Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay

When you’re talking about Founders, you can generally classify them into two categories, says WePay co-Founder Rich Aberman. On the one hand, you have the extreme visionaries: the Jobs-ian pioneers that have a vision for what the world could or should be, and then impose that vision on the world and make it true. On the other hand, you have the scrappy pathfinders: Founders that start in one place, but from there are continually refining and reinventing. They stay close to their customers, stay close to the market, and, like a heat-seeking missile, keep iterating until they find their sweet spot. While plenty of Founders out there like to believe they fit in the magical visionary category, the reality is that you can count those special snowflakes on one hand. As for the rest of us? We're that scrappy heat-seeking missile. And, as the story of WePay clearly illustrates, that's not a bad thing at all.

July 21st, 2016   |    By: Katie Parrott    |    Tags: Idea Validation

Rich Aberman and his co-Founder Bill Clerico were making great progress with their payment processing startup, WePay.

The platform – which made it easy for small businesses, organizations and nonprofits to accept credit card payments online – had taken shape over the course of six years. Revenue was growing month-over-month. Customers liked it, the press liked it — and investors had put in a lot of money to keep growing it.

But in 2014, Rich and Bill were getting ready to kill it.

The transition away from direct business

No, it wasn’t the startup equivalent of a suicide pact. They hadn’t given up – quite the opposite. Almost without meaning to, they had landed on an opportunity with the potential to leave the direct business in the dust.

The success of WePay’s fledgling channel business – partnering with third party platforms like Freshbooks and GoFundMe instead of directly with the merchants that use those services – had taken everyone by surprise, Rich and Bill included.

What had started as a side project while they worked to build the direct business had evolved faster and farther than anyone could have imagined.

By 2014, it represented over half of WePay’s revenue, and had the potential to keep climbing — potentially into something even bigger than what they were building on the direct-to-merchant side.

Team WePay knew if they wanted to keep that momentum going and seize that opportunity, they had to commit 100% and put all of their chips on this one card.

And that meant saying goodbye to the direct business.

If the answer is that it’s the future of the industry, we can grow like gangbusters, and it’s going to be a race to win this market, then it’s a no-brainer – we should do it.

The only problem: the direct business was still doing really well. It still represented 40% of WePay’s revenue. Not only that: “It was what we had started the company to do,” Rich remembers. “It was what we had worked four years to build, and to build our brand equity around. It was deeply instilled in the culture of the company, to work with these users directly.”

WePay’s leap of faith

Retiring the direct business was a huge leap of faith – especially since there was no way of knowing if the big bet was going to pay off.

“It’s impossible to know what’s going to happen until you do it,” Rich remembers. “How much faster can you grow this channel business, and what will it mean for that business if we were focused on it 100%? If the answer is that it’s the future of the industry, we can grow like gangbusters, and it’s going to be a race to win this market, then it’s a no-brainer – we should do it.”

But, Rich goes on – and in the world of startups, there’s always a “but” lurking in the background – “But if that turns out not to be the case, if none of that materialized, then you’ve now deprecated this other business, which has already proven to be at least decent.”

Here’s the thing: “at least decent” isn’t exactly what you’re going for when you’re the Founder of a startup. It was definitely not what Rich and Bill were going for with WePay.

So, six years after launching what had begun as a simple money sharing app, Rich and Bill took the leap of faith and shifted their company’s focus 100% to their channel business.

At the time, Rich says, it was a scary decision – one that was laden with a tremendous amount of anxiety.

In retrospect, though? “In retrospect, it’s the best decision we ever made.”


The WePay that exists today is a pretty dramatic departure from what Bill and Rich were envisioning when they started the company in 2008. So much so, Rich says, “If I described it to my former self eight years ago, I don’t think I’d really even understand what it is that we’re doing today.”

Like a lot of Founders, Rich and Bill started building WePay “to scratch our own itch.”

“We wanted make it easy for friends to collect money from friends for shared expenses, like a ski house or a group activity or group gift,” Rich explains.

If I described it to my former self eight years ago, I don’t think I’d really even understand what it is that we’re doing today.

In those early days, Rich says, the idea of building a payment processing platform couldn’t have been farther from their minds. “We didn’t think we were in the payments business at all – we thought we were in the app business,” he says. “We were trying to build an experience just to manage the social dynamic around group expenses.”

