How Buy Now, Pay Later Solutions Strengthen the eCommerce Economy With Charlie Youakim

Charlie Youakim is the CEO and Executive Chairman of Sezzle, a fintech company on a mission to financially empower the next generation by offering interest-free installment plans for online and in-store purchases. As a fintech founder, Charlie leverages his leadership and management skills to build exceptional companies. Before Sezzle, he founded Passport, a leader in the transportation payments space.

Here’s a glimpse of what you’ll learn:

Charlie Youakim’s inspiration for founding Sezzle
Knowing when to pivot and adapt to discover the best product-market fit
Why young, non-prime customers are attracted to Sezzle’s products
How Sezzle helps customers build credit
What benefits are available to brands that partner with Sezzle?
Charlie’s advice for e-commerce companies persevering amid inflation
How Charlie’s upbringing fostered his appreciation for corporate culture
Remote work’s impact on company communication and efficiency
The importance of dedicating time to building a team and support structure

In this episode…

Many young adults entering the workforce are ready to create a stable financial future, but preparing for a career and building a line of credit is difficult during inflation. eCommerce brands also experience challenges due to the US financial climate. In uncertain times for consumers and e-commerce providers, buy now, pay later programs are an asset for the economy.

Most Americans are not white-collar workers and are ill-equipped with financial resources to help them build credit lines. Innovative solutions to bridge the financial gap are critical for the US economy during a looming recession and inflation. Aware of the opposition affecting the economy, Fintech founder Charlie Youakim helps the e-commerce market and its consumers by providing a buy now, pay later service that promotes financial health for both parties.

On this episode of the Up Arrow Podcast, William Harris welcomes Charlie Youakim, CEO and Executive Chairman of Sezzle, to discuss how his company financially empowers the next generation. Charlie shares why young individuals are attracted to Sezzle’s products, how it builds customers’ credit, and the benefits it offers brand partners. He also imparts wisdom to e-commerce founders on preserving their company through inflation and why dedicating time to team-building is your most valuable asset.

Resources mentioned in this episode

Sponsor for this episode

This episode is brought to you by Elumynt. Elumynt is a performance-driven e-commerce marketing agency focused on finding the best opportunities for you to grow and scale your business.

Our paid search, social, and programmatic services have proven to increase traffic and ROAS, allowing you to make more money efficiently.

To learn more, visit www.elumynt.com.

Episode Transcript

Intro 0:03

Welcome to the Up Arrow Podcast with William Harris, featuring top business leaders sharing strategies and resources to get to the next level. Now, let's get started with the show.

William Harris 0:15

Everybody, William Harris here is founder and CEO of Elumynt. In the host of this podcast where I will be featuring experts in the D2C industry, sharing strategies on how to scale your business and achieve your goals. Really excited about the guests that I have today, Charlie Youakim Charlie is a FinTech founder, and currently the CEO and Executive Chairman of Sezzle, he previously founded passport and which was a leader in the transportation payments space. Charlie, I'm excited to have you here today.

Charlie Youakim 0:41

Thanks for having me really appreciate it.

William Harris 0:43

I was thinking back to who first introduced us. And I think we ended up meeting at a an event that you actually hosted for the e-commerce. I don't remember what's just like the e-commerce of Twin Cities, whatever we met up at, I think it was hosted at your space. Or maybe you were the speaker that night. And I just remembered listening to you and thinking, Boy, this guy gets it. This is something that you understand ecommerce on a level that I felt like a lot of people were missing at the time. Do you remember even speaking at this event?

Charlie Youakim 1:13

I don't they're probably like four or five years ago. It's probably five years ago,

William Harris 1:16

I'm guessing. Yeah, probably. It was very, very early on. I think it was tech.mn. I was trying to think of like a who was a tech that mn like used to put on like these e commerce meetups, obviously before the pandemic. And then the next time you and I really hung out was was when we had Kurt Elster come out and he was the speaker for the e-commerce events we brought on.

Charlie Youakim 1:36

Yeah, I remember that. Yeah. Yeah, I put my, my speaking events in the past, I put a lot of my memory.

William Harris 1:43

Sure. I want to dig into a few things here of what's going on with just buy now pay later. And you know what this means for just the broader economic environment that's going on right now. Before I do, I want to do our sponsorship real quick. This episode is brought to you by Elumynt. Elumynt is an award winning advertising agency optimizing e-commerce campaigns around profit. In fact, we've helped 13 of our customers get acquired with the largest one selling for nearly 800 million. And we were ranked as the 12th fastest growing agency in the world by Adweek. You can learn more on our website, which is at elumynt.com spelled e-l-u-m-y-n-t.com. That said, let's get on to the fun stuff. Tell me about the backstory of Sezzle, what made you say, hey, we need to create this company. Why?

