed a car. Our job as technologists and software developers, if you will, is to lead, is to take that vision, understand the pain points, understand technology, where it's going, what's the cross section? And how do you actually innovate in a way that drives customers into a new experience and new creativity for them? Because we're all about making it simple to connect and do business. That's been the mission since day one. Never been a pivot. It's always about making it simple to connect and do. Three key words, simple, connect, do they all mean different things depending on who you are? But the doing of business is time consuming and we want that not to be the case. The connecting with your customers, with your employees, with your documents, with your banks, that should also be simple. All these things should be simple. We focus on delivering that benefit and finding the product market that they're in. Long winded answer. But I think really finding those early customers and then since many of them were accountants, that helped spread the word to get more businesses. And then in the Valley, there was a lot of technology companies that we were able to connect with and that spread the word. So it was definitely word of mouth drove a lot of the early adoption, for sure.

B (23:38)

Has that experience repeated itself as you've launched new products, showing your customer like, hey, maybe you'd be interested in this as well, getting them to try, like how. What is your process to figure out what's next?

A (23:53)

Yes, probably not as specifically as the example I just gave, but customers will say, can you go fix this? We want this to be a little bit better. Can you do this? Can you do that for us? And we'll say we can, but if we do this, you won't need this, right? If we do this, you won't need that. Right? And so we're going to go, we'll do a little bit of that because you're asking us, but we're going to go invest in this because this is really what's going to change the game. And so I think about how we've used AI, so we've used AI a fair bit around automating document entry and, you know, billions of documents on the platform, a trillion dollars, like that's a way for us to actually really enhance and we keep getting better at it. Customers will say, it's good enough. Like, no, no, no, it's going to be perfect. We're going to focus on that different ways that we can kind of Continue to invest behind that.

B (24:44)

Let's talk a little bit about the power of compounding, because correct my math if I'm wrong, but I think it took you about 12 years to get to 100 million annualized and six years to a billion.

A (24:55)

Yeah, about six years, maybe five to six years. We went public in 2019 and the trailing revenue was 100 million and four years later it was a billion. So that was four years from the public, but probably four and a half to five years. In the last three years we've doubled the revenue again. So the growth is now. It is the law of large numbers. So when you're a billion and a half plus in revenue, it's harder to actually double, but the opportunity in the market is massive. So we keep working at it.

B (25:28)

I understand you focus a lot on job scorecards rather than a job description. Love to hear more about that.

A (25:37)

Yeah, I wish I was better at remembering authors names, but there's a book called who so folks can go look that up. And it's really about hiring and the practices. And the thing I took away from that was a scorecard is a better way to actually define what you want than a job description. Job descriptions tend to be about skills and scorecards tend to be about outcomes. And so if I were interviewing you today and I were to say, look, these are the outcomes I expect in the first 90 days, the first six months, the first year. That is a great conversation starter. Like, okay, well how would you go about doing that, Miguel? You would have some ideas and that creates an interesting conversation. At the same time, you might be like, he's smoking something. I don't think I can do that. They're never going to get that done and you might fall out. Well, I don't want somebody who doesn't want to believe that they can hit those outcomes. I want somebody who believes they can hit those outcomes and is excited about that. So I think the scorecard approach is understanding what it is that you want from that particular employee to impact the company. And that defines success. Because if you get clear on that, you will understand in the interview process what skills are necessary. And so some of the skills are always obvious. But understanding the outcomes you want creates a better interview experience and a better alignment for the work that the employee is going to do.

B (26:58)

I can completely see that by reverse engineering what you want out of that role as a company out the gate, you already know what you want. Because oftentimes in the first week or two weeks of interviewing, companies are just figuring out what do they want after interviewing a bunch of candidates, right?

A (27:19)

Yeah. And this is the danger that companies have is they say, okay, this is typical job spec for this job is X, Y and Z. And it's like, no, no, no. What does it mean at this company? What are the features you're going to deliver this six month period? What's the impact you're going to have on customer acquisition? Whatever it is, having that conversation is a much better conversation.

B (27:42)

You briefly talked about your AI strategy. Let's dive in. That's obviously a big part of the conversation these days. Where do you fall?

