JMS / John Mason-Smith (00:11)
how do you describe yourself? Like I know who you are and like I know how I describe you, but who who are you to yourself? Yeah, whose nate?
Nate P (00:16)
Me myself.
I'm a very optimistic, grind it out for results kind of guy. I get very passionate about the things I do, whether that be personal or professional. I obsess over what it's gonna take to make it fun and to make it grow and to make it something that everyone is kind of looks at in a high regard. And
Particularly
I like the championing, I like to champion hard things. I don't like I never take the easy street. So for example, a lot of people play the piano or the guitar. I do that, but heck, I picked up the accordion and taught myself. Not an easy instrument, right? And a lot of people yeah, what there you go.
JMS / John Mason-Smith (01:03)
My God. Nate, we could have the weirdest band. I have I play the ukulele, so we could just jam out together with the ukulele accordion.
Nate P (01:09)
I tend to I like I like to find humor and in in even the most grim of circumstances. So I tend to bring I think a lot of just fun and and whimsical attitude even to the business world, even to when we're selling complex, sophisticated stuff that has to do with compliance and people's money and making a difference in people's lives. You know, if you can remind yourself that
You're here doing it with other people, you know, not just AI. You're here doing it. you can have a few laughs about it and stay positive and grind it out. It's just it's a lot more fulfilling.
JMS / John Mason-Smith (01:50)
Well, and not to immediately do a sidetrack, but like one of the things that's been really weird for me working remote with people over the internet is how much of the communication I've had with others where I can tell it's just AI now, where it's like, they
Nate P (02:05)
Yeah.
JMS / John Mason-Smith (02:05)
had this email auto drafted by AI because like I'm pretty sure they didn't use seven dashes last time they emailed me. so it's like it feels like you're more alone now, you know.
Nate P (02:12)
I I I rarely use
I rarely use AI to draft communication to anyone. I see it a lot more and more. There's a huge push and I think for the right reasons, for the right roles, for the right duties at Earnin, particularly we can develop product a lot faster, we can
Optimize certain roles to do more versus hire more sometimes. But in a business-to-business role in a relationship-driven type environment where you're delivering software where people are running their businesses on it, and it's inevitable in the software space, you're gonna put out innovative new stuff. That's what we're doing. There's gonna be a bug here and there, right? There's no new product that exists, especially something that's
Doing something different where people aren't going to expose, even if it's not a an actual software bug, it could be a workflow issue. I don't really like how this thing jives with the way I do my business, right? And what always I have found triumphs, people saying, this product isn't what I thought it would be, or I'm I'm not satisfied is
But these are good people and they're working really hard to make it happen. And when they take my phone call or they respond to my email, I don't want a chat bot. I actually want to talk to Nate and I wanted to make sure it's a genuine voice if it's an email.
I like when we went to market with earning payroll, for example, we were getting pushed, just because of where we operate, who our investors are, et cetera, a lot of AI tools for BDR, for business development resources. So outbound sales
motions, and it's like
JMS / John Mason-Smith (03:46)
Yeah. The Silicon Valley.
More AI, please.
Nate P (03:50)
And so I demoed all the software and I just said, We're not in that game. If we were selling something transactional and we were trying to sell millions of whatever that thing is, millions of widgets or subscriptions or whatever, maybe that had a maybe that type of
tool has a place, but I told our one sales pro one sales rep, I said, if we're gonna get conversations, we're not I'm not even interested in making sales yet. I'm interested in learning and making conversations. Like let's be genuine, let's be ourselves, let's tell them what what we're about. And if they don't take our meeting now, they will eventually, because we're just gonna keep being humans and that's gonna be a unique thing in this world.
JMS / John Mason-Smith (04:29)
it's a soapbox that I think I have been on many times. Like the thing that I didn't get when I started selling payroll software because 'cause I started when I started in the mid market and I was selling paylosity, it was a lot of tech focused sales. Like we were we were going in and say our technology is better than this legacy technology of our competitors and that's why you should switch from them to us, because you can do stuff in our software that this so your other software can't do. And
The thing that I think I overlooked until I had to get into the operations side because I when I started my own parallel company, now I was not just sales. I had to like stay after the fact and actually watch these clients be clients, was just like,
Nate P (05:06)
Yeah.
JMS / John Mason-Smith (05:07)
no matter how pretty the front end, it's still like shooting a fax over to some person in Wisconsin because like the local tax agencies are just run by like three people in a fax machine sometimes. So it's like, don't get me wrong, technology matters, but there's more to it than that. And
we're still just using technology to talk to other people, right?
Nate P (05:27)
it it's always funny when you're going to market and someone says, How are you different? So, well we're better, we're newer, we've got all these things. And they say, Well, that's great, but you haven't identified the need, and they may not have identified the need, and I find that's when you hit the sweet spot in selling is the customer has
on their own initiative, internally figured out, shit, I I need something different or I need this thing that
JMS / John Mason-Smith (05:50)
Yeah.
Nate P (05:50)
my software company's just not gonna deliver on.
And your timing is impeccable, that you have that thing that they need, and you are selling to them directly and developing a relationship behind that sale. It's not just a robot, particularly in the payroll space, because this is like the the the service bureaus, that's how they operate. They're winning business on integrity relationships.
delivering on these very sophisticated or or not so sophisticated but sometimes personal needs for these small businesses or large businesses, but payroll and benefits can be a very personal thing. And that's how they sell. And that's how they've built their business. And they're selling on reputation and referrals. Generally that's like a a recurring theme I hear is
Most of our purposes comes through re referrals, right? That means that they're doing something right with their relationships, that those relationships is actually what's building their business, not AI. Now, does AI have a place in all
JMS / John Mason-Smith (06:38)
Well and
Nate P (06:39)
this? A hundred percent. And they can they can augment that type of work, but at the end of the day, it's in this business, it's gonna be can you can you deliver when shit hits the fan? That can be the product that you sold me, or the service the product you sold me doesn't work, the service you're supposed to give me didn't meet my standard, or I'm in trouble with something and I need some.
