I just read a post by Ben Pieratt, the CEO of Svpply, a social shopping site from New York City. Ben recently raised half-a-million dollars in investment, and he admits to having very little understanding of what he is doing. As he says: “I have zero experience or expertise in building a company. I’ve never worked at a web or product startup, I’ve never worked in a healthy team environment.”

Ben ends his post with a description that will sound eerily familiar to any founder in a similar position: “my level of personal confidence is appropriate. Skeptically hopeful. The bouts of depression and self-doubt are reasonable and inevitable….I couldn’t ask for better. I am thankful for the opportunity. It is an amazing challenge.”

When I dropped out of law school to found WePay in the Fall of 2008, I had this notion of what it was like to start a company: You come up with a great idea, convince investors to give you money to build it, hire people to build it, and watch as the customers and dollars roll in.  While I was obviously incredibly naive, I owe everything to that initial naiveté: without it, I never would have had the courage and resolution to venture off the beaten path, alone and in the dark.

In the beginning, my co-founder (Bill Clerico) and I spent a year trying, unsuccessfully, to raise money during “the worst recession since the great depression,” and it cost us nearly a year of our lives and hundreds of thousands of dollars in opportunity. It was like getting punched in the face repeatedly, and I am embarrassed to admit how close I was to crawling back to law school, tail between legs. It was my first major bout of self-doubt and uncertainty; not only in regard to WePay, but in my entire life.

Tim Ferris writes about Harnessing Entrepreneurial Manic-Depression. In it, he outlines the general path of the entrepreneur psyche: At some point, we trade the excitement of uninformed and unmitigated optimism for the anxiety and depression of informed pessimism. This happens when we go from “I have the next million dollar idea!” to “holy shit, this is going to be a lot harder than I thought, and I’m not so sure that I can pull it off.”

Read the rest of the origins and early struggles of WePay over at Business Insider!

We’re still asked in what areas we’re outgrowing our current team, and more specifically, “why are you hiring?” This question came up the other day, so I thought I’d share the answers here to better inform the rest of our readers what our current needs are.

Why are we hiring? Because we need help in:

* UI: As your customer base grows (along with your company’s reputation), the overall expectation of a quality product grows with it. Bugs that are a minor irritation for some people are dealbreakers for others, especially when you’re taking on an industry giant – so minor problems make you lose customers (often permanently, given the “tried them three years ago, buggy, will not come back” attitude of most people). We’re taking on PayPal – which, while not exactly known for a quality user experience, is extremely stable. We found this problem increased by at least an order of magnitude when we launched our stores product.

* Testing: Front and back-end. Like above, growth = reputation = expectation of quality. Gotta keep things stable, and there are some things that have absolutely zero margin for error (I’ve spent three days to produce a three-line patch, simply because I had to be aware of and handle dozens of different scenarios, and making an error could result in the wrong amount of money ending up in an account. Yes, it worked correctly)

* Support: If you’re dealing with people’s money, it’s kind of a big deal. I’ll let you use your imagination.

* Fraud: A non-trivial portion of our payment review involves human screening. With a couple hundred payments per day, that’s manageable. Hundreds or thousands per hour? Not so much. We have to make smarter automated rules to avoid human screening where possible, and improve the UX in our back-end review panels so that humans can make intelligent decisions faster where necessary. Good code can replace (or free up, or avoid the need for) several human reviewers, and good human reviewers are just as hard to hire as good programmers. This and support are currently our tightest bottlenecks, since they directly limit the number of payments we can process in a day.

* UX: Not so much “is it pretty?”, but “does it do what I want?”, “will I use it again?”, etc. A huge percentage of our user base is virally acquired (ex. someone who previously made a donation comes back and sets up his own donation campaign and starts collecting money), which costs us nothing. The more we can entice users to stay engaged or engage their friends, the faster we can grow. If we can turn a payment receipt into a customer acquisition medium (customer meaning person collecting money, not paying), that’s more users at effectively no cost to us.

* Scaling (in the traditional code sense): Not just server load, but weird problems that simply don’t happen except at volume – database row locking, update collisions, etc. Detecting and fixing those types of problems is much harder than most people would think.

* Sales + Marketing: Not only expanding your markets, but making sure that as you’re spending more on those efforts that your spending is effective. Have you saturated a tiny niche? You need more niches, and bigger groups to go after.

* Compliance and legal stuff: Did you know that as your annual payment volume increases, you have to adhere to stricter security guidelines for PCI compliance? While we’ve always held ourselves above and beyond the strictest guidelines, you still have to deal with compliance audits and such that don’t happen at lower payment volume.

* Analytics and metrics: We’re past the point where we can randomly guess at what’s working and what’s not. While we don’t hold ourselves up with internal red tape and politics, we do actually need to measure the efficacy of the changes we’re making. It’s no longer a single new customer bumping the graphs by 20%, so we need pretty fine-grained measurements for this kind of thing (thankfully, we have enough volume where we don’t need to let stuff sit in production for weeks to get a statistically significant sample size)

There’s plenty more than that – most is quite general, though some is very specific to our company (fraud, in particular), and obviously not all of it is specific to engineering. My day-to-day is around payment stability and related back-end services, which also includes fraud management and our admin panel. Working 50+ hour weeks – quite a bit less intense than the 80+ I did during YC, but actually sustainable – simply doesn’t allot me enough bandwidth to do everything that I need to do.

