Paycom founder rides innovation to successPublished: Wednesday, February 12, 2020 By: Chip Minty Source: The Journal Record
Who says you can’t build a billion-dollar tech company in Oklahoma City?
Chad Richison has spent a lifetime thinking outside the box. The founder, president and chief executive of Paycom spoke to members of the Rotary Club of Oklahoma City on Tuesday about his early adventures in entrepreneurialism and the spirit that carried him to the top of his industry.
His first business was hauling hay as a 16-year-old growing up in Tuttle. Richison earned his degree from the University of Central Oklahoma, then leveraged his business acumen to amass a net worth of $2.5 billion.
Starting his career as a sales manager for payroll service company ADP, Richison envisioned a new way to do the business. He eventually went out on his own and transformed an idea into a $17 billion juggernaut that Forbes has listed among the fastest-growing tech companies in the country, and Richison sees no sign of slowing down.
“We’re very focused on automation and eliminating keystrokes,” Richison said.
Last year was Paycom’s best year yet, and the Oklahoma City company has provided investor guidance suggesting more growth in 2020. With Paycom having a 93% client retention rate and 98% in recurring revenue, the HR software market is still wide open and the wind appears to be at the company’s back.
Despite all of its successes, Paycom still must go out and do the work, and there is little doubt it will be a dogfight, Richison said.
For the company that ran payroll for more than 26,000 clients nationwide in 2019, more opportunity for growth is ahead, Richison said. About two-thirds of businesses outsource their payroll and other HR functions.
Richison said he was 27 when he founded Paycom, offering payroll services to clients through the internet. It was 1998, and the technology was still slow and often hard to use, but the innovation provided the foothold he needed.
Selling the technology to prospective clients was particularly difficult in those days, he said. First, he had to show them what the internet was, which usually involved rigging fax machine lines to computers and tapping into early-day web portals.
Money was also a challenge. After failing to interest investors in his new idea, he obtained a $200,000 Small Business Administration loan, which he quickly depleted. He then turned to credit cards, learning how to game the system to maximize the cash he could secure for his startup. At one point he had 13 active credit card accounts standing between him and bankruptcy, Richison said.
Advancement and innovation have been at the foundation of Paycom from the beginning, he said. What’s more, women make up 60% of Paycom’s management team.
“We’re proud of that,” Richison said.
In addition to payroll, the company