JMS / John Mason-Smith (07:02)
Well, and Nate, there's a a thing that's really that I find really weird about you in a good way. Don't take this the wrong way. You're weird in a in a few really fun ways to me. Like one is most people I meet that are in the payroll industry came from the payroll industry. Like it that's like it's somehow that became their whole identity as like, I spent 25 years at ADP and then, you know, whatever. But you're like almost an outsider in a sense, from what I understand, because you had all this restaurant stuff. We were just talking about your grilled cheese book like yesterday. Me and my wife were. So like what
Nate P (07:30)
Yeah.
JMS / John Mason-Smith (07:32)
Can you talk about that? Like what okay, what was your life prior to being sucked into this little corner of the world? You know?
Nate P (07:38)
my life prior to this was I spent almost called six and a half years building a global real estate company or restaurant infrastructure and robotics company. Now it's commonly known as Atoms at the time, like ATOMS, you know, like Bits and Addams, and at the time it was called Cloud Kitchens, but we were the largest operator.
Of off-premise, so that means non-traditional real estate, but off-premise restaurant food service real estate. And those facilities were filled with all kinds of cool robots and software and infrastructure to enable restaurants to get to market faster. That could be anything from the world's largest food brands like Starbucks and Taco Bell to a mom and pop burger shop that wants to do a delivery-focused restaurant, or to very large-scale commissary catering providers like airport caterers or
meal prep companies, right? You know, the folks that deliver prepackaged meals weekly to busy professionals or busy families, they need massive production space to make up Hubble food. So that's the world I operated in. Prior to that I ran my own restaurant company of which I franchised at several locations here in San Francisco. I I literally was the grilled cheese guy and I sold grilled cheese for a living. My title was The Big Cheese. So
JMS / John Mason-Smith (08:50)
And I have to ask who
did your payroll, by the way? You have to confess. Who was it? no. Hmm. Anyone doesn't okay, yeah. Okay.
Nate P (08:54)
It's an acronym. It's an acronym. ADP, run by ADP. N now to be
honest, I ran the payrolls. I had 72 employees, I could handle it myself, and then I had a bookkeeper that prior excuse me, post running the payroll would then extract the files, put them to QuickBooks, and she was a very good bookkeeper. She was my mother in law, so she kept it all honest. Yeah.
JMS / John Mason-Smith (09:19)
Yeah. Or unhonest in the best ways, right? One or the other.
Nate P (09:24)
But I I look back to those days. I d thirteen years I ran a restaurant company and I sold it at a forty percent ROI and and was able to pay some money back to investors. That's a rare situation in the restaurant business, right? It's a a business even in the franchise side of it that's ripe with failure. but I did well and I think back to those days,
At Cloud Kitchens a couple of years ago, I'm I'm a senior executive there. I'm running enterprise sales. I'm I'm innovating on these like super super interesting delivery concepts for the world's largest food brand
and my day to day is basically rubbing shoulders with the world's largest restaurant brands and restaurant operators. For example, I bumpadou and became a good a good friend at contact, but
Well, here's a guy that owns two thousand restaurants, you know, four hundred Apple Bee's, three hundred Taco Bells, fourteen Wendy's, and he's an investor in a couple of high end Michelin concepts in the Bay Area, something like that, right? These are the types of folks I was working with and we're working on super innovative solutions to bring them, you know, custom built to suit physical infrastructure and software.
point of sale type software, menu management, line management. So line is is what you refer to where you cook in a kitchen. They called it the cooking line. So how do you manage all your food tickets coming in for the individual orders? So that type of software integrated into our platforms in these in these buildings which involved robots and weights and sensors and things. So I was working with them on these innovative concepts so they could continue to grow their business in this ever growing food delivery world.
JMS / John Mason-Smith (10:59)
I mean, is it fair
Nate P (10:59)
I remember
JMS / John Mason-Smith (11:00)
to say like you're a an entrepreneur that got dragged into tech? 'Cause like I don't think most restaurant people become tech people, you know?
Nate P (11:04)
Yes. s this is this is
what I'm getting at. I I it in those
JMS / John Mason-Smith (11:11)
Yeah.
Nate P (11:11)
moments when I'm like doing this innovative stuff and I'm meeting these really, really dynamic people who have their own interesting stories, I think back to like seven years prior where I'm like making sandwiches for a living.
hundreds and hundreds, if not thousands, of sandwiches every day. And there's no shame in doing that. Right. And that it was a beautiful thing. There was a real labor of love in that. every customer I served, I got to see them smile. Right? Like that's a thing. And every staff member I hired and paid with ADP. You may not want to hear that. But we really took care of them. We were like a pioneer in paying above minimum wage in San Francisco, which was expensive. We were a pioneer in offering full benefits to our staff. So you know you can sell grilled
Cheese and and make a cool business out of it. And we did. But I'm very entrepreneurial. I see a problem, I want to fix it. I see a target, I want to run at it. And if I see a mead in the market, I want to go for it. And how did I stumble into payroll?
JMS / John Mason-Smith (12:11)
what do they do to like rope you into urn?
Nate P (12:14)
but
JMS / John Mason-Smith (12:14)
It's like such a left turn on paper.
