She almost gave her idea away 8 times (then she bootstrapped it herself)

Joining me today is someone who is taking on merchant processing, an industry that has been around for YEARS.

Well, she came up with a brand new model and she nearly gave her idea away 8 times. She finally realized she had to go build it herself.

If you’re an entrepreneur (especially a female entrepreneur) wait until you hear how she bootstrapped her business. Suneera Madhani is the founder of Fattmerchant, subscription-style merchant services.

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Suneera Madhani

Suneera Madhani

Fattmerchant

Suneera Madhani is the founder of Fattmerchant, subscription-style merchant services.

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Full Interview Transcript

Andrew Warner 0:04
Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of mixergy, where I interview entrepreneurs who are ambitious for an audience of entrepreneurs who are also ambitious, who want to do things, you want to build things, you want to leave a mark on the world. And joining me today is a woman.

A interesting side note, I get a lot of requests from female listeners who want me to feature more women and it’s on me, I need to keep doing a better job of getting more women entrepreneurs here. But I should also say that a lot of times when I get a female entrepreneur on, they don’t want to be identified as a female entrepreneur, which I think is I get it totally sensible. But it’s disappointing for my audience of female entrepreneurs who are looking for somebody who could they could relate to someone who’s like them. Joining me today is a woman who one of the first things I asked her was, how do I make this interview win for you? She said, Look, I’m a female entrepreneur, if I can inspire somebody else as a woman, like I am, who’s out there listening, I’d love This is great. And then I have to tell you, if you’re not a woman, she’s freaking inspiring to this a woman who’s taking on merchant processing. How many the merchant processing is a business has been around for years, people bid on it with deep pockets. She gets into this business brand new model. She says, Hey, you know what, all these companies out there, whenever they want to process credit cards, what they have to do is sign up with a merchant processing company. That’s what they’re called, right? They’re categories called merchant processing. That’s correct. And I never understood how this worked. I just knew I needed it. And then they were going to take some magical fees and I couldn’t figure out what it was then I hired somebody finance person went through all the all the documentation to help me understand it. And we what we realized was, every time we accepted a credit card, the price was different. If somebody used a Chase Sapphire card, Chase has some percentage that we’d have to pay. If somebody then used a chase freedom card, that percentage might be different. If they use a Citibank card, that percentage that we that that credit card charged was different. All those fees for us to process their credit cards. And in addition to it, the merchant processing company that we worked with, would charge a fee to and this whole thing was So opaque and so mysterious. And the weird thing was if we just called up the companies that we worked with and said, Can you give us a discount? Often they would instantly say, Oh, yeah, there’s a discount here, which made me feel like a fool because what they’re doing is just try charging as much as possible until they get caught. Right? You’ve seen that scenario. I’m gonna say this, anyone who’s listening to us if they don’t take anything away from this, let me introduce today’s guests. I’ve been so rude. She’s been so kind and I’ve been just rude. Her name is Sarah Madani. She everyone.

Suneera Madhani 2:31
Say my name. Say hi.

Andrew Warner 2:33
Hello. The company is fat merchant. What they do is credit card processing with a flat monthly fee. We’re going to talk to her about how she bootstrapped it how getting started, since you had very little money was possible because she entered entrepreneur competitions to raise money that way she then did so well that she got investment money and she grew the business is really big. We can do it. Thanks to two phenomenal sponsors. The first will host your website, right? It’s called Hostgator I’ll tell you about that. And the second is a podcast that I’m going to urge you to listen. It’s called Traffic Secrets by Click Funnels, Sr. How many people the company now?

Suneera Madhani 3:11
We have 110 people at the company but I’d love to say hi to the audience. I’ve been like, super quiet for the first five minutes but it is so such an honor to be here today. Andrew, I love what you’re sharing and especially when you first talked about having more female entrepreneurs speak up and even identify as female entrepreneur when you asked me that it was just it was second nature to me like I am a female entrepreneur and I want to inspire other women, as well as just other entrepreneurs to take a chance and go follow their dreams. My background, I should have never been an entrepreneur. I did not go to MBA school CEO school I like to call it I was super risk averse. I come from an immigrant family of entrepreneurs and where entrepreneurship was never sexy. It was a necessity. That was the only way that my family could make a means to an end was through entrepreneurship. So education was a huge emphasis for me growing up so that I could kind of get out of the entrepreneurial rut. And so hold

Andrew Warner 4:09
on, I’m sorry to interrupt, but you told our producer that your family had done so many different businesses, what would you come from and what kind of businesses did they run?

Suneera Madhani 4:18
Yeah. So my parents immigrated separately from Karachi, Pakistan. So I am a Pakistani descent. I was born in the US, but definitely around like that culture. And they had every type of business under the sun, you know, convenience stores, pizza, the pizza shops, restaurants. At one point, my dad had a nightclub, you know, marketing company. I mean, he was a serial entrepreneur, and I’ve went to 10 different schools in 12 years. And so for me, I never had entrepreneurship. I kind of grew up around it. And so that was kind of the one of the reasons why I felt I had to go get a corporate go down the corporate route. I didn’t want to bring the stress Home of entrepreneurship. So I kind of had it from a different lens. But definitely it’s in the blood I grew up around business, I grew up from a very young age working in all of the businesses as well. And so that’s kind of like where my background of entrepreneurship does come from.

Andrew Warner 5:15
It seems like if they’re running all these companies, and it’s stressful, was it working out? It seems like it maybe wasn’t,

Suneera Madhani 5:22
it was we definitely grew up, we didn’t grow up. I don’t want to say I grew up poor by any means. I mean, I was in a middle, middle class income family, and we, you know, I grew up in a really stable environment. We’re in that sense, but I think for my parents, it was always this pursuit of what was next. And they never really finished things through. So it was here, let’s build this business. And then now there’s this next opportunity and this next opportunity and so for, for me, this has kind of been the opposite of why I have like I’ve been in Orlando now for over 15 years. So once this was like my final move, I know In college at University of Florida got a degree in finance.

