Cleveland Brown Transcript
Clint Betts
Cleveland, thank you so much for coming on the show. Honored to have you are the co-founder and CEO of Payscout. Tell us how you came to be the co-founder and CEO and tell us what Payscout is.
Cleveland Brown
All right, well, what Payscout is, Payscout is a payment processing technology company. And really, what we do is offer payment solutions to enterprise, medium, and small businesses. Our differentiation is that we utilize what we have as a proprietary payment orchestration platform that converts payments from what we traditionally think of as a cost center to a profit center for businesses. We do this really by harnessing payment data and utilizing tools such as artificial intelligence to accomplish what we call the three Cs. And that's for our customers and merchants to increase conversions, reduce costs, and improve compliance for them. Ultimately, Payscout's goal is to eliminate processing fees for merchants by offering the convenience of a myriad of payment types for customers that our merchants service. And that's in a quick nutshell.
Clint Betts
What got you excited about payments?
Cleveland Brown
It's the journey. So you just asked a little bit about how I became CEO and founder. So prior to Payscout, I had built out a communication platform for public schools, started K through 12. As that evolved, that platform eventually required the schools that we were servicing the ability to orchestrate e-commerce transactions and for schools to be able to sell different items, as well as parents paying different fees that may have impacted their student child. So as that evolved and those requests became more common, I had to then shift from building out communications to, how do I integrate payments? As I went through the journey of ultimately integrating payments into that platform, I actually sold the school side of the platform, but I kept the payment side. And what I saw from the payment side was really this ability for payments to go global at the time, and I just got married to it through that particular experience.
Clint Betts
I see that you studied philosophy at UCLA, which is really cool. And you also studied business economics, but far more interesting is philosophy. I did a little bit of that myself in school. What was it about philosophy and just general, are you still reading that type of stuff and digging into that type of stuff?
Cleveland Brown
Yeah.
Clint Betts
Yeah. Okay. Now we can talk about some things, man; here we go.
Cleveland Brown
Oh yeah. I don't think you ever get away from it. I would say that the challenge is how the brain solves problems. Right? Traditional, what I would call traditional, our English, our history, our people. Sci, how logic solves problems is very straightforward. In philosophy, as you know, the questions were so open-ended, so difficult to wrap the brain around as we talk about different things like existence or morality or whatever it may be. That challenge for me, I just naturally gravitated towards that as really the foundation, fundamental way to think and solve problems.
Clint Betts
Yeah, the first time I read Nietzsche, I was freaked out, dude. You know what I mean? What was your experience with Nietzsche the first time you read him?
Cleveland Brown
Very similar. Really understanding how logic and how he used logic to once again solve these difficult questions. It was fascinating to me. Yes, it definitely in the beginning, it does freak you out, but I think once you understand how they're using logic to come to certain conclusions using language, then it just becomes fascinating. No different than looking at a covalent bond in chemistry.
Clint Betts
That's a good way to put it, actually. Yeah. And by the way, he's also just a great writer, so it's super fun. You emphasize the importance of culture a lot. At Payscout, you've actually been recognized as a leader in culture. What is it about culture? How did you develop that? Give us a sense and some advice on how to build great culture within a company.
Cleveland Brown
So, building culture is something that I had to learn and learn, you'd say, the hard way. But where it became increasingly important to me is as I was building the international side of Payscout and bringing in different payment types from different places across the world, obviously having to, in some instances, either interact with different cultures and at the same time having employees from different cultures, and as I said all over the globe, it really became apparent to me that I had to figure out how to define a universal culture, which I would call a universal language. So what language can we all utilize collectively, even if we speak differently, have different religions, backgrounds, etc.? How could we be successful as a business? And I found that culture was really the tool that made that happen.
Clint Betts
And what do you think about mentorship within your company and mentoring people to grow within the organization, even just to grow as human beings?
