GE 234: Tom Villante on Growing YapStone Which Is Now on Track to Do $18B+ in Payments by End of 2017 (podcast)

Hey everyone! In today’s episode, I share the mic with Tom Villante, CEO of YapStone, one of the leading online payment service providers for global marketplaces and large vertical markets.

Tune in to hear Tom explain how an investment banker became CEO of an online payment provider, how he made YapStone profitable after just two years, the challenges of growing in such a competitive space, and why it’s difficult to motivate your sales team if you don’t know how to sell your own product. 

Download podcast transcript [PDF] here: Tom Villante on Growing YapStone Which Is Now on Track to Do $18B+ in Payments by End of 2017 TRANSCRIPT

Time-Stamped Show Notes:

• 00:30 – Before we begin, please leave a review and rating and subscribe to the Growth Everywhere Podcast
• 00:50 – Tom Villante is CEO of YapStone, the leading online payment service provider for global marketplaces and large vertical markets.
  • They are on track to do over $18 million in payment volume in 2017.
• 01:10 – Tom has been doing this for 17 years, even though he thought he’d only be doing this for 18 months.
• 01:57 – YapStone’s primary function is online payments and e-commerce solutions for some of the largest marketplaces in the world.
  • 02:41 – YapStone tries to make the payment experience seamless.
• 03:50 – Tom was an investment banker in his twenties, then realized the Internet was the next frontier and invested in Core, an Internet consulting firm.
• 04:18 – A consistent issue that kept cropping up was payment processing
  • PayPal was the only one in the game at the time, so they decided to tackle payment processing from a different angle.
  • 05:00 – They started a division of YapStone called “Rent Payment” and became the largest online provider of apartment rents.
  • 05:13 – YapStone had to figure out who would pay the merchant fee in their new structure for Rent Payment. Landlords were not willing to pay 2-3% of rents as a fee.
  • 05:41 – YapStone created a layer of automation which integrated seamlessly to property management software, which helped track payments.
• 06:12 – They found having industry-specific knowledge was helpful in giving them an edge and allowed them to have a larger profit margin.
• 07:06 – Tom admits that he had no idea what he was doing in the beginning when working atYapStone.
• 07:32 – The one thing you learn quickly when you create your own business is that you are not entitled to anything; it’s not about you, it’s about how you can be helpful to your co-workers and customers in order to create success.
• 08:29 – Of the 5 companies in which he was an angel investor, YapStone is the only one that took off.
• 08:48 – Tom ended up taking overYapStone because he enjoyed working on it so much; he was the majority owner and he took over for the person who had been running it.
• 09:42 – YapStone eventually branched out into vacation rentals and then the sharing economy.
• 09:53 – They only raised a small amount of money in the beginning and then didn’t need to raise money for 11 years; they were modestly profitable after the second year.
  • 10:22 – They expanded and became profitable by using traditional routes of self-promotion.
• 11:46 – Tom would not depend on Facebook ads alone and encourages getting your hands dirty to sell your business.
• 12:48 – Tom invested in Core in 1997. The business went from $1 million to $35 million in revenue.
  • 13:52 – In early 2000, Core lost customers and the business tanked.
• 15:47 – One of the powerful things that Tom has done is never being afraid to get on the phone. He values phone and face-to-face contact for establishing relationships.
• 17:00 – Eric agrees that dinners with customers is valuable to building relationships.
• 17:24 – Tom hired Deb Tannenbaum as Chief People Officer.
  • 18:22 – It’s important to have someone making sure that the office culture and people are being taken care of. Career development and general well-being are important at YapStone.
• 19:15 – Culture is more than just pizza parties and ping-pong; what people really want is career and personal development.
  • 19:42 – Tom will sit down with new employees and make sure they are fitting into the culture.
• 20:36 – They didn’t seek out a Chief People Officer, but Deb came to them at a time when they needed better leadership and improved office culture.
  • 21:23 – Deb helped them to double their Glass Door rating after it had dropped.
• 22:03 – In 2011, they raised $50 million in equity from Excel Partners and Meritech Capital
• 22:45 – The one thing entrepreneurs need to be cautious of are the covenants around debt.
• 23:37 – Tom will get up at 6 a.m., do yoga, and meditate; this helps him focus more during the day.
• 23:53 – He speaks to 3 direct reports on a daily basis.
• 24:35 – Tom constantly tries to challenge his own convictions by talking to others in the industry, even his competitors, because it is helpful.
• 25:20 – Eric references Gary Keller’s opinion that there are three things that matter regarding direct reports:
  • 1) The person needs to be damn good at recruiting
  • 2) Within the first 90 days, needs to bring in $100,000 in revenue
  • 3) Needs to have a vision for the future of the team
• 26:09 – Tom agrees with Gary Keller’s assessment, with one caveat: he would say the report should bring in $100,000 in revenue within 180 days.
• 26:38 – Tom recommends Tony Hsieh’s Delivering Happiness. Treating people as individuals instead of cogs works immensely towards creating positive office culture.

Resources From This Interview:

• Tom Villante’s website
• YapStone
• Core
• Rent Payment
• Excel Partners
• Meritech Capital
• Must-read book: Delivering Happiness: A Path to Profits, Passion and Purpose by Tony Hsieh
• TV@yapstone.com

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