Hussein Fazal: How I Got Backed By Steph Curry & Raised $150+ Million To Create A Super Savings App

Hussein, prior to becoming an entrepreneur, you worked as a Software Engineer at Bell. What attracted you to leave the corporate world and start your own company?

Yeah, first of all, growing up and going through university, I always thought I was just going to be an engineer. And I think that's an important point because a lot of people, as they're going through school, don't really know what they want to do.

I wanted to be a Microsoft engineer, but I soon found I didn't enjoy it that much. The biggest reason I did it is because I was at a big company. But I just wasn't making much impact.

I'd go in every day, write some code, and more than half the time, whatever code I wrote wouldn't even make it to a consumer. I'd spend 3 months working on some font size and color on a specific website, and it just never really went anywhere.

So, on the side, in my evenings and weekends, I started to build Facebook desktop games. This is when Farmville and Mafia Wars were really hot. As I started to build these games I was like, “Wait, how do I make money?”

The obvious thing was, “Oh, let me start showing ads on my games,” but there wasn't a great Facebook ad network. That's how it kind of all started. My co-founder at the time, Kristaps, was actually an intern at Bell, and he also was building Facebook games.

We said, “Let's come together and build this network of games that can drive ad revenue and share traffic.” What I realized just a couple of months into it was that this is way more fun than working at a big company, right? It is really exciting. Every bit of work that you do directly results in something you own.

That allowed me to eventually quit my job at Bell and decide to be an entrepreneur full-time.

One of the topics that comes up with entrepreneurship is this topic of risk. Some will think of entrepreneurs as very big risk-takers. As a multiple-time founder, how do you approach risk?

Yeah, I've been very fortunate. When I started my first company, I was still really young, living with my parents, so there wasn't much risk for me. I'm giving up my big company salary, but, in the worst case, if this startup doesn't work out, I can always go back to a big company and be an engineer.

I realize when I say that I'm speaking from a big position of privilege, and I appreciate the opportunity I was given in the circumstances I was in, but to me, there just wasn't that much risk. If I go a little bit deeper, what kind of bothers me a bit is a lot of other people who are in my situation or a similar situation, but yet they don't take the leap for whatever reason.

They're like, “Oh, it's just too risky. I don't know if I have the right co-founder. I'm not sure if this is the best idea.” And I would say you just got to go for it. You have to think about what's the worst-case scenario. For some people, they do have dependencies and family to take care of. If you're in a position, especially as a younger entrepreneur, where you take a step back, and you're like, “Hey, the worst case scenario is I forgo a salary for six, eight, 12 months, and I can probably get another job and have a roof under my head.” You got to go make the leap and stop making excuses.

Another thought that can come up, is some people might be afraid of what others think of them after they leave their big job at Google. What would you say to them?

Yeah, that's a very real thing. The way I generally advise entrepreneurs to do it is. First of all, you shouldn't care what people think, but that's, I know that's a whole other topic, but if you do, what I generally tell people is that you don't need to blast your social media, tell all your family and friends, or update your LinkedIn profile on what you're doing.

You can always start doing things on the side and start growing the business until you feel confident that this is a real thing. Then you can go and do it.

This is a good segway into how we started SnapTravel. Because when we started that company, my co-founder Henry and I, knew we wanted to start a business together. So we just started doing stuff.

There’s this book called Running Lean by Aksha Morya, which tells you how to build business ideas. The very basic concept is if you have a B2C idea, you build a website, drive traffic to it, and you see what people do.

If you have a B2B idea, just start talking to customers, see what their problems are, and how you can help solve them. We didn't announce to everybody that we started this company. We didn't update our LinkedIn to say, this is the name of our company, and this is what we're doing. We just started doing stuff, iterating on business ideas every two to three weeks trying to what worked. With SnapTravel, what we ended up doing was hypothesizing that people wanted a travel agent over messaging. So we built a simple website, bought some ads, and drove traffic to it.

People would come in, they would say, I want a hotel, and Henry and I would pick up our cell phones and manually respond to people and say, “I got a great hotel deal for you.” We'd go look it up on the web and book the hotel for them. That's how we started. We made our first 100 hotel bookings without actually even really telling anyone what we were doing, and when we saw there was something real over there, that’s when we started to rebrand.

You got your first hundred users by hand without writing a single line of code. Many founders today hyper-obsess over getting the product exactly right before releasing it. What is the importance of getting the distribution down before the product?