I have to solve problems like “an API call to a credit card processor timed out, how can I resume this automatically in a way where I know we will not accidentally charge a card twice” and “what changes do I need to make to ensure that a data integrity check never fails?” while at the same time architecting data models for new features, interviewing developer candidates, refactoring old systems for reliability and future-proofing, and providing our support team tools that allow them to do their job but don’t allow them access to sensitive information (see again: PCI regulations). And I don’t even touch the front end anymore.

To apply for one or more of these positions, please visit wepay.com/jobs for more information.

Things have been going well. Thirteen months ago we raised $7.5M in venture financing. Since then, we’ve maintained the “early-stage” startup hustle and culture, adding less than 10 full-time employees, while iterating rapidly on the product. We went from an “easy way to collect money for groups” to the “hassle-free way to collect payments online,” and we’ve far exceeded our revenue and growth projections.

It’s time to scale. Our pitch to potential employees is simple: you have a unique opportunity to join a startup that’s just now blowing up; You get all the benefits and upside of joining an early-stage startup without sacrificing security, stability, and salary.

Unfortunately, the most effective pitch in the world isn’t effective unless you have enough candidates coming in the front door. So, in addition to our own internal hiring efforts, we’ve decided to engage a few professional recruiters.

Now, to date, most of my experience with recruiters has been limited to watching a few poor and unsuccessful attempts to poach our engineers, but we are so swamped internally right now, that I figured it couldn’t hurt to have a few recruiters pounding the pavement, getting our name out there.

In an awesome twist of irony, however, one of our own recruiters recently attempted to poach one of our own engineers. He wanted him to join… you guessed it…WePay! Yes, I’m as confused as you are. His email is below:

Hi XXXX,

Hope all is well. I wanted to reach out to you about an awesome opportunity at a strong VC-backed startup. WePay takes the hassle out of collecting payments online. WePay was founded in 2008, and has raised $10 million in venture financing… They are one of the fastest growing company in Palo Alto, just a few blocks from Caltrain and California Avenue. They offer competitive salaries, early stage stock options, a subsidized gym membership, a stipend to donate to great charities, and a fantastic health, dental and vision plan. Let me know if you have a few minutes to chat.

I guess it really is a tough hiring market when you need to poach your own employees.

I’m reminded of an awesome blog post by Kevin Hale of Wufoo fame, in which he lambasts junior associates at VC firms for failing to do even a minimal level of diligence and research before initiating an unsolicited conversation:

…it’s sort of not cool to not do your homework and effectively make the company do the pitch anyway. Then we’re doing your job. Then, when you show the company how not different you are from everyone else following what is apparently the same lead, you’ve accomplished the exact opposite of what you intended: We do not think you’re different. We are not confident in your ability to establish strong relationships with companies. And we will probably not think of you when we need funding later on.

Recruiters are charged with filling the pipeline with good candidates. This means they need to research two things: the company they are staffing and the candidates they are staffing it with. If you send candidates that are clearly a bad fit, then you are either not doing your job or you are doing it poorly. And you’re wasting both of our time.

I had the good fortune to meet Aaron Patzer, the founder and CEO of Mint.com, a few months ago. Aaron is credited with hiring some incredible employees – perhaps most notably, Jason Putorti, Mint’s lead designer.

A few months ago, I asked Aaron: “How did you know Jason was your guy? He obviously made a name for himself at Mint, but you had to see something in him when he was still unproven.”

I wanted to know what I should look for in a lead designer. He replied: “You shouldn’t worry about experience (so long as he has at least 1-2 years outside of college), or what school he went to, but you should be very impressed with his portfolio.  Otherwise, I would keep looking.”

So when we asked a recruiter to help us fill an open design position, I tried to communicate this feedback to him. First, if the candidate didn’t have an online portfolio, personal site, or blog, I didn’t want to see a resumé. Even if I missed out on some great candidates, that was the only way that I knew how to screen them. So I sent a few examples that I found impressive for various reasons:

• Zach Johnston
• Alex Chan
• Dustin Curtis
• Sacha Greif

I even attempted to reiterate my fairly simple criteria for hiring designers in a subsequent email:

Dev skills (especially a working knowledge of html/css/javascript) are definitely a huge plus, but not absolutely necessary. The designers that I respect the most are usually able to implement their own designs (even if their code is a bit messy).  As I mentioned, I should be impressed by the blog, portfolio or personal website. The ones you have sent thus far have been mediocre at best. They may be “career designers” but I couldn’t imagine any of them designing the next Mint.

