Shola Akinlade (@Shollsman) knew that the online payments process in Nigeria was broken, and that he was in the perfect position to help fix it. However, numerous challenges stood in his way, including broken financial infrastructure, unreliable internet, and users that had little experience making online payments. Learn how Shola overcame the odds to build and grow Paystack — Stripe for Africa — to over 17,000 merchants processing over $20M per month.
What's up, everyone? This is Courtland from IndieHackers. Com and you're listening to the Indie Hackers podcast on this show.
I talk 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?
The goal here is always so the rest of us can learn from their examples and go on to build our own successful businesses.
Joining me today and in person and my dining room is Shola Akinlade the CEO of Paystack. Welcome to the show and thanks so much for agreeing to swing by for this interview Shola.
Yeah, cool. Thanks for having me. Really excited to be here.
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 Stripe 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. 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 bus ticketing companies moved from just selling ticket offline to just selling via the app, so yeah.
Things like that. Yes, God is Good Motors.
So Paystack, Stripe for Nigeria, Stripe for Africa. What's the ultimate vision here? Is this going to be a Stripe competitor for the entire world?
That, actually we used that at YC just to get Americans, to get people at YC to understand what we're doing.
Very quickly into the business realized that 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 other payment companies do.
So, 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. Most of these things happen offline. Someone has to facilitate it and that's what we're trying to do at Paystack is make sure that merchants can accept payment from their customers.
I told someone last week actually that imagine if your customers, the first time they are paying on your website is the first time that they're using the card in their life.
Exactly. So we've seen that a lot at Paystack. We've seen people get a bank account, get a card and a 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, well, it's just it's very interesting.
Yeah. You're building almost from the ground up. Whereas companies like Stripe has this sort of rich existing infrastructure that already existed.
We were putting our credit cards into websites well before Stripe existed.
That makes me so curious. What was it like to pay for things online Nigeria beforehand?
To be clear we didn't invent online payments in Nigeria.
So there's been an online payments industry and there were companies trying to figure it out.
We just thought that firstly it can be easier to get started. Before paystack, it probably would take a business about maybe three weeks or four weeks to just start accepting payments. We thought why can't that be simple APIs to make this work.
So and then from the customer side also, the experience was very cumbersome.
I think that's also what Stripe thought. We said this can be very simple. This can be easier. So just we thought we had to rethink the customer experience and just filled it in a very simple way.
So I would say that the difference here is that for most businesses, so like the businesses I talked to you about, the God is Good Motors.
This is a business that has busses, they run 700 busses. They've done this for the last maybe 12, 13 years and have this network but it's always been offline. How does this company start accepting payments online?
How do they get the customers to book football tickets in their homes and so just empowering that. Making sure that this can happen, is what we try to do.
Yeah and I think what's interesting is Nigeria's a very populous country. I think you guys have 100.
200 million people in Nigeria! So it's 2/3 the size the United States, people don't know that.
Sub-Saharan Africa is close to a billion people. Yeah, 40 countries. It's very populous but also very diverse.
There's tons of payment methods, tons of government, tons of different payment infrastructures.
How do you tackle that problem and start a company and say, okay. I'm going to unify all these diverse systems into one?
Exactly so I can dial it back very quickly so that you probably understand why the answer to 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 Heineken beer company, but of course I just thought I'm a maker. I should be making stuff not just chilling.
So is that common and Lagos or Nigeria there? A lot of people who are makers and who decide they're going to just go on and build their own stuff.
Yes. 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. Which is very common.
Happens in the States too.
Oh, yeah. Well, yeah exactly I can imagine so but I thought about it. I said 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 imagine if I spent like my full day making stuff, it will be amazing. I don't know why I guess I was high or something. I don't know. It's like, do this! So I left and my friend and I we lived together and we talked about the time.
We said Dropbox is cool, Dropbox is on the cloud since 2007 actually. Emerging markets, we don't have the cloud. I think we were naive then we were 21, 22. What if we built something like Dropbox that runs on premise for the businesses that don't really have good Internet can still just collaborate within the building and we did it.
We did it. We uploaded it to SourceForge, SourceForge was big then and like the same day we started getting people downloading it and using it and emailing us so I was very excited and we did it for five years.
Let's pause for a second. How did you, why did you think it would be a good idea were 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 put something together.
