What's up, everyone? This is Cortland from
ndhackers.com. And you're listening to the Indie Hackers podcast. On this show, I
talked to the founders of profitable internet businesses, and I try to get a
sense of what it's like to be in their shoes. How did they get to where they are
today? How do they make decisions at their companies and in their personal
lives? And what exactly makes their businesses tick? And the goal here, as
always, so that the rest of us can learn from their examples and go on to build
our own successful businesses. Joining me today in person and my dining room is
Shola Akimade, the CEO of Paystack. Welcome to the show, and thanks so much
for agreeing to swing by for this interview, Shola. Yeah, cool, cool. Thanks
for having me. Really excited to be here. I'm excited to have you. So why don't we
start with you explaining what exactly is Paystack? Paystack is a payments
company, so we're like striped for Africa. We help merchants in Africa accept
payments from their customers. We currently have over 17,000 merchants, and
we help them process over $20 million every month. Wow. And I take it that your
customer base is similar to Stripe's. These are people building largely online
businesses. Do you have any brick and mortar businesses using Paystack?
Actually, yes. We have one of the biggest boss tickets and companies moved from
just selling tickets offline to just selling the idea up. So yeah, oh, cool, like
that. Yes. Nice. So Paystack, Stripe for Nigeria, Stripe for Africa. What's the
ultimate vision here? Is this going to be Stripe competitor in the entire world?
Actually, we use that at YC just to get Americans, to get people at YC to
understand what we're doing. Very, very quickly into the business, we realized
that this is this is Africa is very interesting. Nigeria specifically is very
local. And so just what it takes to build a payments company in Nigeria is
different from what most of the payment companies do. And so yeah, I think for us,
really, what we think is that there's a lot of transactions, there's a lot of
financial services happening in Nigeria, in Africa. And most of these things
happen offline, you know, and someone has to facilitate it. And that's what we're
trying to do at Paystack is make sure that merchants can accept payments from
their customers. You know, I told someone last week, actually, that imagine if your
customer is the first time they're paying on your website, is the first time
they're using a card in their life. We've seen that a lot of Paystack, we've
seen people get a bank account, get a card on the bank account. And the first
time they're using that bank, that card online is on Paystack. So building for
that takes a lot of, I don't know what to say. It's just, it's very interesting.
Yeah, you guys are burning almost from the ground up, whereas a company like
Stripe has this sort of rich, existing infrastructure that already existed. And
so you're putting our credit cards on the websites well before Stripe existed.
Exactly. That makes me so curious, what was it like to sort of pay for things
online in Nigeria beforehand? To be clear, we didn't invent online payments in
Nigeria. Right. You know, so there's been an online payments industry, and there
were companies trying to figure it out. But we just thought that firstly, it can
be easier to get started. Like before Paystack probably would take a business
about maybe three weeks or four weeks to just start accepting payments. We thought,
why can't there be simple APIs to make this work? Right. You know, so and then
from the customer side, also the experience was very much like cumbersome. I
think that's also closer to Stripe though. And we said, you know what, this
can be very simple, this can be easier. And so just we thought we had to rethink
the customer experience and just build it in a very simple way. Right. So I'll
say that the difference here is that for most businesses, so like the business I
talked to you about, but God is good, Montrose, this is a business that has
been had bosses, like they've run 700 bosses, they've done this for the last
maybe 12, 13 years, and they have this network, but it's always been offline.
You know, how does this company start accepting payments online? How do they
get their customers to book for both tickets in their homes? You know, and so
just empowering that, making sure that this can happen is what we try to do.
Yeah. And I think, you know, what's interesting is Nigeria is a very
populous country. I think you guys have about like 100, 200 million, 200 million
people in Nigeria. So it's two thirds the size of the United States. People don't
know that. Sub-Saharan Africa has close to a billion people. Yeah. 40
countries. It's very populous, but it's also very diverse. There's tons of
payment methods, tons of government, tons of different payment
infrastructures. How do you tackle that problem? How do you start a company and say,
okay, I'm going to, you know, unify all these diverse systems into one. Exactly.
So I can value back. I can value back very quickly. So you probably understand why they
answered the question. So I grew up in Lagos, spent all my life in Lagos, studied
computer science. I started building stuff from school, actually, from college.
After college, I worked with Eineken, the beer company. But of course, I just left. I
thought to yours, I'm a maker. I should be making stuff. Not just today. Is that
common in Lagos or Nigeria? Are there a lot of people who are makers and who
decide they're going to just go on and build their own stuff? Yes, exactly. Well,
well, now it's happening. Now it's happening. But what we've seen is that
because a few people are makers, but they just find themselves in very good
jobs and they don't make stuff again. So which is very common. Happens in the
States too. Yeah, exactly. I can't imagine. And I thought about it. I said,
you know, I should be making stuff. I shouldn't be here. I tried to make stuff
on the side. But I just thought about it. I said, you know, imagine if I
spent my full day making stuff. It would be amazing. I don't know why. I guess
that was high or something. I don't know. I need to like, just like do this. So I
left. And my friend and I, Maya Wathen, we lived together. And we thought about it
and we said, you know what? Dropbox is cool. Dropbox is on the cloud. So since
2007, actually. Imagine markets, we don't have cloud. You know, like, I think we
were naive then. I probably was 21, 22. We said, what if we build something like
Dropbox that runs on-premise web businesses that don't really have good
internet. Can still just collaborate within the building. And we did it. We
did it. And we uploaded it to Sosfod. Sosfod was big then. And like, same day,
we started getting people downloading it and using it and emailing us. You know, so
I was very excited. And we did it for five years. Let's pause for a second.