Nate P (12:18)
So I had at that point in time I'd spent close to 20 years in the food service or food service adjacent industry. And I pretty much knew, with the exception of, you know, working in the fineness of dining where where the food is put together with tweezers, I never had that experience. A lot of friends in that in that business, but I I needed a break. That's all there was to it. I just said, you know, what else is out there? I've built my own small business, which became a medium business. Then I
joined cloud kitchens which our our CEO is a is he's an entrepreneur that changed the world and our generation. He the CEO in Cloud Kitchens is the former founder and CEO of a company called Uber. And I got to work shoulder alongside shoulders with him in scaling a business to be something global. Right and I joined very early. but that was all in all in the food service space. Food service, food service adjacent. And
I got there by sheered networking. You asked how did a restaurant guy get into this sort of like technology thing, like just through my network
I was selling my restaurant and in the process of selling it through like, you know, a local MA type business broker, I was doing some networking to my
Different folks that or with with different folks that had served the restaurant because I said, I'm not going to open a restaurant from the next endeavor. Let me start reaching out to people in the payroll business, credit card processing, point-of-sale company, restaurant technology, and the CEO of a restaurant ordering app called Chow Now. His name is Chris. Chris said, You should talk to my buddy in LA, his name's Colby. He owns a bunch of restaurants, former tech guy. He is an investor and he's running sales at this startup called.
Cloud kitchens. Have you heard of it? I said, yeah, I'm I'm zero interest. I don't want to do anything with food delivery. That food delivery has changed my business. And I want you to put a put a thumbtack in this moment in the conversation. Change. That thing's changed my business for the worst. I hate food delivery. I used to serve
people
JMS / John Mason-Smith (14:16)
Yeah.
Nate P (14:17)
in person. No one comes in anymore. They just want to order on DoorDash. He said, Travis just made a big investment. I said, Who's Travis? Okay, I'm not from the tech world. And if you're in Silicon Valley
If you weren't living under a rock and you followed the the tech world, you know that Travis was the founder of Uber that had at that mo at that moment in time had just left Uber prior to the IPO after some scandals and stuff, I loved working with Travis. Best best experience of my life. But anyway, I said, Who's Travis? And he explained, I that guy.
JMS / John Mason-Smith (14:48)
Mm.
Nate P (14:48)
He
said, just go to LA, take a meeting, see what they're doing. And so I went through the process and I was pretty inspired. That I was like, this is gonna be big. This is gonna be big.
JMS / John Mason-Smith (14:58)
I think the one continuity between every one of these companies out in LA and all these tech based founders is they're they're all amazing salespeople and they're all really good at getting other people excited about something they're excited about. So of course you go out and talk to clearly one of the best salespeople in the world and you walk away sold, right? I mean, it's not that black and white. Inspired. Yeah.
Nate P (15:17)
Sold at inspired. I think it I think I think inspired is the better word. Yeah.
So I Ern in. I at the time Ernin approached me, I was starting to think about, you know, I I was at the top of my game at Cloud Kitchens. I loved what I was doing. I loved the people I was working with. I wasn't necessarily hunting for something new, but I started thinking about the next step, and I had a lot of personal changes in my life. And saying, you know, maybe I need to think about expanding beyond restaurants.
In hindsight, I'll decide if that was the better idea ten years from now, if that was the right move. But the CFO here at Earnin, the whole company, not just Earnin P. Well, the CFO was a former colleague of mine at Cloud Kitchens. He was the VP of finance there. And him and I had stayed in touch. I knew him before my time at Cloud Kitchens because he was one of my best customers at my restaurant, relationships.
JMS / John Mason-Smith (16:08)
Good thing he
was hungry. I just like to eat.
Nate P (16:09)
Yep, he came in every
day. He well he lived in the building above the restaurant,
He said, listen, we Earnin, which if for those that don't know that might be tuning in, Earnin is is the leader, one of the leaders, if not the leader, in consumer financial wellness and earned wage access. We have a consumer direct-to-consumer application. The B2B business, we've taken some swings at it. It hasn't fully evolved as sort of you know like a plug-in to a payroll or a benefits program, although we're making a ton of progress there right now. Massive partnership with Workday just announced for what it's worth.
JMS / John Mason-Smith (16:40)
nice.
Nate P (16:42)
But he said we acquired a payroll software about a year, year and a half ago. We're at the stage where we want to scale the business and we need a GM go-to-market leader, someone that can take this thing and run with it. You'll get all the resources on that team to make this like we want to have a million employees on this payroll platform in five years. Like we want to grow this thing. I had no effing clue what I was getting into.
But it sounded he inspired me enough, right? And the offer was good and I said this sounds like an interesting challenge. I've never worked directly in a pure software role. I've never worked in financial software. I've never worked in compliance software. And I know it's a massive market.
But I sure know a lot about payroll, not in the sort of operating a payroll company sense, but I'm a small, or I was a small business owner, I ran my own payrolls. I also understood what Earnin was offering, because in any small business owner,
JMS / John Mason-Smith (17:40)
restaurant.
Nate P (17:41)
well any business owner really, there wasn't a single payroll where an employee didn't approach me and said, I need an advance. Can you spot me 600 bucks? Okay?
JMS / John Mason-Smith (17:50)
Well w so back when you were
running your restaurants, were there early wage access providers or is this before that became
Nate P (17:57)
No.
JMS / John Mason-Smith (17:58)
a whole industry?
Nate P (17:59)
No, I mean, I'll give you an idea. When I when I started my restaurant, the phone in my pocket was called an LG N V.
So
I was inspired to come and grow a business again. Because that's what I like to do. You mentioned an entrepreneur in tech, like that's my thing. I like to grow business, I like to create relationships, I like to inspire other people. I didn't know a thing about the back inside of Peril. I didn't know about the Peril Service Bureau industry. I didn't know what a notcha file was until you told me. So because I took your course.
