“Small but mighty” is the mantra this week, as small businesses (SMBs) celebrate the entrepreneurship and perseverance (otherwise known as “blood, sweat and tears”) that have brought them this far, as well as looking ahead to what they might achieve next.
National Small Business Week, led by the U.S. Small Business Association (SBA), runs from April 29 through May 5 this year. In a nation where more than half of adults either own or work for a small business, the purpose of this week is to recognize outstanding small business owners and entrepreneurs throughout the U.S. and its territories. Awards are being distributed throughout the week.
But for every business in the limelight, there are just as many — if not more — struggling to get on their feet. That’s why five SMBs took the time to tell PYMNTS what they’ve learned on their journeys in the hopes that others might learn from their successes (as well as their mistakes).
PYMNTS: As a thriving and fast-growing startup, what advice do you have for entrepreneurs who are on the verge of launching their first product or service?
Cascade: Get your “Minimum Viable Product” (MVP) into the hands of your early adopters as quickly as possible and get their feedback. Then, iterate your product quickly and strategically until you find the right combination of features.
At Cascade, we launched the first version of our mobile app without some features that we felt were very important — like Touch ID for logging in. Our cardholders were happy to have the app, and we quickly followed up with an upgrade that offered the faster login option.
Using this methodology, we made our customers happier in the short term and had the pleasure of making them happy again with a continual flow of upgrades.
Tipalti: Focus on the customer experience. Solve a real pain, remove friction or delight them to the point that drives word of mouth. A lot of our new business comes from customers passing the word on about us to others.
Modo: Don’t fall in love with your plan, but do stay (madly) in love with your beliefs.
When we started Modo, we had a consumer-facing app that allowed people to combine their loyalty points, coupons, offers, discounts and credit cards at the point of sale. We soon realized that nobody wanted that app, but the payments technology behind it was unique and valuable.
We pivoted to helping banks, networks, FinTechs and processors become interoperable with each other and new emerging payments systems. The way we connect payment systems together today is [by] using the same basic ideas and technology from our first iteration. The plan fell apart, but what we believed we could (uniquely) do endured.
Kasisto: First, make sure that the product or service is a pain killer — a “must have” — and not a vitamin — a “nice to have.” And, whether your business model is B2B or B2C or something else, always focus on the ultimate end user: the customer.
Second, eat your own dog food. Every employee uses our consumer banking bot. Test, learn and iterate rigorously and try to push the boundaries of what your product can do before you launch.
Finally, rushing a launch can be detrimental. If your product and engineering teams tell you that the product is not yet ready, listen to them.
FitPay: Know where you’re going and stayed focused. When you are doing something new, it’s very easy to get sidetracked by different ideas and alternative implementation paths. Having a clearly defined vision for how you want to get to market will help you distinguish between things that are in- or out-of-scope with your goals.
AvidXchange: I encourage entrepreneurs to start with a basic question: What bus are we on? From there, you need to have constant dialogue and experimentation to make sure it’s the right bus. Be calculated when taking risks and don’t be threatened by hiring people smarter than you.
PYMNTS: What are some of the major takeaways from your first years of existence as a company?
Cascade: Be flexible. Read the book “Who Moved My Cheese” and don’t be like the mouse who refused to confront his new reality when it was staring him in the face. At Cascade, we have had multiple pivots which, at the time, seemed like a huge departure from our core business but in hindsight turned out to be good moves that were critical to turning Cascade into the company we are today.
Tipalti: Spend time listening to customers. That not only includes hearing what they say, but watching what they do, how they do it and how they say what they say. Where is the emotion in their words? What do they emphasize? Are there things they are doing in their workflow that they may not realize is problematic but that you can solve for them to add additional value?
Think carefully about when and where you add headcount. Look for places to apply technologies and other techniques so the heads you add are truly high value and necessary to your organization. Interview every candidate to check culture and fit — it’s important to maintain the highest quality personnel who are in line with your company values and culture.
Modo: Be who you are and structure your company accordingly. Just because everyone else has a certain structure for (fill-in-the-blank) doesn’t mean that’s what you ought to do too. At Modo, ideas were encouraged, thoughts were shared openly and freedom was never hindered or taken for granted. That worked, as we’ve grown to over 30 people with millions in revenues and billions in volume.
Kasisto: We prioritized creating a culture of trust, empowerment and openness. Through my years as an entrepreneur, I have also learned the importance of strong relationships between colleagues and have become heavily involved in the hiring process, because strong talent and culture fit is the No. 1 driver to a successful business, especially in a startup environment.
FitPay: Patience and perseverance pay off. When we started FitPay, our goal was to create a platform that seamlessly extended payments to wearable and IoT devices. That required integrating with the entire payment ecosystem, something only the largest companies in the world — Apple, Google and Samsung — had successfully done at the time.
When our platform went live with Garmin Pay last November, it was incredibly gratifying; we had gone from zero to launching a platform with one of the market’s top device manufacturers.
AvidXchange: First, be open to expanding upon your original idea. Our initial vision focused on automated invoice processes for midmarket companies. As AvidXchange grew, we discovered that our clients were also interested in eliminating paper checks through their accounting process.
