May 24, 2017 · 29m · top-founders
668: Will Bill.com and Intuit Lead Small Business FinTech Space?
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The Top, host Nathan Latka interviews Bill.com CEO René Lacerte to explore the unit economics, growth metrics, and payment infrastructure powering small business financial technology.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 45.2% of the talking time here. How this is scored →
Nathan as informed peer 4.8 Guest teaching 2.9 Guest disagreement 1.9 Nathan pushing back 3.6
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 12:23 Lacerte shuts down customer count questions
Lacerte firmly rejects Latka's repeated demands for customer figures, describing any disclosure as a slippery slope and refusing to provide even a wide range.
Hardest push from Nathan ▶ 15:56 Latka corners Lacerte on monthly additionsLatka refuses to drop the growth metric question, escalating from brackets of tens of thousands down to pinning Lacerte to an on-record confirmation of exceeding 2,000 monthly active business adds.
Biggest teaching moment ▶ 2:21 Lacerte educates Latka on B2B transaction scaleLacerte breaks down why consumer fintech disintermediation theses do not translate to B2B, explaining that handling $40B at $1,700-$2,000 per transaction fundamentally requires traditional banking rails and credit facilities.
Nathan holds their own ▶ 17:25 Latka calculates CAC and warns on payback cash gapsLatka instantly translates Lacerte's 10-15 month payback window on $100 ARPU into an implied $1,000-$1,500 CAC and demonstrates expertise on cash-flow risks in extended payback periods.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Data Dashboards and Analytics Tool Overview | 6 | 5 | 4 | 6 | Latka challenges Lacerte's thesis that banks remain at the center of financial universe by citing Wealthfront's automated disintermediation model. Lacerte counters by pointing out that typical B2B transactions of $1,700-$2,000 and $40B in annual volume inherently rely on bank infrastructure and lending. | |
| Bill.com Business Model and Inherent Virality | 5 | 3 | 1 | 3 | Latka breaks down the revenue split between subscriptions and flat transaction fees (49 cents electronic vs $1.49 paper check). Lacerte clarifies that the two million entities in their network are collaborative endpoints rather than direct paying SaaS customers. | |
| René Lacerte's Background and Entrepreneurial Heritage | 4 | 3 | 1 | 2 | Latka explores Lacerte's family history of entrepreneurship, uncovering how his grandfather sold a business to ADP and his mother sorted punch cards for defense contractors on the night he was born. | |
| Founding PayCycle and the $170M Intuit Acquisition | 5 | 2 | 1 | 3 | Latka details the origins of PayCycle, pushing Lacerte on why he left a $300k-$400k executive package at Intuit in 1999 to build an online payroll company, which he later sold back to Intuit for $170M cash during the 2009 recession. | |
| Customer Activation, Onboarding, and Retention Metrics | 7 | 4 | 5 | 8 | Latka repeatedly presses Lacerte for exact paying customer counts and net adds, refusing to accept vague answers until Lacerte explicitly confirms adding more than 2,000 active businesses per month. They also dissect onboarding activation thresholds where churn drops drastically once a bill or sync is executed. | |
| Go-To-Market Channels and Customer Economics | 7 | 4 | 3 | 6 | Latka probes unit economics and capital structure, calculating a $1,000-$1,500 CAC based on a 10-15 month payback on $100/month ARPU. Lacerte corrects Latka's funding records, clarifying that their $50M Series F consisted of $30M equity and $20M venture debt. | |
| SMB Financial Data and Future Lending Potential | 5 | 3 | 1 | 2 | Latka asks whether Bill.com leverages proprietary SMB transaction data to offer underwriting or lending products. Lacerte confirms partner interest but maintains they are focused strictly on back-office payments automation for now. | |
| The Famous Five Questions with René Lacerte | 4 | 2 | 1 | 2 | Latka guides Lacerte through the Famous Five, where Lacerte shares insights on mentor Bill Campbell, running dinner table MBA discussions with his kids, and advice to avoid overstressing hard operational decisions. | |
| Interview Recap and Bill.com Key Metrics | 0 | 0 | 0 | 0 | Latka recaps Bill.com's metrics ($40B volume, $100 ARPU, $120M raised) and delivers promotional sponsor reads. |
Statements from this episode (14)
Lacerte: Bill.com processes $40B annually with a $1,700 average transaction size
“We do close to forty billion dollars a year in money movement, and the average transaction is 1700 to 2000 dollars”
Bill.com reduces customer paper payments from 95% to 35% in one year
“When a customer comes to us, 95% of their payments are paper-based. And we're able to move that to, you know, probably 35 to 40% over the course of the first six to 12 months.”
Lacerte: Bill.com charges $0.49 per electronic payment
“We charge 49 cents for an electronic payment period.”
Lacerte: Bill.com has over two million entities using its payments network
“And we have over two million entities that are in our network now that use us to pay and get paid.”
Lacerte: Bill.com raised $110 million in venture capital over 10 years
“And so this one, we have about a hundred and ten million from venture capital. In the company over the last 10 years.”
Lacerte: Intuit acquired his previous startup PayCycle for $170 million in 2009
“We sold it for a hundred and seventy million.”
Lacerte: Bill.com retains over 90% of customers who complete their activation
“And when I say the most part, I mean like well over 90%, right? If they sign up and then they don't do any of those things, and in particular if they don't get the sync done or don't get a payment done you know, then within 90 days, you know, we might lose 20%…”
Lacerte: The average Bill.com customer pays around $100 per month
“The average customer is paying us around a hundred dollars a month.”
Lacerte: Bill.com is embedding its product directly inside Intuit's QuickBooks Online
“Also in addition to banks, we have a great partnership with Intuit where we are just in the process of becoming embedded inside of QuickBooks Online.”
Lacerte: Bill.com consistently hits a 10 to 15-month CAC payback period
“Our payback target is, you know, somewhere between 10 and 15 months. And generally we had that.”
Lacerte: Bill.com models average customer lifetime at well over five years
“We assume, you know, well over five years, but we don't actually know because, you know, the data is just growing so fast, and, you know, we expect that, you know, customers will last longer, so we've had some customers obviously been in market right now for m…”