Andrew Warner 6:03
Let’s let’s go back to your parents give me an example of a business that they started that if they would have stuck with it instead of jumping to the next one might have been more exciting might have been better.

Suneera Madhani 6:13
Yeah, I think um, you know, they did really well in a in a marketing agency where you know, pop up ads used to be the thing in the early 2000s and that was that like the pay per click way of advertising and so you know, my dad had invested in a marketing agency that was really focused on pay per click advertising, and they did really well and that was something that I think would have carried through I think that there would have been new innovations that came through in in agency advertising, but when that died, their company kind of died.

Andrew Warner 6:48
What died about it pop ups as a as a medium died and instead of iterating to the next alternative pay per click. Yeah, medium they just said let’s move on to another business

Suneera Madhani 6:58
move. Let’s move on to the next opportunity. So and I don’t want to take it. I mean, I’ve learned so much from, you know, kind of seeing all of us and I have had so many wonderful memories around these businesses. So it wasn’t I’m not trying to paint it in like a horrible lens, by any means just different. I just grew up around a lot. And it was it came with a good, bad and the ugly. And with that I ended up going to a good university, got a stable degree, and decided not to pursue finance, just because it was boring. And I had a couple of different corporate positions and ended up working for a payment processing company, which I thought would be super exciting. And quickly, like you were talking about Andrew, in six months, I learned that it was the most non transparent industry that you can work for. And it was really about nickel and diming. The customers It was really a poor customer experience. But no, did you

Andrew Warner 7:54
see the example that I gave was, yeah, call them up and they say, Oh, yeah, of course we’ve got to lower right right. You get it back. Right?

Suneera Madhani 8:00
Exactly. Why can everybody give you a lower and lower and lower rate? It’s because everybody has high margins that they’re just gouging customers on. And even if there was no

Andrew Warner 8:11
margin, give me an example of a high margin that they were charging typically.

Suneera Madhani 8:15
It was so variable. That’s what’s that’s what’s so crazy about the industry is that it was and I would say it’s getting better now, but this is in the 2000 10s of early 2010. I’m talking about I mean, they’re making anywhere from one to 3% off of these transactions

Andrew Warner 8:32
on every every hundred dollars that I charge, in addition to what I’m paying Visa or MasterCard or I guess, Chase, I should say bank through Visa, MasterCard, in addition to that, they’re also getting $1 to $3 in my sales,

Suneera Madhani 8:46
yes, on the bottom line, right and so that quickly adds up like very, very quickly and it ended up so that’s how the industry just kind of has always been the way that exactly how you described it as you got to pay the you got to pay the Visa MasterCard fees, right? You got to pay the card brand fees. And that’s kind of how we as consumers, we love our rewards credit cards, and that’s never gonna go away. Whatever form that looks like we want to be incentivized by where we spend our money, but somebody has to pay for it.

Andrew Warner 9:14
And so the way it works is, if I get a Chase Sapphire card where I get miles every time I buy something, what happens is Chase will charge the merchant extra for that for to process that credit card, just so they could give me the miles. Now if I use my other credit card that has no miles, no points, no nothing. Chase charges the merchant a little bit less. Right?

Suneera Madhani 9:37
That’s correct. Got it. But there’s there is a cost. So there is a che there’s a cost component to it. But what is what we found, and this is why fat merchant is so unique is so there is an additional, there’s a bunch of hands that it goes through by the time that the merchant ends up paying for it. And what we do at fat merchant is open up the direct cost that’s known as interchange so we open it up to every business Ever, and say, Hey, you can we’ll just give you the direct cost. And instead of charging variable percentage markups on how much or less your business does, we’re just going to charge you a flat monthly subscription. And so this idea was extremely novel. This is 2013. I’m stuck in a snowstorm in Texas, which is super reminiscent now that I’ve been stuck at home and COVID. And I think this is where like the best innovation happens, actually. So I can’t wait to talk to you about what’s happening at that merchant and COVID but 2013 I’m stuck in in Dallas, Texas. This is where my family is. And I’m trying to reroute my subscription boxes. And this is pre subscription economy. I like to call myself an elder millennial. I was I was like obsessed with every subscription that I could get my hands on. And now I’m in the payment industry for about a year and I already you know, know that cost is the same for every provider. So it doesn’t matter if you’re chase square PayPal, any of the banks Visa, MasterCard, Discover set, set the rates every year. But how payment processor companies make money as they charge their own percentages. Like why isn’t anybody doing a subscription and payments? Where it’s flat? it’s transparent. It’s so easy to understand. Yeah, our margins are going to be less, but we’re going to be able to scale that so quickly. So I first thing is any any entrepreneur does when they have their business ideas, go to the, you know, Google Academy online and start searching for what’s out there. And I learned I was like, Wait, how is there nobody doing a subscription? I can’t be the first person to come up with this. And so I put together probably the best business plan I obviously I have ever come up with because it’s very successful now. But I put together this amazing plan. And it wasn’t for myself, I wanted to take it back to my company. So I was working for a processor, as I told you, and I can’t disclose the name of the processor. But I took this back to them and said, Hey, you know, I think this is going to be a fantastic go to market angle. This is what we should do. And oh, we’re going to remove contracts. Oh, we’re going to remove all the bullshit fees that we’re charging them. And we’re just going to charge them this flat fee. And it’s going to scale.

Andrew Warner 12:10
We wanted a company you worked for to jump on this idea.

