This past Friday was my last day at Dwolla. The past two years have been nothing short of amazing but it was time to start on my own journey. Well actually not on my own. Michael Schonfeld, better known as @baconseason and I are starting our own company as of today.
Michael and I met back in May 2011 on Ohours. Michael was living in LA and doing freelance development. I was working at Aviary but thinking about fun side projects to work on. I convinced Michael to leave LA and move to NYC. He got a job at Nerve Dating and we started to collaborate on a little project focused on online debating. We built the app and had a few investment offers to run it full-time, but decided to decline them as it wasn’t something we were ready to work on for the next 5 years. At the same time I had been introduced to Ben Milne, the founder of Dwolla. Ben mentioned that Dwolla was also looking for a developer evangelist and next thing we knew Michael and I had both joined Dwolla to open its New York office and run the API platform (the business side by me and technology side by Michael).
Fast-forward 22 months and it is time for us to set sail.
So what will we be working on?
That’s a great question. Before answering, here’s a story: While Michael and I were thinking of side projects together in 2011 and 2012 we built an app called MVF, which stood for Most Valuable Follower. The premise of MVF was to find out who, out of all your followers on Twitter, was your most valuable. Michael and I put together a formula, built the hack, and put it out there a few days later. Within a week we had over 50k people and brands trying the application. We had everyone from the tech crew usuals to the band The Smashing Pumpkins and former NBA player Jamal “Monster Mash” Mashburn trying out the tool. It was fun. But we both had full-time jobs and eventually needed to shut it off because it was taking up too much time. Even though we shut MVF off, every few months we’ve had a brand reach out to us asking if we could turn it back on to find out more about the people who follow them.
The first thing we will be doing at Newco is spinning back up MVF and layering some good stuff on top of it. Things that people and brands might find interesting about those who follow them (If there is something you are especially interested in, as a person or brand, please email me at email@example.com).
The reason we are bringing MVF back is that it is very much connected to the business Michael and I are building. It’s still too early to jump deep into that (not stealth, but not fully baked), but we can say it has to do with social media, commerce, next-gen advertising tools, and something we know very well: APIs.
We’re very excited about this opportunity to build a business and will have more to share within the next month (we work fast). Oh, and the name of our company (not the product we will be launching) is Modern MAST (MAST = Michael, Alex, Schonfeld, Taub).
Check out our website: ModernMast.com
Follow us on Twitter: @ModernMastCo
Here is our logo, just built over the weekend:
Today’s post will be on Medium. It’s a pretty good one, so please head over there and check it out (link here).
I don’t always post on Medium, but when I do, it is usually a doozy :)
Today is a big day for Dwolla.
For me, it all started 10/31/2012 when Ben introduced Michael and me to Brian Billingsley, the director of Strategic Business Development at Alliance Data Systems (with the email subject: “My Favorite Email Introduction Ever”) to figure out the best way to team up and issue credit to the Dwolla network.
Almost one year later, we are releasing Dwolla Credit to the public.
We’re actually announcing 4 things today.
The first is Dwolla Credit, the product. Select users will be able to get access today (you can apply here).
The second is the partnership with Alliance Data Systems. You can read about it in countless other public press.
The third is the 40+ merchant partners that will be accepting Dwolla (and Dwolla Credit) for the launch. Most of them are live today, some of them are going live this and next week. There is something for everyone and you can find them all at the Storefront. Maybe next week I’ll write a post about how we went about getting 40+ companies involved in our launch. I think that would be an interesting post.
The fourth thing is the Storefront. We are using the opportunity of the Dwolla Credit launch to release Storefront, a place to find merchants that accept Dwolla. The 40+ merchant partners are just the start, but we will be adding more companies (whether they accept Dwolla Credit or not).
In this launch I’ve taken on multiple roles. Early on it was as project manager, then I did a little Product (before the awesome Brent Baker joined Dwolla to lead Product), and then (since July) I have been leading partnerships and closed the 40+ partners with Brian Kil for the launch. This has been the most exhilarating and stressful time of my life. I’ve never been part of something so big. The next few months are going to be an even wilder ride. By the way, we are hiring :)
Lastly, you probably can help. Here are some ways:
2) Get access. Check out realtime.dwolla.com and see how slick the product is.
