How to build a financial service platform

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Today I’m talking to Edrizio De La Cruz, the founder of Arcus Financial Intelligence. He late sold that company to MasterCard.

I want to find out how he did it.

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Edrizio de la Cruz

Edrizio de la Cruz

Arcus

Edrizio De La Cruz is the founder  of Arcus Financial Intelligence, which was sold to MasterCard.

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Full Interview Transcript

Andrew: Hey, they’re freedom fighters. My name is Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. Joining me is a guy who was a dropout. Dude, it feels like there are a lot of people who say that they’re dropouts, but I feel like with you, ed Rio, you really would just kind of.

Not as motivated as I would’ve expected. Somebody who succeeded as well as you had. Um, anyway, we’ll get into that in the interview. I should actually first of all introduce you. Uh, you are Ed Rio de Cruz. I invited you here because you created arcos, the company that became arcos after changing so much I found over the years.

Um, it’s a payment as a service platform that you built and sold to MasterCard. And I wanted to find out how you did it and we could do it thanks to two phenomenal sponsors. The first you you know of it’s Origami. It is connected to Y Combinator, and we’ll talk about them and how they create dows decentralized autonomous organizations.

And the second, if you’re at all, anyone out there interested in hiring developers or you or anyone in Y Combinator, you should know about lemon.io/mixergy, but I’ll talk about those later First, good to

Edrizio: Excellent. Thank you so much, . Happy to be with you.

Andrew: Dude, did I see you win? As I gave that intro, did I get something off? I did,

Edrizio: No, no,

Andrew: Be open with.

Edrizio: No, nothing.

Andrew: Okay. I’m trying to read you, I, I don’t know you that well because truthfully you haven’t done a lot of interviews. You did a few in the early days, and then I feel like you were in heads down mode mostly when we talked, you said, you know what?

After all this, I thought I was going to go and retire and I didn’t. You had a good exit. How much did you sell to MasterCard for?

Edrizio: I can’t disclose that. I’m sure they have lawyers all the time looking at it. , reviewing podcasts and see, but, but it, but it was successful. Uh, everybody was happy, every investor was happy, even for my employees were happy. So very fortunate, the timing. Uh, right before the recession. Uh, but overall,

Andrew: Yep.

Edrizio: aside from the economic value, I just got a lot of the experience.

Just learned a ton.

Andrew: You personally ended up with millions of dollars, personally and not a need to continue to

Edrizio: Yeah, it, it was definitely

Andrew: Am I right about.

Edrizio: Definitely life changing for me and my family. Uh, uh, you know, I grew up not wealthy or I come from wealth, quite the opposite. So to see the morning that I woke up and saw the wire hit my back account, it looked like a phone number. So it was . It was very excited to see that.

So, but besides that financial value, just the experiential value of going through the process, learning so much from other people, something that I just wanna kind of pay forward.

Andrew: I wanna find out about your background in the Dominican Republic and why you dropped out and so on. But first, let’s just make sure that we understand what Arco is. If I understand it right, the big benefit is if somebody wants to buy something and they don’t have a credit card, they could pay for it, even if it’s an online or a digital product using cash.

And if they’ve been paid by someone and they just wanna cash out, they can cash out. And that’s one of several features. But am I right

Edrizio: the, the core. Of what we built was a household bill paid in Mexico. So before we came along, uh, to pay a household bill pay, you would need a physical form. Uh, you have to go physically into a store, uh, and they would scan it in the store and you have to pay cash. And it was very hard to transpose that experience over to a mobile app.

Uh, we were able to create an API on top of all of. Household bills. So think of your electricity, gas, water, uh, where any FinTech bank could plug into our API and serve up a very, um, elegant consumer user experience inside of the mobile app. Uh, and we started, that company started working on Bill Pay around 2013.

Uh, luckily there was a FinTech boom in Latin, uh, which we were able to partake of. So companies like Newbank ra, uh, and several others kind of started using us around 20 18, 20 19, and we just grew like wifi.

Andrew: A, and why would rai, which is the delivery service in South America, why would they need to use you to do

Edrizio: Well, they, they launched something called Rapid Pay, I think this is public. Uh, and they wanted to help their consumers pay their bills instead of rapid pay. Uh, bill pays is one of, if not the stickiest financial product, because it’s inherently, Monthly by nature and people gotta pay their bills, right?