Before long, though, Rich and Bill realized that they couldn’t really separate one from the other.  “We realized that the actual movement of money was the core piece of the platform that we were trying to build, and that we needed to take an active role in managing that part of the experience if we really wanted to deliver on our product goals,” Rich remembers.

At the same time that the product they were building was evolving, the audience they were building it for was evolving as well. Initially, Rich and Bill had envisioned WePay as a peer-to-peer service.

But, Rich says, “Going after consumers – especially peer-to-peer – it was a tough use case. How many times a year do you plan a bachelor party or rent a ski house with your friends? It was hard to create a cadence where people were using us regularly.”

In the app business, where monthly active users is the North Star of KPIs, creating a regular cadence of use was an absolute must. “So we had to think, What’s a use case that has similar pain points but is easier for us to acquire, or market to, where we can have more persistent relationships?” Rich remembers.

Shifting their focus from consumers

At that point, in their first step away from their original vision, Rich and Bill made the decision to shift their focus from consumers to small businesses, groups and organizations – customers that were in need of exactly the kind of simplified, streamlined payment solutions that WePay offered.

But here’s the thing about making this kind of shift in focus: it’s rarely an isolated event. It ripples out, like dominoes falling one into the other, across all aspects of your company.

Once they made the decision to shift their focus to serving organizations – and started talking to customers in their new target market – Rich and Bill discovered there were other changes they would need to make in order to serve their new customers effectively.

“We realized that if these were the users we were going to support, it wasn’t enough to give them a really simple payment service – they needed certain tools or functionality to make use of that in practice,” Rich explains. “So we built it all.”


It wasn’t long before the quest to build the tools their customers needed to use their payment platform effectively yielded another set of challenges for Team WePay.

“What we realized was that different verticals, different users, needed very different things,” Rich explains. “And we ended up building this solution that was good for a bunch of different use cases, but not best-in-class for any one use case. Why would you use our donation platform when you could use GoFundMe? Why would you use our event management platform when you can use Eventbrite? Why would you use our invoicing platform when you can use Freshbooks?”

The thing that WePay had that all those other platforms didn’t have: a really kick-ass payment processing solution. And, Rich says, the epiphany for WePay came when they started asking themselves – why not?

“We started wondering, why haven’t those platforms built their own payment solution?’” Rich remembers. “And the reason why is because there’s a significant amount of risk, regulatory and organizational complexity associated with being in the payments business.”

The crucial realization: all of that organizational complexity and regulatory red tape these other platforms were struggling with – WePay had already navigated it all on their way to building their solution. Not only that, they had the ability to offer their solution directly to these other platforms.

We ended up building a solution that was good for a bunch of different use cases, but not best-in-class for any one use case.

“When you’re an early-stage company, you’re experimenting with a lot of things,” Rich explains. One of the things the WePay team was experimenting with in the early days: an API that would allow third party platforms to process payments using WePay’s technology directly on their own site.  

“So we realized that, instead of competing with all those other platforms, we can empower them to offer a more seamless user experience around payments, where they’re the ones providing the value-added tools and functionality, and we’re the ones powering their integrated payment services.”

Born out of partnership

It’s important to point out that the epiphany about WePay’s potential as a third-party partner for service providers didn’t come to Rich and Bill out of the blue. Like so many great business ideas, it was born out of a partnership – a friendship, really, that Rich and Bill were building with the Founders of another young startup called GoFundMe.

“There were two of us in a garage, two of them in a garage,” Rich remembers. “And one day [GoFundMe Founder] Brad called my cell to ask about how we built our payments offering, and the relationship evolved from there.”

As the two teams compared notes on their experiences, they began to notice synergies between the two businesses. “The GoFundMe team came to us and they said, ‘Look, we have this great donation platform, it’s better than your donation platform, but we don’t have our own payment service that powers it, and we’re seeing a lot of challenges because of that. If you guys can help us solve those challenges then you can power our business from a payments perspective.’”

Gradually, a new picture started to come into focus. “We saw there was a need, and a need that was probably there, not only at GoFundMe, but all kinds of platforms for small business, for event organizers, for even larger businesses that are being run on software,” Rich remembers. “So we released this API as a side project, and as GoFundMe grew, they had more and more demands and were able to articulate those better and better, and at the same time we were able to organically discover other platforms that were excited about what we were doing and wanted to integrate into it.”

