EKMH Innovators Interview Series
A new interview series spotlighting global tech influencers, disruptors, visionaries, and of course, innovators.
In March global commercial payment solutions provider FLEETCOR Technologies, Inc.(NYSE: FLT) acquired Nvoicepay, Inc., a leader in full AP automation for businesses. Oregon-based Nvoicepay continues to deliver automated accounts payable solutions to over 400 business clients, providing a simple UI that allows customers to electronically pay all of their suppliers. The full disbursement capabilities of Nvoicepay, along with FLEETCOR’s existing card processing solutions, enables businesses to pay their entire accounts payable expenses, including both domestic and international payables. With Nvoicepay joining recently acquired Comdata and Cambridge, “FLEETCOR will offer one of the most comprehensive domestic and international AP payments solutions available to businesses,” according to FLEETCOR Chairman and CEO Ron Clarke.
With CEO and Co-Founder Karla Friede at the helm, Nvoicepay has transformed the way enterprises pay their domestic and international suppliers. I reached out to Friede via email to share her insight and expertise on a wide range of issues including Nvoicepay's recent acquisition, electronic invoice payment innovations, advice on building high-performing teams, diversity in the workplace and new tech to keep on our radars.
Our interview follows:
EKMH: Last year you wrote the article, “Why Companies Seeking Diversity Should Start at the Top.” While obvious to many, clarification is always helpful: why should companies seek diversity? In which companies have you seen leadership pushing toward diversity and succeeding?
Karla Friede: Companies should seek diversity because it's good for their bottom line. There is now plenty of research showing that companies that have a more diverse set of employees generate more ideas and deliver better results. Unfortunately, I don’t know many large enterprises that are doing a great job with diversity and inclusion. I do see many early stage companies that are interested in diversity and in changing the way businesses work, and that’s encouraging. I think the only way we’re going to make real progress is when people stop thinking about this as a feel-good initiative and realize that it’s a competitive advantage.
EKMH: You’ve also written, “When you have people who think differently, you get more ideas on the table.” How has this belief specifically benefited you and your own teams?
Karla Friede: There were three founders who started Nvoicepay. Shaun McAravey, our brilliant CTO, had built big systems in the past and has a special talent for solving complex technical problems. SVP & Co-Founder Tana Law is an innovator who came from the credit card world, starting at Discover Card when it was a startup and growing with the company as it scaled globally.
I had worked in technology companies in both finance and marketing roles. The three of us understood and leaned on each other's strengths, and were humble enough to listen to each other’s ideas, debate them, and let the best idea win. That led us to better decisions than we would have made on our own, and set the tone for a culture where good ideas could come from anyone, where it was ok to debate, and where it was ok for people not to agree as long as they were respectful of each other’s point of view. When two of the three of us were in agreement, we would accept that as the decision and move forward. I think that’s been a big part of our success.
One of the biggest challenges I see around diversity and inclusion is that it is uncomfortable for people when there’s debate and people don't agree. When somebody doesn't talk like you, or think like you, you have to work harder to understand their point of view. You have to let go of your desire to argue with them right out of the gate and think about what they’re saying before you respond. Basically, you have to let go of your desire to win, and focus on the real win, which is driving the best result for the customer.
EKMH: In order to create and lead high-performing companies of the future, how do you recommend putting together a diverse workforce?
Karla Friede: I think it's a huge mistake to hire diversity for diversity’s sake. At Nvoicepay we try to hire the best person for the job. Now, that may require you to examine your biases and broaden your definition of what the best person can look like. It may require you to rethink “culture fit,” because in many cases that simply means people who look and think the same as the people already there—so they won’t debate or disagree or take anyone out of their comfort zone.
On tactical level, you can make sure your job descriptions are written so that it's clear that all kinds of people are welcome to apply. We have a wonderful VP of People who is very attuned to how much these words matter.
Look at your interview teams. Are they diverse? These things are very telling, and applicants will often self-select out of companies that don't seem welcoming to them.
I do think diversity begets diversity and makes it easier. But, if you're starting from a culture that is not very diverse and you want to get more ideas around the table, start with how your job descriptions are written, who's on the interview team, and what you communicate verbally and non-verbally about your culture.
EKMH: Why Fintech? Please discuss your career trajectory. How have mentors played a role in your career?
Karla Friede: Today someone might say, I want to start a Fintech company, but Fintech was not a thing in 2008 when we started working on Nvoicepay. I always wanted to start a company but didn’t have a particular industry in mind. It was an opportunity that presented itself at a time when I was open to an opportunity. That said, my background is in technology and in finance, so it was a natural fit.
As we were growing Nvoicepay, I sought out mentors with deep experience in business payments. One in particular, Garen Staglin, who we recruited as chairman of the board, was invaluable for providing industry knowledge, but also for always being supportive and encouraging through the many hiccups you inevitably have as a startup.
EKMH: To prep current job seekers: best interview question ever.
