In September, IAS expanded its leadership team by appointing Bob Corbin to the role of executive chairman and hiring Patrick Brown as president and CEO. Citing Brown’s experience as an entrepreneur and executive, Corbin describes Brown as “the right person at the right time.” Agent Entrepreneur caught up with Brown less than a month into his tenure to learn more about his personal and professional background and what made IAS the right move for him.
The remittance model has been around for hundreds of years in some form. Before starting the business, I experienced this personally, sending money back home. You have to fill out a form at a customer service desk and someone has to retype that into a DOS-based computer. It’s very inefficient. It can take 20 minutes to do a transaction. And some of the folks sending money are illiterate or don’t speak the language on the form.
Our business plan called for streamlining the registration process on the front end. We took it from 20 minutes to 10 seconds. We grew that company and ultimately sold it to a publicly traded company.AE: Any growing pains? Brown: All the usual growing pains a startup has. There were times I told my wife to make sure the groceries lasted an extra week. AE: Do you ever reflect on those early days and think, “If I knew then what I know now …”? Brown: I do. If I had the financial backing and the experience I have now, that kind of thing. But I did have Wayne, who was a seasoned businessperson and really a guiding light. And it was during that time that I went back to school and got my MBA at the University of North Carolina in Charlotte.
Growing up, my grandfather instilled in me that there are two things no one can take away from you: your education and your last name. Understand that, when there was a regime change in Bolivia, and you were on the wrong side, you could get thrown in jail. But they can’t take your name, and they can’t take your degrees. Therefore education and integrity are very important to me.
When we sold the company in 2004, I signed on to run the money transfer and bill pay division of Euronet, the company that acquired us. We wanted to be No. 1 and we couldn’t do that with organic growth, so we started acquiring a number of companies. The last acquisition made us the third biggest provider in the industry.AE: Having been an entrepreneur since Day One, was it a big adjustment to join a company and adapt to their culture and their way of doing things? Brown: There was some adjustment, but the reality is they were very good about allowing me to run the business. Euronet had three divisions and each division had almost a president or general manager for that business. So I was able to stay in Charlotte and execute my strategy. I reported to the chairman and CEO and they essentially allowed me to run it as a standalone.
That was a phenomenal opportunity, but I did get to the point where I wanted to get back to a smaller, entrepreneurial environment. I decided to leave Euronet and start Procesa, another company in the cross-border bill pay world. Instead of sending money to the family member, we wanted to create the opportunity to “directionalize” — to pay that family member’s electric bill, phone bill or tuition bill, for example. It was successful, and in 2008, we sold Procesa to NetSpend and I joined that company.AE: When you were building Continental Transfer and Procesa, did you do so with the goal of being acquired, or did the companies that bought them come to you? Brown: We were not looking to sell the first company. We had offers from General Electric and NationsBank, but we were still growing it. Euronet brought a growth strategy to the table. You need a sender network and a receiver network, and they came to me with the idea. If we had been acquired by GE or NationsBank, we would have been consumed and dismantled.
It was a similar situation with the second company. We were literally a year and a half or two years in and it wasn’t time to sell yet. But I saw the opportunity with NetSpend and decided to sell. When I joined, they were doing about $200 million in revenue with 200 employees, and they were owned by private equity. It was still very entrepreneurial, and it represented the opportunity to go into an industry that was relatively nascent.
So I joined up and eventually ran a division we called “commercial prepaid business.” My division worked with companies and individuals who wanted to rid their ecosystems of paper and cash by switching to online statements and electronic W-2s, for example. We took that company public in 2010. We then sold it to Total Systems Services, also known as TSYS, in 2012.
I could have stayed there for the next 30 years. It’s that kind of company. Folks who join don’t usually leave. It’s a well-run company with high integrity and a great reputation. But by the beginning of 2016, I was doing some soul-searching. We had been acquired three years earlier. If I was going to do something, what would I do? Lo and behold, through contacts and headhunters, the opportunity with IAS came up, and it happened to be in my backyard.AE: You were in Austin? Brown: When we were taking the company public, prior to selling to TSYS, I was spending a lot of time in Austin. My wife and I thought, instead of spending two weeks here and two weeks there and weekends at home, let’s go check out Austin. We decided to move the family in 2011. It’s a great city. Charlotte’s a phenomenal city as well. We went from one great city to another. AE: So you didn’t have to move, but you did have to switch industries. How did your previous experience prepare you for work in F&I? Brown: My history has been mainly in regulated industries. The money transfer and bill pay world is heavily regulated. We sold that company and started another one, which we sold to NetSpend, which is also very regulated at the state and federal level. AE: Based on your prior experience, do you believe there is anything the automotive industry or the F&I segment needs to do better? Brown: Specific to the regulatory environment, I think the industry has done a phenomenal job. We’ve got strong associations. But I know that, as the federal regulators get closer to the automotive industry, there will be more interest in our business line. We’re here to partner with our dealers and agents to make them successful. But the industry needs to be focused on who’s buying our products, and that’s the consumer.
The CFPB and the FTC want to be sure the consumer knows what they’re buying and whether there’s value in the product. Being able to get out ahead of that and telling the story rather than letting them tell the story for us will be important in the next five to 10 years.AE: And that story will be told online. Brown: Absolutely. Look, I think the power consumers have today is second to none at any point in history. You can go online and find information about any product you can think of. You can comparison shop for any product you can think of. The power is in the consumers’ hands, and it’s about how to design products and deliver them in the way they choose. AE: Does that reduce or eliminate the role of the dealer and the agent? Brown: Dealers and the agents who serve them will always have a role. But the opportunity to educate consumers on the value of service contracts and ancillary products online is powerful and should be embraced by the industry. AE: What have your first few weeks on the job been like? How do you learn a new industry and meet expectations as an executive at the same time? Brown: I make sure everyone understands I’m not the smartest guy in the room. It’s very humbling to step into an industry and know less about it than anyone else. That’s the first order of business, making sure you have the very best people in the industry onboard. You want people smarter than you and even more driven to succeed than you are, as well as people who are humble. Combine those three things and you’ve got a winner. AE: You must have been pleased to learn you have a trainer like Frenchy Mélon on the team. Brown: He’s phenomenal. And it starts with him, but it doesn’t stop with him. We’ve got people throughout the organization who are passionate about the products we sell, passionate about our agents. Somebody who wants to punch in at nine and punch out at four? This is not the place for them. Frenchy, Frank Klaus, Bob Corbin — a fabulous group of folks. And that’s part of what attracted me to IAS. This organization is full of passionate and talented people.