I absolutely love that question. So the most important thing we talk about all the time when I advise entrepreneurs as we try and build new products within our company is NOT product-market fit. It's product market model channel fit. So if you go into Google, PMMC fit for those who are listening is a mega key concept because what you'll see is that there are a lot of great products that have product-market fit that fill some need that's essential, but they either don't have the business model or they don't have the distribution channel in order to make that product grow.

And if you don't have the channel to grow, then it doesn't matter. You may have a great product that a few people really like, but you're never really going to be able to get the business to scale.

So we always look at PMMC fit before thinking about product market fit. Way too many founders spend too much time obsessing over product. Yes, product is important. Yes, product can drive retention. Yes, it can do a whole bunch of great things for you, and it's important that you work on product. But it doesn't really matter if you don't have the model and the catalog as well.

For, you've raised over 100 million dollars in venture dollars. The first company you built, you bootstrapped. How do you think raising money changed your mindset as a founder?


So, a lot of entrepreneurs, myself included, who haven't raised money, they are like, “Oh yeah, I didn't raise money because I didn't want to.” The reality is, “I couldn't raise money. I tried. And I wasn't able to.”

What that meant is that every single time I wanted to hire someone, I had to scratch and claw to make the revenue and the profit to be able to afford it. So, it was a very slow growth stage because we'd go in, and have to make enough money to hire someone and then wait for another three months to make enough money to hire someone else.

This time around, we've actually raised over $150 million from VCs, up to $200 million if you include some of the extra access to capital we have. It allows us to invest faster and more aggressively in where we know there's going to be success. Without the VC dollars, you just can't do that. So as an example, one of the things we built into is the pay card. The pay card is effectively a card that allows a customer who typically couldn't get access to a credit card a Master Card. What it does is they can start to use the money they already have to build their credit score with their everyday spending.

Now building that out took a lot of time. Almost a year to get the product the way we wanted it to work. Imagine you were completely bootstrapped. It'd be a lot harder to go to do that, but with supportive investors, it can really help you accelerate your product development.

What do you think you did differently this time when you're raising money compared to last time that made it much more successful?

I would say there are a couple of things. One is probably the relationships that we have. Everyone talks about, the pitch deck and the traction, which is obviously very important, and you need that in the vision and the story. But every round I've raised has been on the back or on the basis of some type of relationship that I've had.

So when we did the seed round. Our two biggest investors were Lightbank and Bee Partners. Lightbank were the ex-Groupon guys, and at AdParlor, Groupon was one of our largest advertisers.

When we did our next round, with iNovia, which was about 8 million. I knew one of the partners there, Karamdeep, for many years because we went to Waterloo together. When we raised with Telstra Ventures, Yash was actually on the Corporate Development team at  AdKnowledge, which acquired my previous company AdParlor, so I knew him for several years, and you kind of keep going down this path.

I would say the relationships were probably the key differentiator. Obviously, I'm a much more experienced entrepreneur, I have a better network, I was able to tell the story better, I was able to get traction better, and all that stuff, but really it came down to the relationships that I had that allowed me to raise much easier this time around.

For founders who are starting out without a network, how can they build those relationships from scratch?

Yeah, it's really hard. It's not easy. You have to put yourself out there. Start with the people who you do know. I imagine a lot of entrepreneurs have gone through some type of college or university, so reach out to the people around you, and see what they're up to.

If you see anyone who's an entrepreneur or a VC or an investor, start to have conversations with them, and that's how you start to build relationships. It is very difficult when you're young to do that. When you're early on in your career, I'd encourage you to just, keep asking around and connecting to people and trying to make these things happen.

But it does take time.

You mentioned at a conference in the past that your target customer is an underserved demographic because even for small purchases, like booking a $50 hotel, they would use a debit card instead of a credit card. Why is it an underserved demographic, and why did you choose to go after it?

So when we started the company, it was just about helping people save money on hotels. So we were able to get access to discounted hotel pricing and provide it to our customers. When we took a bit of a step back, and really looked at the customers and the data, you'll see they're typically lower income, lower FICO score, and when we talked to our customers more and more, we started to really feel the pain.

Through that, we started to understand areas in which we could help them. For example, they didn't just need to save on hotels. They needed to save across everything they bought. They were paying with a debit card, not by choice, but because they didn't have access to credit.

So that's what led us to this bigger vision of, “How can we help our customers grow?”

Now, the common North American thing to do would be, “Oh, I'm doing really well in hotels. I'm going to go expand into flights and tickets and tours and activities and car rentals, or I'm doing really well in hotels in the US, I'm going to go and take this and internationalize and do hotels and every other market.”

