There are only two types of startups that seem to get funded these days- the really cool ideas and the most disruptive ideas. But leading a unique startup through funding rounds takes the experience of a seasoned entrepreneur, and no one knows how to do this better than entrepreneur and Quippi founder Michael Aleles.
Unlike many entrepreneurs today who are starting fresh out of of college, Michael held management positions at some of the world’s top companies for over 20 years in Silicon Valley before he got into entrepreneurship. His startup Quippi, which he founded in 2012, is looking to disrupt the growing money transfer industry of digital wallets and has raised over $3 million in venture funding.
In this email interview with Michael, we discuss the value of college for aspiring entrepreneurs, how to eraise a successful round of funding, and his thoughts on the current startups coming out of Silicon Valley.
Tell us a little bit about your business background before you started Quippi.
“I spent most of my career in Silicon Valley. The bulk of that was doing venture deals for Intel. That was really my whole life and I decided to start this company and I always had at the back of my mind to do a startup- it was really just for me. It always had to be something that was a very big idea and something that can really leverage my own skill set and network, and for me that’s just really a perfect combination of that.”
You worked in Silicon Valley and now you’re based in San Diego. Which city do you prefer working in?
“Well I grew up in San Diego, so San Diego is pretty close to my heart. I spent a lot of my career in Silicon Valley and obviously that’s a very important part of my career. Silicon Valley being what it is, I’m very fortunate to have a great network up there but given that I’m from down here and I have a couple of young children, it was the right place for us to do this, from a personal standpoint. Now from a professional standpoint, for the business that we’re operating, which is doing business with Mexico, there is really no better place anywhere in the US to do business with Mexico than to be here, a half hour from the border. So we’re really fortunate that we have tremendous access to doing business with Mexico.”
You went to college and got a degree in business- how beneficial was this education for you in your career?
“It’s been indispensable. I mean, now it’s a long time ago but you’re always going back and leaning on what you learned previously. I kind of take from what I learned academically, what I learned on all the previous jobs I’ve had, and all the other previous experiences that I’ve had and so every step I’ve done in my career is really built upon the previous step. Education is part of that but of course all my previous work experiences are equally if not more relevant.”
Would you say that young and aspiring entrepreneurs need to go to college if they want to start a company some day?
“Look, I know that there’s some different schools of thought on this, especially these days. You really have to consider what the person’s goal in going to a university is. It’s more than just what you’re going to get, it’s really the experience of being with a peer group for many years, listening to different perspectives and views on issues that may be the issues you may care about. I think for me it was very important and I think it’s still very important for young people today to get an education.”
How did you come up with the idea for Quippi? Is there any sort of personal backstory to the company?
“So you know my career has been spent between Silicon Valley and Latin America. I lived in Latin America on and off for about ten years so I really saw firsthand the way consumers get ripped off. Our approach was really about how can we help out and offer financial services. It’s extremely consumer centric and consumer friendly. We saw firsthand how consumers, especially consumers at market that we have as servers. so yeah it definitely comes out of some personal experience.”
Briefly explain what exactly Quippi does and its business model.
“We are selling gift cards on behalf of major foreign retail operators. Our business model is to charge the retailer the fee, we don’t charge the consumer a fee. So the way we make money is by charging that retailer a fee, because we’re sending business in their door. In turn, we offer the consumer a free way to support their family back home instead of using expensive remittance services. Let me be clear: we are not a remittance service, we are a gift card business, but our gift cards happen to work across the border. We offer a benefit to the consumer that otherwise doesn’t get the type of a benefit. If you look at the kind of consumer that we serve, they typically pay the highest fees for financial services whether it’s check cashing, money transfer, payday loans, or prepaid credit cards our approach is how we can offer a financial service to the same customer and not charge any fee whatsoever, and the way we do that is via gift cards.”
Immigration is a really important issue right now and your industry directly affects the situation. What are your thoughts about where tech can come into that scenario?
“The other thing to think about when you talk about immigration is that the market that we sell to is generally ignored by Silicon Valley, generally ignored by tech. That’s something else that we are excited about. The innovation coming out of the Valley generally ignores the underbanked and underserved consumer. Those are the kinds of consumers we are aiming to serve. We are fishing where no one else is with this market and that’s what excites us.”
What have been the biggest challenges of building Quippi so far for you?
“Well building a startup is ripe with challenges the second you decided to do it, so we’re no different. I mean I think the biggest challenge is in getting the company off the ground. That encompasses convincing consumers, convincing partners, convincing investors- startups aren’t easy and it’s not for everybody. You’ve got to have an iron stomach to go the startup route because along the way you’re going to get lots and lots of “no’s” from all three of those areas but you need to persevere and you need to be able to pursue what you want to push in order to see it happen. But you know, anybody who’s considering launching a startup needs to consider that.”
I’m assuming that when you decided to launch Quippi you were fully aware of all of the issues and challenges that could come about, right?
“Yes. Because I’ve been around startups for most of my career, I’ve done a lot of investing and work in startups so you go in with eyes wide open, but really for me it has to be something that I was really passionate about and that’s what this is.”
Since you launched the startup in November of 2013, you have raised over $3 million in investment funding. Can you give us any tips when it comes to pitching your company for funding?
“Sure. In order to raise money you have to be excited in yourself and the concept because if the entrepreneur is not excited and that enthusiasm doesn’t come through in any meeting, you can forget about ever raising money. So whatever entrepreneur is out there you must be entirely confident and excited about your concept, that’s step number one.
Step number two is you have to go after people that will be similarly excited about your concept. In our case, we pursued investors that understood our target customers and investors that understood Mexico. I would tell it to any entrepreneur, you have to go out and pursue people that can really get the concept right away. If you have to sell the concept you’re a step behind. You’ve got to go out to people that will understand what it is you’re doing and will be similarly passionate to this.”
Tell us your most memorable failure and how it changed you as a person.
“With any startup, there’s always failure. What we’re trying to do as a company is to learn from our failures- what I tell my team is do more of what’s working and do less or what’s not working and if you find something that’s not working, adjust and don’t do it again. So again, with the startup you don’t have all the answers going into something. You are going to fail at certain decisions that you make along the way. The idea is to minimize those failures, to learn from them and not repeat them.”
What’s your opinion of the tech products coming out of Silicon Valley right now?
“There have been really great products that have come out in the social world. For the world we look at though, financial services, how many mobile wallet companies do we really need? It’s just more of the same. We are doing something that nobody else is really doing and that’s harder to pull off. People understand the concept of a mobile wallet, we aren’t that kind of company nor do we aspire to be one. There are some great innovations coming out of the valley, but a lot of it is me too stuff and is just technology looking for a home and that’s not what we are trying to do.”
What is your ultimate goal for yourself in this company?
“The goal for any founder I think is to build a strong independent company. You build a company that can stand on its own two feet. If along the way somebody comes up and thinks that the company is a better fit with their organization, as a founder you’d be smart to listen. But at the end of the day, you build a company to be independently successful. That’s my philosophy as an entrepreneur.”
Lastly give us some words of wisdom or advice to any entrepreneurs or young aspiring entrepreneurs out there.
“Number one, be passionate. If it’s something that you’re not excited about you’re just thinking of some good opportunity to make some quick bucks, you’re wasting your time. So be passionate about what it is you’re working on. Try to do something that nobody else is doing and in the course of doing that you can get a lot of people who are going to tell you that you’re nuts but that’s fine- the great businesses out there started where nobody else is fishing. So you know go out and fish where nobody else is fishing.”