Bootstrapping a FinTech Startup by Piggybacking with Services: Quavo Co-Founder David Chmielewski (Part 7)

Sramana Mitra: When you decided to pick on, what was the process?

David Chmielewski: My initial endeavors were around disputes. It was always near and dear to our hearts. For Joe, one of the other co-founders, that’s where he started. His first job was at Bank of America as a call center agent. This was the fundamental use case.

More important than that, having a good business case for clients when we sell. We can save our clients so much money by selling them dispute systems. Some of the other products didn’t have the business value that disputes do. It wasn’t a technology decision; it was more around how we can make our clients successful and to what level we can save them money.

Sramana Mitra: The ROI that the client would get from buying your dispute system is what determined where you wanted to go with.

David Chmielewski: Yes. We could have been successful with any of the other products, but we wouldn’t have been able to sell them for as much. They wouldn’t have the ROI for our clients. It would have put us on a slower trajectory of growth.

Sramana Mitra: What does a dispute system do?

David Chmielewski: If you’re a cardholder and you receive your statement and don’t recognize some transactions, our software manages that process. There are laws involved and Visa and Mastercard have their own rules. It’s a complicated process that’s exception-driven. Fraud is pretty rampant. Banks stand to lose from this process. There are times you look at your statement and dispute something, the bank actually loses that money. We have a strong business case.

Sramana Mitra: I have a Citibank Mastercard. That dispute is resolved by Citibank and not by Visa or Mastercard. That’s the system?

David Chmielewski: Yes. If you called Citibank up, you would be using a system much like ours. Visa and Mastercard govern the process between the merchant and the bank. There’s a whole process involved. Citibank is going to go to the merchant and say, “Why did you allow this transaction to take place?” Visa sits in the middle and governs the interaction between them. Then there are consumer protection laws. You’re entitled to a credit while this is sorted out.

Sramana Mitra: Switching gears, I want to talk about your team strategy. You started by telling me about your own remote work interest and background. Now we are in the era of remote work. Everybody’s doing remote work. How is your team set up? What’s the configuration?

David Chmielewski: I’m the COO and I have three pillars under me. One is the product. One is technology, and one is operations. They have leaders and teams under them. There are about 80 people at the company and probably about 65 of them are under me in one of those pillars.

Sramana Mitra: They’re remote?

David Chmielewski: We have an office in East Lansing and we have an office in Phoenix as well. When we were growing the company, we wanted to recruit on college campuses. We brought in some folks into our office. Part of our growth strategy was to bring in those folks, train them up, and have them be part of our workforce. We didn’t want to go hire everybody out and pay some of the really high salaries. For part of that process, this office is important. Lots of folks on site are working with us.

Sramana Mitra: How many people do you have in the Lansing office?

David Chmielewski: About 10. At one point, it was double that. When the pandemic hit, people moved wherever they wanted. We encouraged that. Our recruiting efforts are a little bit less these days. Now the office rule is to come in when you want to come in. We have folks here most days, but it’s an option for people. There’s not much presence here, but that was its original purpose. In Phoenix, we have an operation center where we work these disputes for some of our clients and we have folks there who work all day on cases.

Sramana Mitra: Total, how many people do you have?

David Chmielewski: About 85.

Sramana Mitra: Wonderful story. You talked about bootstrapping using services and bootstrapping using platforms. You talked about remote work and virtual companies.

Thank you for your time.

This segment is part 7 in the series : Bootstrapping a FinTech Startup by Piggybacking with Services: Quavo Co-Founder David Chmielewski
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