Drive customer value: Be laser-focused on your customers needs, and build for them. Don’t be afraid to stay focused on the particular type of customer that is best suited to your product or service. At Wave, we’re focused on service-based businesses — consultants, construction workers, creatives, and freelancers, for example. While we invite business owners of all kinds to use our software, we know our offering is of particular value to a certain business-type, so we keep their distinct needs in mind and as we build and deliver innovative solutions.
As part of my series about the “Five Most Important Things One Should Know In Order To Succeed In The Modern Finance Industry”, I had the pleasure of interviewing Kirk Simpson, CEO and co-founder of Wave Financial. Most recently he was named Canada’s Most Admired CEO in the growth sector and Wave was named Canada’s Most Admired Corporate Culture by Waterstone.
Kirk failed twice before launching Wave. At 23, his youthful naivete and a small network led to the demise of Adventurelifestyle.com. A decade later, his second venture Outdoorsica, while more successful, met the same fate, with lack of passion as the culprit.
It wasn’t until 2010 Kirk found his niche — helping entrepreneurs feel empowered to achieve success and giving them tools to do so. Like Kirk, nearly 30% of entrepreneurs fail, so he uniquely understands their challenges, and created Wave as a solution to their multitude of money management needs. Wave is an award-winning, free, easy-to-use and secure financial software and service for micro-business owners to move and manage their money.
Since launching Wave in 2010, the comprehensive platform is used by 400,000+ small businesses every month, and its innovative platform supports the expanding small business market, which includes 31 million small businesses. In June, Wave marked one of the largest Canadian tech exits following its 405 million dollars acquisition by H&R Block.
Thank you so much for your time! Our readers would love to get to know you a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
The journey to where I am today has been anything but typical. In fact, I dropped out of university. It wasn’t the right avenue for me for many reasons, but it did make me consider quite early on why I gave up when the going got tough. It also motivated me to break free from those tendencies. I had something to prove to myself and to others when I launched my first startup at 23.
I launched Adventurelifestyle.com, offering live web-streaming of adventure races long before YouTube existed. This project was ahead of its time as the market wasn’t ready to support this venture, and three years later it went bankrupt. This experience was like getting an MBA the hard way. I made a lot of mistakes running the company, while learning from them.
After that, I altered my path, and became deeply involved in the evolution and transition from print to digital at several major Canadian print media companies.
My second startup, Outdoorsica.com, was an online community of outdoor adventure enthusiasts with a user-generated knowledge base. This was a part-time business that taught me some valuable lessons, including the harsh reality that you can’t expect impressive results when you’re on the sidelines. Our developers and engineers had day jobs too, which made it difficult for them to feel as invested in the company and deliver their best work. I eventually sold Outdoorsica to an outdoor adventure magazine.
With experience running two startups under my belt, I knew it was time to launch Wave alongside my co-founder James Lochrie, and that’s where I truly found my niche. I understood firsthand the pain points of being an entrepreneur, and also had the unique perspective of running two businesses that ultimately failed. James’ experience at a tax preparation firm and running custom IT software for hundreds of small businesses gave us both a natural insight into the needs of entrepreneurs, and real empathy for what it truly takes to get a successful business off the ground.
With Wave, small business owners are empowered to focus on what they love, while we take care of the back-office tasks that are essential, but also time-consuming and burdensome. Wave is a free solution with a mission to help small business owners remove the friction from their finances.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
Lead by Greatness: How Character Can Power Your Success by David Lapin is a book that has had a meaningful impact on both my sense of self, and my leadership style. It encourages you to lean into your strengths and your values, rather than focus on improving your weaknesses. I run a technology company, but I’m not a technologist. It’s easy to experience self-doubt without having “cred” within an important subset of the organization. But, I’ve learned to leverage what I am uniquely good at: connecting people, communicating the vision of our company, and empowering my team to do their best work. This book was pivotal in reshaping my approach to building and leading a team, and it’s a must-read for anyone, especially those who don’t fit the standard criteria or makeup of the role they’re in.
Are you working on any exciting new projects now? How do you think that will help people?
At Wave, we live and breathe small business, and have a unique connection to the needs of entrepreneurs. From high fees to outdated business banking, we see their financial challenges every single day. Banking is a major pain point for small businesses. Traditional banks are expensive, archaic, and not built to meet the unique needs of entrepreneurs. We saw that small business banking was ripe for disruption, and created Wave Money: a no-fee small business bank account that provides instant access to payments, automates bookkeeping, and creates tax-ready records.
The value Wave Money can bring to small business owners is probably best explained in this scenario: Imagine you’re a business owner taking your client to lunch. You finish and pay. You need to keep your receipt. Then you need to save it somewhere or upload it to your bookkeeping system. Then, you need to categorize it. And even after all that’s done, you still need to check your bank records and make sure it matches up.
But, what if when you paid the bill, that was the end of it? What if all the rest just took care of itself? What if bookkeeping just happened? You’d save a lot of time and effort, and be able to focus on that client, right?
