251: How to Implement FinTech to Compete with Big Players - with Joe Keeley

Joe Keeley: 0:10

You know, I think we need product folks to be, you know, completely geeked out in a good way about what our product is. But we also need to have team members that are balancing all these other plates from sales, marketing, product engineering, fundraising, finance, HR, etc.

Unknown: 0:33

Welcome to Scale Your SaaS, the podcast that gives you proven techniques and formulas for boosting your revenue and achieving your dream exit brought to you by a guy who's done just that multiple times. Here's your host, Matt Wolach,

Matt Wolach: 0:49

and welcome to the show. Very, very awesome to have you here. Thank you very much for joining us. Thanks for watching. If you're watching on YouTube, thanks for listening. If you're on the podcast, this is gonna be a fun episode. I am really excited to chat with Joe Keeley. Joe, how you doing?

Joe Keeley: 1:04

Great. Thanks. Thanks for having me.

Matt Wolach: 1:06

Absolutely. Let me make sure everybody knows who you are Joe. So Joe, he's the co founder and CEO of JustiFi and JustiFi exists to accelerate the potential of vertical SaaS platforms by bringing optimized embedded payments and beyond payments FinTech solutions to bear resulting in increased value for the platform of three to five times with remarkably lower cost of ownership. It's really cool what these guys are doing over justify. Prior to that Joe founded and grew college nanny sitters and tutors, also known as CNST. It's the nation's largest in home child care and tutoring company, he led CST to over 200 franchises in the USA and United Kingdom, a milestone less than 5% of franchisors achieved and over 13,000 employees. That's quite the story, I'm sure. And I can tell you, my kids are a little bit older now. But we definitely could have used you back in the day. But Joe, thanks so much for coming on the show.

Joe Keeley: 2:03

My pleasure. My pleasure. Thanks for having me. For sure.

Matt Wolach: 2:06

So tell me, what have you been up to lately? And what's coming up for you?

Joe Keeley: 2:10

Well, you know, I'm, we're trying to make FinTech possible over it JustiFi, which is, of course, it's interesting. There's, you talked about it every time I hear the stark contrast, I don't know if some of the listeners feel the same way. But, you know, running a global childcare company made me uniquely unqualified to solve some FinTech problems. In software. On one hand, on the other hand, it's remarkably similar, because we're talking about, you know, building culture a company and the good news is I don't have to be the smartest technical person in the room, because I have a lot of a great co founder and a great team and, and things but, but we've been, we're doing what, you know, one of the famous VCs, Marc Andreessen is sort of He is quoted are a number of things. One, he said, you know, Software is eating the world. And then he said, You know, every company paraphrase, will soon be a FinTech company. So, we're really working on that last part, how can how can platforms? How can software companies harness the power of embedded finance those those software tools, those products for the value given to their customers and to them in a more easily digestible way? Because the reality is, it's these terms are thrown around a lot. It's, it sounds really great, but how do you actually do it because these tools historically have been reserved for the few and with the advance of technology and other things we think that that's maybe not right and we want to enable every software platform where it fits to have the same opportunity to grow and increase value and as as the next

Matt Wolach: 4:04

I love that, that's one of the things I love about some of the great tools are coming out justifies right in there with all of them it's some of the you know, older days the big players had all the fun that all the tools they had all the the access to everything but now there's so much opportunity for some of the smaller and medium sized companies to be able to accelerate and catch and really zoom right past the big ones so super awesome job that you guys are part of that making that happen. But I definitely want to know and you did mention it how did you go from building a platform for tutors and nannies and all that to a fin tech company? What was that whole like thing like