Charlie Youakim 2:30

Well, it all started actually back with passport. And like a lot of founders once you been in a space, like if passport was transportation payments, and I was used to payments, and I just thought to myself, like would be another sector to get into with payments. And retail was exciting. I mean, that's, that's where you want to be if you're famous. And so I reached out to Paul Paradijs, who's my co founder with business school with him. We started brainstorming about ideas in the retail payments area. And we actually came out with a different idea. So it says it originally was I think the term is basically decoupled debit checkout. Basically, we're trying to lower costs for merchants, by by enabling bank payments at checkout. And we raised a nearly a couple of million dollars put a team together starting to launch products. And we just couldn't grab hold, like we were not getting that product market fit that we're looking for. And then they just had a searching. And for me this was this wasn't the first time I had pivoted a company. Passport was a pivot as well. So we think the key is really just given the game. And once you're in the game, you can kind of see what's working. And and so it says we noticed by now pay late or taking off in Australia. And we saw the dynamics of this, you know, really incredible customer pull to the product in that market. And which made it such a powerful product for the merchant as well. And Paul and I were talking and the rest of our team, perhaps this would be a good product to pivot into in the United States because the US is so similar to Australia, in many ways. And so we made that pivot in May of 2017, relaunched in August of 2017. And it was like, holy cow, like we were right, this thing just it took off, all of a sudden just took off.

William Harris 4:23

I love the idea of a pivot. I've done a lot of work with VCs in private equity groups and one of the things that they have instilled upon me as I you know, talk to him about like, Well what are you looking for in these different businesses and and I actually generator I don't know if you're familiar with generator but one of the mentors there as well. And so, you know, I listen to a lot of pitches, is they'll say that the founder makes a bigger difference than even necessarily the business idea in and of itself right then and there because inevitably, they said you're you're pretty much always going to end up having to pivot at some point in time, whether it's a year three Here's five years down the road, you're gonna end up doing something that's a little bit different than whatever you said you're doing here today. And so knowing whether or not the founder is, you know, has the ability to pivot is willing to pivot things like that down the road, they said, is one of the keys to being able to make a wise investment. And you said, both of these were pivots. And I think that that's just a really good way to see remind anybody, even in e-commerce space, right now, if you're not finding the product market fit that you thought you were going to have when you started the business, maybe consider a pivot, maybe look at why is there not product market fit? And is there something that's close to what you're doing that might be better, test out some MVPs there to see if you can find something that really can take off, because that might be the thing that's holding you back?

Charlie Youakim 5:45

First of all, we have a spot on everything that generator Sam is spot on. I mean, my view is that it's a very, very slim chance that whatever you launch is the product for 567 years, I mean, even sessile, even though we're adapting, you have to be able to adapt, because this competition comes if you're not innovating and adapting, you're gonna get squashed. You know. So I think that's a really key component. It's such as the founders, the founding team, basically, the entire team's got to be ready to do it and willing to do it. You know, definitely a great call out. And, you know, it really important to our past. And I think one of the things you see with some teams is that they feel we even had that sense as well, there was some views that, hey, we raised money, with the idea that we were building this XYZ. And, you know, when I, we talked about it a lot, as a team, we're pivoting and I basically told the team, and what we promise is that we're going to make these investors a lot of money. And if we don't think this is working out, we got it, we've got to adapt, you know, you're you're there, you've seen what's going on. That's ultimately what matters is that you return that capital and plus them to investors. That's what's gonna make them happy. Not what not doing the original idea, right into the ground.

William Harris 6:54

Yeah, right, exactly. And that's not gonna make anybody happy, it's not gonna make you happy, it will make your employees happy, because everybody's gonna be stressed out frustrated, that they're not having the impact that you want to have. And so if you can shift that just a little bit, find out where that impact is, all of a sudden, the joy from every single person and in that even outside of, you know, let's just say the capitalization of the joy. But the joy itself is a lot higher as well.

Charlie Youakim 7:16

Yeah, another thing people think about a lot, or I think there's a fallacy is that they think that jumping into a space that already has, competition is a mistake. I think it's actually indicative of a smart move typically, like if there's competition already in the space, maybe it's early, like you'd rather be in an earlier space right? Now, but there's always someone doing that business. It's proof. There's product market fit. And I think a lot of founders want to find like, they want to create the new thing. And quite frankly, the one of the most fun things in business and entrepreneurship is actually the competition aspect, waking up every morning like, they're, they're angling to beat you, or angling to beat them. And it's like a game of tennis every day, you know, you're going out there and you're trying to beat this these competitors. I think it makes it fun. And it takes up the hardest part, which is the product market fit. And then once once you're past that it's just execution.

William Harris 8:12

It reminds me of Burger King's go to market strategy when they first launched, are you familiar with what they did? At the beginning, though, so I learned about this in our textbook, I don't remember what it was. But in college in our in our marketing textbook, their go to market strategy was to basically establish a Burger King right next to every McDonald's. And the whole reason was they knew that if you like they've already done the market research in the I know that you're coming to buy a hamburger, you're already like, likely, you know, in the mood for what they're serving. Let's just give it some competition. Hey, you've got that you've got an option. Now, do you want this one instead? It's a brilliant move. And it worked out very well for them, you know, see, in the short term, didn't help them become number one, but it helped them become quite successful.

Charlie Youakim 8:56

Yeah, I think they did pretty well. Yeah.

William Harris 8:59

Um, I want to talk about Buy now pay later then. One of the things that you told me that I really liked is it helps reach a different customer segment. What do you mean by that?

