Fast Money, Smart Data: Inside Wayflyer with Aidan Corbett

WEBVTT - Fast Money, Smart Data: Inside Wayflyer with Aidan Corbett Hello and welcome to the latest episode of the Rena podcast. My name is Greg Dilger, and I'm delighted to be joined today by Aidan Corbett, the CEO of Waveflyer, one of the fastest growing fintech companies in the world. Founded by Aiden and Jack Pierce in 2019, Waveflyer helps high growth e-commerce brands to scale using data-driven revenue-based financing. In this podcast, we're going to talk about the founding story, ie how it all started, what exactly Wave Flyer does for its customers, the funding story, ie equity and debt, and how Aiden has managed the transition from startup to CEO of an international company with several 100 employees and professional VC investors.

But before that, Aiden, you might spend a few minutes about yourself and where you grew up and where you're from and life before Wafla. Born in Cork in the early 80s and Went to primary school, secondary school in a suburb of Cork City called Bishopstown, and then went to UCC and did electrical engineering. Never really worked in electrical engineering. And when I graduated, I actually moved to Dublin to become a civil servant.

So my first job really at a university was working in the Department of Communications, Energy and Natural Resources. Not the usual start for an entrepreneur, as you can imagine, but a very interesting all the same. I think I was watching too much West Wing at the time, spent a summer in Washington DC as an intern, came back one to work in government and so for about a year and a half, I worked in government before deciding to move to the private sector. Does it still stand to you, do you think that?

I think it does. There's a couple of things that you you learn in there that are not intuitive. So the first thing that you learn is that public policy and working in government is actually a lot more complex than the private sector. So for example, in the private sector, you're focused on profits, you're focused on revenues.

If you're solving a problem like the children's hospitals, you have so many different things to solve for and so many different trade-offs to make. A lot of the problems that they're grappling with. In the public sector actually more challenging and more difficult. So you do learn a lot.

You also learn in that department in particular, you learn how the private sector interacts with the public sector and government as well. It's a very policy heavy department. That was really interesting to see. So you'd see, for example, some of the energy companies and how they would interact with with government, how legislation is processed.

So I think I learned a ton, but after a year and a half decided that probably wasn't where I wanted to spend my career and decided to move into the private sector. And how did that play out? What did you do? So I asked Around and I said to people, if I wanted to go on the fast track and learn about business, where do I go?

And everyone said either management consulting or investment banking. So I did interviews with Morgan Stanley and Bain and McKinsey, and McKinsey had a Dublin office and I wanted to stay here. So I joined them, I think in 2008. That was just before the crash.

So I think I joined in April 2008 and then the crash happened. McKinsey aren't known for taking on stupid people, so you must have had a reasonable CV and reasonable interview with them. I did their interview process is tough, I think. We might have borrowed some of their processes, but it was a great place to work.

I think I was there for about 1.5 to 2 years before then jumping into a company called NTR which is owned by the Roach family, and there I was really focused on working in renewables. So while I McKinsey, I pretty much worked entirely on energy renewables, and NTR was a big investor in renewables at the time via electricity and then subment about 2 years in NTR looking at some of their various investments for doing an MBA in London. So NT, how many years was maybe.

9 to 2011. Why did you leave and and what was the next move? So the the next move was actually an NBA in London. My girlfriend at the time, I think, was eager to move to London as well.

Lived in Cork and Dublin. I never really lived outside of Ireland. We wanted to get that experience. And I also wanted to take a step back to figure out what I wanted to do next.

The NBA was a nice way to do that. So I do describe the NBA as an expensive way of taking time off. I don't recommend it per se as a great option for everybody, but for me at the time, I think it did give me the chance to kind of Take a step back and figure out what I want to do next. And that's where I really had the time to decide, oh, I'm going to become an entrepreneur and I had no inclination up to that point.

Like you could have been an entrepre anything you didn't have a digital, not really. Not really, no. I think one of the things I noticed in NTR was that we backed a lot of entrepreneurs in the energy space, but it was so expensive to find out what you had. So we were launching a new solar technology or we're launching a new energy storage technology.

You got to spend like 40, 50, 60 million to figure out what you actually have and whether it's economic or not. Whereas in software you didn't need to spend anything and you could launch a product to market. So was that essentially what sort of pushed you a little bit down that direction, the ease of access and the sort of the capital investment requirement. Absolutely.

I think most people when they're looking at doing a startup today, they look at software first because it's ability to scale. You don't need much money to start off. It is very attractive. It's also very competitive, but, but it's very attractive if you want to go big.

