Accelerating Global E-Commerce: Adyen Cofounder Peter Caparso (Part 4)

Sramana: How did your first customer find you?

Peter Caparso: I cold-called them. I find most of my customers by reading trade magazines, crawling the Internet, and cold-calling. I have built the business the old-fashioned way.

Sramana: What made you target gaming companies?

Peter Caparso: Initially I targeted verticals that I felt made sense for our industry. I thought the gaming vertical made sense for a few reasons. First, there is not defined user base for gaming. It is truly a global user base. Second, there is a lot of fraud in the gaming area. We wanted to test our solution so we wanted to work with that segment. Third, we felt by working with gaming companies that they would come back to us with additional feature requests. Today we work with close to 30 gaming companies.

Sramana: When you first started making cold calls, how many did you make, and what was your conversion rate like?

Peter Caparso: I called a lot of people in the gaming space, upward of 200 companies. As a new payment processing company that nobody had heard of, our initial penetration was low. That did not deter us.

Sramana: If you can get five customers out of a cold-call outreach that is great.

Peter Caparso: It was good. One of the early companies we signed up is FlowPlay, based out of Seattle. FlowPlay had a very good pedigree, which at the time I did not know. They really took to our solution and embraced it. They liked the solution a lot and they started referring our service. To me, that is the greatest compliment you can get. The first three to six months were slow going and painful.

Sramana: What is your business and revenue model? How do you make money?

Peter Caparso: We went old school with our pricing model. Typically when you buy any e-commerce transaction, you pay a transactional price and then a percentage of the sale. First, we charge a transactional price, which is essentially a few cents per e-commerce transaction. Second, we have an interchange plus global pricing. We are the first company to come out with that. In the United States the percentage rates charged for commerce transactions are published. In other countries they are not published. That is how my former employer made all of its money. In Europe it can be a blended rate. We have pushed the ambiguity behind, and with our partner banks we have revealed what the true cost of interchange is, and we simply put a fixed markup on that. That markup starts at 60 basis points and scales down to 40 basis points; it’s all dependent on the volume they transact through us.

This segment is part 4 in the series : Accelerating Global E-Commerce: Adyen Cofounder Peter Caparso
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