Charlie Youakim 9:08

Well, you know, traditional products, credit cards, you know, traditional finance, financial products, even debit cards. These these customers in our segment, a younger, non Prime customer, this customer either is afraid of credit, lacks access to any credit whatsoever was new to credit, perhaps doesn't get enough access through those channels like a credit card. And I think in many ways, these customers especially younger customers are afraid of traditional credit cards. Like there's this either through experience or just the fear of having a debt overhang their heads because it's, it's nebulous, you know you've charged and charged and charged and you supposed to pay it back because a bullet payment at the end of the month. I think our product really helps that young nonprime customer convert at checkout. And the reason they converted checkout with our product, which is, you know, just shortcutted, its final pay leaders interest free for payments over six weeks. So 25% of time of purchase, and two weeks, four weeks, six weeks, all free. What helps that customer is, first of all, we're able to give them the access to credit. But But second, it's planned, it feels debit, like, like, I know that these payments are coming out in two weeks, four weeks, six weeks, I know it'll be done in six weeks, I'll have this off my plate, I know it'll be automated, then I have to go into my my portal and mid choose the minimum payment or some larger payment or the full payment. I think it just seems simpler, easier. And fits this like hybridized solution between debit and credit. We see a lot of our customers have credit cards, like 50% will have a credit card, they prefer not to use it, they actually pay us back with debit. Or they did we're typically checkout with debit. And so the reason it works for the customer is it gives that little bit of extra juice for purchasing power, that's we're looking for, but safely. And if the reason works for the merchant, is that the customer that would typically want to hang on to the debit card, or they will checkout, they'll just kind of sit back and say, Well, maybe maybe in two weeks, maybe in four weeks, I'll come back. And I think a lot of people listening to podcasts and e-comm would know that that customer doesn't come back. Like you have a very, very low chance of them coming back. So you want to get them right at that checkout when you have that chance.

William Harris 11:34

Yeah, it makes sense. You know, it kind of sounds like something I feel like you've said before, which is you're not necessarily going after the American Express Platinum user, this is the everyday American user. Exactly. Or group.

Charlie Youakim 11:51

Yeah, that high end, top tier customer financially, they've got tons of options, if they want to check up, they've got six credit cards in their wallets, probably, that they can choose, you know, which one has the highest rewards? That's not our customer? Yeah, our customer is young nonprime you know, perhaps working like gig economy, jobs being paid, you know, bi weekly, in a part time work type of arrangement. Just getting into the workforce just getting into their financial future. That's our customer, which, you know, I think is a larger percentage of Americans, quite frankly.

William Harris 12:25

Yeah. If you had to estimate how big of a percentage differences that compared to you know, like the average customer coming in, how much how much does that improve their ability to reach a bigger audience or what how much percentage bigger audiences that roughly

Charlie Youakim 12:42

in terms of like population?

William Harris 12:44

Yeah, go ahead.

Charlie Youakim 12:47

I just think it's the meat of America. I mean, this is, you know, everyday Americans, you know, the, the higher rate like basically $125,000 income plus, that's not typically our customer. You know, that's Darryl, these are so we're probably more rural, younger. And whereas like the AMEX, Platinum type customer is like your suburbanite, a urbanite type customer, you know, white collar that that is not typically our customer.

William Harris 13:16

Yeah, and like you said, let's, let's even say that that's maybe top 10%, right or something 125,000. I don't know where that falls. But let's say it's top 10% Or even top 15, top 20%. This opens it up to the remaining 80% of people. So it's a significant amount of people that you're you're exposing, giving the opportunity to buy this more so than they would have otherwise, which is a big segment of America.

Charlie Youakim 13:41

Exactly. And it's a very safe product. This is why in my mind, it's safe. If you use our product, and you struggle to make a payment, you're on payment two or three, if you're struggling with the payment, we don't allow you to purchase more, the moment you've had a problem or a trip, we don't allow you to purchase more until you catch up, make that payment and catch up on your payments. Or you think about credit cards. Not to be too mean to the credit card companies. But that's what they're looking for. They're looking for the trip, you're paying everything off monthly. Can't do it this month. I've got to have a revolving balance. Now you're winning for the credit card company, where for us, we're not allowing you to overextend yourself, the moment you do that, you're stopped. And that's also why I think the customer likes our products so much because we don't allow them to overextend

William Harris 14:31

is brilliant. I mean, it's it's a way to where you can give them that buying power without jeopardizing a significant portion of their financial income in the next couple of months as well.

Charlie Youakim 14:44

Exactly, exactly. This holiday period even popped up this way. For us, William like we were really trying to be strict this holiday period. Because holiday periods people can overspend, you know. And for us that's a lose lose situation because customers overextend, can't pay us back we lose Last summer, potentially. So we know, I just think there's perfect alignment between companies in this final payload or space and the customers.

William Harris 15:07

I think it makes a lot of sense. And I feel like a lot of e-commerce stores have finally adopted this. I remember, you know, when you and I were talking before we first met, it was still a fairly new thing. There weren't a lot of people that were doing this, but it's, it's grown to the point where a lot of people have at least added an option to their website. You know, what about, is there? Is there a limit to this? Or it's like, hey, this one works better than this one? Or how do people decide which one to use on their website?

