After graduating from Amherst College, Brad Stroh went to work for a venture capital firm. Then he went to work for another one, and then another. Through his experiences as an investor, Stroh saw firsthand the struggles of financial startups and entrepreneurial companies. By the time Stroh and fellow Stanford MBA Andrew Housser co-founded Bills.com in 2005, he well understood the challenges and risks associated with building a new business from the ground up.
In 2002, Stroh and Housser had successfully co-founded Freedom Financial Network as a platform for direct-to-consumer financial services. In growing Freedom Financial, the partners realized that what was really missing in the finance industry was consumer financial education. The idea evolved into a business plan for Bills.com LLC, an online portal of free resources and tools to help consumers with money management.
With Stroh as the company’s CEO, and Housser as the company’s only other employee, the two combined their entrepreneurial experiences to launch Bills.com using a scrappy, customer-focused business model.
“Challenge No. 1 was bootstrapping a business and figuring out a way to create value every single day for your clients,” Stroh says. “The reality is, we ended up picking a really successful industry, and we executed really well on our plan; our business became extremely successful. That led to a second major challenge.”
In five years, Stroh and Housser have grown their two-person company into a full-blown $106 million enterprise with more than 600 employees. Though they overcame the initial challenges of being under-resourced, undercapitalized and bootstrapped, adjusting a business model to account for fast-paced success and subsequent growth presents obstacles of its own.
“The things that made us great, which were that commitment to executing, being scrappy, really valuing your clients, having a very unique culture and appreciation of all of your employees — how do you maintain entrepreneurial vision when you are hundreds and hundreds of employees and you’re not 10?” Stroh says.
You do it by making sure every employee contributes to a company culture of entrepreneurism, innovation and competitiveness. Stroh now says his most important job is hiring and building a culture of entrepreneurism.
Find the right people
At first, Bills.com had to operate with a very restricted budget, resources and staff. When growing a company from scratch, you hire entrepreneurial people to get it off the ground and drive growth. But after your business is established, your people have to maintain that momentum.
As the former captain of his college lacrosse team, Stroh builds his team at Bills.com by hiring people with the same athletic spirit of teamwork and competitiveness to drive continuous improvement.
“They want to compete,” he says. “They don’t want to work at IBM. Not that there’s anything wrong with that, but they want to be a part of something that’s growing and challenges them.”
That means Stroh looks for people who don’t just care about making money but who really care about helping people solve problems. He’s found that employee referrals are the best way to find people who can thrive in the Bills.com culture.
“The vast majority of our new hires are referred by existing employees,” Stroh says. “That’s always the best place for us to get new, great hires, because it’s someone who embraces our culture, values it, and they’ve worked with other people where they say, ‘This individual would be a great fit here.’”
Get the buy in
Continuing to hire entrepreneurial-minded employees ensures Bills.com has the right team in place to grow successfully. But hiring is just one part of building an entrepreneurial culture. When building any team, you have to let your team members know what they are signing up for.
“Hiring is No. 1,” Stroh says. “No. 2 is training, getting people to embrace your culture from week one. The people that are joining you — they haven’t been along for the several-year ride that we have.
“You get people to self-select in or self-select out of your culture, and you want that to be a very conscious decision. You don’t want hiring to be mindless on either side, the new employee side or the company side.”
Today, Stroh visits the last session of every training class to share stories and history about the company and to talk to new employees about his vision for the future of Bills.com and their role in contributing to its success.
“The last message that I’ll leave with them is, ‘You guys in this room are hires 599 and 600 and 601. I’m standing in front of you as employee No. 1. … You guys, if you’re number 600 and 601, if you’re not smarter than us, better than us, care more than us, and don’t maintain and perpetuate that culture of entrepreneurism, which is looking for things to improve, we’re not getting better every day,’” Stroh says.
To get employees to buy in to a vision from the get-go, you have to help them really understand their role in its execution. You have to reinforce the importance of employees being entrepreneurial in their own right, whether it’s looking for things to make better or places where they can break things and fix them.
“The worst thing in a business is to have a bunch of employees with uncertainty about their role, the future of the company or about what they are supposed to be doing,” Stroh says. “It’s OK for the CEO to have ambiguity, but you have to be communicating certainty about where you are going.”
Align your goals
As your company’s work force grows, some of the intimacy that comes with having a tight-knit team of employees can get lost. In order to keep employees engaged in your vision, you have to find new ways to show them that you really care about them as individuals.
In the first months of Bills.com, Stroh was having pizza on the floor weekly with his handful of employees, using the time to talk about process changes, company updates, growth challenges or even just to chat about life and family. He was also closely connected to every one of the company’s clients and potential customers.
“As a bootstrap business, you don’t have layers and layers of management between you and the client,” Stroh says. “You, as the founder of the organization, are literally on the phone with your clients, on the phone with consumers, figuring out what do they value and how you can create a profitable business around that.”
Now, Bills.com has three corporate offices and 600 employees, and Stroh has had to find new ways to maintain effective communication and stay in touch with employee needs. Stroh still calls all his employees on their birthdays to thank them personally for their contributions and chat about their personal lives and individual challenges. He also continues to be very involved in talking to customers, finding out about their pain points, and seeking out opportunities to stay engaged in all levels of the business.