Why did you think this would be a good idea? Are there a lot of businesses in Nigeria
that didn't have good internet but that needed something like Dropbox?
Exactly, exactly. That's what we thought. And I had a few people ask me to help
them act something together. I thought about it like, if these people are asking
for stuff, then that means there's so many people that would need it. I thought it
was easy. I thought, just do this, do this, do this. Of course, it wasn't very easy,
man. Typical engineer founder. This will only take a day or two, just a weekend
project. Yes. And actually, we tried to sell it, but we were so also like, we didn't
want to just sell. We wanted to make, like, you know, this is too stressful, sell it
software is stressful. I used to read a lot of business of software then and all
this, you know, but eventually just decided, let's just keep it open. Let's see
what, let's get people, let's see what people will do with it. Actually, the day
we uploaded it to Sosfod, I think like about four hours later, someone sent me
an email. It was in Portuguese. I had to use Google translate and I was like, wow,
this is amazing. I've been looking for this. Can I translate it to Portuguese for
you? Like, whoa, we don't know how to, so we had to rewrite it and then put like the
files in a translation file and then sent to the translation file and did it, you
know, and so like, just, it was a very interesting and exciting journey. And
then people started emailing us that, wow, can we pay for this, that my company has
a policy not to use free software? Wow. Okay, that's cool. How would you want to pay for it?
Yes, I think it was in $1,000 licenses. Wow. Yeah.
Have you considered turning this into a real business before then? No, no, we, we
did, we did, of course, because we didn't really push it, we didn't really set it,
we didn't know how to, I don't know why, but we probably would send just a
four or five licenses a month. But there were so many people using it, but just a few
people wanted to just write. And we also didn't want to, like, because I see a few
companies where it's the same thing, the free version and the paid version.
No, the free version is like a very cut down version of the paid version. So we
said we didn't think so, because we also started like with a very good version
being free. So it was hard for us to like define what the paid version will look
like. So eventually it was almost the same thing, to be honest. So how did this, how
did this end up winding down? Because it sounds like you're making sales. I think
it happened, it went on for a long time. We had so many people from, I think it
was exciting for me because just interacting with people from everywhere in
the world, people from China, people from Australia. And I was in Nigeria, you know,
so that was really cool. The time zones, people invited me to the countries, come
sit with them, talk to them. So that was really exciting. So I did that for a
long time. We did it for a long time. And then I, the good thing about it was people
locally started seeing it. Some people didn't really need it because of course
Dropbox and the cloud was working well. And so people were asking me to do other
stuff for them. At first I wasn't doing, but after a while a few banks started
reaching out to me and saying, oh, we have this thing we want to do. It's not
exactly like what you have, but I think just like patch things for me. So we started
patching things for this banks and just shipping very quickly. And also just like
because we had built something before, it was easy to just build something else.
So they thought we were efficient, but actually we were not. Exactly. So we did that. I did it for about three or four
banks. And so started realizing that, wow, there's an opportunity here. When we were
doing Peculio, we had to use a company called Avangates for payments actually. We
had to, they sent us a card. We had to use the ATM to remove cash. Like it was
really broken, you know. So I knew payments was broken, but I didn't think I
was going to be the one to figure it out. But just working with the banks and one
day was just playing around with something and I was able to charge a
card from my local house, from my computer. I'm like, wow, this is it. If I
can do this, then I can like build, I can figure this out. So I started just talking
to the banks, talking to customers, talking to people and saying, you know
what, there's actually, I'm building a new kind of payments company. Are you
interested in the future of payments? Like I was just like, everybody knew
payments was broken. And I just, the only thing I said was, I'm trying to figure
out payments. Are you, are you interested? I need a lot of people interested. I had
a wait list and I said, Paystack is coming. So before Paystack, actually, there
was no recurring payments. Just think about that. Of course, that was the first
picture we just put in there. Right. So people were excited about it. I had about
300 people on the wait list. And these are people that you talked to in person?
Yes, exactly. I spoke to everybody. I didn't know them to be honest. I just put a
wait list. I don't know how people were telling others, but actually what
happened was one of the first people I spoke to, it was in an accelerator, I
think in Nigeria, Gingerbox. And so he told his friends and then I told him, oh,
no, no, I don't have enough capacity yet. I just want to work with few people. So
he felt a bit exclusive. And the people that I tell him before, I don't know, I
was lucky. So yeah, so a few people knew about it. In fact, I wanted to ship very
quickly. And he told me his website wasn't ready because what they do is they
do fruit deliveries. That was my first customer, actually. They do fruit
deliveries for businesses. So they go to a business and deliver fruit maybe twice a
day. So they have multiple people in the business that give this fruit. And it was
difficult for them to do payments. It was difficult for because there was no
requirement building and everything. So I told him, hey, like you space that I'll
solve your problem. It was like, you know what? I don't have a developer. I need to
like make changes on my side. So I'm like, no worries. I'll do it for you. So I
built out his website and I did the Facebook conversation.
That's service. Yeah, exactly. So it went live. I did that about three or four
people actually just kicks out everything. So it went live. People saw it. People
started like, oh, I want this. I want this. I had a waitlist. And then one of my
friends actually, one day I was sleeping actually and sent an email, copied all
the YC partners and said, AYC, Stripe is not in Africa. Well, we have Facebook now.
And then Michael from YC responded and said, Hey, shut up. Tell me more about
Paystack. It was one line actually. Tell me more about Paystack. And I said, I have
to respond. I can't respond to one line. So I spent about five hours just trying to
like cover the perfect response. Do you remember what you said? No, it is so long.
