Clint Betts interviews Divvy co-founder and CEO Blake Murray. They discuss how Blake built a multi-billion dollar fintech company in such a short amount of time, leadership lessons he's learned along the way, the influence his father has had in his life, and the future of Divvy following its $2.5B acquisition by Bill.com.
Blake, I can't thank you enough for doing this. We're talking on the heels of Divvy getting acquired by Bill.com for an astronomical amount. We'll talk about that, I mentioned that in my intro. But I want to talk first just about your journey as an entrepreneur, as a leader, as a CEO, as building Divvy into what it is and what it continues to be. And you're still leading Divvy as the CEO.
But you come from an interesting background which I don't know that you and I have ever really talked about. Your dad is a tech legend. And maybe you should explain to those watching who your dad is and what the roles he's played. He's like the Forrest Gump of tech, because I understand he was in the middle of everything back in the days of the Steve Jobs era, the Bill Gates era, all those types of things.
And I want to learn more about your dad and how his influence, being the tech legend that he is, maybe put you on the path you're on today, or maybe it had nothing to do with it.
For sure. That's a really interesting topic, but also my path was not like his. I wish it was more direct. I mean, to cut to the chase, my dad had an incredibly storied career. It really is one of those kind of fiction where I think a lot of us in tech wish we could rub elbows and learn from some of the titans that he was not just able to learn from, but he had his hand in some of the most important early projects in tech.
And so, he went to Stanford in the '70s. And it was during Stanford as a first-year grad student getting his MBA where he went to, I believe—I don't want to misquote him, especially on the spot—but this is how I remember at least him telling the story. He went to an evening fireside chat, and it was by a young guy named Steve Jobs, and it was a packed house.
And he stood there for an hour listening to Steve Jobs talking about not only Apple, but about personal computing and how it was going to be absolutely transformational not only to families, but to how all of us interacted with the world and interacted with each other. And during the meeting and after the meeting, I think he was probably experiencing something similar to what most of us do, like this general confusion about life of, “What do I do, what's my purpose, what am I actually interested in?”
And I think that was a really pivotal moment for him where he was like, "This is it. This just spoke to me, to my core, to my inner soul, something just woke up. And I have to go here, not just in the space, but I have to go figure out how to go work for this guy who is my age. I’ve got to go work for him because I just know that goodness is going to come from that."
And I think that it was an incredible example of hustle and to really summarize it, he got on a cold call to Apple until they paid attention to him. I think he somehow even got Steve Jobs’ executive assistant's number, and just cold called the crap out of them until they paid attention to him, interviewed him, and then hired him. And he was one of the earliest team members—I believe that was in '75, '76, something like that.
So this is very early on. This is super early on.
Super, super early stages.
This is '75. I bet Steve loved the cold call, by the way. That's what he did when he was a kid. I'm sure you've read the famous biography Walter Isaacson did on Steve Jobs where he cold called Hewlett-Packard. And he actually got the CEO of Hewlett-Packard, Steve Jobs. So I'm sure Steve loved the cold calling approach. I bet that was super useful.
Yeah. And so, not only was he fortunate to then have a very material job there in sales, marketing, some product development—that famous commercial of that 1984 commercial where it's the woman running through, it's the Super Bowl commercial that still to this day spoken of as the perfect commercial—that was my dad's brainchild. He's just a really creative, interesting guy.
And so, he brought that to life working with a famous director, I can't remember who it was off the top of my mind. But he had an incredible professional experience there. But I think way more meaningful to him was his personal relationship with Steve as they became very, very close. And Steve Jobs became close even with my mom, and the three of them would lean on each other for support and commiserate with each other.
My dad was this albatross in this group of really young, brilliant, hard-charging individuals—but then he had four young kids. And so, that was not only a topic of conversation with the Apple executive team, but it was something then that Steve wanted for himself when he looked at this little Murray family. I mean, there's stories of him coming over super late at night where us kids are in bed and he would just sit with my parents and being like, "How do I get this in my life? How do I get balanced in my life?"
And so, we love sitting around with my dad and hearing his stories, again, that I think touch more on the personal level. He's got incredible stories of the crazy meetings and contriving these crazy strategies to out-position IBM, because IBM was already massive at that point.
But then, the other component of that is some of the fallout of when Steve was fired, and my dad was just as loyal as he could be to him. He was like, "If Steve's not running it, I'm out." He went to grad school with Steve Ballmer. And so that's when, after a period of different pit stops, Steve Ballmer recruited my dad over to Microsoft. My dad joined Microsoft at '88-'89, something like that.
Now, before they had any HR practice set up, any formal people in places, he was able to build all of that for them throughout the '90s. And he also then became very close on a personal level with Bill Gates and some of these other just really fascinating individuals.
I grew up hearing names like Nathan Myhrvold, who is just a tech giant, and Frank Gaudette, who was a really meaningful influence to my dad and also just a business genius. He was brought in by Bill Gates early on to be the adult in the room because all of them were just too young and just shooting from the hip and trying to build Microsoft, and Frank was brought in to be the adult.
