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Banking on KC – John Thomson of PayIt

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Kelly Scanlon:

Welcome to Banking on KC. I'm your host Kelly Scanlon. Thank you for joining us. With us on this episode is John Thompson, the CEO of PayIt, which is a digital payment platform for governments that he founded in 2013. Welcome to the show, John.

John Thomson:

Hi Kelly. Thanks for having me.

Kelly Scanlon:

Big congratulations in order, I saw the announcement last week. You're an Ernst and Young 2020 winner for the Heartland region. Congratulations on that.

John Thomson:

Thank you. Thank you. I appreciate it. It's one of the things that's always a bit exciting, but uncomfortable is to be singled out as an award winner, an entrepreneur of the year, when it's really just a reflection of how good the team is and how great our clients are and all of that work. So I'm always thinking about I'm accepting on behalf of everybody that works at and with, and invested in and believes in PayIt. But exciting, so thank you.

Kelly Scanlon:

So excited to see local entrepreneurs get that kind of honor whenever it's due and PayIt has certainly been built from the ground up. Let's talk about that. It's a digital payment platform, but it's so much more too, and it's also focused, as I said on the government sector. Why did you decide to specialize in that sector? A lot of times government gets this rap that it's slow to adapt to new technology. So what made you think that you could be different and that you could penetrate that?

John Thomson:

First of all, absolutely, we are a digital government and payments platform. So you're right that it is so much more than payments. It's all that software, the experience, the citizen experience to really simplify government and make government more accessible, more transparent, more connected, and just simplify it the way the rest of our lives are. Banking's a great example. So we wanted to bring that to government and really born out of a sense of purpose and mission. I was just trying to renew the registration on one of my vehicles and I was trying to do it online and I couldn't. It couldn't find me, and I found myself sitting at the DMV and I just thought, of course, this should be different. It should be smarter, more modern, more convenient, more connected, and just easier to do business with government, at city, county and state government.

John Thomson:

And then, frankly, as I got into it and started working with forward-looking, tech-savvy, thoughtful government clients, they just really didn't have good partners to choose from. Old technology and old technology partners and they were always being asked to write big checks to fund R&D and, and we're believers in software as a service or the cloud where we can kind of rebalance the risk sharing. They're experts in government and government service delivery and we're expert in digital transformation and platforms, and bringing those things together turns out to be a pretty powerful combination that makes government more digital. There are a lot of benefits and reasons to do that.

Kelly Scanlon:

Talk to us about some of the different things that increase visit engagement. What are some of the different features that both the government and citizens can tap into using PayIt?

John Thomson:

Absolutely. Well, it starts with things like a wallet and a profile so that the platform is smart and, of course, secure. It's modern. So we help governments ratchet up security in a lot of different ways because that matters to everybody and certainly to us. As a part of that then, we can make these interactions more personal and more convenient. And so now I can carry a digital copy of my vehicle registration instead of a paper copy. And so I can carry it, not unlike I carry a mobile boarding pass on my Southwest app or whatever it might be. But I can just sort of organize and manage all of my interactions with government and forget about them. And the platform will just send you an alert. "Hey, Kelly, it's 30 days to your tags are due. Is this still your Prius?" And you can just say yes, card on file done and never go to the DMV again.

John Thomson:

Then we do that across lots of different use cases, always thinking about how do we just continue to drive more value to constituents, also creates value for the government. And then if we do all that, then we think at the end of that will be some value for us in long-term relationships. And then we do a lot of other things like we launched a voter registration capability, free of charge, out of our platform that we've turned on for, for instance the state of North Carolina, first time ever. And we think those are just part of being a great partner and a good corporate citizen and the right thing to do, even though we didn't make any money from it and didn't charge anything from it. It's a sort of a function of building a good platform. It affords you some opportunities to do some things because they're the right things to do.

Kelly Scanlon:

And you're also in scale-up mode. Earlier this year, you launched a Canadian headquarters in Toronto and that's incredible. You've seen 300% revenue growth. You've got over a hundred employees now, and you're not done. You're planning a headquarters move to the Lightwell Building for your Kansas City headquarters. So talk to us about what's driving all that growth and what these two recent headquarter moves are going to help you do.

John Thomson:

Yeah, I never think about those things, so it's kind of nice to hear them. But I think what's really driving it is just being connected to this market, being innovative, being trusted by clients and more clients all the time, and with an eye towards more innovation, creating more value in those partnerships. That's a formula that fuels growth and it attracts the next client and it really builds trust. And there's a lot to do as we simplify government for constituents at city, county and state government, and so I talk openly about wanting to build a great business and a billion dollar company in Kansas City, the next Cerner or something like that. I think we have a ways to go to get there, but we're on a path to getting there. And so each of these moves is really a step in that journey and being committed to Kansas City and moving to Lightwell was another easy decision, frankly, a great partner.

John Thomson:

We believe a lot in their vision for Kansas City, for that building, for this region and being connected to it and easy, easy choices. Now, we haven't actually moved in, even though it's ready because we're all working from home, but it's a phenomenal space that'll really help us continue on our journey. A vibrant downtown's I think important to everybody in this community, not just PayIt, but to our employees or future employees and restaurants and just all of it. We're believers in the ecosystem and kind of regionally, not just one side or the other of the state line, but regionally. We think we've got something special here and we can be a part of the growth of that. And that's good for everybody.

