It's spring of 2001, I'm out of a job for the first time since I was a 11, and I decide I'm going to play a lot of golf and finally get good. Within a week I break my thumb and my golf plan isn't looking too good. Golf is no fun by yourself when all your friends are working anyway. I tried to find another hobby but the startup bug is just too tempting and I figured it was time to get back in the game.
Paytrust was all about giving consumers an extremely convenient way to look at and pay all of their bills online. The way we did this was by redirecting your paper bills to one of our processing centers where we would open them and scan them with all sort of nifty hardware and software. You would then get an email saying "You've got Bills" ( I'm thinking it should have been a Barry White kind of voice - we did joke about this once at a meeting at AOL's office - not a very funny joke obviously). Even though we automated this like crazy with envelopeners and OCR software, it was still pretty expensive.
We knew all along that to make the business profitable we would need to convince the billers who mailed us paper bills to send them electronically to us. The pitch was simple. Your customers want them this way, it will save both of us a ton of money, and you'll get paid faster. The pitch worked on the big billers that had spent the $100K+ on ebilling software or had an IT department that had built them one. The small and mid-market billers had no such solution and often barely had more than brochureware for a web site. It was a non-starter for them for technical reasons.
The value was there for the mid-market billers, they just couldn't afford to get in the game because all of the ebill software vendors were chasing the top billers with an expensive software solution.
For those fellow entrepreneurs out there, this was the light bulb moment. When you think you've come up with a solution to a problem that is so blindingly obvious, that it just can't work. One of my VCs from Paytrust once told me "Flint, there's no new ideas. Just new takes on old ideas." That's probably correct 99% of the time. So I looked for business models that had successfully transitioned from a paper world to an electronic world that I could model after. The obvious answer - Payroll.
Payroll used to be about who could print checks the cheapest. Nobody shops for Payroll that way any more. People need compliance with state and federal tax rules, automatic deposit, 401K, workers comp, etc. What they really need is one throat to choke for all things payroll because in the mid-market, they don't have nor do they want to pay staff to figure it out.
That's how we modeled Billtrust. Almost all vendors in the billing space were focused on who could do the best print and mail solution (i.e. printing good looking bills, stuffing them in envelopes, and getting them to your mailbox). EBilling to these vendors was somebody else's problem. And for good reason. Every time a customer went to ebilling, that was one less paper bill for them to get revenue on.
If you believe in EBilling, which after starting two companies in this space probably qualifies me as either a zealot or just completely misguided, then these print only companies wouldn't be able to compete as the market moves to ebilling because mid-market billers will want one throat to check for all things billing. They don't want a print/mail vendor and a ebill vendor and a epayment vendor.
So in September 2001 I saddled up the startup pony (I didn't really just type that, did I?) and started Billtrust.
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