But yeah, he had an incredible career. And then, not to belabor the point, but then from there, after Microsoft, which I believe he left in '99 or 2000, I would suggest he built his most important one, which was before microcredit financing or Kiva, and these other really incredible microcredit organizations that are focused on the most impoverished communities really trying to lift, women especially, out of poverty. The concept was his brainchild, and he was one of the creators of it.
My dad was with two other really just fantastic individuals, and they created an organization called Unitus. Unitus then has lifted millions and millions of people out of poverty by helping them start their own businesses on these small microloans and creating systems of accountability and returning or reporting. Now, I mean, he poured his heart and soul into that. And so, just what a great example, a great example I think of self-awareness, of being aware of what his skills were, of giving his heart and soul to whatever he was in as well.
At the same time, he was just a fantastic husband and father, but it definitely gave me a significant bar to shoot for in my personal life and my career.
Well, I get the sense that your father means a lot to you. And you are close now and you were very close growing up. I'd love to touch on what your childhood experience was like. Did you have a sense when Steve Jobs was coming over and you guys all had to go to bed, did you have a sense that was abnormal? The fact that Steve Jobs was at your house, did you have that—or was it just this is who your dad is?
I was too young to remember any of that. It was my twin brother and I, we were babies, but I vividly remember the Microsoft days. And we lived in Redmond, Washington. My family went to Bill Gates' wedding. And I think we were one of two families of kids that were invited to Bill Gates’ wedding, flown out to Hawaii.
And that's what I do remember, like, "This is not normal," because Bill Gates was already Bill Gates at that point. It wasn't like he was this up and coming big tech executive. His ascent was pretty rapid at the global scale. And so, I do remember knowing and respecting that what he was working on and achieving was extraordinary in the truest sense.
And my parents did a good job, though, of being pretty blunt with us of, "This isn't normal, don't let it get to your heads," kind of the tasks behind the scenes to your kids that you hope to try to figure out how to keep them grounded and not turn them into spoiled brats.
So yeah, I think that's just part of trying to be a parent. But yeah, to answer your question, I think we knew that what he was working on was pretty crazy at the time.
As a kid, given who your father was and what he was doing and the people he was rubbing shoulders with, did you imagine that this is what you would be doing as a career, too, getting into tech, building companies?
No. I like to think that my path was this crazy rambling path that ultimately had led into tech. But as I get older and as I just get to know more people, I actually think my story is a little more similar to some other success stories than just this direct, immediately injected into the pipeline of successful companies.
My path was I love animals. I love animals more than I love people. I'm naturally very introverted. As a CEO, I can turn it on. I can tell stories and I love it. And I love working with people and I love that part of my life. But being around people absolutely just takes energy out of me. My ideal weekend is some time with my wife and kids and just being quiet. And so, I always believed that I was going to be a wildlife biologist. As a freshman in college that summer, I went and worked in Africa with a world-renowned elephant conservationist named Joyce Poole. After I served a Mormon mission, I went and did some more. I got my degree in environmental sciences. I believed I was going to go get graduate degrees in wildlife biology, and then go spend my time saving the whales and saving the elephants and working with them.
But I had children at a very young age. And I had at one point in one of my trips to Africa, left my wife with an eight-month-old, and I believe, pregnant with a second at that point. And we have three kids. We had kids really early and really young. And it all felt unfair. And it all felt very selfish to me. It all felt unfair that I was leaving her and my kids. And I wasn't there when they were young. And so, that's where I had to abandon that career path. And then from there, I felt like again was going to be a direct route and towards wildlife biology. Jumping around all over the place. I dropped out of law school, I dropped out of an MBA program, after a year in each, two separate programs. I joined a commercial real estate fund which was easily the most boring job I've ever had in my life, but then it was really informative now that I look back on it.
To the skills that I've achieved from a literal underwriting perspective—because we're underwriting assets that we're trying to invest in—to understanding contracts, to really utilizing contracts, to, I don't know, from a competitive advantage and leverage. And so I was bored out of my mind during that, but that ended up being important.
Well, that makes sense why you dropped out of law school. That would have been your most boring job had you stayed in law school and become a lawyer.
I was bored out of my mind. Hey, actually, if you want to go down a tangent, I went to law school with a very strategic and different motive. I've never spoken publicly about it. Those that know me know the whole story behind the scenes because it was just crazy how it unfolded.
But I went to law school to get recruited by the CIA. My goal was to check that box. And that was the last box I needed that they would notice, and I would get recruited. And I did. So I did get recruited by the CIA—which was a dream scenario—a process of about eight or nine months. And I was recruited. The job that I wanted was to become an operations officer. And that is through the Clandestine Services. So that is where you're over in foreign countries and you're essentially a spy. You're posing as a different career and then you're working as a spy. And that was my absolute goal of my life, truly. That was more than animals. And so I did, I actually got recruited. And that was just maybe really thrilling and exciting period.