OK, so what was your first adventure in that in that space? So my first startup was called cubicle, which does data analytics and data science training for large corporates, and I started programming, learning how to program during the NBA. So I would attend the classes and then go home and forget about all of it, and I would essentially just spend my nights programming and learning. Did you form a company at an early stage or did that come?

That took about a, I think that took about a year and then we moved back to Dublin after the NBA and I formed the company here. But had you made any money? On any revenues for any bit of advice or anything you were doing? No, no, no, as I, when we moved back to Dublin, because you have to keep paying the bills, I did start doing some consulting based off the management consulting work I've done previously, but then I spare time I had, I was trying to build out this new product cubicle, and I don't think we had a customer for about 1.

5, 2 years. So one of our first customers was actually Smurffa Business School, and we started and we signed a contract with them to provide training to some of their students and then anyway second customer might have been Bain, the consultant group. So that was an amazing win where we had a great logo with hundreds of users that really kind of allowed that company to scale. But it was never going to be a kind of a venture backed company.

Like it was really, we bootstrapped it and that worked out quite well. We exited the company in 2020 and got a good return, but it never had that kind of hockey stick trajectory that I was reading about all these other companies. I think any younger people are college graduates who listen to this will be amazed at the randomness of it all. Like it's not like you had.

I think I think most entrepreneurs end up launching. First of all, we all launch way more products than we disclose because we were very selective about the ones that we do disclose. And the thing to bear in mind is that we all launch products that fail. So even if you look at Sam Altman today, with the CEO of OpenAI, his first startup looped was a huge failure, and I don't know if they even made for their investors.

Absolutely. So I think almost all founders today have at least one skeleton that they disclose or not. The too because it's it's it's unrealistic to think you got a straight pathway. So you sold that.

Did someone approach you or did you try to sell it or? No, we tried to sell it. We went through a process and we had a couple of buyers and we were and the company's actually gone from strength to strength. So I'm still on the board.

It's probably 4 or 5x since we sold it. So the company's doing really well. It's based in Dublin and they have a global set of customers now. Current CEO is is definitely scaling it better than I.

From cubicle and obviously made a few Bob on that. What came next and we're still one stage away and Yeah, so the next startup was called Conjura, and we started Conjura as kind of a data analytics consultancy where we would work with companies on data analytics projects, and that had the nice side effect of actually giving you ideas for products that you might want to build. Conjura's products was when I was running at the time was a sas solution for e-commerce, a single source of truth for all the data that you would want in one single location if you're an e-commerce merchant.

So e-commerce is a data game. You from Facebook. So presumably you kind of had this idea a little bit. When you were in cubicle and you kind of took it with you and developed it more.

No, actually we were doing a consulting project with an e-commerce company and said actually this is a problem that's that we could actually turn into a product rather than it just being a project. A customer need exactly exactly. So that really we spent about a year to building Conjura and then in 2019, my co-founder and Wavefler, who wasn't in Conjura at the time, he came to to me and said, this is a great technology, but you shouldn't be using it for a fast solution. You should be using.

It as an underwriting engine because e-commerce companies need money much more than they need analytics. Had you ever thought of that? No, Jack was working for Liam Casey at the time, I think, in an accelerator and so he had firsthand experience of that work. And for me at the time, sir, did you know Jack from a previous?

No, he had played golf with my co-founders is a very good golfer in Conjura, Fran, and I think they both played in Kilmarnock, so they're much better golfers than I'll ever be. So that was the connection. I actually realized that, you know what, this was a painkiller, whereas I think. And some products are vitamins.

They're nice to have. Money is a painkiller. That's the problem that keep entrepreneurs awake at night, and that had the potential to have a much bigger impact. So we set up a new company called Wayflower, did an IP license agreement, give all the employees in Conjura a stake in Wayflower, so they had two bites of the cherry, and then half the employees from Conjura joined us in Wayfler and we got going in September 2019.

Raised a bit of money because if you're going to be a be a lender, you're going to have to have a big balance sheet, then launched in April. 2020 any fear during that phase that this isn't going to happen? You weren't going to get the money, were you? No, I think we actually had it early on.

I think one of the skills that Jack and I both have is that we are good at raising money, and that is a skill, especially at the beginning because you're, you're selling a story, you're selling a dream, that's always the hardest one to sell. And presumably you had a deck, some sort of a deck, it might be sophisticated as it would be now more speculative. Yeah, and that it was a friend. And family around essentially there was, there was actually more angels.

So I think one of the things that we didn't do is we didn't bring a lot of family in investment rounds and I think that's probably a good thing because I think that can make the Christmas dinner a bit more awkward, especially if the company isn't going very well. I prefer to keep it to more angels and it works and some small funds, and we were able to raise an amount of money pretty early on. We had a VC. We went through all their due diligence in March and then when COVID hit, they kind of said we need to pause.