Kelly Scanlon:

Now with the establishment of a headquarters in Toronto, does that mean that you are expanding your footprint throughout Canada? Are you focusing primarily on the Toronto area? What are your plans there?

John Thomson:

We definitely think a lot about international expansion. We think the Canadian markets are really good market for us. We think the city of Toronto is a great fit for us in a lot of reasons, it's a great tech town, it's easy to get to it, it's very similar to Kansas City, believe it or not, in that it has a really vibrant tech and startup ecosystem supported by a really strong university setting. And we think it can be a really good place for us to continue to grow outside of the US, so we're excited about that. And have made a number of announcements in that market recently.

Kelly Scanlon:

And it's always nice to see a Kansas City company go outside of the area, whether it's regionally or whether it is internationally, and spread a little bit of that Kansas City brand outside of Kansas City.

John Thomson:

Right. It turns out you can build a world-class tech company in Kansas City.

Kelly Scanlon:

I know you, like a lot of entrepreneurs, you had to have had your ups and downs. Talk to us if you will, about some of the adversity that you've had to overcome before all of the success. I hear some entrepreneurs say, "Yeah, I was an overnight success after 20 years."

John Thomson:

Business building is hard, right?

Kelly Scanlon:

Definitely.

John Thomson:

It's competitive, it's hard. There are a lot of challenges. It's risky for early clients because you're unproven. I mean, there are a lot of reasons things don't work, and I always share with other entrepreneurs or future entrepreneurs or students or whomever it is, one of the greatest, maybe most underrated attribute of any successful entrepreneur or leader in anything is grit, toughness, because you're just constantly overcoming challenges, that test you and you're learning and growing. And for me, and I bet a lot of others, it's half the reason you do it, to see if you can do it. I know that's true in my case. And certainly the sense of purpose and mission to make the world a better place through what we do is very motivating, but also, to see if you can get there and make a difference through those efforts. Folks like you and the great coverage we get, do absolutely celebrate the highlights. And it looks like that ducks swimming across the pond and people see, and they go, oh man, what, so easy. What an obvious idea or this or that. And they don't realize how hard you're kicking underneath.

Kelly Scanlon:

This isn't your first rodeo. You were involved with a company named Sapio back in 2007, the mid 2000s. It was very entrepreneurial too. What appeals to you about entrepreneurship? I mean, we just talked about the grit that's necessary and the perseverance and so forth, but what is the overall appeal? And did you have any early influences in terms of entrepreneurship?

John Thomson:

Of course. Yeah, of course. I got my start at Cerner, out of a business degree from Baker University. And I went to Cerner and I worked in a support queue carrying a pager was my first job and I didn't even care. I just wanted in. It was a phenomenal business that was growing. And I knew if I got in, I could learn and I like to work hard, so I knew I'd get opportunity and sure enough, I did. And frankly, because it was growing so fast, I got opportunity that I didn't deserve or kind of beyond my years.

Kelly Scanlon:

Yeah, it was growing so fast, it was like everybody on board sink or swim, we're all going to go down with the ship or we're all going to rise. Yeah.

John Thomson:

Right. And as long as you just kept delivering, you'd get bigger assignments and it was awesome. I watched great entrepreneurs in Neil and Cliff build a business, a phenomenal business. I mean, look at it today, it's a Fortune five. I just was, I guess, aware enough of what I was a part of, a small, very, very tiny insignificant part of, but I learned a lot. And I listened and paid attention and absorbed everything I could from them and people who were running that business. And I just learned a lot and it made a difference, but I always had the aspiration. I was selling baseball cards as a kid on the street corner, or I worked in newspaper route in grade school and went door-to-door to collect. I always had that. And then just saw the opportunity and parlayed a lot of lessons I learned working in big software companies and just wanted to go do it.

Kelly Scanlon:

Yeah. So many companies that spun out of Cerner, I'd like to see the numbers on that sometime. I don't even know if you can keep track of them now, because they've probably had various iterations. The companies that came out of it directly probably spawned off other companies at this point. But yeah, what a great learning ground for you.

Kelly Scanlon:

Talk to us about Kansas City's investment scene. I know that PayIt has attracted a hundred million dollars in investments as recently as last year, so what advice would you give other tech startups who are seeking outside investment?

John Thomson:

Talk to people, be active. I'm a believer ... this is a horrible metaphor or analogy, but it's true that if you can play left tackle, the NFL will find you no matter where you are. And I think that's true, if you can build an investible, scalable business, the money will find you or you will find the money. That's true. And so Kansas City is a very friendly town. It is easy to get to people like Darcy Howe or Lisa Mitchell or John Fine, or you name it. There are a lot of folks that are eager to help and give you good feedback and good advice, which is different than friendly feedback or friendly advice. You need honest advice. It's really good in that regard. Or Jeff Shackleford. I mean, I'm leaving people out. You could go on, but really think about a business that's scalable versus a lifestyle business.

