20VC Why We Are Still In The Very Early Days For Fintech, Why Your Company Has To Have An Opinionated Culture & Why The CEO Should Not Be The Sole Point Of Contact With The Board with Bill Clerico, Founder & CEO @ WePay

In the final episode of "20 minutes VC," host Harry Stebbings interviews Bill Clerico, co-founder and CEO of Wepay, discussing the company's evolution from a platform for collecting money among friends to a comprehensive payment solution for platforms, raising $75 million from notable investors. Clerico shares insights on the importance of building strong relationships with investors, especially during pivotal moments like strategic pivots that can see a startup lose significant revenue overnight. He emphasizes the value of an opinionated company culture, guiding behavior and decisions when leadership isn't present, and the role of culture in aligning a company's direction. Additionally, Clerico highlights the early days of fundraising challenges, the critical role of a CFO in a scaling business, and the potential for fintech to disrupt traditional banking in the coming years.

• The episode marks the third and final installment of the 20 Minutes VC series.
• Harry Stebings is the host of the podcast and can be found on Snapchat.
• The episode aims to provide a platform for prominent founders to share their experiences.

We are back for the third and final episode of the 20 minutes VC.

This quote introduces the final episode of the series, indicating its ongoing nature and episodic format.

This week with your host Harry Stebings, found on Snapchat at H Stebbings with two b's.

The quote provides information about the host, Harry Stebings, and where listeners can find him on social media, specifically Snapchat.

• Bill Clerico is introduced as the co-founder and CEO of Wepay.
• Wepay is highlighted as a comprehensive payment solution for platforms.
• The company has raised significant VC funding from notable investors like Max Levchin and Dave McClure.
• Bill is also a part-time partner at Y Combinator, an angel investor, and has a background in investment banking.

So joining us today, we have Bill Clerico.

This quote introduces Bill Clerico as the guest of the episode, setting the stage for the conversation.

At Wepay, the most complete payment solution for platforms. To date, they've raised close to $75 million in VC funding from some of the best in the business.

The quote emphasizes Wepay's position in the market and its successful fundraising efforts, highlighting the company's credibility and the caliber of its investors.

• Thanks are given to Kevin Chow for introducing Bill Clerico to the show.
• The importance of networking and connections in the industry is underscored.

And I do also want to give a big thank you to previous guest Kevin Chow for the intro to Bill today, without which this episode would not have been possible.

This quote acknowledges the role of Kevin Chow in facilitating Bill Clerico's appearance on the podcast, illustrating the value of industry connections.

• Harry Stebings discusses the impact of the Eight smart mattress on his productivity and sleep quality.
• Full Contact is promoted as a solution for contact management, which has improved Harry's engagement with his contacts.

Eight is a sleep innovation company with their latest product, the eight smart mattress, being a bed that literally tells you how well you slept last night.

This quote describes the functionality of the Eight smart mattress, tying it to the theme of productivity and health.

Full contact really is the best all in one solution for contact management. And it truly has changed the way I not only manage my contacts, but engage with my contacts.

The quote endorses Full Contact as an effective tool for managing and engaging with personal contacts, showcasing the product's benefits.

• Bill Clerico shares his early interest in technology and programming.
• He discusses his education in Boston and how he met his co-founder and early advisors.
• The initial idea for Wepay was to simplify the process of collecting money from friends.
• Over time, Wepay evolved into a fintech infrastructure provider for marketplaces and small business software.

I grew up on the east coast of the United States in New Jersey. From a very young age, was into technology. Started a program when I was seven or eight years old.

This quote provides insight into Bill Clerico's early passion for technology, which eventually led to his career in the tech industry.

So we founded Wepay on the premise that we could make it easier to collect money from friends.

The quote explains the original concept behind Wepay, highlighting the problem it aimed to solve in its early days.

• Bill Clerico reflects on the challenges of raising capital during the 2008 recession.
• He shares his initial misconception about the fundraising process and the lessons learned from being rejected by VCs in Boston.
• The move to the West Coast and acceptance into Y Combinator were turning points in Wepay's fundraising success.

It was the worst recession since the Great Depression, if you listen to the headlines.

This quote sets the context for the difficult economic environment in which Wepay was trying to raise funds.

I think I pitched 40 evcs in Boston and didn't raise a dime.

