Oscar: I would like to welcome to the studio today, Sam Zietz of Touchsuite. Welcome.
Sam: Thank you.
Oscar: Tell us a little bit about Touchsuite.
Sam: Touchsuite is a financial technology company where we focus on the payment processing space. We essentially provide business throughout the US, Canada and, soon to be, Western Europe with the ability to accept credit cards for payment. We also provide the technology solutions to go along with that, such as point of sales systems for restaurants, salons, retail establishments.
Oscar: Interesting. What made you get involve or launch a business like that?
Sam: I started off I was an attorney specializing in structured finance and I thought to myself I need to get my own income [inaudible 00:00:54]. Had the idea to provide working capital to businesses and with the research along that path to securitize the credit card component, I learned about the payment processing industry. I saw that it was very analogist to the cellphone industry 10 years earlier.
With that, it kind of gave me a crystal ball as to where the industry was going to go over the next decade and in most part played out just like that.
Oscar: When you were getting ready to launch your business, did you create a detailed business plan?
Sam: We had a pretty detailed business plan. Like any new venture, once you get going and you actually are in the throws of the business, there’s a lot of pivoting that takes place, but in the large part, the core business was very similar to the initial business plan.
Oscar: Think back to launch or pre-launch, how were you able to test out your assumptions?
Sam: It was real easy. We literally got on the phone and talked to customers. We tried out marketing, what worked, what didn’t work, replicated the ideas that worked. Tried to see what had scale and we would maximize those out. The ideas that didn’t work we quickly killed and the ideas that were tweeners, we played with a little longer to see if we could make them successful or if we needed to kill them.
Oscar: Do you remember your first client?
Sam: Not really. With us, it’s a lot small businesses. Our first real clients were the businesses in the local city that we opened up. The first week that we opened up our business, we were in a small city in New Jersey, northern New Jersey called Halden. It was a one mile by one mile city and I went out and I said we’re going to go talk to every business in this city and we’re going to sign them up and we’re going to give them unbelievable rates so they’ll do business with us and that will be a message to all of our competitors that if they come into our city, they will know who we are.
Oscar: Very nice. How were you able to establish credibility early on?
Sam: Early on I leveraged a lot my reputation in the legal community, but we quickly were very aggressive in our marketing campaigns and were able to partner with a lot of associations and groups and we were able to leverage their credibility onto us.
Oscar: What habits helped you to become successful?
Sam: I’m very much a visionary, so it allows me to almost have a crystal ball and see where things are going before they necessarily happen. On the execution side, it’s just a pure drive to make something happen. For me, when I started the business, I had two young children. I was leaving a very high paying at a prestigious law firm and failure was not an option.
For me, I worked backwards and figured out what the end goal was and at that time we needed to write 20 new clients per month to be successful, to break even. What I did is I broke that down to 20 business days in a month and I said every day we’re going to do at least one deal. I had a rule that if we didn’t do at least one deal that day, I wouldn’t go home. On two occasions, once I remember 11:30 we closed a deal in Alaska and another time it was 12:30 in Hawaii, but everyday in our company’s history we’ve written at least one deal.
The great thing about making sure you hit that individual daily goal is some days you’re going to 2, 3, 4, or 5, but if you never have a day where you’re doing less than your goal, you will blow your end goal out of the water.
Oscar: That’s very, very interesting. You mentioned a couple days, at least, that you worked til 11:30, 12:30, what was your average work day early on when you started compared to today?
Sam: Actually, my work day when I started the first year of the company was 18 hours a day, 7 days a week. The thought process was that was the equivalent of having to hire three high priced executives that I did not have to pay for. I was able to, during business hours, work the phones, talk to clients and write business and at the night hours I was able to do my research, I was able to put together marketing plans and do all those things.
Later, as the company became more successful and with us we do a lot of recurring revenue, we’re able each month to hire another employee. Literally when I started, I was wearing 20 hats and each month I could take one of those hats off and hire somebody to handle those.