JMS / John Mason-Smith (18:28)
You're
yeah. Yeah. Well, I'm glad you did. You made the course basically by making me realize it needed to exist.
Nate P (18:34)
what I did know is there was an opportunity to grow a new business at scale. We were starting small, but something that could scale across the whole country. Not not a global thing like I was doing before, but a much different thing. I knew the competition was gonna be fierce. And I like that, I like that challenge.
JMS / John Mason-Smith (18:51)
Hmm.
Nate P (18:53)
And I also had never had this opportunity to sort of work directly with senior engineering and product leadership for pure software.
My old job, the software side, I was more a stakeholder that the senior engineering and product people needed to listen to 'cause I was now I've sort of indirectly managed a lot of
physical engineering and physical construction, call that product management or project management work because we were in this world of massive real estate, but and robotics, but less on the software side of it. So I thought this was a cool opportunity. And when I met the team I was pretty inspired because the people here are innovators. and our CEO is is among them and he's backed by some of the best investors and
He had a similar story to mine, which was pay should be streamed, right? Like this is a world where everything is on demand. Why isn't my pay on demand? I've earned it. It's there. It's my asset. Right? the way we're we're paid, yeah, it's like we're
JMS / John Mason-Smith (19:56)
yeah. it's unbelievable.
Nate P (20:00)
our own accounts receivable department when it comes to our our wages. so if there's a if there's some sort of service that can make
make that a possibility for American the American workforce at no risk or cost to the employer, that starts to become interesting. And so I was sold on the concept, inspired. And I joined Ernan
JMS / John Mason-Smith (20:19)
inspired.
A a few things stand out to me hearing you tell this story. I mean, one is, as someone who has done a lot of payroll and payroll sales and payroll operations, it's funny. going from restaurant to payroll is like, I want to go from this stressful thing to this other thing that's completely stressful in another way. Right. So it's a little bit of a lateral stress move. Although I
Then then again, I think every restaurant owner I've ever met has worked harder than I've ever worked. So maybe I can't say that.
Nate P (20:45)
It's funny, th
during the the tougher moments here at Earn End, sometimes I'll hear from from one of my teammates like, Man, I'm stressed. We got a lot going on. This is tough. The pressure's on.
JMS / John Mason-Smith (20:54)
Yeah.
Nate P (20:55)
And my res you know, I and I'm empathetic and we have a good conversation, but I usually walk away saying, You have no idea. You have no idea what pressure is.
Not just from my
JMS / John Mason-Smith (21:04)
Yeah.
Nate P (21:05)
past role building a global business, but I think back to being in a kitchen. Imagine feeling that stress and it's in real time 'cause there's, you know, hundreds of eyes on you in your kitchen and everything goes wrong in the
JMS / John Mason-Smith (21:15)
standing there watching you.
Nate P (21:17)
plus it's a hundred and six degrees and there's gre and like the the risk of physical injury is real, not just from the cooking equipment and the hot grease, but from another employee busting your teeth in because yeah, like these things happen. These things happen
JMS / John Mason-Smith (21:26)
Throwing a punch at you? Yeah.
Nate P (21:30)
and they have happened to me, so I know what that's like.
JMS / John Mason-Smith (21:32)
No, I
I was a buster at at a restaurant for many years. I I know the feeling.
Nate P (21:37)
So yeah, throw throw some drugs and alcohol in the mix, you get a much different type of stress. But
JMS / John Mason-Smith (21:41)
It's a wow.
Nate P (21:43)
but no, ever everyone's level of stress and and what they feel is all valid. It's just y you gotta take it everything in in context of what you're actually trying to accomplish.
JMS / John Mason-Smith (21:53)
Yeah. Well, I mean, i my brain thinks about Ernin. So I when I was at TPG, I know you guys were there as a big sponsor and you guys had this crazy demo and all that. And for context, you mentioned continuous pay. I have as you know, a history of doing stuff in the banking system very briefly back before Signature Bank had their failure, when I was
Nate P (22:16)
Yeah, yep.
JMS / John Mason-Smith (22:16)
trying to figure out a solution to the problem on the employer side, which is like why is it so hard to move money?
from the clients to the payroll company and then to the employees. And like, I think this goes back to what we were talking about earlier, where the whole world is kind of held together with bubblegum and sticky tape. And you don't, you don't realize it until you like ask, wait, how does this happen? some guy takes a cassette tape to the IRS every night and they put it in a machine. Like it's ridiculous. So I I I get the destination. My question is, what is it about Ernan that made you think, okay,
these are the ones that can get there. Cause I feel like in the last five years, earned wage access has become like top of mind. Like I've I've it didn't exist anywhere. And now it's like literally everywhere I hear people talking about this product. So I'm I guess the question is, what was the combination of things that made you say, we're the ones to do it.
Nate P (23:12)
The only ones venturing into payroll directly, right? Many of the other providers, and I and listen, I I these guys were at restaurant conferences too that I go to. I'd see Daily Pay There, for example, right? Or RAIN, I think is another one, where or Chime, where they offer similar products, but they're all offering it from the HR perspective. Here's a benefit we can put into your HCM suite or into your payroll software that you can offer your employees. Earn in, like I I want to be clear.
I'm not an EWA guy. Okay, like I believe in what Ernest's doing.
JMS / John Mason-Smith (23:44)
You're a grilled cheese guy.
Nate P (23:45)
Well, I'm a grilled cheese guy, I'm a kitchens guy, but now I'm a payroll guy. So I'm payroll first. And we are building you saw some of the demos, we're building new software. We're bringing something new to the payroll world that doesn't exist yet, which is
besides the modern interface and the UI and the very responsive and collaborative relationship with our licensees, we are building a a payroll product that, because it incorporates earn wage access into the payroll flow of funds.
