50 Coffees: Mark Goines of Morgenthaler

Mike and I met up with Mark Goines and Kyle Doherty of Morgenthaler today in downtown San Francisco.  Mark was introduced to us through Kartik Raghavan as someone we should chat with as he has lots of domain expertise in the payroll / tax world.

“Prior to joining Morgenthaler, Mark was a successful angel investor. His investments included two Morgenthaler portfolio companies, Pageonce and Practice Fusion. He currently represents Morgenthaler on the Practice Fusion board.  Previously, Mark helped build and ran Intuit’s Consumer Tax business (TurboTax). He also served as Senior Vice President of Intuit’s International Division, managing businesses on every continent, creating new products, acquiring companies and building partnerships. He then served as General Manager of Intuit’s Consumer Division and helped generate over $200 million in annual revenues, serving 15 million customers across a broad range of software and e-commerce services by 2000.” (source)

(50 Coffees)

Robert Scoble Gets A Preview of Payroll Hero

My business partner Michael Stephenson and I stopped by Rackspace’s new San Francisco office a few weeks ago to meet up with Robert Scoble and show him Payroll Hero.  He posted the video yesterday to the web for all to see.  Check it out, you will get a good idea of what we are up to at Payroll Hero.  If you are interested in getting on the beta invite list, drop your email in here.



Robert Scoble (Interviewer): Who are you?

Michael Stephenson: Mike Stephenson with Payroll Hero

Robert Scoble (Interviewer): And welcome to my new studio over here at Rockspace San Francisco… And who are you?

Stephen Jagger: I’m Steve Jagger, Payrollhero.

Robert Scoble (Interviewer): And what do you guys do?

Stephen Jagger: Ah… We do payroll softwares.

Stephen Jagger: Oh… I do the business development

Robert Scoble (Interviewer): And How About you?

Michael Stephenson: CEO

Robert Scoble (Interviewer): Excellent, so what’s payrollhero?

Michael Stephenson: Payrollhero is a happy human capital management software.

Robert Scoble (Interviewer): ah…it’s where you pay your employees, hahaha!

um… I love ??? your entrepreneur crazy enough to enter a very crowded market, that’s almost a… really mature market is in it, because when I paid my bills I start up in a… 2003 I was using the ADP, I’m using Quickbooks right. So why do we need yet another way to pay people?

Michael Stephenson: Currently employees don’t dig the way their paid, they don’t dig the fact that they get the payroll every two weeks and it’s paper and they have to request if they loose it. They want the online equivalent and were do it yourself repository, so were trying to approach with our own findings and our own problems it is how do employees want to interact with HR, how do they want to get paid, so using payroll as the base, a way to engage an employee or it’s workforce on a daily basis

Robert Scoble (Interviewer): This is not right aim huge enterprises like rockspace so were probably small, mid size company, like for about four thousand employees.

Michael Stephenson: Yup.

Robert Scoble (Interviewer): who are you aiming at right away?

Michael Stephenson: Our current users are actually alpha client right now, it’s about a thousand employees using our system, so they have this big monstrous HR and payroll administrator back ends, this don’t relate to their current workforce.

Robert Scoble (Interviewer): And so… Tell me a little about what the first experience is going to be using… using as an HR person instead of using an ADP or any other kind a… What makes you separate, maybe I have to see it..

Mike: well from a HR person point of view lot less interaction with employees, they could really focus on retention and motivation instead the day to day working more of “i need this payslip from two months ago or need a, this tax form I need to understand how many vacation days I have and a… can I use them”. So a lot of that questions should be naturally answered online then place one answer quickly, and they don’t want to wait  a week for response from HR, can get answer immediately, when they want, how they want.

Robert Scoble (Interviewer): So, it builds a webpage for them all about their paid life. And it’s not just getting a check anymore. You need ah… If your going get a house you need the paystub right, I wont do that, and that was pain of the ass to get the pay-stub from my employers because I delaying to get them. Now you get everything electronically so fighting out where all that stuff was and who had it was pain in the ass back in a day now. can show you me a little bit of that…

Michael Stephenson: Sure. I’ll show you from a couple of point of view. So this is from the point of view of an employee. Ah.. An employee

Robert Scoble (Interviewer): Can you check the screen down just a little bit?