A (27:53)

I think technology has always been about leveraging human capital, not other capital. And so the example I oftentimes use is the wheel. That meant that you could have a wheelbarrow, which meant one person could carry everything instead of five people. And that created efficiency. So what do the other people do? Well, maybe they started thinking about building a cart, so now you carry 10. It allowed people to be creative about what they could do next. And that gave people time back to think about what else they could do. Right. And so when I think about AI and I think about technology, it is always about being an enabler of human creativity. And so I think that we're in this period where we don't exactly know what work AI is going to do versus what work humans are going to do. But it doesn't mean that AI is replacing humans, it's just understanding what the work is. Right. So when I use AI for whatever I'm trying to say, it's research, whatever, it gets a pretty good answer pretty quickly, but doesn't get the final answer. So that pretty good answer pretty quickly gives me more time to go really dive in about the final answer that I want to understand and think about. I think that's true whether it's coding, whether it's marketing, whether any of the creative things, it will give you a head start, but it will not, I think, be the completion. Now there are some tasks and this is why I think it's super important for what we do that are just manual rote tasks that are the same every time. Financial operations is full of manual rote tasks. These tasks are the same. It is collecting and entering bills. It is creating invoices and collecting on those invoices. It is collaborating with employees, it's collaborating with the bank system to be able to make payments. These are all tasks that don't have creativity in them. And so we can automate those in a way that gives people back time to be creative about how they manage their business and so that time might allow them to expand to another store, another entity and add another location that creativity might flourish into how they add new product lines. All these things I think are something I get excited about is giving people back the time so they can think more creatively about how they engage from a work perspective and, and how they create impact in the world. I think all humans actually like having impact and I think that's something that AI is going to help with and not actually hurt. So I don't see it as a replace, I see it as a compliment that we are in this period where we don't know exactly what the AI is going to do and what the human is going to do. And that creates obviously stress for a lot of people. And that's something that we work hard at build to make sure that we're focused on developing AI capabilities inside for our customers and for our employees to actually continue to enhance their creative contribution to the impact they have in society.

B (30:45)

Would love to hear about some of those maybe one workflows that you've been able to automate and significantly change for the better. Bill because the fear that a lot of companies have or investors is that for companies that are not getting started in the last three years, you have infrastructure that wasn't built in the current era. Right. So there's a lot of retrofitting going on or just adapting. It's an important topic. I'm sure it's come up in your board meetings or management conversations.

A (31:22)

I think the most critical element for successful AI development is data. You have to have data to be able to understand how your customers, how it's being used. And so just think about what AI is doing. It's actually collecting all this data and then interpreting it and spitting it back out. Right. And so if you think about the workflows that we help SMBs with, we have the data like we've been doing this for 20 years. We are experts on what SMB and mid market companies need from a workflow perspective. We've built that into automation flows that require humans to be involved. We're in a unique position to take those flows that we understand so intimately and to automate them completely and make them autonomous. And so going from automation to autonomy, that requires data, it requires expertise and requires trust. And we have those things in spades because of the time that we've been doing this. And so when we think about the expertise on the workflows, I'll give you one example. We recently announced the W9 agent. It kind of sounds boring, but let me just explain why that's so important. Taxes are a pain in the butt for everybody every year. If you're an employer and you pay, not just an employer, but if you're a business and you pay anybody who is of a certain size, you have to file a 1099. So filing a 1099 takes effort. You have to collect the W9 from the supplier. Suppliers are busy. I already talked about how the ADD businesses are doing so many things like getting their attention. Well, we know from our customers that they spend a lot of time collecting W9 so they can file the 1099 so they can get on with their life. None of it wants to do any of this. This is what nobody wants to touch. They want it to be touchless. And what we're able to do now with our W9 agent is have the agent go work with all suppliers and collect those W9s and get them ready so that when you want to do the 1099, we do those automatically as well. You have a seamless experience. And so we get from something that nobody wants to touch to a touchless experience because of the agent. Now if you think about that workflow that I just talked about, automating, nobody should be doing that. It's necessary. And so what we're doing is we're eliminating workflows, we're eliminating friction that SMBs have that mid market companies have that keep them from actually being their most creative self because they have to do these things, they need to be done. But if we can eliminate that friction, that grind, then that actually takes the business to the next level. That's just one example. But you wouldn't know that. The reason I love that example is there are tons of examples of workflow that SMBs deal with every day. Because we've been helping SMBs for Bill now close to 20 years. And with Pay Cycle 25 and with my time at Intuit, 30 plus years, I've been doing this and living and breathing this for a long time. And the opportunity to leverage that into experiences to get rid of the mundane friction based tasks that every business is consumed by. That's exciting because now the business has a better chance of succeeding. 20% of businesses fail because they don't know how to manage their finances. Well, nobody should fail because they don't know how to manage their finances. We should make that automated. We should make sure they get insights and reports that help them understand their finances.

