Sramana: What experiments did you run during your early years of starting the company?
Vince Thomas: I look at the world in terms of problems. As I walk through the world every day, my mind thinks of the world in terms of problems. When I saw the problem of managing shared bills, my first experiment was to test the idea of helping multiple people manage their money. Once I did that, I saw a bigger problem, which is how businesses of all types, for-profit and nonprofit, manage their money and data.
In the financial world, every company has a bank account structure of some kind and it must account for that bank activity in some sort of accounting system. Ten years ago I did not believe that it made any sense for those two things, management of money and data, to happen separately because that would require other people or systems to sit in the middle and keep things in order. That is a waste of time and energy.
About three years into Billhighway, we merged how incoming and outgoing cash was used, and we mapped it to an accounting platform. An organization that uses Billhighway does not need to know how to bridge the bank account structure with the accounting system. It all happens in one system. We can automate and use rules engines to do a lot of the work that companies today do with people, systems or programs.
Sramana: From a competitive landscape point of view, this is a precarious problem to try and solve. There are large systems like PeopleSoft. Where did you establish yourself in this ecosystem?
Vince Thomas: I saw that this problem was very visible in large non-profit organizations. If they have $10 million of revenue or more, with many members and donors, then they are typically going to have issues managing inbound and outbound cash flow while correlating it to data.
I chose this space because nonprofits are typically behind the technology curve a bit; they always try to do things with fewer resources, and because they have to do more with less, there are a lot of people working roles they are not trained for. That means you have pretty sophisticated finance jobs that are being run by people who do not necessarily have the experience to run them.
Over the past 10 years we have focused on these types of organizations. We have found tons of success mapping our solution to how their group functions. We map their payment processing, offline and online, through Billhighway, into their other systems.
Sramana: How many of these charities are there? What is the TAM for this segment?
Vince Thomas: The non-profit world is a super scattered world. The whole world is a $1.4 trillion revenue area. Across the U.S. there are probably 15,000 to 20,000 non-profits which are in the space we target. That is probably 4% to 5% of the total number of nonprofits which are in our sweet spot.