People have to keep the lights on, keep the water running. Uh, and there was no easy way for consumers to do that. Uh, thanks to our api. We made that process seamless.

Andrew: So they could pay for their electric bill, water bill, that kind of a thing with credit cards and cash, if I understand the way

Edrizio: Yeah, the cash

Andrew: I right about that?

Edrizio: came out later towards the talent.

Andrew: Okay.

Edrizio: it was either, it was kind of a payment agnostic, uh, because, uh, and it had to become that because, uh, obviously LA is probably not as highly banked as developed countries like the US or, uh, but we started with credit cards or, and then added cash on on.

Andrew: Am I right that you were a little less. Ambitious. Like you came to America from Dominican Republic and you ended up dropping out of school and, and working in aviation. Am I right about my assessment? Am I right about the history?

Edrizio: Um, I think I’m the opposite of less ambitious . I’ve never met someone more a mission than me.

Andrew: So then here’s the deal. So you come to, you come to America 18, you drop outta college and you become an airline. , why? Why would you be such a smart person? I think a Wharton graduate. Am I right about

Edrizio: different people come from different backgrounds, . So in my circumstance, I, I had to drop out because to help my parents, uh, I’m sure there’s a lot of people that don’t have that necessity. Uh, their, their parents are educated, their parents. Uh, I left the. Went to the South Bronx, grew up in Harlem.

I was in a situation where I needed to help my parents. They, they have made a big sacrifice for me to, you know, come and immigrate, uh, and, and leave their life so I can have a better life. So after being in the Air Force for one year and being in college for one year, uh, my initial goal was to become an airline pilot.

So I was gonna take the military route. Uh, and decided, well, I can do that, or I can drop out of that track and take on a job as an aircraft mechanic to make help against me. Uh, and maybe I’ll pick that up later or maybe not. So I went, I went at 1818 and decided to mechanic took on two jobs. Work like endlessly, uh, saved enough money to put a down payment on a house who bought a house in Queens and around age 21, 22 decided to go back to college.

I knocked on every door. Uh, every school, everyone rejected me. Uh, wound up going to community college in Queensborough. Uh, didn’t necessarily love it, uh, but I became ena with the whole notion of just learning and being a sponge. About Wall Street became an hour Wall Street, not necessarily cause of the money, but cause of what it represented, uh, success.

Uh, and even though I was so geographically close to Wall Street, uh, I felt miles away. Uh, so I actually wound up transitioning into Baru College, which was in, in downtown. Uh, and then I ultimately, Kept on knocking on doors. The banks, every bank rejected me. They don’t want a 25 year old kind of college dropout drop in

But I wound up getting an opportunity to, um, basically intern at UBS Investment Bank. Sorry. I wound up getting an opportunity to intern at UBS Investment Bank, and I became an investment banker.

Andrew: Uh, so you know what, I think I read too much into an article that I saw about you, which was that you were a mechanic, and then it wasn’t until you did it for three years that you said, I’m done with this. I can’t live this life that you moved on. You couldn’t do anything else. You’re saying you had to help your family earn money as quickly as you could.

That’s what it was.

Edrizio: Mm-hmm.

Andrew: Got it. And then eventually you did go to the Wharton, uh, to the Wharton School back in 2009. All right, so then why’d you leave investment banking? You ended up getting a job there from what I saw in your LinkedIn profile. You’re working at Pegasus for about a year and a half, and then you went to startup Chile.

Why?

Edrizio: Well, yeah, I think I this when I transitioned from, Being a mechanic to be an investment banker. That was a major transition. I mean, I kind of traded my coveralls for, for a Brooks brother suit, and I discover at, at JP Morgan was that, uh, who you spend time with is who you become just so by virtue of submerging yourself in kind of this ecosystem where a lot of people, uh, have high intellectual horsepower.

Come from great backgrounds, speak a different way, interact a different way, think a different way. Uh, you, yourself, adapt to that environment very quickly. Um, and I really love that. I love, I love feeling uncomfortable with the fact that I may not be as smart as anybody else, but I want to, I’ll work everybody else and I’m gonna wind up out executing everybody else by virtue of that.

So I, that was a bit intimidating, but I really enjoyed. Aspect of being kind of the underdog. And what I discovered is a lot of my coworkers had come from Ivy League schools, and I knew that I needed to be able to compete. Uh, so lo and behold, I started looking at Ivy League schools, uh, uh, and that year the number one ranked business school in the world was Wharton.