Michael Stephenson: So when they clock in, if they want any of their prior pay-stubs, ah they could just view them all and they can automatically see if they have any missing requirements. So, this is actually for our own company that we ran out in Manila. Ah so, this are all the requirements need from employees they can see if they… have them ready or not. The thing ???? from previous pay-stubs they could self provision them. And then the different factors with us is, a lot of companies, they worry about ghost employees and ah.. body punch in. So some of them use thumb prints others may use key-cards what we used is the face as the biometric. And what we know.

Robert Scoble (Interviewer): It’s hard to fake… this right. hahaha

Michael Stephenson: Yah.. So when they clock in, clock out we get a picture of their face and we analyze it. To make sure it’s the employee and some learnings we’ve been finding is, we could actually get the employees like using their face. Like, whether they use daily mugshot, or whatever, they like having a repository or a journal of their face when they clock in, clock out. And a lot of them will get together or they’ll clock in pairs or as group so they’ll take this photos and they’ll upload on Facebook. So that’s one social engagement the employee has. As it They could take their daily photos, clock in, clock out, and oh.. upload them and they’ll like share with them.

Robert Scoble (Interviewer): Interesting… This is interesting cause.. ah separately I interviewed a Path who just came out with a new journalling software for their iPhone. To be interesting they have this goes straight to Path or go to Facebook or ??? come back in my Path. Because path is gonna be use for exactly that.

Michael Stephenson: Yeah..

Robert Scoble (Interviewer): A great way to journal your life. Or check in ??? that work. I do that when I get to Rackspace like check on Foursquare and I take a picture usually and post it.

Michael Stephenson: Yeah.. See.. We found.. We found is that, beyond this clocking in, and clocking out from work, they wanna check into work. Uhmm, they want to really to engaged their friends and followers…

Robert Scoble (Interviewer): Yeah.. You gotta be the Mayor of the headquarters. Ahahahaha

Michael Stephenson: Yeah.

Robert Scoble (Interviewer): Or should I say you’re really checking in a lot. Ahahaha

Michael Stephenson: And one thing we’re actually doing the photos is kinda interesting we’re very concern with the happiness of our work force. So we’re analyzing the photos beyond is it the right person? or analyzing their mood. Are they happy? or they’re sad? are they bright eyed? Or bushy tailed in the morning and just dead dog tired at the end of the day. So in short, we sort flagging’s some conditions we ?? investigate if they’re really energetic in the beginning of the day and just dead tired in the end of the day. That employee may be over worked. We flag HR automatically and they can investigate. Is this employee over worked will they burn out? Same thing, we kinda call the devil boss scenario. Is if you have a Manager, that super happy everyday and all subordinates are sad. That’s something HR should investigate and converse if an employee is happy on a Monday and sad on a Friday. They might really love their job and you should explore for the corruptions of them. (interviewer laughing in the background) Vice Versa if they’re really sad on a Monday and  really happy on a Friday. You have an employee who might hate their job. So we’re starting to think about beyond us..

Robert Scoble (Interviewer): So you better put on a good face when you check in at work. Ahahaha. Your boss will like ahh “Oh you’re not too happy this morning. What’s going on..”

Michael Stephenson: So over the course of the year, ah sometimes people wanna fake photos. But over the course of the year we get really understand of a baseline. And beyond that we’re letting employees rate their moods and we’re letting them curate on how they wanna show their ??? it’s just for a personal self so they can reflect upon. This is a job for me. If they would look at their schedule calendar, and see a ton of sad faces they know they should seek happiness and they need to do something about it. Vice versa if they are happy everyday, they know this is a job for me and how can I certainly look for different corruption. So so.. From the Payrollhero from the mid-point of view, we curate and categorized the moods of employees, and from the employees point of view they could help with that cu-ration and help ah… us understand is the ??? true or not.

Robert Scoble (Interviewer): Yup. It’s very cool. Uhm.. So give me a tour of what makes you different. and then uh..

