As part of my series about the “How to Navigate and Succeed in the Modern World of Finance,” I had the pleasure of interviewing Daniel Nadeau, co-owner and principal Payway.
While Principal and Co-owner Daniel R. Nadeau manages all facets of Payway, he is most proud of his continual ability to stay ahead of the payment processing industry by producing the best-possible software enhancements and fixes — all sensitive to customer issues.
That makes a lot of sense since Dan holds a master’s degree in computer science from Northeastern University and originally joined the company in 1991 as a software engineer. When he’s not deep into software development and business planning, he always makes time for the Red Sox when they are playing.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
The company began in 1984 as Edgil Associates and was the result of a partnership between two High Tech innovators. Edgil was a pioneer of the web, starting in the mid-early 90s when we developed a self-service web tool to assist media companies with classified ads.
I (Dan) joined the company in 1991 as a software engineer and David Fabrizio (co-owner) joined in 1997 as customer support manager.
In 2003, the original two founders decided to retire and sold the company to a public company. This is the period we refer to as the “dark days.” Although this term is meant to make people chuckle, it is still somewhat serious. The company experienced a period of instability and was run by people that did not share the same vision of providing software solutions as we did. So in 2011, we purchased it back and we have run it the way we had always wanted it run…with integrity and trust.
In June of 2017, the company was rebranded as Payway Complete, to better communicate our payment processing services.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
We learned during the “dark days” that not everyone will always share the same vision as you. So it is important to surround yourself with people who support the mission and vision of the company.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
Recently I read the book “In Defense of Trouble Makers.” It is important to learn how to manage dissent among your team. People have different opinions and really want to be heard. As a leader, having different tools to manage people is helpful and books like this can be a big help.
Are you working on any exciting new projects now at Payway? How do you think that will help people?
We just signed a partnership with Zoho. They are a single online operating system for running an entire business, and they added our merchant gateway platform into its CRM tool. Businesses that use Zoho CRM will be able to utilize Payway’s payments solution for billing, reporting and invoicing, helping to streamline their operations. The solution also provides a simple and straightforward user interface with minimal learning curve giving businesses the ability to set up and start invoicing and billing right from day one. It also allows users to spend more time interacting with their customers and less time on manually entering invoices and billing information.
We also announced that we would offer our free gateway service for six months to businesses that might need support during the COVID-19 global crisis. It’s tough out there, and we want to help do our part. Subscription companies are seeing tremendous churn in these uncertain times, but payments shouldn’t be part of that uncertainty. We don’t want the cost of processing transactions that businesses need, to add to a growing list of operational concerns.”
So customers can sign up with Payway’s free gateway services and then we will then handle all the gateway transactions free for six months.
We’re also making it easier for our customers to accept digital wallets and expand their payment options.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
Our guiding principal is that we form relationships that are built on trust, integrity, ethics and transparency. We are dealing with reoccurring payment clients, and these relationships are not just transactional, but they are long term, and last for many years. We always want to do what is right for the customer because we know we will have the relationship for many years. We have had some of our clients for nearly three decades and so longevity is in our DNA. We have these long relationships because it really is a true partnership.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
Measurement is key! We make sure there’s a clear objective, and then determine the best course to meet the objective. We use a CRM platform for all aspects of lead generation This permits us to look at all our channels and see where we’re getting the most activity, what’s the conversion rate, time to conversion and so on. We then look at the measurements and pivot if necessary, to ensure we’re allocating the time and spend on the right channels. We have the tools in place to see which channel is driving the most qualified leads. The channels can vary — they can be word of mouth, referrals, paid or organic search, trade shows, our partner network, and so on. One area we have focused on is looking at how our value proposition — expertise in card-not-present transactions and subscription payments, knowledge of recurring payments, exceptional customer service — benefits our existing customer base and expanding it to additional markets that would benefit from our expertise and would gain more operationally from lower costs. Creating, targeting, segmenting and measuring — and learning is how we approach everything.
If a fellow CEO would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
We are big supporters of bootstrapping. Organizations need to start first with what the business plan is about. Is bootstrapping your business possible; what level of investment do you need; what does your cash flow projection look like? All of these questions are critical. You don’t want to invest all of your savings and then realize you have to bartend at night to make a living.
If a businesses does decide to bootstrap their organization, it might require another sources of income, (beyond bartending) and keep in mind that you can always move over to other forms of investment. Business should consider what their end game is going to be. Are you building something that you want to grow; are you building something that you plan to IPO or are you building something to sell? If you consider bringing a VC into your company, you need to consider how that might impact the tonality of your culture and how much time and effort you have in order to conduct a roadshow, or to conduct meetings to raise the capital versus just running the operations of the business.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
Our advice is to get a really good cash flow! Look at how much cash comes in and goes out and then protect yourself for the future or any possible changes due to an economic downturn, a pandemic, changes in technology and innovation or even client contracts.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill? From your experience do you have any general advice about how to boost growth and “restart their engines”?
Take a look at your current customer base, the product you are offering, and the customer base. Start to reassess everything. Has something in the marketplace shifted that prevents your customers from buying from you? Has there been an overall change in the industry? Payway has worked in the newspaper and publishing industry since our inception. In our case, we saw the consolidation in the publishing industry and realized we had to make a change and pivot our strategy. Before you make the change though, ask yourself a few questions. Why are we flat? Is it because our business is serving an economy that is flat? Or perhaps look internally at your own organization instead of just looking outside to the industry. Do you have a complacent workforce? The way to spur the growth is first about communications. How are your current customers making the most of the value you bring?. What about your partners? There could be a lot of opportunities to go through your partners and find out what they are doing to continue to grow. Look at your channel options too. Is there a place to play in that space and could you develop some new relationships and create a channel strategy that would give you more resources and “feet on the street?”
What are the most common finance mistakes you have seen other businesses make?
We have seen a few finance mistakes. Here are a few:
- When you purchase a business, make sure there are real assets
- When you are running a business, don’t overextend yourself. You need a cash flow plan for more than 3–6 months, so don’t go spending money right away on capital, trade shows, fancy offices, etc..
- Do not set unrealistic growth expectations with loans you now have to pay back.
- Do the market research. You don’t want to build something that no one wants.
- Don’t lose sight of your strategy. Make sure to stay true to the core of what you are trying to accomplish.
- Don’t under fund your business or your projects. If you are taking out a loan, the worst thing to do is fall short on money and investment.
- Don’t fail to account for other costs such as healthcare, other overhead and other costs every year.
OK, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
- Operational run rate: the assumption that your rate of cash generation will continue on in the future
- Revenue run rate: your profitability
- Profit margin: how much are you making
- Risk planning: Understand how much ramp you have for risk, crisis, new laws and regulations
- Industry Change: Understand how your industry is changing — especially if you are in an area such as digital payments or digital currency
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
You have to schedule time to celebrate the successes and the losses. It is about pausing to see how far you have come and then adjusting to see how far you need to go. Even the smallest thing can keep you going and grounded. And, if you aren’t grounded you will burn out. Never lose sight on why you started your business in the first place. Remember to also have fun! You still have to enjoy what you are doing.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
We would start a free credit card processing for charities.
How can our readers follow you online?
They can go to our website and read our blog at www.payway.com or they can follow up on linkedin, facebook and twitter