My theory is if you go big or go home. So I applied to the number one and I got in thankfully. Uh, and, and it was a quite a transformative experience. Uh, love it.

Andrew: The original idea for what is now our coast, um, was to enable people to manage their family’s finances overseas. It was called

Edrizio: it. Yeah, exactly

Andrew: Am I right?

Edrizio: Yeah. So

Andrew: Why is it? When I saw old photos of you and your co-founders, your t-shirts for Regal had a gift box

Edrizio: yeah, so, so Regal means Regal, which is a gift, uh, in Spanish. So the initial concept came from my own experiences. Having received remits and then coming over to the state and sending remits. The initial concept is how do we productize remittances because it’s, it’s very expensive to send money and also very dangerous to go pick up money and move it around physically in, in Latin, so, okay.

Andrew: someone in the US might send a family member in Latin America, some money. That family member would have to go into a store and pick up a wad of cash, put it in often her purse and walk home, and that’s expensive. But then on the other side, it’s dangerous. And you said, you know, there should be a better way and your better way was

Edrizio: So we’ve, we’ve learned that a bulk of the remit funds are used to pay household bills, gas, electricity, water, cable, cell phone. So we decided why don’t we just bypass the cash exchange and create a direct path to pay? The household build from the US to Latin. And that was the initial concept.

That’s what, uh, Regal, uh, came out as.

Andrew: And then you pivoted. Why did you pivot? What was going on with

Edrizio: Yeah. So we learned a lot, uh, in, in I think one of our key lessons that I learned very early on, because at the time we had come outta y Combinator, went to Texas. Uh, became finalists, raised a lot of money and we were kind of drunk on our own power or getting higher on our own supply, meaning we had raised a lot of money, we had a lot of neuro, and started spending a lot of money, uh, on a product that wasn’t taken off.

Uh, so it took us a while to, to pivot. Um, and what I learned quickly is, Racing around doesn’t solve all your problems. You still have to get product market fit, uh, and we weren’t getting product.

Andrew: Which part was not, I guess it was the people in the US who were not willing to do this, or was it people in Latin America who said, I don’t want my family member to

Edrizio: Great

Andrew: Yeah. What happened?

Edrizio: Uh, this is actually the latter. So what we discovered was that, uh, remains is in essence a a two-sided market. Uh, there’s a sender and a recipient, and we put all of our energy on the sender when we should have learned more about the recipient. And in this sense that the recipient didn’t want their funds to be controlled.

Uh, the recipient typically was a, a a a, a young mother or a. That was under the side, and they didn’t want those funds to be controlled. They wanted the flexibility to do whatever they wanted with, with those funds. Uh, and by the time we realized that we just kind of too deep in,

Andrew: Yeah, I do remember you saying things like, um, in old articles, once you can pay someone’s finances, you can give them more guidance, you can help out. And it’s kind of like I, I will see when I was living in San Francisco, family members who were clearly financially savvy helping out their parents who often weren’t by managing their finances and investments and it was that kind of a thought.

But I guess when it comes to daily household expenses, you don’t want your know-it-all kid guiding you, and that’s

Edrizio: That’s what we discover. Yeah.

Andrew: Okay. Meanwhile, you’d built this infrastructure, and I’m curious about how you decided what to do with it. But first, let me tell you about my first sponsor. It’s origami.

You know a little bit about this because you’re a Y Combinator alum, and as I understand it, a bunch of Y Combinator people got together in this chat community to talk about these crypto investments that they made individually. Then they said, Hey, you know what? Let’s form a Dow, a decentralized, autonomous organization where we all get to invest together.

And so they did it. It recently announced that it, uh, raised over 80 million. They’re huge investors in their own right this Dow. Are you

Edrizio: Yeah, a little bit. You’re doing great.

Andrew: They’re doing great. They’re like the one of the best funded and most respected investors in the crypto space. Well, one of the founders and many of the early participants got together and said, , why don’t we help other organizations create dows like this? And so they formed a company called Origami, and Origami creates these dows, and they’ve done it for many people, including like the Kaufman Fellows who’ve gotten together and created a Dow, a decentralized, autonomous organization to invest in.

Anyway, anyone who wants to. Create a, Dow knows at this point they could go to join origami.com and sign up and they’ll help you create your Dow. But the thing that I wanna say to you is, if you’re not sure what a Dow is, you should understand this method of organizing people and working together. And so I created a podcast with origami.