John Thomson:

Look, I think part of the appeal of building a big business here and attracting seed and then series A, and then some add on, and then the big round $100-plus million investment was bringing sophisticated coastal growth investors to the region for ourselves. But then also every time they come, I try to introduce them to somebody else or share or introduced them. And not just the people that actually invested in us, but lots of other investors that came that wanted to invest in us or talk to us about an investment, that we didn't think were right for us or vice versa, but I always talk to them about Kansas City and other companies that were worth talking to in Kansas City. So all of that you see it pay more dividends all the time, right?

Kelly Scanlon:

Yes. And it's about putting yourself out there, whether you're the one seeking funding or whether like you, you're putting yourself out there making introductions to companies that could use the funding. And I think you made a really important point too, and that is not every company needs funding. A lot of founders, I think come out thinking, Oh, I got to get to these funders and give up part of their company. But as you said, it's really a lifestyle business, or even if it's a little bit beyond a lifestyle business, it's not going to ever have enough market share to attract the big funding, and so there's really no need to give up any ownership in the business for that little bit of funding that you might be able to get. So you really have to ask yourself the hard question. Do I need that kind of investment funding? I'm not talking about traditional bank financing, I'm talking about investment funding.

John Thomson:

Yeah, no, there's no one way to build it. So you have to decide what kind of business do you want to build. We knew early on, from day one, as Mike [inaudible 00:15:32] and I were writing all the checks ourselves back in the early days, we knew we were doing that, and we wanted to build a great company in Kansas City. The next great company in Kansas City in the spirit of Ewing Kaufman. And so we knew capital was a part of that journey for us. That was our journey. It doesn't have to be every journey.

Kelly Scanlon:

Talk to us about some of the innovations in payment platforms. There's a lot of them out there. Yours is obviously focused on government. There's a lot of payment platforms out there that individuals and businesses are using, but what are some of the innovations that could be coming up that we need to be aware of so that we're on top of them, especially businesses who could take advantage of some of these innovations?

John Thomson:

Well, there a lot. I always think it starts with consumer behavior patterns. You want to skate to where the puck's going to be, as Gretzky once said. And so you think about just the shift in consumer behaviors and a more cashless society all the time and smarter. I mean, we buy coffee with our phones, we bank on our phones and digitally. Everything is digital and therefore, sort of the underlying infrastructure and things you need to be able to serve your customer, whether you're a dry, cleaner or software company or a coffee shop, it's different. And so you need to be really thoughtful in where are your resources aligned and are they properly aligned or are they misallocated? Or are you investing all in kind of where your customer used to be, not where they are now and where they're going. And it's getting easier and cheaper, but it also needs to be more secure, more robust, and so making those choices is really important as well.

Kelly Scanlon:

One of the criteria that the Ernst and Young award was judged on was societal impact, and you've obviously made achievements in that area. Talk to us about PayIt societal impact and your vision for a better world, I guess is one way of putting it.

John Thomson:

I believe in it a lot and so does everybody who works with us. Mike and I talk about a lot. We met each other at Missouri Boys State as a part of that volunteer leadership. And we think about the mission of simplifying government. You and I can likely afford to go sit at the DMV all afternoon or go down to City Hall to figure out how to deal with a ticket or whatever it might be or apply for some benefit, but not everybody can. I always think if I were a single dad working an hourly job, it's a real burden for me to have to make multiple trips and take time away and find daycare and all that. And it just shouldn't have to be that way. It shouldn't be so complex. And so, feel a sense of mission and purpose to simplify government for people and just take friction out across lots of different use cases.

John Thomson:

So that's one thing, and know we can make a difference there in a big way, and we are, and there's a lot to go do. I also think it's about Kansas City and the region or the markets we serve or we have employees, and in creating a great company where really talented people, driven, motivated people that are empathetic and care about the world can come learn and grow and contribute and get better. And that's valuable. As we win, they win, I think that's important, but then they can also make the communities we all live and work in better too. And maybe the next great entrepreneur, maybe the next EY Entrepreneur of the Year is somebody working inside of PayIt right now. I would love that to be the case, or I just am a believer in those communities and ecosystems.

Kelly Scanlon:

It gives a whole nother dimension to your company name, PayIt, with all the PayIt forward that you are doing and the impact that it has as everything ripples out. John, it's been so great catching up with you today. Congratulations again on the Ernst and Young award and just much success to you in the future.

John Thomson:

Great. Always great to talk to you, Kelly. Thanks for the support and thank you, Country Club Bank.

Joe Close:

This is Joe Close, president of Country Club Bank. Congratulations to John Thomson for being named the winner of the 2020 Ernst and Young Entrepreneur of the Year award for the Heartland region. Like John said, it takes grit to be an entrepreneur. So often, everyone sees just the successful side, the awards and honors and other accolades, but every entrepreneur knows the ability to persist, to work through the highs and lows and to continue believing in their vision is part of everyday normal. So is building a great team that challenges the company to even greater levels. Country Club Bank strives to be a team member entrepreneurs can rely on as they navigate their way to success. Thanks for tuning in this week. We're banking on you, Kansas City. Country Club Bank, member FDIC.