3) Know any merchants that might benefit from saving on credit card fees? Of course you do. Send them to realtime.dwolla.com and tell them to reach out to us about accepting Dwolla.
Let me know what you think in the comments or email me at Ataub24@gmail.com
Every few months I write a post titled “What I Am Looking For.” It’s worked out pretty well, with friends and acquaintances offering to help in various ways. I am a big believer that people genuinely want to help others and if you make it easy for others to actually help you, then good things happen. So here I am putting out what I am looking for and asking for help.
For the next 30 days I am looking for a handful (less than 25) companies to work with and test out a beta product we are working on at Dwolla. The perfect makeups of these companies are that they sell a product (there is a checkout flow), they have a small engineering team (so that they can move quickly and give us feedback), and they have the bandwidth to move quickly (the upside being new users and $$$).
Companies in the ecommerce, gaming (not tied to Apple, Google, FB credits), marketplaces, services/subscriptions, home and hardware, are all great examples of the type of companies I want to talk with. If you use Shopify, Magento, hosted and unhosted commerce platforms, that works as well.
So if you fit the bill, please drop me a line in the comments or at my Dwolla email address: AlexT@dwolla.com. If you know someone who fits the bill, send this post to him/her and ask him/her to reach out. If you have any company suggestions, don’t hesitate to hit me up.
To infinity and beyond,
I had a chance to answer a few questions from Crush New York last week. For those of you who don’t know what Crush New York is: it’s an insider’s guide to navigating through the island that is Manhattan.
It was a fun and pretty short interview.
You can find it here.
I want to take this opportunity to welcome Ezra Ellenberg to Dwolla BD for the summer. Ezra is a student at the University of Maryland, majoring in philosophy and minoring in neuroscience.
Yup, neuroscience. One of things that I think is pretty awesome about the operational side of the startup world is that you don’t need any particular experience to break in. All you need is passion, interest, and a willingness to work hard.
This summer we were looking for someone to join the team and do research for upcoming product launches, and Ezra having some research background stood out among the candidates. It was a mix of asking the right questions and being thoughtful in his approach. Ezra will be doing some good research and get to participate in the fruits of his labor (i.e. deals, baby).
I’m excited for the summer and the opportunities ahead of us. Welcome aboard the Dwolla ship.
Also, while I am not working directly next to them (they will be in SF), welcome Dillon Myers and Adam Krainson to the Dwolla SF team to join Nicole (last year’s intern, MBA drop-out, and practically my boss at this point ;D).
If you didn’t see the news yesterday, Dwolla raised a new round of capital, $16.5M led by Silicon Valley venture fund, Andreessen Horowitz. It’s an exciting time to work at Dwolla and it’s great to finally share the news with everyone.
It’s been a year since I joined Dwolla and every day is an amazing challenge. Building a payment network from scratch is no easy task and I’m happy I get to work with such great people at Dwolla. The rest of 2013 is going to be a rollercoaster and I wouldn’t have it any other way.
Here is a roundup of the press from yesterday:
Des Moines Register: Dwolla raises $16.5 million, will open Silicon Valley office
Business Insider: This 18-Slide Pitch Just Landed Payment Startup Dwolla $16.5 Million
Silicon Prairie News: Dwolla raises $16.5MM Round Led by Andreessen Horowitz
Mobile Payment’s Today: Dwolla raises $16.5 million in Series C funding
WSJ/Dow Jones Venture Wire: Taking on Visa, Dwolla Raises $16.5 million to Make Digital Payments Affordable
Financial Times: Silicon Prairie Attracts Silicon Valley Investors
Iowa Press Citizen: Dwolla raises $16.5 million, will open Silicon Valley office
AP (Des Moines bureau/Register): Iowa-based Dwolla raises more than $16 million
Albert Wenger’s Blog, Continuations: Dwolla gets a check (to do away with checks)
Scott Weiss’s Blog: How would you start a PayPal or rebuild Visa today?
Upward and onward.
Since January 2nd I’ve spent a majority of my time in Des Moines, Iowa at the Dwolla headquarters. It was not easy being away from my family and friends, but I think it was essential to start the year off working there.
