Bootstrapping a FinTech Startup by Piggybacking with Services: Quavo Co-Founder David Chmielewski (Part 5)

David Chmielewski: The closer you can stick to having a real product, the better you’re going to come out in the end. It’s really those first three or four clients that help refine your product and allow you to understand what’s truly different and what’s not. We had the experience at BoA. At First Tech, we had the experience of two clients, so we had some ideas.

Our next two clients were Golden One Credit Union and CardWorks. By the time we were done with them, we knew what our product should look like. We had a breadth of knowledge that allowed us to say that this is what our product is.

Today, we are very prescriptive. We have our own platform and our own product. You’re buying into that. Early on, it was like, “This is an application and we’re going to maintain most of it. You are going to get the benefit of some customization.” That was a little tricky.

Sramana Mitra: Talk to me a little bit about the relationship with Pega as your platform provider. The product was built on Pega. It’s still on Pega?

David Chmielewski: Yes, they’re still our partner.

Sramana Mitra: That’s what I want to probe a little bit. We have this track of bootstrapping using services. We also have bootstrapping by piggybacking on other platforms. That works really well because of the things you’re describing. That platform provider also helps you sell. Elaborate on how much they helped and what kind of benefit you got out of it. How did you navigate that partnership?

David Chmielewski: We’re like a hybrid of the two. We bootstrapped with services and platforms. Pega was very instrumental early on. We sold with Pega hand in hand for a very long time. We still do in some regards. There came a point where the salespeople would bring us in and we’d take it from there.

Early on, it was probably a little more like half and half. We would show up on-site together. It was because our clients were learning about the Pega platform – that Pega would bring Quavo in. As we gained our reputation, it became more of our clients found out about Quavo and reached out to us. Pega is more secondary. That’s also been great. They’re a good partner. They’re a solid presence when we need them to sell.

Sramana Mitra: In the beginning during 2017 to 2019 timeframe, how many customers did you get out of Pega based on their efforts of selling?

David Chmielewski: Six probably.

Sramana Mitra: What was your average deal size?

David Chmielewski: Our deal sizes were relatively large. When we did an onboarding, that was a fixed price, usually for around $300,000 to $400,000. As our product gained in functionality, we would also charge a case fee for our software. We’d charge for each transaction that went through our system in addition to that onboarding or customization.

Sramana Mitra: Pega was instrumental in bringing you almost $2 million worth of revenue early on.

David Chmielewski: Yes, absolutely. We were very fortunate to have Pega and be able to build on their platform. It’s a flexible platform. It’s allowed us to deploy on-premise. Pega has a cloud offering. We were able to use that. We’re working with financial data. Our clients wouldn’t have accepted us hosting something ourselves. We were using Pega’s cloud and their on-premise solution. That helped a lot.

Sramana Mitra: It gave you a channel to sell.

David Chmielewski: Absolutely. It gave us good partners. When we were at Bank of America, we knew how to build solutions and push them out to business, but we didn’t know how to sell. We didn’t have to sell. We had a budget. That was something that we had to learn ourselves.

As a technologist, I found that I knew how to build what we were building. I had a technology-driven goal. I knew how to get there, but you need a lot of help. We needed people who could sell. We needed people who could keep track of our finances. We needed people who had product vision. There are a lot of areas in running a company.

You go back to all the things that your company sets up for you. Those are gone. As a technologist, it wasn’t enough that I knew how to build some software. You have a lot of other things that you needed to do. If I didn’t have these other co-founders, there’s no way we would have been nearly as successful.

This segment is part 5 in the series : Bootstrapping a FinTech Startup by Piggybacking with Services: Quavo Co-Founder David Chmielewski
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