Showing success stories in the Dow space. It’s kind of like Mixergy, but for Dows. And I will do what I’ve done here, which is demystify, educate and highlight the success stories. And so if you’re interested, you should go to join origami.com/podcast. Join origami.com/podcast.

Edrizio: cool.

Andrew: Thank you. Yeah, you fricking y combinate our founders.

You stick together, you help each other out. It’s an amazing organization. What did, when you went through Y Combinator, what did they help you as far as thinking through your business?

Edrizio: so YC was transformative in its own right? Uh, when we went through it, it was much smaller. Uh, it was 50 companies now. I think the last batch was like 300 companies or so, or two 50. Um, but the essence and culture remained the same, which was, uh, learning from ex founders who were partners at the time, but also learning from your peers and kind of lifting each other as you climb.

So you either. Get help by getting your peers as clients or getting your peers as testers or getting your peers as investors. All of which we tried right in, in, in the ecosystem. Like some of our best investors were actually our peers in, in the batch. And, and more than that, it’s just a moral support.

It’s like a support group because it’s such a tough, a tough journey. You know, they say misery loves company and it is true. Uh, and and that’s why I think people tend to stick together because you are going to become a struggle.

Andrew: Did they help you think through how to get more customers, how to do any of the early product

Edrizio: Yeah, that, that is their bread and butter, or I should say our bread and butter. Cause

Andrew: Yeah. So what did they teach you that worked and what, what wasn’t

Edrizio: yeah, I, I think at the beginning, uh, they helped us first of all kind of, uh, what I would call an attention diet. Uh, at the beginning when you were a founder, you get caught up on a lot of vanity Activit. Uh, think about talking to, uh, lawyers, talking to press, talking to accountants, focusing on your logo.

Those are vanity activities that don’t really have anything to do with progress in your business. And the number one vanity activity, which is talking to investors. Um, uh, so they told us at the beginning, look, stop focusing on all those things and concentrate for the next 11. Of a 12 week program in just talking to customers and getting users.

Just get users on the platform, talk to them, learn from them, and that’s what we did. We went out there and talked to users every single day and kept growing our user base weeks on end and kept learning a lot of things and kept kind of iterating the product, iterating the product until demo day. We were able to present a kind of nice hockey stick graph showing our user.

Andrew: All right, and then as we said before, it wasn’t, it wasn’t the right product market fit, but you’d build all this infrastructure. Why wasn’t it the right product market fit? If you’ve done all that work at Y

Edrizio: Yeah. So it’s very common for companies to pivot. Uh, companies like Twitter, YouTube, uh, Instagram all, all were different at the, at the beginning stage, but I, I think at the beginning what investors are looking for is, uh, signals and, and growth are signals that even if this company is gonna change, these guys can execute. Uh, and execution is a proxy for success. So at the beginning we just focused on, on accumulating that learning. And as I alluded to earlier, what we discovered a year after graduating from YC was that we should have focused more on the recipient than the center, but the underlying infrastructure that we have built, Is what, what ultimately we have today at Arcus, which is instead of using that infrastructure for cross border bill pay, we used it for, um, a domestic bill pay API in Latin America,

Andrew: And the customers for that, were going to

Edrizio: uh, for, for the latter product, the product today. Uh,

Andrew: for the,

Edrizio: so our, our.

Andrew: who, so now that you had this infrastructure where you could make payments via APIs and it was all organized, it wasn’t going to be used by the son in America, who was gonna pay his mother’s bill in Latin America, who was it going

Edrizio: So we discover, uh, in the late 20 teens is that there was a, a desire from a lot of, uh, banks, FinTech retailers to engage their consumers with digital financial products. Uh, and what I mean by that is how do we get customers on our mobile? Engage with financial products and stay there, right? So if you were a bank, you had a financial.

You can get them onto your app, but they wouldn’t stay and actively engaged. Same thing with fintechs, same thing with retailers. So one of the stickies products that exist is bill pay. People gotta pay their bills every single month. If you don’t pay your bills, they’ll cut your electricity, they’ll cut your gas, they’ll, they’ll cut your water.

Um, But there was no easy way for, uh, these banks, FinTech retailers to integrate into dozens of billers, uh, in one single troop. They weren’t gonna take the time to do one by one. Its, um, so we wound up doing that and basically aggregating all of those integrations and making it seamless for any FinTech or, or bank to roll up and provide a very elegant consumer bill pay.