I thought about it, like if these people are asking their self there must be so many people that would need it. I thought it was easy to do this. Well of course, it wasn't very easy.
Typical engineer founder. This will only take a day or two, just a weekend project.
Yes, and actually we tried to sell it. So we didn't want to just sell, we wanted to make. Selling is so stressful.
I used to read a lot of Business of Software then this, but eventually just decided let’s keep it up and see what people will do with it. Actually the day we uploaded it to SourceForge I think like about four hours later someone sent me an email.
It was in Portuguese, I had to use Google Translate and it was like wow, this is amazing. I've been looking for this. Can I translate it to Portuguese for you? We were like whoa. We don't know how to respond.
So we had to rewrite it and then put the files in a translation file and I sent to the translator who did it. So it was a very interesting and exciting journey and then people started emailing us saying can we pay for this? My company has a policy not to use free software.
Okay, that's cool. How would you like to pay for this? Yes, I think we'll send $1,000 licenses. Yeah.
Have you considered turning this into a real business before then?
No, no, we did of course because we didn't really push it. We didn't really sell it. We didn't know how to, I don't know.
We probably would send four, five licenses a month, but there was so many people using it but just a few people wanted to just buy it. We also didn't want to because it's I see a few software companies where it's the same thing free version and a paid version.
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 with a very good version being free. So he was hard for us to define what the paid version will look like.
So eventually it was almost the same thing to be honest. It was just, do I want to use it or do I want to pay a lot?
Yeah. So how did this how did this end up winding down because it sounds like you're making sales.
No, it didn't wind down actually what I think happened it went on for a long time. We had so many people, I think it was exciting for me because interacting with people from everywhere in the world.
People from China, people from Australia and I was in Nigeria, so that was really cool. There are timezones, people inviting me to countries come sit with them and 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 the good thing about it was people look at this and were saying some people didn't really need it because of course Dropbox and the cloud was working well. So people were asking me to do other stuff at them.
At first, I wasn't doing that but after a while a few banks are reaching out to me and saying, oh we have this thing we want to do. It's not exactly like what you have but just like patch things for me.
So we started patching things for these banks and just shipping very quickly and also just because we had built something before it was easy to just build something else.
So they thought were very efficient but actually we were not.
It's all relative.
Exactly. So we did that, I did it for three or four banks and started realizing that wow, there's an opportunity here. When we were doing Procurio we had to use a company called Avangate for payments.
Actually they sent us a card and we had to use the ATM to remove cash. It was really broken, so I knew payments was broken, but I didn't think I was going to be the ones figure it out, but just working with the banks and one day I was just playing around with something and I was able to charge a card from my computer.
I'm like wow, this is it. If I could do this, then I can figure this out. So I started just talked to the banks, talking to customers, talking to people and saying you know what, I'm actually building a new kind of payments company.
Are you interested in the future of the payments? Like everybody knew payments was broken and the only thing I said was, I'm trying to figure out payments, are you are you interested? I needed a lot of people interested.
I had a waitlist and said Paystack is coming. So before Paystack actually there was no recurring payments. Just think about that. Of course, that's the first feature we just put in there.
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?
Exactly, I spoke to everybody. I didn't know them to be honest. I just put up 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 was in an accelerator in Nigeria, Gingerbox.
So he told his friends and then I told him oh no, I don't have enough capacity. I just want to work with a few people. So it felt a bit exclusive as some people started telling other people. I don't know, I guess I was lucky. So yeah, so a few people know about it. In fact, I wanted to ship very quickly and he told me his website wasn't ready.
What they do is, they do fruit deliveries. My first customer, actually they do fruit deliveries for businesses. So they go to a business and deliver fruits maybe twice a day.
So they have multiple people in the business that they give these fruits and it was difficult for them to do payments. It was difficult for me because it was no recurring billing and everything. I told him, hey use Paystack and I'll solve your problem.
He was like I don't have a developer, I need to make changes on my site. So I'm like no worries. I'll do it for you. So I built out this website and did the Paystack integration for him.
Wow, that's service.
Exactly, so it went live, I did that for about three or four people actually just to kickstart everything. So it went live, people saw it people started saying oh I want this, I want this and I had a wait list.
Then one of my friends actually one day while I was sleeping, they sent an email and copied all the YC partners in said hey YC, Stripe is not in Africa, well we have Paystack now. Then Michael from YC responded and said hey Shola, tell me more about like Paystack, like ha!