That’s exactly what we had in mind when we created Wave Money. The Wave Money bank account and Visa® Business Debit Card sits at the core of our suite of products and services, and enables each part to work together to create the absolute best experience for small business owners.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose-driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
James and I founded Wave to truly liberate small business owners from the pain of administrative tasks so they could feel empowered to thrive as entrepreneurs without so much other stuff getting in the way. As the company grew, I also wanted to create a work environment where innovation could thrive and people felt they were working on something important with a great team around them.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
Through previous failed startups, I allowed my feelings to run too high during the good times and too low during the bad times. I’ve since tried to level out as best I can, reminding myself that you’re never as good as your highs, and never as weak as your lows. Finding middle ground is key to creating something sustainable for the long-haul. When I think about it, I’ve been running Wave for 12 years now, and there’s not many things I’ve done consistently for 12 years. Running a business is a marathon, not a sprint.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
This is easy: just give your software away for free!
In all seriousness, Wave has always been free, so the barrier for new business owners to give us a try has been low from the get-go. We’ve been incredibly successful at generating leads, but over time, we’ve learned to spot segments of our customer base that use and adopt our software in particular ways that are valuable to us. These insights have allowed us to over-index to serve those customers as well as possible.
My advice is to focus on converting leads into great customers, and if you’re like us and offer a software solution that is either free or has a very low barrier to entry, focus early on separating high quality leads from the rest.
If a fellow business leader would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
This is a difficult choice that ultimately comes down to a few key factors:
- How big is the potential prize? What is the size of the market, and if you win your share of it, how big can your company be? If that slice of the market is large, VC can absolutely be the fuel to help you do this successfully.
- What sort of an entrepreneur are you? Do you crave independence, autonomy, and being your own boss? Having VC partners naturally creates oversight and adds external influence that might not fit into your vision.
- What are you hoping the outcome will be? Are you looking for a lifestyle business to run for the next 20 years, or is speed-to-market a top priority?
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
Entrepreneurship is defined by these ebbs and flows, but it’s important to first understand what has changed. Is it within your control, or is it an outside factor you have no control over? The first is quite possibly a problem within the company itself — perhaps an execution, process, or operational issue that can be resolved. The latter could be a competitive or market dynamic issue.
I would approach these two scenarios differently. If the issue lies internally, ask yourself: How can we get better and what do we need to solve? The latter warrants taking a pause. It means stepping back to consider what the market dynamics are telling you. These are tough questions to ask yourself, but take the time to understand if your company is still relevant, or if it’s time to pivot, or even consider selling your business.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
As CEO and co-founder of a venture-backed, high-growth company, I’ve found that the biggest mistake is premature scaling — those scenarios where you end up spending before you’ve received a loud and clear signal that you have true market-product fit. I’ve done that a few times, and learned the hard way that premature scaling ultimately slows you down.
Okay, here is the main question of our discussion: Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share an example.
- Drive customer value: Be laser-focused on your customers needs, and build for them. Don’t be afraid to stay focused on the particular type of customer that is best suited to your product or service. At Wave, we’re focused on service-based businesses — consultants, construction workers, creatives, and freelancers, for example. While we invite business owners of all kinds to use our software, we know our offering is of particular value to a certain business-type, so we keep their distinct needs in mind and as we build and deliver innovative solutions.
- If, like me, you run a business in the financial sector, get serious about compliance and stay ahead of it.
- Make sure the culture of the company recognizes that you are moving peoples’ money, and ensure there is a deeply held belief that every customer’s dollar is as important as your own.
- Understand what you’re good at, and believe in it. Stay mindful of competitors, but don’t get caught up in their activity. Again, focus on delivering customer value above all and avoid the distractions that come along with constant comparison.
- Success in this industry is all about the people. Create an environment your employees are excited to be a part of. Foster a culture that values openness, the healthy exchange of ideas, and creativity. Remember you’re only as strong as your team.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
If you’re in a leadership role, make it a priority to hire great people — especially those that bring skills and experience you don’t have to the table. Play to your strengths and encourage your team to do the same. By creating a culture where you’ve hired people with a diverse skill set and with particular strengths and specialities, you’ll significantly reduce the risk of burn out.
If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
While there’s plenty of talk about the importance of small businesses, they rarely get the support they deserve. It’s not easy to start a small business. From government policy to navigating bookkeeping and payroll and tax to opening a business bank account, many of the prerequisites to becoming an entrepreneur are overly daunting and complex. That’s why Wave is committed to removing as much of the friction as possible.
We want to enable entrepreneurs to do what they love and focus on their craft. As a society, we know that small businesses are the backbone of our economy, and that has resonated all the more deeply in the past year. The pandemic has been crippling for small businesses, but we also know we don’t want to live in a world of big box stores and Amazons. We’re committed to doing our part to support a movement of empowering entrepreneurs, but there’s still a long way to go.
Thank you so much for sharing these important insights. We wish you continued success and good health!