We took an approach that you'll see more Eastern companies or Asian companies do, which is “We're doing really well in a particular area. How can we understand our customers deeper? And how can we offer more things to that existing customer base and that existing customer set?”

So seeing that it was an underserved demographic, a lot of companies were ignoring them. They say, wait, this is not the most profitable customer. This is not, the platinum customer, so we're not incentivized to build services for them.

Whereas for us, (A) we want to make a bigger impact, and (B), it's also a very big opportunity when we talk about lower income, depending on how you categorize it. You're talking about, over 100 million Americans who fit into that category.

How did you convince investors that just because they don't have a lot of money to spend, this is actually a large addressable market?

Yeah, I mean, I think it came from the traction. So as we've been going through each one of these funding rounds, it's always been built on the basis of the growth and the revenue growth and the traction that we've had.

We talked briefly about fundraising, and one of the things that makes fundraising a lot easier is having the growth and the metrics to back it up. We're at a point now where we are well over a hundred million in net revenue, and the reality is that we're kind of just getting started.

On an individual basis, you may have a customer who has less to spend, but it's a massive demographic, and they do spend money, but they're often spending it less efficiently than they should be, and we want to help rectify that.

Speaking of the hotel market, there's actually a big duopoly with and Expedia, which each did a $100B+ in sales. How do you gain market share in such a competitive market?

Source: CNBC

That's a really good question, and you're right Expedia and are two of the very large and dominant forces. When we started the business the focus was around being able to get the best price to our customers. Ultimately, if you're a consumer trying to book a hotel, if you can find a better price, then that's the service you're going to use.

The analogy I like to give is if you booked with Expedia eight times in a row and the ninth time you find a better price than, who are you going to book with? You're going to book with because you're like, “Hey, that's like the same hotel. But I can get a better price.”

That was our wedge into the market. The president of Hotwire is actually now our GM of travel. His name is Clem Basin. So he knows a thing or two about, getting access to discounted hotel rates. I do want to say that it ended up being a win-win because it's not just getting the lowest price for the customer. It's also about helping the hotel with management and helping the supplier distribute the inventory they pre-purchased.

So it is a win-win because you have 30 to 40% of hotel rooms that go empty every single night. They want to fill up those hotel rooms. They just can't necessarily do it at full price. They look for ways to be able to distribute inventory at a lower rate. So all that to be said, being able to access the best price really allows us to put our wedge to wedge ourselves into that market in what would otherwise be a very competitive space.

The thing about apps that can do everything in one platform is sometimes they do everything Okay, and not everything great. How do you do hotels, car, and everything really well?

I think the reality is we don't do everything really well. You need to do things really well in two or more areas. The best example I can think of is Uber. They do Uber, which is rides, and they do Eats, which is getting food. Now, what most people don’t know is that they also offer flower delivery, alcohol delivery, groceries, package delivery, and a whole bunch of other things.

Those other things are ancillary services, which are additional value adds to get people to use the app, but you can't expect a customer to come in and use all of these services, right?

Most customers will only use 1, maybe 2, and ideally 3 or more. So we do travel really well. We do a really good job of being able to get the best rate for the customer. Our pay card is extremely innovative. It's a patent pending card that allows our customers to build their credit score and earn cash back with their everyday spending.

Those 2 things we do really well. The other services to save money on gas, groceries, or on pharmaceuticals, are our ancillary services. Over time, as we think about the bigger vision and we really see the customer demand, that's when we'd go and like double down and say, “Okay, we want this to also be done really well.”

That's kind of how I think about our business. People will download the app just for travel, and they'll book 10, 20, 30 hotels and maybe not do anything else. Some people will download the app just for the pay card to build their credit score and earn cash back. And then some people will come in and do both. And some people will come in and use the ancillary services as well.

For those who have had like a negative experience with credit and credit cards in the past, how do you convince customers to use your pay card and your platform?

Source: Business Insider

Yeah, that's, that's the question. The way the card works is we do our best to ensure that the customer is going to be able to build a credit score in a responsible way, and we try and make it as risk-free as possible. So when they are making a purchase, we're basing it against some of the money that they already have and then being able to secure that and then pay it off at the end of the month.

So it really is almost automatic. We sometimes talk about it as, building your credit score without even trying. So putting the guardrails in place and being clear about what it is and how the program works is a way in which we try and build trust in the program.

We talked about raising money a little bit earlier. You've mentioned you've raised well over $150 Million. Stephen Curry, whom you previously have never met before, invested in your new startup. How did that come to fruition?

