[Editor’s Note: Founder Forum, a weekly interview with a startup founder in Maine, is sponsored by the Maine Technology Institute. Read more about MSI’s sponsored-content strategy here.]

Jamie Nonni

Jamie Nonni’s entrepreneurial story is one of perseverance. He’s taken big risks that have paid off. But he’s also experienced failure, including a bankruptcy that forced him to rebuild his business.

But the experience has paid off. Today, Nonni is CEO of not one, but two companies in Portland’s financial technology cluster.

Nonni founded Nationwide Payment Solutions in 2002 to provide payment processing services to merchants and other business customers. It currently employs roughly 60 people in its Portland office. His newest company is Municipay, which he co-founded with Patrick Allen and spun off of Nationwide in 2009 to provide payment technology solutions to municipal governments. It currently employs six people in the same office.

Both companies fly under the radar in Maine, but have been posting impressive numbers for years. Nationwide and Municipay have both made the Inc. 5,000 list of the fastest-growing private companies in the country several times. Nationwide, with annual revenue of roughly $20 million, made the list each year from 2009 to 2012, while Municipay, with $2.9 million in revenue in 2015, made the list in 2015 and 2016.

[If you want to learn more about Portland’s cluster of financial technology companies—think: WEX, CashStar, BlueTarp Financial, Bottomline Technologies, Nonni’s own Nationwide Payment Solutions and Municipay, etc.—and how it developed, I dug into the topic for the Portland Press Herald in 2014. I traced the origins of the cluster to four payment-related companies, only one of which (WEX) still exists today.]

In our conversation, Nonni discusses his early entrepreneurial stumbles, the importance of surrounding yourself with the best people, and why every entrepreneur should be prepared to fail. As usual, the interview has been edited for clarity and length.

Tell me about your first entrepreneurial experience?

It’s kind of funny, but I think I’d go all the way back to having a paper route. That was, in a sense, the first run of sort of being independent, being in charge of the cash that you collected and having to be responsible enough to pay the newspaper. You got all the basics: customer services, everything. That was, at the time, probably one of the best jobs you could have, and those days don’t even really exist anymore.

Then, to jump ahead, during my last year of college I went to work for a technical company that did cell phones, like those three-watt bag phones they had. This is before the flip phone even came out. There was no convenience to them; they were just for emergencies back then. I was delivering those things all over the state of Massachusetts and dealing with contracts. To fast forward, that company grew faster than the owner wanted and he wanted to get out, so he offered to sell me the business.

So, before I finished college I had already jumped into starting a business and I had no idea what I was doing. I had no money. I financed the thing on a credit card, literally, and lived off my debt and was living at home and fortunately didn’t have a lot of bills. So I was able to keep that thing afloat for a couple of years. Eventually, it evolved into a retail store, which came with much more responsibility and was much more difficult to maintain. I was basically making a living, but a living back then was maybe $400 a week. It was barely enough to get by. But it was a good experience and it opened the door to get me where I’m at today.

You had the cell phone store in the mid 1990s. You founded Nationwide Payment Solutions in 2002. Tell me how you got from owning a cell phone store to launching a payment processing company.

I’ll give you the short story: I had a customer come in who was an antique dealer and she traveled to antique shows all over the northeast. And she sold antique jewelry, which was worth a lot of money. At the time, there wasn’t a mobile solution for credit card processing, so when she was out in the field she used those old knuckle busters. At the time she came in, she said, “Hey, I’m taking these losses from bad credit cards and I heard there’s a way to hook up my cell phone to my credit card terminal.”

I had no idea, but I said I would find out. And, sure enough, I found this device from Motorola that sales people used for faxes that created a dial tone. And we tested it and sure enough she was able to run live credit card transactions at these trade shows. And it eliminated all these bogus credit cards she was getting. Not only that, it also reduced her fees because now it was considered a face-to-face environment for the credit card transaction.

So, she referred like 50 more dealers to me, and I started to see an opportunity rather than just selling cell phones. So I immediately jumped into that with both feet. I actually randomly just picked someone out of the yellow pages who did credit card processing and asked a little bit more about how it all worked and found out there was also an opportunity to sell merchant processing to these same customers.

 I felt there was no better time than now to take the risk.