But we couldn't pause because we had to keep going because we're burning at that stage because we launched. So we launched the next month, whatever money we had in the bank account, we gave out to the customers that were coming in looking for funding and thankfully it all came back and then we were able to raise a VC round in August because as a matter of interest, you know, typically and kind of traditionally people would start with their home base, do something in Ireland or Dublin or take it from there and maybe go to the UK and go to the states or whatever, but you didn't have a sort of an Irish kind of trial or this is where.

the UK and UK was month one and the US was month 2, and I think Jack has spent a lot of time in the US I think working with Liam as well. I sold cubicles to customers all over the world and I think we knew that if you stayed in Ireland, there's two things that would happen. Number one, it's not actually a good test bed for other markets, but also we use the logic of it's a good test bed you can start here. Selling into Germany is very different to selling into Ireland.

Selling into the US is very different to selling it to Ireland. So we said what. Can we just go after the main markets that we're going to go after ultimately, so they were the UK and the US and even in Australia, I think we launched in month 5. OK, I think of it like there's a language dimension there with Germany and France those European countries.

How did you cope with that at a very early stage? Were you translating websites and things like that? We we waited for a while. I think Spain and the Nordics, Netherlands, Belgium.

We went there first. So one of the things that constrains us is regulation because like France and Germany take a bit longer to enter that. kind of regulation because you're not a bank, clearly you don't have to deal with what they have to deal with. No, so sometimes our product is slightly different in different markets.

So in certain markets it's a loan, and other market it's a purchase of receivables and depending on the local regulation, for example, in Germany, we would need to work with a with a partner bank in the Netherlands we do. That's great. Now just to go back a little bit because you have your product now in the plainest of plain English, you can. I know there are different types of product.

Tell me how you describe to your aunt, what exactly Wa flower does and how you get paid. Sure. And how the customer and where the money flows from because it's not really a loan as I understand it. It's it's, it's a bit different.

Let's assume, Greg, you come to me in the morning, you're running an e-commerce business and you're looking for $100,000 and you pass our underwriting and I say, Greg, here's your offer. So $100,000 there is a 7% fee and I'm going to charge you, I'm going to get paid back by taking 15% of your daily sales. So what that means is you get $100,000 into your account the next day, you pay me back 100. $7000.

But I'll take it by taking a percentage of daily sales and that 7% is it's not 7% per annum, it's 7%. So it's not cheap money. It's, but they can't get it in the regular banks and and it's also unsecured. So normally a company that lots of companies that we fund already have bank debt because we tend to understand e-commerce in a lot more detail.

We access a lot more information. You normally get more money off us and you'll get it faster. So our process by which you're being. Underwritten tends to be a lot faster, and the offers tend to be a lot more ambitious for the want of a better word.

Core proposition is that's that's well explained. I even get that. Yeah, again, in pretty simple terms, how do you, how do you find customers and how did they find you? What happens?

Most of the time when we go to market, we're going and finding the customer. So we use a lot of direct outbound. So we have a sales team of probably about 100 people. They're based in Dublin, London, New York, and Sydney, and we're actively contacting customers through phone, LinkedIn.

And etc. as we go. And that really worked for us from day one. We scaled it and probably scaled it with blinkers on.

And what we should have done, I think in hindsight is invested more in partnerships, invested more in marketing. While Outbound is a great channel, there's limits to it, quite expensive. So right now, one of our big initiatives this year is reducing our reliance on outbound and hopefully bringing down the total percentage of leads coming in from maybe 85% down to 50%. OK.

And that's one of our main initiatives right now. Historically, as someone of my age, I associate selling with an element of personal relationship in it. But in this particular case, maybe at the outset, I can see how there were personal relationships when you were small, but as you get bigger, presumably you probably don't speak to the customer that you're lending money to, or do you? Oh, we'll speak to them.

We just may not know them. I think historically in financial services, there's a lot of referrals and a lot of businesses based on referrals. But if you want to scale very aggressively, you can't just be relying on referrals. And we do rely on referrals, but we also contact.

maybe 1000 companies per month that we've never spoken to before and we'll like to be outreach. And do they, do they listen to you? Absolutely. And that's where the product actually helps a lot.

We're solving the thing that keeps you awake at night and as a consequence, we tend to get very good response rates on our outbound messaging. It's all so simple and so credible what you're doing. Yeah, my grandmother can understand it. What I'm inclined, I'm always inclined to think, God, the banks, you were the traditional source of funds really for for businesses and small enterprises.

They always borrowed from banks. This is a different. Solution for people and I think it presumably comes from like the banks probably aren't particularly interested in lending a lot of money into that segment. It depends very much on the geography.