I moved my mail service now so I don't even have access. Was it one sentence? No, it was
like maybe 10 paragraphs. It was good. I thought it was good because I just talked
about what we were doing. Talked about why it was a big deal. Give them some
context about payments in Africa. Talk about what I had done before. And then
talk about why I thought I was going to be the one to figure this out. So I think
it was a good model. I had people who did this for me. Like now I can see what it
looks like. Well, just having people that did an email was interesting. I just said
this before. He helped me edit this email. So I think it went well.
Michael responded with another line and said, just ask another question. So we had
back and forth the access to apply for YC. So I'm curious, at the time, what
made you the person who was going to figure out payments? Was it your
experience working with the banks? Was it your experience growing up in Lagos? Was
it running Pecurio? I think it was everything. I think, firstly, I had to
software before. I built world-class software before. So I had a good sense
of what needed to be done. So I spent about five years just talking to
customers, people using my software, people I haven't made before. So I
think I got very comfortable just understanding people's requirements. So I
think on that side, that was good. On the other hand, also, I just wanted to do it.
So I think for most people building software, like I guess there's always
like the, I don't want to invest that interest. I didn't care. I really
just wanted to fix it. I didn't want to make money. I didn't think about any of
those things. I was like, you know, this is a problem. And I don't care about
anything else. I just want to fix it. So I think that was helpful because the way
payments had been, it was really focused on enterprises, you know, because the
enterprise companies are the ones that can pay for it. And enterprise companies
like complexity somehow, you know. So I guess everyone had built for that
complexity and it was just affected with it. I didn't really have that body. I
just wanted to, this is what it should look like. And so you're kind of all
about serving the little guy. The companies are maybe like you, companies
like your friends, companies that you're dealing with with Curio. I knew that it
was going to be big, but I didn't want to start like, I just wanted to serve a few
people that spoke to me. I got a lot of people pressurizing me actually. When we
got into YC, which I will jump into very quickly, when we got into YC and we knew
about how YC has demonstrated once time, a lot of people were telling me, oh, you
know what, you have to go for some big accounts now so that you can make it for
them. I'm like, not really. I have people trying to use this thing. Like I just
need to go it every day, which was also very helpful. So again, just can we serve
the people that come to us? Can we understand why they want this? And can we
fix it for them? So that's how we started. And I think that was really helpful for
us. So I want to talk a little bit more about these, these pre-YC days before you
came to the States. And part of what I want to do is get an idea of what life
was like as a startup founder in Nigeria at the time. You were selling
Procurio to all sorts of different other startups across the world, but also in
Nigeria. Who were these companies? How common is it for someone to go off on
their own and start a tech company in Nigeria? And also what was the funding
environment like there? And how people actually financing their businesses,
including you? Exactly. I think you have so many questions. So I think the
interesting thing is like Lagos Nigeria is almost like San Francisco, almost. So
like we had access to, I had internet, had a laptop. I think I had a Mac actually,
which is interesting. I had a laptop that was connected to the internet. And really,
and I had been reading stuff. So I've been reading, like I said, I've been
reading business or software. I've been reading everything PG program I've
been reading. I read it, you know, I've read it. So like, I felt, and there's so
many people like me just, and that's the part of the internet, like, the internet
is the same everywhere. We have the same internet in New York, Lagos, everywhere.
So we were really exposed to the internet. We're exposed to what was happening.
Where would you go to meet other founders? Were there like hubs? Were you
going to work together? The way there was somewhere called CC Hub then. And now
there's so many hubs now. Well, yeah, so the first part of it was, in the early
days, just having exposure to the internet. How did people fund their
startups? Also, just because then not so many, not a lot of makers, there were
multiple opportunities to make money as a maker. So you could just do some
consulting projects for someone else. Like, it's like a third party chain. So
what would happen is someone that was connected would get a big deal, maybe
from a bank or from a government or something. And then that person will be
looking around for, oh, who can do this for me? Most likely, if you have a good
reputation for being the fixer, you get people like that. So you will make a lot
of money, because of course, like, the person that got the deal has money to
spend. And the person is taking a huge mark-up. So I had access to people
just switching out to me every time and saying, oh, can you help me build this for
cheap? Well, yes, let's do it. What were some of the bigger challenges to starting a
business in Lagos at the time? Yes, yes. So I think really there was some
infrastructure stuff happening. So electricity is not 24 hours a day. So you
probably need to have like a generator. Oh, wow. Oh, yeah. Do you know what a
generator is? Yeah. You guys had a generator running in Korea. It's pie with the
credit gas, yeah, petrol. So yes, every day you have to, even more than the cost, to
be honest, the stress of having to, like, the way you get gas for your car, you have
to pour petrol in the generator every day. Because of course, you can't even, once
you're running for maybe three or four hours, you have to pour more. It's gonna
finish. I think that was the most stressful part for me, just having to get, just to
have 24 hours par. And sometimes also, because it's very noisy, you don't want
24 hours at night. So you might like be really fired up. I had this happen to me so
many times. Like I would say, you know what, I'm tired. I want to sleep from 4 p.m.
to 10 p.m. so I can work from 11 to all through the night. So right there you'll
sleep, and then you'll wake up at 10 p.m. but there's no power to, like, what do I do? I can't sleep back. So maybe you have to read us out there.
So yes, I think that was really common. I think it's getting better now. I'll say.
Yeah, so that was a very big problem. So it must have been like a tremendous
difference once you guys actually flew to the United States to interview for Y Combinator.
Yeah, funding from American investors. It was fine. I remember Ezra saying that I think he
was, he had a connection on terminal, and the connection didn't time out for maybe 24 hours.