Now, I’ve got a very powerful executive team that I would put up against any team in the country and they handle all the day to day. They can allow us to scale because they have visions. The company’s not limited solely my vision and to the ideas that I can create by really surrounding myself with, really, the top talent that’s out there.
Oscar: That’s fantastic. Two part question. How did you finance your launch and how did you finance the growth of your company?
Sam: My launch, I boot strapped it. Literally, as I just stated, every month as our revenue would go up, we would higher another person. Failure was not an option. I had two young kids at home. It was just sheer brute force that we pushed through and made sure we were going to be successful.
As for financing our growth subsequent to that, I was able to fall back on my structured finance background and be able to explain to banks and financial partners the value of the assist that my competition really couldn’t explain and we were able to securitize that revenue stream and be able to borrow inexpensive capital.
Oscar: Great. Can you tell me the creative sales tactic or an unusual sales tactic that you may have used in the past?
Sam: There’s an interesting one that they actually just published in the Inc. Magazine last month, which was I had a strategic partner, a perspective strategic partner, that we wanted to for distribution and every trade show our business development person would go up and meet with them, they were excited and they’re ready to do business with us and we’d get back from the trade show he’d followup and never hear from them. It wasn’t that they weren’t interested, they were just too busy. So I said, you know what, give me the gentleman’s phone number and I’ll give him a call. Sure enough I called him, left him a message and low and behold he didn’t give me a call back.
I wrote him a quick note and I said your time is very valuable, what I’d like to do is buy 5 minutes of it and I enclosed a 100 dollar bill and FedEx’d it to him. Sure enough, the next day he gave me a call. He said, “You know, you really didn’t need to send me a 100 dollars, I would’ve called you, but it did work.”
We talked, sure enough he agreed it was a great proposition. He was like, “Perfect, send me the contracts and let’s go forward.” I emailed him off the contracts and again I didn’t hear from him. I said all right, so again I wrote a note and I said spam filters being what they are, you might not have received the contracts that I emailed you, so I’ve taken the liberty of printing out two copies, they’ve been executed and I’ve enclosed a pen, which I went and bought a 100 dollar Montblanc pen, and enclosed that and sent it off to him.
The next day, I didn’t hear form him, but I received the FedEx with an executed agreement with a Post-It note that said, “You guys are just to much.”
Oscar: That is fantastic. I love hearing stories like that. That’s great. Have you ever turned down a client?
Sam: Yes, we turn down clients all the time, just like we turn down lots of people to work for our organization. For us it needs to be, especially as it pertains employees, it needs to be a cultural fit for our organization. I tell people all the time that Jimmy Johnson won a Super Bowl, Bill Parcells won a Super Bowl, but neither one of them would’ve won a Super Bowl with the other guys players. That’s how we view our employees and a lot for our clients.
If they’re overly demanding of things that are not necessarily ethical, we’d rather make less than money and have a long term relationship than make a quick buck.
Oscar: Sure. You mention cultural. Who’s responsible in your company to develop the cultural?
Sam: Ultimately, that’s me. I set the tone. I’m a huge sports fan. There are football analogies thrown throughout the company all the time. We are an entrepreneurial organization. We’ve grown at rapid rates and the first time we went through a series of growth, we kind of hit that plateau of around 100 employees and it became more … We lost the intimacy. When we started growing again, I swore that that would not happen. Now we are a large company again, yet we still have that core value that everyone is an entrepreneur.
The way we’ve done that is we’ve instituted our core values throughout the organization and they’re posted everywhere with posters, daily and weekly meetings that we have with departments or with the employees, we reinforce examples of people executing on our core values. What that allows our employees to do is anytime they make a decision, they can reach back and think of the basic core values and if they make that decision based on that alignment, it’s going to be the right decision.
Oscar: Fantastic. What was the toughest decision you had to make in the last several years?