So, why? Why was that what you want to do? That's fascinating. You were going to law school specifically to get recruited by the CIA. That was your goal. You actually did get recruited by the CIA. But why was that what you wanted to do? What about that excited you and got you fired up and made you—I mean, you went to law school for that. Law school sucks, dude.
Law school sucked. It was terrible. I love this country a bizarre amount, with a passion that, like, talking about it for 30 more seconds, I'll start getting emotional about it. And it was a way that I felt like I could serve and use the skills that I have to be meaningful and to truly be an asset to the country, from language capabilities to my persuasive capabilities, to some other elements that are just part of that job that I felt like I would have been really, really good at. And service is something that's important to me. And it's something that I wanted to give in perpetuity to the country. Anyway, long story short, I got to the last step which is getting your conditional offer of employment. After you passed all these checks, you would get your assignment of a hardship tour of duty, which is going to a wartime area. And I never heard from them again.
And my heart was totally, totally broken. After eight or nine months of going through all the jumping through the hoops and meeting with them and flying all over the place to meet with them in interviews, and all this kind of stuff, and assessment tests, and I never heard from them again. So obviously, I didn't get selected. And that was pretty devastating. That was like right smack-dab of trying to have a plan B, C, and D from providing for my family and these investment real estate funds and all that kind of stuff. But I came back to Utah. My cousin Brandon Rodman is the CEO, or was the CEO, of a company called Weave, here in Utah. And it was tiny at that point. And he gave me an opportunity to invest some money into the business and then to come and work there. And that's where I cut my teeth, really cut my teeth in the tech ecosystem here in Utah.
And so, it was a much more winding and less direct path into technology. But once I got back here into Weave is where I started to get back into tech. That was a long answer to the short question.
That was wonderful, man. At what point do you start thinking about Divvy and this idea that really was revolutionary? And we're going to talk about fintech, the future of fintech, all that type of stuff. But fintech wasn't what it was now, where fintech is just exploding, when you started Divvy or when you were thinking about Divvy, it wasn't a proven industry or at least a subset of the overall technology industry.
It was. Yeah, your assessment is right.
I mean, there is some fintech inside of Weave now, in particular. I'm not sure that that was a big piece of it even back then. But Weave, I would even consider a fintech company at this point. We'll probably have Brandon on this show and people can learn about what Weave is and what they do.
But at what point were you thinking about Divvy and, "I want to branch out and do something on my own?"
So, it was the end of January, beginning of February of 2016, I had left Weave a few years earlier. And I had started as a franchisor, so owning a bunch of territories—Idaho, Utah, I think I had some pieces of Colorado or something like that—of a pizza fast-casual franchise, similar to Blaze Pizza. And they sold me hard. And I had a chance with the group that did the series A of that investment to participate and to own some of these territories.
And so, here I was pretty young thinking that would be incredible passive income for my family because everybody looks at franchises and thinks that they all work, and that they print money.
And so, we pulled the trigger and we did it. And they ended up being the single worst investment that I've ever made in my life, probably just because I was naive about the restaurant industry. But also top-down, they weren't organizationally ready to grow as fast as they wanted to. And as a franchisor, you don't have any control over that. You're just up to whatever the product company is doing. But they were insolvent. They were a financial mess, the businesses. And so again, what was supposed to be a side project for me, I had to dive in headfirst to all of a sudden save this. And to fix each one of the individual units, and then the product group that now I was in charge of, to figure out how to not lose just a metric ton of money.
And it was in the process of diving in, not only into the financials, but then into the software stack of like, "How can I just get more information in real time about what is going on with my business?" Like, "Are you kidding me? This accounting software, all of this finance software is so out of date. Everything that you're showing me is stuff that happened 90 days ago." Like, "That's not helpful, I need to know what's going on right now."
And it was in that process where what I realized was, yes, what I was experiencing from just a process perspective was largely ubiquitous with small businesses, meaning you just lacked visibility. But the more important thing that drove me to Divvy was that the fear, the literal and visceral fear that I was feeling as a small business owner of making payroll, about surviving another month, about taking things from the red to the black, was absolutely ubiquitous with small business owners. You go and talk to any small business owner and at some point in their journey, no matter how big or small, how mature or immature they are in their process, they have felt the same elements of fear. And it's largely you can trace it back to, "I just don't know what's going on. I don't have enough data. I cannot see into the actual mechanics of my business financially to see what's going on in real time."
And what we understood pretty quickly was that there was a relationship between your banks and then the software stack, and then a massive freaking gap, a huge gap of how to get them to work with each other and to sync with each other. And instead of trying to integrate those, the aha moment for us was that they should be one and the same. And how I make payments in my organization and how I receive payments in my organization is the same as the finance stack and the software stack that I'm using for all the finances, you will just have a real-time flow of information. And you'll be much more agile. You'll be able to adjust on the fly. You'll be able to make decisions right now that can prevent failure in a few weeks or a few months. And accelerate growth on the positive side.
It's not just about preventing failure. It's also, “Do I have the information to drive growth?” And it was a lightning bolt moment, Clint, where the succession of connecting those dots occurred in a single day. And it was within then two weeks, I was investing money into building this out, because it was just so clear to this day in my mind.