Suneera Madhani 12:13
Yeah, I want I do them. Because Andrew, I was 26 years old, I had no money in my bank account, I had never started a company, I told you, I was super risk averse. I did not want to become an entrepreneur. I just thought this was like a, I wanted to solve a problem. And that’s what I was so focused on in my mind, it was never about me or me wanting to solve it I wanted or me wanting to benefit from it was really about, I’m already at a place where I have the resources around me to really go scale it. So instead of starting over, let’s just go make this product work. And so that was kind of the lens that I was viewing it from, but also this is where like the female part kind of comes in. My story is I think just as women sometimes we don’t even put ourselves in those positions where we think naturally to be like it’s I can go do this. There is definitely a fear factor a confidence factor A there’s not people doing it faster like I didn’t have anybody to look up to to say, Oh, you should definitely go do this thing for yourself. I was my last choice. So what ended up happening Andrew is that I pitched the idea I got rejected. I knew that I didn’t want to work for that company anymore. But I knew that this had like, I became like super obsessed with wanting to launch this. So I took it to about 12 different processors and investors. I got shot down every single time until I was pretty much left with being my last resort. And I was like, Okay, now that everyone has pretty much said no to me, I still want to see this through. I’m going to go out to do it. And you were

Andrew Warner 13:43
started. Let me see if I can get a job somewhere where they could help me implement this.

Suneera Madhani 13:50
Yeah, it was a it was a hybrid. It was an entrepreneurial role you could per se is what I was trying to I knew that this business model would work. I knew I needed resources.

around it. So I wasn’t trying to be the, like, it wasn’t coming at it from this venture back. Like I didn’t even go to like venture investors, where I’m like, here, go give me money, I’m gonna go run it, it was more around, hey, you are a successful processing company or a successful bank, this is how this could fit here. And also you have to remember, it’s not like opening up a payments company is like opening up like a cupcake shop down the road. So there’s a lot of regulation, there’s a lot of things that go into starting a financial services company, as well as like from a regulatory compliance standpoint, running housing transactions, I had to get a sponsor bank, I had to get Visa, MasterCard card approval. I mean, there’s a lot that goes into it. And so it’s definitely $1 investment time and investment. Also, it was a lot of unknown that I purse. I didn’t have that experience to go do that. And so at that time, you know, now looking back, I probably should have skipped that whole first time. Six months of that phase, but you kind of go through that was the part of the journey for me to realize that, you know, I can I can go do this. And if I gave myself six months, I had $20,000 in the bank account that I had saved up. And I got a little bit of money from friends and family and it was like, here you go. And I went out to go pitch fat merchant, which was the first flat subscription processing company

Andrew Warner 15:26
started pitching it to who from what I understand visa was one of the first partners Is that right?

Suneera Madhani 15:33
Yes, I was able to get all of the card brands on board but I needed I was able to get my my bins on I got all the regulatory stuff done. I think the exciting part was like that was the hard part. And I was able to do that. Well, that’s a

Andrew Warner 15:45
problem that I imagine it’s just a checklist of different things that you need to do in order to be up and running as a merchant right. It’s been done several so many times already. Right. It’s a solid problem you just needed to go through Can you describe what it what’s, what goes into this?

Suneera Madhani 15:58
Yeah, I mean,

I don’t want to bore the audience with like, details about like compliance standpoints, but you pretty much have to get a sponsor bank, you have to be able to put transaction and then house transaction somewhere somebody has to clear the money, it has to be a bank that has to do it. And so at the end of the day, you can’t just get up and be like, Oh, I’m gonna go sell processing, there’s a process you have to go through, you have to get a sponsorship. It’s definitely It was a lot tighter to just start a company. I could do it under the umbrella of other companies, which I didn’t want to do, which was definitely an option. But it took about six months to get all my ducks in a row. Once I had my licenses, which was March of 2014. I will never forget that day. When I got my go, that everything is done. I actually went on I signed up for a business plan competition. So give me just a flavor of what’s involved in creating a merchant merchant processing company. What what are some of the things on that checklist?

Yeah, money. So I have to be able to hold transactions. And if like fraud happens, I have to be able to do that I have

Andrew Warner 17:07
a balance of balance sheet with enough money that you can do what that you can sustain the number, the amount of charges that you get.

Suneera Madhani 17:16
Yes, so So again, I don’t think that I don’t really want I’m trying to, like, get out of the details here on like, what that looks like. But it’s a lot of shit that felt like what’s what I’m trying to get to. So in terms of fraud in terms of compliance in terms of tools, in terms of one I keep mentioning, you got to have a bank sponsorship, that was a huge component of it, a bank is not going to give you a sponsorship. So I can go pitch everywhere to say, Hey, here’s why you should run these transactions and why this is going to be a profitable business for the bank. And so that was part of the details. I didn’t know what needed

Andrew Warner 17:53
to go into it. How did you get that checklist of things that you needed to do in order to process credit cards, Google University, really You just go and then you put together a list. There’s not a checklist already out there.

Suneera Madhani 18:04
No, I mean, there’s there’s not I had I definitely had, I had to find my way is like what I can like, I’m sorry, I’m not feeling I’m not giving you what you’re looking for right now here in those details. But I figured it out like it took six months of me figuring it out talking to people, the right mentors, going from bank to bank, getting the bank sponsorships talking to my old processors. So there was those details that went into getting things up and running.