Charlie Youakim 15:39

I think a lot of what I'm saying a lot of e-commerce companies out there are choosing to use multiple. And I think, sure, I think when the e-commerce company is looking, you know, who to add into their checkout, it really comes down to, you know, how do you differentiate? So I wouldn't be asking to buy now pay later provider, you know, who is your customer? How does your product differentiate from the other providers in the space? You know, and basically, how does that kind of fit in? You know, because I think our recommendation nowadays, when we're talking to e commerce companies is, you probably want to put Sezzle, alongside XY and Z. Because these companies go out of business this way, they're reaching this sub segment, within this final pay their audience, which is a little bit different than our segment. And I think by doing so that you can actually drive even more volume and more conversion through your site.

William Harris 16:30

Yeah, so even if you're using like one of the let's just say the quote unquote, big ones, right, where it's, you know, Pay Pal or something like that, it's you have the ability to still reach a completely different segment than even PayPal would, for instance,

Charlie Youakim 16:43

totally, you know, absolutely pay pals audiences a whole lot different than Sezzle's audience. No doubt about it.

William Harris 16:51

Yeah, so that makes sense. And so then it's like, well, you're still restricting the audience, if you if you are looking at just one. What about financial empowerment, credit building? That's something else that you talked about this? And one of the benefits that comes from this? We just hinted at this a little bit. How does this help people beyond just even Okay, limiting them from making bad financial choices, but helping them build up in these areas?

Charlie Youakim 17:13

Yeah, I think the core product does hit the mission. So it says his mission is financial, empower the next generation. And so we think the core product does that. But we wanted to keep on thinking on this pathway, and what can we keep on doing. And one of the viewpoints I heard, actually, my sister in law, when we were first launching the product, she said, You know, I would use your product, if it had credit building. And it got it got me thinking along those lines, and then it got our team thinking along those lines, you know, what, what should we be doing here, because we do on this customer, tends to be a non Prime customer tends to be younger. And the thought process we started talking about as a team was, I've got a little one, only two and a half years old. But if I had someone that was a son, or a daughter that was older, you know, 1819 years old, just getting into their lives in their first financial products. What would I want them to do? I would want them to build their credit score up. Yeah. And so we started talking about this as a team that, like, if that's what we want for our own kids, why don't we build this into our product, and no one was doing it. And this is like three years ago, by the way, it's still, almost no one is doing this in this space. Our thought process was, let's create a credit building product within Buy now pay later, because it is a credit product, that people are basically taking out a loan to make this purchase, even though it's very small. But let's take that concept. And let's have customers choose to join Sezzle Up. We call it Sezzle Up, and then by doing so we can help them report on their credit, and build their credit scores up for their future. Yeah. And the great news is, we've been doing this for three years now. So we have some data. I think it's really awesome data. So it's still it's still young, still new. But on average for us. In four months, the average user and Sezzle has both people that pay non pay excetera their credit score rises by 20 points in the first four months. Really, that's awesome. And so imagine, imagine that pate meet the ones that are paying on time, it's we got a better number there. So I think that's, that's a great, that's a great result for customers that are like in the low six hundreds, you know, they can get their credit scores up, maybe up to 700 over some time, perhaps with sezzle up, you know, just by that alone, but I think it'll give them a loan rate journey, like understanding that, hey, you get into credit building products. This will help you get further in your financial future. And that'll that'll unlock lower mortgage rates, you know, access to an apartment or access to a car. And you know, these things that are really important to you, and I know that but I don't think the average American, especially the young, average American knows that.

William Harris 19:44

Yeah, I feel like maybe this is how great if you're one of the brands then that helps your customer do this. Have you seen any brands even talking about why they've chosen let's say, Sezzle over another option, you know, In this being one of the reasons I you finding the brands that are being outright and just saying, Hey, here's one of the reasons we're using Sezzle, because we're trying to help empower you to be able to just be an overall better financial health for your future to have your credit built up things like that. Is anybody doing that right now?

Charlie Youakim 20:16

Oh, it definitely impacts the choice of Sezzle, you know, one of our biggest partners is Target. I know, that says a lot was a big part of why they chose us. They knew that that was the right thing to do, as well, the team working on on our product. And, you know, we've heard it elsewhere. And I, you know, I think it makes sense, you know, we can do with a core of whatever the other Buy now pay later does. But why not do a little bit more again?

William Harris 20:40

Yeah. What are other ways that brands can benefit from using a buy now pay later option like Sezzle? You know, it's one thing to just have it on your website. But are there ways that you see it being underutilized, you're like, Oh, if you just did this, or this, it would work way better, like use it in your ads like this, or what are the other tips that they can get more out of this?

Charlie Youakim 21:03

Well, one is like abandoned cart campaigns, that one to me is like a no brainer, you've got to put in your abandoned cart campaigns, you've got to basically create special campaigns just for the Buy Now pay later option, you know, perhaps you've got a higher price point item that's going up, like somewhere around $160 $200. That's a great product for an ad campaign. And on the ad campaign, you know, call it out. Buy now pay later available. The other one, I think that a lot of merchants don't utilize enough is actually our own marketing channels within Sezzle. You know, we've got well over a million customers that are using our app every month. And so there's a lot of eyeballs going through this app. And if you get into the app, take advantage of some promos with Sezzle, and probably other buy now pay laters as well. You can get you can actually drive traffic from the app into your storefront. And so that's another one that's not utilized as much.