Yeah, I love that story! So when we did a Series B round, Telstra Ventures actually led that round. And in that process, as they were getting close to closing that round, one of the things he said was, “We're going to introduce you to Steph Curry or at that time his fund SC30.” And I was like, “Yeah, sure!” Like, I didn't know if that was real or not.

So he introduced me to Brian Barr, who is Steph's manager. And once I met him, it was kind of just like any other investor I would meet. So we did the presentation, did the pitch, answered some questions, shared some due diligence material, and did some follow-up questions. Then at the end, when Telstra decided to lead the round Brian and SC30 were like, “Okay, we're coming in as well.”

But what was really exciting is what happened after the investment…

So after the investment, Steph really leaned in. He came to our office and did a Q&A in front of the entire company. We went on stage together at Tech Crunch Disrupt, we spent a weekend together in Napa along with other companies he's invested in, and at that time when we were SnapTravel, he actually wore a SnapTravel hat to the NBA finals with the Warriors versus the Raptors walking into the stadium.

So he's done a ton of stuff for the company, which has been really exciting. I'm a huge basketball fan. I'm also obviously an entrepreneur. So to bring basketball and entrepreneurship together, it's probably one of my happiest accomplishments when I look back at things.

Currently, the team has over 200 employees. Now, we've talked a lot about the importance of company culture for success. With your company being remote, how do you engage with your employees to build a culture with the entire company dispersed all over the world?

Yeah, it's hard, right? It's not easy. It's one of those things where if we're honest, there's going to be some hit you take to company culture by being fully remote. You're not going to have the same culture that you're going to have when you're fully in person.

So you kind of first have to realize that. And then what you need to try to do is to build culture in the ways that you can. So we do that through our values. My favorite value is open and transparent where anyone has access to anything.

Anyone can talk to me. Anyone can set up a meeting with me. Anyone can see all our financials, see our bank balance, and can do all of that. So it's like you create this, open and transparent culture. One of our core values is moving fast with intention and being able to get things done quickly.

Another one of our core values is being an owner. So whatever it is that you're working on, you own that.

And then secondly, we do get together in person, but it's just not on the every day. We get together as leaders in somewhat larger groups, at least like 2, 3, or 4 times a year.

One of the things we did last year is we took about 200 people, pretty much the entire company, anyone who could make it to Las Vegas for four days.

And people think, “Oh, wow, that's amazing! That must have been so much fun!” And it was, we built a ton of culture, and we got to know each other. But one of the things we also did on that trip was a customer empathy exercise. We talked about our customer being an underserved customer, but we have a lot of employees who don't necessarily relate to that customer.

So what we ended up doing is we took these 200 employees, broke them off into small groups, and gave everybody a physical check for, let's say, $200. We would then send them to cash checking stores, and they would physically walk in, cash a check, and feel the pain that a lot of Americans do, which is “The only way to get my money is to take my check into the cashier, get charged an exorbitant service fee, then take that money, go to Walmart, try and buy groceries for the week, and then come back to the hotel and talk about that.”

If people are going to take away two things from this podcast:

(1) Really understand your customer and build for what your customer needs

(2) Make sure that whatever you're building, you have a large distribution channel that works for the product that you're building.

As we wrap it up here, what would be your takeaways for the next generation of entrepreneurs listening?

I'm really excited for this next generation of entrepreneurs. I don't think there's a better time to be an entrepreneur. With the amount of infrastructure we have, it's just incredible how fast you can build a business. Back in the day, and I'm talking, 10-15 years ago, if you wanted to start a business or a website, you had to buy servers, set them up, and do a whole bunch of stuff to get going.

Then, AWS came along, and you were able to just get rid of that entire infrastructure layer. It became like, “Okay, how do I build a website? I need to hire a developer.” Well, now all these website tools have come out, and you can build a website with AI and do almost anything very fast with very little resources.

I would say that those who want to be an entrepreneur, should take a little bit of a step back and say, “Hey, what's the worst-case scenario if this doesn't work out?” and they should just go for it.

My number one piece of advice I give first-time entrepreneurs is just go and do something. You can always convince yourself not to do something. You can always convince yourself, “Oh, there's too much competition, or this is not a great idea, or this is not a great model, or now is not the right time, or I want to get more experience first.” Just go and do it.

Totally agree. Well, Hussein, it's been a pleasure to learn from you today on your journey as an entrepreneur, thanks so much for joining, I greatly enjoyed our conversation! :)

Awesome. Thank you, Shamus. I really appreciate it!


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