What did your dad think? I assume you talked to your dad, probably the first person you talked to about this idea, or one of the first people you talked to about this idea. What did he think?
Yes. He wasn't the first.
He wasn't the first. That's interesting.
Yeah. He was not the first. The very first was my cofounder Alex Bean. He was the first. But my dad, I went to him in May. I simmered on it and wanted to make sure that my logic, my reasoning, and business case was not only sound but that it was just rock solid. And then I went to him.
And again, you're trying to bump up against people, pressure tests. What's their initial reaction? Do they sit back and think about it for a little bit? Did they grimace? Are they leaning in? And to me, I was just trying to pay attention to all of that. And he looked at me and he's not a puff piece person, "If it's not right, listen to me, Blake, I really think you should spend time doing something else." Like, "Let me tell you why." This is when he was like, "You got something here. You got something here." Like, "How do we make sure that you're headed in the right direction?" And so, he felt it also pretty quickly. He could tell that my research was incredibly thorough and that I had mapped out the end in mind. And I had mapped out in that short amount of time effectively a playbook of what that user experience and product needed to look and act like for it to be successful.
How validating was that to hear that from your dad? I assume you were probably thinking, "I'm all in on this. I really like this idea." But once he says, someone who—like we've mentioned before, someone who means a lot to you so your father, your mentor, all that type of stuff. Was it just like, "All right, I got something?" Was that like a light bulb moment in the journey?
Yeah, it was actually. I'll be honest, because the other side of it is I'd already learned in my career that not all advice is created equal. I think when you have a good idea, the inclination for anyone and just human nature is to go start talking about it with anyone and everyone, assuming that as much feedback as I get is going to be helpful. But why? If they're not a subject matter expert, if they don't have experience, you shouldn't be seeking feedback from that person.
And so, from a Divvy perspective, I was actually really quiet by design outside of a few selected people. And as you and I have spoken about, I was working with the Gundersons, who are a development agency here in Utah. But we had a really tight knit group of people who knew what was living in my head. And so then, going to my dad and then not just talking, but pitching him and really pitching the business—and not just the product—for the first time, and for that to be received so well, that was that good. It was important.
And again, context matters because I pitched him probably 20 other businesses before and never had a positive response ever. And so finally, getting a real positive response and not just positive but like, "Whoa, Blake, this is big." That we knew we had something pretty big.
That's incredible. And how validating is that. And you just mentioned something and I want to give some context to it. You mentioned the Gundersons who I've worked with. They're like brothers of mine. I live in Utah. They're like Utah legends within the startup community, very wonderful people.
But they were running a software development shop at the time, like an outsourced software development shop. And what they would do is they'd work with early stage startups and founders. They'd help them build like an initial MVP or prototype or anything like that. And then, the idea was to get that company to a point where they could transition in an in-house team.
I bring that up only because that's a model that you did. You went to an outsourced software development team. You built the MVP. And then you obviously transitioned it into its own thing. But what was that process like, that initial like, working with a software development firm, picking the right software development firm, picking the right partners to do that with. And then eventually saying like, “All right, Izeni, we've gotten everything we can out of you. It's time for us to transition this to all in-house. And we're going all in on this." What was that whole process like for you?
At first, it was scary. For a nontechnical founder where your strengths aren't there, and you literally have zero skillset of even how to do a wireframe for a mobile app or for a webpage. You don't know how to do any of that. But you have all the ideas that are here. I needed somebody to help take what was living here and put it into screens.
And that's the very specific help I needed because then, I could give direction just on my own confidence on the aesthetics of it, of how it needed to look. I just had an incredible amount of trust in my own skill in that, but I didn't know how to do that. And Izeni was probably one of the only one, two, or three groups in Utah at the time that had a track record of success.
And then, I had known them a little bit, but like brushed shoulders a little bit because of their work also with Weave. And so again, there was just an embedded level of trust because they had been working with some of the better Utah tech companies and helped them get off the ground. And that's what Izeni and myself really focused on.
We focused on making sure that we could design a user experience that would be a no-brainer to all the different stakeholders that would need to use Divvy. There was actually a really logical baton pass. So the conversation of moving off of them was never difficult because they also realized that, whoa, the technology you're going to be forced to build is, it's not that it was outside of their skillset, it was just going to be too massive of a project because having to build into banks and these APIs that really didn't exist at the time.
So their advice to me was, "We'll get you to this point. We'll get you to where you have functional wireframes on mobile. We'll build your webpage where you will build even the wireframes on the web. But any material code, you're going to need to go hire some engineers. And by the way, here are some suggestions of who we think you should be looking at."
And so, they even helped with pointing me in the right direction of early engineers that we should be looking at hiring. But what I would say to not undersell their impact, their wireframes are a direct result of why we were able to land our big commercial agreements that we landed at the very beginning. Our first one was with US Bank who at the time, I think, was the fourth or fifth largest bank of the United States.
