René Lacerte, CEO Bill + Jason Lemkin: "It's Just Getting Good for SMB SaaS"

Everyone at Sasser, we are here. This is a treat with really one of my very favorite founders, CEOs, Renée Lecerte of Bill.com. And I was lucky enough to meet Renée relatively early. We were both funded back in the day by Emergence Capital. I think that's where we first met. And in some ways it seems like decades ago. In some ways it seems like yesterday, but it was fascinating. Renée was one of the, it was a group, this early group at Emergence. There was some incredible founders in it. Uh, there is Peter Gassner from Viva from this group and David Sachs and others. And René to me was particularly compelling because he'd just been working at this problem for a long time, which we'll be chatting about. And I'm probably one of the few folks here that will even remember his startup before that, PayCycle, which we'll chat about. But someone with this tenacious vision and Build.com is worth something like $25 billion today, but it took a long time. It was hard work and we'll learn why next. So René, thank you so much for joining us.

You bet, Jason. It's great to see you and those early memories of being in SaaS and being in the cloud before it was called the cloud. You were there, I was there, and I just really enjoyed those conversations as part of the Emergence family. And it's great to be here talking to you. So thanks for having me in.

Yeah, and it's fun. And I just want to— now, most folks I talk to, I'm not like a super fan customer, but Build Faster Now is, it's a company and a fund and we I run everything on bill.com and it's funny as the CEO of whatever, a 10-person company, it's my dashboard, it's my everything. And it's funny, I don't even know what we pay. This is a classic CEO thing, but whatever it is, we don't pay enough. And what I do, all I care about, it's funny as a CEO, I only care about one thing that all of our bills and everything flow into one dashboard and I can just pay it and see where the money goes. And I don't have to do any work. It's magical. Tell us a little bit about how you got to this magic, because it wasn't easy to get all of these vendors and everything connected. Just getting bill.com. To where it is, it took a decade to make this, these underpinnings work, didn't it?

Yeah, it's, it's interesting. It always starts with a, a strong vision and mission of what you want to do. Yeah. So me, my grandparents, my parents, they were serial entrepreneurs. I grew up around them. And when I started the first company, PayCycle, which we'll probably get to talk about that at some point, I found that everything I was doing to run the business was really not that different than what my grandfather had done 60 years earlier, which were filing cabinets, paper, checks, walking around, finding employees, asking what was going on. And it was at the time when I started PayCycle, it was internet payroll. We weren't thinking about cloud payroll. It was called internet payroll. But I realized, hey, we had taken this concept of a software application. We had made a database in the sky that was shared by everybody. And then we had software UI that could be customized for our bank partners or for accounts, whatnot. And so I realized that there was this opportunity to really solve all of that mess that a business has in running it. Like the thing that you talked about, being able to get your fingers on the documents that actually drive your business, whether that's a contract or a bill or an invoice or a cleared payment, having all of that at your fingertips, the cloud makes that possible. And so I just started noodling that and then it came up with kind of this broad platform of how we could do things. And so to your point, I came up with the platform and then I started executing on it. Like we didn't have it day one. It, it took us Like you said, it was probably 10 years before we started having meaningful revenue that others like, huh, that company might go public. And then you fast forward kind of 2 years later, 3 years later, we're filing for the IPO. We're launching some of the payment products that were new to us that had a variable-based pricing that kind of turbocharged some of the growth. And all of it came together, but really wasn't that different than what I envisioned back in 2004 before I left PayCycle. I started thinking about this. Before I left, I started in 2006 and then I started executing. So I think part of the learning is like, if you have your vision, stick to it if you can. And if you have the investors that will support that, stick to it and make sure that you're finding stuff that supports it and pay attention to stuff that doesn't and then tweak that. But we were fortunate. Everything we did seemed to support what we were doing, not as fast customer growth in the early days as we wanted, but we found a way to crack that code as well.

And didn't you have to, I might be misremembering, but didn't you have to convince a lot of partners and merchants to join the platform? Wasn't it that not easy in the beginning, probably until you had a network built?