Cleveland Brown
Yeah, it's extremely important. When we talk, the way we look at mentorship is actually built into our culture. Part of our culture is that we have what's called short-term goals. So they're kind of the yearly goals that we look to tackle. And then, we have something called long-term goals, and these goals don't really change. One of our long-term goals is to develop C-level qualities in our managers as they progress professionally with Payscout. So, for us, mentorship is fundamental to what we do because it's fundamental to how we look at our long-term goals and how we look at performance appraisals as it pertains to that particular goal.
Clint Betts
What about AI? How are you thinking about it within your company? It is also just a broader question, and I know this is an impossible question to actually answer, but I'd love your kind of perspective on it. Where are we going with it? And what is the future of payments in the age of AI? And by the way, this is a loaded question, so take whichever we want. The president also just came out with crypto reserves over the weekend, so I would love to be free to comment on crypto and its effect on payments.
Cleveland Brown
Yeah, so once again, I'll go kind of fundamentally. The way I characterize AI is really this evolution of data that's available, both offline and online, and really bringing these data sets together and then utilizing these data sets for decision-making. The way I think about it is similar to the rise of the internet. I look at AI as a necessary tool. It's a tool to compete with others.
And what's important is, for me, how do we utilize AI the same way? How do we utilize the internet and the available apps? If we utilize the tool to positively impact the world, then it puts us obviously in a great position. And that's whether it's individually, if it's from a family perspective, or from a professional perspective, AI is a great tool. If we utilize the tool for nefarious purposes, then we are perpetuating the ability really for people to commit crimes. It is the same thing that we see when we look at the internet, and I equate it to kind of what we see from the white hat hackers, which are security professionals that are protecting the system versus the kind of black hat hackers that exploit the system for personal gain.
So that's kind of how I look at it. It doesn't change. I still think that we're going to ultimately have to wrap legislation around the prompting for AI, which is a loaded proposition as well. But that's where basically how I see AI, just from a fundamental perspective. And I can get into payments if you'd like.
Clint Betts
Yeah. Tell me, let's go to crypto real quick. I'll go back to payments for AI. Give me your sense for crypto, that space. It must be an interesting space for you to look at given what you do. I don't know if Payscout is engaged in any crypto, payments, or other things like that, but give us a sense.
Cleveland Brown
Yeah. So, traditionally, we've looked at crypto; we're not currently engaged in crypto payments. We do understand how they work and how they operate. If we strictly go from a payment perspective in terms of cryptocurrency, we want to give merchants the ability to accept payments based on the different payment mechanisms that customers use. So, as we see the evolution of crypto, it's really for us not to be on its bleeding edge but more on its cutting edge. So, as we see more people want to utilize crypto in their daily lives, then that's something that we look at integrating and putting in place. We're seeing more, I can tell you, requests for it, but it's not quite enough to really push it into the ecosystem the same way digital wallets are pushed into the ecosystem today.
Clint Betts
Yeah, it doesn't have the adoption, certainly that the entrenched money has for sure. And who knows if it ever will, which is a really interesting piece. I imagine it will, but who knows. Yeah, give me a sense on the payments front and with AI and how are you using it within your company?
Cleveland Brown
Well, we've always used datasets and what I would consider artificial intelligence from a fraud and risk protection perspective. And that's once again, taking, as I characterize it, offline data, which are data sets that we have based on transactions that happen with all the demographics that surround those transactions, and then integrating those with online data that's available in terms of the nefarious things that can happen, the flags and toolsets that allow us to spot fraud very quickly and kind of protect the ecosystem. So, I would say that our industry has always more or less been at the forefront of AI. All we're doing now is we're able to take larger datasets, both offline and online, and kind of integrate those for fraudulent purposes and make sure that we catch it.
What I would say as an organization is very similar to any organization in terms of what we do from a day-to-day perspective when it comes to tasks. Our goal is to teach our employees how to be prompt and efficient when they're using AI. And I think the secret sauce is once you have those prompts in place and you get a result back; you personalize it rather than a lot of people do, cut it, and paste it. Same thing people did online, as you know. Go back to those days when people were writing papers, and they would just cut and paste a paragraph, and the professor would Google it, find it, and bust you. It's kind of the same thing with AI, making sure that there's a personalization to the final product that's delivered.