Andrew Warner 18:33
Let me take a moment talk about my first sponsor, then we’ll get back into the story. My first sponsor is a company called hostgator. It’s for hosting websites. You know, the other day I had my kids asking me questions about insects that I didn’t know the answers to. So I finally went on Twitter right there in their bedroom at like seven, it must have been 745 or late at night while I was getting them ready for bed. I said, Does anyone know an entomologist to just zoom in with my three year old and my five year old and answer their questions, and somebody said yeah, Here’s an entomologist who’s actually working at the zoo. But the zoo is closed right now. So he’ll do it. And drew from the zoo said, Sure he got on Zoo with my kids. He actually allowed me to bring some my kids friends on and he answered all their questions. It was so riveting because he had a snake in his house. He had a chameleon in his house. He brought him on, he answered all their questions, and he and he showed his animals and he was so good. I said, Is there anything that you want, once we were done? I said, Can I help you with anything? He said, Well, we’re out. I’m out of the zoo. There’s nothing for me to do right now. I said, you’re so good at this. You should do this professionally in charge. He goes, I would love to do that. I said, Would it help if I just started a website for you where you could sell tickets? He said, Oh, yeah, that’d be great. So I went to Hostgator hostgator.com slash mixergy because I wanted to discount.

Suneera Madhani 19:45
And within minutes, I had a WordPress website up and running for him. I actually recorded a video with clips of him talking to my kids to show what he was about. And I said, if anyone wants, here’s how much it would cost to get a ticket. We sold seven tickets very quickly, and when

Andrew Warner 20:00
I showed him the website and the fact that he had tickets sold. He was so excited. He showed it to his mom. I know he showed it to his mom because his mom came on the website and kind of added her name to the mailing list. And all within a few minutes. Now he’s got a little side hustle that he can keep on running even after the zoo opens up after COVID lockdown. The point is so much easier now to take an idea and instead of sketching it out and thinking Should I do it should I not just put it into WordPress on Hostgator, or put it into any number of different platforms that they have on Hostgator Hostgator is incredibly inexpensive, super quick, like every click had been thought out to make it easy for me to get started. And it just works. So if you’re out there and you’re looking to start a business, go to hostgator.com slash mixergy. When I use that URL, I got a super low rate. And they made it really easy for me and if you hate your hosting company, or you’re thinking hey, you know what this post COVID world’s is the time when I need to cut costs, go to hostgator.com slash mixergy. They will migrate your website for you and give you a lower cost hostgator.com slash mixergy. Right you then you had this business up and running. You were starting to say that you entered business business competitions. What happened? Tell me about that?

Suneera Madhani 21:06
Yeah, so I was just trying to get on any platform that I could to talk about the subscription style processing solution. And so I ended up remember that business plan that I was telling you about, I ended up putting this business plan into a business plan competition, it was actually the National Association of women business owners now that was like a big chapter. And I put in my business plan there and ended up getting selected. I went through the whole pitch competition and then won first place and I took home one of those giant checks. And that I think my first place chakra was 70 $500. And I was like, great, I not only that, I got to get up, I got money for the company. But I got to actually pitch to other investors and get in front of an audience of customers and people that have friends and so I ended up getting business out of this competition. I’m like, Well, that was a pretty good use of my time Let me try it again. And so I applied to a another competition this one was like a venture competition. And then we apply to another one and literally in our first year, we took home about $200,000 in prize competition money we would like literally show up win first place at these competitions. I’ve taken home check sizes as big as $100,000.

Andrew Warner 22:23
And and you’d get customers because other

Suneera Madhani 22:27
runner Benz’s. And that’s exactly how we got our first investment too. So I pitched Rawlins venture plan competition, which is a University here in Orlando, and they have a venture playing competition where they’re all local venture companies come to watch these really high selected pitch pitches. And there’s a whole process that goes you know, through selecting the companies and then they get us ready to go pitch to investors. It’s pretty much like Shark Tank in real life. Yeah. Now there’s so many of these, but there was so much opportunity in just getting up to present in front of these and That competition, we ended up winning in 2014. And it was our first it was like $25,000 was the cheque size, but it came with a $25,000 investment from a local fund of local Angel group fund. And that is kind of where I got our initial invest like the local investor community excited and did a like a seed round for about $850,000 was our seed round coming out of that year. And so that was kind of the the initial funding that we needed to really scale and get started on growing fat merchant.

Andrew Warner 23:38
How long did you go before you raise money? investment money, not prize money?

Suneera Madhani 23:42
Yeah, it was about a year so it was about one year until we ended up taking home our our seed our seed round, and then to date, we’ve raised 20 million in venture capital.

Andrew Warner 23:52
And how big was the company revenue wise in that first year?

Suneera Madhani 23:56
Yeah. So we were actually on Who was our run rate? God, I think we’re doing about $20,000 in MRR per month. So we had revenue of

Andrew Warner 24:06
20,000 in monthly recurring revenue, that means the subscription fees that people are paying you and not that doesn’t include the percent that you’re giving the credit card companies, right? No,

Suneera Madhani 24:16
because that’s direct pastor. So we always pass through the direct cost where we make our money is on the subscription. Obviously, there’s margin there, but we’re a software company. So it’s pretty high margin on this on the software side. And so I’m just I’m just doing our run rate here. But that’s literally where we were in 2014. We did 5 million in payments are first year so through our systems, we are processing 5 million in payments. And we just five years later we crossed a 5 billion and processing that’s that’s when last year 2019, New 5 billion and then whether your revenue how much is your revenue from that because you don’t get a percentage of it. We do not get a percentage of it. There are components to it. You know that we do earn some dollars on but it’s Still, it’s not just a vanity metric from a billion standpoint, we are one of the largest merchant acquires online and our technology is now being used through and we can get into that. But our, the company has evolved quite tremendously. So where are we we’re at that 5 million mark. From a processing standpoint, we were direct to customer and the way that our customers found us was online. And so that was also really novel. In our industry at that time, where everybody was still feed on the street, you were going directly to the banks to get your processing, you would open up a business account, that’s where it was your processor was attached to it. When was this? This is 1014. Not many

Andrew Warner 25:38
people are still going back to their bank.