And yet, I’ve been consistently disappointed. I still receive 2-3 referrals a day from the recruiter, which alone is a bad sign. If I spent all day scouring the earth for great designers, I still wouldn’t be able to consistently find that many candidates. It’s increasingly clear that I’m being sent every resume that comes across his desk, which is by far the most common criticism of all recruiters. I’m not asking the recruiter to be a great judge of design ability, just to do the bare minimum to screen applicants. If I say that I won’t interview a designer that doesn’t have a portfolio or website that I find impressive, and you send me a resumé without a link to either…you are not doing your job.

And so (liberally paraphrasing Kevin, here):

What I find surprising is how every recruiter misses the opportunity to be a hero—to truly make an impression. Because, honestly, it’s so bad out there, that it would probably take very little to actually impress us even a little bit. All you would have to do is indicate to us that you’ve at least looked at the candidate and made an attempt to see if it’s a match, rather than just matching keywords in our job description to keywords on resumés.

It’s one of the big secrets of the commerce world – one of the few times you’re going to make a real profit with your business (sometimes called going “in the black”) is during the holidays. It’s true for retail stores and it’s certainly true for ecommerce store owners as well.

Since many of our WePay Stores merchants are new to the online sales game, let’s go over some basics of holiday sales to get you acclimated and ready. There’s a lot of money to be made and you don’t want to be caught with your Santa-pants down!

Cyber Monday

For years, the Friday after Thanksgiving was the biggest shopping day in the nation. And for the most part, it still is. Stores open earlier and earlier to let droves of crazed holiday shoppers looking for the biggest deals and hot selling items. Last year, some stores actually opened super late Thursday night, meaning that the invisible “next day sale” barrier had been broken.

This day is known as Black Friday, named after the aforementioned profits going “in the black.” The Internet, not to be outdone, has started its own version of Black Friday, known as Cyber Monday. The term originated in 2005 and was seen as an aftermath of Black Friday – as folks went back to work after Thanksgiving, they started ordering the remainder of their gifts for the holidays online. This big rush became Cyber Monday, and it’s gotten bigger and bigger ever since.

In fact, last year’s Cyber Monday saw more than $1 billion worth of sales, the first ever for this particular shopping event. It enjoys worldwide success, too – while Black Friday is typically North American, Cyber Monday is now a phenomenon in Germany and Portugal, too.

How Stores Take Advantage…and Profit

While Cyber Monday (and the rest of the holiday season) can make you a lot of money, it’s easy to get totally lost in the mix. Soon you’ll look around and wonder what happened to Christmas and why it’s 2012 already! The holidays can fly by, and if you’re not prepared, you’ll have to wait until next year.

But there are things you can do to better prepare your online store for the mad rush of the season. Like the rest of the year, the reason customers buy your stuff is because you’ve filled a niche. They may or may not have realized it beforehand, but they needed your product as soon as they saw it.

“See it” is the operative phrase! If your winter shoppers don’t see your products, they can’t buy it. Most websites put together a dedicated page to feature all the holiday items. This way, as soon as a newcomer enters the site, they have all the products they’ll need this season right in their eyeballs. If you use WePay Stores, you will want to feature your holiday items front and center, so holiday shoppers don’t get lost after clicking around.

And you should never underestimate the power of a good free shipping offer or bundle deal! After a while you may feel like you’re just giving stuff away, but sell your items as cheaply as you possibly can. Would you rather sell 5 items for $5 each or 20 items for $2.50 each? Since the latter also leads to more word of mouth and sales throughout the year, I have a feeling you’ll choose that one!

To further our relationship with the many merchants and entrepreneurs who rely on WePay, we’ve recently strengthened our API to include subscriptions support. Our interface was already easy to use and helpful, but we feel these new additions have really brought something special to the ecommerce WeFamily.

To show how confident we are in the API, we’ve partnered with Attendstar, an event ticket management system that streamlines the process for managers and customers alike. Attendstar exemplifies the progress we’ve made on our customizable interface, and rising businesses like them are who we are proud to represent.

What is the WePay API?

An API is a tool that lets one website talk to another website. So if you want the functionality of WePay on your own site, you could use the WePay API to help you do that. The WePay API allows websites to create WePay accounts, charge people’s credit cards and bank accounts, and now charge subscriptions. The WePay API is an advanced tool for individuals or organizations that know how to program and want to use WePay on their own site.

Our API Improvements

Since we’ve added WePay Stores, we needed to make our API available as soon as possible. This was to give our users the fast and easy WePay checkout option to offer to their customers. As a result, we’ve made it so everyone can have the API running faster than ever.

We’ve also streamlined the entire checkout system and included many advanced features for those who want even more customization with the interface. This includes setting up a “subscription” or recurring payment system with a customer. When the customer approves the subscription on WePay, the API application has permission to charge them per week, month, or whatever has been agreed to.

We’ve also built a tool that lets you make API calls from the browser, so you can start testing the API without writing any code at all! If there are any questions , though, we’ve also established a dedicated API support line to answer them – around the clock.

Attendstar Partnership

Our partnership with Attendstar shows just how far the API and our relationship with our customers have evolved. Attendstar is an event manager created by event managers for event managers that’s a big up and comer in the world of ticket sales.