The employer can offer a great experience to the product, the Service Bureau can ensure compliance to the product, and the employee can get paid when they need it. And because the employee can get paid when they need it, the employee, and this has actually been proven, well, take that as you will, it has been shown in two independent studies, one by Harvard, one by University of Oregon.
That employees that use earned wage access products are more likely to show up to work. Their income increases by I think somewhere up to fourteen percent monthly. They experience less overdraft fees. So their quality of life you could say is better. The quality of the employer's life is better because the employees are showing up at work more. The more they work, the more access they have to their wages.
And yeah.
JMS / John Mason-Smith (25:03)
Well, I mean I I always thought of it as
it was pay advance management. It's what I always thought about when I was running my own payroll company and EWA came into my life. I like, I don't have to deal with pay advances anymore, some other company's gonna deal with that for me, you know?
Nate P (25:15)
And and
and we get we get this a lot like, well that sounds like a payday loan, it's a bad habit. It's like actually there's no interest, there's no fees, unless you wanna get the money even faster, within hours, you pay a small fee. we can stream the pay live onto a debit card.
there's no hit to your credit whatsoever. If you can't pay us back because you lose your job or some other random event, you just can't use that pro that thing anymore. Like you can't use the app or if you're a payroll customer in your employee self service, you just can't use it until you pay us back the hundred bucks.
JMS / John Mason-Smith (25:45)
Yeah. So if you're not dinging these employees,
like if you're not dinging people with a bunch of fees, like where where does your money come from and all this?
Nate P (25:52)
So
you ask me why did I join Earnin, right? Like A we're so I say first payroll, we're building an innovative payroll solution. And because, you know, for any of the service bureaus listening, wink wink, let me inspire you, we pay you a revenue share of all those transactions that the end user uses.
we believe that if you have a killer product with a happy employee and a happy employer, the payroll aspect should be free or far less expensive than everyone's paying today from the service peer to employer. Now, where does the revenue come from? Why did I choose Earn N? Earn in, I'm I it's not public information, but I won't disclose our revenues on this call. But
JMS / John Mason-Smith (26:33)
I don't need the numbers.
Nate P (26:35)
the EWA business is sensationally healthy.
We are a profitable company. I'm usually the guy that joins a company to help make them profitable. And in my role here, I own the PL for the payroll business unit here at Earn Inn, so I still have profitability on the mine. But the the parent corporation, which is generating lots of money, I think we serve close to one and a half active users on our Earn Wage Access app monthly, is a very healthy business, which told me that if we have a healthy business, cash flows are strong.
There's gonna be a lot of smart people here knowing what they're doing. We're well positioned in the market, albeit competitive. But if you are operating the business well, you can be very competitive and not burn through your cash, which typically happens in fintech startups, payroll startups, and you ask where does the revenue come from?
We do generate revenue off small fees. So you can get on the earned wage access side, you can get a hundred dollars at no fee delivered to your bank account in twenty-four hours advancing your check. But maybe you need to put gas in your car right at that moment or change a or a spare tire change. You can pay I th I think it's three ninety-nine. I forget the pricing. Go to our website, check it out. There's a there's a fee. So
JMS / John Mason-Smith (27:49)
So there's like a like a give it to me right
now, don't make me wait, charge. Yeah.
Nate P (27:53)
Right.
So we do charge what we call that lightning speed and you can get that money right away. But there's no interest on that money, right? There's no hit to your credit on that money. it's not a it's not a compounding thing. It's a one time transactional fee. And that's where the bulk of the revenue comes from. there's you know, because of and the nature of bank relationships and floats and things like this, there's other revenue streams, but that's key.
rate is minimal, right? 'Cause we're
we're dealing in small amounts and we're using technology and even payroll now to to really know to really mitigate that risk of getting paid back, not just taking someone's word for it.
JMS / John Mason-Smith (28:30)
Well, I mean, you're hitting a lot of things that obviously fascinated me and and inspired me to start some of my other side hustles back in the day. You know, and one thing that's fascinated me is like the reason I think most financial institutions use the systems they use to move money around is because they're really, really cheap. You know, I think like an ACH transaction's like ten cents a lot of times or less, depending on the situation, versus moving money instantly, I had
to pay twenty five dollars for a wire. Yeah.
Nate P (28:56)
Whoever's paying ten cents, whoever's paying ten
cents, please tell them to talk to me.
JMS / John Mason-Smith (29:02)
wait, you do ACH now? Great.
Nate P (29:04)
We we have an
A so well, just a side note, I I gotta inspire you. We have a we
JMS / John Mason-Smith (29:07)
Yeah, no. Please inspire me.
Nate P (29:10)
have an ACH partner, ACH bank that we work with because in our consumer side of the business, as I mentioned, there's one and a half million transactional users. That's
JMS / John Mason-Smith (29:18)
Yeah.
Nate P (29:18)
a lot of ACH. So we have extremely low rates. Now we can we can resell those rates to our payroll customers.
JMS / John Mason-Smith (29:23)
Ooh.
man.
Well, and that's that's one of the things that I've always really enjoyed like talking to you about is the fact that again, you're not coming from the same path everyone else comes from when it comes to this. And like one thing I'm curious about is how how long were you with ADP when you're running your restaurants? You mentioned you were doing it for a while in Rome. So it was a
Nate P (29:41)
I mean since day one, I still remember
I still remember reviewing the contracts I got from Hartford Group ADP
JMS / John Mason-Smith (29:47)
Yeah.
