Matthew: Hi, this is Matthew Wise with FounderLY.com. We empower entrepreneurs to have a voice, and share their story with the world, enabling others to learn more about building products and starting companies.
I’m really excited today, because I am here with Richard Aberman, who was one of the founders of WePay. WePay is a web service that makes it easy to collect and manage money online.
Rich, would you please give our audience a brief bio of yourself.
Rich: I graduated from Boston College in 2007, with a degree in Political Science, Economics and Philosophy; everything other than technology. My original plan was to go to law school. I spent about seven months in the Valley, right after undergrad, just kind of figuring out what I wanted to do. Ultimately, we decided to go to NYU Law. In the fall of 2008, I ended up dropping out to work on WePay full-time with my co-founder, who at that point was an investment banker, still in Boston.
Matthew: Excellent. And so, what is WePay? What makes it unique? Who’s it for? Why are you so passionate about it?
Rich: We have made it easy for anybody to collect money, for anything, online. It’s really for people that struggle collecting money from lots of different people, for lots of different things.
We have people using our site to collect dues for an organization, donations for a friend, selling tickets to their events, collecting money from buddies, when they are going to a bachelor party in Las Vegas.
The reason why I am so passionate about it is actually, because we built the product to scratch our own itch. About a month and a half before I was to go to law school, I was planning my brothers bachelor party. I was collecting $400, or $500 dollars, from 15 different people.
I’m using a combination of PayPal, cash, paper checks, trying to remember who’s paid, who hasn’t, reminding people who haven’t paid. And ultimately, when I collected the money, I really own had one place to put it, either in my personal bank account, or my personal PayPal account.
What we realized is that’s a problem that a lot of people have, for a lot of different reasons. Our goal was, ultimately, to build something that made it very, very easy for normal people to collect money online, for anything they wanted.
So, it was an idea that started off solving a problem we had in our everyday lives, and what we realized is, a lot of other people have the same problem.
Matthew: Excellent. Given your domain expertise, what are some of the technology and market trends that currently exist? Where do you see things developing in the future for your space?
Rich: I think people are getting a lot more comfortable transacting online. PayPal obviously, pioneered the space a decade ago. Back then, it was novel for a small mom and pop merchant to sell things online.
If you look at recent innovations, like Mint, people are getting comfortable with tracking and managing their finances online. I think, even if you look at the social networking space, people expect to do things online, now, that they would not have done online, in the past.
If you want to manage you social life, you go to Facebook. If you want to manage your finances, you go to your online banking center, or to Mint.
I think what we realized is, we were trying to solve a very traditional problem that’s been around forever. Whether it’s the soccer mom collecting dues at a game, or a Boy Scout troop collecting dues, or you want to collect money for a sick friend.
These are things, and activities, people have been doing for years. But, no one before now has really thought like, “Hey, it would make a lot more sense, if we brought this online. It would help us manage this process.”
I think we are really riding that wave. The problem that we are solving is not incredibly novel, in revolutionary problems. It’s a simple problem that a lot of people feel. What we are doing is, we are just providing online tools, to help you manage it better.
Matthew: Excellent. Now that we’ve covered your background, and an overview of WePay, we’d like to dig into the details of WePay and your story.
You mentioned that you came up with the idea for WePay, because it was your own pain point. When did you actually decide to launch the company? What’s the story behind that? Did you do more marketing research when you came up with the idea? What’s going on there?
Rich: I think there are a lot of reasons why people start companies. There are a lot of ways that people come up with ideas to start companies. We really didn’t have an end goal in mind. It wasn’t like we were sitting around one day and saying, “We need an idea, we need to start a business.”
It was one of those ideas, when you realize you have a problem, and there’s no great solution out there for it. I can’t think of a single person I know, that hasn’t had a million of those great, million dollar ideas. It’s just that so few of them come to fruition.
I think at first, our idea wasn’t really any different than any of the other times that we said, “Oh, this is the one. Like, this is a brilliant idea. Someone needs to build the solution. We should be the one to do it.”
I think the only difference between this time, and other times, is we decided to commit to it. I really had no desire to start a business before law school. I had every intention in the world, of matriculating in the fall.