In mid-December I approached Michael and Nicole (from the Dwolla NYC team) about spending an extended period in DSM at the start of 2013. They both agreed and we pitched the idea to Charise (Dwolla’s COO) and Ben (Dwolla’s CEO). They too thought it was a really good idea, and we arrived two weeks later, bright-eyed and bushy-tailed.
I thought of writing a full post-mortem piece about my time spent in Iowa, but I’d rather write about why Dwolla is special, what made me want to join, and why I think 2013 is going to be a very big year for us (without giving away too many secrets).
Building a Payment Network From Scratch
I’m going to be honest; I had a next-to-zero payment background before I joined Dwolla. I’m not 100% sure, but I imagine if you had asked me before I joined, I would have had no idea what ACH (Automated Clearing House) was. What made me attractive to the Dwolla team was my experience with developer platforms and third party integrations. In this regard, Dwolla wasn’t so different from my previous role at Aviary, working with companies to integrate the photo editing API. Except this was a payment API. Transferrable skills.
I remember meeting Ben and Jordan for the first time to learn about the business. There are three things that stuck out to me after we met.
The first, Dwolla was building a payment network, not so different than Visa or Mastercard, from scratch. Using some legacy technology (really only ACH for the time being), but not like other payment companies. They didn’t owe anyone money, as opposed to other payment companies that need to pay the existing infrastructure players just to operate (Think Paypal charging 2.9% + 30 cents. They don’t keep most of that, obviously).
The second was, they were going after a huge market, in fact a 34 trillion dollar market: ACH. There is no bigger opportunity. It is so big, most people are frightened to go after it. If you added up all of retail in the US, you may come up with a comparable number.
The third was that in terms of the API, the optimal integration was anywhere there is a transaction/payment/donation. This means that any business that is operating and creating revenue, whether wildly successful or even moderately successful, could benefit from integrating Dwolla. The sky’s the limit. Other API’s have ceilings. They can be high ceilings, but ceilings nonetheless. Dwolla’s API didn’t have one. That was a huge deal for me.
The opportunity was too good to pass up. I knew that if I didn’t join the Dwolla team, I would regret for the rest of my life.
Why Dwolla Is Special
It is hard to innovate in the payment space. Re-inventing the wheel is easier said than done. So most companies stick to status quo; they push the ball forward in ease of use or convenience. They don’t, metaphorically speaking, look at the plant, say this is not the right way it should work/grow and dig out the roots and re-grow them correctly.
The best analogy I’ve heard about how Dwolla is different from other payment companies (think Paypal, Stripe, Braintree, etc.) is that imagine the payments world was the Apple App Store and the payment companies were developers submitting Apps. Now, you submit an App to the App Store, people start using it, and you are making money. Woo hoo! Well if you create revenue by selling some sort of digital good or service, you are going to have to send Apple 30% of your revenue. This money is for the infrastructure and distribution Apple provided you. You know, and so Apple can make profit- which is not a bad thing, they are indeed a business. This is the exact relationship of those above mentioned payment companies, and Visa/MC/Amex/etc. If you’d like to build on top of them, essentially becoming a payment method aggregator, well then you owe them money. Typically anywhere from 2-7%, depending on how high risk your business is.
Now imagine you are a developer thinking of building the next cool app. You look at Apple’s App Store and you start to understand why things are so. Some things don’t make sense. They are old and slow. They were built before better technology was available. They are asking for a percentage of your business: 3%! Damn. That’s an entire month of operation costs for your business. There has got to be a better way. You can do this better, you tell yourself. Instead of perpetuating the problem, you say, F them. I’m going to build my own infrastructure. I’m going to compete with the App Store. I’m going to build a better App Store. Then I’m going to convince other developers and the developers’ users to use my App Store instead. It is going to be cheaper, faster, and more secure.
So imagine you decide to do that. You buck the trend and build your own App Store. And look at that- you start to gain traction- people start to use it. First it is just a few close friends who are developers, but then you get some developers you haven’t met before. One is in Hawaii. Cool. It starts to grow. You are getting twenty new developers every day from all over the US. Twenty turns into 100. 100 turns into 1,000. Then 10,000, then 100,000. Very soon you have a few million. Now the Apple App store is getting scared because you are encroaching their turf and war-chest.
