Repeat Entrepreneur Lara Hodgson on Her Early Start Into Entrepreneurship and What Led Her to Found Now®
FemWealth Founder's Stories
Repeat Entrepreneur Lara Hodgson on Her Early Start Into Entrepreneurship and What Led Her to Found Now®
While scaling her previous company, Nourish, Lara Hodgson and her co-founder Stacy Abrams experienced a problem many small businesses are confronted with in their operations: slow-paying customers.
Together they decided to tackle the root of the problem and co-create Now®, an innovative payment system that enables businesses to get paid immediately.
Now secured its Series A in June 2021.
“Underrepresented founders face a unique set of challenges when it comes to entrepreneurship, but those challenges can be what propels you to a higher level of success - typically, we succeed not despite our challenges but because of them.” - Lara Hodgson
Read all about Lara Hodgson’s early start into entrepreneurship, how she nurtures her relationship with her co-founder, and her advice for underrepresented entrepreneurs in our Q&A:
What was your foray into entrepreneurship?
LH: I developed an interest in creative problem-solving at a very young age. I started my first business in the third grade to solve a personal problem. A new hair barrette became popular, and I could not afford to buy them, so I designed and made my own and began selling them to friends and to the craft store, from which I bought my materials. While my mother shut down that business so I could focus on homework, it was the beginning of something bigger. I thrive on solving seemingly impossible problems and took that mindset to Georgia Tech, studying aerospace engineering. While I enjoyed the problem-solving aspect of engineering, I wanted to work more closely with people (I was told by a professor that I had an engineering mind and a liberal arts personality), which led me to Harvard Business School. From there, I discovered I was really good at helping other people start and scale their businesses, creating new groups and divisions within large companies and startups. It was becoming a mom that pushed me to found my own companies, first Insomnia, then Nourish and later Now®.
What inspired you to start Now®?
LH: We started Now® because thousands of businesses end the same way my previous company, Nourish, did; by growing to death. Our product was flying off the shelves in small boutiques, and those stores were paying us quickly, typically with a credit card or purchasing card. That success, though, was what eventually put us out of business. A big box grocer approached us, and for small businesses like ours, it was a vast growth opportunity but one with new challenges that, quite frankly, we weren’t prepared for. Larger companies pay invoices 30+ days after receiving the product and the invoice. Our cash was tied up in unpaid customer invoices, and we couldn’t meet the demands of larger orders that came with rapid growth. Everyone told us to get a line of credit or try factoring, but we knew there had to be a better solution for small businesses without taking on the risk of debt or factoring.
That’s where Now® came in. It was the very thing we needed as a growing small business, and we knew other entrepreneurs dealt with the same frustrations. Solving the cashflow problems of B2B small businesses with a payments solution instead of a risky and expensive finance solution enables companies to grow fearlessly and focus on what they do best.
Small businesses are the backbone of communities across the country, and the owners are the true heroes of our economy. They bring innovative solutions to problems and fill market gaps in their communities. We can’t afford to lose great businesses due to growth limitations. Now® is taking one thing off entrepreneurs’ plates, relieving them of the burden of being free banks to their customers and, in turn, enabling them to grow and serve their communities.
What are the values that define your relationship with your co-founder, Stacey Abrams? How has your partnership evolved?
LH: Stacey and I met in Leadership Atlanta in 2004 and have been business partners for 18 years. We share many of the stories and lessons of great partnerships in our book, “Level Up: Rise Above the Hidden Forces Holding your Business Back,” which we published this past year with Portfolio Penguin. Stacey and I are friends, but not too close. Many start businesses with people they barely know but whose resumes they like - bad idea because there are no shared values. Others start businesses with their best friend - also a bad idea because your lives overlap too much, and you begin to think alike. Stacey and I have complementary skills. We developed a mutual respect for each other’s core values during our time in Leadership Atlanta, where we worked together on problems larger than either of us. We don’t live in the same neighborhood, go to the same church, or share school affiliations so we can work closely together but maintain our independent thinking. Stacey has always been more on the cautious side when it comes to taking risks and demands thoughtful deliberation before making important decisions.
On the other hand, I’m more open to taking business risks. She’d describe me as an eternal optimist. I like seeing the possibilities in everything, even challenges. The varying risk tolerances between the two of us keep us balanced, which, honestly, is a key ingredient in any partnership.
While we may not agree on everything, we have an aligned vision: opening the door for small businesses to thrive. The company’s mission will always be something to look back to when you face challenges operating your business. We continuously incorporate our core beliefs in operations, including diversity, ethics, and advocacy for small businesses. In the last decade through Now®, we've each carved out the business niches that best fit our skills.
What is your approach to problem-solving?