Suneera Madhani 25:40
Still today. Literally we are we were one of the first pioneers online. From a top merchant acquirer standpoint, we are literally the top five merchant acquirer today in the US from a digital standpoint.

Andrew Warner 25:51
You know what, I wonder if I’m just so disconnected from the real world because I work online that I forget that people operate differently. You’re nodding. I’ll tell you why. I went to open up a new chase account, as I just wasn’t happy with Citibank, which I happen to be with for years, they say, you know, we can process your credit cards and see who’s doing this who’s gonna stick with Chase to process credit cards. It’s just looks like a dummy operation. They don’t they don’t even understand technology. And you’re telling me most people do that most businesses sign up with their bank.

Suneera Madhani 26:17
Yes. And so what’s what’s crazy is that at this time, so square and stripe are coming to market at this at this time as well. So there’s a couple of players emerging from a true technology standpoint, but truly, the banks really controlled most of the market share. So processors and banks and still today, so what is really interesting, the shift is happening. But there are hundreds of thousands of small businesses in the US and they are still there now coming online, but it wasn’t that case in 2014. So when we first came online, you know, for me, honestly, it wasn’t because I was even trying to be novel. This is like where this just happened because I couldn’t afford to hire people. salespeople.

Andrew Warner 27:01
Well, I want to get into your sales process in a moment, because I think the first sales are just as innovative and interesting or interesting to me as the latter are. But what is your revenue today? Like? What’s your commission?

Suneera Madhani 27:13
Yeah, I can’t share a ballpark. Give

Andrew Warner 27:15
me a sense of how big you are.

Suneera Madhani 27:18
Yeah, so we are 20 plus million

Andrew Warner 27:21
20 plus million comes to you. And we’re talking subscription fee of $99 a month or $199 a month, depending on where the businesses are plus a per transaction fee. If I’m if I’m right, it’s eight cents per transaction, if they’re under half a million dollars in sales, six cents per transaction if they’re over half a million in sales. So I have that right.

Suneera Madhani 27:38
Yeah. So it’s based on it just depends on how big your businesses but we don’t process so you have to be at least $100,000 in processing volume to come to fat merchant, we just don’t play for the micro merchants. Our solution just doesn’t add enough value for you. And so our like range of businesses is between that like half a million dollars in revenue to $20 million. revenue, that’s our sweet spot, ideal customer that we serve. And so, yeah, in the subscription tiers as, like it goes, you know, based on how much volume you processed so the 99 and the 199 is based on I believe it’s like less than 2,000,002 to 3 million in processing revenue. So if you process higher than the subscription goes up, but yeah, so we are roughly in the in the 20s. From a error standpoint, but we are growing. I mean, we have been on ynX fastest growing companies now for the last two years. Last year we were to 17 on Inc 5000. And so we are we just got I mean, US World Report this year, put fat merchant as the number one processor for neck and neck with square square being from micro for micro merchant and for anything over $100,000 it was fat merchant,

Andrew Warner 28:55
why’d you call a fat merchant? I feel like it’s more like lean merchant you know, like you’re cutting out so much why Did you come up with that name?

Suneera Madhani 29:01
We’re cutting out the fat. So that’s kind of where we’re at premise came from. But it was really awesome. It was a it was it was it was a it’s a fun story. So I started writing down this I could go back to the moment was everything that I wanted to be as a company, I’ve worked for several several processors. I’ve worked for several organizations, I was like this, these are all the things that we want to be. And the words I started writing these words on the whiteboard, and it was fast, came out affordable came out transaction technology, so it’s actually an acronym, but it was just oh, we should call ourselves fat merchant. We’re going to make their wallets fat, we’re going to you know, take out the fat and it just became this really fun marketing kind of play, I guess. And so we’re like, let’s just make that the LLC. Like, let’s just go book. You know, it was available on you know, GoDaddy and ended up buying the domain, thinking that I’m going to change it later. So that was the plan. It was not the plan to keep it fat merchant. And then when it just we never got around it and then when I started talking about fat merchant everyone’s like what? What is that? What? And it just kind of stopped and what’s really incredible is when I go speak at like major national conferences like money 2020 and I’m sitting with like all these payment executives like everybody loves fat merchant because it’s so unique in our space. And honestly, it’s our culture as well. So I think not only were we disruptive from what payment processing look like, fat merchant religious is our culture is also just so fun and energetic.

Andrew Warner 30:34
does feel like a like a looser name. Then some of the other merchant companies for some reason a lot of them have acronyms and why two T’s you own fat merchant with one t calm fat merchant calm. Why do you need the two T’s?

Suneera Madhani 30:47
Well, that sort of thing. Initially it was it was an acronym. It was fast, affordable transaction technology and we want that now. We just we never we never changed it. We never looked back and I it was it was unique in a sense it I didn’t want it to be just It wasn’t supposed to be just about like, literally the term fats. And so we named it fat merchant with two T’s FA TT merchant calm and this is what this is they’re gonna start company, the first

Andrew Warner 31:12
customers came from you in addition to winning competitions going out to to store owners. Am I right? You walking door to door?