I was like, wow, this is amazing. So let's see. Of course, the next problem was just the
speed of the internet. So it wasn't, now it's very fast. For 10 years ago, it wasn't very fast.
So you had to just, you had to do what you had to do. That's to open like multiple browser
windows, maybe about 20, and then go back while you're doing one, the others are loaded.
So yeah, you had to be very patient. So that was definitely that.
It's interesting with things being so different, and Nigeria at the time, it presented a whole bunch
of different business opportunities. Like you said, with your Dropbox competitor, it's like,
okay, well, you had to build this for companies that didn't have fast internet, and other people
in other parts of the world would never even consider that, because it wasn't a problem there.
Exactly. That's very correct. That's very correct. Yeah, so there were multiple problems like that.
But I think the, and that's the part of the startup community. I think there was still a lot of
community stuff happening. I think there was back home, Nigeria, there was Garage 48, you know,
so all these events, actually, all these events in the US, some of them were happening in Nigeria.
So there were meetups happening, and all that. So yeah.
So I want to talk about some of the logistics to starting a payment company in sort of this first year.
Was it a year before you ended up going to Y Combinator? Yes.
How long did it take you to get to the point where you could actually provide a working product
to somebody on your waiting list? What went into that process?
I don't know if you have a working product now. Yeah, I'll say, I'll say, I'll say it was...
So at first, like I said, I could charge a card before I started the company.
So I had to define what I really wanted. But I got a lot of people, thank God, I had good advisors.
One of my friends, Ooh, was also very helpful. I had so many people push him and say,
Yo, you got to do this. You got to ship now. So yeah, and then there was this start of vitamins,
I think, all this. So I had, I knew that I had to ship as soon as possible.
So I actually shipped a very crappy version as soon as I called.
So as soon as I got Gingerbox, which was probably, so we launched, I think the first transaction happened in August.
I started working on it in January, maybe about eight months to where the first live transaction happened.
And what could actually occur at that point in time? What could your first customer do?
No, his customers could go to his website and pay for it. And yeah.
Cool.
But I couldn't even pay him his money because I hadn't figured out that part.
But that was why I knew there was something there because there was a company, I think, Sculpture Cologne.
They were building a ride-sharing app. And he told me that, hey, I need to use Facebook now.
I said, no, I'm not ready for you yet. He said, no, I need it because I have a site.
I have an app. I can charge my customers. So my customers are using my ride-sharing app for free.
So in their world, they just put in Facebook. You don't have to give any money.
You know people want what you're building if they're willing to have you keep their money.
The customers are paying you. They still need it.
That happened. And we kept his money for a long time, actually. So we were not settling.
In fact, the way we were paying the first people all their money was someone was just doing them outside the back.
Like I would send an email to somebody.
So when the transaction is successful, I would trigger an email that goes to somebody else to figure out to settle it.
And then she was just like, OK, this is our successful transaction, so let's pay them.
Yeah, so it was at the back very crappy, but we just wanted to move from, I wanted to solve the problem.
I wanted people to accept payments. And I think we did that. And then started getting more etiquette at the solution
because more problems. And the thing about payments is if it works for one transaction, at 1.7 million transactions,
your problems are different. There's going to be disputes, there's chargebacks, there's fraud.
So there's new things to figure out. Yeah, so it's been very interesting.
How much of the work to get to the point where you could accept this company's customers' payments
was a result of you just writing code? How much of it was negotiating with banks and partners?
What was the work like during those first eight months?
Because it was payment, there was some compliance back to it.
So I needed to figure out PCI, DSS, and let's figure out the right servers, the right infrastructure.
So I would say it was one-third infrastructure, one-third code.
Because again, because it's payments, you have to support everything, support everybody.
So I had to be able to JavaScript and figure out how to make it work.
So it was one-third that. And then one-third just talking to people.
It wasn't really hard because talking to the banks, because I didn't talk to all the banks,
just had one bank that didn't know I was very serious about this. So that was fast.
So it was a lot of talking to people, understanding what they wanted.
Most of the people that talked to me also went already with whatever they were building to.
So just getting them to do it very quickly was also part of it.
Yeah.
What was your team like at the time? Did it just you?
It was just me. My co-founder, Ezra, so I reached out to him to help me build a Node plugin,
because I realized that people wanted plugins. Oh, I thought I could just have people build
plugins to make it work. Now we have so many plugins, which is exciting.
While I was back and forth with Michael, going back and forth with Michael, it was like,
is there anybody that can really join you to figure this out?
Right.
I was like, yeah, Ezra, because Ezra and I actually went to school together. He was a
very good engineer. There's this stuff we do. We do our words in our college program of the year.
Ezra won that for four years. So it was really good. And then he had tried to do payments before
too. So I just reached out to him.
Oh, it was like the perfect co-founder, really.
Exactly, exactly. And he was also excited because, yeah, payments.
Right. And I think we made some progress. So it was more than an idea.
So did the two of you fly out to San Francisco for your Y Comator interview together?
Actually, it was a very funny story happened because it was a long flight. We did seven
hours from Nicholas to Amsterdam. And then we had maybe like a three hour wait. And then we flew
from Amsterdam to San Francisco in 11 hours. So doing the three hour layover, I think we shipped
something. I pushed the code or something. And then while flying, we realized like, wow,
there was a bug there.
So that was 11 hours of bug. But thankfully, it was just one or two transactions that happened.
So yeah, but yeah, we flew to San Francisco. And then we got into YC.
What was that process like of going through the Y Cominator interview and getting in?
