Meet the co-founder of Tremendous
Nick Baum is the co-founder and CEO of Tremendous. Prior to founding Tremendous, he worked as a quant at an investment fund building algorithmic trading models. He founded his first company, GiftRocket, in 2011, with COO Kapil Kale. In 2018, that startup became Tremendous.
There’s always a lightbulb moment before the beginning of a new venture. What was that moment for you?
Our lightbulb moment actually happened eight years into the existence of the company. We built our first company, GiftRocket, in 2011 to provide a way to send someone a gift card for a business that didn’t sell gift cards. It went through YCombinator and launched at TechCrunch. Growth was slow but we were profitable. Eventually, though, we noticed that we had a lot of business customers using our dinky consumer site. They found that we were the best way to pay individuals in bulk, for things like taking surveys online and delivering marketing incentives. If they were willing to use our consumer gifting products, we figured we should build something for them to actually solve their needs.
Tell us about your journey into this market.
From GiftRocket, we followed the money. We took note of what types of customers were already using our consumer platform and why. Essentially: they were using our platform to pay people for taking surveys online. We built the tools to distribute incentives at scale, and first targeted the market research industry. Market research remains a cornerstone of our client base as we expand.
Today, we offer an easy process for just about any reason a business would be sending money to people, such as referral programs and employee gifts. Because of the ease with which we make distributions possible–allowing payouts in the form of prepaid cards, cash, gift cards, or even charitable donations–our platform is now used by businesses from Google and MIT, to Visa.
How did you fund the launch of your business and what creative strategies did you use to execute a minimal cash flow?
We used the revenue from our consumer business, GiftRocket, to fund Tremendous. There were eight years in between the founding of GiftRocket and Tremendous. We had raised $500,000 for GiftRocket, but we ended up buying out our investors. Even though the business was profitable, it wasn’t growing at a rate where it made sense for investors to stay involved.
The business was in maintenance mode for a few years, and then we saw an opportunity in the corporate space. We used the profits from the consumer business to launch Tremendous in 2018 and grow it. This also allowed us to meld the original business into our product package.
As a highly profitable company, we are in a unique position to avoid some of the funding pitfalls of our competition. To execute a minimal cash flow, our strategy is simple: we don’t take any VC money. We only spend money we have.
Working with a co-founder can be tricky, so understanding and compromise is important. How have you both found the process of building a business together? What makes it work?
Tremendous is round two for me and Kapil. We learned a lot–in the early days we were very opinionated about things that turned out to be unimportant. We learned to clearly delineate areas of responsibility and let each other operate. We’re also now much better at providing feedback to each other - it’s an essential muscle to build. It took awhile–we were both 25 when we started this journey, and more than a decade later, we’ve learned a few things along the way.
What’s the most common problem your customers approach you with?
It’s really hard to pay many thousands of people annually. There are nearly eight billion people on this planet, and they all prefer to get paid in different ways. It’s also really hard to pay people directly to their bank account if the sender and recipient don’t have a close relationship. The banking system just isn’t built to work this way and this means delayed payments, customer frustration and even fraud.
Tremendous is helping companies pay virtually anyone around the world - and those same clients are looking for tools to efficiently manage the process of distribution and receipt of funds.
How much business is concentrated among your top customers?
Right now, about 30% of our business has come from our top 5 customers. In 2022, we’re on track to triple our revenue and headcount–and a really important part of stable, long-term growth is diversifying our client base. Because we don’t want to overvalue any one account, we developed “capped run rates” as a metric for our business health. Basically, we set a limit on how many dollars count from each client.
There are other companies in the fintech space that have most of their revenue concentrated with one client. But we’ve chosen this metric that helps us stay focused on growing our portfolio of clients, rather than focusing individually on one particular client, or just a handful. This way if one client shifts in any way, we can account for that fluctuation without sacrificing our overall financial outlook. So we actually have a very large and diverse set of customers, and a meaningful amount of revenue is being delivered across the entire portfolio.
How do you believe the evolution of tech will impact your industry over the next 10 years?
The old way of sending money meant that payments were always directed through a handful of banks in the payments space. Now, there's a proliferation of different payment options for companies, and consumers now have an even broader set of preferred payment methods.
I think it only makes companies like Tremendous more important. Having a company that essentially functions as an aggregator, to help every consumer get paid the way that they want to get paid, is really important. With Tremendous, no matter the method of disbursal a business is using, the process will be streamlined for everyone involved.
What’s the most important question entrepreneurs should be asking themselves?
Why do I care about solving this problem? When you start a business, you need to be prepared to be working on it for a decade or more of your life, and understanding that you deeply care about the problem space is the most important thing to consider. For me, there’s inherent value in solving payment problems–and the process of giving and receiving funds should be simple. Tremendous is a solution-centered business that not only helps businesses, but also helps their clients in a direct and tangible way.
How important is company culture and what is your top tip to get it right?
It's critical. The most important thing is to choose cultural values that are authentic to the leadership and the people at the company. For us that's been a low meeting, high autonomy culture. That might not be the same for other businesses, it’s the right culture for the team that we have.
What are your thoughts on ‘no sleep’ culture as an entrepreneur?
I think it works in bursts. I don’t think it’s a good long-term solution, but sometimes it’s a necessity.
What are your top three tips to hire and develop new talent?
You have to think really critically about who you are as a business, and figure out the right messaging to convey that, and then you'll naturally attract people who are good fits. The key here is having strong core messages about the work you do, the work you hope to accomplish, and the work you value in others.
You also need to think about what you actually value in employees–and that’s not always obvious. At Tremendous, we look for high performers who are great writers (including the engineers!), among their other skills. At the same time, we’re completely remote, so we can consider applicants from all over the world.
Finally, paying well is one of the most essential ways to not only find great talent but also to nurture that talent. When employees feel like they are being compensated in a way that meets their potential rather than the level at which you hired them, then they feel valued, and want to grow with your company.
This is all particularly true in engineering, which is a really competitive hiring market right now. You need to do all of the same things to hire great engineers, but put in five times the effort.