“Unlike the other major players in the ticketing industry, we are more than just do-it-yourself ticket sales,” Attendstar CEO Gary Bradshaw says. “Most event managers don’t even have a staff. They probably even have a day job or are just volunteers. They need help. But Attendstar is there all the time and provides phone support for people about the event for you…so you can go to your day job.”

One of the best things about Attendstar is their ticket pricing plans. Instead of one-size-fits-all model or misleading titles, they have three levels: Self Service, We Help, and Involved. There is a flat fee associated with each level that allows customers to use it most effectively with no confusion. Plus, when the pricing tier goes up, the transaction fee goes down to compensate.

“We started with huge events and worked our way down,” Bradshaw says, “which means that our technology is a little more proven because we are probably one of the largest event ticketing companies to the air show industry. Two or three years ago, we did an airshow with 210,000 people attending!”

As tech savvy as they are, Attendstar knew WePay’s API could be extremely beneficial to them. After testing the interface and experiencing documentation with the system, both companies decided a partnership could potentially rocket both into the future.

Integrating WePay’s API means Attendstar customers and managers can sell tickets more quickly and collect payments swiftly into their accounts, resulting in more revenue (and happier attendees). Also, the use of the interface means Attendstar clients are able to have their own payment account in the system. Just like the pricing tiers, there’s no one-size-fits-all solution for unique clients.

“Of the major players, we’re the only ones to offer WePay integration,” Bradshaw says. “The uniqueness of that is that they are the only ones who have implemented their new API. They worked on it directly with Andrew, the API developer at WePay. It allows someone to come directly to Attendstar, and Attendstar creates their WePay account and signup. There is no buying the ticket THEN signing into PayPal or whatever pay for it.”

Attendstar is currently running a WePay specific promotion. When you sign up and use “WePay” as a promo code, you get a check for $100 after you first 100 tickets sold! Head to their website for more details, and keep an eye out for Attendstar and more API updates from WePay in the future.

When starting up a new ecommerce store, you want to have all the help you can get. It sometimes gets a little daunting when confronted with all the issues that come up – not just major issues, but the day to day headaches you never imagined. This isn’t Business 101 anymore!

So in honor of our 2000+ new WePay Stores, here is a starter list of blogs and conferences to get you on your way. We’ve also thrown in ten places for you to source products for your store. This is by no means a complete list, as there is an absolute ocean of information out there to take in and use. Check it out!

10 Blogs

Ecommerce has been around for quite a few years now, so there has been plenty of time for various folks to work out the kinks and discover tricks. Of course, the world of online selling is always evolving, so you don’t want to get left behind, either. These ten blogs should give you a good start with news, thoughts, and discussion.

1. 1. ColderICE – John “ColderICE” Lawson is a superstar in the ecommerce game, constantly giving advice, news, and honest, straightforward discussion.
2. 2. Get Elastic – Get Elastic has won all sorts of awards, including the #1 Ecommerce Blog by PostRank.
3. 3. Ecommerce Journal – The ECJ pumps out ecom (plus some tech and mobile) news all day long!
4. 4. Ecommerce Times – If the ECJ didn’t cover it, the Times will – plus, it’s in more of a “blog” style.
5. 5. Online Seller’s Resource – Though most of what Skip McGrath covers is in eBay and Amazon, it’s also good advice for all ecom stores out there!
6. 6. Shop.org – A wide variety of bloggers about a wide variety of topics.
7. 7. The Whine Seller – Hillary DePiano has been in the ecom game since the beginning of eBay, so she knows her stuff!
8. 8. Better Retail – Want to know how your customers see your store? Look no further than Better Retail!
9. 9. ProBlogger – Your customers almost expect your store to have a blog, so get to writing!
10. 10. Practical Ecommerce – Features everything from productivity apps to reading lists to interviews with pros to help you succeed in ecommerce.

10 Conferences

Conferences can be some of the most enriching experiences you’ll have as an online seller. You’ll meet tons of people, make loads of future contacts and potential sales, and acquire endless knowledge. All within a couple of days!

Here are ten to check out – hopefully at least one is in your area to get you started.

1. 1. Internet Retailer – Live in Chicago? New York? San Francisco? Houston…well, you get the idea. Internet Retailer’s conferences are all over the country and going on most of the year.
2. 2. Schmoozd – Since you’re just getting started with your store, you probably need to learn more about social media. Skip all the jargon and start talking at Schmoozd.
3. 3. BlogWorld – We mentioned above about starting a blog, and of course there are conferences for it. Los Angeles will see BlogWorld descend in November.
4. 4. Entrepreneur Magazine – Entrepreneur Magazine holds several conferences a year, including the “Growth” conference in January. Keep an eye out for that one!
5. 5. Small Business Summit – Headed back your way next spring, the Small Business Summit focuses on issues and topics straight from other small business owners’ minds.
6. 6. Summit For Women – Is your business run or geared towards women? Then make your way to Tennessee next fall.
7. 7. Inc. 500/5000 – Learn from the brightest and best at Inc Magazine’s 500/5000 conference. Featuring folks like Russell Simmons!
8. 8. Biz2Beach – Not exactly hyped about wearing a suit and tie all day? Then hit up the Biz2Beach conference in San Diego. Laid back but just as devoted to the cause.
9. 9. Open Mobile Summit – Takes place in San Fran in November, and covers ecommerce, electronics and mobile tech.
10. 10. Public Relations Society of America – As a new business, you probably won’t be able to hire a public relations expert. Instead, learn all about being your own PR champion at the PRSA’s many conferences.