It was really exciting. At first, it was intimidating. So where we got in, we wanted
to get in a day before I was reading a lot about YC interviews. And people were like,
you know, if you're not from America, you're going to have a problem with your accent.
And you might not understand what you're saying. I hope you guys understand what I'm saying.
Like you might have like your accent might not be good and all that. So we said, you know,
let's go in. We had an interview, I think, on Tuesday, and we got in on Monday. So we said,
you know, let's go in on Monday and just like talk to people and see if like they can understand our
accent. Which is good, actually. So we got in, of course, there was no problem. We got in,
I'm sorry, I've seen different kinds of founders. So we saw someone building a shed that never gets
dirty. We saw someone building a timber building rod that detects breast cancer. We saw someone
building self-driving cars, self-driving shuttles for colleges. I was like, oh, shit. They asked us,
hey, guys, what are you building? I'm building famous South African guys. I've just tried to build
10 years ago. But no, we said that because we didn't think what we were doing was interesting
compared to every other person. But everybody that listened to us said, wow, you guys are
doing something amazing. Because obviously, there's so many people in Africa. Obviously,
famous is Brooklyn in Africa. So obviously, whoever is figuring this out has a very strong
chance of being successful. So I think that was really exciting to hear. We got people emailing
us that night saying, wow, it was good meeting you guys. We want to stay in touch because we know
you guys are going to be big in the future. We're like, okay, thank you.
It's a huge opportunity. I think that's what investors want. The YC partners want to hear
that you can build a billion dollar unicorn. What was it like going into the meeting with
the actual YC partners and having them challenge you on your idea and having to defend what you're
doing? That was also very funny because on that flight, I wrote out my notes and I had to cram
my talking points. I just had everything in my head. This is Facebook. It's like, oh,
that's where I got it. And I tried to just repeat what I crammed. But immediately I started. I said,
oh, what are you guys building? I said, oh, we're building Pesach. It's a payments copy in Africa.
We made a huge leap over what currently exists. We moved from two steps. The experience used to
be about seven steps, but we moved it down to two steps. Like, oh, shit. We had to go get our
laptops, open it up. And then we showed them the old experience. And then we showed them the Pesach
experience. Not bad. So just a lot of questions, but it went very fast. And I didn't remember all
the things I wrote down again. So I just started. It was very funny. And I was like, oh, wow, we've
messed up. Let's just go back home. But thankfully we got into the program. We were the first Nigerian
companies to get in. Now there's over 12 Nigerian companies in just two years. You guys sort of
broke up in that barrier. Yeah, I think it was a mental barrier, to be honest. I didn't think
twice it would fund a Nigerian company. We didn't think we were the ones. We didn't think the corporate
building was interesting enough. How important is it, in your opinion, to have sort of the blessing
of Silicon Valley investors to have funding from Y Combinator? Do you think you could have built
Pesach into what it is today, without coming to Silicon Valley? So two answers. I think we were
very sure, even during YC, we didn't think we were going to get into YC. So Pesach was in a very good
trajectory before YC. And I think it should have continued. So I think that was that. But getting
into YC was helpful. I think just getting that money was good, because getting someone else to
join us very quickly, getting the advice was really cool, because I'd just been reading online, you
know, I hadn't had access to people that had built stuff before. So that was really helpful. And just
the mindset change and all that was very helpful. So yes, getting into YC changed the trajectory.
So I guess we were going very slowly before, and just getting into YC just changed it.
I want to hear more about that. A lot of people listening are building companies, and they might
feel like things are going slowly. What do you do to change your trajectory for the better and to
move faster? Yeah, exactly. So I think what I've heard and what I've seen, even what happened to me
was a lot of founders struggle with the next step. Extremely difficult, because you want to build a
payments company. How many things are you going to do? So it was hard to think about it in weeks.
Well, getting into YC, we had to think in weeks, because we had to go for Tuesday dinner. We had
to do office hours weekly. And so just having to think about my company and execution on a weekly
basis was really, really mind blowing for me. And it helped me focus. So I just put the numbers on
Excel. And worldwide, this is just talk to your customers and build your product. So it was really,
what do I want to achieve next week? And how do I do it? So that was very clear. It was obvious
that when other things that looked important happened, it was obvious this was a distraction.
So I think fun is just for me, having a very clear sense of this is what we're doing next week,
this is what we're doing next week, this is what we're doing. So the early days, I was thinking in
weeks. Now I'm trying to think in quarters, which is really fun as I got big. But yeah,
in the early days, I was really just thinking in weeks. And it was helpful.
It's funny, because it reminds me of the early days of indie hackers. And I was also doing this
week long thing where I would send a weekly newsletter to all the indie hackers readers.
And every week, I needed to have something to report to them that I had done. Otherwise,
it would be embarrassing. So I agree thinking in weeks and having sort of this weekly milestone
you have to hit is pretty powerful in terms of moving fast. Yeah, no progress and momentum
is very important, because there's so many smart people. I don't think we're the smartest people,
even from Vegas. So there's so many smart people, but the difficult thing to do is to just make
progress every week, every day. Because incremental progress is just amazing.
Exactly. You look back and it's really added up to something huge.
Exactly. Yeah. So what were you worried about in those early days? I'm worried about everything.
We were worried about everything. We were worried about
fraud. We were worried about competition. We were worried about...
We're just worried about everything, to be honest. But very quickly, we started getting
very good feedback from our customers. So just talking to our customers. And they were telling
us that this is really nice. This is what I have been looking for. So that was helpful.
And that helped us figure stuff out. We were worried that when we started, when we got the
120k from YC, we said, you know what, this is it. This is all the money we're ever going to raise.