William Harris 22:00

Yeah, I didn't even think like it. Admittedly, I think so much around the actual clients website that I didn't even think about your app and how people are coming. They're looking for options for they're saying, Hey, I know that I've already approved with Sezzle, I know that they're, they've got my best interests at mind. And so from a consumer, they're saying, okay, and I'm trying to build up my credit score, they're the one of the only ones that are doing this. And so, because of that, I want to see who else is available that's willing to do this, and maybe I'll shop there, you know, proactively as opposed to someone else. And that makes a lot of sense.

Charlie Youakim 22:29

Exactly. Our app is almost like a digital Mall of America. You know, like your walk me into it. Where else can I shop and this digital mall, and getting your storefront up front and center is a great move.

William Harris 22:41

Yeah, yeah. Especially if you're already for thinking about these types of things. I was also thinking about the broader economy as a whole right now, whether or not we want to call it an economic recession or not, I'd imagine that this is something that is a very smart thing for people to do if they're not currently doing this, or if they only have one option, getting something like Sezzle on the website as well. Because of the the idea that maybe a lot of people are struggling to make some of the same financial commitments that they did before. Are you seeing anything like this? Or is there anything economically in your data that you're seeing that would recommend something was happening like this?

Charlie Youakim 23:23

Willie, man, I don't think you know, we're not the Pay Pal. Unfortunately, not quite there yet. So I don't think a lot of our data tells us enough about macro economic conditions. But I think your concepts right, I definitely concentrated unemployment still low. But we're seeing a lot of strain in white collar America, especially in tech sector fintech. So if you look at Tech, that customer that that employee may not have been a typical Buy now pay later customer. But I think economic times when they create some, some financial stresses can change someone's mindset. So I think our viewpoint is that we're well prepared to help customers across different strata of incomes or former income. And our thought is that an economic downturn, like the one where it's a tough time, but it's hard to kind of read this one, like where we're gonna go, but, but some people are struggling. And in that case, it's a chance for us to potentially offer a new customer segment our product, and I think that can help the merchant drive an additional sale. Because this customer might be like, you know, I I typically wouldn't use Sezzle. But this time, I'm gonna try it. Because I just feel a little bit of extra strain in my pocketbook. Why not stretch out and get a little bit of time value of money?

William Harris 24:36

Yeah, so maybe not in your data. But I have to imagine somebody in FinTech yourself. You're watching a lot of other things that are outside of this. Was there any indication to you as far as hey, maybe this is a bit of a downturn that we need to be watchful of?

Charlie Youakim 24:54

Well, I think I just saw data this morning. You know, take a look at it and peek to see what what the data point was, but I know that data point is working from that basically, online prices were down 3%. year on year, in May. So So you know, this inflation, at least online, is coming down, which I think is a sign of stress, like, you know, otherwise that wouldn't be that wouldn't be happening unless people are trying to make the sale. And I think enough ecommerce companies out there trying to make the sale, that it's driving online prices down.

William Harris 25:31

Yeah, yeah. That's it's interesting. If you were going to give some advice to somebody who's in e-commerce right now, then everything that's going on everything that you know, beyond what we've talked about, What other advice would you give to people right now, as you're looking at it, say, you know, it's one of your kids that's running this e-commerce store? What would you tell them to do? Or be aware of, or be watchful for as they move forward? Let's say for 2023 into 2024?

Charlie Youakim 25:59

Well, I'm a bear Williams, like, I'm basically I think, I think we might have a couple more years of pain. I think it's more like.com than anything to me, because we just have this deflating bubble. But we'll see, you know, I could be wrong, but I think better to prepare for the worst. So you know, as a company, we're really thinking about profitability as a key component of the company right now. I think that's a smart move for anyone. So drive more and more incremental profit into the company at this time, you know, cut costs are possible, I wouldn't be making that choice of, you know, expanding or taking on an unusual product right now. I would really just kind of bring things back to the core, you know, so for every e-commerce company, just if you have to contract a little bit, just get through this time period, because there are greener pastures ahead. But this is really an uncertain time. I mean, the signals are all replaces, like, we have inflation, but we have unemployment low. It's just, who knows what's, what comes out of this. So just play it safe.

William Harris 27:08

Yeah, I think that's easiest way to word it is it's uncertain, right? We're seeing so many markers that would suggest that it's going to be an absolutely, you know, bloodbath, come up here. And then we're also seeing other markers that come up, and they're like, No, maybe not so much, and things are gonna be good. And the reality is, nobody can agree on whether or not we're heading into troubled waters or not. But we can all agree that nobody really knows. And so by the fact of nobody really knowing what's going on, the best thing you can do is say, hey, how do we just, you know, shore up our defenses, make sure that we're ready. So that way, when we need to, let's say, attacking go after this, you know, market a little bit more aggressively, we'll be in a position where you can do it can't do it if you're out of business. So figuring out how you find that cash flow and that profitability.