Michael Stephenson: So this is, uh employees point of view which allows them to clock in, clock out. Ah… Say they are ???? environment they could see when their schedules are, they could understand, they could like ah, “is my schedule gonna change?”, Or some employees like ??? or get in a coffee shop, they may have morning shift, One week and the next week they have evening or afternoon. They could see upcoming holidays and what.. base on feedback from a place they would also like to see beyond their schedule, they wanna see how much they made each day. They don’t wanna wait 2 weeks and they count on how much they made, they wanna be told when they clock in, and when they clock out is “Congrats John! You made this much.” and from employees point of view, they also want social recognition from their employer. So.. if From John ??? I work from an ex coffee shop and I just hit my 1000hours as a 20yr old kid, thousand hours doing anything is big milestone in my life so from my employer to post to my wall on Facebook, “Congrats John, you just hit 1000 at ex coffee company.” ah.. they feel proud of that. Besides telling their friends now their employers telling them and beyond that the employer gets ah.. more brand awareness amongst their target hiring market.

Robert Scoble (Interviewer): Now when I was ??? I was paid ah.. partly on a hourly wage and partly on commission kind of thing or a ??? for a incentives right or you sell somebody camera here and get 100 bucks can you mix that kind of payroll in here?

Michael Stephenson: Yeah.. so and then we could also account for…

Robert Scoble (Interviewer): or car dealers  are often paid this way right?

Michael Stephenson: Yeah. Those are other things you could look into when you start introducing the productivity measurements, you get even more out of our happy feature. So ah.. Understanding what the corollary between is it sales and happiness? So if in a work force, is Happy on a sunny day vs. a rainy day and if it’s a Friday, has a company know when is.. when your should spike. But conversely when its been raining 5days in a row, ah.. you don’t wanna introduce a stern memo during that week. Cause you know the mood is down. So it allows the company to know, when they need to buy pizza for the company. So I’m just surprised to like the stuff. So if your goal is always constantly making your staffs happy, we believe that the first step is, measuring what is the current state of the fares and ahmm.. that’s aim to do.

Robert Scoble (Interviewer): Very cool. How do you.. How does the business pay for you guys?

Michael Stephenson: Ah.. They pay per employee.

Robert Scoble (Interviewer): Ok. And do you discuss that or is that..

Michael Stephenson: Yeah. We’re still playing around it. So one thing we’re thinking about is making access to the software completely free and then when they start want some of the more higher end in terms of HR kind of modules, like happiness or will start charging per employee for that. If the inside proofs is valuable to them. But our goals really is just to shake up and dis-wrap the industry. One of our focus is in small businesses. 52% of employed people in the United States are employed by small businesses and ADPs and paychecks don’t really speak much to them. They really like the laggard big corporate clients. So..

Robert Scoble (Interviewer): Now the two of you know where the force is right?

Michael Stephenson: Yeah.. So from a small business point of view, lot of them are struggling. And they finance business and credit cards and now this payrolls providers acknowledge that. So as a small business, why do I have to have money debited for all my staffs 5 days before it’s actually paid to the staff? We know the reasons, because they wanna hold up money, why do I have to have quarterly remittances take every two weeks when you only pay them every 3 months.

Robert Scoble (Interviewer): Do you pay through Paypal by the way? I don’t know if any employee wants that yeah but? I paid…

Michael Stephenson: We’re looking at..

Stephen Jagger: I paid it…. I pay for it..

Robert Scoble (Interviewer): I paid my employees through Paypals..

Michael Stephenson: Some do, and ahh.. Some wanna be paid for bank accounts. So one thing we’re trying to tackle, with the ??? like ??? Is, can we take the money out of their bank account, Friday and be paid that Friday afternoon. So they no longer have to use bridge financing and if they need to pay by credit card, they don’t have to go to an atm machine and take up money at a service fee that more still than purchasing something and having a daily interest rate, can they just pay there payroll via credit card. and they could can at Paypal.

Robert Scoble (Interviewer): Oh the employer can I see ah., Like ah the employees sick time over the last year? And that’s more or less based on hammerhead or somebody is taking out.

Michael Stephenson: Yeah.. So.. What we wanna..

Robert Scoble (Interviewer): and wanted to have discussion with somebody “hey you’re sick a lot what’s going on?”

Stephen Jagger: Every third Friday you’re always late.