Joe Keeley: 4:40

well you know it's it's a bit bumpy but had a had a 15 year overnight success as I like to call it grew a company the old fashioned way, you know, didn't have remarkable the high or very much any outside professional investment and just started that company in it. As I was a, I was a hockey player in college, I went to the University to There you go, well, they were very common. And I answered an ad, in perhaps that's only placed in a couple places in the country, you know, Minnesota is one of them. That's where I went to university. And it said, looking for a hockey player to watch our two boys. So, so I answered the ad and said, I need a summer job and, and then ended up being these two boys, their big brother, their nanny, if you will, we like to call that a manny. And that was the beginning, that sort of entrepreneurship spark that led to that 15 year journey of all those offices and building a tech platform that that allowed folks to book their trusted babysitter whenever they wanted. And, and that whole full cycle journey was very, very impactful. Of course, it was, you know, changed our family's life, but but also just it taught me a lot of skills that are transferable, you know, building teams, building organizations, solving, problems, achieving product market fit, all the things that, frankly, are independent of whatever the business that you're actually in is, you know, I think we need product folks to be, you know, completely geeked out in a good way about what our product is. But we also need to have team members that are that are balancing all these other plates from sales, marketing, product engineering, fundraising, finance, HR, etc. So that's really what what I do so as I took a sabbatical, I took about a year and a half off after I fully exited college nannies and that sort of intersected with the onset of the pandemic. So things were really quiet, actually. And I asked myself, you know, what, what am I really really good at? What gives me energy? What do I what do I want to do with the sort of second two quarters God willing, of my, of my game here, and so I had a I had a unique opportunity to have halftime and a couple of things I, I wrote down on the list as I reflected one, I wanted to solve a really big problem. I wanted to solve that with technology, because that's really what really got me excited and created the most value that is our gold rush of our generation. And I wanted to have experience a different type of entrepreneurship you know, I did the startup unfunded grind it out literally started in a dorm room, you know, used cash flow to fund it, bank that put your house up, you know, all that stuff. So this time when we built justify, I partnered with some folks that have solved a very, very real problem, which is how do you take your embedded finance your FinTech aspirations and bring them to life? My partners started a company called sports engine. Sports engine is a youth sports vertical SaaS platform that solves solves problems for registration and just the workflows for a tee ball organization, hockey organization, so many parents like oh, I've used it for my kids. Exactly. Well, sports engine is a FinTech Trojan horse hiding in plain sight. They make most of their money, monetizing payments, insurance, lending other financial products. So there was some technology and know how that my partners had built in, they exited that company. And so we got together and I merged what I was looking to do, and the problem didn't know how that they had. And that's how justify came to be so we exist to accelerate the potential and specifically the FinTech potential of other software companies and, and we're having a blast doing it. And also, from an entrepreneurship perspective, this sort of business, like many software companies, like many FinTech companies, requires, you know, very, very real capital that that that isn't sitting around under the cushions. So you know, we've raised 13 and a half million dollars to date for some sort of very well known investors. We have a very strong team and you know, dozens and dozens of customers so we're well on our way and I'm enjoying these very similar but different second half of my entrepreneurial journey.

Matt Wolach: 9:35

I love it. First of all, I've never seen an ad looking for a hockey player to watch some kids but I guess that they wanted you to kind of share your skills with the boys so that they could grow Have you kept up with them? Are they doing well?

Joe Keeley: 9:48

I had I have and they you know they're they had a successful you know, everything was okay. We got them to their activities and their hockey on time. I kept them fed relatively safe. If I played chef show for a referee, Coach all of those things, and you know, the first the first day I showed up, the nine year olds introduced to say, you know, I'm Joe, I play hockey at XYZ University of St. Thomas. And he's, oh, that's cool. And he said, I'm gonna play hockey at Harvard. I said, Oh, heard of it. I guess we've got to get to work. So they went on, they had a great high school hockey career, great young man, they both played hockey at Harvard, played a little pro, and now they're off in the business world, doing great things. So it was a transformative ad that I answered.

Matt Wolach: 10:37

Well, I liked them a little more. Before I heard that I went to Cornell Harvard was our rival. And yes, so not so not so happy anymore. But no, that's good. That's awesome. Good job getting them. I'm sure it was all of your skills that you gave them that got in there. So well done is ultimately very easy. Let's talk about this. You know, where should founders start when considering adding a FinTech layer to their platform? How's that all go?