Suneera Madhani 31:22
Oh yeah. So I used to I’ve been in sales practically my whole life. And when I talk about this, this is going to it’s going to age me I was literally in Field Sales. So I went Field Sales. I think there’s probably some industries that Field Sales still still exist. But when I was first launching the company, I needed to go get customers and we started to build a website. We started to put money online, but I literally also would show up Plaza Plaza and go talk to business owners about their pain points on what were their frustrations with processing. So I’d like show up and ask them like how I can help them kind of act as a consultant. And not only not for money, like literally to understand what their pain points were and how we can make it better. And then I would offer them free processing literally free processing for them to become a beta of fat merchant. And I would tell them, like put our solution Next, you don’t have to change your solution. So because why would anybody want to trust this brand new company, but I needed to get customers into the door to prove my MVP that this was going to scale. And so I would literally give away the solution for them to run transactions on our terminals. And that is that is how we probably got our first 100 customers was through those competition wins meeting people through networking, literally going door to door, signing up my like, uncle and dad and his friend and all like our neighbors. And that’s that was like the initial start of the company. And now we have, you know, 6000 customers. Nationwide, we’re onboarding roughly four to 500 net new businesses per month to the velocity of our Growth now is pretty, pretty massive. And not only from that we’re also growing through our partners. So something that changed for us in two years ago, I was really protective of and this is for any founder out there listening. From a software company standpoint, I was really protective of our API and what we built from a technology standpoint. So yes, fabrics was a subscription based processor. But that wasn’t our value. Our value add was transparency there, but it was really a great user experience across the board. It wasn’t just user experience on price. Something that we also identified was that the payment products that the customers were using are really shitty. And there was often companies doing things great things from a retail perspective, like square, there was awesome companies doing things from an API perspective, like stripe, but nobody was really doing anything for like a card not present environment like a virtual terminal. So where you could do invoicing, recurring billing, and kind of tying in all of the solutions that a business needs to accept payments. And even in 2020, a small business owner has to go to four different places to get their their merchant needs. So they have a mobile processor. They have an online shopping cart, they have a retail store. They have online invoicing, but nothing talks to each other. And so I can just get stripe

Andrew Warner 34:17
because stripe will only do credit card processing. They won’t do invoicing. They do do subscriptions though, but they won’t have the form to get somebody to sign up to a subscription. Right?

Suneera Madhani 34:27
Yes. And they’re they’re just they’re great at their one, B and you have to almost be a developer to understand stripe documentation right and to be able to implement it for the small business owner. That’s really difficult for

Andrew Warner 34:41
you just use whatever software they want whatever shopping cart they want. Then the shopping cart says hit this link you’ll go to stripe stripe will give you a code or will automatically take it and then put it into our software. That’s it you’re done.

Suneera Madhani 34:52
Yeah, so that’s only on the online e commerce side right so there’s that same customer may also need In a retail solution, but the retail solution is not talking to stripe solution, right? And then the invoicing solution is not talking to square solution. And so there’s what I’m trying to say is that there’s business owners now need to take payments in a multitude of ways. There hasn’t been a way for a business owner to consolidate all the which ways they take a transaction into a single platform. And that’s what our platform does it we let the customer choose. However, they want to pay whatever channel of beans a payment that you guys want to take, you can use those channels, we will pull in those transactional data into a single house. And so you can view all your analytics, your transactions. So for us, it was really about the user experience from not only from a transparency on a price perspective, but also from a from a customer product perspective, as well as from a customer experience perspective, meaning

Andrew Warner 35:51
if somebody’s selling necklaces in person at some live event, but also on their online store. They want to be able to see All the credit card information in one dashboard be able to give people refunds, regardless of where they came in from the same, had the same experience. And that’s what you want to do.

Suneera Madhani 36:09
Yes. Or you want me to solve it? Yeah.

Andrew Warner 36:11
Let me talk about my second sponsor. Then we’ll get back into my second sponsor is Russell Brunson. He is the founder of Click Funnels. Everyone knows him as the company that created landing pages. He’s got a podcast called Traffic Secrets where he breaks down the secrets that he has learned as somebody who’s grown his business over 100 million dollars in sales and also help businesses like mine, get more traffic and convert that traffic into customers. His podcast is all about different secrets, different techniques, different ways that real businesses, including his have gotten customers. What’s the best way that you’ve gotten customers today be? Let’s use that as a way of promoting his Traffic Secrets podcast.

Suneera Madhani 36:46
Yeah, so exactly that way so we went online and through digital acquisition of our customer. So it’s a full inbound digital marketing methodology. It takes it’s not just one One way to digital advertise. So we use Google advertising we use Pay Per Click we use. We use all kinds of landing pages, we have blogs, SEO optimization, I mean, the entire social. So the entire digital suite is how we use to then bring customers directly to our website, and then convert them through our funnels, essentially, through different workflows. And we have an inside sales team that we have, like, our hundred and 10 employees are all in Orlando, but everybody, it’s all digital commerce. So customers come directly to us online, and we convert them to our to become a customer

Andrew Warner 37:41
through a series of email drip campaigns, right?

Suneera Madhani 37:44
emails, like all types, all kinds of digital advertising,

Andrew Warner 37:48
before you actually get on a call with someone.

Suneera Madhani 37:51
And immediately I think you can like go on to our, you can probably do like go sign up right now and then within a couple of minutes, you should have a salesperson calling you They better be calling Yeah, no, we have an our conversion from our like site landed from an SQL to a customer is over 10%. So we have a pretty machine running inside sales funnel at least less than 17 days sales cycle as well. 10%

Andrew Warner 38:16
Yeah, well 12 other people who fill in a form now who just hit the page the way they did the second, they fill in a form percent of them by and part of it is that you get them on a call that fast.