So for example, in Spain, the banks are actually very active and most of our Spanish customers will have funding from banks as well. In the US they won't. In the UK they typically won't encourage the banks refer customers to you to complement what they're doing with them? Has that happened?

Some banks might do, often as a turndown, but most of the time, what's interesting. For us is that outside of Spain, really, it's very rarely will we compete with banks, especially in the US and the UK. They have less and less appetite to fund small businesses. That's something we actually didn't realize when we started the business.

We thought we would have customers graduating from us to banks at a certain size, and that does happen, but the size is a lot larger than what we thought. That's that doesn't surprise me, although I can only imagine as well that banks have a massive regulatory burden to deal with and capital consequences to doing this. So I can see why they avoid it, but it does open up a pretty rich space for you guys to play. And as of now, how many obvious competitors do you have in the e-commerce space, we Shopify, which is like a huge platform for e-commerce, they have their product called Shopify.

That's only a little piece of their overall that's definitely a very small component of their total business. So they would be probably the biggest in the market and then outside of that, I would see us as probably the biggest independent operator in the markets that we're in. And by independent, I mean we don't have another. Platform that we're leaning on.

Do you ever use a market share a sense of a market share? We don't because it's a little bit vague, particularly when, as I said, in certain markets you have banks and other markets that you don't. But, but we know the size of the various providers and we know, I think we're probably the biggest independent by a factor of 2 at least. You obviously have a direct channel where you, you know, it's B2B business, but you have a direct selling proposition to customers, but you also have this indirect via the likes of Shopify, even though they compete with you, they also refer business to you.

Yeah, so we have some partnerships that we, we work with quite well and and that's beginning to scale. Ultimately, I think that will be a big growth driver to begin to crack that. And in hindsight again, we probably should have invested in it earlier, but we, our bone is working, we doubled down, we treble down and really now is the first time we're really beginning to see a considerable amount of flow coming through outside of our so those people who are using your services, taking advantage of them, many of them won't even know it's you.

It's Wayflow will be hidden in that? No, no. They'll always know it's you don't white label it anywhere. No, we experimented with that before, but the challenge of white labeling, a lot of the time comes with the support.

So let's say they contact one of our customer service reps or they contact one of our customer success team, and then you're almost pretending that you're working for somebody else rather than actually being a wave flower. So we decided actually let's do partnerships, but let's not do the white label because it creates a lot of overhead on the back end. Also, I think rightly so, large companies are wary of their brand. represented by by smaller startups like flower.

So that's just one. It may change, but right now I think there isn't a need to offer a. Is it a vulgar question to ask you what's the biggest loan you've made or loan or to one outfit? I think the largest customer we have right now is probably about a 15 million outstanding 15 million and the smallest 1010.

OK, so it's a whole range. Just going back to the data thing, this appears to be your kind of secret sauce as far as I'm concerned anyway. What sort of data are you? Looking at that allows you, you know, in the way that obviously banks do due diligence on a on a company, they, they see the cash flows and they make a recommendation, credit committees, all of that.

What machinery do you have in and around giving money to a customer? So the main difference is operating data. So outside of the classic information that you would gather, for example, bank statements, financial accounts, bureau information, what we really look at is operating data. So for example, I will know how many sales did you make yesterday?

How many returns did you have to process? To you and discounts. Do you have existing customers or new customers? Are your marketing campaigns beginning to have a higher return or a lower return?

All that operating data points to future performance. That isn't necessarily captured in your bank account and not captured in your financial statements. And can you get that easily they can they do the work for you email password, 2 or 3 logins, it will take like 2 or 3 minutes. They're happy to give that data away because normally they'll have already connected different services to that data.

A credit committee of sorts that would oversee when you get a bit bigger, I guess we do. So, so the way it works is the smaller advances or the smaller loans can be largely completed by a single underwriter and then as the deal sizes increase, you basically bring in more oversight. So one will need a 4 eye check with two people and then deals above a certain size, what we call enterprise deals would go through a committee and you'll have a proposal and then you'll have a credit committee that review.

So it steps up as the sizes increase, and that's the But you should have it. So for the smaller deals, you shouldn't be spending a lot of time on them. You have also got more data that you use in your underwriting, but in the larger ones, you do need to be going into every single risk for that. And do you, you know, when you go back to the fee as you get bigger and as you're dealing with bigger, does your fee vary a little bit or will it vary as you go forward presumably larger companies have lower flow, but normally we just do it based on performance.

So if it's an A grade customer, it gets an A grade price regardless of the size, but most of the larger. Customers that we have will be stronger businesses. They'll have more options so that the price will be lower. At some point here, I'm going to talk about the funding of the business because you've told me about the early stages and this more serious funding later on.