What was I going to say? It was one line actually, tell him about Paystack and I said I can't respond with just one line, so I spent about five hours just trying to compose the perfect response.
Do you remember what you said?
No, well it's so long I moved my mail servers now so I don't even have access.
Was it one sentence?
No, it was like maybe ten paragraphs but it was it was good. I thought it was good because I just talked about what we're doing, talk 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 that I was going to be the one to figure this out. So I think it was a good model. I had people that did this for me, now I can see what it looks like. Just having people that did send an email.
It wasn't just me and I just said to 50 people help me edit this e-mail. So I think it went well. Michael responded with another line and said just asked another question, so we had back and forth. They asked us to apply for YC.
So I'm curious at the time what made you the person who's going to figure out payments? Was it your experience working with the banks? Was it your experience growing up in Lagos? Was it running Procurio?
Yes, I think it was everything. I think firstly I had to suffer before I build world-class software so I had had a good sense of what needed to be done. So I spent about five days talking to customers.
People using my software, people I haven't met 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, I guess this always like I don't want to say a vested interest.
I really just wanted to fix it. I didn't want to make money. I don't like to think about any of those things. I was like, this is a problem and like I don't care about anything else. Fix it.
So I think that was helpful because the way payments had been it was really focused on Enterprises, because the Enterprise companies are the ones that can pay for it and Enterprise companies like complexity somehow.
So like I guess everyone had built for that complexity and it was just affecting everything. I didn't really have that burden. I just wanted to say this is what it should look like.
So you're kind of all about serving the little guy, companies that are maybe like you, companies like your friends companies that you're dealing with like Procurio.
I knew that it was going to be big but I didn't want to start like that, I just wanted to sell to a few people that spoke to me. I got a lot of people pressurizing me actually.
That is what we got into YC, which I will jump into very quickly. When we got into YC and we knew about how YC has demo day in three months time. Like a lot of people were telling me oh, you have to go for some big accounts now so that you can make it for them only.
I'm like, not really, I have people trying to use this thing. Like I just need to grow it everyday 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 that was really helpful for us.
So I want to talk a little bit more about these pre YC days before you came to the States. 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? Also what was the funding environment like there and how are people actually financing their businesses?Including you.
Exactly so I think after this is you'll have so many questions as well. So I think the interesting thing is like Lagos, Nigeria is almost like San Francisco, almost.
So we had access to the Internet and I had a laptop, think I had a Mac actually. This is interesting, so I had a laptop connected to the Internet and I had been reading stuff like Business of Software.
I've been reading everything PG, Paul Graham had written, I had read it. I felt there's so many people like me, and that's the power of the Internet. The Internet is the same everywhere.
We have the same Internet in New York, Lagos everywhere. So really being exposed to the Internet we were exposed to what was happening.
Where would you go to meet other Founders were they're like hubs where you go to work together?
There were! There was somewhere called CcHub then and now there's so many. The first part of it was in the early days, just have an exposure to the Internet.
How do people fund their startups, also just because they're not so many, not a lot of makers, There are multiple opportunities to make money as a maker, so you could just do some consulting projects for someone else like in 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 would be looking around for who will 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 the person that made the deal.
They have money to spend
That person is taking a huge markup. So I has access to people just reaching out to me every time say 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. So I think really there was some infrastructure stuff of happening. So electricity is not 24 hours a day. So you probably need to have like a generator.
Oh, yeah. Do you know what a generator is?
Yeah so you guys had a generator running Procurio.
You need to buy Calor Gas or petrol so yes.
So these are extra costs then?
Every day you have to do that, even more than the costs 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 once you have ran it for three or four hours you have to pour more.
I think that was most stressful part for me. Just having to get that just to have 24 hours power. Sometimes also because it's very noisy, you don't want to turn it on at night. So you might like be really fired up.
I had this happen to me so many times like I would say I'm tired I want to sleep from 4:00 pm to 10 pm so I can work from 11 all through the night. Then you'll sleep, wake up at 10 pm but there's no power, so what do I do!
I can't sleep so maybe you have to read or something. So yes, I think that was really common. I think it's getting better now I'll say. That was a very big problem.
So there must've been like a tremendous difference once you guys actually flew to the United States.