And we were able to take what we had, a functioning MVP, to Minnesota. We find ourselves sitting in the HQ in a room all of a sudden. It's Alex Bean and I, we're sitting with 14 other professionals. They're all wearing suits and ties and we're like, "Holy crap. Sorry.” But then we give the pitch of a lifetime.
And we tell this story of this shift of how small business owners are going to, with confidence we said, "You may not believe it, but we promise you that the small businesses, they do not care about their cashback, they care about the value that you add to them. And the logical shift is going to be this convergence of payments with software, banking with software." And those screens were really, really important to pulling all that off. And we walked away with an agreement with them.
And that meeting with US Bank must have been one of the times in the journey, of obviously, the validation of the idea, and this is something I should pursue talking to Alex, being your cofounder, talking to your father, getting that validation is a big deal. Working with Izeni, them putting up those wireframes, helping you build the product, that's probably another validation along the journey.
But then, that meeting that you just mentioned with US Bank and actually selling and getting them to understand, like you said, it was like the pitch of a lifetime, the meeting of a lifetime. Was that the first time you're like, "This is actually going to be something?” Because this journey is like, "Who knows if any of this is actually going to be anything?"
Yeah. No. That is no doubt the meeting, and that was the end of May of 2016, where we knew that we had a tiger by the tail. And not just because of how they received it, their emotional response to the presentation we gave, and then what materialized afterwards, which was an agreement that had real revenue baked into it.
I mean we're embarrassed to admit, but now, five years later, it's fine admitting it. I had no idea what interchange was. Interchange being the revenue or the transaction fee that is assessed to every single transaction. And all of a sudden, they're giving us this contract where they're giving us a portion of that. Alex and I, we're like, "What? We have revenue." And so, we obviously became experts afterwards but we were very excited by that.
At what point did you start thinking about raising capital from venture funds or taking outside capital? What was your strategy around raising money throughout the early days of Divvy?
Our strategy from day one was to optimize for control which sounds very, very weird. Can I actually answer it a little sideways?
There is a pretty consistent and persistent narrative in just social media, really easy on LinkedIn which can just be a cesspool, but of bootstrap businesses versus venture-backed businesses. And that one is somehow better than the other.
And it's so disappointing because any intelligent individual and especially an adult should recognize that rarely is life as binary as that. And that they both can be great. They both can be bad. You know what I mean? And there's so much gray that exists between them. We made a decision.
I've run the bootstrap businesses. I've done it, great. It was a fantastic experience where I learned a hell of a lot. But as a venture-backed business, your goals are different, your expectations are different from a growth perspective, from a revenue perspective, from a customer acquisition perspective, from a virality perspective. So you use the capital in a very different way.
And so, our objective was to get Divvy into as many hands as humanly possible. If we were a bootstrap business trying to do that against other fintechs, or against other banks who really were our competition at that time, that had massive distribution channels, we wouldn't be able to do that, invest enough capital in a bootstrap perspective. So we did it as a venture-backed business.
But we wanted to preserve control as a venture-backed business, which meant that when offers started to come, we weren't always looking at the highest valuation because sometimes the higher valuation would come with an additional board seat, or it would come with different voting rights, or it would come with more dilution. I don't know. It always came with something, like an alternative that you had to weigh.
And we always wanted to opt for control, where not only that I ended up being the largest shareholder, but that we had control the votes at the board level, because we believe, Alex and I, and then my executive team, that we knew how to run the business, not the investors, not the venture capitalists, and also not the board. Even if they had our best interests at heart, they didn't know how to run the business.
And so, one, that's what we optimized for. So it was probably 2017 that we decided to, "Yes, we're going to become a venture-backed business." First, we did a friends and family round, that was pretty material. And it was my dad, some of his peers, my family and myself—we funded the business first. And that was really to get us through the end of development through a really strong beta, just testing the hell out of the product and really working with the initial customers.
And then we launched in January of 2018. January 1, 2018, was our official first date of market. And Divvy was received just really well. So that was exciting. Then probably by the end of January, I started to get a lot of inbound from institutional investors. So like, "Whoa, this is like a crazy idea. Can we just meet with you?" And it was really fun and it was flattering. But that's where you have to put it into check and make sure you know, again, what you're optimizing for and know what you're looking for in investors.
And so then, it was after about five months, we decided to take an investment. And it was with a Utah firm called Pelion Ventures. And they're the largest fund here in Utah and so they had the capacity to make a material investment as a series A investment. But they also had the ability to follow on, if they believed in us, to continue investing in us which was important to me. And they were just excellent, excellent partners.
But then it just went fast. We did an investment two months later with Insight Ventures out of New York, less than a year later from NEA Ventures, one of the largest Silicon Valley funds. But in every single round, I optimized for control and would push some of the other investors that were interested to the side. And we were really happy with that because then ultimately, when the business got really difficult during the height of COVID, we were able to look out for people. We were able to look out for the business.