Sam: Probably having to terminate good people who either weren’t performing or just weren’t a good cultural fit for our organization. It’s not that they were bad people. It’s easy when there’s bad people, it’s easy when there’s bad people, to terminate them. But good people who come in and work hard and they’re just, for whatever reason, either not a fit or just not able to produce, it’s difficult to have to let those people go.
Oscar: What are you most proud of in your company?
Sam: I think our reputation. Our reputation out there in the community is extraordinary and that is a direct correlation to our employees. I look around and I see a lot of very successful people in our organization and in a large part we’re responsible for that. That’s makes me very proud that they’re able to thrive and provide for their families and develop.
Oscar: Sam, you are such an experienced, knowledgeable entrepreneur, your company is going through explosive growth. I’d like to make a one million dollar investment in your company, how would you deploy those funds?
Sam: Today, we’re doing a lot of acquisitions and we’re doing acquisitions of smaller companies who are very similar to where we were years ago and, in fact, I had the same conversation with a group from Kansas earlier today. What I tell them all is that I’ll provide you with capital to grow your business because a lot of times business owners make decisions that are based on cash flow. In most cases, those are made out of survival and not good business decisions.
What we do, is we will provide working capital to these businesses so they can make intelligent decisions, but more importantly than what we will provide them in cash, we’ll provide them an experience. We will allow them leverage our team, because we’ve already been there. We’ve already made those mistakes. We’ve paid the “idiot” tax and they can leverage our experience. So, we’ve done a number of these acquisitions and they’ve been very successful. Taking organizations that were producing 15 to 20 deals a month and 6 months later producing over 100 deals a month. If I were too, and we are, deploying cash as an investment, it would be in these acquisitions and strategic partnerships where we not only provide the capital to help them grow and along with that we grow, but also providing our experience that we’ve [inaudible 00:14:16] over the years.
Oscar: Amazing. I’d like to give you for a few moments some magical powers. You have the ability of going back in time, back to day one of your company, up to current, you have the ability of reversing a decision you made, what would that be and why?
Sam: I would’ve given a greater importance to culture earlier on. I always thought that early on I could be smart enough for the entire organization, but you reach a certain point in the companies growth that one person can’t put everybody on their back and continue to move forward. That was my attitude early on. I focused more on people who were loyal or friendly than people who had the experience and the aptitude to take it to the next level and had the right culture for our organization.
I’ve hired a lot of people who are very smart and very good, but they weren’t a cultural fit and what actually happens is they act as a cancer to the organization. They actually detract from everyone else. If I had to go back in time, I would’ve stuck to only hiring people as we do today, that are a cultural fit to our values.
Oscar: You referenced earlier in the interview, you have the ability of looking into a crystal ball and you still have a little bit of remnant magical powers that I’ve given, so looking at, please, one more time, and tell me how the business climate will change over the next 5 years and how it will impact your business.
Sam: Our industry at it’s core is payment process, which is commoditized space. Where that industry is changing is through the use of technology. The items that were cost prohibited to small business owners are now accessible. We’re providing these technology solutions to level the playing field so every small business in America can compete with the big box retailers. Our internal mission statement is we’re rebuilding America one small business at a time.
Oscar: You’re in an industry where you have large corporate players. You’re an entrepreneur. Is that an advantage or disadvantage competing against Corporate America?
Sam: It’s a huge advantage.
Sam: Because I’m an entrepreneur. They are stuck with corporate red tape, bureaucracy. It’s like competing against the government. While we can turn on a dime and make decisions and see where the industry is going and make those adjustments and in the next week, month, we’re already on to that, executing on that plan. They’re in board meetings, running numbers and trying to debate whether that would be a good plan to role out four or five quarters from now.
Oscar: What one word describes Sam Zietz as an entrepreneur.
Oscar: In your opinion, are entrepreneurs born or made?
Sam: Both and I’ll give a perfect example. I have two entrepreneurs. My daughter is 14 and she runs a successful business called Gladiator Lacrosse that’s already doing over a million dollars a year and revenue and she is a clone of me and she was born that way. She is pure bruit force. She will will a win every time. My son is completely different. He’s also starting a business right now, but he is more analytical. He’s brilliant, but to him he analyzes it like it’s a puzzle and it’s a game, how do I put the pieces of the puzzle together. While she was born an entrepreneur, he was made an entrepreneur.