To interview for Y Combinator to get funding from American investors.
It was fine. I remember Ezra saying that he had a connection to the terminal and the connection didn't timeout for maybe 24 hours and I was like, wow, this is amazing.
So of course the next problem was just the speed of the Internet. Now it's very fast but 10 years ago it wasn't very fast. So you had to do what you had to do.
That's open multiple browser windows, maybe about 20 and then go back while you're doing one to the other side. You have to be very patient. So that was definitely bad too.
It's interesting with things being so different in 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 that wasn't a problem.
Exactly. That's very correct. That's very correct. Yeah, so there were multiple problems like that, but I think that's the power of startup community.
I think there was still a lot of community stuff happening. There was in Nigeria Garage48 and all these events actually in the US, some of them were happening in Nigeria. So there were meetups happening and all that.
So I want to talk about some of the logistics to starting a payment company and sort of this first year. Was that a year before you ended up going to Y Combinator?
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 even have a working product now! So at first like I said, I could charge your 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 advice.
One of my friends was also very helpful that had several people push him and saying. yo, you got to do this. You have to ship now. So yeah, there was this Startup Vitamins poster, so I had I knew that I had ship as soon as possible so I actually shipped a very crappy version as soon as I could.
So as soon as I got Gingerbox, so we launched, I think the first transaction happened in August. I started working on it in January.
So about eight months to the first live transaction happening.
What could actually occur that point in time? Like what could your first customer do?
Customers could go to his website and pay for it.
But I couldn't even pay him his money! I hadn't figured out that part. That was why I knew there was something there because I had this company, I think it was called Jekalo.
They were building like a ride sharing app, and he told me, hey guy. I need to use Paystack now. I said, no I'm not ready for you yet. He said I need it because I have a site, I have an app but I can't charge my customers.
My customers are using my ride sharing app for free. He was saying just put in Paystack, you don't have to give me the money.
You know people want what you're building if they're willing to have you keep their money. The customers are paying you because they still need it.
That happened and we kept his money for a long time actually. So we're not settling. In fact the first, when we were paying the first people their money someone was just doing the maths at the backend.
Like I will send an email to somebody, so when the transaction is successful I will trigger an email that goes to somebody else to figure out the settlement. Then she was just like, okay let’s add the successful transaction to this list, let's pay them. Yeah, so at the back it was very crappy but we just wanted to move on, I wanted to solve the problem.
I wanted people to accept payments and I think we did that and then started getting more elegant solution because there's more problems. The main thing about payments if it works for one transaction at 1.7 million transactions your problems are different. There's going to be disputes, chargebacks, fraud. So new things to figure out. It has been very interesting.
How much of the work to get to the point where you could accept this companies 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 payments there was some compliance part to it. So I needed to figure out PCI DSS and I needed to figure out like 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 for everybody.
o 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 were not ready with whatever they were building too so just getting them to do it very quickly was also part of it.
What was your team like at the time? Was it just you?
It was just me. My co-founder Ezra, so I reached out to him to help me build the Node plug-in because I realized that people wanted plugins or 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, it was like, is there anybody that can really join you to figure this out?
I was like, yeah Ezra because Ezra and I actually went to school together. He was a very good engineer.
We do awards in my college, programmer of the year, Ezra won that for four years. So he was really good and then he had tried to do payments before too so I just reached out to him.
It's like the perfect co-founder really.
Exactly and he was also excited because it was payments and I think we made some progress so it was more than just an idea.
So did the two of you fly out to San Francisco for your Y Combinator interview together?
Yes, actually there is a very funny story what happened because it was a long flight.
We did seven hours from Lagos to Amsterdam and then we had maybe like a three hour wait. Then we flew from Amsterdam to San Francisco, 11 hours. So doing our three-hour layover. I think we shipped something pushed the code or something
Did it break?
Then while we are flying we realized that wow, there was a bug there! Thankfully it was just one or two transactions that happened. in that period. So we flew to San Francisco and then we got into YC.
What was that process like of going through the Y Combinator interview and getting in?
Yeah, it was really excited at first it was intimidating. So we wanted to get in a day before.
I was reading a lot about YC interviews and people are saying if you're not from America, you can have a problem your accent and they might not understand what you're saying. I hope you guys understand what I'm saying.
I understand you just fine.