Andrew: How did you know that they were willing to pay for. There was a need in the first place, and second that they were willing to pay an outsider to do

Edrizio: We just kept knocking on doors, kept knocking on doors, and, and kept iter, and kept launching the product with one customer, then another one, and then the first customer would kind of provide an intro to the next customer, and they liked it so much that it just became a, a word of mouth effect. And that’s when we learned, okay, if the customers are talking, To all the questions about us naturally, then I think there’s something here.

Andrew: Can you tell me about one of the early conversations that made you realize this was

Edrizio: Yeah. We talked to one early retailer that was launching an A payments app, uh, in Mexico, uh, and, and they wanted people to pay their bills, pay their bills inside of that. So they had two options to either go integrate. 30 or 40 different billers across Mexico, uh, or integrate with us, um, basically and

Andrew: I.

Edrizio: launched it.

And they had pretty good engagement at the beginning and they just kept getting better week over week, uh, and kept building the relationship. And that relationship was parlay into other, other relationships. And that’s when we learned that. This has something. And then later on the banks came on and then the fintechs came on and it became kind of an entire ecosystem.

Andrew: Why couldn’t they build it themselves? I mean, this is a key part of what they do move money around. Why couldn’t they

Edrizio: Yeah. I think one thing that just kind of like general rule of guidance, I think in, in the tech system periods like. Businesses succeed better when they are focused on their core functionality. So a bank’s core functionality is savings loans, uh, retailer’s, core functionality. Uh, it’s so merchandise, uh, fintechs core functionality could be something like savings loans digitally.

Uh, for neither those three use cases that we serve was bill pay, their number one core use. But it would serve their core kpi, which is retention. So when you provide that usability to a, to another company that that needs the product, but doesn’t have the resources or desire to go through a three year journey, I think that’s kind of where you can hit a really good.

Andrew: Okay. It still feels like for Fin, for banks being able to do bill pay, if not core, it seems important enough that they could do it on their own.

Edrizio: Yeah, but banks move slow. Banks don’t innovate. Yeah. , yeah.

Andrew: I see. Meanwhile, you could just give them the full solution all in one already done and then keep adding to it cash and so on. How did you know what else to keep adding?

What new features to.

Edrizio: so we, you know, we just looked at data, we looked at retention rates, usability. What kind of bills were people paying? Um, what, what kind of, and what regions, uh, were most in demand? Uh, because, you know, there’s different billers in different regions. So we started off with the national billers, like electricity, uh, water, and then went to kind of the long tail of pillars, the smallest municipalities.

Um, but predominantly we just really relied on our customers and let our customers kind of dictate the. Uh, as opposed to having us dictate the product, let our customers kind of knock on our door and come back, and if enough customers would tell us we need this specific biller, this specific feature, then we would add it to the roadmap and prioritize that accordingly.

Andrew: I’m looking at photos of you from this period of your life. There’s a lot of motivational words up on the screen. Uh, or up on your walls. There’s no excuses. There is push, which stands for persist until something

Edrizio: nice,

Andrew: Are you like a motivational books reader? Are you self-improvement guy?

Edrizio: I love you diligence more, more than like any podcast ever. And I love that. Um, yeah, man, like a lot of, I think just because of my background, uh, I, I felt. I really couldn’t rely on anything. I couldn’t rely on like network cause they didn’t have one. Uh, I definitely wasn’t the most talented or most intelligent person.

I just relied on, on hustle and grit. Uh, and I felt like, uh, I’m just gonna outrun everybody else. And that was always my, my approach to life. Uh, and I brought that approach and that desire and that grit into, into ar and I felt like that culture. Personified throughout the fabric of the company’s dna, uh, to this day.

So,

Andrew: Do you have an example of, of a way that you out hustled in the early days where you expressed grit and I don’t know, whatever this push type of personality is. How did you do that in the early

Edrizio: uh, the company surveys or personal.

Andrew: Like personally or at the company. I wanna see what this kind of personality does like in the

Edrizio: Sure. I think one example personally was, was basically when I was at Baruch trying to get a job in Wall Street, uh, and Wall Street. I wanted to get a job in investment banking. Investment banks don’t typically recruit from non-target schools, especially school. But I just chose to not believe that I wanted to get a job as an invest banker, because that was, not only was that the highest pay, but I felt like it was the pinnacle of success at the time.