Joe Keeley: 11:00

Yeah, you know, I think it's, the first thing we need to do, I think, is take a step back, you know, and say, like, what is it? What is it? You know, there's so much jargon that's thrown around. And, and I think what I've found and what's been a benefit to me, like transferring industries, is just straight away, saying, Okay, let's just so I'll just say, for me, let's, even if it's not the case, but I think it's really helpful to say, let's explain what we're talking about first, because I think we all have our own imposter syndrome, you know, that's going on. And people talk about, oh, you got to, you got to be a FinTech company like, well, what does that actually mean? And then how you best to do it. So I think if we step back and say, you know, financial technology or, or embedded financial products and services, we're talking about any sort of product that you could put into your software that your customers could use, and hopefully, you can participate in the unit economics of that. So the first thing you need to do is to understand what products or services might your customers on your SaaS platform benefit from having inap. So in sportsmans, example, you know, payments are the sort of, you know, obvious one, you know, in many cases, it's sort of a table stakes, if you're going to have a software platform, being able to have your customers collect money is there, but there's a massive difference between having payments and monetizing payments and monetizing it in an optimized fashion. So that's sort of first off. And then there's other things like embedded insurance, lending, card issuing, etc. So just like your earlier comment that some of the, you know, great technology, if we go way back, when was reserved to only the you know, fortune 500 companies that could afford a supercomputer today. There's so many things that are fingertips and I think there's this burden of abundance that exists out there, because what is the actual way, best way to go about this and the best way, because you can get some pretty dated advice. You know, you know, you if you have some really seasoned experienced investors that said, you know, you're a great platform, you need to monetize payments, you need to be a pay factor, a payment facilitator. You do not need to be a payment facilitator. There's only 250 payment facilitators in the United States of America, we are one of them. But the cost associated to do that is, is it's just not it has increased with compliance. So, you know, there, that's why there's pay fax as a service and things like that. So the first thing that a software platform needs to do to unlock and sportsengine learned this over decades of roaming through the desert switching processors and, and going through a lot of pain. And that's essentially what what we're going to market with with our infrastructure platform is you need to own your customer data. You know, and we like to throw that around like, oh, data is the new oil and you have to, but why you need to own your customer onboarding data in a tokenized way, so that you can quickly and easily launch and swap between FinTech providers. So we help customers get control platforms, get control of their customer data, and then deliberately launch in a non disruptive fashion, new products and services because you need to think about this as a FinTech journey. What product today might be perfect may not work for you five years from now. And if you have to go through ripping out infrastructure and swapping things out. That's why many, many platforms have very high FinTech aspirations, but yet very low You know, activation, it's because they're busy, they're busy building their own software platform, getting customers, you know, keeping them happy. And that's what they should be doing. So the first thing is to really have a plan, have it at a high level that makes make sure that one has flexibility. And optionality. Because the tools that are out there today, if executed properly, can really help you accelerate that potential. It's similar, like, you know, you don't need to have a closet full of servers to host your data anymore. Like that would be ridiculous. But there was a time where that was the only way to do it before AWS and as your and other things. So that's, that's our view of the world anyhow.

Matt Wolach: 15:48

I love it. I want to ask you, you said you've taken on money? Was that a tough decision to bring in money? Or were you always planning on doing that to help you accelerate? Well, how did that go? I know a lot of our reason I asked you a lot of our listeners are bootstrapped. And they're considering, Hey, should we take on money? Should we not? How did it go for you?

Joe Keeley: 16:04

Yeah. Well, in this instance, it was it was by design from the very beginning. So the some of the founders in the core engineering team sports engine, we came together, and we were incubated inside of a vert, a venture capital firm called rally ventures. So we were sort of a mature seasoned team that was brought together, we had initial seed funding went out for a round. So and, and when you this is a very, very big aspiration to orchestrate embedded finance for software platforms and the bar super high. You know, when I always talk about when you're talking, when you're dealing with OPM, or other people's money, you know, there isn't mistakes that can be made with that. So we knew that we needed a very top rate team, we needed to build out the technology that we had used for the last 10 years, or at least the know how. So there's just certain businesses that you can't get off the ground without that sort of capital, you know, others as like my prior company, you can. But in so that was very attractive to me, because that was a different path. And when loser draw, I'll have two very different entrepreneurial experiences that I'll be able to talk about at some point in the future. I'd love to hear in contrast manner.

Matt Wolach: 17:32

Yeah, I love it, what a wealth of experience you've got behind us. Fantastic. So tell me about, you know, this company, you got kicked off, you're growing it? What were some of the best moves you guys made in the early days to to help it get going and get accelerating?

Joe Keeley: 17:46

Yeah, I mean, you hear this over and over and again, and certainly, capital helps this, but, you know, getting that core experienced team, right. You know, we have some we had, it was interesting, because our founding team, and there's some really, really tremendous value of having young new fresh eyes on things. I am no longer young new. And I don't have fresh eyes at 42. But we brought together a very, very seasoned team of folks that have had, you know, we have multiple exits to public companies under our belt, we have senior engineers that have built the things we're building before. So that that was buy, buy, and we have, you know, top rate investors that have great connections. So but, you know, we like to, you know, accelerate potential of software platforms, but we had great potential when that too. So with that comes, you know, great expectations. So there's none of this is for free. So, you know, we have to execute, so I'm keenly aware of that.