Charlie Youakim 27:49

Exactly. I mean, worst case scenario is you lose some market share, which we were contracting a little bit, and some competitor was taking the riskier move. But you're still in business, you can still compete. And I think that's really the key. Yeah,

William Harris 28:01

staying in the game, right? Gotta get in the game. And I think you've talked about that before. It's like you got to get in the game, you got your pivot, you've also got to stay in the game. You can't win if you get exit the game. Exactly. I wanted to shift a little bit into who is Charlie Youakim I really like learning about like, who you know, each individual person is as a human being as well. Is there any stories about you from childhood, something that made you the person who likes to watch what's going on in financial markets and help create companies and work as hard as you do? Like, how did you get to where you are? Grandma, Mom, something along those lines?

Charlie Youakim 28:40

I think, you know, maybe a kind of a common story among entrepreneurs, son of immigrant. So my dad moved over from the Middle East, married my mom, they met in college and university, Illinois. And then I was the fifth of six kids growing up lower middle class. You know, that that's um, you don't you don't realize that, you know, didn't have Nintendo goober friends, a Charlie younger played Nintendo over your friend's house, but you don't care. You know, you have no idea as a kid. And quite frankly, I still don't care. I think it was a great child that I had. And, you know, one thing that kind of led to where I am today, I think was that family unit that we had had a great childhood, my parents ran a tight ship, but you know, not a fun one, too. And I always tell people, that was where I learned about creating corporate culture. Because I was the thin get. And so I knew like, Okay, I'm supposed to do well in school. I'm supposed to do chores, supposed to listen to mom and dad. And I'm supposed to, you know, basically be a good kid. And that they created that culture prior at the detriment of some of my older siblings, you know, curating that culture, but but for me, it was like, easy choice, you know, keep on doing the right thing. And then I tell that to the team, as we start both both companies that we started both companies, you know, it's really important to create the right culture here, and work hard, roll up our sleeves. to be transparent, you know, and just basically create the right expectations for the team members that were hard working unit. You know, this is not an easy time. It never is for a startup, by the way, I think people should go into I always, I think the first company I went into, at passport thinking it'd be easy, but being really talking brash, oh, man, we almost got wiped out, you know, a few times to realize that this is not so easy. And so I think, you know, you have to have that hard work and roll roll the sleeves up type of attitude. Elon Musk talks about it a lot. You know, the, you gotta work harder. There's so many smart people out there. And so I, you know, growing up the way I did, I think just helping with that culture aspect that creates expectations, and then you create the expectations in the company. And that culture basically drives the results.

William Harris 30:45

Yeah, I like that. And I like even just where you went about the idea of, you know, roll up your sleeves, and you got to get it done. Reminds you of some of the things that we even talked about with our team, right, like, there's ups and downs within the agency as well. And thankfully, a lot of the team played sports and we've got a couple of girls I think, played D one soccer and, you know, when you talk about, you know, what that's like to get to a, you know, any kind of an elite level of anything that you're doing. It takes hard work, and there gonna be days where it's hard, and there are times where you're, you know, throwing up from two days or whatever that might be. But it's like, but it's for this goal, and you have to be the type of person who's willing to push through pain in order to realize that, you know, that pain is is momentary. And that's, you know, kind of like the birth of greatness is through, you know, some of those birthing pains of pain as well.

Charlie Youakim 31:37

I think it's spot on. Well, yeah, I hope no one's thrown up at work.

William Harris 31:42

That's a different story. Maybe I should explain that, you know, but yeah, that's a common thing.

Charlie Youakim 31:50

But you're spot on the pain and, and some of the hardships along the way are what? make you stronger?

William Harris 31:58

Yeah, exactly. In being willing to endure that. What about any hobbies incorrect? You're talking about fantasy football night, right? Like, if I was in an office, if I was in an office with you, what's something that I would learn by being in the office with you that I couldn't necessarily perceive over over the camera? Are you the guy who like walks loudly? Or?

Charlie Youakim 32:26

It's a good question, actually. Well, I definitely play fantasy football. I'm actually in a fantasy football draft my family right now. Nice doing dynasty. So I'm a dork about that. Play a lot of video. I used to play a lot of video games. I still do every once in a while, like my nephew's want to play, you know, Oculus or something every once in a while or, you know, play some online game or something here or there or wherever. In the office still. Golf. I do like golf. I think that yeah, a lot of team members know that. When I when they get to know me, Paul, my co founder, and I like to play. So those are some of the things you know, I like to go fishing and stuff, but I haven't been able to do that as much recently. It's been so busy with work.

William Harris 33:13

Yeah. Well, you were talking about the Oculus suit is a fun tangent. I'm gonna go on there with you. What's one of your favorite games to play on the Oculus quest, then? I love the quest. What's that? The Oh, the mini golf.

Charlie Youakim 33:26

mini golf games. Awesome. Oh, it's so good. Yeah, I mean, it feels like you're playing mini golf. I swear to God, like you're really? Yeah, it's, it's spot on. They did a really good job with it. That's a good one. You know, I'm actually really curious to see where this stuff goes. I think it's kind of too big right now. It's too heavy. I'm curious what the Apple product is going to look like and feel like, that'll be a

William Harris 33:53

pro. Oh, that looks amazing. I have been waiting for this for three years, probably I feel like is when I was like, Okay, it's gonna come out soon. Okay, maybe not this year, but next year, okay, maybe not next year, but the year after that. And it's like, I just keep, keep waiting and waiting. And they unveiled what it is. And, you know, at least the promo video of it looks absolutely incredible.