Nate P (29:48)
and paychecks in like two thousand and eight, sitting up in in a dining room at my friend's house in Lake Tahoe. I was twenty five years old. I was like, my god, I'm about to sign a big enterprise contract, you know, for my small business. so I used ADP from two thousand and eight all the way through twenty twenty two as long as I had that business. Always ran our payrolls.
JMS / John Mason-Smith (30:11)
this is a silly question. But like I think a lot of the people I meet that have payroll companies now, they were not ever really users of another payroll company leading to them in that position. Like they came from being in sales and then they decided to get become an entrepreneur, or they came from being like a CPA or an accountant and kind of an operational back end and maybe they're doing payroll in-house and they had some light exposure to it, but you had.
a really long track record working with what I think many of the independent payroll providers would consider their mortal enemy. what did you think of ADP for those 10 years? Like did you ever think about it or was it like fine? Like was this something that was ever a part of your day that you had to deal with?
Nate P (30:49)
It was it
was fine. It was like a pair of underwear. Like you put it on every day and it works as long as it doesn't rip. Well, I mean, some people wear dirty and ripped up underwear, but
JMS / John Mason-Smith (30:57)
Hmm.
Nate P (30:59)
it was just there every day. we didn't have any issues with it. Part of that, and I I credit my my mother in law on this one, but she was a very experienced former restaurant executive type bookkeeper, so she understood the restaurant business very well. And this was a side hustle for her. She had a she had a small accounting practice and
We use different so ADP was only for payroll. We didn't ask we didn't ask up ADP run to do anything else but payroll and obviously the the back end tax filings behind it. That's all we asked ADP to do. We didn't we didn't go to the marketplace and find other products. Why? Because
I had a point of sale system. That point of sale system was fine for time in attendance, right? It wasn't a very complex operation. California, yeah, it's got overtime rules. We proved in the programmed those all in. We got a bi-weekly report and we imported that right into ADP. It wasn't all that hard, right? Every payroll system has that. benefits administration.
We didn't have as much enrollment as we would have liked. I think you tend to see that in the hourly
JMS / John Mason-Smith (31:58)
Well, restaurant.
Nate P (31:59)
industry, yeah, because it's turnover. But for those that had it, we're trying to remember we didn't run it through ADP. my bookkeeper just ran it through our benefits administrator, who then produced a monthly report that could be uploaded into our QuickBooks. So the glue that held it all together
JMS / John Mason-Smith (32:15)
On an Excel.
Nate P (32:16)
actually wasn't software. I mean, today software would handle all this, but was the bookkeeper.
And she was fantastic. And because she was family and I trusted her and she gave me a discount of rate, it was far better than any software that probably even exists today, also. and that that just made it work. It was the engine that worked. And so despite all these different softwares that that was in that were in our HTM suite, including some learning management tools we used, and we even used an applicant tracking system. That particular company has now gone very big and they're they're a payroll provider as well.
They're called the work stream. They specialize in HCM for restaurants. And wonderful founder, CEO, really great guy. Anyway, we used all those things and she was the glue that put it all together. So it was just good, a smart person that was doing doing great work for us.
JMS / John Mason-Smith (33:07)
I mean, so here's the question. If somebody that was licensing earn and payroll were to send a sales rep to past you like two years into your ADP run experience, and they had the product you have now, and the answer could be no to this, but like would there have been anything they could have said when knocking on your door to get you to say, this thing that's working, I'm gonna break? Or is it like
Cause like my experience it has been that there's active buyers and passive buyers. And the reason most people stick around with one vendor for a long time isn't because they're necessarily in love with that vendor. It's because it's working well enough and there's other shit that's more broken than the thing that I have with this vendor. So what
Nate P (33:50)
That's a question.
JMS / John Mason-Smith (33:51)
would they have said? Like would that have worked on you, like as a sales rep coming up to your door?
Nate P (33:55)
N
so a couple things. You're an entrepreneur. I'm an entrepreneur. I always take sales rep calls because I wanna hear their pitch. Even if I don't
JMS / John Mason-Smith (34:03)
Love it.
Nate P (34:03)
give a give a darn about what they're selling, I wanna like hear hear what they have to say. So and and in a re
JMS / John Mason-Smith (34:07)
yeah. Standler training has
a a sign on their door that says no bad pitches, and I love it. Like it says no bad solicitation. And it's just like great.
Nate P (34:12)
Yeah. Yeah. Well an and when you own
a restaurant, there's no office admin that can there's no gatekeeper, right? They can just walk in and I do this or did this when I was selling to restaurants at Cluckage. If you go into a restaurant and you buy their food, I used to tell my reps this at Clutkitchens, go to the restaurant, expense the meal, get something to eat, take a picture of it.
Send an email to the owner saying, I just ate at your restaurant, this food is incredible. Thank you so much. That owner is going to respond to you because you didn't do the thing
JMS / John Mason-Smith (34:41)
Ha ha
Nate P (34:42)
that they hate, which is you didn't post something on Yelp or one of these things. They love that stuff. And now you have a relationship to sell off of. Say, I'm gonna come in again. I want to tell you about this thing we're doing. So if the sales rep took that approach with me, I always took the pitch. If to answer your question,
How would they have bent my ear to go to the next conversation? At that point in time, price. That would have been a thing. I would have loved to save a few shekels on a per employee per month payroll. But also the if they had the pitch on the story of, hey, do any employees ask you for an advance? We got that built into our payroll system. It's gonna help your employees show up to work more. They would have had me.
Because the vein of every restaurant owner's existence, most small business owners in general, but restaurants, grocery retail, you wake up every day, no matter how good your manager is or your team is, you wake up every day, could be the day of your wedding or the day of your grandfather's funeral, and you say, Am I gonna have to go to the restaurant today to fill in a shift? Am I gonna have to go
JMS / John Mason-Smith (35:45)
Yeah.