Well, one of the things that I focused on, which I've learned from others out there, is you can't force a crossing of the digital divide overnight, right? So all of your listeners, everybody's trying to force that crossing. They have this great idea. We're trying to force that, but you can't, you have to have a bridge. Right? And so the bridge for us in the early days was send us in, take a fax, take a document and fax it in. And you'll just handle it. Right? But that was the bridge of taking the paper and getting it in the system. And then on the payment side, we'd be like, we'll just cut you a check. So we didn't force people to connect their vendors, but then we did incentives from a pricing perspective. A check was $1.49 or whatever, $1.69 today, and an ACH was 49 cents. So that price incentive enabled us to grow that network. If you have vendors, if you have suppliers that you work with that want to get paid electronically, they're going to say, hey, Jason, I want to get paid electronically. We make it super easy. But then we had this other thing, which is, hey, Jason, you might save some money and you'll have better control and you'll have better security over those funds that are going out if you use us for the ACH of the payment. So go invite your vendors in. So a lot of this was the network side actually wasn't as hard other than that it took time. We made it in the product where you could easily invite people in, bring them into the platform, have them engage. That was the thing that was important. The platform lets pros engage. And part of the reason, you know, for buying the URL bill.com is that my bill is your bill means something very different. When I send you a bill, it means you're going to pay me. When you pay the bill, it means money coming out. And so that two-sided part of the network is something that we built a platform around that to do both AP and AR depending on which side was covered in.

Yeah, but you didn't force it, right? If people want to continue to fax or deal outside of the network, it could be transparent to them until they saw the carrot, right? Which was to make a little bit more money.

Yeah. I still have vendors that I, I use Bill.com personally and I have vendors that want to receive a check and I always ask them, sometimes they get very perturbed. It's almost like the vaccine question. Some people don't like to be asked the question, right? And they get perturbed. Like, I'm not going to tell you what I do, but no, don't send me a check. Don't send me electronic.

I have to have check.

Can you just tell me why you want a check? It's not secure. Somebody's going to anyways, some is religious for some people. So you have to have a way for you, like you run a business, you're not going to have multiple methods of payment. Yes. You want to go to your bank. You don't want to apply your checkbook. You want to be able to pay your bills anywhere.

And when, and we think that, that sort of that power law you described of Bill.com's progress, right? Where it's X years and then all of a sudden people, a lot of people maybe could only see it a couple of years before the IPO. And then probably 10x in market cap since. Yeah. You would know better than me. When did it, when do you, when did you see it? When did it take off? When did it start to feel de-risked? When did it feel inevitable to you?

One of the early measures, so I, both FaceCycle and Bill were very focused on having a business model that works, right?

Yeah.

So the first 1,000 customers, you're losing money on every customer. It doesn't matter, you lose money, right? You have to have support and stuff like that. But we worked hard and probably within 5 years we had gross margins that were probably north of 50%, right? right? And so now our gross margins are close to 75 to 80, somewhere in that range. But when we, when I saw that we could flip the gross margin and I knew we could go more just on our core subscription business, I knew we had something because those are strong software gross margins. The market was massive. And then the next inflection point would be when we decided to monetize more with the international payments and the virtual park products that we added. And we knew maybe the, the inflection point that was interesting is When we decided to go do international payments, we did some research into our customer base and just to see, we thought since we have this sync capability with the accounting software, we'll see how many international vendors are there. What we were surprised to learn is yes, we had lots of international vendors because they had synced from the accounting software, but our customers were reporting payments outside of bill.com in bill.com. So you can do a wire and you can say, so they were using us for all the workflow on those payments that were going international. But they were making the payment through their bank. And then we realized that we had something more than just a workflow platform, that we really had a system of engagement. So we had the system of record, the system of engagement, and then you get to the system of information, which is all about the data that we're using to figure out what products to serve and offer our customers, the AI tools that we have. But that was a turning point when we realized we could have a much different understanding and use case with our customers because the platform was doing the job. The stickiness of workflow, document management, security, compliance, all that stuff that you don't have to worry about as a customer. That was sticky enough that we realized we could start selling other things. And that's really what's happened since the IPO. We started that at the time of the IPO. Yeah. But then kind of the growth that's really driven the transaction revenue growing at the rate that it has been.

Let's come back to that next, but just to step back to make sure I understand the learning, the case study. So these international payments. This magic moment? Was it because that's such a, it's so much work for a small business that it was magical when Bill could handle it? Or what, why was that the magic? Was it just, I don't know how to send a payment to, to 22 countries and then I could just click a button and Bill, it would happen. That was so much more magical than just a domestic transfer.