And although I felt an accountability to investors, they were never in the driver's seat. I was able to look at my executive team, shut the door from the investors and say, "What are we going to do? How are we going to solve these problems?" And man, am I glad that we had that clarity back before we raised our first round because I feel like obviously in hindsight, it was the right thing to focus on for us.
By the way, Pelion Ventures doesn't get enough national pub. They've been behind some incredible, huge companies. I know everyone always talks about like Andreessen Horowitz and Sequoia and Insight, Insight is another legendary firm that you got to work with.
But Pelion Ventures, man, unbelievable team over there, Blake Modersitzki, who is the managing partner over there, just unbelievable people. Here's my question around that, though. Who's advising you? Who are you listening to? Who's coaching you that optimizing for control is going to be important back then? Or is that just instinctive? Because that's rare, as you know.
It was just instinctive. Nobody told me to do that. It was trying to pay attention to the horror stories that you read about on Twitter of the nasty side of venture capital. I think there are some from Utah. You just kind of get to know the ecosystem of the community you're in where you should at least. And there are some horror stories of where investors took control of businesses and took them sideways. And I just never wanted that to happen.
From a very selfish perspective, I didn't want it to happen to me. And certainly, we didn't want it to happen to our team members here. So, yeah, I think it just was a decision that Alex and I made early on.
You said something early on in this conversation that I want to circle back on. It was probably like a throwaway line but I don't know. As you've been talking this whole time, it stuck with me because I think our personalities are actually quite similar.
You say like, "Hey, I can turn it on and be a leader. And I can turn on being the CEO, but my preference is actually not to do that." It's very much like me, like I don't know if I can turn it on as well as you, but I'm certainly the type of person who would much rather read or just be alone or go for walks or go for runs, or whatever it is.
And this whole idea of you being able to turn it on, I'd love to explore that a little bit more with you, what that means, and just overall—how you experienced that because you really can turn things on and off. A lot of people don't talk about that piece.
Yeah. What do you want me to start with on that?
When you said that, again, the light bulb just went off on me, I’m like, turn it on. That's fascinating. That you can turn on being this incredible leader. You've said like, "Hey, I can be persuasive. I can do this type of stuff." But your preference is not to do that.
And so, what does that mean to you and how do you do that?
Yeah. It means being my ... And this is just business buzzwords like garbage fest in a second, so just pardon me. But it is being my authentic self and unfiltered and just who I am. I don't have versions of who I am. And so, I don't want that to be misconstrued.
And so, when I turn it on is the type of Blake that my wife would see, my brother would see, my close-knit group of friends, totally unfiltered, sometimes a little hot-headed, sometimes a little crass, but just one of you. And I've never loved the idea of being a figurehead CEO or somehow needing to, I don't know, of trying to be somebody that I'm not and to act the part.
So, my version of turning it on is expecting a lot of people, asking a lot of people both verbally and through action. And I'll only do that because I know that I have a track record of doing it myself. And so it gives me incredible confidence to stand in front of a room and absolutely expect it from the rest of the room.
And so, I've always tried to lead by example. And then, I will ask them to follow the example that I have set. That sounds really weird. And I hate talking about myself.
No, it doesn't.
It's so uncomfortable. But storytelling has also been just naturally quite easy for me. I mean, storytelling is such an important skill as a CEO from recruiting to maintaining and increasing buy-in from the people you already have, to getting investors, to your first sales and customers.
It is just absolutely critical to I would suggest not just being a great CEO, but really any leader and executive. The best leaders are incredible, incredible storytellers because they don't just tell you what to do. They persuade you that you want to do it. Like deeply, you want to do it. And so they awaken something in you. And the only way that I know how to awaken people is to lead by example and then to ask them to follow me.
And I want to, just for those listening, because I think everything that you just said is so important for people who are leaders now, want to be leaders, want to be entrepreneurs, want to start companies, all that type of stuff. You mentioned this in here and I want to double click on it for those who are listening or watching.
What you're talking about is not manipulation, which a lot of people could perceive it as, as though like, "This is the way I'm able to manipulate people into doing what I want." That's not what you're talking about. It's not what I'm talking about. That's not what this conversation is. And I think it's important that I bring that up here.
This isn't manipulation. Like what you said, it's being your authentic self. As you said that, I was thinking about this episode of Comedians in Cars Getting Coffee. I don't know if you've seen that. It's Jerry Seinfeld. He drives around in old cars with comedians.
Yeah, I've seen it every now and then.
He has this episode with Dave Chappelle, who's maybe the most prominent and famous and greatest comedian of our generation. That's arguable, but he's certainly up there. And he's talking to Jerry at this coffee shop. I believe it's in Washington, DC.
And he says, "A lot of people think the guy on stage is the inauthentic person." And he said, "It's actually the exact opposite. The guy on stage is authentically Dave Chappelle. The guy offstage is just trying to create space and room and ability for that guy to do what he wants to do, and be who he wants to be, and be his authentic self."
It's not possible to always be on is what I get from that and what I get from what you just said. You're not always on. It's not possible.
