Rolling Up Bill Management: Flint Lane, CEO of BillTrust (Part 3)

Sramana: When you were doing that validation, who were some of the customers you talked to?

Flint Lane: We targeted smaller companies in the beginning. That was a mistake. Yes, the problem existed for them. However, they were not willing to pay for it because it was not that big. If they had 50 invoices a month generated out of QuickBooks and I saved them 10% of the cost, then I was saving them only $8. That’s just not worth it.

After three to four months we realized we needed to go upmarket. We were successful entering a number of larger verticals such as wholesale distribution and manufacturing. The bottled water industry introduced us to [larger] industries.

Sramana: What business model did you come up with? How did it compare to payroll services?

Flint Lane: We are the one throat to choke related to billing. Our customers expect us to handle all their billing problems. We can print and mail across North America, and we have seven facilities strategically located across the U.S. and Canada for that purpose. We can build an online billing site. Most important, we help our clients build strategies to get them to the online platform. They save money because they are not paying postage, and we make good margins on ebills.

Sramana: Do you charge per bill?

Flint Lane: There is a small setup fee, but the majority of the revenue comes from transaction fees. We charge a fixed transaction fee for a paper bill, an electronic bill, or a payment. It is mostly recovering revenue based on a number of transactions.

Sramana: What segmentation did you end up with?

Flint Lane: We are mid-market and up. Our threshold is 1,000 bills a month to one million bills a month. That tends to be companies that have $50 million in revenue or higher. A company like Boeing is probably not a good target because they probably don’t bill for a thousand airplanes a month. McDonald’s is a billion-dollar business, but they are all point of sale. We do well with companies that have a large number of monthly bills and invoices.

Sramana: What strategies did you follow to acquire customers?

Flint Lane: We did some direct sales and some partner sales. We have a direct sales team that is out there trying to sign up clients. We also feed that direct sales force with referral partners. We partner with them to provide incentives to drive business to each other.

This segment is part 3 in the series : Rolling Up Bill Management: Flint Lane, CEO of BillTrust
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