Like that, there it was: the beginning of WePay’s channel business. As demand for the service picked up, the WePay team started pushing more and more resources toward the API and the opportunity they saw there. By 2014, something had happened that, just a few months before, no one could have seen coming.

“The API kind of crossed over and began generating more revenue than our direct business.”


All of this brings us back to 2014, and the crucial decision: keep going with the direct business and the channel business side-by-side, or bring down the lights on the direct business and focus on the channel business full time.

For a while, Rich and Bill tried to convince everyone – partners, investors, employees, and themselves – that the two businesses weren’t actually two different businesses at all. “We were trying to tell a story about how our direct business helped fuel our channel business and our channel business helped fuel our direct business, and here’s how there’s advantages to being in both at the same time,” Rich says.

The problem with that approach: “It was a complex story,” Rich explains. “It made it hard for us to clearly articulate what we did to the market.”

Gradually, Rich and Bill started to recognize some hard truths about where the direct business stood in the market. As foundational as it had been to the original vision of the company,  “It didn’t align with the direction that we thought the market was going in,” Rich explains. “It wasn’t something that we thought was wildly disruptive and differentiated.”

The opportunity they had tapped into with the API, on the other hand, was both.

We’d rather have a chance at winning big here, than have a guaranteed mediocre victory here.

For helping to move the decision along, Rich gives a lot of credit to WePay’s investors – the same investors who had invested in the direct business in the first place. “There are lots of disadvantages to raising capital, but one of the advantages is those guys don’t just want to win, they want to win big. And so when we were putting the two business side by side they said, ‘Yeah, we’d rather have a chance at winning big here, than have a guaranteed mediocre victory here.’ And I think that helped push us over the edge.”

With the decision made, the WePay team was ready to come out strong, with a new, streamlined story about who they were and what they could offer. “Once we ripped of that band-aid, we were able to go to the market and say, ‘We are exclusively focused on this use case, and that means we are going to be the best partner out there.’”

Thinking back on the decision, Rich says his only regret is that they didn’t make it sooner. But, he says, that’s  part of the journey Founders like him and Bill have to take.

 “Every Founder hears a tremendous amount of advice, and what I’ve realized through the past eight years is most of that advice is actually right,” he says. “It’s just hard to really internalize until you’ve been through that experience yourself.”

One of the most common pieces of advice Founders tend to hear, Rich says: it’s better to do one thing and do it really well, than do a lot of things not so well. Rich says that’s a piece of advice that the WePay team thought they were following – up until the moment they realized they weren’t. “

We kept telling ourselves, We are doing this one thing – these two businesses are complementary to each other and it’s basically the same thing,” he remembers. “But it wasn’t until we’d lived through it, and made the decision to retire one, that we truly started to understand that we really weren’t as focused as we needed to be.”


Flash forward to today, and WePay has reaped the benefits of that newfound focus. But if you think they’re sitting back and resting on their laurels, think again.

The thing to remember, Rich says, is that in the timeline of the company, the decision to retire the direct business is still pretty recent. “That’s still only two years ago in a company that’s eight years years old,” he explains. “So when I think about who we are today, there’s two time periods – one is before we were entirely a channel business, and after. And the after period is the shorter piece.”

I hope that we have a wartime mentality until we’ve gotten where we want to go. Until we are sitting on top of the pyramid.

In other words: WePay is still very much a startup. “We’re fighting some very large, well-capitalized players, and there’s a huge opportunity in front of us that we haven’t gobbled up yet,” Rich says.

“I think by definition for a startup, a non-mature business, you’re in wartime – you’re trying to carve out a place for yourself in the world, and it’s always at the expense of some incumbent, or it’s racing against a runway, or a timeline, or market dynamics.”

And, Rich says, he wouldn’t have it any other way. “I hope that we have a wartime mentality until we’ve gotten where we want to go,” he says. “Until we are sitting on top of the pyramid.”

About the Author

Katie Parrott

Word nerd, idea enthusiast, and startup storyteller able to leap tall word counts in a single bound. Brought to you by coffee.

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