Clint Betts
Yeah, that actually is a great analogy as well. I wonder what you read. What do you read and what reading recommendations would you have for us?
Cleveland Brown
That's funny. So, you did ask about philosophy.
Clint Betts
Mm-hmm.
Cleveland Brown
So I consistently read a book, it's called Groundwork for the Metaphysics of Morality. It's by Immanuel Kant. I've just always been fascinated with the subject. So from a philosophy standpoint, that's a book that I always dive into. Interesting enough, another book that I would recommend is a book called The Inner Game of Tennis.
Clint Betts
Hm.
Cleveland Brown
I have these analogies, and I have a sports background, so I really equate what we do every day to what happens in sports. The Inner Game of Tennis is just a well-written, easy-to-read piece that really talks about so many different mental aspects of high performance. And starting off with, not to give it away because I'd love everyone to read it, but self one and self two, figuring out what that means and why athletes talk to themselves and why leaders talk to themselves as they're looking at high performance. In terms of what I'm reading right now, I'm reading 11 Rings. It's just a book I never did read. So...
Clint Betts
Oh, cool.
Cleveland Brown
And for fun, if you want to call it fun, there is a book called Project Hail Mary.
Clint Betts
Oh, I've never even heard of that. What is that one about?
Cleveland Brown
I just started. So it's really about the existence of mankind and the fight for existence through a number of challenges. So like I said, I just started, just picked it up.
Clint Betts
Yeah. Hell yeah. That's awesome. That sounds great. That's a great topic. That's the topic right there.
Cleveland Brown
Yes.
Clint Betts
I also wonder, as you kind of go along here, or I don't know, have you raised money?
Cleveland Brown
No.
Clint Betts
How have you thought about raising money and why haven't you raised money? That would be an interesting thing for our audience to know.
Cleveland Brown
Yeah, so we've been blessed. From the time we've started Payscout to now, over a decade, we have been a profitable company. So the need for us to raise capital has not really been something that we've looked at until recently. What we're seeing now in our industry is we're seeing a lot of consolidation, and so raising capital is now something that's on our radar, but it's not about profitability, it's just about scale at this point.
Clint Betts
Yeah. Who's a leader or an example of a leader that you admire?
Cleveland Brown
Gosh, so many. So many. I mean, it goes from my father, I would say. That's where I would have to start. I grew up in a military family. In terms of my father's service, he was a special forces reconnaissance Marine and really embedded tools for us for leadership, kind of growing up, understanding self-discipline, and certain things of that nature: confidence, empathy, and optimism. So, I would say it's the father figure where it starts. There have been a host of figures that have impacted my career up to this point, but I would have to say, my father.
Clint Betts
Yeah, it's the best one. Tell me what you're thinking about 2025. We're talking about the end of February here. 2024 was obviously kind of a tumultuous year just because there was a lot of uncertainty. Is there more certainty now as you're looking at this year? Is there less certainty? You mentioned there was a lot of consolidation in your industry. What's happening?
Cleveland Brown
For us specifically, I would say more certainty than the prior year. And it's really the industries that we serve are now stabilizing. A lot of the payments that we work with here at Payscout happen in medical billing, it happens in education billing, and telecommunications as well as government. So what we're seeing is more stabilization there as it comes to the payment industry.
When we have an administration change, there's always a big impact. So, for us, the CFPB is a central federal agency that impacts the payment ecosystem. We've done this once already with Trump's prior term. So, him coming into place now, it's really us gearing for what we saw in his first term, which was a shift from the federal enforcement actions that we see in the payment ecosystem to state enforcement actions that happen at the attorney general level. So for us, all we're going to do is just really look at that shift and just make sure that everyone understands the issues that are fundamental to the different states, and that's what we build out in our technology, and just to make sure everyone's safe.
Clint Betts
Where are you based?
Cleveland Brown
We are in Sherman Oaks, California.
Clint Betts
Okay. Tell me about your name, Cleveland Brand. I'm sure you get asked this all the time. Was your dad or your parents big Cleveland Browns fans? I mean, your name is incredible.
Cleveland Brown
I appreciate it. Like I said, from a CB to a CB. I appreciate it.