Suneera Madhani 38:27
We get them on a call that fast we give them like it’s a credible value proposition as well. So the products good, we’re able to demo the platform, it’s like super quick to understand we see them a shit ton of money and consolidate all the tools that they’re using. It’s it’s a really quick sales cycle. And when we by the time that we get you to fill out that form, you’re pretty educated. So from a even from, like most of our customers are not new net new customers like net new businesses. So that’s why we play in that you have to be processing At least $100,000, I’ve talked about you’re not a new business, you’ve ordered at least in business for a year. And

Andrew Warner 39:05
I thought it’d be harder to convert someone who has a business because they have zero, their current price. There’s no system now they’re

Suneera Madhani 39:10
coming to us because they’re frustrated, they’re coming to us because they need multiple solutions. And it’s not talking to each other. I wish we wouldn’t be the first choice that they ended up doing. But they’re we’re not we’re not their first choice. We’re usually picking up all the crap that they like, they had a bad experience. They’re burnt by their last processor,

Andrew Warner 39:28
the pair changes. I know, in all my different tools, I guess, and, and reroute the payment to you.

Suneera Madhani 39:36
It’s I mean, we have a we have a team of integration specialists. And we usually get a customer fully up and running and I, you know, matter of St. It depends on how many solutions that you have. It can be as a matter of like, here’s your payment solution. Here’s 20 minutes and you’re up to a couple of days of like a full, you know, full integration to your full suite, I think,

Andrew Warner 39:57
is it paid ads and what else

Suneera Madhani 40:00
I’m just searching just online right

Andrew Warner 40:04
there. For you doing podcasts like mine,

Suneera Madhani 40:07
you know, it’s okay. Um, I just, I don’t usually pitch on podcast. So I’m not like usually talking about necessarily the details of fat merchant in the company. And usually when I’m on a podcast, it’s really around my entrepreneurial story, usually around how we’ve been able to be successful. So I’m usually on those kind of podcasts. And so for me thus far, I would say that it’s more of brand exposure than it is customer exposure, but let’s try it right. So your audience a code, and let me see how like how it’s gonna convert. So why don’t we do mixergy as the promo code, okay, and so I’ll get that set up. And so if any of you guys out there listening, when I signed up for fat merchant, get a savings analysis, kind of take a look at what our toolset looks like, let our team know and then we’ll do a code for mixergy and we can get you a discounted rate on on on processing solutions as well.

Andrew Warner 41:00
All right, I’ll close on. This was all part of clickfunnels. I’ll say, if anyone out there is listening to me, you’re obviously a podcast listener. If you’re looking to add a new podcast to your life, just try Traffic Secrets, a good podcast created by a guy who’s great storyteller who has serious tactics for getting traffic. And if you’re not looking for a new podcast, try it anyway. Because really, you’re already listening to me, you’re going to be open to a brand new way of thinking about your traffic. Look at his podcast number 15. It’s about how to do Facebook traffic. podcast 14 Instagram podcast number 16. He’s doing Google. He does even one on one interactions, how that can convert into customers. Go check out Traffic Secrets on your favorite podcast app.

Suneera Madhani 41:43
I love that name, too. It’s a great name Traffic Secrets.

Andrew Warner 41:45
What do you like about that? It’s like a secret.

Suneera Madhani 41:50
It’s secret. It’s like the club like I want to be on the inside. Like I want to know this secret. Don’t you want to know the secret? I want to know the secret.

Andrew Warner 41:56
That’s what he’s doing with it. He’s kind of like hitting that. part of your brain that says, Let me see what’s behind the closed door even Yeah, even despite yourself might want to go do it. It’s a secret. He’s all about marketing. So you can let’s talk actually about COVID. I asked you before we got started, did you grow? Did sales grow or? Or get take a hit around? COVID?

Suneera Madhani 42:21
Yeah. And I was I feel bad answering this question, because I bet he

Andrew Warner 42:25
does. But I think it’s important.

Suneera Madhani 42:27
Okay. Yes, we had the highest number of sales that they every month we beat last month’s goals. And that’s just part of the culture that we’re in a high growth environment. Our goals are bigger and bigger every single month. And we surpassed April was our biggest month that we’ve ever had. And Mei is about to be as well. And so.

Andrew Warner 42:49
So January was better than December. Yes. Oh, and you know what, here’s why I’m guessing, usually busy. I’m imagining businesses like yours. Have a better time. December then January because they get a cut of sales for you. It doesn’t matter. You’re just getting a subscription. Right

Suneera Madhani 43:05
now we’re a SaaS company. So we happen to do payments. So our like the way that we view like all of our metrics are SAS metrics. So we are from, like, a net new additive standpoint, it’s not a cumulative of like last month, of course, it’s going to be better than this month, because we’re adding last month, it’s a net new sales record and in terms of bookings,

Andrew Warner 43:25
is even growing every month,

Suneera Madhani 43:27
net new gross every single month, I’m talking about the highest net new bookings that we’ve ever had. Which is every like, every month, we surpass the month. So

Andrew Warner 43:36
why what what are you doing that’s allowing you to grow

Suneera Madhani 43:38
so much? Well, we have. So I think it’s really there’s a whole thing that we talked about this for another hour in terms of growth strategies, but one we’re just a high performing team. And I think you have to have the right leaders around in your organization to kind of create that culture of a high performance culture. One of our core values of the company is called get shut down. That’s a core value that we have. So we are definitely just naturally type a high performers and the company that we’re like, we’re just goal, you know, we’d like to crush our goals. So that’s part of it. But also we have an incredible product. And that is a necessity for businesses. And as we continue to grow, as more businesses are evolving, they need additional ways to accept payments like this is not going away. And when I started the business, when I started in payments, I would say in the 2010 2010 2011, it was like 60%, of 50 to 60% was credit card transactions and the rest was cash. We’re a completely cashless economy now. So every business needs to have it’s a necessity to be able to have processing but it’s really around this platform and how they’re, you know, they want analytics for their business. They want to grow their business. They want tools to be integrated into their business,

Andrew Warner 44:56
but they wanted that as much in January as they did in December. Why is it that you grew What is it? Is it? You know, why? Why do you think you’re growing more?