Karla Friede: I don’t have a “best interview question.” A lot of people on the interview team are going to ask the behavioral questions. What I like to do is find out how a candidate talks and how they think about the world. My best hiring advice ever came from Dana Evan, and exceptional CFO, board member and investor. She said if you wouldn't get in a car with a person and drive from San Francisco to L.A. for eight hours, don't hire them. That is fundamentally what I am trying to find out—whether we could go drive eight hours together.
EKMH: How has Nvoicepay shifted gears and grown since launching in 2009? What innovations have you initiated to ensure dynamic payment data management, a superior supplier experience, and a seamless integration with an ERP?
Karla Friede: Ten years is a long time, and any company that has successfully grown and scaled in financial services has probably innovated a bunch of times. Nobody starts a company and has it down pat right out of the gate. Part of the magic is listening to the customer and understanding what changes you can make that will get them to buy.
As I look back, there are a few key “shifts” we had. When we started out, our intention was just to offer a platform for ACH payments. We found out quickly that, one, it’s hard to make money with ACH; and two, about a third of suppliers in the automotive industry, which is where we started, only wanted to receive a card payment. So, in order to have a full solution, we had to offer every payment type. That led to us to develop some payment methods that are unique to our network and offer speed, visibility, and easy reconciliation.
A second source of innovation was around how we communicate with the ERP system. One of the big barriers to electronic payments for businesses has been getting payment data to the institution that would transmit the payment for you—which historically has been your bank. To transmit funds electronically, you have to get your data out of your ERP into a very specific file format bank systems can read.
Early on, we made the same mistake as banks have, asking companies to give us their payments in a certain format. We quickly realized a lot of companies don't have the capability or the resources to do that. So, we built a transformation engine to read payment instructions from any ERP system, in any format that the customer wanted to use. That was a huge breakthrough, because it made it so much easier to get started with Nvoicepay. It allowed us to serve a much bigger market with a product that was much easier to implement and to use, and it really differentiated us from banks.
The third thing that we did early on was decide that we were going to conquer, once and for all, the biggest barrier in B2B payments, which is having to keep track of the suppliers’ payment data. If you want to pay your suppliers electronically, you have to know which ones accept cards or ACH. Then if you want to pay by ACH, you have to collect banking information and keep it secure and up to date, and you have to keep track of whom receives the remittance. Most banks require customers to track that information themselves, but it is an enormous amount of work at scale, and one of the major reasons businesses still write checks.
We had a fundamental belief that accounting teams should not have to do that, and that companies shouldn't be exposed to the risk of managing and securing supplier data. We knew we could use cloud technology, which was new at the time, to hold the data and scale information management. So, when a supplier changes their bank account or remittance information, we make that change to our database once, and the data will be right for every customer in our network.
What that means for us is that as our network grows, our services and our results get better and better. So, it doesn't take very long to shift from paper to electronic payments and our customers never have to take on the risk of managing that data. This is something we’ve invested in steadily over the past decade and now that we're at critical mass and we can do it at scale it is a big advantage for us.
EKMH: How has the platform changed and grown since being acquired by FLEETCOR? Where do you see Nvoicepay in five years?
Karla Friede: As of this writing, it's only been three months since the acquisition, so we're early in this journey, but here's where the journey is going: FLEETCOR is the 14th largest payment company in the world, and one of the largest B2B payments companies in the US. They have size and scale. Together we have one of the largest business payment networks in the world.
EKMH: When and how do you think big banks will finally move toward embracing or acquiring fintechs? How can new technology be better adapted into the fintech and banking industries?
Karla Friede: Big banks are partnering with fintechs now, but some of the largest banks are still trying to build their own solutions.
Banks have built strong client relationships, and I think they can pretty easily succeed selling to small businesses. For example, Bill.com is having success with their relationship with J.P. Morgan serving up a solution online.
It's when you get to selling solutions to larger corporate clients, which have more complex environments--more users, multiple business units, multiple bank accounts and a lot of regulatory and business requirements—that I think banks are going to struggle. I have a hard time seeing that kind of technology sold through a banking channel. It’s a very different type of sale.
EKMH: Which interesting new technologies or services should people follow?
Karla Friede: I still think that blockchain has a great promise for international payments, but it’s a lot further out than I initially imagined. It makes a ton of sense for that application, but is a very big change to the status quo.
I also like consumer banking applications that give you visibility into different aspects of your finances on a mobile device. As the mom of two members of Gen Z, I have a hard time imagining them ever going into a bank, but I can easily see them using their phones to understand their balances, see where they're spending and how they can save.
EKMH: Last but not least, please name a few of your all-time favorite reads. Which books have you save to read this summer? What podcasts do you listen to?
Karla Friede: Some of my all time favorites are The Book Thief by Marcus Zusak, The Brothers K by David James Duncan and Lamb, by Christopher Moore. As for summer reading, I’ve got Bridge of Clay by Marcus Zusak next up. As for podcasts, I’ve gotten plenty of recommendations, but I haven’t delved into that medium yet.