So if your accent might not be good, we said, let's go in early. We had an interview on Tuesday and we got in on Monday.
So we said let's go in on Monday and just talk to people and see if they can understand our accent. Which was good actually, so we got in. Of course there was no problem we saw some different kinds of founders.
So we saw someone building a shirt that never gets dirty. So a team were building a bra that detects breast cancer.
We saw someone building self-driving cars, self-driving shuttles for colleges. We were like, oh shit. They asked us, hey guys what are you building? We're building payments for Africa, something Stripe built 10 years ago.
We said that because we didn't really 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 payments is broken 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 were like, okay, thank you!
It's a huge opportunity and I think that's what investors want, right? 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 were doing.
That was very funny because on that flight, I wrote out my notes. I had to cram my talking points, I just had everything in my head. This is Paystack, Paystack is blah blah blah.
So I got in and I tried to just repeat what I crammed, but immediately I started they said what are you guys building? I said we are building Paystack, it's a payments company in Africa. We have made a huge leap over what currently exists. They experience used to have seven steps but we got it down to two steps.
They were like, show us. Oh shit. So we had to go get our laptop, open it up and then we showed them the old experience and then we show them the Paystack experience. Not bad.
Yeah, 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 it was very funny and I was like, oh, well, we've messed up. Let's just go back home but thankfully we got into the program.
We were the first Nigerian company to get in. Now I think there are over 12 Nigerian companies in just two years.
They have gotten inside, so yes it's exciting.
You guys sort of broke open that barrier.
Yeah, I think it was a mental barrier to be honest. I didn't think YC will fund a Nigerian company. Oh, I wouldn't think we were the ones, like we didn’t think what we were building was interesting enough.
How important is it in your opinion to have the blessing of Silicon Valley investors, to have funding from Y Combinator.
Do you think you could have built Paystack into what it is today without coming to Silicon Valley?
So two answers, we were very sure, even doing YC we didn't think we were going to get into YC. Paystack was on a very good trajectory before YC and I think it should have continued.
Getting into YC was helpful, just getting that money was good, too because we could get someone else to join us very quickly.
Getting the advice was really cool because I had just been reading online, I haven'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 changed that.
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 heard and what I've seen, even what happened to me was, a lot of founders struggle with the next step. It's extremely difficult because you want to build a payments company.
How hard are things are you going to do so it was hard to think about it in weeks, 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 to just having to think about my company and execution on a weekly basis was really really mind-blowing for me.
It helped me focus so I just put the numbers on the Excel and all YC says 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, like it was obvious this was a distraction.
So yeah for me having a clear sense of this is what we're doing next week. This is what did. So the early days, I was thinking weeks now. I'm trying to think in quarters. Well in the early days I was really just thinking 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 of 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. I agree, thinking and weeks and having sort of this weekly milestone you have to hit is pretty powerful in terms of moving fast.
Yeah, progress and momentum is very important because there's so many smart people. I don't think we are the smartest people even from Lagos. So there's so many smart people but the difficult thing to do is to just make progress every week, every day. Incremental focus is just amazing.
You look back and it's really added up to something huge.
Yeah, exactly. Yeah.
So what were you worried about and those early days you had?
We worried about everything. We were worried about everything, worried about fraud, we were worried about competition. We were worried about, we just worried about everything to be honest.
Very quickly, we start getting very good feedback from our customers 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 helps us figure stuff out.
We were worried when we started, when we got the $120k from YC said this is it. This is all the money we are 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 people. This is very anti sales, but I was worried about will people use this, will I be able to sell this to X, will this big company switch to Paystack?
Which in retrospect was unnecessary. So in the early days I thought that was unnecessary. I was spending a lot of time just trying to think about the the big companies and what it would take for them to switch to Paystack.
When in reality, I just needed to make progress. I just needed the smaller companies to use it first. Then people that work in the small companies are actually friends with people within the big companies.
Then seven months in we were talking to someone from a very big company and they said oh yeah my friend told me about Paystack or my brother told me about Paystack. So the sales conversations were really easy, but I unnecessarily thought it was going to be difficult.
Yeah and then of course, sometimes a small company turns into big company which is pretty cool.
So one of the things that people at Y Combinator talked a lot about and people in the startup Community as a whole talk a lot about is product Market fit.