And so within, say, six months, I sold my retail cell phone store—I think even at a loss—to focus on that. At the time, I was just starting a family, so the risk was high. I had a new baby on the way, wasn’t really making much money, but I saw an opportunity. I felt there was no better time than now to take the risk. In fact, my daughter today is 20 and I still say that if it wasn’t for her, I may not have made that decision because I actually felt there was no way to fail.

So, I quickly moved into the payment space and I immediately started focusing on this mobile environment and trade show merchants across the country. I did some advertising and they were coming out of the woodwork. I had a lot of success and so I grew the business. At the time it was just me, literally operating out of a closet in my apartment.

It wasn’t all smooth sailing. Tell me about your experience working for someone else.

So, in the middle of that stint, I wanted to earn more money and I actually took a job with one of the biggest payment companies in the country—I don’t want to name them—and really learned the ropes of the operational side of the business, the more high-level sales side of the business, and how the transactions work. And so I did that for about four years, and made some decent money. But that was a corporate job and after they went public many of us lost our jobs. And so I learned the hard way that when you work for other people, you’re not really building things for yourself and there’s a risk that if they change their mind about their direction, it could negatively impact you. I had a good thing going, and then they decided to sell and the whole world kind of came crashing down. It actually put me in a really bad situation to the point where I ended up filing for bankruptcy because I had built up some debt as I was trying to grow the business on the side. And you know when they basically sold it, I lost my ability to collect that income. And that was more just a lack of experience.

(Editor’s note: Some context is in order. Nonni had been successful selling the early mobile payment terminals to people like the antique dealer, but he often partnered with larger payments companies to process those payments. One of those companies took note of his success and offered him a job to lead a sales team, which he accepted. Without considering the consequences, he brought his entire book of business to his new employer without protecting himself or the investment he had made to compile that roster of clients. When he was laid off, he lost not only his job, but that business he had personally invested in.)

I was still young in the business. I didn’t really know how to dot my i’s and cross my t’s contractually, and enter into agreements, and how to protect my assets. At the time, I was more interested in, “Hey, I’m just making some money, I can do the sales, obviously I know what I’m doing here.” But I didn’t really have the experience to protect my assets and investment. And, unfortunately, I learned the hard way.

What did you learn from that failure?

My failures were things that I had not foreseen. Just like anybody else, no one plans to fail. But you’re learning from the failures. You’re going into things now with a little bit more experience and knowledge of what can happen. I knew what to avoid. I became more efficient and smarter. I think I became a little bit more aware of where opportunities lie. That is really, I think, the biggest thing: If you see an opportunity, you’ve got to be able to act upon it. And if you don’t, somebody else is going to do it. You just have to have the confidence and knowledge of what to do with it. And fortunately for me those learning experiences allowed that to happen. If I hadn’t failed, there’s no way I’d be where I’m at today. I would not be as successful. Those failures were a necessity to get here.

If I hadn’t failed, there’s no way I’d be where I’m at today. I would not be as successful. Those failures were a necessity to get here.

What have been the biggest challenges for you while growing the company?

There’s a couple. When you have a small company, it’s a lot easier to manage. The things that you do: just building the business with customers and growing all the fun parts of the business starts to change. The business starts to take on its own form. You have to manage the business. It’s not just finding customers and growing. Now there’s staff, you have HR, you have to manage these things. So that evolution of going from, I would say, 30 employees to 60 employees is a very difficult transition. I’d say it’s starting to get a little easier now as we evolve further, but that in-between time is difficult. You’re spending most of your time managing the business versus growing the business. So in order to grow the business, you have to put people in place to do that for you. You can’t do it yourself.

You also learn a lot of new skills through that process. You learn how to hold people accountable and empower people to be the best that they can be and welcome their ideas. Today our company is as much a result of my input and my business partner’s as the staff’s. They’ve helped grow the business at this stage of the game. And the hope moving forward is they take more of the lead role in that. And eventually you step away, you step back, or you put other people in place to do those things, and you watch it evolve even further.

The other challenge is probably the biggest one for us in the payment space: technology. Because we’re dealing with very sensitive data. It used to be really simple, like those mobile solutions I started with, that little black box that gave a dial tone. Today you could never run a transaction that way because it wouldn’t be secure. Somebody would be listening, trying to scoop the credit card numbers out of those dial tones. Today it’s a much different industry where things are more locked down and it’s a very expensive to stay in compliance and to stay secure. And the industry has shifted all that responsibility to the acquiring companies like us, and so we are the ones responsible for making sure that stuff is secure, not the manufacturers. So that’s been a challenge and it’s been a very expensive endeavor.