Nate P (35:45)
to one of my four restaurants today and fill in multiple shifts? So if I knew there was a payroll application,
with an employee portal that offered tools that ensured my employees were gonna show up to work, damn right I would have listened.
JMS / John Mason-Smith (36:00)
so how many years was it that you were in the restaurant with ADP? You said like a good seven
Nate P (36:04)
Thirteen.
JMS / John Mason-Smith (36:04)
years? Thirteen thirteen. Okay. During those thirteen years, I know someone knocked on your door to sell you payroll, right? Who did
Nate P (36:11)
A lot. Yeah.
JMS / John Mason-Smith (36:12)
who did you say no to and why? I'm j I do you remember any of those people?
Nate P (36:19)
The good news is eventually, you know, after five or six years, I got out of making the sandwiches every day and I still had to do them sometimes. I got upgraded to I
JMS / John Mason-Smith (36:25)
Yeah.
Nate P (36:26)
got upgraded to dishwasher. No, I'm just kidding, but
JMS / John Mason-Smith (36:28)
Nice.
Nate P (36:31)
I wasn't in the day-to-day operations of the stores every day, so I was much more back office, and so any of those types of solicitations that came in an email just automatic delete. so I didn't get exposed to it as much. But I definitely had I definitely recall
Zenith's coming in 'cause they were down the street from us, which is now, I believe, Rippling or Gusto, they've become one of those companies. I can't remember which one. I I remember
JMS / John Mason-Smith (36:53)
Yeah, they got acquired by somebody. Can't remember.
Nate P (36:57)
This is the weird thing. ADP ADP reps coming in to sell me, not realizing I was already an ADP customer. So competing with their own company and undercutting their own sales reps. That happened once and I got a lower price. So someone got fired because of that. That's what I assume. paychecks definitely
paychecks came in
Square. Because we we we had we had different POS Square eventually offered a payroll product, and so they were calling me all the time, right? so Square, Square Point of Sale offered a payroll service. yeah, that's what I do. I recall and I just I wasn't that interested unless someone had something interesting to say. Or they bought the food, sent
JMS / John Mason-Smith (37:35)
Well, you and I mean a big part of it is
Nate P (37:37)
me, sent me an email and then told me they were gonna come in again, and I took that meeting.
JMS / John Mason-Smith (37:40)
when you are talking to someone who is doing as many things as you are, you kind of have to prioritize what's on fire right now.
What? It's like several industries in one way or another, whether directly running on operations versus starting something from the ground up. I mean, the question I'm thinking is is if you had to start over tomorrow and you were twenty-five and you were about to launch another business or something, I mean, now that you know about the payroll industry, is that a space you'd want to go into?
You can be honest. No is an acceptable answer to this.
Nate P (38:17)
I mean there's a lot of businesses to go into. I think I would probably want to do something more ground up, meaning like I 'cause payroll exists, right? So when you start a bureau, it's about the service and what you can offer within that service and what type of other HCM solutions you can offer. there's a consultative approach to it. I would do a payroll service bureau.
But I would probably try to put
A broader HCM spin on it. I I know there's a lot of money to be made in in insurance and benefits. there's a lot of fulfillment in that too, right? Like that thou those things make a big difference in both employees and employers' lives, just as much as earned wage access can. so would I consider it? Yes. Thinking back to twenty-five-year-old Nate, grilled cheese was just fun, man. It just sounded cool. Like I it's it
JMS / John Mason-Smith (39:06)
Well you know it's
Nate P (39:07)
sounds it sounds a little more fun than payroll, don't you think?
JMS / John Mason-Smith (39:10)
Well, that's the thing, is like every decision you've made that you've described to me was like, I saw this really cool, amazing thing and I wanted to be a part of it. I don't think anyone really ever looks at payroll and goes, That's a cool, new, amazing, innovative thing. That's you know, it's a safe bet for I mean, in terms of like it's a boring business on paper, which is both a pro
Nate P (39:30)
Mm-hmm.
JMS / John Mason-Smith (39:30)
and a con for twenty five year old Nathan, I imagine, you know.
Nate P (39:34)
Yeah, but I I did have some experience at enterprise software before I so I was laid off in the Great Recession in two thousand eight from a management consulting job and we primarily consulted on
sales tooling with I'm gonna date myself with Oracle CRM on demand, right? This is like old school this is we would go head to head in sales conversations with Salesforce in the early days. So like I kind of knew that world of enter you know electronic records and relational database management, that type of thing. so it wasn't that I didn't know what I was getting into with payroll because yeah, you like you said, payroll's boring on paper. Everyone needs it.
JMS / John Mason-Smith (40:13)
Yeah.
Nate P (40:14)
Not that exciting, it's just gotta work. Right? But
The earn-in aspect is obviously what hooked me in. Because to be honest, I didn't know I was gonna be selling a back end payroll software that is a legacy product that is owned by fifteen, you know, resellers. That was like the whole story about how we got into this is a very interesting one. I didn't r I didn't understand any of that. Right? You you take a risk when you take a new job.
I wanted to build something from the ground up that was hard and I wanted it to be different than what I've been doing before. And I think you and I spoke last week, you said how things are going, and I told you some of the challenges, which I believe we're finally overcoming. But we we are migrating our service bureau's clients, I should say they migrating, but we're enabling them.
their clients to use our new employee self-service portal. So they're taking their clients off a legacy product that they've been on for 15 plus years and putting them in this new world of earning payroll. Okay, and that is we've been working on this for months, almost a year now, since I got here basically, we're finally making progress. Took a lot of trust building, took a lot of features, took a lot of testing to get it right. And this shit is hard.
and rewarding when you
JMS / John Mason-Smith (41:26)
Yeah.