But just before that, just a sense of the revenue growth. Did you start off with a particular goal or has it just sort of worked your way along to see what you're discovering where it can take you, but thus far it's it's 5 years old the company now. So can you publicly say where your revenue has got to? Is that OK to ask you that?

I think last year. In 2024 year our revenue was 100 million, so it's so it's been very fast, and I think the previous three years were roughly speaking, 40 million dollars. You know, again, for the traditional investors want profit immediately, and of course it's not available in this type of business. And then this goes back to some of your new funders coming in, but when do you think there will be a sort of a clear profitability line that's growing?

It'll probably be next quarter. r. Yeah, so I think last month and now we would have been even that positive. Our H2 is much bigger than our H1 because normally e-commerce merchants.

Will order for Black Friday and Christmas. Those orders will be a lot bigger, but we, I imagine we will be consistently profitable from next quarter onwards. There'll be a party that Friday in the head office. You had your early stage funding that got you got you going.

Now you're growing fast. You need capital. You need debt to lend effectively. You can explain the difference.

It's two different bits of money and you need equity to to raise more funds to do all you want to do, hire people, all of that. Tell us about the conditions that were there that made you. Go for the fundraising, how you did it and how much you raised at that time. Yes, so the first round we did, trying to remember now, I think the round might have been around 8 or 9 million.

In all cases, we would have gone on the higher end of a typical round. And the reason was we would benefit massively from having a very strong balance sheet. If you want to bring on JP Morgan as a partner, if you want to bring on, it was Credit Suisse at the time as a partner, one of the things that they look for is the strength of your balance sheet. We did a round in August.

Of 2020, which is about 10 million. We did another round in April of 2021. I think it was around 70 million primary, and then we did another round the following January of 150. Each time we were doing big rounds, we were being diluted, obviously, but the reason we wanted to do the big rounds was we realized that unlike other startups, our business model demanded that.

Our business model, we benefited enormously from having additional capital on the balance sheet, some of which we would never use, but actually having it was very beneficial. And then if If we look at our fictitious $100,000 advance I offered you earlier, where does that money come from? So 80 to 85% of that will come from a lender to flower. Let's say JPMorgan.

10 to 15% of it will come from one of our mez lenders, and then 5% of it will be Wayflower's money. So there's always some of our money and that can vary from facility to facility, but roughly speaking, those numbers are, that's where the money comes from. So that's where we raise debt and we raise equity because you need. equity to run the business, but you also need the equity to contribute into each advance, but the debts, the vast majority.

Obviously the business grows fast, you need to. So do you, do you come for more equity as well as more of the JPMorgan style debt at a later point, potentially a later point, but ideally what will happen is your profits will begin to accumulate and then the profits can be used. The larger fundraising there, the 150 million one that kind of got you a bit more in the news and places than you had been. Tell me about the investors that came on board there that you've got a bigger animal coming into the company now in terms of VC they were actually were they?

They were in earlier so they're coming in for more this time the two leads on the Series B were were existing investors, but it's a good point that you make that as you get bigger, you're bringing in investors who know what the next couple of years look like. So I think we're very lucky in that we have investors on our board and observers that know what the next. 2 to 3 years look like and that's really what you want. So yeah, it's not just money, not in my case anyway.

I think we've benefited massively. Like if you look at the portfolio of our investors, you have companies like Revolut, Klarna, Newbank in Brazil, like some of the best performing FinTechs over the last 20 years, and they have learned lots of lessons from those companies and then we get to tap in. So it's actually it's a great privilege to to those insights. They're represented on your board and they contribute to strategy and all that kind of.

It's fantastic. I'm reasonably clear now on the that stage of the company. Now just a little bit about yourself. This company has changed from 2 people on the back of an envelope to now several 100 people, very sophisticated investors coming in who have very clear demands and goals for you, which is great because they help you along.

But that skill set and range of abilities, like it's beyond a lot of people who are great entrepreneurs. They launch a company, they found it and they just can't handle the detail and the bureaucracy and everything that goes with being CEO. Tell us. A bit about your, I hate the word journey, but your journey in that regard and and what you found difficult and what you found relatively easy.

So that I've spoken to a lot of founder CEOs at my stage about this, and I think we all find the same thing, the hardest, which is basically dealing with hard conversations and making decisions as quickly as possible, because there's so much to do and you're, you're balancing so much simultaneously. The only way really to get through it is to not put off hard conversations. And I think that's probably been the biggest learning I've had over the last 4 to 5 years. So what kind of conversation you talking about firing somebody basically or letting them go not not just that.

