As part of my series about the “How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies,” I had the pleasure of interviewing Mark Lenhard, CEO of Invoice2go.
Mark has a passion for empowering entrepreneurs and small businesses. Most recently, he spun Magento out of eBay, ultimately selling the business to Adobe. Previously, Mark held executive roles at JPMorgan Chase and PayPal and launched several entrepreneurial ventures. He serves as a board member, advisor and seed investor to a number of growth companies in commerce and financial services. Mark holds a BA in Economics from Yale University and an MBA from Stanford University Graduate School of Business.
Thank you so much for joining us in this interview series. 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?
Certainly. Well, I’m Mark Lenhard, CEO of Invoice2go. I started with the company in late-April of this year; yes, at the beginning of the pandemic. Let’s just say it’s been a wild year! I have a tech and startup background — have built my career at companies like Adobe and PayPal — and am based out of Silicon Valley. I’m a New Yorker at heart, though, and have some fond memories from the East Coast.
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?
I can remember early in my career as a management consultant that I worked so hard on a particular project I got multiple days without sleep. It ended with me sleeping through a couple of alarms and a hotel wake-up call on the day of a big project presentation with the client. Eventually someone from hotel security came into my room and woke me up. Key lesson: Pace yourself and set realistic expectations with the team.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I’ve been fortunate to have a number of folks help me along my career. In college, I worked part-time for a local firm that advised non-profit and government agencies. They did incredible work for local organizations that were really helping the local community. I worked for the managing partner who would put in countless hours, his heart and soul, long past what he could bill for because he believed in the work the organizations he supported were doing. Many jobs provide income, but the ones that pay the most provide purpose.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
Since I’m a relative newcomer to Invoice2go, I can say that we’ve only grown in our purpose — to amplify the independent spirit of small businesses — as the years have gone by.
Our goal is to be the technology platform that independent entrepreneurs choose first for user-friendly business tools — we seek to enable them to launch and grow their passion, no matter if it’s flooring or custom mural work. We are a champion for independent small businesses, and to be a leader of a company like this has been a joy and a privilege; I grew up the son of an independent contractor, and memories come back to me often while I work with those who need our tools.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you tell our readers a bit about what your business does? How do you help people?
We know that being a small business owner can be incredibly daunting. That’s why we’re here: to make starting out a little less fraught and a little less intimidating (both practically and emotionally). Our main model works to provide tools to small businesses and independent contractors, tools typically only within reach of much larger, established organizations. We help provide the critical scaffolding that businesses need to survive and become successful, like help for invoicing, expense tracking and reporting.
Which technological innovation has encroached or disrupted your industry? Can you explain why this has been disruptive?
E-commerce has fundamentally changed consumer behavior and preferences, and it’s impacting how consumers expect all businesses to behave. Regardless of the service or context, customers want to be able to discover, communicate with and pay for products and services digitally for everything they purchase, physical goods or services, in-person or remote.
These small businesses, including independent contractors and sole proprietors, are therefore expected to have the capabilities to offer such experiences or risk losing business to those that do, or more typically, larger enterprises that have the resources to provide them. Additionally, services-based marketplaces and/or social networks (much like Amazon and eBay for e-commerce) have begun to gain traction particularly within certain verticals, e.g., Upwork, Thumbtack, Nextdoor. Not being a part of these marketplaces can have a considerable impact on a businesses’ ability to grow.
The impact on small businesses is heavy. It’s not easy for them! While there are lots of payment tools in the marketplace, there’s nothing yet that’s simple and accessible for the smallest of businesses, who we focus on.
What did you do to pivot as a result of this disruption?
We are focused on two fundamental priorities to help our customers grow: (1) acquire and close jobs online and (2) deliver seamless digital payment experiences to their customers.
Regarding our first priority, we’ve been helping customers negotiate jobs digitally for years. We recently launched the ability to instantly create a website and collect ratings and reviews after each job that can help drive additional work. In 2021, we’ve got an impressive roadmap to help our customers drive new leads through marketplace integrations and marketing features to get more work out of their existing customers and leads.
And regarding the second, we’ve launched the first version of our digital payments, including cards and bank transfers, a couple of years ago. We also added integrations with PayPal. In 2021, we’re going even further and making this experience far more accessible to small businesses by making the cost of accepting payments even lower, and the speed of transactions even faster. All of this should help small businesses better manage their cash flow!
Was there a specific “Aha moment” that gave you the idea to start this new path? If yes, we’d love to hear the story.