So let's just keep the money. Let's make it last. Build the business. So we were just worried
about everything. But I think at the end, it's turned out well. Which, if any of those worries,
ended up taking the most of your time and was the hardest to overcome?
It was trying to convince... This is very anti-sales. But I was worried about people,
like will people use this? Will I be able to sell this to X, like all this big company?
I will switch to Paystack, which in retrospect wasn't necessary. And so in the early days,
I thought that was so necessary. I was spending a lot of time just trying to think about the big
companies and what would it take for them to switch to Paystack. But in reality, I just needed
to make progress. I just needed the smaller companies to use it first. And then the big
companies. In fact, the small people that work in the small companies are actually friends.
And then, so seven months in, we will be talking to someone from a very big company. And they'll
say, oh yeah, my friend told me about Paystack. My brother told me about Paystack. So the sales
conversations were really easy. But I didn't think about unnecessary thought it was going to be
difficult. Yeah. And then, of course, sometimes the small companies turn into big companies.
Exactly. It's pretty cool. So one of the things that people at Y Combinator talk a lot about,
and people in the startup community as a whole talk a lot about, is product market fit. Do you
actually have a product that matches the needs of your market? And there's sort of a before and
after where before product market fit, all you should care about is actually building something
that customers want. But afterwards, you need to worry about scaling and then also continuing to
build up your product. Had you guys reached product market fit when you were into YC?
No, I think we just reached product market fit like a few months ago, actually.
What is the milestone there for you?
I think it's at the point where you know if it is for your part.
So I had this conversation at YC, but I knew that the customers we want,
which is tied to what I was saying, the customers we want don't really want us
as the customers. Well, exactly. So I knew that even though we had customers,
the product market fit for us will be to the people were looking for actually want us,
the customer, you know, so people were still looking for more people where,
you know, they expected more from us. So I don't think we had that. We had to define one moment,
we had to define this is what you should get from a payments company. But earlier in the year,
I think after making a lot of progress on the products and all that, so again,
it's a point where, oh, do you have this? Yes, we do. Can we do this? Yes, we do.
We have this problem. Yes, you know, so yeah, so I think that was very huge shift.
So the way I think about product market fit, I think is really getting the right customers,
the customers we want, how easy is it for them to understand our friends, can we satisfy them,
you know, and all that. And now it's looking like that.
So how big were you guys, if you can remember back at the end of Y Combinator,
you started with just you and Ezra. Do you have any employees?
We almost came to YC, actually. So it was Ezra and I, but immediately we got into YC,
we reached out to our friend, Okwe. He was a very good designer. And thankfully, he came,
joined us. So we stayed in a two bed, but three of us stayed in a two bed.
We shared the best. Exactly.
Yeah, so that was good. So we did that. And by the end of YC, we had two people in Nigeria,
because the time zones were really bad. We needed someone to help with the admin stuff
and customer service. And then we needed someone to help develop a spot. So we did that for,
so at the end of YC, we were five people. Yes. And then by the end of the year,
we became about 10 people. Okay.
And then by this time, last year, we were about 15 people. And then now we're about 36 people.
Were you funding all these hires with the money that you got from Y Combinator? Or were you
generating enough revenue to sort of help hire all these people?
In the early days, it was just with the revenue. Because payments, you have to like ramp up.
Right. Yes. We're making so little money. It was the first month we launched. We processed
$2,500. We made about $20. Which is really sad that I think about it.
Yeah, the last month, we did about $26 million. Wow.
Yeah, so it's just about just over two years.
That's crazy. Do you ever look back and think, wow, I can't believe how far we've come.
No, to be honest, I think we knew that it would just go every month, go every week.
And you say, but yes, I look back and say, I didn't think, I looked at the deck I prepared,
and I was just laughing. Because I didn't think, even the numbers were so small,
I don't know why I put it on the deck.
So yeah, so I didn't think so. But I think one of the things that also helped us
was just acting our age. I'm not trying to be unnecessarily, I don't know what to use for that,
but we knew we were small. We knew we were early. We knew the problem was big. We knew
we hadn't figured it out. So just having all that context helped us just do the right things.
We didn't try to be big. We didn't try to convince people we were bigger than we were.
It was very simple.
Whenever I see a company solving a problem that's, I guess, as obvious as yours was,
everyone you talked to said, yeah, you're right, payments are broken in Africa and Nigeria,
we need to fix this. I always wonder, why hasn't someone done this before you? Why wasn't there
a paystack in Nigeria before paystack? Exactly. That's actually a very interesting
question. Two things I've told, two things I think might have contributed to the answer.
So the first is I would say courage. So I think just the courage to say, I want to figure out
this problem. In Nigeria, there's this thing about how business people should be the ones
solving problems. So there's this thing about business people should be the ones solving
problems. And then developers should just be getting paid for. Exactly. And that was big.
So maybe I was lucky and just haven't been a developer that I solved business problems.
I thought, you know what, I don't care. I think I can figure this out. So I think that just that
courage to say, I probably can figure this out was there. And next thing was focus. So the thing
about payments in Africa is that there's a lot of side opportunities to make money. There's a lot of
ways to capture value without doing the right thing. Give me some examples. What I mean is
because the transactions are happening, because there's a lot of volumes happening, you can just
go to one company and build something very custom for them and make a lot of money doing that.