Bill Clerico's quote illustrates the initial struggle and failure to secure VC funding, emphasizing the challenges faced by startups.

• Bill Clerico emphasizes the significance of having quality relationships with investors.
• He challenges the notion of the commoditization of capital, asserting the value of strong investor relationships in the longevity and success of a business.

Yeah, I sort of disagree with the idea of the commodization of capital.

This quote expresses Bill Clerico's perspective on the unique value of investor relationships beyond the monetary aspect of venture capital.## Investor Relationships

• The value of investor relationships becomes evident during challenging times.
• Building trust with investors is crucial for drawing on their support when needed.
• Treating investors as mere capital sources can backfire during tough times.
• Strong relationships can accelerate progress in good times and provide stability in rough times.

"I think where investors can add value is when things are not going so great, where there needs to be a change in strategy, where things are going sideways for a little bit, where you really need their support, and that's where the relationship really starts to matter."

This quote emphasizes the importance of investor relationships, especially when a company faces difficulties and requires strategic changes or support.

• Building trust with investors involves demonstrating results and being honest about setbacks.
• Investors value transparency and honesty when things don't go according to plan.
• Long-term relationships with investors are based on mutual trust and support.
• A bad relationship with an investor can have detrimental effects on a company.

"I personally think that relationships with investors is built on you saying what you're going to do and then showing results against that and then being incredibly honest when things don't go well and explaining why and what you're going to do differently."

This quote outlines the key to building trust with investors: making commitments, delivering results, and being transparent about failures.

• Culture is defined by the norms and values that guide employee behavior without direct oversight.
• A strong culture aligns company behavior and decision-making.
• Great companies have an opinionated culture with specific stances on values and norms.
• Culture is not just a set of values but also includes actively curated group norms.

"What culture is, is it's the set of kind of norms and guidelines that guide people's behavior when no one's telling them what to do."

This quote defines company culture as the guiding principles that influence employee behavior autonomously, highlighting its significance in leadership.

• An opinionated culture is one that takes a clear stance on company values and behaviors.
• A generic culture leads to open interpretation and lacks direction.
• Companies with an opinionated culture have a distinctive feel and align actions with their mission.
• Cultivating an opinionated culture involves specific actions that reinforce the company's values.

"I just think you have to take a stance on something. I think if you have a generic culture, then you don't really have much of a culture."

This quote stresses the need for companies to have a distinctive and strong set of values, which is what constitutes an opinionated culture.## Culture Evolution and Transformation in Scaling Businesses

• Culture must evolve as a business scales.
• Core principles or values should ideally remain consistent.
• Culture challenges increase with company growth and must be policed and revisited.
• Larger tech companies like Uber and Facebook have experienced culture shifts due to scaling.
• Facebook changed its motto from "move fast and break things" to a more responsible variant due to the realities of scale.

"But as companies scale, culture becomes a challenge, and culture has to change and evolve and has to be policed and revisited."

• This quote highlights the necessity for a company's culture to adapt as the business grows, emphasizing the need for constant monitoring and adjustment to maintain a healthy work environment.

"I think the new expression they use know, move fast and ship love or something to that effect."

• The quote indicates that Facebook has modified its original motto to reflect a more mature approach to innovation, aligning with its larger scale and greater societal impact.

• Pivoting is a fundamental change in business strategy due to the failure of the original plan.
• It involves difficult conversations with investors and board members.
• Internal team management during a pivot is crucial; authenticity and clear communication about the reasons for change are necessary.
• Pivots can be painful and may result in significant revenue loss and personnel changes.
• The process can be lengthy but is sometimes critical for future success.

"But what it actually means is that you've failed as an entrepreneur."

• This quote candidly describes pivoting as an admission of failure in the original business strategy, which requires a complete reassessment and redirection.

"It took us probably 18 months to get all the way through it."

• This quote reveals the time-consuming and complex nature of a pivot, emphasizing that such significant changes are not instantaneous but gradual and require perseverance.

• Building and maintaining strong relationships with board members is essential.
• Early stage investors may have a well-established rapport, while newer investors require more education about the business.
• It's important to involve the management team in board interactions to scale relationships and provide direct feedback channels.
• Encouraging team members to build relationships with board members creates a virtuous cycle of communication and feedback.

