Are twins competitive? Does the sun rise in the east each morning? (OK, it doesn’t actually rise, the earth rotates toward… stay with the analogy, please.)
“I think that’s one of the reasons we’ve been so successful,” offers Matt, the married twin (he lives in Corte Madera). “We’ve always pushed each other to set the bar that much higher. If Zach opens 140 new accounts for a week and I only do 110, he has bragging rights for the whole weekend, and he’ll just grind at me for that success. On the other hand, if I take the honors for the week, he’s going to know about it—and then some!”
Born in San Francisco in October 1976, Matt and Zach Hyman were raised in Marin County. They graduated San Rafael High School in 1995, attended Santa Barbara City College for a couple of years, taking business classes mainly. Then, at just 20 years old, they dropped out of school and started their own direct marketing business. “At that age, with no car, no wife and no big responsibilities, you have absolutely nothing to lose,” says Matt with a hearty laugh. “That’s the time to really go for it.
“That—and the fact that our family had given us both a good, solid work ethic—taught us to rely on ourselves and not to expect others to do the work for us,” adds Zach. “That direct marketing business we had in Santa Barbara taught us how to build a business on solid footing.”
Soon, they came up with the notion of providing financial services and, in 2000, founded Card Payment Solutions (CPS), a Santa Barbara company that let businesses process credit cards more easily. Three years later, they sold the company to their primary competitor, iPayment Inc.—for $18 million! “We had to sign a two-year ‘non-compete’ clause that prevented us from opening another business in the same field. So we stayed on with them to help them expand the business,” recalls the unmarried Zach (he lives in San Francisco). During those two years, we helped iPayment quadruple the size of CPS.”
Matt recalls starting CPS. “You have to understand, we started out selling candy door-to-door as kids—10, 11 years old. We loved it. We quit college because it was too much theory and not enough ‘real world’ business. When we started our first company, Productive Marketing [the Santa Barbara direct marketing business], we hit up our folks, our grandparents, our friends to raise the $75,000 we needed, mostly in $2,000 to $5,000 increments. I think one of our supporters kicked in $10,000. I know they wrote us checks never thinking they’d get their money back!”
They did, though. Five- or six-fold. That’s a good return on investment.
Life skills
While Matt concedes that education is important, he also suggests he and his brother got more from their hands-on experiences than finishing college could have given them. “The biggest thing we learned was how to manage employees,” he says. “That’s not something we could have learned in school. We still stress education with our employees, but we’re also open to those who have the skills without the education.”
I ask Matt what he sees as his strengths and weaknesses. “Communication is my strong point,” he says without the slightest hesitation. “I’m on the phone all day long, talking with our associates, listening to their needs, motivating them to do well. I think I understand each and every one of them. My job is to give them the tools to make it happen—for themselves and for our company. Curiously, my weakness is also communication, I think. I kind of jump the gun sometimes, just blurting out what I think before I’ve given it enough thought.”
As soon as the two-year noncompete period was up, the Hyman brothers returned to Marin County and immediately set out to work on their present business, Central Payment Corporation (CPC). And surprisingly, iPayment helped fund the $4 million startup (and remains a minority shareholder). CPC built to more than 13,000 accounts in less than a year and currently has 70 full-time employees at its Larkspur headquarters; a 450-person salesforce (constantly expanding) is spread across the country. In July, the company processed $55 million for 13,000 merchants.
“The essence of our business is to make it easy for merchants to accept credit card payments,” explains Zach, who says he’s the better-looking twin. “We work primarily with Visa and MasterCard, but also deal with Discovery and American Express. We also guarantee checks and handle check conversion services, guaranteeing electronic transfers. We handle debit cards and contract-less payment programs. Gift cards are also a big part of our business, as are all e-commerce transfers. It’s a crazy, competitive, wildly expanding business—and we’re well situated to handle the rapid expansion. We do everything.
“The part of our company’s service that’s most important to many of our merchant clients is we’ll advance cash to them as part of our partnership relationship. They need a new pizza oven? They need to pay back taxes? They need to increase their investment? We’ll advance, say, $100,000 to them. It’s not a loan; it’s an advance on their next month’s receipts. It gives us a chance, too, to educate our clients and help their businesses be more efficient in what’s an increasingly more competitive marketplace.”
Trust me, these brothers know competitive. They’re both avid golfers (one will admit to a handicap of 18 “but that’s going down”) and intense poker players—both online and in open tournaments. Zach recently came home from Las Vegas nearly $750,000 up, having won an important open tournament. (Matt says he hasn’t won a tournament yet, “but I’m due.”)
I ask Matt where he sees himself in five or 10 years. “I’ll still be in the industry,” he says. “It might not be this company. We get offers all the time. But Zach and I have the mind-set to succeed in a cutthroat world. I really like working with kids, especially now that I have a daughter of my own, Caiya. I want to make sure they get steered in the right direction.”
