Stacey Abrams didn’t dream of becoming an entrepreneur. Her first small business was a consultancy that she launched out of necessity to supplement her salary as a member of the Georgia House of Representatives. Lara Hodgson (MBA 1998) came to it from a somewhat sidelong trajectory herself, after a degree in aerospace engineering and several years at a real estate development and investment firm. But they collaborated on multiple ventures over the last 17 years. The most recent is NowAccount, a fintech startup that helps small businesses overcome the hurdle and hassle of waiting for invoices to be paid. Hodgson, who is president and CEO of the parent company and a former entrepreneur-in-residence at HBS, sat down with the Bulletin to talk about how these unlikely entrepreneurs used their differences to their advantage, a process they describe in their new book, Level Up.

Why did you want to write this book?

Stacey and I realized we’d overcome all sorts of obstacles to eventually build ventures that scale, and we wanted to use our story to help level the playing field for other small businesses. They are the source of innovation in this country, yet small businesses are held back by so many financial and regulatory systems that can be invisible or unexpected. If we can inspire more small businesses to stand up, identify the obstacles ahead of them, and work together to change them, then I think we could experience the greatest era of economic growth we’ve ever seen.

You mention your partnership with Stacey. Talk about how you used your differences to your advantage.

There’s this tribalism going on in the world right now that tells us to retreat from discomfort. There’s also amazing innovation and growth in the messy middle, but you have to be willing to learn and see things differently. Stacey and I say that our differences are our superpower, and I think that idea has never been more important.

We met during Leadership Atlanta, which was a unique experience because we got to know each other in the context of tackling problems that are bigger than either of us. We both came to truly respect each other’s skill sets and the fact that we both aspire to create a better world. Stacey and I are so different on every axis, and people ask us how we get over our disagreements. The truth is, we don’t get over them: We each apply a different lens to the same problem and see it differently. We refer to each other as “Yes” and “But.” If you come to us with an idea, I’m the optimist saying, “Yes, we can do that!” She’s the realist who’s saying, “Okay, but how are we going to do this?” With those differences of perspective, we wind up finding an approach that’s probably different from what either of us would have done on our own.

We all learned this in negotiation class at HBS: If one person is gaining, it doesn’t necessarily mean the other person is losing. There’s actually a third point where you both can gain. We don’t always remember that in our normal lives and we assume that difference means disagreement, but it doesn’t have to. It’s actually a good thing.

Explain how the downfall of one startup, Nourish, was also a good thing, in that it led to your cofounding of a fintech company called NowAccount.

On the surface, we did everything right with Nourish: We built a great line of formula-ready baby bottles, and we found a solid customer base. The unit economics made sense. The branding was great, and we were seemingly successful. Then we got a big order with Whole Foods, the dream client, and ironically that was what killed us. We just didn’t have the cash to pay our vendors to make the product and deliver it in time. We looked at all the solutions, and they didn’t work for us.

But Stacey and I are both wired such that, when we face a problem, we dig deeper to find the underlying dynamic that created the problem. We realized that it’s not that we hadn’t structured our capital right; we had a payment problem. In the consumer world, if I walked out of a store without paying, that’s called stealing. But in B2B it’s accepted that I’ll deliver my product or service and send you a piece of paper saying you owe me money and can pay me in 30 days. Then I just wait. It’s funny that we think 30 days is considered on time. Years ago, you might’ve argued that it could take 30 days to move the money around. But today I can pick up my phone and give you money in less than a second. So why does it still take 30 days to pay someone? It took the absurdity of trying to solve this problem with Nourish for us to see that the system is illogical.

Our initial vision for NowAccount was very tactical. We can help small businesses get paid immediately so they don’t have to use financing tools like debt and factoring and instead can use them for other, more appropriate things, like to finance equipment and tooling. That way, they can use revenue as a key source of capital to strengthen their balance sheet and get through the initial scale phase.

As the company has moved forward, we’ve realized that there’s a bigger vision: If we can change the way businesses get paid, we can change the US economy. Sometimes people look at me like I’m a sandwich short of a picnic when I say that, but I know this can be done. We are on a mission to enable businesses of all sizes to have access to customers, capital, and commerce. We’re going to do that by getting them paid faster with the NowAccount, but we’re also building out the NowNetwork, a curated platform where small businesses can connect with more customers so they can engage in commerce. Our economy needs more entrepreneurs.

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