Before I start, for newcomers who don’t know me. I’m focused on Narrative - not tech, not numbers. I place a high value on simplicity, clarity, authenticity. This post will detail why I was, and remain, convinced Bill is a winner. After the run-up it is now my highest allocation at 18%. From a Narrative Investing standpoint it has as strong a foundation as any stock we follow. While some of this may seem absurdly simple, I insist these simple things are grossly undervalued.
The Name, (Juliet was Wrong)
The company’s name is Bill dot com. They help companies deal with paying and collecting, wait for it … bills! I love the simple, unaffected name. It’s old school. It’s not trite, silly, trying too hard. If they were called Byllii, I would projectile vomit. This matters because it speaks authenticity and a founder comfortable in his own skin.
Compare Bill to New Relic, an acronym for founder, Lew Cyrne. Or Coupa, a non-word paired with a splattering logo more suited to kid’s yogurt or adult entertainment. Coupa’s been dead money for two years. New Relic for three. The weak name in itself is not the problem. But it’s a symptom of people who don’t have marketing, sales in their DNA.
I have worked in marketing and sales and done cold calling. It’s very tough work. Put yourself in a salesperson’s shoes. Cold call someone and say, “I’m Dan from Bill.Com” vs. “I’m Dan from New Relic.” Or Coupa. The natural response to cold calls without immediate value is irritation. New Relic? Coupa? Why are you bothering me? The salesman from Bill instantly zeroes in on a pain point. This matters. Like the metaphor of the arrow. If it’s slightly off, it goes further off-course as it flies forward. Studies show people make decisions about people, brands in seconds - and don’t change their mind. (See Malcolm Gladwell’s Blink) Again - CrowdStrike, Cloudflare, Zoom, Netflix, Shopify, Salesforce - all nailed it.
Juliet Capulet famously said, “A rose by any other name would still smell as sweet” in declaring her love for Romeo Montague, a family at war with the Capulets. This is just not true. With Valentine’s Day coming up hand your true love a bouquet of red flowers and proclaim, “A bush of Reeking Diarrhea for you my angel” and see if the response matches “roses.”
Honestly not making these up. Competitors include Tipalti, DocuWare, Plate IQ and the insult to intelligent thought, Plooto.
The mission is crystal clear. They help sm/med sized businesses spend less time paying bills. This frees up time to do more productive, enjoyable things.
That’s perfect. And mission critical. No entrepreneur likes being mired in paperwork, begging for money, stressing about paying their bills. Making it more efficient to bring in money and manage own payments is invaluable. And brings massive ROI.
RMTZP, one of our board’s truly great contributors, shared this interview with me. It’s really something.
Personal Growth Needs To Be Every Cloud Software CEO’s Top Priority, Says Bill.com’s Rene Lacerte.
Don’t be fooled by the flowery headline. All CEOs spout the same cliches about culture, empowering people and blah blah blah. But still, some actually mean it. And do it.
Lecerte comes from a long line of entrepreneurs. He expresses a convincing affection for his family, and talks about his warm memories of their nightly dinners. Interestingly, this is something you see in interviews with Upstart’s David Girouard. Something deeply meaningful and positive happens inside a young person who is truly loved. They gain comfort in their own skin, feel inherently valuable, have nothing to prove. He says,
“Growing up, my parents never hesitated to talk about their days at the family business. I got to learn about management. The huge challenge that every business has is how do you manage and grow the people and the culture, and how do you hire effectively and manage the teams to get it done what needs to get done. I got to learn about customers and selling. I got to see passion, and some of the most exciting times at the dinner table was when Dad was coming up with a new product offering.”
That’s nice, touching, etc. But get a load of this.
In the late seventies, he came up with remote payroll. Today, we would call that internet payroll. In the late seventies, the first thing he did was he got payroll data entered on cassette tapes, right? I remember him coming up with that and later getting suited up to go tour the Intel chip factory in Santa Clara County. I took that as like, “Okay, I want to do something that I am passionate about. I want to feel really excited about solving the problems in the world that I know or saw.”
His father, whom he loved and revered and spent weekends working with - was revolutionizing the same space in the 1970s. Holy moly.
My three favorite words in evaluating leaders: Intelligence. Authenticity. Alignment. Here’s Lecerte’s bio.
- 20 years experience in finance, software, and payments industry.
- Founded PayCycle, “first and largest online payroll solution”. Acquired by Intuit in 2009, where he stayed five years.
- Seven years in a row named “100 most influential people” by Accounting Today.
- Stanford grad with M.S. in industrial engineering and a B.A. in quantitative economics
So, his education is world-class. And he fits the pattern of other great CEOs like Jeff Green and Reed Hastings, who both sold successful businesses, prior to building monsters.
And in the interview he discusses having worked for a legend, who was the subject of a book, “The Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campbell.”
Campbell was a Columbia football coach credited with mentoring Steve Jobs. Tim Cook says he joined Apple’s board when company on brink of collapse, and “Not only helped Apple survive, but he’s lead us to a level of success that was simply unimaginable back in 1997.”
Vision and Focus
I won’t go into details - others have, but clearly Invoice2go and Divvy, their two recent acquisitions are entirely on Story. And make perfect sense.
From the most recent Conference Call:
Bill.com Holdings, Inc. (BILL) CEO Rene Lacerte on Q2 2022 Results - Earnings Call Transcript
If you read his brief opening statement it is excellent. He speaks quickly, makes key points and there’s no fluff, drama, nonsense.
“We are well on our way to becoming a profitable, multibillion dollar revenue company, delivering the all-in-one platform for small and midsized business financial operations. Achieving this goal requires us to continue to enhance our platform while also expanding the breadth and depth of our go-to-market ecosystem.”
Then he says he’s named the Divvy CEO their new Chief Revenue Officer, adding a brief “don’t let the door hit you on the way out” to the former guy who’s leaving the company.