This piece was originally published on the S.I.C. blog that can be found here.
Every once in a while you stumble upon a product or service that makes you say, why didn’t I think of that? One of the best examples I could think of is Truebill. The big idea: Find all those subscriptions you are still paying for like your inflight Wi-Fi and make sure you never get charged again.
The genius is in its simplicity. The man behind this bright idea is Yahya Mokhtarzada. He’s grown companies before and after speaking with him I have confidence he is about to ride the growth in the subscription economy to build a truly unique and innovative company that is helping to solve a pain point for consumers in this new age of commerce.
Check out our discussion below to hear from Yahya, a really cool guy solving a really cool problem through tech…
CL: Taking a step back from your current endeavor with Truebill, can you tell us a bit about your time at Nanigans and what led to you deciding to found Truebill?
YM: I joined Nanigan’s six years ago as the first employee, Facebook was just getting its advertising products off the ground and we knew it would be a huge opportunity. We also knew the tools built internally weren’t suited for large advertisers so we set out to build an ad platform really suited for high performance advertisers versus brand advertisers.
Brand advertisers are just trying to get their message out and build their awareness. Performance focused advertisers are trying to tie media spend to revenue, so Nanigan’s product launch went extraordinarily well. It was the right time and the right product and it did really well by solving a big pain point for a lot of advertisers on the platform.
We became the dominant provider for game developers then we moved in to e-commerce and more. Then we went after more traditional advertisers as well. By the time I left we had somewhere between 100 to 200 people with $34M in funding. I think it was 180 employees when I left.
CL: For those who don’t know can you give an overview of what Truebill is?
YM: Truebill is the first subscription based platform for consumers. More of our money is moving to a subscription model and that’s great for consumers and businesses.
The problem is, as this trend continues it becomes increasingly difficult to effectively manage all of our subscriptions. What inevitably ends up happening is we start paying for things we don’t know about or forgot about. Or maybe you continue paying for something you don’t want anymore but you haven’t had time to go through the headache of actually canceling.
The idea came to me when I was looking at my credit card statement a while back. Realistically, many of us often don’t look at our credit card statements. When I finally looked at mine I saw a $40 charge for inflight Wi-Fi, which was odd as I hadn’t taken a flight that month. I realized I had been paying for this subscription for 14 months. Obviously I was not happy. I logged into my credit card account and Mint and thought they’d have something to detect other recurring charges, I was surprised to find out that they didn’t. So I was chatting about what had happened to me with my brother and we said “let’s just solve this problem”.
He put together an algorithm to search through our credit card statements for subscriptions and then we sent it out to friends and family. The feedback convinced us that this was a big opportunity. It seemed like half the people we sent it to were finding things they didn’t know about or want.
Then as we dug into the data we saw that subscriptions are a growing trend. The average number of subscriptions per person has doubled over 18 months. The next thing we did was add the ability to get rid of subscriptions you don’t want with just a couple of clicks and no headache and that has driven a lot of our growth so far.
CL: Can you tell us a bit more about your experience in the Y Combinator accelerator?
YM: We were in YC from January through March. It was an amazing, awesome completely worthwhile experience. We were working with a couple dozen outstanding startups all with hyper-ambitious founders. That type of environment gets very competitive because you don’t want to fall behind in progress and it inspires everyone to push themselves harder. On top of that you have awesome mentors that have achieved huge things in the technology space so it’s a phenomenal network at your disposal. No introduction or company is out of reach.
Then at the end we presented at “Demo Day”. Right now obviously in this tough fundraising climate, having the YC badge helps us stand out from the crowd and makes the fundraising significantly easier
CL: I know Truebill has had some excellent adoption early on. How does the Truebill team think about a customer adoption strategy to maintain current levels of growth?
YM: I think first and foremost it’s about building a product people like and need. Right now we have had two key “aha” moments that we have found drive people to share Truebill. One when they sign up and see all subscriptions for the first time, especially if they find a subscription they didn’t know about. People will be vocal and tell others about what they discovered and tell people to do the same and make sure they don’t get billed for things they don’t want.
Then when we cancel the subscription for them they are grateful as well.
Another big opportunity is around content creation and distribution. Obviously, we have tons of data we can look at and trends in the subscription ecosystem to compare things like growth rates of different companies. There is an opportunity to package that up into case studies and create different graphics for some interesting stories.
CL: As the platform stands currently it’s a free service, what types of services are you planning on adding to the mix to monetize Truebill?
YM: We’ve started to build out a few early monetization partnerships that come in the form of recommendations. For instance, if we see that you have Netflix we may show you something to the effect of “People who like Netflix also like Spotify” then show an offer for 3 months of Spotify for 99 cents.
CL: One aspect that I was reading about Truebill is the fact that you guys will be sitting on mountains of data about subscription users. What do you think are the most valuable data points you will have and what types of companies will be lining up to purchase the data?
YM: I don’t know. I think if we wanted to package and sell the data we could do that but then you become a data company and that becomes your focus and expertise. We don’t want to do that, we want to be a consumer utility. We are talking about how to externalize the data, trends, subscription rates, growth rates, cancellation rates, average cost, etc. Beyond that we don’t have plans to sell the data.
User data is something we will never sell, Industry data we could sell but it’s not something we are actively working on.
CL: What are some of the challenges for Truebill in terms of accessing user credit card accounts, and being able to access what I would have to imagine is very different and unique data sets based on the credit card company?