Michael Stephenson: Yeah or after Football game you’re always late if it’s ah.. So what we wanna start to do is take all that information that is round attendance so whether it be tardiness or absenteeism and we wanna make it transparent. We wanna make whatever reports available from the employer, available from the employee. So time for review and they’re on power. They can show and you know what “I stayed 30minutes late everyday, I come an hour late. I deserve a promotion cause I work my ass off” So whatever kind of reports we’re gonna give to the employers, so they can make easier decisions about who to promote and who to fire. We wanna empower the employee to be owners of that information as well.

Robert Scoble (Interviewer): Can the employer.. Let’s say working for me in a coffee shop and you had a really busy day and I notice that the cash register had double the number of sale and you guys did great and everybody is happy. Can I put that on you’re day. Like “great day you rang up double the number of sales of average and thanks…

Michael Stephenson: Yep. That’s definitely one thing we’re working on this integration with PO system so they could really calculate. Ahh…. Their staff really needs up to base on sales. So if I have too many baristas and I know sales are down on a rainy Tuesday,  I can lower my staffs I need and If I know it’s a sunny Friday, I… the system will tell me you need this many employee hours ready to go. And it’s also ah.. The other thing we try to do is the thing from the employees.. one of the.. If I’m a key holder, and I have to open up the coffee place and I can’t make it in, but there’s 3 other key holders instead of meet or chasing them down, and trying to get them to cover for me, I could.. The system could make a ?? offer and I could add a little something to it. I could say, “Who could cover for me? Cover for me and I’ll thrown in 6 bucks” Or offer them 2 tickets in the next game and have in a.. have in that go out to the SMS.

Robert Scoble (Interviewer): thats the thing. Because that way I can ah.. I can auction off my days and see if somebody..

Stephen Jagger: Your shifts..

Robert Scoble (Interviewer): my shifts or my days. Yeah.. And ah re-configured it on the fly..

Stephen Jagger: And the system will be smart enough to tell them which people can’t take certain shifts. Like if you’re the key holder for this location, you know, you can’t give your shift to somebody else that’s not a key holder cause they can’t open the store or whatever it is. SO be smart enough to say, you know showing the shifts to the right people.

Robert Scoble (Interviewer): Now it makes sense.. Uhm..

Michael Stephenson: The other… One other measures we looking at is, Geo location so when they clock in, clock out, we’re not only looking at their face, we look at where they are. So whether it’s IP white list or its a Geo tagging, so if they clock in.. So let’s say my sales person or savers technician I have to go so many homes, ahmm… I clock in each home and don’t know I’m there, I’m not there. So for the employees… that matter they really want to be recognized, for their good work, ah they can.

Robert Scoble (Interviewer): ??? for that employer I could say well you know, “Hey John you’re taking ah.. 30minutes per visit. Your competitor is taking 15..

Michael Stephenson: Yep..

Robert Scoble (Interviewer): What’s going on? You know….  You know you can sort of say have a conversation about why the prior activity is different than with one employer..

Michael Stephenson: Yeah. You can definitely word on ??? in 15 minutes and help coach the one whose doing 30 minutes per session. And then there’s other interesting needs ah.. where I find my restaurant in California, my employees don’t take the 30minutes break and doesn’t ??? upon meeting and sure they take their 30 minutes break. If they don’t I’m in trouble. So.. We automatically if the conditions of the employer sets, So.. it recognizes the break hasn’t been taken by Bill and he’s a server, we’ll IM him or will SMS him like time to take his break and that covers the employer.

Robert Scoble (Interviewer): Very cool. Uhmm.. How you guys funded with.. with step on the middles of your business?

Stephen Jagger: there you go.. ??? self funded with ???

Robert Scoble (Interviewer): Self funded. That’s awesome..

Stephen Jagger: Yeah. We’re the.. We’re.. I guess unique spot. Mike and I got a couple of other businesses that… You know help us. Build out this product.. That’s ???

Robert Scoble (Interviewer): That’s very cool. You’re crazy and you’re using your own money… Ahahahaha….

Stephen Jagger: That’s one of the reason we’re in San Francisco to try and you know.. meet people and meet pc’s and learn more of that side of the world. As well as continue developing the product.