B (34:39)

On the point of data, something I just thought of you Obviously have high quality firsthand data for decades of the SMB, the heart of SMBs in the US. A lot of the training that's going on for a lot of these new tools, they're using synthetic data. Do you have an opinion on that?

A (35:03)

I think the, the data we have is unique. I think we have one of the best financial maps of the S and P economy out there. You think about, we've been doing this one for decades, so that matters, having it over time. We've seen multiple economic cycles. We have well over a billion documents that have been through our AI ability to read and classify and do all the data entry. We have over a trillion dollars in spend across the economy that we've been able to manage and, and do from a risk perspective, which really manages. When you're moving money, it gets back to one of those other elements. I said I think for AI to succeed, you need expertise, I think you need data, which we talked about and you need trust. Those two go together. The trust and the data go very much hand in hand. When you're in fintech and you move money, trust is one of the core elements of any relationship. But if you do not trust that the money is coming or that the money is going to be valued at what it was you were sold the goods at, then you won't do the work. Right. And so trust really matters. And so we have a unique data set and this is the financial map of SMBs across country that allows us to understand and understand the risk elements, understand the worthwhile elements, understand how to interpret all the different invoices. And there are lots and lots of different types of invoices. We can read all that and we can translate that into experiences that really give our customers an advantage that they can't get elsewhere. This is why we talk about really supporting the Fortune 5 million. People think about the Fortune 500 because those are easy to target. Back to your question. The Fortune 500 are known. Everybody can put a salesperson on and find a way in and they can try to sell and they get the sale or not. But it's a known entity and people spend a lot of money to go after those businesses because they spend a lot. The Fortune 5 million nobody focuses on because nobody knows how to reach them. Well, we're here to focus on them. We care about SMBs, we care about their power to unlock the creativity in the economy. We care about their success. The Fortune 5 billion, nobody's cared about them before, but we do care about them. This is my whole life's work. It's what everybody at Bill is focused on. We think that AI, when you combine trust and data and expertise, it's going to create a completely new turning point unlock for their experiences. And we're excited about it.

B (37:17)

Let's talk a bit about acquisitions. That's been an important part of your strategy, I guess the last half decade or so. Divi Invoice 2 go. How do you decide versus buy or build and maybe talk to us about the integration?

A (37:35)

Yeah. So oftentimes what we're doing is we're thinking out like what is that SMBs need? Where are the financial operations that could continue to have friction, that continue to be automated and have an opportunity for integration to the core experience? With Divis and the spend expense category, our AP side, we would be paying all the corporate cards. We would see a corporate card payment, let's say for $10,000. We would see the invoices attached in the bill. We'd see all of the transactional information inside the statement for that corporate card. And we saw that there was a lot of volume of spend that was outside of bill. Maybe 20% of the spend was outside on these corporate cards. At the same time that we had noticed that, we started seeing our customers paying companies like Divi that were trying to address the spend and expense. We talked to our customers, found out that Divi was the best solution. It's what they felt had the most robustness, had budgets, had all sorts of spending controls in a way that fit with our belief that controls were important for a business to be successful. That became easy because we had the data inside our platform to see what customers were using the data to see what value their platform had. That became a focus and a target. We've been able to make that very successful. It's been a great opportunity for us to expand the overall payables to include spending expense. On Invoice2go. There was international presence on invoicing on a mobile app. Again, when you think about our Network and the 8 million entities we have in the network, it's an important part of the overall experience is actually connecting all that. Both have been very important. Another one which small and I can't remember if we even announced it, but it was a small acquisition called Abound last year which has actually helped us build this W9 agent I just talked about. Sometimes you look for core capabilities and understanding of that part of the financial operation ecosystem that you think is going to be important. Again, like I said earlier, it's our job to understand what Technology is capable of and then to go make it happen. Sometimes we see small companies like they're onto something. We could take that. And they didn't have a W9 agent before they were doing 1099s and, you know, so they were already thinking about this. But together we've been able to really build, I think, a very interesting experience in less than a year. And so I think there's lots of reasons to do acquisitions, and we feel very good about all the ones that we've been able to do.

B (40:12)

Rene, a lot of the listeners, they're founders, much like you earlier, usually, or aspiring founders. Conflict resolution is something that is super important, especially in the role of CEO. Internal conflict, conflict with your customers. Like, how do you handle. What's your approach to conflict resolution?