You actually have a product that, matches the needs of your market, and there's sort of a before and after where like for 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. Had you guys reached product market fit when you move into YC.
No, I think we just reached product market fit a few months ago.
What is a milestone there for you?
I think is the point where it's a falling apart. So I have this conversation on YC, but I knew that the customers we want which is tied to what I was saying. The customers don't really want us. It's the customers.
Well, exactly. So I knew that even though we had customers be product market fit for us will be to the people were looking for actually want to see the real quick the customer, so people were still looking for more people that. The expected more from us, so I don't think we had that we had to Define one moment.
We had to find out this is what you should get for my parents company, but earlier in the year, I think after making a lot of progress and products and all out so I can serve my where or do you have this? Yes, can we do this? Yes, we do have this problem. Yes, so yeah, so I think that was very sure it's just so the way I think about product market fit.
I think it's really really getting the right customers customers we want how easy is it for them, too? Understand our friends can we satisfy them, and all that and now it's looking like that.
So, how big are you guys if you can remember back at the end of Y combinator. You started with just you and Ezra. Did you have any employees?
Three of us came to YC actually. It was me and Ezra but immediately we got into YC, we reached out to a friend of mine, he is a very good designer and thankfully came to join us. We stayed in a two bed for three of us.
You shared the beds.
Yeah, exactly. That was good. So we did that and by the end of YC, so we had two people in Nigeria because the time zones were really bad.
We needed someone's help with admin stuff and customer service and then we need someone help with developer support. So we did that, for the end of YC we were five people. Yes, and then by the end of the year we became about 10 people.
This time last year of about 15 people and now about 36 people
Were you funding all these hires of 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 in the early days. It was just with the revenue because payments you have like ramp up, right? We're making so little buddy.
It was the first was we launched we the process $2,500 we made about 20 dollars, which is really sad that I think about it. Yeah last month, we did about 36 million. Oh 24 26 million dollars.
Yeah. So it's this is well just about two years.
Yes, you're a look back like and then think wow, I can't believe how far we've come. This is 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 what?
I didn't think it was I looked at the deck I prepared and I was just laughing because I think even the numbers with so small. I don't know why I put it on the deck. Yes. I didn't think so, but I think one of the things I also helped us was just acting our age.
I'm not trying to be unnecessarily like I don't know what to use for that. But we knew we were small venue were early when you're the problem will speak when you hadn't figured it out. So just having all that context helped us just do the right things.
We don't try to be good and try to convince people we were bigger than the way so so yeah, it was very simple.
Whenever I see a company solving a problem, that's I guess it's obvious as yours was everyone you talk to you said yeah, you're right payments are broken and 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 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 is this thing about how business people should be the ones solving problems?
So this has been about business people should be the ones solving problems and then developers should just be getting paid for right we don't do.
They do exactly what they're told by the business people
Exactly that and that was that was that was big so, but I didn't thought maybe I was lucky and just haven't. In a developer that solve business problems. I thought 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 the next thing was focused so, about payment. In Africa there is a lot of side opportunities to make money there's a lot of ways to capture value without doing the right thing.
Can you give me some examples
What I mean is because it transactions happening because 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
As against just can I just build a very simple API that I might even be able to charge for.
Even in doing that so when we started Paystack that there was so many new ideas of things we could be doing all you want to do something like them or do you want to do something like this you want to do something like that, so the multiple opportunities and like.
Focus to just stay on the path, especially when you're solving a difficult problem is very important because otherwise you would think the problem is difficult you would jump onto. Is there a problem you might solve the easier problems with the difficult problems still?
Which will not be opportunity for someone else. We just can't figure it out. So I think courage you say, what if chosen this difficult problem. We would try to fix it before we move onto without the problem. We want to fix was helpful.
Why did you avoid all these distractions. How was it that you're able to focus as I understand that you being a developer who started a business before 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 in saying no to those.
Oh, that was my support system. So good friends. I told people that I wanted to pick our favorite so and so there's so many people looking up to me and say what, You have to be the one to figure this out.
So I think that was helpful. I honestly think I could've lost focus to the fact the two problems. I was talking at the same time. I was trying to build something called Expandly. Which is an expenses management system, again that stuff love it easier because I could just get a business pay me and I can help them to the expense management and all that. It was so closely tied to it but it was I felt easier, what very quickly. None of my friends and people in my support system that what just to this prevents the in this period is Big Edge just do it and after we'll lock so I think I was lucky I had good advice as people that just said just doing this.