Suneera Madhani 45:05
Because we are, we’re high performing. I mean, we have like, I didn’t add any new sales people to me in between them. Right? So we’ve had the same team, we continue to optimize, like, just like any great SAS company does, we continue to optimize we’re spending dollars in the right places. And so we have a pretty large marketing budget that we, you know, ensure that converts correctly. And so it’s a it’s a whole suite of its optimization. It’s right if the right team is having the right comp plan, it’s having the right leaders to implement having a team that’s motivated as fuck to do it. Right. Like those are like, that’s kind of I don’t know if we’re fucking successful because we we don’t we don’t we don’t let anything stop us. Right. And even during COVID, I would say, not just from a sales standpoint, even from an innovation standpoint, the amount of products that we are like that how we came out of COVID from really thinking about the future of commerce, we’re about To launch one of like the biggest products that we’ve ever launched coming in the next few weeks, and it’s really around the entire contact list evolution that’s about to take place in payments. Customers where we love to we’re going to pay when the easiest, simplest way possible and business needs to be able to support that. And right now they really just don’t have the the, the ease of tools to be able to do so. What

Andrew Warner 46:22
what what do you mean by contactless?

Suneera Madhani 46:23
Yeah, so we want to, we don’t want to have to see anybody face to face. We want to take payments online, we want to take payments via text, right? Like texting. Not a lot of companies are doing text payments right now. And I think that’s the absolute future. If you look at any Gen Z right now, they’re never not on their phone and look at Tick Tock. It’s 15 seconds attention span. That’s the future of where you’re

Andrew Warner 46:45
going to go via text.

Suneera Madhani 46:48
No, what I’m trying to say is texts payment is going to be a part of what’s happening to like it’s the future. So we’re launching a full contact list suite when I was talking about Tick Tock was just attention span of like a Gen Z if you were there, it has to be quick. It’s without humans. It’s easy payments are embedded. Right? And so that’s where I see the future of commerce going. And we talked about something like

Andrew Warner 47:15
paypal.me service where I go to paypal.me slash my name and people, I could send it to people by text, and then they could use that to send me money. Is that what you’re talking about?

Suneera Madhani 47:26
No, no, what I’m talking about is, let’s say your local Dry Cleaners right now and COVID, right? Like you still need your services, right? So you can you know, go to your dry cleaners and drop off your product outside and then they can text you that your dry cleaning is done. And then you can they can just send you the payment link and you could pay right off your phone and you could text them I’m on my way, right and then they can have your order pulled out right there ready. Okay, even for a small business to be able to accept payments so quickly in today’s environment. There’s not tools out there there’s a lot of disjointed tools

Andrew Warner 48:03
right? Where we put something together you’re saying put it all together and are you gonna do together? Are you gonna do this using imessages payment and like almost chatbot process or are you doing it by

Suneera Madhani 48:15
all my secrets? I can’t give you all my secrets but it’s coming and look out for it on fat merchant. And we’ll share our contact list sweet for to take all these businesses virtual got into

Andrew Warner 48:26
using contact less not contact list. It’s less contact, no

Suneera Madhani 48:31
physically no connection physically, even when you go out like we’ve had, you’ve had Apple, you know, all these contactless payments, like when you go to the grocery store you could have with your Apple Watch, you can you don’t have to touch the physical devices anymore. Yes, the percentage of contact usage today, it was like less than 3% like of all card transactions or contact list. Now that percentage is to be on the flip side where we’re not wanting to actually touch anything anymore. And I’m not just talking about from like an immediate post cobit. I’m looking at this from a what’s next standpoint, and I’m looking towards the Gen Z right now to see how they’re going to be wanting to accept payments in the future and it’s all going to be integrated. It’s going to be seamless off their mobile devices.

Andrew Warner 49:17
Got it? I see. I see what you’re saying. If I understand you right, though, merchants have seen a reduction in their in their payments since COVID. From what you see, right. I will just close it out with this. merchants have seen the reduction. You haven’t seen a reduction because you’re you’re not taking a percentage of their sales. You’re still keeping your current customers and you’re adding some that’s what you’re seeing. Right?

Suneera Madhani 49:41
Absolutely. There was a decline of actually it was 70% decline in transactional volume across our industry and shut down less

Andrew Warner 49:50
sales being done by your customers.

Suneera Madhani 49:53
Yes, overall trends app and the industry. Overall payment industry in the United States is your business to type over All business was down 40% in transactional volume declined when the industry was down. 70%

Unknown Speaker 50:06
Okay,

Suneera Madhani 50:07
a lot of our customers are ecommerce so we didn’t see that hit that much. But point being is that there’s going to be a new way when we you know, things are moving back up even COVID or no COVID be innovative, right COVID or no COVID continue to crush your goals. You know, it’s it’s tough, but you know, hard work is the answer.

Andrew Warner 50:29
All right, the website for anyone who wants to go check this out, what are they going to get if they go to fat merchant comm slash mixergy

Suneera Madhani 50:33
I have to go back and figure out what you’re gonna get, you’re gonna get some ugly, I’ll put something together because we came up with almost by least a free month. So we’ll make sure that we get at least a free month for your customers so that you guys can take a look and see what we can do for you.

Andrew Warner 50:48
All right, I’m not getting a cut of it. I’m just curious to see how it works. And people yes, if it works well for you. Let me know and if it doesn’t work for you, I want to hear about that too. But I’m really fascinated by this company and I looked it up good ratings. It’s fat merchant. dot com slash mixergy. And I want to thank my two sponsors. First, if you’re hosting website, go to hostgator.com slash mixergy. And second now that this podcast podcast is over, go to podcast app and sign up for Traffic Secrets podcast. You’ll love it. Thanks, everyone.

Transcribed by https://otter.ai

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