The Exchanges

Q But you know, I'll ask you something maybe that's actually maybe more interesting is because from a timing perspective, timing is so important. What drove that? Like what made earned wage access so important to all the apparel companies more or less at the same time, you know, a couple of years ago?

A Yeah. Yeah. It's, it's, it's a good question. Um, and one that I've, I've, Tried to think through and should have a better answer for, but I think in part, um, you know, a lot of the, a lot of the payroll industry in the US is, is, uh, old legacy technology that is owner operated. Uh, they've been in business for 2030 years, and they've built a beautiful, you know, lifestyle business over, over the decades. And so that, that, that's important to point to, right? Like in the US, 50% of payroll is paid by the big guys, ADP, Paychecks, Paycom, these, these big players, right? 50% though is, is effectively mom and pop independently owned payroll companies. In Canada is much different. We don't need to get into that, but you know, it's like ADP and Ceridian are, are the 80% and then 20% is, is everything else. But what that means is for all those mom and pop, like they're getting to this point in their life cycle or in their business and personal lives where they're like, no, I want to retire. And so you've had a huge influx of private equity come into the payroll space and start to consolidate all of these payroll providers. Consolidation occurs, private equity occurs, and, and, and tech, you know, goes up. Uh, so basically they've been modernizing their systems. Um, they're, they're, they're more, uh, like you, like you, you said, we do give a pay, a revenue share to the payroll c…

AI assessment note: “huge influx of private equity come into the payroll space and start to consolidate”

Q And what did you pitch him then? Like, what was your vision? Was it already, you know, earned wage access through payroll companies, like all that was fleshed out.

A It was effectively. Yeah. So it was. I, I'd, I'd create a relationship with a payroll company already. Um, I basically had them at a point where they said, yeah, if, if you build this, like we're in. And so at the time it was, um, it was lend money, uh, at a much, at a higher rate, right? Um, like now, now we charge anywhere from zero dollars to five dollars. At the time, a payday loan was 25 dollars. And so the thought was, well, if we can be like 12 bucks, that's like, Half the cost. That's pretty awesome. Um, and we can do it through this payroll company and all is great. And so that was like kind of the, the initial idea. Right. And then over time it sort of shifted into, well, actually like this payroll data, we should be getting like their actual hours worked and you know what, like that's going to allow us to do it for even cheaper. And then we don't need to actually extend credit. We can do it simply just as like a flow through of funds. And that was sort of like the, the, the continual progression of, of the idea. But, uh, yeah, so, so, so Darcy and I hit it off, um, and we were kind of, you know, I'll say off to the races. Uh, in reality, it was walking around drunk in the dark for, like, three years trying to, trying to figure out, um, what we were doing.

AI assessment note: “It was effectively. Yeah. So it was. I, I'd, I'd create a relationship”

Q This is what? Morning to night. Like, literally, like, nine to nine. Like, this is the reality of it.

A Oh, like, like, yeah, literally, yeah. Um, or, or more, right? Um, because you're just obsessed with, like, wanting to get this thing off the ground. As the years have gone by, though, like, transparently, like, it is, it is, uh, difficult to outwork people. Like, like, there are people that work a lot I don't want to say harder, but know how to work better, right? And so that, that's been a really big shift for me as an executive in a, in a, in a, in a organization now is learning that, like, I can't just put, I can't just like outwork in order to maneuver something. I need to actually figure out how to work differently in order to do, do something. But in the early days, like, yeah, man, you just gotta, like, you just gotta figure out how the hell to do it. You gotta go hard.

AI assessment note: “Oh, like, like, yeah, literally, yeah. Um, or, or more, right?”

Q What were you looking to lend by, like, quantums? Like, you wanted to give out, what, like, 10,000 at a time, a thousand at a time? Like, what are we talking about? Yeah.

A You know, so, so this is interesting and this ties into, I think like finding product market fit in general, like a little bit of it is I, I didn't know. Um, like, like the only proxy I had was like a, a mortgage, which is obviously massive. And so when I went onto Craigslist, I think in part I was like, okay, well maybe more people want mortgages, but the other part of me was like, well, Hey, if I'm lending to someone on Craigslist, I probably want to Decrease my risk threshold quite a bit. And again, I think in finding product market fit, like there's a bit of intuition. There's a bit of like throwing stuff at the wall. Uh, but then there's also a lot of the market telling you what they want. And so what I found on Craigslist was there's a ton of people that were looking for kind of a thousand dollars, 2000 dollars, maybe stretching up to like 5000 dollars. It was enough where they couldn't get it from a, a You know, regular financial institution. Uh, they'd already extended in other areas. Um, and so they were on Craigslist.

AI assessment note: “looking for kind of a thousand dollars, 2000 dollars, maybe stretching up to like 5000”

Q Like when you think back to that, like what were some of the most like meaningful ones that you did?

A Yeah, I think, um, for one, it was, it was our product is so easy for employers. It's literally a set it and forget it. They, they, they activate ZayZoon, they let their employees know, and then it's completely hands off because Of the relationship that we have with the payroll company and then the subsequent employee. Um, and for the longest time, we thought that that was a really great thing because, oh, it's hands off for the employer. They don't need to do anything. How great is that? In reality though, like, like that employer is, is, is such a great channel to that employee. And the more attention that you can grab from them, the more that they're willing to then talk about Zayzun, bring Zayzun up, include us in their onboarding, not forget about us in their benefits package. Um, and so for us, it was like site visits, go and visit employers like crazy. Um, we, we have a full team now that is like on the road, 24, seven visiting employers. It is, it is taking that same site visit and packaging that up in a digital format. So when an employer is onboarded to Zazen, they get a full download of materials. It's easy for them to pick and choose and select and have things automatically printed and sent to them. Um, and so we're, we're, we're making it still seamless for them, but we're, we're, Showing them, um, added value through some of these workplace materials that they can…

AI assessment note: “for us, it was like site visits, go and visit employers like crazy.”

Q obviously building, you went the tech route ultimately. I'm just thinking out loud, like if you're doing loans, like you would think the obvious thing would be, okay, how do I raise a fund to do bigger loans? Or how do I start like something on the payday side? Like that's where I would think your mind would go. How do you end up more like on the tech side?

A Yeah, it's a good question. Um, you know, a lot of this stuff is just, Uh, like looking back, it's just a series of, of choices or decisions that at the time didn't feel like anything. Uh, uh, they're just the throw away decisions. Right. But, but over time they compound and eventually, um, they turn into what is now, you know, Zayzun. But I think, I think like, I, I, I definitely did go down that path. Um, and then at the time it was like 2000 and, uh, you know, call it 2011, 2012. Like tech is starting to become cool. Right. Snapchat had just launched. Instagram had just done their thing. Like, like it had started to be a thing. And so the, the idea of, well, how do I take what I'm doing and make it infinitely scalable was really interesting to me and payday loans. Like the other thing is, is I got obsessed with payday loans and payday loans are really expensive because of three reasons. Um, one brick and mortar. So, so, uh, just, just being storefront. To old school administrative practices, they have just like terrible ways of collecting data, terrible ways of processing that data. And then third, and it's the biggest one, like 15 cents of every dollar they, that they give out never actually comes back to them. And so that's why a payday loan is so expensive.

AI assessment note: “the idea of, well, how do I take what I'm doing and make it infinitely scalable”