Matt Wolach: 18:51

For sure. Yeah, it's a it's definitely a good focus for you then. So let's flip it the other way. What were some of the mistakes you guys made? You're like, Oh, I wish we could have done that differently or avoided that.

Joe Keeley: 19:02

Yeah, you know, so it's really interesting, particularly so one of the things that our core infrastructure platform really addresses the data layer, the strategy, the orchestration of making FinTech possible. But one of our and then we either partner with those offerings like insurance and lending, or we have solutions that we built an own ourselves so payments is one of those. Most folks are on stripe or something they can continue to be in stripe and use our infrastructure or they can move over to justifies payment solution. We think that's we're not trying to out stripe stripe, but we've built this specifically for platforms, and in our experience in that and we thought that, you know, simply saving money and that people would be as excited about that. And it's interesting, many are, but there are some With scar tissue that has been built up, over changing infrastructure, and, you know, it's particularly in payments, that even if you put, you know, hundreds of 1000s of dollars of savings in front of someone, or in some cases, millions for larger platforms, you know, they don't always even say yes, so I think a mistake we made is just assuming that that decision is in a vacuum. And we know it's not, we know that everyone has roadmap, everything is busy. But I think what it actually has done now is reaffirm that the aspiration is high on becoming a fin tech company, or at least harnessing or appropriately the value of it, but actually doing it is can be really debilitating. It's, it's complicated, it's expensive. And every capital dollar, no matter if it's invested capital, or internally generated cash or a loan on your home, you know, software, company CEOs, you know, like all CEOs, we don't have all the answers. And sometimes, you know, making the fear of making the wrong decision, and the consequences associated with that is just too big. So that is actually it's reaffirmed what we're trying to, to do, which is make this accessible, to break down some of the barriers and when we chose the deliberately the company named justify, because we think there's some things that aren't right out there. We want to cause some alarm, we think that the notion of, you know, what, what platforms are being charged for payments is not right, that's not actually what the cost of a payment should be. We don't think that if someone's processing $100 million, and it's one rate, that when they get to a billion, it should be a lot less, shouldn't just be what it costs. So these are some of the things that that have reaffirmed, but, but nevertheless, you know, we all make mistakes each and every day, we I just reserve the right to try to be smarter tomorrow, and I am today.

Matt Wolach: 22:07

I love it. Yeah, we got to continue to learn from them. And that's some of the best parts about going through these experiences. And like you said, you have a wealth of experience, too. They're completely different with your last two gigs. And it's, it's amazing what we can apply to learn from so, you know, as we wrap up, what would you say to other software founders who are kind of just getting started and really looking for those those methods for getting going?

Joe Keeley: 22:31

Yeah, I mean, we'd be happy to talk to anybody and give our experience, you know, regardless of a commercial relationship, but happens because we just love talking to other software companies, and what are you building? And how do you do it? I would say that, you know, there's, there's two times two, good times to plant a tree, as the fable says, one is 10 years ago, and the other one is today. So the notion that, well, once I get to blank, then it'll be the right time to better monetize payments or launched insurance. But what ends up happening is, as you kick the can down the road, the hill decline just gets bigger and bigger and bigger. So my advice would be, you know, these tools are available today. Just like, you know, spinning up servers is a lot easier today than it was one year ago, five years ago, and certainly 10 years ago. I think one would be surprised that it's not quite the mountain to climb that it once was, so to consider starting on their journey, because every incremental dollar or basis point that you can generate inside of your platform, from this strategy is one less that you need to go find somewhere else.

Matt Wolach: 23:55

Totally agree. That's awesome advice. Absolutely. So Joe, this has been great. Thanks so much for coming on. Where can people learn more about you and justify?

Joe Keeley: 24:04

Thanks for asking. We're at justifi.ai

Matt Wolach: 24:15

Very cool. We'll put that in the show notes as well. So anybody listening, you can go there. Click that link. You're good to go. Awesome. Joe, thanks for coming on the show. My pleasure. Thanks for having me, man. Absolutely. Everybody else out there. Thank you really appreciate you being here. Make sure you're subscribed to the show. That way you won't miss any other awesome leaders coming in and sharing their story like Joe has just done, hit that subscribe button, you'll be good to go. And I'll see you next time. Take care.

Unknown: 24:40

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