Before we get to Municipay, how has Nationwide evolved over the years?

So, the first seven years in business, the first half of the business, the model was going after retail customers. But that retail market has been very saturated to the point where the loyalty has diminished. It’s very difficult to manage that part of the business now. In fact if we had to rely upon that, I’m not sure we would hold our success. The primary thing that we do today is not in retail. It’s more in the niche market, business-to-business, wholesale type of payments—your non-mainstream clients.

So if you’re walking down the street in Portland, you’re not thinking about the retail stores, you’re thinking about who’s doing business for payments that are not retail. Let’s talk about the wholesale, and the B2B, manufacturers that are shipping stuff.

Today we’re looking more at the software vendors who provide solutions to those larger clients. Tuition payments might be an example. We’re starting to do some hospitals now. We do a lot of contractor, business-to-business lumber yards that are selling huge ticket transactions. One of our biggest markets today is the parking industry. We probably have well over a thousand parking garages. Big ones. Those are the things that drive our business today. Retail is diminishing.

We definitely needed to adapt. To keep the business going you have to start looking at where there’s less competition, less turnover. These are the markets that are more stable.

One of those niche markets was local government. Tell me about Municipay and the decision making process that led you to spin it off.

There was almost nobody in the government space from a competitor standpoint. In fact most government offices didn’t even take credit cards. You saw cash, checks. There are many of them throughout the country that still don’t take credit cards. So we always knew that was sort of an emerging market, but they required some customization to make it work. We saw an opportunity when a municipality came to us and was looking for a software solution that could process multiple payments at the same time because they knew that we sometimes built this stuff, so we saw an opportunity and we built some software.

Municipalities were looking for something that could centralize their payments. So, take the city of Portland as an example, which uses us. They have multiple departments and before us they had multiple merchant accounts, multiple reconciliations, no unified reporting, no one system to access any of it. And so that’s what we designed. Municipay consolidates all those payments into one solution that they could use in multiple departments. And that’s what we built. We actually got a patent on it, believe it or not.

Why did you spin it off as opposed to having it as a service within Nationwide?

I think it was simply the market. When you’re dealing with government entities, we just felt like we wanted to separate it from the retail branding altogether. Also, because we’re dealing with software, it’s a different kind of compliance when you’re actually providing the solution versus reselling somebody else’s. So we needed to deal with the compliance differently. It just made sense to have two separate entities entirely.

Beside a development loan from the Maine Technology Institute, have you had to do any fundraising?

Nationwide has no debt. We started it by bringing on a business partner, which is still a partner today. (It’s Evo Payments International, which is also the same company that acquired PowerPay.) We started with them financing some of it, but we paid them back within, I’d say, six years and became profitable. So Nationwide is free and clear, but I don’t own 100 percent of it.

With Municipay we have personal investments there to keep it going and we’ll continue to do that to the point where the thing can turn the corner, which I think it’ll do here in 2018. There’s no option to fail with Municipay. We’ve dug a hole there and we’re committed to it one way or another.

What are your long-term goals for Municipay and Nationwide? Are you building a legacy business or is an exit your ultimate goal?

In a perfect world, with Nationwide there would be some exit, but more along the lines of enabling it to continue on its own without us. Over the next couple of years, what we’re trying to do is get the thing so that it can run on its own, have better people to manage it and run it so that it can indefinitely just kind of keep chugging along. We built Municipay sort of also to be on autopilot.

Do you have any lessons you’d like to impart to young entrepreneurs or someone who wants to start a company? 

One of them is definitely find good people. That’s the backbone of any company. You’ve got to find people that can grow with you, and you also have to empower them to succeed and incentivize them to grow with you. That is probably the biggest thing that makes a company succeed.

I think the other thing you need, which is equally important, is you have to have a viable economic model. If you’re starting a restaurant, as an example, you need to do all your homework and all your research to make sure that is a viable option in, say, the city of Portland that’s got a 150 of them. You need to know what’s going to stand out or if you’re not really any different than anyone else. You’ve got to find what makes you different.

And number three, you have to be willing to fail. You have to be capable of failing in starting an endeavor. And you have to have enough time to invest in it. Because if you do it half assed, if you don’t commit to it, the chances of failure are much higher. So you really need to commit to the business.