YM: Yes and no. The cool thing is we have an API for that built by a company called Plaid. Plaid and Yodlee they maintain connections to the banks so we don’t have to.
CL: How do you think about user security and protecting users information?
YM: The good thing is because we don’t touch the user login that’s done by Plaid or Yodlee we don’t have to take responsibility for that info. On our end, all we get is just a list of transactions for the user. It’s almost like getting a statement with no name on it.
All we know is that somewhere out there someone signed up and paid for Spotify and Hulu. We follow all industry practice protocols around security. But we also really don’t touch any login credentials that could compromise a user’s identity or bank accounts.
CL: You’ve had some awesome traction with investors here early on and raised some meaningful funds. With the pullback in VC funding recently how do you think about pursuing growth vs. profitability?
YM: I think if this was two years ago, we would be focused on pursuing page user acquisition. Meaning running ads to get users. That’s a model that was extremely popular a couple years ago. That’s a big reason Nanigans was able to grow so quickly — because so many companies were running ads to get users.
I think two and three years ago, a company could raise a series A and B just on growth but now there is a renewed emphasis on monetization. While it’s unlikely we will be profitable in a series A, it’s important to at least have a model in place for break even, if things continue on this current trajectory.
CL: Since you are really building a brand new service that people have never had or really needed before, how do you convey its value proposition to investors?
YM: First, I think the fact that the average number of subscriptions has doubled over the last 18 months has really framed the context for what we are doing. It’s also a common pain point that just sort of clicks with people. We help keep track and manage subscriptions and people say oh my god I need that.
It’s also really cool in investor meetings when an investor signs up for the first time and discovers things they didn’t know about and we watch their face when they see it.
CL: What is your vision for Truebill thinking five and ten years out?
YM: Firstly, Truebill can’t cancel any subscription for you currently. We want to be able to handle all points around discovery, enrollment, tracking, and cancellation. Discovery is recommending the right subscriptions at the right time. Enrollment is making it easy to turn on any subscription. We need to identify a way to test a user identity and shipping method all in one.
Last summer I went to Europe for two months on vacation and when I was there they don’t have Netflix or Spotify. But I continued paying for Spotify and Dollar Shave Club razors. I kept it going because I didn’t want to log in and figure out how to skip months. What should have happened is I log into Truebill and have everything paused instantly. There is more to management than just skipping, that’s just one example.
Then tracking and cancellation which I think we have solved. The subscription companies themselves are surprisingly interested in us building this out as well. It’s very common for customers to subscribe to services like Birchbox and the user ends up with too much of it so they just cancel the subscription and that’s a cost. What they prefer is an easy skip button where the user skips a month but stay a member.
CL: Switching gears here a little bit I’d like to try something I call the “Minute Rundown” that will help us to better understand a little bit more about you and learn something from a startup founder
The Minute Rundown with Yahya Mokhtarzada
CL: So, if you could provide one lesson to someone considering starting their own company, what would it be?
YM: Firstly do it. Secondly you know people tend to think what’s needed to launch is much more significant than what’s actually needed. So a friend of mine is starting a fitness clothing company. He was hiring a designer, sourcing a factory to manufacture, having it manufactured and shipped to the U.S., figuring out warehousing, building a website and then getting ads and selling it.
YM: I told him get the design and just start selling it, put up a ten minute website and click on some ads. If no one makes a quick purchase you know it won’t work and you save yourself all that capital and time associated with building the company.
CL: Since you created Truebill, what is the one subscription service you can’t live without?
YM: That’s a good question for me there is two. One is Spotify and the other one is Dollar Shave Club.
CL: What product or service do you think will be infiltrated next by a subscription based model?
YM: You know I think firstly transportation. So Uber has kind of replaced car ownership. I can see that becoming a subscription, so transportation or tech products. Like my next laptop could be a subscription.
CL: What is your favorite and least favorite part of working in San Francisco?
YM: I’m from the east coast I really miss the east coast. My favorite part is there is such a concentration of interesting people working on interesting problems here. People are really open to having a conversation. I’ll be searching online and come across an interesting company and can send an email and have lunch with the founder. My least favorite part, because everyone here is so focused on tech I think there is a lack of diversity of interest.
I moved here from New York where you can meet an artist, an actor finance and a tech guy all with their own perspectives and ideas. In San Francisco we have less of that.
CL: If you had to select one CEO you would like to model yourself after who would it be, and what can we learn from them?
YM: Let’s say Jeff Bezos. I think either him or Howard Schultz, Howard Schultz I love his fixation on small details and obsession with perfection. I read his book he talks about your business is the sum of the small details both in the product and organization. His book is Onward.
And Jeff Bezos what I love about him he takes something small and straightforward and he’s a visionary in seeing the bigger picture beyond what it is today. So Amazon if you asked me ten years ago what it was I’d say oh it’s an online bookstore. Jeff Bezos had realized it was so much more than that.
Truebill is the type of company that helped shape the name of my blog, Simple.Innovative.Change. This technology is exactly that, a simple innovative change that helps to solve a real consumer problem and move the needle in terms of better serving consumers.
This company is still in its infancy and I can see from talking with Yahya there is a ton of room for growing the services offered by Truebill to make it a staple of any consumer engaged in the subscription economy.
I would suggest keeping an eye on Truebill in the coming years as this is a company with the tailwinds of a Y Combinator building experience, a seasoned leader, a strong set of technology and is positioned in a fast growing market.
I’m bullish on Yahya and the whole Truebill team. Can’t wait to see what’s next.
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