Charlie Youakim 34:13

The only crazy thing is the price point. Oculus is like 300 something and that's 10x

William Harris 34:20

I think the way that I'm looking at it in my mind is I think that this is going way beyond just like a VR headset, and it is an entire it is a computer. It is a completely new type of computer computing systems. That makes sense, where I mean like even the way that it's looking at like recording a lot of stuff and like having your FaceTime conversations right there. It's it's a completely different device. And I don't think that it belongs in just the same same. You know, category is just like a VR headset or an AR headset. But

Charlie Youakim 34:53

when's the launch date? I'm actually curious on the launch date, check if I remember

William Harris 34:56

correctly, it's coming out like mid 2024 Something like So, also, it's always what I right now, it's always a way where I'm a little bummed about it. But I love I love my quest as well. I actually invested in a VR company up in Toronto called allegory that really excited about some of the stuff they're doing. Actually, one of the co founders, there was the guy who was leading all of the AR stuff over at what is the company called now? Wayfair. And so a lot of the stuff that they were doing, they're really, really smart guy, and I'm excited about some of the stuff they're building there.

Charlie Youakim 35:28

What's your favorite game, by the way?

William Harris 35:31

Man, I don't know if it's my favorite. It's hard to say that there's a favorite cuz I feel like I go through cycled through, there was a while where it was like beat Sabre, I was playing that, you know, multiple times a day when that one was really new. And it was really fun. But maybe similar to sports scramble is a lot of fun to like, complete with my kids. And so we'll, we'll take turns playing that. And it's, it's where you're playing, let's say baseball, but they'll switch up the baton. So instead of a bat, you've got like a golf club. And then the next time you've got like, it's like a dead fish, a floppy fish, but you're batting, right? And then they'll change of the balls. And you can do that with baseball. And you can do that with a couple of other sports. And it's just really fun and silly. So it's a little bit less realistic, but it's a lot of entertaining fun for kids.

Charlie Youakim 36:11

That's cool.

William Harris 36:12

Yeah. What about, you're talking to me about when you moved to Puerto Rico during COVID? And I'd love to unpack, you know, like, what was that move? Like? And why are you still there? You know, take me through this.

Charlie Youakim 36:29

Well, it all started during COVID. You know, COVID hit March of I mean, I still remember COVID hitting, we're flying back from Australia. And we're on a road show in Australia. We're an Australian listed company. And we were talking to investors. And I remember going to like the meetings with investors. And everyone's saying, from our team, how come no one's asking about COVID Like this, this is so weird. And so no one asked about COVID mastrad, then we get on the flight and takes 24 hours to get back. So we get to the flight land back in Minneapolis, that the bleep is hitting the fan on COVID in 24 hours on that flight. And all of a sudden your team's like, we should work remote. It was that week, we landed on like a Monday I think. And by Thursday, we were remote only as a company at that point. That was in March. And then we're working remote in the middle of winter in Minnesota working remote, and everyone's just kind of bunker mentality at that point. But then you get to like, October, you're starting to get stir crazy a little bit about being remote. And we're sending out swag packs to investors. And one of our investors was down here in Puerto Rico. And I had learned about their tax breaks, etc. And I said, Hey, Chris, you're down there in Puerto Rico. You're down there, you know what this tax? Break. So please come on down and check it out. And yeah, so I came on down, took a flight down. And I just had never been to Puerto Rico. I absolutely loved it. And especially for Minnesota. I mean, you know, winter, it's tough. And stuff that was talking to my wife, like, you know, it's, I think we should do this in the winter times. Like why not, because we're basically realizing at that time that we were hiring everywhere. across the US. It was basically becoming a remote first company. And you could tell it because we were allowing it to happen. And we had to because of COVID. And we never really felt that we were gonna bring it back to require an office at that weekend understanding this is not going to go back to an office. So I started to think like, why not keep down in some, like nice weather area, take advantage of a tax incentive at the same time. And then come back to Minnesota and summers you know, to spend time with family come to the office, etc. Because we're gonna be remote first. And that's really what drove the mood down was crazy. But uh, William is we were definitely not the only ones all by like, the rush down to Puerto Rico was wild, like really just tons of people who have down here. And there's really cool communities now like so I my reasons are great weather, great taxes. And the reason why I'm still down here, we're still down here is because first of all love it down here. But our company is still remote first. You know, we have this, we actually moving offices now. But our office in Minneapolis could fit like 170 people. On average, we have four or five people coming in. And we we have probably 150 160 People in Minneapolis. And it's just no one's coming choosing to come in. So our thought was we're actually moving into a ratio moving to Dayton's project, which is on Nicollet gorgeous office building. And so we're scaling down in size to an office that can hold like 70 instead of 170. But moving up in terms of quality, big time. And the viewpoint is like you know, maybe that'll draw people in. I know I'll be going in when I'm in Minneapolis, but maybe that can draw people in and create some sort of an office but for us we're still remote first. You know even with that. We're going to be remote first. And so I think this is kind of here to stay I think Everyone's learned that you can work remotely and do a great job. And I'm the same viewpoint.