Yeah, I think it's the having one place. It's like you said, like you've got a company, you could be traveling, you might've been on summer vacation, you need to pay a bill and it happens to be a wire that has to go international. Now I have to call my bank. Look, I, I just had dinner with my family. It's 11 o'clock at night here. I don't know who the hell I can call at this hour. Right. But with Bill, you just be like, oh yeah, just schedule the payment. We'll go out tomorrow. And so it is the simplicity, the ease of use that you have one dashboard that has all. Now to do that, it's back to that platform, that end-to-end platform that has the regulatory, the compliance pieces, the security, all that stuff around money movement is not always the easiest stuff to do. So, yeah.

So let's chat, let's talk a little bit about the payment.

So.

You can tell me what you call it. If I call it the fintech side of Bill, it's got this almost amazing Shopify-esque element today where Shopify started off as websites for e-commerce and now it's mostly merchant fees. You're 50/50 today, aren't you? Or something like that based on your last stuff. 50% of your revenue is from payments, 50% from software.

Yeah. And we've been moving in that direction as we've been able to capture more of the international payments and virtual card transactions. With the Divvy transaction and opportunity there, that's going to increase the transaction revenues. You know, having this ability to leverage the platform, the same platform to execute payments. The payments, I, one of the things I got asked a lot in the early days as well, hey, I don't need to change things. I have a way to make a payment. And so then I had other people saying, how do you do more electronic payments? And it's, and I would always start with the payment is the last thing that a customer does.

Right?

It's everything before that matters. Like you, you're not going to just sign a check or use Bill.com to essentially sign a check or execute electronic payment unless you know what the content of that bill is. You're going to want to look at it. And so that's where we spend all the time on that workflow and that process. And I think for us, it's really turned out that's quite sticky and quite hard to do.

And remind me, you probably have a broader and certainly more sophisticated definition of payments for Bill, of course, than I do, right? As just a fan, but If I remember, I remember reading the S-1 when you went public and you had some interchange and other revenue, but this real payment stuff actually took off post-IPO, right? It's really the last couple years. So what had to come together to make that happen? Because that's a crazy acceleration, right? In the last 2 years.

Yeah. Yeah. So the payment, the transactional revenue we had around the IPO, because we had not yet, we just started the international payments and the virtual card payments was all fixed unit pricing. So the check was $1.49 or $1.69, depending on the timing. And the ACH is 49 cents. So if you're doing 20 payments a month with us, on average, we'll get a dollar per payment. That's $20 a month.

I'm not making it that much at Zaster, but it's something, it adds up. Yeah.

Something like that. But then if you, we now offer international payments and instead of you going to the bank and paying the fees that you might have there, we'll charge something less than that and be inside of Bill.com. And then there's an FX opportunity for us and those transactional fees end up being significant. Anymore. So it's the, the fact that we went to variable-based pricing for some of our payments. It's a very small number of the payments, but it's the payments that matter for the business. Like you don't have to go somewhere else to do it. That matters. The virtual card payments is the same thing. Suppliers don't have to create a new method of accepting payments. They can just take the card that they're comfortable taking. And so those things allow for variable-based pricing versus fixed-based pricing.

And did, did the markets just have to evolve and maybe even APIs and others, or Why was 4 years ago not the right time?

I think it was for us, we were still working on a number of things. We had the end-to-end platform. Part of that end-to-end platform was distribution, right? So having a diverse ecosystem that allows us to go direct, which we do, a good number of customers come from that, allows us to go to accountants, which is a, a many-to-many relationship, right? So every accounting firm, 5,000 across the country, they bring us a lot of customers for accounting firms. And then go to the strategic partners, financial institutions, and do it. That's a many-to-many, right? So there's just, and having the ability to have a platform that has that ecosystem, it took time to get that right. At the same time, having a platform that allowed us to bolt on payment vehicles, if you will, meant that we had to get a number of really strong capabilities around regulatory compliance that I just, we weren't, we were focused on doing it, we were going to do it right so we can make sure that we continue to grow the business and then start adding the things on top. And it was, it was very purposeful. It was very intentful on how do we make sure that the business can scale? And we've been very happy with our ability to scale once we add those capabilities on. But I think it really gets back to the efficient go-to-market and the efficient platform that we built from day one. Get that right. And then there's lots of things you can do with it.

But ultimately the idea of owning payments yourself and interchange and all that was part of the original vision. It, it's not like you, you came to that a few years ago. It just took It took a whole bunch of time on your platform to real— a bunch of patient time to realize it.