LH: The best ideas come when your passion and ego are in a problem and the impact you can have solving it, not in the solution. I’ve always seen an impossible problem as a tempting challenge and have looked for opportunities within those situations. This means finding new paths when another doesn’t work.
After Stacey and I started Nourish and completed the design molds to start manufacturing, we realized the material on the label wasn’t performing well on the high-speed line. We had a large order to get out, so we gathered friends and family to apply labels to thousands of bottles by hand. To deal with less stick from the adhesive, we started cutting the labels with scissors. This ended up making for smaller labels, thus saving us costs.
That experience is an excellent example of how we learned something new from what could’ve been a significant roadblock if we had let it be. It’s essential to evaluate the problem and devise a solution to resolve it, but also be okay with the possibility of failure. Failure will always be the best teacher in business and life - if you fail fast and fail forward.
What advice do you have for hiring and growing talent?
LH: Hire mindsets over skill sets. There are not many tasks that I can’t teach you how to do, but I can’t teach you how to think, how to approach obstacles, or how to find the 10th solution to a problem (the 10th solution is always better than the first but most people give up and settle before they get there). Find people who believe in your product, service, or business’s mission - your “so what” rather than your “what”. Be patient and hire people who look nothing like you in their background and life experiences so you can build a team with diversity of thought throughout. It’s an opportunity to capture different mindsets and experiences, and we’ve found that top talent is often found in overlooked areas. When building a small business, focus on hiring within the community you are servicing.
One of the core beliefs in Now®’s mission is not only to empower entrepreneurs through our business but to empower our employees as we help others. This means listening and seeing how we can implement new ideas and consistently being willing to learn. It also provides opportunities for employees to grow their skills and contribute what they learned to the business, improving overall productivity.
How do you build trust with your customers?
LH: There are three ways I help build trust with our customers:
Being transparent. Transparency is the foundation of trust with customers, who depend on us to provide the services as promised. We always make sure we communicate clearly and frequently with our customers, even when we don’t have answers.
Prioritizing ethics. Among the pillars at Now® are good ethics and honesty. That means being available and accessible and partnering with other good businesses and people. We evaluate and vet every business we work with. Having a host of trusted individuals and companies makes for a great internal network.
Being open to feedback. We wouldn’t be in business without our customers, and listening to how you can improve your product or service for them is essential. Companies that don’t integrate helpful feedback are limiting their growth potential.
How do you navigate the systemic challenges in the (still) male-dominated FinTech industry?
LH: FinTech is the intersection of Finance (male-dominated) and Tech (male-dominated), so it is male-dominated. As a women-led company, we take seriously the responsibility to create a voice for those who are often overlooked. We choose to view being female-led not as a challenge to be overcome but rather as our superpower. We bring a female voice to a crowded space. We talk with customers, not at them, and our clients love it! I always recommend women speak up because you have a unique perspective and being different is a gift if you use it as one.
Also, being a role model to others is especially important for business leaders. There’s a lot that others can learn from your own career. For example, I’ve founded multiple small businesses and could give tips on things I wish I had done or known. My seat on different university boards can bring a new perspective for someone who’d like insight into that experience. It’s essential to be visible to other women in your respective industries. It is a way to show others what’s possible and where they could be in a few years.
Lastly, use your “challenge” as your “superpower.” My personal experience as a mom has made me a better CEO. I use my previous career experience to coach female students and young professionals. Even now, I encourage our employees at Now® to start their businesses and celebrate their successes.
What advice do you have for underrepresented founders?
LH: Underrepresented founders face a unique set of challenges when it comes to entrepreneurship, but those challenges can be what propels you to a higher level of success - typically, we succeed not despite our challenges but because of them. There are three things I’d tell them when it comes to overcoming adversities in business.
Don’t take no for an answer. You must push through the noise of naysayers and find the people who will champion you and your business. Evaluate the factors within your control and start from there. This does not mean you just keep pushing - it means you get feedback, adjust your approach and try again. You have to listen and adjust in order to be sure your message is heard.
Your network is your net worth! I’m a huge advocate for using every player in your ecosystem. Use every system to which you have access to your advantage, including leveraging your network and other peoples’ networks. For example, access to capital does not have to mean raising equity from an investor or borrowing money from a bank. Your partners, suppliers, and customers can all be sources of capital in the way they pay you. The way they accept payment and the way they bring resources to the table.
Lastly, know your power. Underrepresented business owners bring unique perspectives, skills, and services to the market that no one else can bring. Stick to the core values that you’ve set for yourself and say no to anything that doesn’t align with them. Knowing your power also means focusing on what you can achieve with what you have and using your network to fill in resource gaps when possible.