Wrestling with Entrepreneurs - Tilled with Guest Caleb Avery
Wrestling Payments Podcast: Season 2 - Episode 01
Episode Summary
In this insightful episode of Wrestling Payments, host Joe Casali welcomes Caleb Avery, CEO of Tilled, to discuss the evolving world of payment processing. Caleb shares his journey from door-to-door sales to pioneering innovative payment solutions. He reflects on the complexities of the industry, highlighting the nuances of competing and partnering within the same space.
Caleb dives into the intricacies of payment facilitation, explaining how companies like Stripe and Square have revolutionized the field. He emphasizes the role of software-led payments in reshaping the industry, offering a glimpse into the future of payment processing. His insights reveal how technology and strategic partnerships are key in navigating this dynamic landscape.
The conversation also touches on the importance of adapting to industry changes and leveraging emerging opportunities. Caleb's expertise offers valuable lessons for aspiring entrepreneurs in the fintech space, illustrating the balance between innovation and practical business strategies.
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Guest-at-a-Glance
💡 Guest: Caleb Avery
💡 What he does: Founder, CEO
💡Company: Tilled
💡Noteworthy: Caleb Avery: Started in payments at 19, door-to-door sales, evolved to angel investing and consulting.
💡Where to find Caleb: LinkedIn
Key Insights
The Evolution of the Payment Facilitator Model
Caleb Avery discusses the complexities and the evolution of the payment facilitator (PayFac) model. Traditionally, becoming a PayFac involved a lengthy, costly process, often taking years and significant investment. This challenge inspired Caleb to innovate and create 'PayFac as a Service,' streamlining this process for businesses.
Developing Product Management Skills
Caleb reflects on the importance of honing product management skills in the technology sector. He emphasizes the complexities in decision-making, from feature prioritization to system design. Relying on customer feedback, intuition, and experience, Caleb underscores the pivotal role these skills play in achieving product-market fit.
Adapting to the Competitive Payments Landscape
Caleb observes the increasing competitiveness in the payment space, particularly noting the shift among traditional financial players. He points out that banks and acquirers are now more attuned to the vertical software landscape, recognizing both threats and opportunities in the evolving payments ecosystem. This insight showcases the dynamic nature of the industry, where established entities must adapt to remain relevant amidst the rise of new, agile competitors in the software-led payments world​​.
Episode Highlights
Caleb's Early Career and Introduction to the Payments Industry
Timestamp: [00:01:13]
Caleb Avery shares his journey into the payments industry, starting at 19 with door-to-door sales, then progressing to angel investing and consulting in vertical software businesses. This experience allowed him to understand the payments landscape deeply, from direct merchant interaction to broader industry insights. His journey highlights the importance of grassroots experience in understanding and innovating in the payments sector.
"I started my career in the payment space at 19 years old going door-to-door selling payment processing services to small business owners... over time skilled up that first business and really between that first company until I started doing a lot of angel investing and consulting with vertical software businesses."​​
Role of ISOs in Payment Distribution
Timestamp: [00:15:59]
Caleb discusses the historical role of Independent Sales Organizations (ISOs) in distributing payment solutions to small business owners in the U.S. This segment sheds light on the traditional models of payment distribution and how they have shaped the current landscape.
"Historically, ISOs and agents have been the majority of the way that payments have been distributed at least here in the US."​​
Tilled's Business Partnerships and the 'Frenemy' Concept
Timestamp: [00:13:36]
In his role at Tilled, Caleb talks about the diverse types of partnerships they foster, including banks, acquirers, processors, ISVs, and payment consultants. He touches on the unique dynamics in the payment space, describing many relationships as 'frenemies'—a blend of competition and collaboration.
"At Tilled, we've got a variety of different types of folks that we partner with... there's a lot of what I consider like frenemies, where we're all kind of competing, but we're partnering, and we're working together."​​
The Payment Facilitator Model and Its Advantages
Timestamp: [00:06:36]
Caleb elaborates on the payment facilitator (PayFac) model, popularized by companies like Stripe and PayPal. He describes the extensive vetting process and the streamlined onboarding and complex fund flow capabilities this model offers. This part emphasizes the evolving nature of payment processing and the innovative approaches being adopted.
"The payfac model... is predicated on the idea that the payment facilitator is going through this very extensive vetting process with the banks, the acquirers, the card brands to get registers of what's considered a master merchant."​​