Yeah. I think part of the international payments would've been a part of the original vision. Yeah. I think 15 years ago, virtual cards was not something that was well understood. And so for sure, probably wasn't part of the original vision, but what was part of the original vision was being able to move money from person A to person B. And since all the money goes through us We're able to do other things that other players can't do. And so that, that was part of the original vision. So when new opportunities come up to create a better experience for suppliers and we get to monetize, you know, because of that, that's great.

So one last on this, and then let's talk about go-to-market and SMBs and some fun stuff like that. But should, if ever, should everyone that can be a fintech and SaaS be one? Should everyone that can find some sort of neobank, virtual card, should everyone, companies like Divvy, which we'll get to before we end, they did it. Should we all be a fintech if we can, or is there a Or are there too many? Is there a cautionary tale? Does that— should everybody be doing payments?

Yeah, I'll probably answer the question a little bit differently. I think it's if you have the stomach to do it and have the domain expertise to do it, it's a great way to add on to your business model. But I would say it's not for the faint of heart. The regulatory compliance stuff, if I think about the conversations I have with our bank partners, which by the way has been a great way for us to learn and get ahead of the compliance and regulatory needs, it is pretty daunting. Right? And right now a lot of fintech companies are probably below radar on that front. And so you need to be prepared and investors need to be prepared for what does it mean? I think it was probably our Series E or D. So we ended up getting to I for IPO and locking out, but in one of our investments, one of the investors is, you know what, I'm not sure you guys have all the right regulatory stuff. I'm going to bring my outside counsel in to really help you. And it helped a lot. That was 9 years ago. Wow. 10 years ago. So I think that when you ask the question is if it makes sense for it to be part of the business model, yes, you should do it, but you have to have the stomach for it. And you have to have the stomach. When I say that, you have to be willing to invest. There's plenty of investment that we made over the years that didn't help us acquire customers. That didn't help us increase revenue. It was like, no, we just have to build infrastructure. And so that, that's just one of those things that not everybody's up for.

It is, it seems like with all the APIs and neobanks and banking as a service, and it almost seems easy today, but it's a cautionary tale that there's a huge regulatory overhead, right? Even if you're not a bank yourself, it's huge, right? It's a huge amount of CEO time that we're chatting today. So it's not for the, it's not easy and it's not for the faint of heart.

Yeah. And another part of it, which is what gets into the regulatory compliance is there is fraud, right? There is credit risk, fraud risk. And a lot of our infrastructure was designed around that. How do we manage that successfully? And to make sure that we're in a good spot. And so it, it's, when you're small, you may not think about those things, but if you assume scale, you have to be thinking about those things from day one. So that's just the general— Yeah.

Fraud's minor when you're small, but it can rapidly scale out of control, right? It, it, it can snowball in a way you've never seen before. If you've ever seen it behind the scenes, it, it's a thread that gets pulled fast, isn't it?

Yeah. Yeah. And I think it depends on the business and cards have fraud built into it. So in some ways, yes, your fintech can have a card product, maybe that's different. But if you're trying to, we wanted the ability to be able to do any type of payment because that's what customers needed. You have to, you know, make sure that you're owning that infrastructure versus you're relying on some third-party bank that's going to help you because they won't be able to keep up with you once you get to a certain scale.

So I want to make sure we have a little bit of time for some of your really jaw-dropping metrics. So I may have my math a little wrong, but your ACV is still around $2K. So it's tiny. I don't know what we pay. Maybe we pay $200, $300, $400 a month. It's tiny, right? 121% NRR, which has gone up for 110% of the IPO. So your business is getting stickier and stickier. Let's step back for a minute. How do you get to these 2K customers? I was brought in, obviously I knew Bill from you, but as a customer, I came in through our outsourced controller, right? Who brought us in. Is that a big channel for you? Is the channel a big way you get these little 2K customers? Because the direct marketing and sales is tough at 2K, isn't it? Yes and no.