Robert Scoble (Interviewer): Well.. That’s really really cool. Uhmm… What have you learn so far

by doing this? Cause you know.. This is a different kind of business. Not usually see. You know.. Consumer..

Michael Stephenson: Ah.. ??? our own campaign. We got a hundred employees that we need to deal with ourselves and ah.. among the fundamentals beliefs that if you hire the right person, he really love his job, you really don’t need an HR division.. So ??? you hire a HR team and like you say, why? why? It’s like does it make sense? If they love their job which they do, is their a way we can empower them or they could take care of the daily administration. and I think if you look at small companies, they really happy because HR ??? have face to face contact and they could read moods. Ah… When you start getting bigger HR’s and another building behind ??? they never interact with their employees. So our fundamentals is if you could make the moods a ??? HR or at-least get HR on the floor cause they don’t have to deal with the dealing administration.. Ah.. you could have a happier company. That’s really what really inspire us. Tony Shane delivered happiness.

Robert Scoble (Interviewer): Yeah..

Michael Stephenson: We did his book camp last year and we brought back his ah.. guidelines for making a happy workforce and it just done amazing change to our culture and our company.

Robert Scoble (Interviewer): and we really ??? should see if you ah.. even go as far as ah.. stunning people’s job on ??? you know.. I just heard one side how do you ah… But Mike ??? ring ah.. a job on ??? so that reports ah.. whether he’s exercising or not. and it will be interesting to see when you even get that kind of a data fed into this things uhm.. I don’t know where this all going cause this ah.. It’s really ah.. Stalkering.. Stalker society… that we’re going in. I mean not just you. I mean that was just Facebook talking but open graph on how.. how much stuff they’re gonna be studying about us and feeding back to us. Let’s say hey you’re listening to school all the time on school. ahahaha. Or you what running three times this week and also we are.. Or in the case of you guys, you gonna be studying how well I’m doing at work. You should have work, five times in a row. Ahahaha.

Michael Stephenson: Yeah…

Stephen Jagger: Good job.

Robert Scoble (Interviewer): Congratulations. Good Job. Ahahaha.

Michael Stephenson: Yeah. And definitely for a certain segment they wanna be congratulated for showing up five days in a row.

Robert Scoble (Interviewer): People wanna put on their Facebook page and..

Michael Stephenson: Yeah. They wanna badge.

Robert Scoble (Interviewer): Yeah. So in new worlds that’s comin’ out us, that’s really interesting. Where can we learn about you guys? Website?

Stephen Jagger: There’s no sign up yet. Payrollhero.com but ah.. We got a blog after the blog Payrollhero.com.

Robert Scoble (Interviewer): Very cool. You’ll gonna be on Twitter and Google+ and Facebook and stuffs like that.

Stephen Jagger: Yeah. That’s ??? set up. but that’s good the blog is documenting our whole experience in San Francisco. We’re her for four months. So.. Just trying ahh..

Robert Scoble (Interviewer): Make it happen..

Stephen Jagger:  Yeah..

Robert Scoble (Interviewer): Living the dream.

Stephen Jagger: Yeah. Hahaha

Robert Scoble (Interviewer): Very cool. Thank you so much for coming up.

Stephen Jagger: Thanks for having us.

Michael Stephenson: Thanks.

Robert Scoble (Interviewer): Great!


50 Coffees: Anthony Lee, C100 & Altos Ventures

I had the opportunity to sit down with fellow Canadian Anthony Lee at one of his portfolio companies DemandBase in downtown San Francisco.  Rob Lewis of Techvibes connected me with Anthony so that we could meet up and chat about our startup as well as life in Silicon Valley as a Canadian.

Anthony is a partner at Altos Ventures as well as the co-founder of C100.  Anthony explained how he operates from Vancouver and San Francisco as well mentioned just how many Canadians are down in Silicon Valley.  He said there is a Canadian in a C level position in most of the top firms in the valley including Google and Apple.

It was great to hear about some of the success that Canadians are having down in the valley as well as how the C100 is help connect them all. (50 Coffees)

50 Coffees: Tony Conrad, True Ventures

Mike and I just got back from a meeting with Tony Conrad. Tony is a founder & CEO of about.me (acquired by Aol in 2010), and a founding member & Venture Partner at True Ventures. Prior to about.me, Tony co-founded Sphere (acquired by Aol in 2008) with Toni Schneider.

