Cracking the Very Small Business Market: PayCycle CEO Jim Heeger (Part 10)
Check other articles in the series...SM: That is good insight to carry to the audience in this particular type of business. I have heard that about the GoToMeeting product as well, that they have no vertical bias at all. They are trying to focus on very small businesses as well, and are finding no vertical alignment whatsoever. Switching topics, you raised four rounds of financing, how much does that total?
JH: I think to date that number is $38M.
SM: Will you need more to get to where you are envisioning?
JH: As it stands today, I don’t think we need additional financing.
SM: You are profitable in terms of your operations?
JH: Yes, and there are still funds available in the bank. Just recently we demonstrated profitability.
SM: You still have a long way to go before you can exit though, right?
JH: The question will be, are there aspects of this we would like to make some significant investments in?. I don’t know what those are yet. It could be a move to get integrated with capital markets, but I don’t know yet. However, it would be a strategic move to ramp up what we are already doing.
SM: Do you think the financial institutions deals are going to accelerate revenue?
JH: Absolutely.
SM: Do you think you can hit the $50 - $60M range in the next year or so?
JH: It won’t go that fast. We are in the $15M range right now; that was for the fiscal year which ended in May. I don’t know if we will be able to double on top of what we have because there is this big base to manage.
SM: If you had someone like American Express and you teamed with them, what could happen?
JH: Even with big financial partners, our belief is, in order to make this a unique experience that is going to enhance their business and bring us a lot of customers, it has to bring something truly unique. It is not just a distribution deal. Something in the relationship with the partner has to be unique. We tend to do a fair amount of integration. In the case of Bank of America, we have gone deep into their small business online banking application. We are at the point where we have done two versions with them, and this is a much deeper level of integration. When you go into their online banking application, you log in once with their credentials and we are just a tab in their small business offering. It looks completely integrated to the user.
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