10 Places to Source Product

One question might be on your mind right now as a digital entrepreneur – where in the world do I find stuff to sell? It’s one thing if you’ve invented the next mousetrap, but if your store is more of a one-stop shop kind of place, you might be a tad overwhelmed.

Well, worry no longer! There are plenty of places to find what you need for your online store, you just need to know where to look.

1. 1. Garage Sales – Talk about some cheap deals! Two hints – go either early in the morning or in the afternoon. Morning time you’ll see what all they have to offer, then in the afternoon they’ll be practically giving it away to get rid of it.
2. 2. Estate Sales – Speaking of great deals, check out some estate sales for random and vintage items. It may seem a little weird depending on the circumstance (i.e. the owner died), but someone’s got to take this neat stuff, or they’ll throw it away!
3. 3. Clearance Stores – Google Map “clearance store” and you may be a little surprised at how many there are around you!
4. 4. Liquidation Sales – Like an estate sale, a liquidation sale comes about when a store goes under. Imagine if you sold books during the Borders debacle?
5. 5. Antique Stores – You never know what will turn up at an antique store. Spend hours poking around and you could find some real treasure!
6. 6. Junkyards – Don’t dismiss junkyards as, well, junk – if you sell used auto parts, for example, there is no greater resource.
7. 7. Your Friends – Your best bud is always complaining how the baby’s clothes don’t fit anymore and they’re constantly buying more. You just realized you have a constant supply of baby clothes!
8. 8. Rummage Sales – Some thrift stores and charity groups hold “rummage sales” to get rid of excess stuff – take advantage!
9. 9. Wholesalers – You can also try and go through a wholesaler. It’s one of the most reliable ways of getting product and they can usually offer you deals.
10. 10. Your Own Closet – Did you know you have a ton of treasure in your garage and attic? It’s true, go look now! If anything it’ll give you an idea on what you want to focus your store on in the future.

When I learned that my good friends over at Mixpanel, a real-time analytics service, decided to take out a billboard on highway 101 to declare war on Google analytics, I began thinking about whether picking a fight with an 800 pound gorilla is a prudent strategy for startups. It’s certainly not a novel one; It’s not even the first time a startup has picked a fight with an incumbent using signage on Highway 101 (check out Box.net’s billboard, which pokes fun at Microsoft SharePoint for being so complicated).

Startups, by definition, are disruptive, so it’s no surprise that they’re usually trying to dislodge leaders in their respective industries. But I’m not (just) talking about building a better product and stealing customers; I’m talking about openly and publicly picking a fight with an 800 pound gorilla as part of a company’s overarching marketing strategy.

Virgin Chairman Sir Richard Branson is probably the best known example of one who explicitly designs marketing strategies around attacking incumbents. “At Virgin”, he says, “we challenge the dominant players in a range of industries where we believe the consumer is not getting value for money.” This strategy has worked particularly well for Virgin, which specializes in entering markets where the big players have gotten fat and lazy and the consumers are tired of being neglected and mistreated. Virgin America is a shining example, since most of the big guys really suck.

My favorite Virgin story is the time Branson drove a British tank into Times Square and crushed a bunch of Coke and Pepsi cans to promote the launch of his new soda brand, Virgin Cola.   I guess it’s easy to pick a fight with an 800 pound gorilla when you’re the one driving the tank.

Given my role at WePay.com, I’m particularly piqued by Branson’s summary of the financial services space: “The consumer has been taken for a ride for too long by an industry which  has been able to hide its charges.” I agree, but I think the problem goes even deeper than just hidden fees – especially when it comes to online payments.

Most notably, consumers regularly express visceral frustration with PayPal, the de facto king of online payments. PayPal is well-known for it’s unclear pricing, opaque policies and procedures, and mistreatment of customers.

It hasn’t always been this way, though. PayPal was once an irreverent startup like us, playing David in his epic battle with Goliath. In 2001, PayPal picked a very public fight with eBay by going into the belly of the beast (quite literally), and embarrassing eBay on it’s own turf. During the first eBay Live! Conference, PayPal employees set up shop at a hotel next to the Anaheim convention center and handed out free PayPal T-shirts the night before the conference began. The next morning, during Meg Whitman’s keynote address, about 25% of all attendees were wearing PayPal shirts. This was pretty awkward for eBay, which had acquired Billpoint (eBay’s current in-house payment solution) two years earlier. In 2002, eBay acquired PayPal for $1.5 billion and merged it with Billpoint.

Now almost a decade later, PayPal has become the 800 pound gorilla. And a fat, happy gorilla it is.

Picking a fight with PayPal

I founded WePay.com in 2008 with a former college roommate – a year after graduating from college. I was actually in law school at the time, but that was definitely not my bag.