This is what Dwolla is doing. We are building our own infrastructure. Ben calls it the “ideal network.” A faster, safer, and cheaper way to move money. A massive undertaking that has odds stacked against it. But therein lies the magic. If you can muster the courage (or cojones) to build your own payment network, and you manage to get traction, something beautiful can happen. At the end of the day, you need to think about what would happen if your company reached its full potential. I know that if Dwolla reaches its full potential, the economy, and the way money moves, as we know it, will change— for the better.
This leads me to the next part of why Dwolla is special and that is the team that has been assembled. I’m not going to name any names because we are at 30-40 employees at this point and we’d be here all day. But what I will say is that every single Dwolla employee (or builder as we call it) would be the absolute #1 f’ing rockstar at any other company. You know that girl or guy at your company who just makes things rain daily? That is every single Dwolla employee.
I like to see myself as a problem-solver. I’m solving my own problems as well as always looking to help people with theirs. I try to come up with creative, out-of-the-box answers if the easy-apparent solutions fail. Well, I must say that the problem-solvers who work at Dwolla are next level. The solutions to some of the problems presented can’t really be mentioned on this blog as they are confidential, but trust me when I say that there is never a problem of finding quality solutions to every difficulties presented.
I’m really happy to be a Dwollan and proud that Ben and Charise have put together such a quality group of people to carry out the company’s vision.
What We Accomplished By Working In Iowa
There were a few goals on the trip and I’d say we accomplished most if not all of them. The first was to start the year off right by spending some quality time with the team. Check. The second was to make a case to various members of the team as to why things we are asking for on the API side of the business are important and high priority. As you can imagine, we have a lot of things going on as a company. We have everything from the consumer and merchant experience to the developer portal and financial institution products. Prioritizing where to focus resources is not an easy task. So in the case of presenting why various features for third party integrations are important (and more or less important than other things on the roadmap), we definitely accomplished our goals. While we didn’t get a chance to begin slaying some of the features/products that we want, we did map them out extensively and prioritize them.
This is going to be a big year for Dwolla. We have lofty goals and I’m confident we will power through them. The State of Iowa deal (hat tip to Nicole and Charise on that. Probably the fastest closed government deal of all time) was one of the first fairly big things coming this year. Stay tuned- upward and onward.
And while I have you here: we are hiring at Dwolla! We are looking for engineers (in Iowa), sales and marketing interns (anywhere- paid), and a developer evangelist intern (NYC- paid).
I’m in Las Vegas at the Affiliate Summit today. It has been two years since I was last in Vegas and not much has changed. I think one of the most interesting things about Vegas is that, if you are inside a hotel, it is nearly impossible to figure out what time it is without looking at a watch/smartphone.
Anyways, I am here because the affiliate space has become a very interesting opportunity for Dwolla. Not only affiliate, but all types of payouts (customer rebates, survey incentives, fantasy sports, marketplaces). Anytime you need to pay out to a large amount of people, a quick and cheap way to do so is by using Dwolla. We’ve been seeing many companies paying with Dwolla instead of sending checks. So the affiliate industry is a logical space to spend time and effort.
You can check a short blog post I wrote for the Dwolla blog about the event and why we are attending.
This is my first time here and I’m not so familiar with the event, so if you know anyone going that is friendly, please connect me!
Also, if you or someone you know is at a company, paying out to a group of people, and looking for a cheaper way to do it, send them my way. I’d love to connect!
In life you will encounter challenges. Some of them will have easy fixes, others will be very difficult. I haven’t been alive for very long (only a quarter of a century), but I’ve noticed that nothing that is worthwhile is ever easy.
I joined Dwolla about 9 months ago. There are many reasons I joined, but one of the biggest was that I saw Dwolla as a huge challenge. Building a payment network virtually from scratch. What an opportunity!
Before accepting the job, I sat down with Chris Paik from Thrive (he originally introduced me to Ben Milne, CEO of Dwolla). I distinctly remember Chris saying that I should be aware before I joined that Dwolla was going to be a roller-coaster. There would be ups and downs and it was not going to be easy. We’d have a lot of incumbents and they’d be protecting their war-chests by any means possible.