A (40:36)

You have to accept it. I mean, sometimes people want to deny it and they want to get angry at it, But I mean, conflict is just a natural part of life. Not everything is going to be coming up roses all the time. You have to accept it and you have to address it, and you have to acknowledge that you might be wrong. In fact, you need to give space for others. The most important thing is to make sure that the team knows that they can disagree with you. It's one of the hardest things for me. Even though I say this all the time, I know many people in the companies feel like, well, we can't say Renee has a bad idea. It's like, yes, you can. I don't really care if you think my bad idea is bad. I will listen to your feedback. And I know that my responsibility back to this intentionality that I learned from the days of pay cycle, my responsibility will be to take your feedback and then still make a decision. If I think it's important to disagree with your feedback, because that has consequences into the future. And so I might, because I might see something that you don't, or I might be wrong, and I have to accept that later. But I will be accountable for having made that decision. And so I think think that conflict is a necessary and healthy part of any conversation. And ignoring it and not, I don't want to say embracing it, because that sounds too friendly, but accepting, not accepting it, I think is a mistake that oftentimes founders make. And so I think asking and inviting and making the space available for people to disagree with you and for you to disagree with them is super helpful. I don't want a company full of yes people. The mistake with that is I'm one brain. I've got 2100 brains, 2100 people. I don't know what that does on logarithmic scale, but if everybody felt their creative version of themselves at their fullest potential, well, then that's the biggest unlock I can have, helping people understand that conflict's okay. It's one of the hardest things as a leader, at least that I found. Even though I say it over and over again, nobody ever wants to tell me I had a bad idea. Right. And I have to ask what's bad about it? And I don't do it as often as I should, only because I forget. But I'm always comfortable with it. Right.

B (42:49)

I understand. You're also a bit of a contrarian. You've been in Silicon Valley for over three decades, belly of the beast. You live in the Bay Area. But also there are things about the culture there that you actually differ with.

A (43:09)

Yeah. Jim Collins has written many books, and one of the books he wrote was Built to Last. And I was talking with some investors after he'd come out with that, and they were saying that the problem with the VC community is that we're not building to last, we're building to flip. That's what they were saying. This was dozen years ago, whatever. And I said, actually, I don't think that's right. The reason it was shortly after PayCycle had been acquired by Intuit. The reason Intuit bought PayCycle was because PayCycle was built to last. And PayCycle became the backbone of Intuit's payroll platform. And still to this day, I think, is a critical part of how they serve millions of businesses. From a payroll perspective, that technology was built in 1999. It was built to last. I think the contrarian point of view is that everything we do should be built to last. Everything that we do as leaders, everything we do as a company needs to be built for the future, and not just for the flip, not just for the money today. One of the other ways this shows up for me is I am against Class A shares. I do not think that anybody should have 10x voting rights. I started with 100% of the company. I started the company. I made a decision, again, back to my accountability statement. I made a decision to take the first investor to hire the first employee. Every one of those decisions, all the way up to today, I made the decision to give that stock away because I thought it would make the experience better for our customers, that would make a bigger business opportunity for the overall company. Those are decisions I need to live with. I need to be accountable for them. And if I've made those decisions incorrectly. In the future, investors need to be able to have their say. I don't always like necessarily what investors are going to have to say, but it forces I think a realism that is super healthy. And I think people fail to realize that as a founder CEO, you get the chance to influence all the people around you, which already probably gives you a significant amount of influence anyways. I think the contrarian thing is you got to build the last and you got to be confident that you don't need class A shares to actually succeed and influence.

B (45:31)

It's definitely contrarian. Let's do some rapid fire questions.

C (45:37)

What's something you believed early in your

B (45:40)

career that you no longer believe?

A (45:42)

This is the opposite of your question. I did not realize how important the network would be so early in my career. I would have been like, okay, I can just build something good. And maybe that's what I believe. I can build something good and people would be attracted to it. But if I think back to pay cycle and everything since then it was the people that knew me and people I didn't even know that knew me well, that wanted to invest, that believed in the idea and that continues to this day, whether it's new employees I get a chance to work with. The network is massively important to any of our success points and I don't think I understood how important it was back in 1999.

B (46:18)

I always talk about the study that analyzed early stage founders and the most important quality that you could measure that could anticipate some success down the line was the depth and breadth of their network in their industry. What's a company metric you are obsessed with?

A (46:42)

There's so many different ways that we track this, but customer happiness and so one that is something that we do take very seriously are escalations. Obviously we have mps. We have all these different ways to measure customer effort score. We have all these different ways to measure across the base. But one that I really focus on is how many escalations get to me it's work to come find me. I appreciate that when those escalations come to me, they end up being, I think far more articulate in the underlying challenge that a business is having. We have 1% of GDP going through us. There are going to be times when people don't get exactly what they want. For some reason they misunderstood, we did something wrong, whatever. And us understanding the pattern through all that, that's why that's so important to me. Because that escalation is something that we can all Learn from. So that's the one I focus on.