The original idea was to build a website that made it really easy for “normal people” to collect money from friends, fans, members, supporters, attendees, etc. The idea hasn’t really changed much since then. We added additional tools like the ability to sell tickets and accept donations, but the basic value proposition has stayed the same: giving people an easy way to collect money online.

It’s worth noting that when we first founded WePay, we didn’t think too much about PayPal, and we certainly did not welcome the comparison. PayPal had never been a good solution for us personally (hence our desire to build something new), and unlike WePay, PayPal is built for merchants, not consumers. Our original plan was certainly not to “take down PayPal.”

That being said, it didn’t stop people from comparing us to PayPal before we even built our product or launched the service.  I’m sure the fact that we raised money from Max Levchin, the founder of PayPal, had at least something to do with it.

At the time, I remember thinking how much I hated being called the “PayPal for groups”. But when Mashable used the same tagline to describe WePay two years later, I was all for it.

So what changed?  Why do I now welcome (even promote) the comparison, and what value does it bring to WePay.com?

The first time we actively embraced the PayPal comparison was when PayPal froze the account of the Flux foundation – a non-profit arts organization – just a few days before the Flux Crew headed to the desert to build their famous Temple at Burning Man.

The Flux Foundation and a bunch of other people and organizations collecting donations ended up turning to WePay in protest (and in desperation). Our pitch was easy:  yes, you can use WePay instead of PayPal. WePay.com is better than PayPal for collecting donations, and we won’t freeze your accounts.

After that, people started referring to us as the consumer-friendly or “community-oriented” version of PayPal. CNN actually referred to us as the anti-PayPal. The comparison isn’t completely accurate because — as I said above — WePay is focused on helping everyday consumers collect money from people in their social circles, whereas PayPal is focused on helping merchants sell goods or services online. But it was great for us in terms of press and branding, so we embraced it: “Yeah, we are kinda like PayPal, but we love our customers, have great customer service, and try really hard not to freeze your accounts.

We took the fight to the extreme when we decided to drop 600 pounds of ice in front of the Moscone Center at PayPal’s annual developer conference. In the block of ice was $500 and the words: “PayPal freezes your accounts.”  The stunt was covered by TechCrunch and it rode the front page of Reddit for an entire day.  It was our highest traffic day ever, and we received about 10 resumes from PayPal employees looking for jobs.

(It’s worth noting that WePay was not the first underdog to punk an incombent in front of the Moscone Center in San Francisco.  On Feb. 22, 2000, Salesforce.com CEO Marc Benioff hired ”protesters” to show up at a Siebel conference. They were declaring the “end of software.” When twenty Siebel executives came out of Moscone to see what was going on, local television crews were there waiting.)

The Effect

People always ask me: “are you worried about PayPal?” It’s kind of a silly question.

I’m not really worried about losing to PayPal.  If I looked at it that way, then we’ve already lost. We’re definitely in a race, but PayPal crossed their finish line long before we even started.

I’m also not worried about PayPal “squashing” us. If they’re looking at WePay as competition, as something to be squashed or imitated, then they’ve already lost. Recent history is riddled with big followers who have failed. Amazon tried hard to get into the shoe and diaper game, after watching Zappos and diapers.com pave the way. They failed to catch up, and it cost them $1.5 billion in acquisitions. eBay bought Billpoint and invested a ton of money to compete with PayPal. We all know how that story ends. More recently, Intuit invested heavily in Quicken Online in order to compete with Mint, only to buy Mint a few years later for $170 million.

It’s also not easy for big companies to change course, add features, iterate, or experiment. PayPal can’t simply decide to shift it’s focus toward consumers, nor would they want to.  When a commentator on TechCrunch said, “I love the idea, but see a great risk that PayPal will crush them. This is a feature, not a business. PayPal could employ such a feature within weeks,” Dave McClure, a prolific angel investor, early PayPal employee, and WePay investor had a pretty telling response: “Nothing launches in a few weeks from a large service like PayPal, and certainly not a major restructuring of account entity data / group payments. Yes, they might decide to do it at some point, but development and deployment alone would take 6-12 months. More important, the decision framework takes a year or more to launch a major new service.”

Lastly, the giants don’t really care when they get called out by startups. In fact, the worst thing they could do is legitimize or popularize the comparison by taking it seriously.   Besides, it’s not really that hard for big companies to ignore attacks by smaller startups: the people on top are far removed from the fighting in the trenches, and the people in the trenches don’t really care because they don’t have meaningful ownership of the company; they’re not nearly as (irrationally) impassioned or loyal as startup employees or founders.

In other words, if you’re a fledgeling startup that’s picking a fight with a big company, you don’t really have to worry about “waking up a sleeping giant.” Fortunately, it’s just not going to happen.

So what does it do?