So the job of a CEO is very unnatural if you do it well, and, and I'm not naturally confrontational outside of work. But, but it's if you do it really well, and I mean confrontation in the positive sense, I think there's a lot of conflict that's involved in the in the role, and there's a joke that there's a CEO. AI bot that you can install in a company that wanders into every meeting and asks two questions. Are we moving fast enough here and are we thinking big enough?

And then they leave the meeting? And there's an element of truth to that. I have to constantly push. Are we hiring the right skill of people?

Are we moving fast enough here? Are we being ambitious enough? Almost in every meeting. That's really what it requires.

So I think that's probably been the hardest thing for me. I do say that if your performance as a CEO is directly proportional to the number of hard decisions or hard Conversations you're willing to have in a day. And, and most of those decisions are the areas where I feel like I failed or I've done really well. It's been overcoming an emotional challenge than an intellectual one.

Tell me, you're small enough at this stage, I presume you can gather everybody on a Zoom call or whatever medium use, so you can have meetings with everybody. So culturally, it's not that difficult to keep you all aligned right now. I think it is, and part of it is because we're not all in person in one office. So we've.

in Sydney, we have an office in London. We an office in New York, an office in Dublin. I think when you have multiple offices across different time zones, and we also have a lot of people that work remotely, I think that's a lot harder to instill a culture that everybody's under the same roof. Now there's huge positives too, but one of the trade-offs that you make is definitely you don't have that cultural alignment that you do when everyone's on the same floor.

What kind of culture, you know, the culture is obviously moving kind of targeted but what is the culture and what would you like it to be? Where could it be better and you strive to on the culture we're spending a lot of time thinking about this at the moment. We have a set of operating principles that I think every company has, and we had a set of values when we started off in 2021, and I definitely didn't do enough. You have to constantly repeat them to the point at which you're so bored about it, and I definitely didn't do that.

I think at the end of the process when we were looking at renewing them, not any of us could even recite all the five values. I think that happens in a lot of companies, but we spend a lot of time thinking through the operating principles now that. I think from about January and I'll 2 or 3 kind of counterintuitive ones that run past you. So one is under promise and over deliver.

If you under promise in an ambitious environment, you can't actually overdeliver because you're not even going to try or attempt the things that you would need to do to overdeliver. So the under promise and over deliver works really well in a big bureaucracy and people get the sense of you being reliable. If you under promise and waflower, I'll throw you out the door because we're not in the business. Of under promising because again, you won't try even you won't even attempt the ambitious thing to over deliver.

So that's one that's a bit counterintuitive that I think we didn't embrace initially. And then the second thing I think that's resonating right now is kind of nice and this comes back to having that kind of bit of confrontation. The kind person in the meeting, even though it doesn't feel like it, points out the elephant in the room, flags the fact that actually you could be doing better here. The nice person doesn't do that.

And you encourage, you encourage. You know, to call stuff that's below standard and someday you might be on the receiving end of if I'm not on the receiving end of it, then people get very cynical. Do people give you because you're too distant or you're not on top of things with them. Yeah, OK, that's good.

So, just going back to the culture thing. What what would you like if you had a range of customers and they were all asked what you deal with Wave flower like what what are they like? What makes them good? Why do you deal with them?

Like what kind of answers would you like to hear to that question? One of the benefits of having a single focus on a vertical is that we understand their businesses incredibly well. So if I'm talking to an Amazon seller, I'm going to use a phrase like an ascent off the bat, and that's, that's an Amazon specific phrase. But when you do that, they're like, oh, they they know what an Amazon seller is.

I'm not talking to my local Chase bank account. First thing is we understand their businesses incredibly well. And then the second thing I hope that they would say is that we're incredibly supportive even when we are turning them down or even when they fail in underwriting. It's not just a computer says no, it's what we need to see from you to get to the next stage would be a higher return on ads spend on your Facebook campaigns or more efficient opex or something like that.

So they would be the two things that I want the most today and what I'm going to want in the future is actually even more speed and automation for the customer where they're getting offers and they know how much money they get from Waflow at all periods of time. And I think that would improve the user experience a lot more. I guess the answer you really want from many customers, I really love dealing with them because they just solve problems for me rather than give me problems on that topic as well while we're there in terms of if people all over the world and you're trying to align them to really high standards, do you have champions, your best people around the place who are the the sort of the jersey wearers as it were in each location where they do things really well and they drag others up to their standard and is or do you do it all centrally?

Presumably it's different in different locations. One of the reasons we have the office in London is because we had a lot of Irish people that wanted to move to London. We said, well, that's a good way of keeping them in the company. But also there's a lot of skill sets in London that we don't have here.