So one of the interesting things I think about building a company. That and Away comes behind a lot of your competitors and other countries is that you don't necessarily have a Playbook what you have at least some examples.
You can look toward and say someone else has done something similar before Stripe or PayPal and Braintree or some other payments company. Did you look up to these companies?
yes? Yes. Oh I did. I was telling selling I read every blog post on Stripes blog. I read this blog post, maybe two hours after the publish. It's like, yeah, I read that documentation. Completely I did that for a lot of women from this everywhere.
So this company in Australia, payments. There's everywhere just any parents compare can find I read all their Vlog first. I'll read all the documentation the public confidence like worldpay. I would read their annual.
Just what point what could I get what Kyle earn, so I think that was helpful for me and then just having that passive knowledge, which I think is a very helpful for me as I solve paste that call them is have so much passive knowledge about how things have been done and not necessarily need to copy them, but it helps me like think about how to solve some of these problems in our own way.
What have been some of the most difficult things to learn where perhaps there is no playbook in front of you and how do you deal with that situation where you're blazing a new trail?
Yeah. It's to be honest. You have to make mistakes and we made be made we make mistakes every day. We make a lot of mistakes ve piece in how my favorite mistake to make his check out from we just almost copied Stripe’s checkout.
I don't think so by offering yourself to hear this but I think we try Li we did Barrel but it was very similar to what structure called look back very quickly is that I've seen that users with structuring to use it they would put today's date instead of the expiry date of the card. Yeah, because you just ddmm, like what is that?
They would worry about what the CVV was and all that stuff very quickly is that what? You have to like we think of this check out for and very quickly optimize that check out from for the users who were building for and I was helpful.
Just because like users in Africa weren't used to paying via sort of the standard US or European check out.
It was it was because we started with early adopters. So when we started we added up to speed.
It worked well for a business selling moving deeper without it having customers whose customers were not early enough that so one of our customers buy Power the YC company to this electricity in Abuja and Kaduna, so.
That customers are not the average customers that uses that will choose a laptop or something. So that was taking us into different grounds.
and we had other customers to so it was it was it was because our customers were bringing some of their customers that they have the same exposure. We had all the other customers heart. So that was just big problem for us trying to figure that out.
This is a problem. Yes. I think the other mistake I won't say it was a mistake. And I things we've struggled with was how do you think about distribution of Paystack? So I spent a lot of time in the early days just focused on product my first conference loss that I did look very quickly that I send. What this has to be some distribution play to this thankfully manual. Joined very quickly.
He's your head of growth.
Yes, I had to convince miles each other's.
where'd you come from?
It was an incubator in Ghana. Yeah. We had done work with them there and he was general manager. So I'm very grateful about what it will be hard for us to have to think about distribution from ground up a pace that like we can't. Just look at other people and say this is how this guy's at doing distribution, so yeah, so that was helpful. Just think about it from first principles.
How do we get more people to know about Paystack how to get people. Help me big piece that become the best payments company in Africa, and I think we made a lot of progress with that. We started building a community around them a chance instead it meant something to people to be Paystack at Merchant.
We tackle different customer success, if a customer had a problem with our service you had to do everything to make sure that the customer. Like that, it will never happen to get you
Now just spin attention saw things and and and and that was really good for us because I think we would have made it a huge mistake to think about distribution from another way, to say, what the way to distribute paste that it's just bad
Always to do you do this or do that?
That's not making your company better exactly.
Exactly. So, I'm very excited. I couldn't make that
Did you make any distribution mistakes or anything that you tried it? Worker that you regret going into
Not really to be honest, which is bad. I think you should be making more mistakes already know that I think I think we've been I think the way we've done stuff so far is we start small and very quickly scale it so I don't think we've I can't remember any of this.
What about the flip side of the things you mentioned earlier. What was. What kind of give you the most bang for your buck was most successful in getting the word out about Paystack and getting more customers in the door?
Yeah, so I think it was it around telling us stories. I think we started writing more said I became very transparent we talked about enormous when we crossed our milestones. We told everybody we at the end of the year we wrote the year in review.