“Your partner for growth”
“That’s our motto,” says Zach. “That’s what we’re here for: to partner with the merchants who use our services and help them grow their businesses. We’re there to assist them in any way we can—to consult with them and help them process their transactions as seamlessly as possible. The bottom line in all of this is: They grow, we grow.”
He says wireless solutions are the newest, most rapidly growing aspect of the credit card processing business. “I think we can download from half the cell phones in existence today,” he crows. “We can handle any wireless technology out there. We offer free, compatible software to our merchants, so they can turn their cell phone into a wireless credit card processing terminal. It’s that easy. We also have software that makes it easier for our merchant clients to access their accounts. Instead of getting their information once a month, they can access any day’s transactions the next morning! That enhanced reporting feature helps them to better manage their business.”
Sal Oztuik is manager and part owner at Ti Piacera Ristorante, an Italian eatery located at Polk and California streets in San Francisco. “We’ve been working with Central Payment for three or four months now,” says Oztuik, “and they’re very, very good at what they do. Their rates are excellent, and their service is the same; the money gets to the bank on time. We’re very happy to be doing business with them.”
Central Payment Corporation was started in March 2006. In the nine remaining months of that year, the company’s revenues totaled $4.4 million. By August 2007, revenues exceeded $10 million, and Zach expects this year’s revenues to be in the $22 to $26 million arena. “We work very hard to hire good people, and we compensate them well,” says Zach. “Our outside workforce of 450 works on commission. We get 400 or 500 résumés a day! It takes 16 employees to process them—to cull out the obvious ones and interview the serious ones.”
Zach says the business is growing so rapidly, he expects the company to process $1 billion in 2008. “We’ll be extremely profitable next year, we’re going to grow astronomically. We have an awesome staff here in Larkspur, and the teamwork is extraordinary. It’s not just a Zach-and-Matt pony show. Our infrastructure is pretty well set. The accounts are set up, and we’re gaining 1,000 new businesses a month. Once you have all your systems up and running, the workload drops dramatically, because all our systems are easily expandable. Last July, more than 1 million people ran their credit cards through our terminals.”
Sharing success
Having returned to Marin County after a decade in Santa Barbara, the brothers are keen on being involved in their home community. Recently, they signed on as donors and as a support team (along with their employees) to work with Sunny Hills Services, a San Anselmo nonprofit organization that provides a broad spectrum of programs and services to more than 400 emotionally disturbed children, adolescents and their families.
“We’d worked closely with Direct Relief [a Santa Barbara-based nonprofit that provides medical relief to poverty- or disaster-stricken areas, like the tsunami in Thailand or the Katrina hurricane] when we were in Santa Barbara,” says Matt. “We helped them with raising money. We also had our employees chip in. Helping kids is very satisfying—and so necessary. We were kids here in Marin, so when we came back, we hooked up with Sunny Hills. It’s been a good match. We give our employees two paid days off each year to help the kids at Sunny Hills, whether it’s planting a new garden or some other necessary project.
“When Zach and I were only 12, a nonprofit job program called Youth in Action gave us an opportunity to sell candy door-to-door. By the time we were 18, we were running our own sales teams, offering younger kids the same opportunity we had. It’s amazing to see their unbridled satisfaction with earning a daily paycheck—and to know we contributed to that. It’s a feeling that’s stayed with us over the years, and we’re delighted to be able to give back to an organization like Sunny Hills, which has an awesome group of programs. These are just kids who aren’t as lucky as we are. They’re all good kids, they just have extraordinary challenges to overcome. If we and our employees are motivated to help them, the kids respond well to that. So, we’re there for them. We recently donated $75,000 directly to Sunny Hills, and Zach and I have also been active in their fund-raising auctions.”
Joseph M. Costa is the CEO at Sunny Hills. “Central Payment Corporation is an important corporate and community partner for Sunny Hills Services,” he says. “They provide critical support for our programs and services, which lets us serve the needs of vulnerable children in our community and helps us make sure those children receive the highest level of care. Central Payment Corporation’s involvement with our agency is exemplary; our relationship with them is proof that partnerships between social service agencies and socially minded corporations can be successful and rewarding for both partners.”
Sunny Hills’ services are provided through residential, educational, community-based and residential treatment programs. “Our services stem from the conviction that early treatment creates better and brighter futures for children and their families,” says Costa. (You can see the website at www.sunnyhillsservices.org.)
Grow ahead
As to the dizzying expansion at Central Payment Corporation? “I believe our success is measured by the quality of the services we provide to our accounts and sales partners,” says Zach. “With exceptional energy and a customer-centric, business-focused approach, we’re committed to being one of the most capable and fastest-growing organizations of this kind. We know businesses need honest, effective and reliable ways to reduce costs and increase revenues. That’s what Matt and I are all about.”
Matt adds, “Part of it is our natural competitiveness; we’re always trying to outdo one another. But part of it is that we’ve always been strong in due diligence—doing the groundwork, doing the homework, hiring good people and letting them do their job. It’s like when you write a good review: if you’ve dug deep enough, you get all the good stuff. Do the homework, pay on time and compete. That’s what works for us.”