There is plenty, uh, word of mouth. There's plenty self-service that kind of drives, uh, customers in. They might still talk to somebody in the sales team, but it can be pretty quick. So, you know, ultimately, there, the three-pronged approach on the ecosystem has worked for us, right? So it's the go direct, obviously optimize digital marketing the best that you can, leverage the word of mouth that you can to drive leads, and then go to accountants, and then obviously go to the strategic partners. So the accounting firms do represent a big bulk of client base. And it is because it is like your advisor, they might have 10, 20 clients that they're like, hey, everybody's going to use this because it's going to enable me to support you better. And that happens. Those are the firms that actually do the, I would say the best with Bill.com and they make a business out of it. They actually change the model around and sometimes they will say, hey, Jason, you're going to pay me $5,000 a month to do all your bookkeeping, but you have to use Bill. And you don't even know what you're paying for because they're paying us. And so that approach has allowed us to generally grow with the accounting professionals, the bookkeepers out there that want to do this. And it comes back to trust. So it takes time to get accountants to trust you. It takes time to get financial institutions to trust you. We've been working with both channels and both partners for a long time. KCycle did before. And so my ability to have those conversations with the right providers makes a difference. So I think for having the $2K on annual revenue, it's great, but we know there's a lot of opportunity to do more on top of that, right? And so that's some of what you're seeing. In fact, I think in the last quarter numbers, we announced that the net revenue retention had bumped up to 124%, right? So we continue to grow our ability through some of the different products, whether it's more users on the account or some of these payment products, we're able to grow that capability to drive revenue as we scale, which is great.

Now these accountants and also the banks, they're a channel, right? But I think I'm getting, they're a little different than, I don't think that they're, at least my accountant, right? I don't think they're trying to add fees on top of it. Take a HubSpot or a Shopify implementation. HubSpot might be $10K and then the agency charges $30K or $20K on top of it. This is quite different, right? This is getting everyone normalized on the platform. So do you staff them and manage them like a traditional channel? Do you have a channel team that supports them? How do you enable them to be successful and to pick Bill?

Yeah. Yeah. So ultimately we support each of our channels that are not direct in the wholesale fashion, right? So they're buying wholesale from us and then charging whatever they need. So sometimes they pass it through.

So they might mark it up as well.

Yeah, but they typically wouldn't mark it up on an apples to apples. It would be more like, hey, you need CFO advisory services and we're going to charge $5,000 a month for that. And you're going to use these 3 products, 4 products, whatever it is so that we can do that. And then they just pay the bill directly, right? So they don't mark it up per se, but they are because they're spending a lot less time to be that CFO in a box because they have all these capabilities with the accounting platforms. And tools that they're generating their business around. Financial institutions, what's a little bit different with them is they just, it takes time for them to get their go-to-market machine working. And they are something that definitely involves a little bit of patience and understanding what's working and then supporting them on that. And each one can be different. Some banks, they're better with marketing. Some banks are better with sales. Some banks are better with product and new product promotions. And our team gets to work with them and figure that out. And then obviously that learning becomes something That's part of the toolkit for our go-to-market across all the channels.

But when you were, say, pre-IPO, when you were scaling Bill, just because it's interesting, this, let's take the accounting channel, right? How do you, if it's bulk, did you have a core KPI for the team? Did you say, I want to increase revenue this much? Or did they have group goals, variable comp? Like, how do you, because sometimes these indirect channels, it can be a little challenging to get everyone aligned on the goals there, right? Because it's not like the sales team ringing the bell, right? So did you crack that code in some fashion?

Yeah, direct is probably pretty standard the way everybody else does it. There's a quota and it depends on the revenue and that's how we do that. The accounts, we look at it kind of the same way as we would direct, but we look at the account, the revenue per accounting firm, right? So the quota's driven off of that.

I see.

And so, and then they have an incentive to get X clients on board, what we think is reasonable to get X clients on board in the first period or whatnot. And then we have account managers that go back, follow up and make sure that they're driving. Success there. The banks are very different, right? That's kind of elephant hunting. And so the teams there, they get the bank committed upfront and we drive that commitment in the contract to make sure that there is a commitment. And then it becomes, how do we serve you, Mr. Bank, Mrs. Bank, right? It's just, it's all about what do you need because you've already committed to us. So now we're going to understand your business and work from that perspective. And this really gets back to how we build trust, right? Like when we're working with the accounting firm, when we're working with the bank, we're not trying to, you know, sell them something that they didn't already buy. We're trying to support them in what they bought.

Yep. So let's relate that. Let's just make sure we hit on 2 more points. This, I missed the 124% NRR on the last quarterly one. That's pretty, pretty awesome. So what's going, but, but it's going up, it's going up 110 at the IPO, maybe it was below 100 in the past. So it's going up. What's really happening here? What's the magic? Because that's It's not easy at scale. It's pretty amazing to maintain it at scale because it's the greatest annuity of all.