I don’t think there was one aha moment. At Invoice2go, I’ve spoken to so many of our customers over the past eight months, but I have worked with small businesses for the past 20 years. In particular, our team is obsessed with customers and the customer experience. Whether it’s our support, product, or our research teams — we’re constantly listening to what customers are struggling with or pining for and that bottoms up customer feedback loop is what led us down this path.
So, how are things going with this new direction?
It’s been great. Our growth has been amazing, and continues to accelerate. 85% more customers signed up for Invoice2go this September than a year ago. These businesses are increasingly diverse — spanning multiple industries, age groups, education levels. We’ve also seen double digit growth in our digital payment volume every year since launching our first version. We do over $25 billion in invoicing volume per year and see thousands of small businesses getting paid every week through this method and tens of thousands of transactions every week.
Can you share the most interesting story that happened to you since you started this pivot?
I think the most unexpected thing we’ve seen is the variety of customers using digital payments and their use cases. There’s one small business in the international bespoke luxury retail goods industry using our platform for high five-figure orders consistently. Even with so many e-commerce tools out there, we found this use case to be quite special and unexpected. It speaks volumes for the strength of our product.
What would you say is the most critical role of a leader during a disruptive period?
The role of a leader in a disruptive period is to remain steady and stay close to the team, constantly communicating the change in direction and being open about changes and pitfalls that may lie ahead. Anytime there’s a pivot in direction, there’s going to be an inevitable whiplash for employees, from junior staff to management. So any kind of pivot requires a steadfast nature — something you may have to repeat to yourself, even — during its implementation.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
It is absolutely imperative that morale stays high. Americans have always been entrepreneurial, and always will be — it’s in our DNA. Starting a business in the best of times isn’t easy, and right now, building those essential foundations for a small business is really hard.
So when it comes to boosting morale, it’s important to remember that times have been tough in the past, but we will get through this together. It’s taking small moments out of every day to check in on your co-workers, and do your best to help keep everyone afloat. And make sure to celebrate the wins…no matter how big or small!
Here are a couple of more tactical ways I like to keep people engaged:
- Phone calls are the new face-to-face. I’m all for Zoom, but sometimes, it’s more personal to do some calls on the phone, especially unscheduled ones. It helps to bring in the serendipity that was found in office environments and is largely missing from our daily schedules.
- Snail mail never gets old. Send cards and gifts. People are striving for any physical connection and this is a good way to establish that connection.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Purpose, purpose, purpose. Businesses that have a strong purpose and center everything around it will find it easier to get through ups and downs. It’s not just about how much revenue you’re making or how to cut costs. It’s about the purpose for your existence and does it feel inspiring or motivating during good and bad times alike.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make when faced with a disruptive technology? What should one keep in mind to avoid that?
- Ignoring the change and assuming it will only impact a small sub-segment of your customer base, or only the least profitable customers.
- Responding too slowly or assuming that the existing infrastructure/organization will react appropriately; said another way, not being able to identify when and how they need to organize a small and autonomous group to tackle new/disruptive technology outside of the traditional product development processes.
- Not leveraging the change as an opportunity to drive growth; the new technology may only apply to a small set of existing customers today, but could open up a bigger market for the company to capitalize on over the longer term.
Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to pivot and stay relevant in the face of disruptive technologies? Please share a story or an example for each.
- Never get comfortable. Technology, disruption, black swan events… aren’t in fact Black Swan events at all. They are part of doing business. Get used to them. Build your entire organization including your culture around the fact that change is inevitable. Example: 2020.
- Embrace change & leverage any opportunities it brings. Change is inevitable so don’t fear but rather embrace it. Marketplaces (and other “competitors”) exist in our space. Instead of seeing them as “the competition,” we’re embracing them and looking for ways to jointly add value to our mutual customers, creating the win-win.
- Engage the team in the journey from identifying the disruption to executing the response. At Invoice2go, I am very transparent with the entire organization, holding all-hands meetings every week. As we built our corporate and product strategies, and continue to iterate on them, the key leaders are responsible for leading the development of those plans and the broader team is along for the ride along the way. No surprises and all input is valued and considered.
- Don’t wait or overthink the response and solution. Get something in market quickly and test and iterate. We recently had our ratings and reviews product in market as an alpha less than two months from initial identification of the problem to launch. We’ve since iterated on it several times (and added some features) and went GA to all our customers earlier this month.
- Never give up. You won’t always get it right… in fact usually you don’t get it right the first time so it’s important to learn from your mistakes or failures quickly and keep trying!
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Too many to quote here, but two of my favorites are:
- “It’s not Whether you get knocked down, it’s whether you get back up.” — Vince Lombardi
- “In the end, we only regret the chances we didn’t take.” — Unknown
How can our readers further follow your work?