In the UK we have a lot of our design team, we have a lot of our product managers, engineers, a lot of them are in the UK because we don't have that skill set in abundance in Ireland, whereas in Ireland we have an abundance of sales tax probably the biggest advantage Dublin has in particular. Almost any other city in the world that might have the highest concentration of SMB sales talent in the world. It depends on the skill set. And then the second thing is, and I think we got this wrong the first time we went into the US, but we're definitely changing it now.

When you are entering a new territory and bringing a sales team into that territory, the best way to do it is take a small number of people from your existing offices, put them into the new office, but make sure they're 3 or 4 of the best because they're hitting target. And that's when you start hiring in that new area, a new person coming in is joining a team. That's already high performing and they're going to learn from the best and they're going to scale. If you don't do that, you'll typically have people joining a new office, they'll feel a little bit remote.

They won't be in the head office. Everything will be happening on Zoom and then if everybody around them is missing target or struggling to hit quota, that'll just feed on. The old I can't remember her first heard using the term of the osmosis thing where the good people just pass the vibes to and that's really important when you're opening up a new office because not everybody would necessarily want to go. And ironically, you have to put a really strong team in there, so you've got that winning mentality.

So you're getting bigger all really good things you're presumably have to hire new talent for jobs that didn't exist before a new kind of job. At what level do you get involved in that, or do you have, I'm sure obviously the HR function and maybe run of the mill stuff you you might not touch, but presumably you'd like to see nearly if you could, everybody that comes into the company. I think right now I still do a lot of interviewing and and maybe even more than I used to. So really.

Apart from maybe entry level roles, I think I probably interview almost every other candidate coming through. That's great. It's time consuming, I can imagine, but it is, but it's the biggest calls we make are all hiring calls. So they, everybody says hiring is their biggest priority as a CEO.

You look at your calendar, none of us spend enough time doing it. So I do check my calendar every week to see how many hours I spend hiring last week. And last week I was on 7, which is probably not enough. It's definitely a really good metric to make sure you actually spend time.

I always think that, you know, in terms of. About culture and all the sort of time we give that like one way to ensure that is to have somebody who's really at the top end of the culture looking and seeing the people that are coming in because there will be people that obviously won't fit and you get used to that, the more experienced you are, you'll see that they're may be very good, but they're not going to work here. And if you can do that, it may be sort of a waste of time in one sense, but it's not a waste of time at all if you can control that.

I just have a few random ones here that I've kind of skipped a little bit. I have the Warren Buffett moat concept where obviously everybody. Every company likes to have a moat to protect its business and differentiate itself and keep their profitability. Like your moat, is that the data collection thing?

It's data. It's also scale. If I left Waveflower in the morning, Greg and we set up a competitor, we'd probably be out of business by the end of July because Waveflow would be able to offer all the customers in the market more money at a lower price. So we would only be left with the customers Waveflower doesn't want.

Yeah, that's not a good business. The scale advantage that we have today is really really big. So that that's the main mode that we have. You can obviously replicate how we gather data.

It'll take you a while to build up as big a data set as we do. But even if you did that, you wouldn't have access to that facilities we have the scale that we have today. And so it's it's really hard for a new entrant to come into this market. I'm going to have to mention the dreaded tariffs thing.

I really don't want to talk about that all upsets me, but just give me a couple of minutes on how the tariff thing affected you guys. Obviously it's on and off. It's very hard to plan with it. But give me.

Some examples of how the, I think you told me about a pram thing before which was quite good. Tell me about that. Yeah, so interestingly on liberation day actually my my daughter arrived, so I was in the delivery unit while while while Trump was doing his press conference with his tariffs, but I think at the beginning we were I was hugely concerned because a lot of our customers import goods from Asia into the US. A little over time, especially when the reciprocal tariffs were posed on countries apart from China, it did de-escalate quite quickly.

Now, it's still a big impact on the industry, but I think one of the things that I had actually underestimated is how resilient e-commerce founders are. I can actually, most of them had already diversified their supply chains away from being solely reliant on China. The first Trump presidency had already imposed a tariff, and then when he came back in the second time around, they had already imposed the fentanyl tariff. So they knew this was coming.

So lots of companies had already diversified away from China. And as a consequence, the impact was a lot more muted than we thought. The second thing is, and I think I mentioned this. You before, most of our customers are not manufacturing iPhones, so apparel, toys, lots of these other verticals, they actually can be outsourced to others they can be changed to other locations reasonably quickly, but you do have certain verticals that can't.

So one of them I think I might have mentioned was was prams. Yeah, so there's prams are China. A lot of specific types of electronics are in China. So you have a scenario where certain verticals, it's much harder to diversify and in those markets.