We sat for an hour or so with Tony at Ironside Cafe in downtown San Francisco and chatted about his amazing successes and the journey that we are on with Payroll Hero.  Tony had some great insight about what we are up to and some really solid feedback on business models, choosing venture capital partners and our product.

(L – R) Michael Stephenson, Tony Conrad, Stephen Jagger

(50 Coffees)

50 Coffees: Sunil Nagaraj of Bessemer Ventures

Sunil Nagaraj of Bessemer Ventures dropped by the Warm Gun Conference to meet up and chat about what we are doing with Payroll Hero.  It was a great meeting in a very Zen like location.  We sat outside on a couple of large rocks in the Hotel Kabuki‘s inner courtyard next to their koi pond.

Sunil had some great insights into the space Payroll Hero is pushing into and has some great experiences that lend well to where we are going.  We will be meeting up again to go through the product with him.

(50 Coffees)

50 Coffees: Indy Guha of Bain Capital Ventures

I just got back from a meeting with Indy Guha of Bain Capital Ventures.  (Bain is also a “newbie” to the Silicon Valley area with new offices in Palo Alto and downtown San Francisco.)  Indy and I had a great chat.  He explained how Bain has its fingers in many pies around the world and through its affiliated companies. Bain has lots of experience and connections in many large industries with ownership in many big name businesses.

We chatted about PayrollHero, the direction we were taking it and about our plans for the near future.  Sounds like Indy is going to swing by the PayrollHero house sometime soon to meet the rest of the team and see the product.

(50 Coffees)

50 Coffees: Joe Gebbia, Co-Founder of AirBnB.com

I had the pleasure of meeting up with Joe Gebbia, the co-founder of AirBnB today at their San Francisco offices.  Joe, was in the office on a Saturday of a long weekend, but made time for me so that I could pop by and get a tour of their operation as well as learn more about his experiences growing a startup in San Francisco as his learn more about their journey in launching AirBnB.

I have seen Joe speak twice, once was a few weeks ago at FailCon, the other was a few months ago at the Inman Connect Conference.  Joe and his co-founder have a very cool story that involves creating a breakfast cereal to keep the cash flowing while they continued to revise the AirBnB business model.

It was great catching up with Joe and listening to his experiences.  I look forward to watching their company continue their massive expansion.

 Their meeting rooms are all modeled after some of the real rooms
at some of the AirBnB listings

A huge version of their breakfast cereal

(50 Coffees)

50 Coffees: Leah Busque, Founder of TaskRabbit

Leah Busque was kind enough to make time to meet up with me today at the TaskRabbit.com offices in downtown San Francisco.  Leah has a very cool business working on the simple premise of neighbours helping neighbours. TaskRabbit is an online marketplace, connecting people, to get everyday jobs and tasks done. Leah raised $6.85MM in financing from Shasta Ventures, Collaborative Fund, 500 Startups, Floodgate Fund, First Round Capital, and Baseline Ventures.

I dropped into their very green offices today to sit down and chat with Leah.  We talked about what we are up to here at PayrollHero.com, our similar experiences being “new” to the Silicon Valley world and how TaskRabbit was planning for the future.  Leah was kind enough to share her insights on fund raising, the need for mentors and advisors and how she was growing her business.

(50 Coffees)

50 Coffees: Rob Hayes, First Round Capital

I had the opportunity to meet up with Rob Hayes at First Round Capital the other day.  Rob has led investments in companies such as Mint.com (acquired by Intuit), HomeRun (acquired by Rearden Commerce), Uber, TaskRabbit, AppFog, Get Satisfaction, and DNAnexus.

I actually had the opportunity to see Rob speak when he was in Vancouver, BC for GrowConf a few months ago.  Rob has a great style about him where he says exactly what he thinks, there is no guessing how he feels about something.

When we met, we chatted about PayrollHero and the direction we were going with it.  It was a fantastic meeting, although quite quick (his assistant has him doing back to back 30 minute meetings all day it sounded like), where Rob asked some solid questions about our business and had some great insight into the business to business marketplace.

(50 Coffees)