Rolling Up Bill Management: Flint Lane, CEO of BillTrust (Part 2)

Sramana: When you started PayTrust, the Internet was not as pervasive and consumers were not as mature as they are today.

Flint Lane: That is absolutely true. There was not as widespread acceptance of financial services online. It was 1998, so the Internet was out there. There was a lot of noise about it, but people were not banking and paying online.

Sramana: How long did PayTrust go?

Flint Lane: I was there for three years. After I left it was bought, and is now owned by Intuit.

Sramana: How big did that business become?

Flint Lane: We raised $75 million in venture capital. We had 500 employees and grew to about $10 million in revenue.

Sramana: That brings us to 2001. What came next?

Flint Lane: I left PayTrust. We had filed for an IPO, but the world changed. We were burning through a lot of cash, so I raised a final round for the company. The board was tired of me and I was tired of them. I left to think about my next idea, which is where BillTrust came from.

Sramana: In 2001 the fundraising perspective had changed, as had your perspective. You had a lot of lessons learned. What was your analysis of the market dynamics?

Flint Lane: There was little doubt in my mind that the world was moving toward electronic billing. We will not be mailing out paper bills for people to pay with a paper check over traditional mail in 50 years. The world is changing, and the post office is becoming more expensive. There were a bunch of lessons learned.

First, don’t figure out your business model via the process of raising venture capital. Figure out your business model first and then raise venture capital if you can pour fuel on the fire.

Sramana: Today’s world is very different. You can’t get anywhere without having your business model figured out.

Flint Lane: I was certainly not alone then, but it didn’t make me feel any better when the business did not work out.

Sramana: Talk about the process you followed in coming up with the idea for BillTrust. How did you validate the business model?

Flint Lane: In my past in the software industry, I was with a company that had a wonderful solution that was looking for a problem. I swore to myself that I did not want to do business that way. I wanted to find problems that people wanted to see solved. BillTrust was a similar situation. We wanted to help large organizations make the transition to electronic billing, and at the time they were not able to do it on their own. We did a number of things to assess the problem. We explored how companies would pay for the service. We talked to a bunch of different people.

We came to the conclusion that we were not creating a new business model, we were simply adapting a business model from another industry. It was very similar to the payroll business model. Those companies used to exist to print checks 30 years ago. Nobody buys check printing, but all the services that go around payroll. Our big bet was that billing was going to be the same. Companies would need someone to print bills, email bills, fax bills, build an online payment site, and accept payments online. It was growing to be a complex problem that screamed for an outsourced solution.

This segment is part 2 in the series : Rolling Up Bill Management: Flint Lane, CEO of BillTrust
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