And sometimes you do need to just decompress and have time with yourself. I know you said they're not different versions of, but there are different versions of, how we present ourselves, both to others and ourselves which is the most important part. And sometimes you're just like, "I'm not going to be on in the sense of what that normally means to me. I'm just going to chill, decompress, and think."
When I think about my growth, just in general, of not just as a leader, because that's just a portion, or as the CEO, of who I am, that the growth of me isn't a result of my successes. It's a result of being in the depths of sorrow in my personal or professional life, of my absolute struggles because there's a cause-and-effect relationship if you're introspective enough between a struggle and the effect it can have on your life.
And the effect, at least for me, forces introspection. It forces you to ask questions of yourself, "Am I becoming who I want to become? Am I achieving my potential to the very best of my ability? Am I helping people feel good when they're with me?" And that's where I've tried to share internally here at Divvy, very friendly and openly, about my own personal failures, within reason.
Sometimes some details are best unsaid to help inspire and create growth in others. I would hate for people to have to experience failures if they can somehow learn from mine. And so, that's a really key part for me of being authentic, is sharing your … all of you, warts and all, and then asking people to forgive those words and to grow together and to improve together to get all of that.
I don't have a lot of time with you. Yeah. I don't have a ton of time with you. We need to do this again because like I said, you and I can always go deep on this type of stuff. But I want to finish out the Divvy story for those who don't know it.
The pandemic hits. The majority of customers or small business owners, the majority of the people, at least businesses that were affected by the pandemic, were small businesses. And that must have been super intense as that being your core base of customers, seeing what they're going through, seeing so many of them being shut down either by the government or for all sorts of reasons, because nobody wants to leave their house. And in some cases forcibly shut down.
What gets you out of that to this incredible win and this incredible partnership and now merger with Bill.com, because that must not have been obvious at the beginning of the pandemic that you would have a win that significant?
No, it wasn't obvious, but it was about two months into the pandemic where I understood the strategy to make sure that we had a strong and enduring business with incredible clarity. So, real quick, March of 2020, all of a sudden, all hell is breaking loose. Mandates and shutdowns are happening. Small business is absolutely getting obliterated. There's no travel. There's nothing.
And then what Clint just said about my business, Divvy, we are extending lines of credit to businesses along with software that helps them spend their money smarter, spend management and expense management software. But behind the scenes, that also means that we have a pretty significant credit portfolio which is a pretty significant risk.
So, all we were able to do was look back at 2008 and 2009 at this cohort data and try to extrapolate how this is going to perform and behave. And not only was it intense, it's pretty terrifying in March and April. We had no idea how our customers were going to behave. We had taken great care prior to March of 2020 to bring in high-quality businesses that are credit-worthy that had very sustainable revenue. They were profitable businesses.
And so, we had put in place underwriting measures that should have withstood some elements of a normal recession. But this was abnormal. This was not normal. And so, that's where the fear really crept in. Come April, our customers are doing all right. But more strategically what we did right then is we inserted ourselves into the PPP process.
We worked with one of our bank partners Cross River Bank. We built this incredible onboarding software that circumvented a lot of what the government was doing if some of their forms, meaning that we were able to do it faster than what the government could to ensure that not only our customers, but really anyone that would apply through us could get access to PPP as fast as possible.
And that was an absolute lifeline to our customers, and it bought time which is really what the intent of PPP was not just for our customer base, but for anyone. Let's just buy time until we understand the patterns and how businesses are going to react and how consumers are going to react to the pandemic.
But then, here's what we understood. And this goes back to the conversation of being a venture-backed business or a bootstrap business. That as a venture-backed business, especially in the early stages, you are reliant on just more venture capital to accelerate growth and to keep going. And I knew in the back of my mind, I never wanted to be dependent again on venture capital. I didn't want that to be our lifeline.
That I wanted to be able to look inside our business and say, "Nope, we have a strong mature business. We can survive regardless of what's going on outside." And the only way to do that was to assess our product. Our product at that point from a go-to-market perspective was very direct-sales heavy which means that we were pretty bloated on a sales and marketing headcount perspective, customer success perspective. We just had a lot of people, wonderful people, but a lot of them.
And we knew that in order to survive and to build an enduring business, we would have to figure out how to automate, not all, but the majority of what was going on in our go-to-market process. That we needed a process where customers could come to our website and just be full self-serve from the credit underwriting to onboarding, to using the product, and that they would be successfully inserted to the product and off to the races.
And it was such a difficult decision because that ultimately meant we needed to let go of a lot of people. As a forcing function, we need to let go, shed a significant capital expense, and then move our product and engineering resources to building out now this massive gap that we've created in our business which needs to become tech-enabled.
And so, we just had to bite the bitter pill. And it was so difficult. So many tears shed because you're saying bye to friends that have given so much of their time and energy and their creativity to Divvy as well. But we knew that that was the right step. And then, it was only about two months later after doing that, it was in July, maybe August of 2020, where it was working really well. Probably August, if I'm going to be honest, where that self-serve internal product that we built just took off like lightning, where we're landing a couple of hundred customers a month.