But, a month before I was supposed to move to New York; like I said, I was planning this bachelor party; I said, “Look, this is a real problem that I have. I’ve had it in the past managing other organizations. I want to see if there’s a solution out there.”
I called Bill, who is now my co-founder, just the smartest guy that I knew. He had a software development background in undergrad. We had started a smaller business together years earlier, so we had experience working together.
It was a little bit serendipitous, because he said, “Look, I’ve had the same problem, I’ve actually wire-framed the solution in the past.” He went to Ski Haus, with 15 of his friends every year.
It was, kind of that, serendipitous beginning where we both realized this was an idea that we both had for two different problems, that required a very similar solution.
I ended up going to Boston, to stay on Bill’s coach for a couple of weeks while we decided if this was an idea that was worth pursuing. Whether we thought there was a big market out there, whether we could raise money for it, or whether we could actually build the product. I just never left his couch. It was three weeks into law school, and I had never been to New York.
At that point, I said, “Look, law school’s probably not going to happen.” I ended up deferring for a year. Bill quit his job a couple of weeks after he got his first year-end bonus, which is what seeded the company for the first year. It was two weeks before Lehman Brothers collapsed, which is a pretty good time to quit your job as an investment banker.
That’s when the company started. Bill had some cash in the bank, from saving it up during his first year in finance. I was a law school drop-out. I never ended up going back, until three years later.
Matthew: Excellent. That’s a great story. You mention Bill, are there any other co-founders?
Rich: Bill and I started the company in Boston, in the fall of 2008. We ran the company for a year, trying to raise money. It was a horrible economy to raise money in. No one was doing it, especially two first-time entrepreneurs trying to build product without really coming up with the robust web development experience that you need to build a safe, secure, reliable product.
We didn’t really get a tremendous amount of traction that first year. What happened was, we ended up getting accepted into Y Combinator, which is a very early stage venture fund in Silicone Valley, which is where we are now.
When we got accepted into Y Combinator, we brought on our first employee, Eric Stern, who is a New Hampshire native, who we had met through entrepreneurial circles in Boston. He came on as kind of the experienced web developer that we needed. We brought on an intern from Owen College of Engineering, which is attached to [Dobson], in Boston.
Those were our first two employees, who ended up staying with us after we graduated from Y Combinator, and raised future [inaudible 07:38] capital.
Matthew: From idea to part launch, how long did that take? When did you actually launch?
Rich: It took longer than it should of, that’s the short answer. The longer answer is; as I said before; we spent a year in Boston, doing everything other than, working on the product, and getting customers, which is probably the biggest mistake we’ve made.
Once we got accepted to Y Combinator, our focus totally shifted to nothing but product. We spent all day doing nothing, but designing the product, iterating on the product, and trying to push something, so that people could use it. And that took about a month and a half doing Y Combinator.
In total it took probably, thirteen and a half months. But from the time we really committed and said, “We’re going to start building this product and we’re going to launch something.” It took us about a month and a half to get into private beta.
Matthew: Are there any unique metrics, or social proof about WePay, that you would like to share with the audience?
Rich: We launched the product, publicly, a year ago tomorrow. We had a couple months of private data. We’re processing more volume and transactions, a day now, than we were three and four months ago, combined, for the entire month.
Rich: We grew 70% in transaction volume, and revenue, last month alone, in February. It seems like our growth rate’s going to continue, at least for the foreseeable future.
Matthew: Excellent. And so, since you’ve been in operation, what have you learned about your business, and your users that you didn’t realize before you launched?
Rich: A lot. A lot of it just has to do with how you build your product, and acquire your customers. I used to think that, there was this cohort of people of called early adopters, and you’ve got to get to the tech community, and stuff like that. But what I realized is, any successful product is really going after normal people that have a strong pain point.
Customers aren’t really looking for the next big thing. They’re not looking for a cleverly described product. What they are looking for is something that simply solves the problem that they have.
I think everything, from the way that we position our product, to the press, the copy that we have on the website, to the features that we build, have gone from us trying to think about all these really complicated things, about what customers could possibly want, to saying, “Look, our customers are more than happy to tell us what problems they have.”
Their problems are very, very simple. All we need to do is provide an elegant solution to a problem that causes a lot of pain to people.