Interview with Sezzle CEO Charlie Youakim
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Well, I think we're early days still in this market. I think we have like seven to ten years of growth or strong growth in the BNPL space. So I think it's going to be a rising tide for all the players.
That was Charlie Joachim, co-founder and CEO of Sezzle. I'm Motley Fool producer Matt Greer. Now at our recent Motley Fool member event, Motley Fool co-founder and CEO Tom Gardner talked with Joachim about entrepreneurship, competition, and the business of buy now, pay later.
We're going to talk about Sezzle in a second, but I think I just want to start with your background. What caused you to become an entrepreneur? What made you think about starting the first company you started and how did it lead you to Sezzle?
Well, I wasn't the lemonade stand kid, that's for sure. I was a video gamer. I love science, technology, coding, building computers, basically a nerd. But no entrepreneurs in my family or friend group are anywhere nearby. I just always thought it was interesting. And I think my first job out of school, I wasn't that pressured. It wasn't that high of a bar. I had time on my hand. I was tinkering, playing with stuff. I remember building a Dropbox-like product before Dropbox. And I wish I would have known how to start a company back then. And then it just kind of happened. I was talking to my cousin about starting a company, going to business school. And it was during the global financial crisis. And we just said, let's do it.
Let's try it. I mean, I think we're both adventurers. And We just decided to do it and just jumped in and learn the hard way, every which way and the first company, that's for sure.
How many companies have you started? Just two. Just two, okay. What is happening with the first company? What was the business and what is it doing now?
So it's a company called Passport and we did mobile payment apps. So first of all, we had the wrong idea at the start though. We started into parking hardware, way too hard for us with low capital. We went into mobile payments for parking and... Everyone thought we couldn't do it because at that time there were two big leaders, Park Mobile, Pay By Phone, that were leading the way. And, you know, people in the parking industry were like, you guys should just give up. And we just didn't. We just kept on innovating and adapting. We invented the wallet functionality. We invented white label. And we just worked our way up. And that company is currently a market leader in that space. That is a private. It's a private.
Separate company. Yeah. Got it. I moved out from that company in end of 2015 and then wanted to stay in payments because I knew payments, but I wanted to go after something bigger. So retail payments. And again, wrong idea at the start. We were trying to do like a Venmo for checkout to lower processing fees. And then we noticed buy now, pay later, this paying for technology taking off in Australia, we pivoted to it. And it was just a rocket ship from that point forward.
I still think there's a lot of misunderstanding about buy now, pay later. I mean, if you look out in the comments areas about buy now, pay later stocks, in our case, out in our community and elsewhere, there are skeptics that think people are buying things they can't afford and this is a bad alternative. It should never have been brought to market. So maybe explain the difference between buy now, pay later and typical traditional credit card usage and why you favor BNPL.
Yeah, so I think customers are making these purchases anyway. on their credit cards if they didn't have BNPL. So I think the difference being that with BNPL, the customer actually feels safer. It also computes to a lower cost product for the customer as well. I don't think they're sitting here with a calculator figuring it out, but I think they're figuring it out through usage. And here's the reason why I say that's the case. Well, I'll give an empirical example as well, but I think the customer, when they use BNPL, the payments are planned. We had down payment today, one at two weeks, four weeks, and six weeks, which matches to these pay cycles for these young customers, mid to low income, like these biweekly pay schedules.
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