“Being a relatively young CEO, I’m really hands-on,” Stroh says. “I love to this day talking to clients. I love being in an interview and interviewing new employees. I love standing up in front of our employees and sharing with them our vision and values.”
Instead of pizza parties on the floor, Stroh now visits all three corporate offices monthly to have brown-bag lunches with anywhere from 25 to 250 employees, During these lunches, he talks about the company’s goals and challenges, answers employee questions and talks to his people about what matters to them.
The company also holds regular focus groups with employees, giving them opportunities to share insights and experiences. Stroh frequently sits in on the focus groups to moderate or prepares discussion topics to get feedback on specific issues, such as industry trends or customer needs.
“It goes back to the roots of our business,” he says. “That’s what connects me with the soul of our business, talking to the front-end clients, talking to our employees who are most directly on the front line.”
Even with brown-bag lunches and focus groups, it can be tough to keep employees motivated to execute your vision when the big picture keeps getting bigger. As Bills.com has expanded across offices, Stroh has made adjustments to better align his employees companywide on strategy and goals.
In 2007, he introduced “The Founder’s Corner,” an employee intranet similar to an internal Twitter feed. Stroh posts updates on The Founder’s Corner constantly, communicating information about the company’s ongoing challenges, news, and short- and long-term successes.
“I’m a pretty vocal person, and the person right outside my door knows everything that I’m working on, and I know everything that they are working on, but what about the person who is in our Phoenix office and I see once a month?” Stroh says. “Maybe they don’t have the opportunity to come to a brown-bag lunch. The intranet was just a way to pump out all of key strategic initiatives that we’re working on, every single week.”
To make sure his managers also continually re-evaluate their individual goals and growth strategies, Stroh asks his vice presidents and their directors to e-mail their top three strategic objectives at the beginning of every week, and e-mail progress on those goals at the week’s end.
By having management constantly review the challenges facing the company, Stroh ensures that urgent day-to-day issues don’t interfere with achieving Bills.com’s long-term vision. It also keeps them thinking about new ways to add value continuously as individual entrepreneurs.
“When you are growing as quickly as we are, there’s one universal truth, which is everything is constantly changing,” Stroh says. “You are constantly reinventing your CRM systems, your phone systems, your AP process and your accounting systems. It’s a constant thing. You have to get comfortable dealing with change and have a culture that embraces change.”
Today, Bills.com ranks as one of the fastest-growing privately held companies in Northern California. It has appeared on Entrepreneur magazine’s 2008 Hot 100 and has ranked on Inc. 500’s list of fastest-growing companies for the last three years. Promoting a culture of entrepreneurism long-term means you are always seeking out new opportunities to better serve customers. Stroh never stops looking for new ways to add value for customers. He asks his employees to do the same.
“We are constantly evaluating new ideas,” Stroh says. “It’s part of our core values, to constantly innovate. That’s both in new products, new offerings and new opportunities in what we do.
“In a perfect world for us, we’re taking hundreds or even thousands of small risks every day, but we try to limit the number of ‘bet-the-farm’ risks to a very small set.”
With lots of calculated risk taking, the company encourages employees to be competitive and innovative, without committing too many resources to an idea that may fall flat.
“Part of the reason we like to test small and let Darwinism work its forces is that with limited resources committed, you don’t have to keep sprinting if you are running in the wrong direction. You can change course quickly.”
With new product committees and new business opportunity meetings, Stroh gives employees many outlets to be creative, take risks and test new ideas. However, the chief way he gets employees to drive Bills.com’s entrepreneurial vision is still by showing them the value of that vision for the company and its clients.
“When people say I found something that I think we can do better, you don’t blow it off,” Stroh says. “You fix it immediately, and you send a message to the whole company of whose idea was it and what value that created for the business. Then you perpetuate that culture of entrepreneurism.
“We celebrate the success of our consumer clients with testimonials we post all over the office. Consumer successes —when we change their lives we make that very visible in our company so it never turns into a business that people aren’t tangibly connected with the consumers that we are helping.”
HOW TO REACH: Bills.com LLC, www.bills.com
Photo by Anthony Garcia
The Stroh File
Co-founder and CEO
Education: Bachelor’s degree from Amherst College; MBA from Stanford University
What was your first job?
I was a caddy. Until you turned 16 in my town, you couldn’t get a paycheck. So I caddied. Then, I had my own lawn mower business. I also scooped ice cream at the age of 16.
What sports did you play growing up?
I played everything, but the sport I excelled at was lacrosse. I went to Amherst College in Massachusetts and I was the captain of my lacrosse team. I would say I learned as much about leading a company as captain of lacrosse team as I did in two years of business school at Stanford. I also played basketball, football and soccer. In high school, I played three sports.
What do you do to regroup on a tough day?
I like to write creatively. I actually wrote a novel called ‘The Dharma King’… about the search for the Panchen Lama, a Tibetan Lama. For me, that’s a great creative outlet, which is very different than my day job. I like to work out. When you push yourself athletically, a lot of times you have these cathartic moments when your stress just sort of breaks, and you get clarity in a decision. And I really love going for walks with my kids. We kind of live out in the woods. I try to do it nightly.