When Distribution Trumps Product
This is a solid article from a16z that goes into some of the unique aspects of Bill.com's business model. Bill.com recently IPO'd in 2019 and has been off to a fantastic start. Start is actually a bit of a misnomer - the company has been in existence for well over a decade and has a large number of SMBs on the platform. This network, according to the author, is key in driving the company's growth. I tend to agree - like any network-based business, Bill.com becomes more valuable as the number of nodes grows and more customers push others to join the platform. This customer-driven virality is key to growth. Interestingly, towards the end of the article, the author makes a point about the potential upside to building out a data business: "The company doesn't feed data back to its customers, which could be beneficial in providing analytics, intelligence, and forecasting tools. With the invoice data it collects across customers, Bill.com could help its customers to understand which suppliers are more or less likely to pay on time and to benchmark against their peers. That data could help customers forecast their AR and AP, create a map of vendors, or even launch a capital lending product." I'm sure Bill.com has plenty of opportunity to grow its core business, but this extra value add seems compelling.