"It's really our newer investors where we make sure to take time educating them about the business, sharing things, showing again, demonstrating what we're going to do, actually doing it, and then giving them sort of constant, candid, open feedback."

• This quote emphasizes the importance of proactive communication and transparency with newer investors to build trust and understanding.

"And that's where leveraging the team and encouraging your team to build those relationships is great."

• The quote suggests that involving the broader management team in board relations can help manage the complexity of a growing board and foster a more collaborative environment.

• Having a strong finance department and leader is critical, especially in a payments company.
• A CFO is an important partner for a CEO, bringing expertise in financial management and business understanding.
• Hiring a CFO early on can be beneficial for a company's financial health and strategic decision-making.

"So we, I would say earlier than most, went out and hired a CFO."

• This quote indicates the speaker's belief in the early appointment of a CFO, suggesting that they see significant value in the role for the financial oversight and strategic guidance it provides.## Importance of CFOs in a Company

• CFOs are trusted for their unbiased perspective on company numbers.

• They are the only function that can look across the entire company objectively.

• CFOs advise the CEO on resource allocation and performance measurement.

• They balance the interests of various departments like sales, marketing, and product/engineering.

• A CFO acts as a thought partner and is crucial for running the business and forecasting, especially in the payments industry.

"And I think the other sort of unspoken benefit of cfos is that they're really the only other function that can look across the entire company in an unbiased way and help sort of measure performance and help advise the CEO on how to invest the company's resources."

This quote highlights the CFO's unique role in providing an unbiased view across the company, assisting in performance measurement, and advising on resource investment.

• "Failure is Not an Option" by Gene Krantz is Bill Clerico's favorite book.
• The book discusses the leadership challenges in the early US space program, particularly Apollo 13.
• It focuses on motivating a team and overcoming failures, which Clerico finds inspiring.

"And it's a book about really the early days of the US space program."

This quote introduces the subject of Clerico's favorite book, emphasizing its historical context and focus on the US space program's early days.

• The main takeaway from YC is to focus on creating a product that people want.
• Entrepreneurs should concentrate on their product and user acquisition.
• YC emphasizes cutting through distractions and ensuring the product meets user needs.

"Biggest takeaway from YC? I mean, make something people want, focus on your product, get users, and then sort of all else flows from that."

The quote encapsulates YC's core philosophy of prioritizing product development and user engagement as the foundation for business success.

• Fintech is still in its early stages according to Clerico.
• Despite fintech's growth, major banks have not been significantly disrupted.
• The next 10-15 years are expected to be exciting for fintech development.

"I think it's still early days. I think fintech has sort of wormed its way into different categories of financial services, but the reality is that the big banks have really been unaffected by fintech."

This quote reflects Clerico's belief that while fintech has made inroads, it has yet to fundamentally disrupt the banking industry.

• Bill Clerico regularly reads "The Information" for its in-depth reporting.
• He values the quality and depth of the articles over superficial news.

"I read the information pretty religiously. I think it's just high quality reporting, and I like how it digs deep into different topics versus just sort of a superficial quick hit."

This quote explains Clerico's preference for comprehensive reporting, which "The Information" provides, over brief, surface-level news.

• Wepay's focus is on executing their plan and improving customer satisfaction.
• They aim to sign new customers and broaden their international presence.
• Wepay is looking to expand beyond payments into lending, insurance, and bank accounts.

"We think there's a huge opportunity in international expansion, so that'll be a big priority for us."

The quote indicates Wepay's strategic priority on international expansion as a key part of their growth plan.

• Bill Clerico's participation on the podcast was appreciated and met high expectations.
• The host and guests expressed mutual gratitude for the opportunity to share insights.

"Well, Bill, it's been such a pleasure to have you on the show."

This quote is an expression of appreciation for Bill Clerico's contribution to the podcast episode.

• The host promotes the Eight Smart Mattress, which provides sleep tracking and reports.
• Full Contact is endorsed for contact management and relationship building.
• Both services are recommended for their innovative solutions and productivity enhancement.

"Eight is a sleep innovation company with their latest product, the eight smart mattress."

This quote is part of the host's promotion, highlighting the benefits of a product that aids in sleep tracking and improvement.

"With full contact they provide the ability to organize your contacts, gain rich insights into them, and therefore build deep relationships."

This quote promotes Full Contact's service, focusing on its contact management features and relationship-building capabilities.