This conversation stuck with me, and Chris has been 100% right. There are days that seem like we are poised for world domination. There are also days where it seems like we are climbing a hill that keeps growing and there are people throwing arrows down to block our path.
All in all, life is good and while I experience daily challenges, I remind myself that nothing worthwhile is easy.
Today I’m heading to Iowa with Nicole and Michael from the Dwolla NY team. We all purchased one-way tickets and will probably only return at the end of the month.
We have really lofty goals for 2013 at Dwolla and to make sure the year starts off right, the NY team decided that we wanted to kick it off with an extended period of time working at the DSM headquarters.
I’m really excited about all the things we hope to accomplish in Iowa. Happy New Years!
I’ve been thinking about tools I use everyday and wondered how they stacked up to others.
Here is what I use:
1) Twitter (news)
2) Facebook (distribution of my blog and keeping up with friends)
3) LinkedIn (getting updates on who moved jobs, looking up people, connecting with others)
5) Google Docs (I rarely use Microsoft Word or Excel- only if I’m in a spot with no internet)
6) Tumblr (post my blog on Tumblr)
7) Gmail and Gchat (to email and chat)
8) Instagram (when I take photos)
9) Foursquare (using Explore to find places around me or to let friends know where I am)
10) Citibank and American Express (check on my finances)
11) Reddit and Hacker News (I’m mostly a lurker, but peruse both each day)
12) Dwolla (I work there and I pay people back with Dwolla)
13) Eventbrite (I typically have an event going on, so I check Eventbrite frequently)
14) Verizon, Time Warner, Con Edison (check my bills almost daily)
15) Games: Angry Birds, Derby Jackpot (Angry Birds played typically in the subway if no internet)
16) Spotify (I listen at my desk and with mobile app- easily worth the $10 a month)
17) Brewster (I have found it to be a much better address book)
18) Dropbox (sharing files and such)
I’m sure I am missing a few, but that is a good high level overview.
What am I missing? What do you use that is awesome and you can’t live without?
Leave it in the comments below.
I often have people ask me how they can start their own blog and what they should write about. I always try to tell them that they need to find a vehicle to write about. Once they find their vehicle it will be easy to produce content.
Some example vehicles are - startup newbie, startup VC, lawyer turned startuper, learning programmer, entrepreneur sharing knowledge, VC/entrepreneur combo, etc.
When I was last out in Iowa, I had the pleasure of sitting down with Kate Wagner from the Dwolla team. She has been writing a personal blog for quite some time, but wanted to crossover a bit, find a larger readership, and have it relate back to startups.
After some discussion she decided on reviewing female targeted startups and companies as a female in the coveted demographic (18-35) and geographic (Midwest). She is calling it Review Me Kate.The first review is called Go Try It On and you can find it here.
This is a great example of finding a vehicle. I wish Kate luck and know she will do great.
As you may have seen on the Dwolla blog this morning, on November 28th, Dwolla is teaming up with Derby Jackpot to throw and awesome event in NYC.
We have rented out a bar, Tavern on Third, and will have a night of horse racing with your favorite people in NY tech. Derby Jackpot is a completely legal and safe way to bet on horses online and we have partnered in way so that you can deposit money from Dwolla into Derby Jackpot to bet on horses.
We’ve also upped the ante, so that anyone that comes with a Dwolla account (you can create one here) and a Derby Jackpot account (you can request it here and they will push you through before the event)- will get a free $10 to bet on horses and drink!
So in summary- come to Tavern on Third + get free $10 + bet on horses + drink alcohol + hang out with your friends + meet new people in the tech scene = profit!
You can RSVP here.
One of the hardest strategies in partnerships, business development, and when building companies is betting on growing with partners. But when it works— it can pay off in spades.
Think of Zynga. They bet on the Facebook platform and it paid off handsomely. Other ideas that jump to mind are any popular App that benefited greatly from the iTunes App store.
While I was working at Aviary, there were a few small Apps that we definitely benefited from as they were growing with us (and fueled even greater growth). Betting on and putting time into those relationships improved the company’s situation and, I’m convinced, had a positive effect on building an even greater product.
At Dwolla I try to find companies that are already doing big things, as well as looking out for the up and coming opportunities so that we have the opportunity to grow our payment platform with them. I think this will lead to big things happening in the upcoming months.