B (47:39)

What's one bet you're making now that perhaps most people or the market doesn't understand, but they will years from now?

A (47:46)

Betting on the culture. The most important thing that I do is create a place that employees want to pursue the vision that I've articulated. I've already articulated the vision. I'm always going to be the founder of the company. You can never take that title away from me. I will always be the founder of Bill. I won't always be the CEO necessarily. Right? I could move on. I could retire. Lots of things that happen, right? But the culture that we put in place today, that's what actually takes that vision into reality, into the future. And so I think the bet is that I believe in building a culture. I believe in investing in people and teams and doing things in a way that actually creates an experience for them that they will look back, no matter how long they were at Bill, and say, that was awesome. That bet is sometimes contrarian because sometimes it's more about, what did you do? For me lately? I really believe in betting on people, and that's something that creates lifetime experiences for them and for the company.

B (48:50)

Why is celebrating victories so important for you?

A (48:54)

I think celebration in general is important, right? And it doesn't have to be like, you can celebrate learning even in defeat. You can celebrate the learning, but the victory part. What's important is really making sure to honor the work that people do. And none of us are successful without the support of a village of people behind us, right? Whether that's your parents, whether that's your teachers, whether that's your peers at work. And so celebrating victory is a chance to actually honor everybody else's work and to really bask in it for them and you for them. Right? There's a great prayer from St. Francis, the prayer of St. Francis. And the ending is, let me so much as seek to be consoled is to console, to be understood as. To understand, to be loved as to love. And so when you think about celebrating victory, it is actually, let me understand, Let me console and celebrate. Let me love the people that are working on this. That is far more important than somebody saying, renee, what's wrong with you today? Or, renee, can I love you today? Like, that's not important. Like, what you can give out, that's far more important. And so I think celebrating victory is all about that. And I think that's something that, you know, we probably don't do enough of making it about others. It's not about me. Like, it's not never about me. Like, it can't be about me. There's 20, 100 people that really make Bill possible and make it great.

C (50:21)

Two more what's a book you've gifted

B (50:24)

often or do you recommend often?

A (50:25)

Yeah, so there's two books that I give often, but the one that comes to mind is no Death, no Fear by Thith Nhat Chan. And when my dad was dying, I was reading it, and it really helped me understand and appreciate. It's going to sound corny, the circle of life, but the book is very meditative. It's Buddhist philosophy. But it really helps you have an appreciation that we do not understand death, so there's no reason to be afraid. And so if you think about all the things that we're afraid of, do you really understand it? And so you can apply it to multiple parts of your life. So that's a book I give. When somebody I know has somebody that's meaningful to them past, they get a book for me.

B (51:08)

Thank you for sharing that. Name a founder, CEO or leader that you deeply admire.

A (51:16)

Not going to be a surprise. My dad, I can see that coming. Yeah. And my dad, because he had so much passion around the creative side of building products, so much passion around the employee side, the experience. And it was always about everybody else. Right. So it was just something that, like I shared this story sometimes where a few years ago, Thanksgiving, somebody called up, called my brother. My brother and dad had the same names. And so you looked up, you know, and he called my brother. And my brother, when he took the call was like, you know, hi, can I help you? He's like, look, I just called, it's Thanksgiving. And I just want to extend my gratitude because my dad was never happier than when he was working for your dad. And this is 20 years after his dad had died and probably 15 after my dad had died. And he still remembered that from that long ago. And I think that impact that I saw that his way of managing had, even though he never got to know that he had that impact on that family, it's a good reminder for me every day that when people go home, they talk about work.

B (52:32)

Thank you for sharing that. Yeah, that means a lot. Well, Rene, I can't thank you enough. It's a beautiful story to end with. Big admirer of everything you're doing and entrepreneurs in general. Right. And someone who's gone from private to public and still going. That speaks volumes.

A (52:50)

Okay, well, thank you, Miguel. This is a lot of fun. Thank you for having me on.

B (52:53)

Yeah. Thank you.

A (52:54)

Thank you.

B (52:55)

Did you ever consider changing your name to Bill?

A (52:59)

Every now and then people do call me Bill.

C (53:03)

Thanks for tuning in. I hope you enjoyed this great episode. If you want more interviews, make sure to subscribe, follow and leave a review on Apple Podcasts, Spotify, YouTube, or wherever you get your shows. It helps and truly means a lot. And if you have any suggestions or thoughts, just drop me a line on LinkedIn. Signing off till next week.

B (53:26)

I'm your host, Miguel Armasa.