Lessons We’ve Learned from 65+ Embedded Payroll Partners

One of Check’s company values is Be a True Partner. This means that we constantly push ourselves to obsess over the needs of our partners. We work hand-in-hand with our partners to help them build, launch, and scale their payroll products. This has resulted in our partners operating the largest payroll businesses built on the embedded model in the world.

It’s also resulted in folks at Check becoming experts at launching payroll businesses. We figure we’ve done it more than any other group of people in history, and have the battle scars to prove it! Building and launching any product is hard, and that’s why you want an experienced team at your side. Check’s track record matters because of all the lessons we’ve learned over the past half decade from helping our partners, which we bring to bear in a generalized way when working with any new partner of ours. I’m excited to share a few of those with you below.

1. Every project needs a leader, every leader needs a number

Partners spinning up a new initiative like embedded payroll often do not appoint one overall leader for the project. An executive may decide that payroll is a must-have addition, and then delegate its development to a group of functional leaders within the company. Though each of these leaders is excellent in their own right, it’s common that none of them possess the overall context or authority needed to make the cross-cutting decisions necessary when building a net new business from the ground up.

We’ve seen this break down in a number of ways, but usually the dysfunction becomes clear when it comes time to go to market. The new product, once built, needs to be artfully introduced first to the company’s own revenue teams, and subsequently to its customers. Revenue targets for the new product are a critical piece of the puzzle, as they help revenue leaders understand how to set marketing budgets, or compensate account executives for selling the new functionality. We’ve seen it work best when the executive team sets a target for payroll, and entrusts the achievement of that target to a GM-type leader who is held accountable to it.

2. Don’t forget about billing!

As I wrote in my LinkedIn post announcing our Usage API, for some reason, billing infrastructure is often an afterthought when building a new product. We’ve made this mistake at Check for our own products as well. The basic takeaway is that not thinking about billing can cause project scope to balloon later in the integration process, so it’s a good thing to keep track of up front!

3. Waitlists work

Waitlists are a powerful tool to drive customer demand and identify early adopters. They create a sense of urgency and rarity in the minds of consumers. And they enable you to identify your most motivated early adopters. Folks who will go out of their way to sign up to be on your waitlist truly love your product and want to use more of it, or truly hate their current solution to the problem you’re promising to solve for them!

We recommend that partners build a waitlist before they launch their payroll product, so that when they are ready to launch they already have their alpha cohort identified and can begin onboarding customers quickly.

4. All-in-one is a powerful pitch

Consumers today want to use less software tools, not more. If you can help a small business owner eliminate a software vendor and consolidate that function into a tool they already use, they’ll usually jump at the chance — even if the solution costs a bit more overall.

This is happening for two main reasons:

1. Infrastructure companies like Stripe, Check, and others are making truly compelling all-in-one product experiences feasible and widespread. Before, it simply wasn’t possible for startups to build a high-conversion payments solution, or 50-state payroll, into their platform. Today, it's not just possible, but it's becoming the norm. And customers have caught onto this shift and learned to expect more from the tools they use.
2. SMB owners are more savvy than ever before, especially when it comes to software. As millennials continue to replace Gen X in the workforce, more people who grew up on the internet are making software purchasing decisions, and these buyers demand integrated experiences that work well together.

5. Know your industry

Payroll is quite different across different industries. For example: the particular pain points you might hear from a restauranteur (think tip credit, tip pooling, and different pay rates for different jobs) are different from those you might hear from the owner of a construction company (how to tax work at addresses that don’t exist yet, how to tax work across state lines, how to incorporate union wage rules into compensation structures).

Check’s most successful partners deeply understand their industries, and build products upstream of payroll that create real differentiation in the market. In our view, embedded payroll works best when our partners build industry-specific capabilities on top of our flexible payroll processing infrastructure. We are proud to support our partners doing this, who serve businesses as diverse as restaurants and construction businesses, but also farms, physical security companies, technology startups, solopreneurs, coffee shops, and more.

6. Launch, then iterate

I’ll end with a slightly more controversial take. I’ve enjoyed debating this over the years with a number of partners who I respect greatly. Their basic premise is that the concept of a “minimum viable product” or MVP, can lead a team to make suboptimal decisions, or intentionally avoid thinking through the full extent of a complex problem, just to get something unfinished out the door.

My perspective is that by following Check’s guidance and launching quickly with a scoped-down version of the product you hope to build over time, you get a shortcut to the most valuable input to product development: customer feedback. Effort wasted taking a product in a direction that is proven wrong by customers once introduced can easily trump the quality sacrificed by committing to launching early with a more minimal product in the first place.

So, my advice follows the Y Combinator adage: ship early, and ship before you’re entirely comfortable with the quality of your product. The sooner you get real users on your product, the sooner it becomes real in the eyes of your team, the sooner you generate real revenue, and the sooner you learn from customer feedback. And you can be confident that because you’ve built on top of Check’s technology platform, and have our team of experts by your side, we won’t let you go astray.

If you’re considering embedding payroll into your platform, please reach out! We love talking about these lessons and the many more we can use to help you launch payroll seamlessly.