The Exchanges

Q debt, and I don't even know what the numbers are, it's insane, and, and people have multiple credit cards. On our show, we interview founders who max out their credit cards to start their businesses, right? But the idea behind this is to prevent that, is to essentially, I guess, to discourage people from just putting things on credit cards when they don't have the cash to pay for it.

A There is debt, and there is unnecessary debt. And we are highly focused on the debt that is unnecessary, right? Things that you might not need right away. And why are you going to get into debt for it? Like, I'll give you an example. A lot of our users are first-time moms, and when you're a first-time mom, and you're going to need a stroller, you don't need it for another 10 months, nine months. Why are you going to rack on your debt to go for that, right? When you need a new computer, or outdoor furniture, or even a trip, we have a lot of customers that have started saving for a trip. Why don't you start putting a little bit of money aside every day? So then by the time that you get there, you can achieve your goal. Without having to go into that. I think, you know, as a society, the biggest thing is that people do not understand the implications that unnecessary debt has in the long term. But that has changed tremendously after, you know, after 2008, and now we're seeing a lot of that too. Every, every financial downturn brings new behavior.

AI assessment note: “There is debt, and there is unnecessary debt. And we are highly focused on”

Q service industry, even retail apparel. It's been really tough, and obviously for small businesses. How, how have you guys been doing this year? Um, I know you've got a team of about 20 people, so presumably you're Working in a distributed way. I mean, what are you seeing? What are, I mean, are presumably people can save more money because they're not traveling. They're not going to restaurants, for example.

A Yes. So there are a couple of things there, right? 20 20 has definitely been a very interesting year. I think as entrepreneurs, if every year we, we grow at a five X because of everything that we learned this year, it's been like a 20 X exponential growth. It's not only running your business, but setting new structures for your team to work remotely too, right? Um, for us, because it's safe to buy, Actually, everything that has happened with COVID has accelerated this behavior of people to look for alternatives, right? If you look into data, people are saving now more than ever, and of course, they're saving more because they're not going out, but the underlying there, it's the behavior over time, right? It happened after 2008. You could see how millennials Had less credit cards than the previous generation, because they saw what their parents went through, right? Now with everything that's happening with COVID, we're seeing that people are realizing that living paycheck to paycheck is not the way to go. But at the same time, it's the era of Instagrams and TikToks, and you know, there is a lifestyle that you want to achieve. So finding that balance, it's something that is playing very nicely in our advance because of the kind of product that we're putting in the market. So we've actually seen a tremendous amount of growth this year, month over month. As far as dollars transacte…

AI assessment note: “we've actually seen a tremendous amount of growth this year, month over month.”

Q Here's another question from Sebastian. Sebastian asks, what do you say to people who, who ask, you know, why wouldn't I just open up a savings account instead of using real? Like he asks, what does real offer that makes it a more viable offering?

A Yeah. So look, savings accounts, I've been there for ages and ages, right? You can go to any banking institution and just create a savings account and put a picture of whatever you want. The reality is that the younger generation doesn't only have friction with certain financial institutions over time, but it's looking for ways to sort of optimize their, their experiences, right? When you, if you put money on a savings account, you have to track it. You have to track the product that you're saving for, right? You have to make sure that there is enough money on your account every time you make the transfer. If you come to us, We facilitate all that for you, right? If you come to us, you tell us what you want, and we have a team that looks for sales for you. It's very easy for you to share these with your friends. It's very easy for you, Sebastian, if you make an extra 50 bucks this weekend to put it towards your goal, right? And there is also the aspect of the constant transparency on this is what you have. This is where you're heading. If you don't have enough money in your bank, we will not make a transaction. So there is a lot of advantages of using us as a service because it's not only that we're helping you save, we're taking you through a journey to make sure you achieve your goal.

AI assessment note: “If you come to us, We facilitate all that for you, right?”

Q You mentioned how you responded to consumer demand by creating new verticals for new categories of products, um, because obviously people have been saving more this year. What has been the financial impact? Of the pandemic on your business? Has it, have you seen a drop off? Have you seen an increase in revenue? What, what, what have you seen so far?

A So look, we saw a big increase on dollars transacted, and the reason why that's very interesting to us is because by expanding to our verticals, we started also getting more of the share of wallet from the customers that we also already had. So not only attracting new customer base, but also telling our customers, hey, you know, now you can start saving for your Christmas budget with us, not only You know, the, the TV or not only the computer. So we started seeing more of a three 60 into the life of our customer. As far as purchases, what was very interesting for us in March, which was something that made us sort of rethink the way that we see the business in certain ways is that when COVID happened, we saw people that started, they kept saving, but they didn't want to place the orders right away. And that was fascinating to us because we saw The savings transacted kept the same, and then on the contrary, they increased tremendously. Like November was 24% higher than the previous month, right? So it's increasing at a very rapid pace. However, the sales, people are like, you know what? Actually, instead of placing that order of the shoes, can I transfer these to a computer? It's going to take me a little bit longer to get there, but I want to save for those things. Can I transfer these to furniture? Furniture and Electronics was something that increased tremendously on the platf…

AI assessment note: “we saw a big increase on dollars transacted”

Q That was, was getting that initial funding, was that really hard?

A Yes. Uh, you know, I come from a family of entrepreneurs, so these mentality of you adapt, and you learn, and you get feedback, and you figure out a way to play on that feedback to make things happen, have been really influential on the way that I've evolved the company and that I have gone about. Every fundraising round. But I do remember, right, when at the beginning it was like, oh my goodness, if we get 10,000 dollars, this is all that we can do. And now it's just like 10,000 dollars. No, we need to keep growing, right? It was actually the first money that we got came from Outside of our own money, of course, right, of savings, freelancing, for one case, and just putting our own money and sweat into the business. It came from an accelerator, and we went through different accelerators, and there was one, which is Mocker, that I really, really liked because of the way that they structure their investments, and I remember going to that meeting with one of the managing partners and sitting down, and I'm like, hey, We're talking with all of these others, Accelerator, and this is why I like this one, and if you're gonna make a decision, we need to work into this pretty fast, because we have all these other conversations, but getting to that level of confidence took time, right, but it was pretty much on the face, and they believed in us, and they were our first check, and it just…

AI assessment note: “Yes. Uh, you know, I come from a family of entrepreneurs”

Q person who's been on How I Built This has described, I'm sure you got some pushback. I'm sure people are saying, well, why would somebody do that and not just go to a, an interest bank account? Or why would somebody, you know, do that and not do layaway? Or why wouldn't somebody just get a low interest credit card, right? I mean, what kind of pushback did you get?

A You know, the title of this show has the word resilience, and I think every single founder that you've interviewed, uh, fundraising, it's always a full-on story on itself, right? Because you get no more times than you get yes, but you only need a handful of yes in order to change the trajectory of your story. And, you know, when, especially when it's a product that it's not relatable necessarily to investors, right? Because they don't need to set money aside for a pair of AirPods. Because they don't need to set money aside for the new microphone or, or the new computer. So data was really important in this journey that has been fundraising, right? Proving that, hey, there is a need in the market, right? Proving that the customer that we're after is a customer that can spend and can spend highly. So we got a lot of pushback as far as questions of understanding consumer behavior. And that's, Actually, what I'm very passionate about. It was very fun, and it keeps being very fun to evolve the story over time with the learning that we're having, not only from the hypothesis that we had originally, but for our current customers.

AI assessment note: “we got a lot of pushback as far as questions of understanding consumer behavior.”