Oscar: If you want to brainstorm an idea, problem solve, get some guidance on an issue, where do you for that?
Sam: For me, it’s my forum. This is the group of people that will hear every idea before it goes and I’ll be able to get seven different perspectives and I’ll be able to take that idea to a whole level because I view the world one way, but to gain the insight of seven other people who are just as smart as me, who view the world through different lenses, allows me to take an idea that might of been a million or 10 million dollar idea and turn it into a billion dollar idea.
Oscar: Great leaders are always learning. What’s the best source for knowledge for you?
Sam: I read a lot, but the best, hands down, is experience sharing. Organizations like EO provide this experience sharing. We all learn things, from the time we’re small, so when we’re little and we reached up on the stove and we touched it, we learned that’s hot, don’t do that again. As we get older, sometimes we listen to the guidance our parents gave us and the hope is that next generation is better, but we will learn these things over time. By the time we’re 50, 60, we will have learned a lot because we don’t make that same mistake twice.
The great thing about experience sharing is I can leverage the mistakes that all the other people have made and I can benefit from all the successes that they’ve had. Instead of it taking me 10 years to get from point A to point B, I can do it in six months or a year. That’s the true power of experience sharing.
Oscar: As a leader, how do you make a mark within your organization?
Sam: My job is to provide the overall vision for the organization. It’s to empower people to make those decisions and to be the chief cheerleader, tell people we’re taking on the world, this is our mission, this is how we’re going to go about doing it and we’re doing it together. You get everybody on the same page, moving in the same direction at the same time, you can move mountains.
Oscar: Give me an example of something incredibly cool or fun that you’ve done, either personally or professionally.
Sam: I do a fair amount of angel investing. One of the cool things I’ve done is I’ve made movies. I got three executive producer credits to my name. It’s the only investment I’ve ever made that my wife has actually taken an interest in. My youngest daughter actually has her [inaudible 00:21:35] so we’ve spent a fair amount of time on movie sets and that’s really a cool experience and it’s funny the advise I received when I was on the set was my wife wanted to get pictures with one of the actors and asked if it was okay and they’re like absolutely, but the way you’re looking at them, that’s the way they’re looking at you because you’re their next job. It was interesting to put it in perspective.
Oscar: Interesting. What’s the boldest move you’ve ever made in your life?
Sam: Asking my wife to marry me.
Oscar: When I say the words trust and respect, what do they mean to you?
Sam: Integrity. It’s funny, my COO has a saying with our operations people, as hard as strive to be perfect, we make mistakes and an operations person will come and say, “What do we tell the customer,” and he looks at him at goes, “How about the truth. It’s really easy to remember.” I can tell you that our absolute biggest champions of our clients are the ones that we’ve probably messed up the most because they know you’re not perfect and you’re going to make mistakes, but how we differentiate ourselves is how we recover.
Oscar: Of course. Let’s pretend for a brief second, Touchsuite, you wake up tomorrow and it’s gone. What’s the next business Same Zietz is getting involved in?
Sam: There’d be a million. If you asked me that question 10 years ago, I would’ve thought I caught lightening in a bottle and that was it, but now I’ve learned, especially through organizations like EO, that I can apply these skills that I gathered over the years to just about any industries. As for industries I like, I love things that are scalable, recurring revenue and high margins.
Oscar: Excellent. Sam, it has been a distinct honor and pleasure to have you in our studio today. Again, on I’d like to on behalf of EO South Florida congratulate you for making the Inc. 2014 fastest growing privately held companies in the country. Thank you so much for continuing to be part of the entrepreneurial spirit in South Florida. Thank you so much.
Sam: Thank you for having me.
Oscar: It’s been a pleasure.
Sam: Thank you.