1. It frames the debate.  First, it puts the two companies on the same level: There’s PayPal and then there’s WePay, the anti-PayPal. It also limits the debate to two players: the incumbent and the alternative.
2. It puts your product in context. If consumers compare WePay to PayPal, it means they at least get the basics: WePay is an online payments company. If they add a qualifier: WePay is a consumer-friendly PayPal, then we win.
3. It helps you develop your own ethos and culture. I’m definitely not saying that a startup should copy (or even do the opposite) of the 800 pound gorilla, just that the 800 pound gorilla can anchor the culture context. Startups have the advantage of witnessing and learning from the incumbent’s mistakes.  By calling ourselves the anti-PayPal, for example, WePay is making a hefty promise – namely, that we’ll put our customers first.  We try extra hard to treat our customers well and promote projects that keep us focused on the right things.
4. It makes you the good guy. Since the incumbent is ill-perceived by consumers, it’s easy to put on some shining armor and ride in on your white horse. If the incumbent is not ill-perceived, picking a fight is not the right strategy.

In the end, picking a fight with the 800 pound gorilla forces people to take sides. If you’re confident in your product, and the value that it provides, then declaring war might not be such a bad idea.

I’m not trying to become a developer. Trust me, there’s a ton of other stuff that needs to get done at WePay. I just discovered something that our site needed (and something that I really wanted because it would make my job easier), which wasn’t going to get built unless I found a way to build it.   We’ve received quite a few requests for “How To” guides, and I’ve also gotten tired of answering the same “how do I…” questions over and over again, so I built the How To section of our site. Specifically, How to Collect Money Online, How to Send Bills, How to Collect Donations, and How to Sell Tickets.

In addition to my first official commit, WePay also just hired Rasmus Lerdorf, the creator of the PHP programming language. All in all, I thought this was an appropriate time for me to reflect on the non-technical things I’ve learned about programming since founding WePay.

[Side Note: In a lot of my posts, I think I come off as a self-loathing non-Hacker, which is entirely unintentional and mostly untrue. During our summer in YCombinator, I was one of the few non-developers, and I was frequently asked: “if you don’t write code, what do you do all day?” The question annoys me for a variety of reasons, but mostly because I did a lot. I think there are abundant non-technical factors that lead to a startup’s success, and the responsibility for making those things happen tends to fall on the shoulders of the non-technical people (assuming the company has those – in our case, we did). At some point, I’ll write another post about what a non-engineer does, or should do, during the early stages of product development. In the meantime, I just discovered this post, which is pretty damn good].

So, without further ado, what I’ve learned:

1. Don’t be Helpless. As the only non-developer at WePay, it’s pretty tempting to become technically helpless. That would be a big mistake, and there were times when I’ve gotten pretty close, and it has paralyzed the company. Programmers != Technical support, and a team of developers does not an IT department make. Installing software, setting up a network, changing copy on the site, etc. is not necessarily the job of the developers (in fact, it may necessarily not be their job). I’ve seen arguments about the difference between a programmer and a hacker, and from what I understand, the difference boils down to one thing: hackers will always find a way to get something done.  If you’re a programmer, you can also be a hacker (I would argue that our programmers are), but you don’t have to be a programmer to be a hacker. One of our corporate maxims: everybody’s a hacker.
2. Almost nothing is trivial. I used to say: “this should be a pretty trivial change,” a lot more than I should have. Just because something is logical and it makes sense, does not mean that the code can easily support it. From what I can tell, nothing is more frustrating to an engineer than a non-engineer asking for something complex, and treating it as if it’s trivial.
3. The 90/10 rule. When you first start building a piece of software, you can pretty much do whatever you want because you’re not constrained by what you’ve already built. So the first 90% goes by very quickly, and you can see a ton of tangible progress. You go from nothing to a lot very quickly, and it’s exciting. The other 10% takes forever (literally forever, see #4), and it’s hard for non-engineers to see that progress being made.
4. Software is never finished. Software is like a living breathing organism. It’s never “complete”. For startups this is obvious: the application changes and morphs, it adds features and takes them away, it scales, etc. Even for non-startups, though, the software is never finished. It needs to be updated, vulnerabilities need to be patched, and bugs need to be fixed. I used to think that you build the product and then you get people to use it. As it turns out, these two things happen at the same time, from the beginning, and throughout the entire lifecycle of the company.
5. Non-engineers are not “designers” by default. It’s easy to say: “since I don’t write code, I’m in charge of designing the site and improving the user experience.” And after saying that, it’s easy to put together a bunch of wireframes and say: “make this”, then do some QA and say: “fix that.” That’s not design and it’s certainly not improving the UX. There is both an art and a science to design and UX work, which takes as much time to master as it does to master most technical skills.  I think most non-technical founders working on their first Internet company miss that point. Because you are non-techinical, does not mean you are by default an authority on design and product; in fact, it could easily mean the opposite. If you want that role, you have to work for it (more details in a later post). Edit: Just read a comment that said: “don’t automatically assume engineers can’t design!” I couldn’t agree more.
6. Don’t pretend to be more technical than you are. Especially in the Bay Area. First of all, it’s incredibly transparent (even to non-technical people), and you will lose all credibility. It also pisses off engineers. On the other hand, being honest about your technical skills, genuinely asking for help, and trying your best to contribute, is like trying your best to speak the local language in a foreign country- it’s a sign of respect and humility.

Good advice? Give WePay a try, it’s free to sign-up!