Yeah. So I, there's two components to the revenue. There's subscription revenue, there's transaction revenue. On the subscription side, we continue to invest in features that drive usage and users. For your firm, if it was just you, you're paying us less than if we can get 5 people approving bills in there. Right. And so how do we make it so easy that you think, hey, you know what? I just want somebody else to look at this.

So I see that drives NRR up, right? Just more seats on the platform.

Yeah. So that's definitely a part of us driving the— the other part is the transaction growth, right? So to take it from 20% to 50%, uh, now we have teams that are focused on whether it's in-product placement or sales or marketing that will drive the international transactions of virtual card. That takes just skill and again, rigorous execution. It's a constant look at the day-to-day blocking and tackling that are needed to drive transaction growth. And that's something that is I would say something we've gotten better and better at over the last few years. An example on international payments is how do we take the burden off of you so you don't have to ask your vendors that are international and actually place it on the vendor to say, you know what, I'd rather get paid via an FX transaction than a check that Jason's going to mail me. Right. Yeah.

I don't know how it works, but it's great at Bill. However it works, it's great. That's much I know.

And so there's always more work we can do. I would say, given knowing you and knowing that what you've done your whole career, If you're not a visionary, you're definitely an early adopter, right? So for me to get you to do something, pretty easy. But to get to the late majority or the, even the early majority, it takes a lot more marketing skill to serve those customers, right? The visionaries and the early adopters, like they get it, right? They understand technology. They, I see you doing something, I'm like, oh, I want what Jason has, and then I gotta figure it out. But that's not true for the majority of people in America, right? They need to have spoonfed. And that's something that's working. That's where we do a lot of work to drive up the NRR.

I still think it's magic. Let's make sure we have a few minutes to talk about your M&A, because it's interesting. But for example, on our little team, there is a vendor that we use for credit cards, and my controller said she'd quit if I made her change. She said there's so many recurring payments, and like, you do that every 3 to 4 months. So I think business process change for SMBs is a, it's a big deal.

It's a big thing for everybody. Yeah. And everybody, it's. And you have to think about how do you simplify and not force it all at once, right? That was the aha for me. It's like you gotta work on bridges.

So yeah, I think, and, and especially as founders in that zest to make the UI beautiful and the onboarding rate, we forget sometimes about the soft cost. And sometimes that's a magical piece when you, and you've done it. And yeah, so you decided after all these years you weren't gonna start off with a $6 million acquisition and then an $11 million one. I remember in the old days, Salesforce wanted to buy us and they said, but $6 million is the most Mark will let us do. And I said, I don't know.

I don't know.

I don't know if that's going to work with— I've raised one round of capital, but I love what you did. And I think what Twilio did, which is I'm guessing is see where the cloud's going. Let's not wait. So $2 billion for Divvy. Luckily you're worth more than $2 billion, right? So you have the stock and Invoice2Go. But what did you learn from that? Why did you decide to go big versus build-buy and all that? And what was in your, what was in your mind? Is it just the incredible opportunity ahead of us?

Yeah, I would say the thing that we do is we always talk to customers, understand what they want, what they need. And one of the things in the spend management space, it was growing fast enough that we had a lot of joint customers. So we had a lot of people we could go talk to and understand how they were using any of the spend management solutions. And there was a lot of love for Divvy.

Yeah.

And so when I started talking with Blake and the team and we thought, found that there was a really great synergy across the teams as well. It became a no-brainer. And I know that when we went public, one of the reasons was to have a currency to be able to add onto the platform to serve more customers with better products. And so this does both. This allows us to have better products and tools on top of our platform that we've already built, but also allows us to reach customers that maybe weren't interested in us before for whatever reason. And so having an opportunity to grow both the customer base and the revenue per customer that increases the TAM. It's pretty rare. And so you gotta, you gotta invest behind it. Like I, it's been 15 years growing the business. Uh, I'm in this to, to really help SMBs. This is what I, the reason I started the company is I care deeply about the process management challenges that they have, like you referenced, and that is a pain to change. But I want them to actually get their time back. I want them to go do what they started their business to do. It's all about that passion. And the back office accounting is nobody's passion other than mine. And we're going to focus on that. And so the opportunity to pull things together, whether it's Divvy or Invoice2go, like that's an opportunity that I see. And I'm dead set on making that happen. That's why I started Bill and I feel we're on a good path to make it happen. So anything I can do, I'm not going to shy away from it. I'll look at it and make sure it works. We did all the math and actually the economics worked. I didn't get scared by the price tag.

