Beers and a Business Plan
Back in 2003, PayLease co-founders Ty Kalklosch and Yann Phung were working together at ADP. The friends were frustrated over the need to send physical checks to their respective landlords in Pacific Beach and San Diego. The world was evolving and everything was transitioning online; why shouldn’t rent payment be the same? Ty and Yann met at a bar after work to hash out the details and direction of this novel idea, and PayLease was born. Over a round of beers, the co-founders developed a plan to start processing online payments with residences and homeowners.
For the first few years PayLease was the typical scrappy start-up. It was not until 2007 that the company began to build a strong client base and “get units in the door.” The company did whatever it took to land clients in a quickly growing industry. A pivotal moment came that same year, when PayLease landed the largest homeowner association company in the country. From there, the rest is history. The company had deals coming in every single day as every player in the industry moved toward online payment.
PayLease saw massive growth from 2007-2011, took on private equity investment, and hired a CEO that implemented a growth model which quickly transformed the company from a start-up to a sustainable business. Today, PayLease has 260 employees and works with more than 30 partners.
Maintaining Culture through Growth
Ty and Yann were always miserable working in a corporate environment. When starting and building PayLease, the co-founders committed to making work enjoyable and developing a strong sense of culture that would drive the company forward. The first 10 PayLease employees were all friends with similar mindsets and drive. They scrapped, hustled, and worked, but had fun while doing it.
When it came time to find a CEO, the founders prioritized the right culture-fit. This hiring methodology has remained consistent throughout PayLease’s history. The company hires and fires to culture: candidates and employees must have the right attitude to be successful. The result? The company is filled with friends and people who enjoy working with one another, a culture that breeds creativity, cooperation, and hard work.
Of course, with growth, comes necessary change. As growth accelerated, leadership set the example for how to work together and communicate clearly. At the company’s current size, leadership understands that culture will no longer happen organically, it must be actively invested in. To that end, PayLease constantly seeks feedback through surveys and working groups, developing action items from these forums to maintain and improve culture.
Success in a Saturated Market
When profits and growth increase in an industry, so does the number of competitors. PayLease experienced this phenomenon first-hand as competing firms flooded the online payments market over the past 10 years. Swift market-entry was paralleled by an increase in the availability of high-performance technology, creating parity among competitors.
To maintain success, PayLease taps into its culture. The company strives for every client to enjoy doing business with them. Employees are always willing to go the extra mile, take on the heavy lifting, and bring great energy to every interaction. PayLease has differentiated itself through superb customer service and building mutually beneficial and sustainable partnerships with its clients.
The Future
For a long time, PayLease’s “bread and butter” was online payments. However, market change necessitated evolution, so the company acquired a resident utility billing company, a complementary products and perfect upsell to PayLease’s existing client base. Mergers and acquisitions are a growing trend in the industry as mature firms look to become “full stack” or comprehensive service providers. Per Michelle’s forecast, in 10 years, there will only be 4-5 major players in the industry as a result of this consolidation.
As for PayLease, their goal is to be one of those players, eyeing additional acquisitions over the next few years, on top of potential international expansion. Through it all, the company’s culture of inclusion, collaboration, and teamwork will continue be the key driver of its success.