Right. As against just can I just build a very simple API that I might not even be able to charge
for. And even in doing that, so when we started Pissedat, there was so many new ideas of things
we could be doing. Oh, you want to do something like VAM mode, you want to do something like this,
you want to do something like that. So there are multiple opportunities. And the focus to just
stay on the path, especially when you're solving a difficult problem is very important. Otherwise,
you will think the problem is difficult. You will jump onto an easier problem. You might solve the
easier problem, but the difficult problem will still be there, which will now be an opportunity
for someone else to just configure it out. So I think the courage to just say, you know what,
if chosen this difficult problem, we will try to fix it before we move on to whatever other
problem we want to fix was helpful. Why did you avoid all those distractions? How was it that you
were able to focus? Because I understand that you being a developer who had started a business before
we gave you a lot of courage and confidence to actually tackle a big problem. But what stopped
you from seeing all these lucrative opportunities that weren't quite the same as that big problem
and saying no to those? I would say it was my support system. To have friends, I told people
that I wanted to figure out payment. And so there's so many people looking up to me and say, you know
what, you have to be the one to figure this out. So I think that was helpful. I honestly think I
could have lost focus. In fact, the two problems I was solving at the same time, I was trying to
build something called Expendly, which is like Rex now, which is an expense management system.
Again, that stuff would have been easier because I could just get a business pay me and I can help
them do the expense management and all that. It was still closely tied to parents, but I felt
easier. But very quickly, a lot of my friends and people in my support system said, you know what,
just to this parents then this person is big and just do it and that's the real
work. So I think I was lucky I had good advice as people that just said, just do it.
So one of the interesting things I think about building a company
that in a way comes behind a lot of your competitors in other countries is that you
don't necessarily have a playbook, but you have at least some examples you can look toward and
say someone else has done something similar before Stripe or PayPal or Braintree or some other
payments company. Did you look up to these companies?
Oh, yes. Yes. Oh, I did. I was telling someone I read every blog post on Stripe's blog.
I read this blog post maybe two hours after they published it.
Yeah, I read that documentation completely. I did that for a lot of payment companies everywhere.
So there's a company in Australia, Pin Payments. Everywhere, just any payments company I can find,
I'll read all the blog posts, I'll read all the documentation. The public companies won't pay,
I would read their annual reports, just what can I get, what can I learn. So I think that was
helpful for me. And then just having that passive knowledge, which I think is so very helpful for me
as I solve, paste that problem. I have so much passive knowledge about how things have been done
and not necessarily need to copy them, but it helps me think about how to solve some of these
problems in our own way. What have been some of the most difficult things to learn? Or perhaps
there is no playbook in front of you. And how do you deal with that situation where you're
blazing a new trail? To be honest, you have to make mistakes. And we make mistakes every day.
We make a lot of mistakes. We've seen how my favorite mistake to make is our checkout form.
We just almost copied Stripe checkout. I don't think so. I'm probably upset to hear this,
but I think we did very well. But it was very similar to what Stripe checkout looked like.
Very quickly, it was saying that users were struggling to use it. They would put today's date
instead of the expiry date of the card. Yeah, because you just put DDMM. What is that?
They would worry about what the CVV was and all that. So very quickly, we said, you know what,
you have to rethink this checkout form and very quickly optimize that checkout form
for the users we were building for. And that was helpful.
Is this because users in Africa weren't used to paying via the standard US or European checkout
form? It was because we started with earlier doctors. So when we started with earlier doctors,
we worked well. But our business started moving deeper. We started having customers whose customers
were not earlier doctors. So one of our customers, Bipower, they were wise to come into this electricity
in Abuja and Kaduna. So their customers are not the average customers that would use a
laptop or something. So that was taking us into deeper grounds. And we had other customers.
So it was because our customers were bringing some of their customers that didn't have the same
exposure as we had or as the other customers had. So that was just a big problem for us,
trying to figure that out. This was a problem. Yes, I think the other mistake, I won't say it
was a mistake. The other things we struggled with was, how do we think about distribution
on a paystack? So I spent a lot of time in the early days just focused on the product.
Remember my first conference, that was what I did. But very quickly started saying, you know what,
there has to be some distribution on play to this. Thankfully, Manuel joined very quickly.
Yes, I had to convince Manuel to join us.
Where did he come from?
He was a mess, which is an incubator in Ghana. And he had done product work with them there,
and he was a general manager. So very quickly I thought about, you know what, it will be hard
for us to have to think about distribution from kind of a paystack. We can't just look at other
people and say, this is how these guys are doing distribution. So that was helpful just thinking
about it from first principles. How do we get more people to know about paystack? How do we get
people to help we make paystack become the best payments company in Africa? And I think we made
a lot of progress with that. We started building a community around our merchants. It started
immense something to people to be a paystack merchant. We tackled it from customer success.
If a customer had a problem with our service, we had to do everything to make sure that
the customer will never happen again. So just paying attention to some of the things. And that
was really good for us because I think we would have made a huge mistake to think about distribution
from another way. To say, you know what, the way to distribute paystack is just by ads.
Because that's not making your company better.
Exactly, exactly. So I'm very excited that we didn't make that.
Yeah. Did you make any distribution
mistakes? Is there anything that you tried that didn't work or that you regret going into?
Not really, to be honest, which is bad. I think we should be making more mistakes.
Not really. I think the way we've done stuff so far is we start small
and very quickly scale it. So I can't remember any of this.
What about the flip side of the things that you mentioned earlier? What kind of gave you
the most bang for your buck? What was the most successful in getting the word out about paystack
and getting more customers in the door?
Yeah. So I think it was a lot around telling our stories. I think we started writing more.
Instead, it became very transparent. We talked about our numbers. When we crossed our milestones,
we told everybody. At the end of the year, we wrote the year-end review. And so people felt
that they were part of this. And people wanted to be part of it. And as we continued to grow,
we started sharing with more people, saying, this is where we are now.
