Progress Over Perfection: Interview with Jim Thomas, Founder and CEO of Itemize
I recently went one on one with Jim Thomas, founder and CEO of the FinTech financial data extraction and reconciliation platform Itemize. Prior to founding Itemize, Jim led the data transformation business at Mastercard.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks, or challenges have been most instrumental to your growth?
Jim: As the CEO and Founder of Itemize, I focus on helping companies address digital and process transformation challenges. I founded Itemize in 2012 to close the gap in Financial ERP automation. Our technology empowers financial teams to focus on higher-value activities by liberating them from laborious and costly data entry and reconciliation tasks, which remain manual processes at most companies.
We’re a classic not-overnight-success story! When we first got the company going, we were working with very early-stage technologies in artificial intelligence and image recognition. People said, “image what?” Slow chips, poor camera software, and so on so forth. As a company, we often struggled, with an AI game of “whack a mole” that seemed like we were going around in circles. At times it was demoralizing. But we persisted. We kept at it on the basics, while also trying new things, adopting the latest bleeding-edge innovations as they came along. Agility in our approach to technology has been important, and we have learned to compromise a lot, at least initially, to try new things that ultimately can grow into powerful solutions. Today we have an awesome system that actually does what we set out to accomplish 10 years ago. Patience and Fortitude.
Adam: How did you come up with your business idea? What advice do you have for others on how to come up with great ideas?
Jim: Working at one of the big credit card networks for several years helped me understand how big the “payments” industry is, as well as better understand the area of “commercial payments”. It’s an infrastructure of the economy that we sort of take for granted, but it’s huge. It’s a bit lumbering, and its technology was borderline antiquated. Moreover, when I was leading the data and analytics initiatives, I realized that the data capabilities of the commercial payment industry were lagging from other sectors. Far from treating data as an asset, they were still struggling with manual data entry, accuracy, fraud, long processing time, and much more. I recognized that if I could solve this challenge with technology, I could make a difference and build a scalable business.
Starting a company is hard. My advice to others would be don’t make it more difficult for yourself by looking at industries that you know nothing about. Look for opportunities in business and functions where you have expertise and insight, even access to good data resources and financial information. Do it where your ideations on disruptive concepts have a basis in facts and customer needs analysis. Stay close to the industry you know and even closer to customer needs analysis. There are always opportunities for better mousetraps if you focus there.
Adam: How did you know your business idea was worth pursuing? What advice do you have on how to best test a business idea?
Jim: When we first started, we knew there was a problem that businesses needed solving, and we knew that it was causing enough real dollar pain to merit us trying to crack the problem. I say that because I was also involved in my partner’s architecture business, and we were drowning in paper bills and expenses. It seemed hard to reconcile that the whole payments business had gone digital, but their end customers were stuck doing accounting with paper, manual data entry, and human-powered reconciliation. Still, we did not know for a long time if we could solve the problem – that is to say, could we make AI and Computer Vision work well enough to start “reading” invoices and expenses, to displace paper and manual workflow processes. That was a big bet.
In terms of how to test an idea, it's critical to validate product ideas early on in the process. Although it will take a lot of trial and error, you must establish early on if or not you’re selling something people want. And the best way to do this is in bite-size chunks that are being beta tested with real customers on real problems. It’s not always fun to check in with users and potential users all the time, but their input is critical to you figuring out the solution. There is another side to listening to customers – they describe what their needs and pain points are, giving you valuable insights into the product-market fit. You also need to understand what customers are willing to pay for a solution. If people aren’t willing to pay for a solution to the problem, then you probably in your zeal, overestimated the negative impact of the problem in the first place.
Adam: What are the key steps you have taken to grow your business? What advice do you have for others on how to take their businesses to the next level?
Jim: Accept that there will always be diversions and compromise. It definitely isn’t a straight line. In fact, it’s not even a line – it's a Darwinian mess and you’ve always got more demand for resources than you have money and people to execute. So part of what has been key for us has been to try to meet these competing pressures by doing client work that also contributes to our strategic direction and development. We don’t have unlimited resources, and we only have so much time, so it’s critical that we don’t end up in the startup graveyard by doing custom work that is neither repeatable elsewhere nor contributes to our product development. It's hard to turn down revenue-generating opportunities, but it’s even more painful to miss your own product development goals and get pulled off course from the direction you set out on when you started the business.
Adam: What are your best sales and marketing tips?
Jim: Sales and marketing vary a great deal depending on what kind of business you are in. We operate in a B2B pipe and drains type business. Our sales and marketing are a whole lot different than say a consumer business. We like to say that most of the time our services are bought and not sold. We’re not stimulating near-term demand as much as demonstrating the benefits of our solution to prospective clients in the hopes of planting seeds for future sales opportunities. I would say that the most important sales and marketing tip is to not just knowing the customer needs, but to have a realistic understanding of how buying decisions happen in a particular segment, whether it be consumer, small business, corporate, not for profit, or even government. They are all different. Some of those are fast buyers, even impulsive. Some of them are slow sales cycles, taking three years or more to close. The latter is OK, for a huge opportunity with a good return on investment, and if you can allocate resources to it in long term. If you are a modestly funded start-up without an infinite runway, it’s important to understand these dynamics.
Adam: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level?
Jim: I think there are functional qualities and personal qualities. What makes a person more effective in a leadership role is that they actively advance the organization’s mission. It means they functionally seek interactions with the team to fast forward decisions rather than pass the buck. And they make good, sound decisions exercising good judgment. Some of those are hard and not fun. Additionally, good leaders listen to others in order to gather data. They are good with time and energy management.
In terms of personal qualities, it is a combination of vision for where the team is going, and the ability to motivate others to work in that direction. And that motivation is best conveyed through sincerity, honesty, exemplary hard work, and individual accomplishment that delivers for the team.
Adam: What is your best advice on building, leading and managing teams?
Jim: Lead by example, make integrity your north star, hire great people with three critical attributes: integrity, intelligence, and initiative. Set a clear direction for the team, help coordinate their collaboration, clarify the organizational dynamics, and then keep out of the way.
Adam: What are your three best tips applicable to entrepreneurs, executives, and civic leaders?
Jim:
Dedicate yourself to endeavors that are satisfying and make you happy. Life is way too short to deliberately put yourself in a position or organization that is not your cup of tea. And if you want to excel, distinguish yourself, and accomplish something, you will have to make sacrifices elsewhere. Make sure you like what you are doing.
Embrace progress over perfection – iterative incrementalism is a good thing. Nobody is a genius, and nothing is ever perfect the first time. So, keep at it!
Act with integrity - always, because doing so will keep you from snowballing mistakes in bad times and help you in countless ways in good times. And because it’s a remarkably small world.
Adam: What is the single best piece of advice you have ever received?
Jim: I once opened a fortune cookie that said “Stay True to The Dreams of Your Youth” I think it’s the best advice I ever received. When I was young, I dreamt about building cool electrical contraptions, playing the pipe organ, and having a farm full of rescue animals. A few decades later I’m still working on most of them.
Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.
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