So I wound up interviewing that every bank. Three times. So I wound up getting rejected 33 times. I just, I wouldn’t take no for an answer. I just kept going, kept going, kept knocking on the door until one time I, I, I snuck into a holiday party at ups. Uh, I, I networked everybody and they have, and I learned that they had one opportunity available for one internship.

Uh, I applied, didn’t hear back for months, but I kept asking and then I heard back. I got the, I. And I got it. I got it the same day. Uh, and I was super happy. Uh, I, it wasn’t for seniors, it was for juniors. So I had to become a junior again. I delayed my school year for one year, but I didn’t care. I didn’t care.

I was like, this is what I want. And I’m willing to take a shot at this and I’m willing to better myself. And I did, I better myself. And then I wound up getting an even better job at JP Morgan as a result of that. Uh, and it was great. I went from like making 35 grand a year as a mechanic to making 140 grand a year as an investment banker in a suit with a secretary

Andrew: Wow, we

Edrizio: So,

Andrew: All right. I wanna find out about why you sold the company, but first I should say my second sponsor is a company called lemon.io. Dude. The founder of a Lemon Alexander was in UK Ukraine. He was known for being Ukrainian and having Ukrainian developers that were available for hire for all over the world because he was Ukrainian.

People kept asking him, do you have a local person there who’s inexpensive but good? He, so anyway, he made a big business out of it. The war hits. He gets out cuz that dude is too much of a dork, I think, or not a dork, too much of a nerd, maybe I could say, to hold a gun, let alone to point it at anyone. He goes, I’m not gonna be useful in a war.

And if you look at him, you’ll, you’ll see why. But he says, all right, I’m gonna keep this company going. Somehow he starts to realize, well, you can’t find developers in Ukraine cuz they’re all, they’re all fighting. He still has to support his team that are counting on him, uh, to get paid so that they could feed their families.

He starts looking all over Eastern Europe and other countries where there is a, a developer group that is solid but underpaid because they’re underappreciated. He starts putting together a team of those people and now, Yes, you can still hire from Ukraine, from, uh, through his site, but also from other countries.

He has been working like a crazy person to expand his pool of developers and keep up the service and grow it. And in fact, he has been growing it. And anyone out there who needs to hire developers should know you can get phenomenal developers. They will match you with them. So it’s not like you just go into some kind of marketplace and have to figure it out for yourself.

They’ll match you, but make sure it’s right and at a great price. And if you use my url, you’ll get an even lower price and that url. lemon.io/mixer, g lemon.io/mixer. G I’ll be honest with you, they’re not even paying for this ad. I just want to keep supporting this guy. I see his team, they’re basically working night and day to keep things together, and so I said, uh, they, their team said, , we can’t keep track of these ads.

When are they running? How are they? I said, it’s not on a system. I just wanna support what Alexander is doing over there and what you guys are doing at Lemon. Anyway, that’s what this is. Yeah. Great people. Why did you decide to sell? I mean, great exit, but why?

Edrizio: So in going back to the pandemic, we were, um, raising a series B. Uh, then the pandemic hit struggle. Everybody was Hamed down. Nobody knew what was gonna happen. Uh, and wound up raising a series. Uh, our, our largest round from SoftBank and Citibank, and then we started conversing with MasterCard at the time, and we were growing.

The business was actually growing. We were super excited that we finally found. And build something that people want after so many years of building a lot of things that people didn’t want. So it was, it was a great feeling, uh, but we also had issues scaling. Uh, building infrastructure is a, is a long game.

Unlike building a, a consumer product, building a deep infrastructure, it’s a long game and it’s hard to scale. Outside of one country, cuz you have to go to another country and rebuild that infrastructure. Not only technological investments, but regulatory and compliance, uh, investments, social security investments into that new country, which doesn’t necessarily scale super well.

And then we started looking to MasterCard and of course MasterCard and MasterCard had a great footprint throughout that time. Um, and we had had a great relationship with MasterCard dating back to 20 16 20 17. Part of the PATH program, which is our accelerator program, and it was just a very organic fit because they were looking for things that were directly aligned with our vision and mission.

Uh, and after eight, nine years, you decided that was the next step.