Nate P (41:27)
get it done. And so funny, my old company, Cloud Kitchens Adams, whatever it's called, just did a huge fundraising round with Andreessen Horowitz, one of the biggest VCs in the world that's based here in Palo Alto. Andreessen's also an investor in Earn In.
So I got an I got an invite to this party. I saw a lot of my old colleagues, it was very fun, but I saw my former CEO speak. And my current CEO was there as well. So it wasn't like you know, I wasn't with yeah, I wasn't too awkward.
JMS / John Mason-Smith (41:59)
Well then too awkward, hopefully.
Nate P (42:02)
but he said
Cause he got asked by the VC, why do you keep doing these hard, these huge problems? And he said, Because that's what we do as entrepreneurs. If we want to change the world, and this guy has changed the world, you have to look at the hardest thing that nobody wants to do, or that people are insanely resistant to. Look at the things this guy had to fight to make Uber a thing. And everyone followed Uber. Uber was the first, right?
Look at what you have to do there. and the things that that company is up to now is incredible. So I go back to like you have to have grit and determination and take on the hard things. And I'm taking on this hard thing right now by introducing something very new to a bunch of folks that have been doing something the same way for a generation plus.
JMS / John Mason-Smith (42:50)
the thing that's frustrating about payroll is like it's been kind of static for a really long time. And, you know, you well, you spent what, twelve years on one system, presumably because nobody messed with it enough to break it.
How do you disrupt enough to where someone says, This is worth possibly breaking everything to get this amazing new thing? You know?
Nate P (43:13)
He
gave vizzol in this lecture. I saw there are all these examples of.
the world changing entrepreneurs over the past several hundred years, like the Industrial Revolution.
JMS / John Mason-Smith (43:23)
Yeah.
Nate P (43:23)
And I forget there's this famous story about it was Carnegie and this other guy were the godfathers of the steel in the railroad industry, right? And there were all kinds of in the Industrial Revolution, all kinds of disruptions because of what was happening. And workers were striking because they didn't want to adopt the new technology. But it was entrepreneurs going in and there was some there's some famous painting of a of one of these guys.
He
was shot in a sales meeting by an anarchist that was like, Don't you know, the same thing going on with AIA today. There's anarchists saying, you know, don't do this. the this is not a new story, right? getting people to do something new and try something new is is has happened before.
Another great example, they said there was this big debate when electricity was becoming available to the masses. I forget the two inventors, one was Edison, and Edison wanted DC, and the other guy wanted AC, alternating current versus direct current. AC won in the end, but Edison was so determined to win with direct current. One of the ways he would show investors and buyers is he would use
And he would say that he would attack AC saying alternating current is deadly. It can it it's it's dangerous and he would take live horses and he would elect
JMS / John Mason-Smith (44:34)
Jesus.
Nate P (44:34)
electrocute them to death in his sales presentations. Okay. Like entrepreneurs
JMS / John Mason-Smith (44:37)
God. I
Nate P (44:41)
when they face something hard, they go at it hard. And so that's why this is kind of fun.
JMS / John Mason-Smith (44:46)
I think what you guys are doing had me thinking like, my gosh, it sucks that I got out of doing payroll directly when I did, because there's like interesting things happening there again. And and that hasn't been the case in a really long time.
So I wanted to ask, Nate, is there anything that is going on in your world that you want to plug besides obviously Arn?
Nate P (45:05)
No, I want plug earn in payroll. I think
And I know a lot of folks have wonderful payroll solutions or they're very happy or they're satisfied with what they have and that's great. But if everyone w anyone wants to learn about what we're building, that's my plug. Like just come learn about what we're doing and
It's important that we take some risks. I wanna make a plug for taking some risks in our business to try new software, to try new things, because if you don't you will be a dinosaur.
JMS / John Mason-Smith (45:34)
How how do I find you, Nate? Like what's the best way to get a hold of someone on your team? Do I just like call your cell phone?
Nate P (45:40)
cell phone, email me, find
JMS / John Mason-Smith (45:42)
Ha ha
Nate P (45:43)
me on link, find me on LinkedIn. I'm I'm very responsive, as you know.
JMS / John Mason-Smith (45:46)
Yeah. Well I think I dumped you into the payroll launch lab too. So maybe if they go there they'll they'll find you in there somewhere.
Nate P (45:50)
Great. Yeah, and and
and especially for anyone looking to start a bureau, and you've been really helpful with this, you
can refer them to us. We're offering a a huge sort of incentive.
No strings attach investment. Well, some strings attached, investment in your to start up your bureau
JMS / John Mason-Smith (46:04)
Nice.
Nate P (46:07)
and fifty thousand in license fee credits to use our software. The string attached is you gotta use our software for.
and extended you know a nice ten year contract. but it's great software, it works. We've got close to a quarter million employees served by a twelve thousand employers, thirteen and growing service bureaus using it now, so established bureaus. So
JMS / John Mason-Smith (46:33)
I'm excited to see what you guys do. I wanna see more people investing in this space just broadly. So I I'm a fan of everybody that's coming in and putting money into this space. And I will say
Typically when I talk to people that are starting payroll companies, the answer is, hey, my software vendor wants me to pay fifty thousand dollars, not they want to pay me fifty thousand dollars. So that's pretty wild to hear that you guys are doing that. hopefully people take advantage of that before that opportunity goes away. But that's all I had, Nate. I I really appreciate you. Let me pick your brain for
Nate P (47:03)
Yeah.
JMS / John Mason-Smith (47:04)
an hour here.
Nate P (47:05)
I can't wait to see the final product.