What's going to happen is the price is going to go up because there isn't a natural obvious substitute to a prom, like a sling isn't going to make the difference. So in certain markets, you're going to see those prices going up, but in most of the other markets, as I said, like apparel, health and beauty products, a lot of those products, it's not that hard to diversify into other markets. And as a consequence, we will see some inflation there, but it won't be anything like what was expected at the beginning.

Assume that the pause and assume that the reciprocal. back in July. Given that you just had your baby daughter a few months ago, it must have been a great sadness to you, that particular issue. You're going to need a new pram presumably we actually have one, so we were lucky.

I'm going to talk to you about your little rant of the month. It's not really a rant, but how best do I frame that this is that you were talking about this view that Dublin is we're not quite taking advantage of. When I, when I met you a few weeks ago, Aidan, you talked about Ireland has stroke Dublin not fulfilling its potential in a number of ways. I thought it was very interesting.

Could you share that with us? Sure. So when I start off as an entrepreneur in 2013, there were some natural barriers that made it very difficult to build a really big business in Ireland and really intercom, I think was the one that my generation of founders all looked up to because they, they had scaled the CEO had moved to the valley and they had brought in all the best VCs in the world were were funding Intercom. So they were the first company to really do it at that scale we could relate to.

One of the biggest benefits for the Irish startup system was. actually COVID, because what happened during COVID was all the VCs learned how to work remotely. No longer did you have to go to Sandhill Road in the valley and pitch them all in one day and then probably move over there. The VCs learned how to work remotely, and they also learned how to basically invest in other markets as well.

When people say to me today, you know, Ireland needs a much more vibrant angel system, like, no, it doesn't. Like the top angels and the top VCs are in Ireland regularly looking for companies to invest in. So the financing and the fundraising challenge that Irish companies had in the past is gone, and there is no excuse today for not being able to raise funds in Ireland. Every single VC in Europe and in the US is more than happy to invest in Ireland if they see the opportunity, and they're set up to work and they've had good experiences and they've had good experiences and they know how to do it.

So that negative is gone. And then on the positive side, as I mentioned earlier on, we probably have the highest concentration of SMB or SME sales talent in the world. Every single company in the US, whether they're based in Boston or San Francisco or New York, whenever they want to sell into Europe, overwhelmingly they come and they base themselves here, and they have from companies like Qualtrix to HubSpot to MongoDB, not just the Google and Facebook, everybody else underneath.

They're all here and as a consequence, we have this incredible concentration of sales talent and go to market talent that startups should be benefiting from. And as a consequence, I think we should be in a position. Like a country like Sweden or like Israel where you again a small population, but massively punching above their weight, just given natural advantages they have. So in terms of if you had a child old enough or had a child in college or finished the Leaving Cert, where would you be steering them to in the light of all of that, you know, and particularly again with your data, data seems to be just what would you steer a young person towards career wise right now when my kids are older, I'd probably want them to do something that they are very passionate about and and that they have an interest.

So I'm not sure I'd necessarily steered them to becoming an entrepreneur. In terms of just the area, you did your electric engineering and never worked in it, but for what it's worth, I did civil engineering and I never worked in that either. So in some ways it's a waste of time and in other ways it's not. You learn plenty anyway, but in terms of just the sector that they should, you know, software is sort of programming and writing code, is that going to be less important in the light of AI, do you think?

I just saw an interesting stat today where graduates from computer science and engineering. Have a higher unemployment rate than most other disciplines, which is because of because of AI, there is a big feeling out there right now that AI can replace a lot of junior programmers or junior engineers and that, I'm not sure that's true, by the way, but that's definitely a narrative out there and that's really affecting the hiring market. And seeing as we're mentioning it, what will AI help you with and what will it hurt you with?

So from our perspective in Wavefler, AI helps us with a lot of the manual backend processes that banks And lenders typically do checking, security, analyzing bank statement, PDFs. A lot of the manual work can be automated away incredibly quickly. So most of our customers won't see the impact of AI when they log into our website. But what they will see it in is the speed at which that they we can generate offers and the quality of those offers.

So it's all on the back end and removing all of that cost and all of that time. That's where the user is going to see it in our market first before actually the the user interface changes. Just wanted to thank you. You have a lot on your plate.

I really appreciate that. You've taken time and I really, really appreciate and I really appreciate it. That is as close to a masterclass e-commerce and e-commerce funding that could have got. It's been really interesting and you've been really open with with your views on things and it's just been the most enjoyable conversation and I hope people get something from it and I'm sure quite a lot of young people will listen to this.

There's a lot of interesting things in it for them. So on behalf of Rena, thank you very much and really appreciate it. Thanks. Great to be here.