And what happened? I should know this, but spend management in the last 3 and a half years or something went from a sleepy thing that really did not seem as webified as you might expect. In the enterprise, we all remember banging our head using Concur and other things that are fairly similar to these apps, but ultimately an enterprise version. What's the switch? What happened? Why did this space explode late, relatively late in, in the cloud?

Yeah, I think it's the cloud takes time to cascade, right? Yeah. So one of the things that cascaded with the technology for card payments is the ability to control card payments through APIs real time. And so that's essentially what Divvy is doing, right?

Like, you know, without that, you can't build Divvy. You can't, right?

So that was built. The budget is, you can set the budget for your office manager to get $500 a month, and when they hit it, they can ask you for more and you can say yes on the spot, or you can say no. But that ability to control means you're more comfortable giving out a lot more cards. If you go back to the old day before you had that type of ability, they want to give every employee a card. Because then they might spend up to the limit and they might be doing silly things with that card. Now you can say, yeah, I'll give everybody a card and their limit's $250, so don't worry about it. But if they need more, they can just ask for it through a budgeting process that's on the mobile phone. So that I think is what changed is the APIs, to your point, changed and people, the cloud cascaded down into the infrastructure that is behind the card payments.

Yes. So one last, one last question while I have you, and thanks for all the time. You guys have, I missed a quarter, I'm a quarter behind, right? But 2 quarters ago, you had 109,000 customers. Maybe you have 120 now, whatever the number is.

121,000. Yep.

121,000. I was putting together a list of how many customers public SaaS companies have on average just the other day. And I realized it's 30,000 on average. And then when I thought about it for folks like you or me to a lesser extent that have been in the SMB space forever, that's like none, even 120,000. Like we all thought the TAM was small. It was hard to get these companies, but 120,000 customers. It's like nothing, isn't it?

What I tell folks is, hey, we've been in this business 15 years, 6 million employers in the country, and that's easily those companies have a need for something like what we do. An employer, they have a need for payroll. They probably have a need for what we do. And you can do the math. I want millions of customers and I'm not going to make it unless we pick up the pace. So The opportunity to really expand the market is real, right? There is, and that's why I go back to the distribution system that, that we have, right? So having the ability to go to the accountants and the accountants continue to get better and better at offering this tool to their customers and their prospects, the financial institutions, the direct, the network, the opportunity for us to take those 3.2 million network members and give them something that is a paying product. All of that is, gets stronger and stronger every day. And that's part of the flywheel that we're working on is staying focused on the customer, their needs, and going after that 6 million US employers, 20 million across the globe, and having an ability to continue to simplify their lives, save them time, and let them get back to what they love.

Yeah, you could really, and then not to tie to it, you're a public company, so not to be forward-looking, but it seems to me your true TAM, not even adding Divvy and adding all the other amazing things you're going to add, I think it's 20x what you have today. I don't see why if you have 120,000 And there's 6 million SMBs, 3 million in your network. Why can't you have 2 million customers? Right? Just the cloud is crazy, isn't it? Is there any mathematical reason you can't someday have 2 million?

I, you know, we believe that there are millions of businesses that need our product.

Millions, right?

Yeah. Yeah. And, and it takes time to do that. It takes execution to do that. There's a lot of behind the scenes stuff that has to get done well for us to be in a position to get that. It's part of the ecosystem. It's part of the platform. These are all things. And when we're at the beginning, of that penetration, the opportunity in front of us is definitely something everybody on the team is focused on. We definitely feel that businesses need our solution. They, even when I talk to people that are doing it the, the old way, they will admit that it's pretty bad when you start talking to them, but it's that resistance to change. So our job is just to keep making it easier and easier to change. Sure.

Rene, this was incredible. Thanks for your time again, maybe for the fourth time on this, but not only a super fan, of you as a founder and CEO, but of the product and customer. Put me on the website if you need an extra testimonial. I don't think I could run a small business. I literally think I couldn't run it without Bill. So thanks for all this.

Yeah.

Yeah.

We would