Sitting Down with WePay: An in-depth phone interview with Tyler Gaffney

Recently, team members had the opportunity to interview WePay's Director of Sales & Business Development, (Tyler Gaffney). Check out the interview below to get an inside look at WePay.

Q:     What has been the biggest lesson you've learned so far in growing WePay as a start-up?

A:    “There’s a lesson every day growing a company at this stage.  The hires that we have and the people we bring in are the biggest lessons we learn, for good and for bad.  From the perspective the most we’ve learned – we’ve learned a lot about recruiting, b/c when you start, you pretty much have people in a room and it’s great, going well, but then once you begin to grow you have to find people who are willing to work as hard. We needed to grow really fast, and the trouble is, we had to hire for roles that Bill Rich & I never really had to hire for… got help from investors. Learned that we need to find people who are just as passionate, but don’t need the Google or Apple paycheck and can be motivated by passion and a little equity – you know, to get them to drink the Kool-Aid. 

We brought some on too fast, without a developed process.  We learned that once things are not working out, it’s best to cut that person as quickly as possible and move on.  Now we know that with 30ish people you aren’t getting in without that passion and fire to build bigger than PayPal.  First we put up a phone screen that all the reps take part in; we basically divide all the people up.  After that they come and interview with 3 people, after that they come back and do a demo of the product: do they understand the product? Can they explain it well? Do they stumble? What happens when they stumble? Basically, how do they handle the pressure?  Then everyone needs to meet with either Bill or Rich, with such a small group, everyone needs their approval and to be on the same page. 

Since doing that all those issues have gone down, but most people say I know recruiting is tough, but don’t really think carefully about, ‘how do I reduce the number of employees who aren’t going to be a good fit’ before starting.  We now know that, ‘I like this guy’ is not good enough, we need to feel that they add so much value that we just can’t go on without them.

From a technology standpoint of lessons learned, (my perspective is different because Rich is in charge of product), but simplicity of the product is critical.  Complicating the product complicates things on multiple levels and we now know that the key is to keep focus on what we’re trying to do.

A lot of time we get criticized because we’re getting into different things, some people see that as a lack of focus, but we see it opposite.  We are focusing on the things that we are trying to do to make day-to-day transactions easy for our customers.  For our customers, ticketing and selling goods are a part of their day-to-day processes that need to be simple.

I’ll give you an example.  Oct 2010: MLS came and wanted us to build ‘Going as a Group’ – it was a confusing and convoluted group purchasing, paying MLS, collecting differently, etc.  Frankly, we were starry eyed and so we engaged the whole engineering team 24/7 to try and get it up and running, but after a few weeks we started seeing that the problem was incredibly complex, we realized that maybe we didn’t look into all the details before accepting, and that maybe this isn’t right.  One of the founders had the galls to say it wasn’t right because, as exciting as it was, we’re going to lose company resources through it – we’d have built a product that we weren’t happy with.  We decided not to go with it, even though MLS could have been happy with it. And then they were mad, but now they’re using our core product….it wasn’t easy to say no, because you know when you’ve invested all this time you think, “Maybe another week and we’ll get it.”  So he was brave to pull the plug.  And in the end it was great for our product focus because now our product development is more strategic, now we sit down and look at products and ask ourselves which ones are going to make the biggest impact on 90% of our customers – those are the ones we move on.

And since then we’ve learned that there are always going to be customers on all sides asking you to do stuff, ‘Can you make this happen? Could you pull this off? Can I have it like this?’ But we know that we have to keep focus on the product and what it can and cannot do.”

Q:    As you’ve been growing, and facing these decision making processes, have you run into any IT related challenge?  If so, what are they and how have you resolved them?

A:    “Weekly the [top dogs essentially] sit down and talk about each area of the company, so these are things that we’ve definitely talked about.  We’re in a really cool time to start a company because two people with a laptop and some rack space (cloud computing capabilities to house site) can get to work.  We don’t have the scaling issues that people had to have in even the late 1990’s – now, the issues are more around product and user experience.  For example, we sometimes have load issues, so we have to anticipate that and predict when there’s going to be a huge expected volume from the site.  Our VP of Engineering came from PayPal, so he has experience with a lot of our engineering options.  But if you compare what we’ve had to do to scale, its nothing compared to what it would have been without this technology.  This is why you’re seeing so many start-ups going on today – it’s absolutely cost-effective to use the cloud starting up b/c you don’t have to worry if it breaks, not you’re problem, you just pay the monthly fee, right?”

Q:    Have you run into a problem with customer’s perception of their money security? What security risks are there, and how have you addressed these perceptions?

A:    “Every day we run into people having difficulty trusting an online source with their money.  Most people you know, have read a few articles about us, understand the money, but it’s like, “I know you’ve researched us, but why don’t you give me your money?” Those are two really different things.  People are mainly concerned with two types of security – first, ‘Is my money safe?’ and second, ‘Is my information safe?’  So we explain to customers how the account structures work: “It’s on WePay.com that you enter your information, but an actual account is held in our partner bank. BankCorp has a literal account in each person’s name, and its FDIC secured.  People tend to trust FDIC secured.  And for their information, it’s also better that we don’t house are own credit card information.  We explain to them how their credit card numbers are sent to secure data center, which gives us a token back (this is bank level security), and that token goes to the bank.  People tend to trust bank-level security, especially when we explain that banks would have to be hacked to get at their numbers.  But beyond that we do a lot more audits than probably most banks do to make sure, because we know the brand would be ruined if we had a security breach.