And just that mindset started making people say, well, these guys are figuring out payments.
And that also helped people know that we haven't figured it out completely.
Because if you're not ashamed to talk about some of your problems,
you know, yeah. So I think just been writing more, writing more transparently,
and just trying to connect with your customers was really something that has worked for us.
Yeah. And I'm excited because I don't have to put a lot of money on that.
I mean, here you are right now, doing it for free on the Antiochus podcast,
sharing your story, sharing numbers.
Yeah. And I would say that that is one of the problems.
A lot of, that's one of the problems we've seen, especially for us in Africa is
so many people don't tell their stories. When I started Paystack, I felt like I knew
Mark Zuckerberg. I knew all these guys, more than some of the founders, closer to me,
because a lot of founders, a lot of companies don't tell their stories.
Either because they're focused on their company or they don't have opportunities to tell their
stories. So it was very difficult for me because the people I can connect with are obviously not
on my level, not doing what I'm doing. So there was that disconnect. Yeah. So I'm just excited
that now the opportunity is to just listen to people that are just doing what you're doing.
And I've done what you did two years ago, which is really, really helpful. So yeah,
this is amazing.
Yeah. So on a personal level, what's it been like to go through this journey of growing
from a one-person company to a 30-plus people company to go from making $20 your first month
to making millions of dollars a month? How has your life changed as a founder?
Yeah.
Wow. I haven't had time to think about it.
That's an answer right there.
Exactly.
I think the day we... This is very sad. Well, the day we got into IC, I had a call with my
parents. I'm like, hey, we just got into IC. We spoke for a very long time. And now I think
I look back on it and say, that was one of the longest calls I've had because now there's just
so much happening at the same time. And it's so difficult. So I think the very first bad part
that has changed is I'm not able to assign long blocks of time to anything again. If it's more
than one hour, it's too much.
I got you for an hour and 15 minutes here.
It's just really sad.
That's sad. And I hope I can find some of the best people to help me figure this out. So just
talking about how it was helpful for us to find someone to help us figure our markets in.
It was helpful for me to get Ezra to join and figure out technology. I think just can we find
some of the best people in the world to help us figure some of these things out so I can have more
time to call my parents. So yes, it is that. And I think another thing is just, I guess now my
brain works every time, which is sad also. But the good part is that I think my dreams are coming
true. For the first time, I told my friend that for the first time, it looks like I've achieved
all my goals. It looks like I've lived my dreams. I didn't really have huge dreams to be honest.
But just looking back and saying everything I wanted to do looks like I made a lot of progress
doing it. And that for me is when you get to a place where you can't give any excuse,
you have the team, you have the money, you have access, you have the brand,
and you have the customers. You have everything to make this work. So that's a lot of pressure.
It was easier two years ago, five years ago. I could just give an excuse. There's no lights.
I don't have cars. When I wake up to work, now I have to figure it out. I have to do it.
Exactly. So it's really, really like, it's good and bad. It's good because I can't, it's good.
But it's bad because I have to keep going. I have to just build. But I'm excited. I think this is
payment is extremely exciting. So I used to be worried at my first company every time I read
startup books and they say, oh, the way to know if you're building something cool is if you take
it off for a week or a day, will your people notice? So I'm like, okay, I didn't have the
answer to that then. We're now a taste tag. A taste tag goes up for one minute. So just knowing
that people are relying on us, knowing that we're powering the generation, and just knowing that
so many businesses that will be built on our platform is just exciting for me.
Super exciting stuff. Well, listen, I've kept you for a long time. One more question to ask
and you can get back to your one hour blocks of founder time. A lot of people listening to this
hopefully will be entrepreneurs or aspiring entrepreneurs living in Nigeria, living somewhere
in Africa. You've talked about how important it was to share your story as an entrepreneur,
but what other advice would you have for somebody building a company from Africa?
Yeah. Wow. A lot. So I would say the first thing is just stay focused. I think there's so many
things that can go wrong, but there are also so many things that can go right if you stay focused.
So just have a clear sense of what problem you want to solve and just make incremental progress.
Just fix it little by little. Don't try to figure it out. We haven't figured out payments.
Two years in with everything. Let's still try to figure it out. Stay focused. Understand that
Michael from YC told me that it takes about seven years to build a successful company.
Just know that it's going to take a long time. If it takes smart people, people have always
experienced seven years. I probably expected maybe 10 or 15 years. So just stay focused and just
have the courage to just go at it one after the other. I think that's important. Number two is
which has helped me so well. Can you find people better than you to join you in the journey,
either as co-founders or if you're lucky to just pay them to join your team? Because I think
founders, you have to be the baseline. That's what I told people, have to be the worst person
in Facebook. Please help me be the worst person. So just finding and it's helped us. I see what
my team is doing and I'm amazed because I'm like, imagine if I had to do this myself? I'm just
like, I'm just excited that I was lucky that some of the best people in the world decided
to join me on this journey. So I know you don't start that way. But I think as soon as you can,
just have this huge barrier or huge wave or huge antenna. Just be able to find
impressive people, connect with impressive people and just see how they can help you figure some
of these things out. All right. Well, thank you so much for coming on the show, sharing your story,
talking about Paystack. Yes, thanks. It's been awesome having you. Yes. If there's anyone
listening and you're interested in coming to Africa, I'm going to host you.
So just be able to look at each other. And you want to just spend time seeing what we're doing
at Paystack. Show up at paystack.com. Happy to just show you what it looks like.
Free trip to Nigeria, Shola. Thank you so much, Shola. It's been a pleasure having you. Thanks.
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