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Matthew E. Oakes Video Interview on RedChip Money Report
RedChip Money Report sat down with CEO Matthew Oakes to discuss Direct Insite Corporation.
RedChip: Here with Matthew Oakes the CEO of Direct Insite Corporation. Matthew thanks for being with us today.
Oakes: Thank you very much.
RedChip: Now you have an e-commerce, cloud based company, electronic invoicing, you have clients like Hewlett Packard, Siemens, you’re profitable, you’re doing well. Tell us more about your company.
Oakes: Business is really well positioned I think for a lot of growth right now. We’ve been in the invoicing space for about the last four years, we’ve got a new management team that has been in place for about 16 months. Really focused on growing our vendor network, we see a lot of value in having a 1 to 1 relationship with the vendors of the big companies that we serve. We’re really a pure automation play, if you think about a business, imagine an AP department where you have 50 desks and 1,000 pieces of paper on each one. We want to make all that go away. So we have an initial entry point where we say we’re a green initiative, which we are. So we want to eliminate paper, we want to automate a lot of processes that are manual, we want to automate the relationship between vendors and companies that historically use a lot of email and phone calls to resolve issues between the two of them. We then want to go ahead and make sure that those vendors now have a web-based visibility tool into where their invoices are, where their payments are. It really becomes something that you manage from your desktop instead of over your phone through email and then with 4 or 5 people being involved.
RedChip: Why does a company like Hewlett Packard or Siemens choose your company, your technology?
Oakes: I think there are a couple key differentiators. One, the automation is proven. We’ve implemented in three or four places and they become your best reference customer. Two, I think the way we onboard the vendors onto our system, there is nothing different there is a lot of bocking and tackling but we do it very quickly and very efficiently. So there is a very quick conversion from the traditional paper and the electronic methods and then the interaction between the company and their vendors becomes one of more positive and constructive, instead of contentious and where’s this where’s that. So I think the automation that we provide the manner by which we do it, our portal is very easy to use, and then the way that we board the vendors into the portal and get them up and running. I think that’s a key driver for us.
RedChip: How do you grow this company? You’re doing about 9 million in revenue now, you are earning about half a million. How do you continue to grow?
Oakes: We’ve invested a lot of money in sales and marketing. So I have a direct sales team now instead of just a channel team. We have some great channel relationships and now we are developing relationships on a 1 to 1 basis and getting some market awareness out there. I think there are three key things for growth. Number one, we have to continue to have the direct contact with new people who are discovering automation. Only 40% of the US based large companies have an automation play. Everyone is still very manual, fax, paper based. So huge opportunity to growth to sell in. I think with the existing customers that we have, which are numerous, there is an ability to sell through the additional modules that we have built out to even increase the efficiency of the automation. And all focused on growing that vendor network and then finding a way to provide goods and services to that network of vendors inside that corporate umbrella. So I think there is a three prong strategy that is pretty effective and I think we’ve targeted exactly what we want to do and now we are in the execution mode to go do that.
RedChip: What’s the essential value proposition for investors today? You’re trading at a very low multiple for your industry, light volume but again, you are financed, you don’t need to raise capital right now, you are in a good place. What’s the essential value proposition?
Oakes: I think as you see it, if I’m an investor, and I am a large investor the organization. If you see where large companies are going, companies are figuring out how to grow again without adding a ton of labor, so they are looking to implement tools and services, outsourced tools and services that they don’t have to manage and control but they get the benefit of. So if I’m an investor looking at Direct Insite I say to myself, here’s a company that’s automating some processes for some of the country’s largest companies, they’ve obviously deployed and are operating. It’s a great recurring revenue model. They are lowering the barrier to entry for the ability of new customers to board and so they are doing it in a quicker and more efficient manner. So I think our whole business model is becoming leaner and faster, our sales cycles are becoming shorter, along with our deployment cycles. We are all about recurring revenue so I think from an investor standpoint, our contracts are anywhere between 3-5 years and so there is a real predictability in the revenue stream we have. You are not going to wake up tomorrow and we’re going to be gone. We’re serving these big companies for a long time and that’s our sweet spot.
RedChip: You are early in the growth phase, again, you are trading at lower multiples than your peer group, you’re funded. And I like the fact that you are heavy inside ownership, you got a real stake in this thing.
Oakes: We are very focused. I think when I’m an investor and I look in from the outside, I say what is it about this company, this management team that I like. I think we are very execution based so we find a market, we find an opportunity and we go execute against it. We are very focused on building recurring revenue and really healthy long term relationships with our customers. We value them and provide when another layer of the service comes in or another module we are right there offering it to them. And everything we do is based upon making their life more automated and easier. I think that makes it a very easy buy and once you’ve made the commitment to go, because it is a commitment to get this type of service. But once you’re committed you are going, and I think we are there for a long time for our customers.
RedChip: That’s a great story and I appreciate you being on the show and will have you back soon Matthew.
Oakes: Thank you very much. I’m looking forward to it.