William Harris 40:04

I'm a big fan of remote working our company Elumynt is remote, have had, we were remote from the very beginning even before COVID happened. And I remember this actually starting because of Chad Halverson, who was the co founder over at when I work. And he this would have been when I was working with him, he had me read the book Remote by Jason Freed over at 37 signals base camp. And I remember thinking, hey, this is absolutely the way we need to go asynchronous working right, as long as you, in fact, it forces you almost to have to work more intelligently. Because you have to document things. Well, you have to clearly explain what needs to happen and when it needs to happen. So you put it into Asana or Basecamp, or whatever you're using, you know, for that. And so I think that it forces a level of just to say, heightened communication that I think is oftentimes easy to miss when you're in an office, because it's very easy to just go tap somebody on the shoulder and say, Hey, can you do this for me, versus setting it and running it through the right process? And so I would say that, to your your point, I have felt that building an agency from the beginning this way, has allowed us to be more efficient.

Charlie Youakim 41:18

I think you're spot on. I mean, first of all, it's more efficiency, because you're not commuting as well. I think there's also this element of you know, better quality of life for everyone in the company. Because you can, you know, fit work into the right time slots within your day, and what's going on? And then in what it comes down to DNS production. Are you getting your work done? Are you doing a great job? And I think that's it makes it actually just more to the core are able to get your job done. Some people struggle with it, quite frankly, perhaps we have seen issues. Yep. Yeah. No doubt about it. Would there have been struggles? I think the other area where, you know, remains to be seen younger employees coming into a company. Yeah. I think that can be a detrimental impact for those employees. But that's also why we have the office, in our view is you know, those employees, you're looking for that sort of connection that mentor mentee relationship, go into the office, do that, you know, do the do the right thing for you. If you struggle at home, go into the office, if you can we even allow you know, some employees that are remote. If they really want to work in a we work, let us know. Because we understand better there could be a trap? Like, yeah, let's do what's right for you so that you can be the most productive? Yeah, you.

William Harris 42:33

We do that as well. We have a stipend for people who want to work at, you know, some type of like a shared co working space or something if they're not, you know, here within town, we don't have an office, I have thought about that at some point in time. Like you said, like the hybrid, where you have both options for the people who feel like they're more energized, if you're going to do better work in an office come to the office, if you're gonna do better work at home, be at home? Because to your point, yes, not everybody is created equal. And we all have, well, let's say we're created equal, but we're different personalities. And so we do have differences in how we're motivated to work. And so I think it makes a lot of sense. If you if you are going to give any piece of advice to any founder right now. And so let's say we can even shift away from e-commerce, although a lot of people who are listening will be founders of e-commerce stores, but just founders in general, when it comes to building and establishing your team, or whatever that might be a book that you would want them to read. What would that be? What's the what's the advice that you would give to other founders?

Charlie Youakim 43:31

Well, I, I, one thing I tend to say is you got to be all in, you know, there's no like, you know, one foot in. I mean, there are some rare cases like you know, you got to, you're able to basically dedicate time above and beyond your day to day to kind of put one foot in and kind of weighed in. But generally, I think, go for it. And I would also say, only go for it, if you've got the right support structures around you. Like, for instance, like when I was doing this, I was not married, I didn't have kids. So I was able to basically make the company, my first company, the baby, and I could put all the time and energy into it. And then actually, I had a strong support structure around me with my family. So as you know, times were getting tough. I mean, I was living pretty cheaply. I had a 1993 Honda Civic, you know, living in the office back to that company. So I was living pretty, pretty cheap. But if I needed to help my family, I could reach out to them. A sister, a brother and my parents, they can help out. If I had a bunch of kids, and they were dependent on me, I wouldn't make the same choice. So that's one thing. I talk to founders or potential founders a lot, but it's not. It is not easy. It is very, very difficult. You know, here's what people are saying to Phyllis. Here's how difficult it is. You have to convince suppliers to work with you see what that you're going to pay them and you have to convince them that you're worth their time. To set you up. I mean, that's how hard it is, as a founder early stage, you got to convince everyone that you're worth the time for this idea. So, you know, it's a draining activity. I mean, trust me, I love it. It's like mountain climbing. You know, in the end, it's like a great activity, if it's the right time in your life, but it's not for everyone had their stage of life. So make sure you can dedicate time to it.

William Harris 45:22

Yeah, no, that's, that's really, really wise words. I really appreciate you coming out sharing this wisdom with everybody here on the show. If there's anything else that you'd want to share, let me know. Otherwise, I just want to thank you for for jumping on taking your time and just opening up to us about you know, some of the features of buy now pay later and just even just founders in general.

Charlie Youakim 45:49

Yeah, well, I appreciate you having me why. Great chatting with you.

William Harris 45:53

Likewise, and thank you everybody, for tuning in. Hope you have a great day.

Outro 45:57

Thanks for listening to the Up Arrow Podcast with William Harris. We'll see you again next time. And be sure to click Subscribe to get future episodes.

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