Why zlien Founder Scott Wolfe Wants to Grow More Than Just Revenue

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zlien Founder and CEO Scott Wolfe at the company’s new office in the Lower Garden District of New Orleans

Scott Wolfe is having pizza for lunch and talking about the latest antics of the presidential campaign. He’s listening, laughing, and chiming in from time to time. From afar, it appears as though he’s hanging out with a few of his buddies. But a closer look reveals that he’s surrounded by members of his team at zlien, in their new sprawling office space in the lower garden district, where Wednesday lunch is a tradition.

That’s until one of his young sales leads excitedly comes over and interrupts their leisure banter to share his excitement about nearing the closing of a big deal he’s been working on in the Midwest. His eyes gleam as though he’s just won an award as he shares the news with his colleagues, including Wolfe. High fives are handed off before the group disperses back to work.

For Wolfe, much of his life’s work has converged in this moment. Wolfe had graduated from law school in New Orleans in 2005 and just started a law firm. But like so many others his plans had changed after hurricane Katrina. A New Orleans native and son of entrepreneurs, Wolfe first developed zlien, a mechanics lien and construction software that helps clients with the construction management process in 2007, when he was helping his parents rebuild their company.

During that time, he built an in house application to help them manage their construction process. And part of that process was making the lien process simple. (A lien is a right to keep possession of property belonging to another person, until a debt owed by that person is discharged.) Then, he expanded on that tool.

And so zlien was born in 2007.

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Wolfe with members of his team at Wednesday lunch, a zlien tradition 

Lean Machine

From those early days up until about 2012, Wolfe says it was mostly lots of tinkering with the program, marketing, and finding early clients. It wasn’t until 2012 that Wolfe started working on zlien full-time.

After raising an initial $500,000 round of investment from New Orleans Startup Fund and local angels in mid 2012, they were off to the races.

They utilized that initial funding over a three-year period to grow zlien from 1 to 30 employees.

“Since we ran so long on that 500K, our company was so capital efficient. We were cash flow positive,” Wolfe says.

And then in August 2015, zlien raised a 1.3 million round with Brick & Mortar ventures. Wolfe says that investment allowed them to get on the right path to capitalize the business the way they envisioned.

But Scott points out that they wanted to be very mindful of how and when they raised funding.

Securing funding as a New Orleans based startup was a challenge, Wolfe says. But the big break came after Wolfe competed in the Coulter IDEApitch during New Orleans Entrepreneur Week, which led him to San Francisco to pitch to investors. That was the catalyst for the largest round of funding zlien has secured to date which was a $5m round from Altos Ventures.

Up until then, they started with a little bit of money that went a long way. Wolfe says their efficiency and lean approach paid off.

So, how did they do it? Wolfe says there are two answers and both are equally important.

“We had a good business model and still do. We have capital efficiency in our DNA. We are aggressive with our growth. We have aggressive growth targets, we push the limits, and we’re not shy about setting high targets and getting creative to get there, but we’re also mindful of how hard it is to get cash and the value of money,” Wolfe says.

“We know the value of capital. We don’t waste it. We want to measure twice, and cut once,” Wolfe says.

There is a component of their business model that is cash rich.

“One of the things that allows a company like ours to grow money is that we try to grow faster than expenses. We get cash on the front end, and the customer acquisition cost is lower than what we make on a sale,” Wolfe says.

Because the cash was immediate, Wolfe says they were able to blunt some of the cash needs on the other end of the business. That means the investment they put in to acquiring customers paid off. In other words, their customers created leads for them.

The second factor that Wolfe says he owes to the early success of the company is that they have a really good team.

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Wolfe talking with members of the zlien team in their new office located in the Lower Garden District of New Orleans.

The Most Important Place to Work

For Wolfe, it’s not just about growing the profits of his company. He strongly emphasizes that the success of his team is hiring the right people for the right jobs.

“There are some people who are good enough to lead a team, and some people who aren’t,” Wolfe says.

“What I think we have done well thus far with our team is that we found people that are doing the things that are right for them. It’s using the skills and the talents that they have and we’ve been fortunate to put people in positions where they have this drive to grow themselves. We’ve been successful in having people stretch themselves,” Wolfe says.

And that doesn’t exclude him.

“No one is right for being in a company of 1 person, and then 50 persons. When I was the sole employee, I had to grow as a CEO. When I started the company, I had experience, but clearly I think this will be one of the most important places that I’ve ever worked because it’s developed me in so many areas,” Wolfe says.

But finding and building the right team is like creating a masterpiece in itself.

“One of the things we commit to is the most important place to work. We want people to be uncomfortable and pushed to their limits here, and one day when they leave regardless of what they do, we want them to look back at zlien and say that was the most important place for them to work and that it was critical to them being able to do whatever they do later on in life,” Wolfe says.

And as much as it is an investment to hire the right people, Wolfe says that when an employee decides to join his team, it’s an investment for the individual too.

“You’re not just growing a company, you’re growing people,” Wolfe says.

“When someone works for you, they’re handing you some years of their life and there is an obligation to reciprocate that humbling decision that they made to come spend all of their days with you for a few years, and I think every business has a lot of obligations to its people,” Wolfe says.

Wolfe says finding and cultivating core values of a team is an exploratory, continual process.

“You don’t go sit into a room and say let’s figure out what the core values should be, you figure out what they are. It’s kind of like being an archaeologist; you’re brushing dirt away to try to find what the core values are. It takes a while. We’ve gone through core value iterations for a while, and every time we brush off all the dirt from the bones, it’s built into us,” Wolfe says.

And while Wolfe has been working strategically on crafting his power team, it hasn’t come without challenges that are unique to New Orleans.

Wolfe says that only seven out of zlien’s fifty current employees are from Louisiana. (Wolfe has since hired more employees since this interview was conducted.) Zlien has been recruiting talent from outside of New Orleans.

“When we put out job applications for certain roles, that are unique to our industry, there is not a glut of people in New Orleans who are applying. We get a lot of New Yorkers and San Franciscans,” Wolfe says. “But one day we might need 50 engineers.”

Wolfe points out that while New Orleans is an ideal city for small businesses, it’s still unclear whether it will be able to support larger growth.

“It’s great for hospitality, but I think it will be challenged in how high it can get in the tiers of high growth, invested or technology companies. There’s a growing amount of interest here, but can New Orleans support a business like ours that has 200, 500, 1000, or 5000 employees?” Wolfe asks.

For zlien, hiring tech talent will be a critical factor in continuing to grow in the future.

“How much talent can we groom here that have technology roles and skills, software as a service technology, specifically? There’s just not a lot of people here who are exposed to it,” Wolfe says.

While those questions remain in the air, Wolfe says his team is all in.

“We’re going to do our part. We’re going to keep working to build here. We‘re going to keep pulling people into our building. We’re committed,” Wolfe says.

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