Mobile-payment company Dwolla isn't the new kid on the block anymore. With 60 employees and about $23 million in venture capital investment over the past three years, the Des Moines-based company has grown wiser from its investors, which include Union Square Ventures and Andreessen Horowitz. In 2012, Dwolla was part of Inc.'s 30 Under 30 list of promising young companies.
Among the valuable advice Dwolla has taken from its new partners is the need to hire a permanent recruiter and to build out an executive team. Those things, in turn, have helped the company grow more intelligently and more deliberately, says Dwolla's founder and chief executive Ben Milne. What's more, good investors can offer important advice about choosing your best opportunities while avoiding the dead ends.
And although we chatted quite a bit about e-commerce and the future of online payments, I specifically asked Milne a variety of questions related to his company's investors. For insight into what he thinks about working with such bigwigs, here is an edited transcript of our conversation.
What's it like when you meet with your investors? Is it an informal or formal process?
Ben Milne: Before I met [Marc Andreessen and Ben Horowitz], I was so nervous I got sick. But I came to find out they are people, too. They are really smart people who have a lot of influence, but they are people. And what I have learned beyond all else is to share the ideas you think are good, and to tell the truth. Some of your ideas will be bad, and some people will tell you that. But at the end of the day, if you are honest with your investors and you share your ideas, people will help support the good ones. You have got to get your ideas out there.
What happens if you don’t?
BM: If you never share your ideas, you never know if they are any good. To have someone who has been in the business for 20 years say, "Just so you know, we saw this in 1994, and this is what happened, so you might want to go and read about it." God only knows what you find down that little rabbit hole.
So what's it like to just throw something out there?
BM: The people who are most challenging are normally the most helpful. They create "accelerants" or bumpers, and they amplify what you are doing. Smart people point out flaws, and that is OK; you fix the flaws, and you get better. I have a lot of flaws, and that is why we hired an executive team. Our investors came to us and said, "OK, you have to start building out these other pieces of the company." Albert Wenger of Union Square Ventures did that when I think we were at 14 people. He tried to convince us that we needed an in-house recruiter. I remember thinking this is insane, and that person is going to be really expensive. But we did it anyway, and it was one of the best things we ever did.
What did the recruiter help you do?
BM: Everything. Find more great people to work with. Sixty people work in the company now, and she had more than 1,200 applications. Somebody had to filter out all those other people and know how to recognize the traits of people who could build the best team possible.
Do you still have a startup mentality, or has that changed with big investors? Are there risks you might have taken years ago that you wouldn't take now?
BM: There is more clarity of focus, and there are a lot of people around who have a very deep domain of knowledge, and that gives us the ability to skip over things we might have tried a few years ago. For example, we might have once said, "WeChat is cool; let's build into the API." Today, we would be saying, "How does this help the people we are selling to in this particular vertical, and does this make our core customers' lives better, and are we growing in this vertical anyway? Or is this just another thing to maintain?" And we would have this discussion openly now. A few years ago, you are up at 1 a.m., and you'd say, "Let's work on it." With more people, you need more focus.