Second, be patient. With automation, we had to be patient (and still do) and wait for our customers’ acceptance of technology in general to grow, and then their acceptance of our technology in specific.
PYMNTS: Are there advantages to being a small business when compared to large, well-established corporations?
Cascade: We can act quickly to fulfill client requests. Larger companies often have many layers of management and policies that can get in the way. At Cascade, our size is large enough to achieve great things but still nimble enough to make our clients, and their customers, happy.
Tipalti: When done right, small businesses typically outpace, out-innovate and outgrow their larger competition. That is because decision-making can be made more quickly, oftentimes with sharper focus, and with the true business mission in mind. In contrast, larger companies are often weighed down by internal politics, conflicted goals, hierarchy, bureaucracy and red tape.
Modo: Large corporate partners often ask us “what it will take” to make a decision. Being able to respond in the moment and commit our resources and plans is a huge advantage, which just isn’t possible when you have to take things “up the chain.”
Kasisto: We’re able to innovate much faster than a more bureaucratic organization bogged down by legacy systems and rigid processes. It’s also important to maintain a cohesive, customer-first company culture across our many offices, which we’ve been able to do efficiently as we scale. We’re growing quickly, but at a pace we’re able to sustain.
FitPay: Smaller businesses can be nimbler, reacting to new projects and changes to market conditions more quickly. With fewer layers of internal bureaucracy to work through, they tend to be able to get to decisions faster.
AvidXchange: As a smaller company, your flow of communication is fast and continuous. This type of environment fuels innovative thinking, and ideas are generated quickly. Everyone is aware of what’s going on and [is] vested in what happens. Plus, your team hasn’t thought through the same issues a million times, so you constantly have fresh ideas pumping through the company.
PYMNTS: As you grow and gain traction in your sector, how do you continue to stay agile and adaptive to change?
Cascade: We listen to our clients’ and customers’ requirements and try to go beyond what they expect. We listen to our employees and their ideas and build on their innovations. We pay attention to the industry and try to be ahead of it. That’s why we’ve added expertise in contactless payments so we could support wearables, as well as the ability to convert and load cryptocurrency onto our cards.
Tipalti: The first step is recognizing that it is a challenge and fighting against complacency and inertia. The second is making sure you are hiring the right people. Third is applying technology and other methods that help your company move even faster and let your people thrive doing what they are most passionate doing. Data entry is a waste of talent.
Modo: We encourage everyone to work on the things that they believe are the most important. We don’t always agree about what those are, so a leader has to make a call, but in general we get the benefit of a broadly based team evaluating what the highest priorities for Modo in the market are. We focus on getting hard evidence for what the market is struggling with and where [it needs] our help.
Kasisto: We’ve created a culture of listening and learning. We innovate for the long run by employing the latest technology gains in AI, and for the near term with a disciplined product roadmap process that incorporates 360-degree feedback and insights from our customers (financial institutions) and their customers (consumers engaging with KAI-powered bots and assistants).
FitPay: Staying agile, no matter how big a company is, is really about corporate culture. Hire professionals who embrace and adapt to change; foster a work environment that avoids and removes impediments to progress. This is not something that you do once. Maintaining a truly agile and adaptive company requires continually working to ensure innovation is incubated and grown.
AvidXchange: Our most valued competitive advantage is our people. We hire experts in a variety of fields who ensure we are staying up-to-date on trends and serve as change agents when we need to move in a different direction due to customer needs, trends, competition, etc.
PYMNTS: How do you stay competitive as a small business in a world of large corporations? In other words, what main factor sets you apart?
Cascade: Responsiveness. One of the biggest complaints we hear from our clients and colleagues is that companies in the payments industry are not responsive to their needs. Return a call; reply to an email. Everyone wants their program up in weeks, not months. We have designed our entire infrastructure around this concept.
Tipalti: First, customer success: If customers love what you do for them, they will pull the economy toward you and away from large corporations. Second, differentiation: Can you remove friction, add value, save time and money, help them grow and scale, reduce risk, help them go global, etc. in a better way than the large corporations do it today?
Modo: Big versus small isn’t a real competitive factor for our vision of interoperability. We simply are focused on a different problem than the big, established companies. Modo could handle all of the payments volume for everyone around the world, and the big, entrenched players would still have lower costs and higher revenue.
Which is not to say we don’t compete with anyone — just that at our core, we think the payments industry needs to interoperate so that the best services win. Banks aren’t going away. Networks aren’t going away. FinTechs aren’t going away. Modo is all about connecting the new to the old/existing/proven.
Kasisto: Our conversational AI platform has the most comprehensive deployments across channels, markets and languages in the finance industry. Competitors typically deploy in a single channel, a single market — or even just a small-scale pilot. It speaks to the maturity of our platform, operating as a bank’s AI brain powering conversations across channels and available to millions.
FitPay: You stay competitive by being smarter, faster and better with fewer resources. We’re a young company, but we have a really smart, hardworking team. That helps us apply our industry knowledge and relationships within the ecosystem toward creating cutting-edge payment technology. We stay competitive by anticipating what’s next and getting there first.
AvidXchange: To outwork the competition, I always focus on the same factors; persevere and adapt to customer needs; always learn and ask, “Why not?”; focus relentlessly and spend more time dreaming.