I just read WePay’s latest blog post about interning for a startup when you’re young, inexperienced, and non-technical. The post said that you should “be persistent, network your way in and demand a job….[and] demonstrate a deep knowledge of and passion for the product.”  I think my experiences may add a little color to this advice.

I’m the president of the Entrepreneurial Society (ES) at San Jose State University. I’m also a junior majoring in finance, and will graduate in Spring 2011, hopefully with high honors. I joined the Entrepreneurial Society at SJSU because it introduces business students to non-traditional career opportunities.

Instead of helping students land stale accounting or finance jobs, ES works with entrepreneurs and angels in the Valley to help students formulate their ideas, build business plans, and compete in events like The Neat Ideas Fair & The Business Plan Competition.

My goal as president has been to build previously non-existent ties between the College of Engineering and the College of Business at SJSU, so students can build relationships and leverage complimentary skill sets. Business students need to understand and appreciate the value of engineers, especially at early-stage startups. WePay has a 5:1 ratio of engineers to non-engineers.  My goal is to establish at least a 1:1 ratio in the Entrepreneurial Society. In addition, I am in the process of planning ES Tech Trek, which will include an in-depth visit to 5 startups and VC firms next fall.  I think it’s important for students to learn about entrepreneurship in the field, in addition to in the classroom.

About a month ago, Rich started reaching out to local student clubs and organizations to better understand how they manage group finances.  Since I was one of the people he contacted, I asked if he wanted to grab lunch; I wanted to better understand how WePay could help ES, but I also wanted to start building relationships with startup founders in the area.

Around the same time, one of my entrepreneurship courses at SJSU had begun bringing in startups to pitch their ideas to students. The class also required students to intern for a funded startup to get the kind of immersive experience that one can’t get from a classroom. I connected Rich with my professor because I wanted WePay to participate in the program.  Now a few weeks later, I’m writing this post from within a sunny office in downtown Palo Alto.  There’s a big WePay sign on the wall across from where I am sitting, and I’m two weeks into one of the most exciting internships I have had. I plan to write a future post about my roles and responsibilities here, and what I hope to accomplish during my time at WePay.

Give WePay a try, it’s free to sign-up!

We are aggressively hiring engineers, so if an engineer reaches out to us, it’s a pretty straightforward process.  Are you a Cultural fit? Technical fit?  If yes to both, then we probably want to hire you.

Since we are not currently hiring non-engineers, the process is not so straightforward when non-technical candidates reach out to us looking for jobs.

For starters, if you’re non-technical and inexperienced, you’re fighting an uphill battle, since you’re looking to fill a position that doesn’t exist.  One way to get around this is to ask for an internship.   For one, it’s easier to get an internship than it is to get a full time job.  This is probably pretty obvious, but it’s definitely worth noting.

I intentionally let potential interns fall through the cracks all the time. I don’t really want to spend time interviewing and hiring them, and I know that once I do, it’s just going to take up even more of my time. New hires (interns especially) require training and direction.   More often than not, the amount of effort I put in to training and directing an intern is less than the amount of tangible value I get out of the relationship.  The other option is for me to put in no effort, and hope that you can figure it out on your own.  I have rarely been pleasantly surprised by this approach.

So how do you get an internship with a startup that’s not looking to hire interns? Be persistent, network your way in and demand a job. Offer to do a trial period. If you’re super inexperienced, volunteer to work unpaid.  It also helps if you can demonstrate a deep knowledge and passion for our product.

Most importantly, know how to answer the following question: “What do you want to do if I hire you.”  I’m too lazy (or too busy) to answer this question for you. And if you can’t answer it before I hire you, that means that I have to take the time trying to figure it out after I hire you. That’s a pretty big deterrent.

The following answers send red flags: “I’ll do anything you want me to” or “I like everything” or “I’m not sure.”  This tells me that I’m going to spend more time trying to think of tasks to give you, than you’re going to spend actually accomplishing them.

A better answer would be: “I can help you accomplish X because I am good at Y”. The more specific you are, the easier it will be for me to see where you fit in the value chain. Do you have a deep knowledge of our target market? Can you do customer service? Can you make pretty graphics? Edit videos? Everybody can think of something they are good at; all you have to do is figure out how that relates to some aspect of what we do on a daily basis.  Remember that most startups only do two things: they build a product and they get people to use it. If you’re not technical, then you just need to make the case that you’ll somehow contribute to the latter.

If you’re an intern, you better be 80% doer and 20% thinker.  The worst thing you can say is something like this: “I am a management major, so I can help you create a plan and define your goals”. I would much rather hear something as simple as: “I will help you get more users.”

If you can finagle an internship, then you just have to kick ass while you’re there. How do you kick ass while you’re there? Pretty simple: accomplish something tangible.  Get customers. Own a project or role (company blog, customer service, community outreach, etc.). Get press.  It doesn’t really matter: as long as at the end of your internship, I feel like we would suffer a major set back if we let you get away. If that’s the case, then we would be crazy not to offer you a job.

Check out the progress of our start-up. WePay is free to sign-up.