Andrew: Did you have some kind of like, did they have an option to buy you or to match any offer for you? Was there any kind of relationship like that that incentivized a

Edrizio: no, there was no preexisting relationship. No, uh, it was, it was, uh,

Andrew: It was just that you’d gone through

Edrizio: yeah, it was just more of a informal relationship that we had, and it just felt like, like, uh, their path was squarely aligned with ours.

Andrew: It’s so interesting now to see your logo with their logo smaller all over. Like I’m looking to see, did I have this right? Yeah. Your logo gets priority on your product. They’re just there to add some credibility to it.

Edrizio: mean, they respect the brand. They value the brand. Uh, we built a great brand in Latin and I feel like that’s some of the value that we bring board cuz we have virtually every FinTech and bank working with us already. Uh, but in terms of expanding south of Mexico, I think they’re going to add a lot of value.

Andrew: Um, yeah, it looks like you’re not in a lot of countries in South America. You are in Chile. Peru, Columbia, um, and I could see the opportunity to grow there. How did your life personally change

Edrizio: uh, change completely. Uh, just having access to. Wealth, uh, something that I, I’m just not used to, didn’t grow up with it, uh, above my wife, a ring. I, I told her that I had delayed the wedding, that the wedding ring for like five years, and I finally bought her a ring from Tiffany’s.

Andrew: Wow.

Edrizio: bought my dad a, a car, a Tesla.

That was fun.

Andrew: Nice.

Edrizio: But my, my wife’s parents a car too. Uh, well, I was like Oprah at the beginning. Just you get a car, you get a car, you get a ring. So it was just fun to be able to take care of people that love you and taking care of you so many years.

Andrew: You know what? I grew up in New York too. In one of the outer boroughs I, there was this article that I read about youth talking about going over one of the bridges and then just

Edrizio: Oh yeah.

Andrew: then going back home to your borough. Isn’t that like one of the most. Ambitious things that you could do as a kid is grow up in, in an outer borough and see what’s possible on the other side, and then go back to your borough, especially you were in the Bronx, right?

I, I was in Queens, Bronx was in a worse situation than Queens. And to go back and go, there are two worlds here. I get to decide where I go and it’s not easy to get to the other one, but boy, I’d rather be there than here. What was it like for

Edrizio: nailed it. Uh, yeah. I, I remember that day, that was the day that I, I first came to the States. I was maybe nine or eight. Uh, my dad picked me up, uh, in the airport. I was flying as an unaccompanied minor with my brother. Uh, picked me up at the airport. Never felt cold, never seen snow. He was driving the taxi at the time.

He picked me up. Uh, and we went from the band Wake Over Queensboro Bridge and that’s when I first saw kind of the glistening skyline pop up. And I was just in awe. I kind of press my, my face and hands, I kind of the window and I was just in awe. And the next day I woke up in the South Bronx, which is a completely different world

Andrew: Yeah.

Edrizio: Um, so to. I’ve always said the sweet I without the sour. So I think having gone through that experience is very early on in my really kind of contextualize being here now. Uh, it makes everything just that much sweeter. I am internally grateful for everything now.

Andrew: um, you’re at Y Combinator now. What are, what are you doing there? Do you have an example of how you’ve helped somebody? One of the new, uh, startups that

Edrizio: Yeah, so I’m, I’m, I’m a visiting partner, a Y Combinator, same program that I went through in 2013. Uh, so my, my, my role there is, uh, as a visiting partner is, is to help shepherd the next generation of companies. Uh, so in essence, I, I not only help with interviewing companies, but also. Uh, help, uh, advise companies that are going through the batch with the same exact issues that I faced when I was going through the process, which is how do you get customers?

How do you hire, how do you iterate on the product? How do you know when to pivot? So, fundamental issues that are kind of, I would say, industry agnostic. Uh, it applies to every company at that. Uh, and, and because thankfully, I, I went through a process of spending nine years with startup. I kind of saw a lot of ups and flows, and I just wanna get back.

Andrew: What about this you? When I used to interview Y Combinator entrepreneurs, their stuff was so simple that it was easy to be dismissed. And to call it a feature, not a business, was almost an exaggeration because they were like little tiny nothings. Today when I interview startups, I feel like they started with something so massive that it’s hard to even think of them as a startup.

It’s almost like they’re mini enterprise companies, like even your company, we’re not looking at like, A bunch of guys with a website and hoping somebody’s gonna come to the website and buy into their idea that, um, that renting, uh, space in people’s homes is a thing. You had financial institutions on your, on your platform.