Clint Betts
Yeah, but mine's not as cool as yours. Mine's Clint; that's just lame. You're Cleveland Brown, man.
Cleveland Brown
Yes, it's a name. It's a name you have to live up to. But I am Cleveland Brown Jr., by the way.
Clint Betts
Okay.
Cleveland Brown
My father is Cleveland Brown, so it was handed off. And yes, they were very big fans of Jim Brown and Cleveland Brown, and that goes to, obviously, my grandfather. And I have a son, and guess what? He's Cleveland Brown III.
Clint Betts
So cool.
Cleveland Brown
Yeah, so we're keeping it going. But yeah, it's a cool name. I will say, though, that it is a name that you have to live up to.
Clint Betts
Yeah.
Cleveland Brown
And I tell him that all the time.
Clint Betts
That's incredible. Hey, finally, we end every interview with the same question, and that is, at CEO.com, we believe the chances one gives are just as important as the chances one takes. When you hear that, who gave you a chance to get you to where you are today?
Cleveland Brown
Oh, wow. So the chances. Who gave me chances? I would preface that the chances that one takes are really predicated on the confidence in oneself to put oneself out there. Once again, on my philosophical side, I'm sorry for not answering it directly. But I would want people to understand that you have to have confidence to put yourself out there. As people come along, the chances that you take are more impactful. And I would say for me, it was my first bank manager at a bank; it no longer exists. It was once again consolidated into the US Bank, which was the Union Bank of California. And this is where the entrepreneurial kind of seed started my journey.
I was 18 years years old at the time, so I had to give it up to my bank manager, and she tasked me with rolling out the first version of a Windows-based application for tellers, loan officers, et cetera, as people would come into the bank. And they had these schematics. So I took it on. I put my hand up and said, "Yes, I can do it." Really not knowing what I was doing. But you know what? I said, "I'm confident enough to put myself out there and I can figure it out." Well, I got the schematics, put this, and she gave me that chance. So there's the chance that you're talking about. What happened is that I followed the schematics, but it didn't work. I followed the schematics, but it didn't work. I followed the schematics, but it didn't work. Finally, I used my own logic and reasoning and put it together a little bit differently than the schematics, and I got it to work. And went back to the bank manager. Here it is; it's working.
I Got called in a couple of days later, and the bank manager said, "Well, what did you do?" And then I went, "Oh no, I shouldn't have done this myself." This is a banking apparatus platform. I said, "Well, it wasn't working, so I changed it and did this." She's like, "Well, the engineering team and the technical folks want to talk to you." I said, "Okay." They got on the phone with me, and I walked them through what I had done.
Anyways, long story short, basically what happened is they had about $40 million worth of investment into new equipment and technology that they were going to basically terminate and trash. There were nine pilot offices that didn't work before ours. Ours happened to be the 10th. They basically came back to me with letters from Japan, at the time, ownership, and the US that basically said I helped this $40 million investment survive, and they're rolling this out now to all of their bank branches. The seed that was planted, I'm sorry to make this long, was a fact that for that effort, I did put myself out there, I got a $50 gift certificate.
Clint Betts
That's awesome. Where was it to?
Cleveland Brown
So there you go, and you put it together, $40 million, $50 gift certificate.
Clint Betts
Where was the gift certificate to? Was it a steakhouse?
Cleveland Brown
At the time, it was called CompUSA.
Clint Betts
Oh, yeah. Okay. Cool.
Cleveland Brown
Yes. So, it was a $50 gift certificate to CompUSA, which I never spent. What I did was I took the gift certificate and pinned it on my wall as a reminder that if I'm going to help solve a $40 million problem, I think a $50 gift certificate isn't enough for the time and effort.
So there you go. It was my bank manager. Sorry to give you that long story. But realistically, there you go. There was the seed where I said, "You know what? It'd be best if I worked and built something myself."
Clint Betts
Yeah, well done. And you have. And congratulations on everything you've built. Cleveland, thank you so much for coming on the show. Pleasure to have you.
Cleveland Brown
I appreciate it, Clint.
Edited for readability.