Immediately, we're doubling that. We're tripling that just because of how well that had worked out. Now, that was the design in your head. Rarely does it ever work out that way. And we were just incredibly blessed and fortunate that it literally worked out as designed.
Well, I could tell the pain in your voice and your expression as you talked about having to let some people go during all of that and what that process is like. And I know you took great care to make sure that they were put in other companies, but a lot of people wouldn’t know that. Knowing that you were going to have to make the decision, how did you help these employees who were a family to you? Anyone watching this or listening to this can tell that it matters to you.
Yeah. Once we were in a position to, we were able to rehire a lot of them, those that wanted to come back. We didn't hold blame on anyone that felt burned or didn't want to come back because I think I'd probably fall in that category. But we worked with 100% of them, worked with 100% of them to make sure that they had jobs. I think successfully, well over 90% of them landed jobs as a direct result of our people and places team that just networked the hell out of the Utah ecosystem.
And in most cases, they landed in scenarios where they were making more money now than they were at Divvy, at a startup. And so, that was an all-hands on deck where sales leaders were posting about it on their social media channels. They were back-channeling with their peers and all of us just worked pretty much over time until the majority. And then we took care of the long tail also to make sure that they landed in great spots.
And it works, like you said, which it so rarely does, but it works. And this was a huge bet because this is during COVID-19 and businesses are literally shutting down. I mean, the government was handing out trillions of dollars just to keep businesses afloat.
It works. So not only do you grow but you grow rapidly, it became super successful. At what point do you start having these conversations with Bill.com?
Towards the end of the summer, early fall of 2020. And it wasn't just them. We had several groups reaching out to us. It's kind of been the story of Divvy all along. Groups knew that what we had built was special, that we had tapped into and created a new category and they wanted access to that.
But Bill.com is specifically in the fall—early fall. And we just built a relationship. We spent time with each other. We spent a lot of time talking with each other about our shared vision, about the go forward, what the ecosystem could and should look like in the next five to 10 years. And that's really what we focused on.
In the meantime, we actually continued fundraising. And so, getting acquired wasn't a priority to me—making sure Divvy would grow orders of magnitude was the priority. And so we did end up raising another round but it was a very opportunistic round of some awesome investors that believed in us, PayPal being one of them, which came with elements of commercial agreements and distribution, so an opportunity to really flex our muscle and grow even more.
But then, we just kept communicating with Bill.com. And it was after the holiday breaks of Christmas, in January is when the talks picked up in earnest.
I have two final questions for you then I'll let you go. And again, you got to come back on because you and I could talk about a lot of this stuff for hours. My second to final question is this: how important is faith to you? This is another thing that you've brought up in this conversation, whether people are catching on with that or not. I've caught it a number of times. You went on a mission for the Church of Jesus Christ of Latter-day Saints.
I'm just assuming here that it's probably where your language skills were developed and probably helped along with the CIA stuff and all that stuff. How important is faith in your life?
Yeah. It's a really material aspect. And it's kind of the blanket that I think covers the pillars of my life instead of it being a pillar of my life which I think a lot of people like to visualize. I am a dad, I am a CEO, I like fishing, whatever the pillars of the individual, it's the wrapper around it all.
In a less dogmatic way, also, in a more of I respect and believe in a higher calling, it's spoken to my core in very meaningful ways. And because of that, I'm not willing to ignore that. I've just been too fortunate in my life to ignore some pretty deep experiences. And so, it ends up navigating a lot of my decision making.
We're careful not to let that creep into the workplace. I think if you surveyed the Divvy employees, they would say that this is about as agnostic as it gets, especially for a Utah company. We're just a respecter of it all. But it governs a lot of how I think a lot of just trying to be a good dude—like, kind, generous, thoughtful, it motivates me to try to be better on a daily basis instead of just resting on my laurels.
I think a lot of people after a big exit would be like, "I freaking did it." Like, "I'm done." And I couldn't be more motivated than ever to scale my life than right now. And I think that's not driven from anything other than the faith aspect of just trying to be scaled in all aspects of my life. So, it’s big.
My final question for you is what is the best piece of leadership advice you've received or what is the best piece of leadership advice you would give to those who are listening or watching this as they think about your journey? And what has helped you the most?
It's a super simple phrase: You are what you do. And that is just critical to me. It's how I think about my own personal leadership. It's how I think about recruiting. There's a lot of people that are fantastic at thinking and at saying, but are not great at finishlining, at creating, at building, at making people feel great.
And you are what you do. Then I think a lot of leaders fall short of that. And once they're able to really internalize that, I think that you see a more well-rounded person once they internalize that. And I wish that was something that I understood with greater clarity. I understood the principle but with truly greater clarity when I was younger because it's been pretty formative for me.
You are what you do.
Blake Murray, CEO, cofounder of Divvy. Blake, love you, man. Thank you so much for coming on here again. Let's have you back and congrats on the success. Congrats on everything that's happening with Bill.com. And best of luck, my friend. I really appreciate you doing this.
Thanks, Clint. Appreciate it, man.