I mean, even version one, you had a real tough, big business on your hands from the beginning. Is that what startups are now?

Edrizio: I, I think so. I think you make a lot of excellent points. So yes and no. So I think what’s happening now is that big enterprise. Are no longer dismissing startups as a solution. Uh, I to sound like an od, but yeah. Back in my day when, uh, you present, uh, your startup idea as a potential customer to a big business, you will be dismissed.

Uh, the, the notion of having a, an exec corporation, uh, allowing, you know, a startup to be a client, that was kind of an after thought, but now, It’s actually something that’s considered now. Now you have big companies, Amazon, Google, fa, uh, Facebook, uh, you know, hp, big old school companies, well like using startup as customers.

And that, and that’s something that exists today that did not exist five, 10 years ago, I believe it or not. Um, so if you look at 10 years ago, startups main customers were either other startup. or consumers today you have a third star. I heard third consumer, which is enterprise. So I think that’s why you’re seeing kind of this evolution of, um, of growing companies, as you said.

Andrew: But also then that means that the minimum viable product is not so minimum anymore. It’s a much bigger, more robust product. Right,

Edrizio: Which means you have to raise more capital quicker. So you have companies that are assigned for enterprise, start with smaller enterprise with SME enterprises, and then raise around based on that, validate the, the, the product and then scale to to bigger customers.

They’re.

Andrew: You funded the business out of your own savings in the beginning. There’s a reason why you couldn’t get your wife a ring, right? How much were you able to build with internal personal money?

Edrizio: maxed out my credit card, whatever it was back then, like 30 K or something like that, uh, to fund the, the, the,

Andrew: And so what could you build for that

Edrizio: a basic mvp like, like a, a website and a basic database of clients and, and, and some marketing ads spent. That was,

Andrew: Oh, you know what? I read that regarding hustle. I read that you said that in the early days you had some dude sit down and make payments for people. It wasn’t software, it was like Steve as a

Edrizio: Stevens. Yeah. Yeah, exactly. Yeah. So, uh, I think it, it’s, I think it’s called like the Wizard of Oz, uh, kind of mechanical turk, uh, behind the curtain. Uh, so yeah, I think that’s, that’s something very common that most startups do. You just have a website, consumer interface, and behind the scenes what you been to the product and validate the product.

Just have somebody kind of execute the last mile of the transaction. So

Andrew: I see. So when I looked at your business, I saw, wow, this is a FinTech company that takes a lot of money, a lot of relationships, a lot of everything. There is no minimal viable version of it. And you’re saying, well, actually we had a guy. Who made payments. It was a pretty basic system. And then you’re also acknowledging we had to raise money fast and we had to raise a lot of it.

And if I, uh, I had a note here about how much you raised. Um, it was 19 million total.

Edrizio: Raise total 19 million.

Andrew: All right. You’re, you’re writing a book that’s gonna come out 2023. Let’s close

out with that. What’s the book gonna be about?

Edrizio: Uh, it’s kinda, uh, highlights my journey from, from selling Gus, uh, in, in my neighborhood in central domain goal way to selling, uh, the startup in Silicon Valley. Uh, and the book highlights, uh, seven lessons, uh, catered towards the, the dark horse entrepreneur who did not grow up on third base.

And my goal, , is just to help. Go through the process of going from a half, not to a half full in terms of being a, an entrepreneur.

Andrew: All right, and now I’m seeing also why when I introduce you, I thought I saw wins and I see what it is. I read your history as not ambitious until he decided to quit this one job and go and actually take on the world, but. No, the wince was, I wasn’t born on third base. I took that job, the mechanical job that you’re talking about, because I needed to take care of my family.

I still had that burning desire and here’s what I built with it. And now I’m helping entrepreneurs at Y Combinator do that. And I’m gonna write a book to do that. And I’m gonna continue and continue. All right, I see it. I’m excited to, to have you on

Edrizio: you . Thank you. I love what you’re doing. I love what you built.

Andrew: Thanks. Thanks, man.

All right. Thank you everyone. And remember, if you’re at all interested in what’s going on in the Dow space, this is like early days there. I’m doing it, a series of interviews, go to join origami.com/podcast. And when you’re hiring a developer, go to lemon.io/mixer G. Thanks everyone.

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