“You don’t change horses in midstream.”
This American proverb, pulled from the punchline of a 19th century joke, was given enduring weight in 1864 by Abraham Lincoln. Lincoln used the phrase as part of a reelection campaign, but the meaning transcends politics: In the course of a challenge, you don’t change people or ideas — or else you risk being swept downstream.
The phrase is fairly intuitive, but successful startups frequently ignore this advice. Initial ideas are cast aside. Teams fluctuate. And ultimately, many successful tech companies completely transform to better meet the needs of the market.
And they succeed.
Case in point: In 2012, game developers from Tiny Speck realized that their multiplayer game had failed. They also realized that the game’s best quality was its messaging functionality. In 2013, they decided to relaunch as an instant messaging program, and Slack was born. Eight years later, the company was sold to Salesforce for $27.7 billion dollars.
Maybe the proverb should instead be: “If you change horses in midstream, make sure it’s a better horse.”
In 2014, Center was founded on the premise of developing a hardware product called CenterID, a consumer-facing digital wallet that allowed users to consolidate any number of payment cards into one device. Today, the fast-growing company’s product is no longer hardware but software, and its target market is no longer consumers but small and medium-sized enterprises. Center’s spend management software empowers these businesses to better their productivity and impact and free financial teams to do meaningful work.
“The business started as an entirely different concept from the software company that we know today,” Senior Vice President of Sales Frank Roeder said. He credits founders Steve, Naveen and Nik Singh with identifying opportunities in the market and trends in mobility technology, then using insights gleaned from the iteration process to ultimately pursue the best possible product.
Bringing two decades of experience in technology sales and a strong understanding of the expense industry to the company, Roeder joined Center in 2019. The company was readying to launch its core product offering Center Expense — an integrated corporate card and spend management software package.
Read on to learn more about the vision and history behind Center and the ways in which the company is continuing to grow as it serves the SME market.
What inspired the founding of Center?
In 2014, mobile technology began to drive payments. Steve, Naveen and Nik all saw a massive market opportunity for digital payments.
The first iteration of Center was CenterID, a hardware product that functioned as a digital wallet, with the intent for a user to put all of their payment cards into one device. Through the early years of the business, the team worked through various prototypes of the product. They quickly learned that they would need software in the form of a mobile application to work in tandem with the hardware. The creation of software was a lightbulb moment. Coming from a Concur background, the Center team saw a unique opportunity in the expense management space.
“The creation of software was a lightbulb moment.”
Traditionally, SMEs have been an underserved segment as it relates to expense management solutions — legacy solutions are expensive and not easily configurable. As such, there was a marketplace need for expense management software that was easily configurable to a myriad of use cases. It had to be dynamic. So they combined a corporate card with an innovative spend management system that moves the expense reporting process from batch-based to transactional. In this shift, it could deliver the benefit of real-time visibility into all employee spend.
Eventually, the team reprioritized the business, divesting the hardware to focus on spend management software, creating Center as we know it today. Center’s core offering, Center Expense, launched in February of 2020.
In those six years since the company’s founding, what were the insights or market dynamics that made Center pivot into the spend management software space?
With a deep understanding of the spend management market space and a rise in mobile technology driving payments, Steve, Naveen and Nik identified two core problems in the space that needed to be addressed.
The first problem was the consumerization of buying: Employees’ buying patterns were changing but the business processes and software tools were still antiquated. Spend was leaking out of traditional managed solutions, costs were unable to be controlled centrally and clunky tools were burdening the productivity and patience of users.
The second problem was that existing solutions were costly and lacked configurability and extensibility. One size could not fit all use cases and any customization was cumbersome and financially inaccessible for SMEs.
Steve, Naveen and Nik also recognized market and technological shifts. First, the rise of embeddable payments provided access to real-time data and deeply integrated controls. Second, the rise of AI-driven automation of spend analysis enabled more fine-grained and relevant controls. Third, the rise of no-code and low-code development enabled easy but deep configurability to serve a wide array of use cases with minimal overhead. They also saw the introduction of consumption-based business models that more tightly aligned business success to customer success.
The underserved SME market opportunity paired with technological change made the problem set readily addressable. This inspired them to create Center and reimagine what spend management tools could do for a business and for the productivity, impact and freedom of finance teams.
Were there any surprises or changes along the way?
Through the development process, we encountered a variety of hurdles and setbacks. What kept us going was viewing challenges as areas of opportunity that forced us to get creative and adapt. The learnings, insights and market feedback the team generated while building prototypes were essential to the iteration process.
“The learnings, insights and market feedback the team generated while building prototypes were essential to the iteration process.”
From 2014 until now, we stayed open to adjusting our strategy to deliver maximum value to customers. Maintaining the ability to redirect resources based on evolving priorities was critical to keep the business moving forward.
Though spend management was not our initial focus, we observed a paradigm shift in the business landscape with the rise of mobile payments and the consumerization of corporate buying. There was an opportunity to reinvent expense management workflows and create a consumer-grade product that would empower companies to ensure every dollar is spent effectively and see spend as it happens in real-time, leading to actionable insights, better decision making and the discovery of cost-saving opportunities.
What’s next for Center?
Since the launch of Center Expense in 2020, we have seen incredible customer growth. We’ll end this year with more than 900 customers. Our top verticals are established SMEs, including professional services, construction, consumer services and nonprofits.
Next, we will continue to address the pain points of an underserved SME market, expand our product offerings, support evolving and growing use cases and bolster innovation in other areas of spend management.