And so people felt like they were part of this and people wanted to be part of it. And as we continue to go select share and with more people think that this is where we are now and just that mindset started making people say well what these guys are figuring out payments and that also helped people know that we have a figure it out completely because if you're not ashamed to talk about some of your problems, yeah, so I think just being.
Writing more writing more transparently and just trying to connect with your customers really something else worked for us. Yeah, and I'm excited because I don't have to put a lot of money on that. Yeah.
I mean here you are right now doing it for free on the ndis podcast writing the story sharing numbers.
I would say that that is one of the problems a lot. That's one of the problems we've seen especially For Us in Africa is so many people going to tell their stories when I started Paystack that I felt like I knew Mark Zuckerberg. I knew all these guys.
More than too much fun us closer to me because it'll have found as a lot of companies and 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 to me because the people I can connect with obviously not on my level not doing what I'm doing.
So there was that disconnect. Yeah, so just excited that now the opportunities to just listen to people that are just doing what you're doing and I've done what. Did two years ago, which is really really helpful. So yeah, this is amazing.
So on a personal level. Yeah, 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. How has your life changed as a Founder?
Yeah. Wow, haven’t had time to think about it.
That's an answer right there.
I think like my the day we did are we this is very sad. Well today we got into I see how to call my parents. I'm like, hey, we just got it. Ycy. Blah blah. We spoke with very long time it up. And now I think I look back on and say,
One of the longest cause I've had because the heart is just so much happy that save that so difficult. So I think the very first bad part that has changed is I'm not able to like assign long blocks of time to anything again like if it's more than one. Too much.
We got you for an hour and 15 minutes.
So that's sad and I hope like 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 help us figure out markets in it was helpful for me to get Israel to join the guard technology. I think just can't be find some of the best people.
In the world to help us because all these things out so I can have more time to collect their heads. So yes it is that and I think another thing is just I guess now my brain works every time bottles. Yeah, but but the good part in good part is that. I think my dreams are coming true for the first time and I told my friend that for the first time looks like I've achieved all my goals.
it looks like I've lived by Judas. I didn't really have huge dreams together. So 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.
When you get to a place where you can't give any excuse you have the theme you have the money you have you have access you have the brand you have the customers you have everything to make this work. So that's a lot of Frasier. It was easier to years ago five years ago. I could just give it a squeeze.
There's no light. I don't have gas but I wake up the wall like I don't doubt. I have to figure it out. I hope you got to do it exactly so it's really really like it's good and bad. It's good because I can't like it's good, but it's bad because.
Have to keep going hard to just build and yeah, but I'm excited. I think this is payments is extremely exciting as having so I used to be worried my first company every time I read startup books and they say all the way to know if you're building something cool is if you take it off for.
A week or day will your people notice, so I'm like, okay I can still have the answer to that dance. We're now faced back if there's a good level won't be idiots, like it's gonna be your so just knowing that. People are relying on us knowing that were pouring the generation of and just knowing that this so many businesses that will be built on our platform. It's just exciting for me.
It's super exciting stuff. Yeah. Well listen, I've kept you for a long time one more more questions asked and you get back to your one-hour blocks with found the 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. Well it looked so I would say the first thing is just like stay focused. I think it's so many things that can go wrong. 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. Like we haven't figured out payments two years in which every day that must have got to figure it out.
It is so stay focused understand that Michael from why she told me that it takes about seven years to be was successful company, it's just know that it's going to take a long time if it takes. Smart people. I've always experienced several years. I probably expected to spend maybe 10 or 15 years, so you 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 is help me so well as can you find people better than you. To join you in the Chinese and as co-founders or if you're lucky just pay them to join your team because I think found as you have to be the baseline, that's what I told people I had been the worst person at Paystack.
So just finding good people 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. This is having bad.
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 you don't start that way but I think soon as you can just have this huge buyer or a huge huge.
Wave or huge antenna just be able to find impressive people of connect with impressive people and just see how it can help you figure some of those things out.
Yeah. All right Shola well, thank you so much for coming on the show, sharing your story. Talking about Paystack.
It's been awesome having you
Yes, if there's anyone listening and you're interested in coming to Africa we're willing to host you. Just shoot me an e-mail if you want to spend time seeing what we're doing at Paystack - [email protected] Happy to show you what we're doing.
All right. Free trip to Nigeria.
Thank you so much Shola, it's been pleasure having you.
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