And we know that people don’t want to use automated systems when they’re trying to figure out where their money is.  So we have people there. Is that a cost effective thing to do? Probably not.  But it’s the right thing to do because it’s what’s right for our customers.

Every call is picked up by someone in Palo Alto, so each person speaks with a real customer service rep.  We respond to all emails within 2 hours. We do this because we recognize that customer support, and customer outreach are extremely important and ultimately may make the difference in our ability to compete with PayPal.

I was at GE before this, and when I was there we made a decision that we’d outsource some of our customer service for medical equipment like CT scanners.  So to find a phone number customers had to click a link for your location and then call someone with the ‘correct accent.’ Basically it frustrated the customer so much that they would refuse to buy materials from GE again.  The trend used to be that every company was all about outsourcing and automating helplines – ‘Never talk to the customer. We need to make the product so good the customer doesn’t need to ask us anything.’”

Us: Boy, it seems like you've thought of everything.

“I mean, we try, but there’s always something somewhere that there’s something you haven’t thought about – even just space, what do we do when we add 40 sales people – seems like a non-issue but actually is a real problem and you have to think about that.”

Q:    So what would you say are important take-away’s for MBA students regarding WePay?

A:    Create a product that is safe secure and simple.  Just because it’s payments doesn’t mean it needs to be difficult.  We do a lot of work on the back end to make sure it’s simple for the customer.  We need to provide engines to provide payments because we’re going after the un-savvy customers.  We shouldn’t have to say, we’re the payments platform but now you have to go there to find out the donations stuff.  Instead we’re the payments platform with these tools on top of it.  We get them 90% of the way there – ‘oh so I don’t need to worry about the payments stuff?’ Here’s an example of the opposite – you know EventBrite? It does events really well, but when you go to pay you have to pay with PayPal or WePay etc.

Customer service is critical to the company’s success.  We take it seriously.  We have a rigorous process on who we hire as customer service reps. We only take people who excelled at the apple store for example, people who are about 2 years out of school who love being customer advocates, and have passion for the company.  They serve as our first line of defense, so they have to be that good.

When you’re scaling…. It’s great to start a company, raise money, but the funnel’s getting smaller for those that get to scale.  We’re lucky enough to take a 30 person company and scale it to a larger company but now there’s like 10 different things that could go wrong.  We have to think about all of our processes- can they scale?, hiring, ensure that each employee is happy, that they want to be there, and that everybody jumps up and down when things go wrong.  Our 2012 plans are finished, and we’ve spent lots of time thinking about scaling and what does that mean? We’re going to try to keep operations as simple as possible.  Sales people own the entire funnel, get people onto demo, answer their questions, and seal the deal – they own it all.  With that, how do we increase our leach-in? It’s not an easy problem to solve when your markets are segmented – we can’t just do an industry search because we’re really looking for that little non-profit with a golf tournament, or the fraternity treasurer.

With a start-up, there are tons of challenges.  At the beginning when you aren’t used to it you face challenges every day, but you just figure out a way to deal with them.  You have to have a sense of urgency, but there’s no point in freaking out because you just have to know you’ll figure it out – because of all the times you have before.

Q:    Where would you say the future of WePay is headed?  What are you focusing on in term of improving your product?

A:    “I have to Focus on 4 things right now: A) Sales, in particular we’re changing our CRM to sales force.  B) Recruiting. C) Inside sales program – make sure people are happy and we hit our goals, and D) Traction on our API – how do you add viral marketing into your product?”

We see API as a huge source of growth – estimates in the $100-millions in revenue.

“We launched our API recently but now can run payments on your own site (took it from low revenue to generate significant revenue).  When you release an API, you just want to build a product, launch it, and it’s going to be fine.  But when we developed our first last spring, we got it wrong. What we thought was important was different than what the consumer showed was important. There really wasn’t a market for it.

Our second round we went after the idea of 3rd party payment aggregation (accepting payments on behalf of multiple entities to one merchant account and then divvying it up to multiple payees).

When someone used the iframe, WePay dynamically creates on-the-fly a WePay account.  It’s all about pursuing a sale to end, believing in the product.  Our first company for API was some small little company in Nashville TE. The first step to get to the next level, as a sales person and as a member of WePay is to try to gain traction on things that haven’t existed before – it’s a challenge and its fun.

An example of a current user is GoFundMe.  They basically raise donations for sports league teams, non-profit organizations, etc.  Individuals come to the site, a WePay account is automatically created (with consent).  That person can start accepting entries immediately, which is unheard of with other services.  The customer’s happy because our service reduces barrier to entry, and drop-off from donations.

Think of it from the perspective of the payer, they want to make donation.  When places use PayPal, the payer is redirected to PayPal site, where they have to create an account, and submit their payment information.  We offer companies a customizable iframe onto their site so that it really fits.  I estimate that the opportunities there are 100s of millions of dollars.  We take on all the risk of PTI compliance (how to handle credit card numbers) so they no longer have to worry about it.  Today, many people are using non-compliant systems.  [Why wouldn’t they switch??]”