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Entrepreneurship
Course: Entrepreneurship > Unit 1
Lesson 7: Ben Milne - CEO of DwollaBen Milne - CEO of Dwolla
Ben Milne, CEO of Dwolla, discusses his motivation in founding his company and the excitement of starting something new. Ben advocates for the idea that failure, which can happen in big and small ways, does not have to be your legacy. Created by Kauffman Foundation.
Want to join the conversation?
- I'm confused. At the beginning, he states that anybody can exchange money with anybody else, without interchange costs; however, later he says that they charge for services.
What does Dwolla charge for? How do they make money?(7 votes)- transaction fees. free if its less than $10. and $0.25 for any transaction costing more than ten bucks. Similar to skype except within financial banking industry.(12 votes)
- How does this company's profits compare to other banking ideas?(5 votes)
- Its profits don't compare to other banking ideas, but its ideas do. It makes it much cheaper and easier and faster for the people trying to move their money elsewhere. If you mean how much customers are paying, it is a lot cheaper for Dwolla customers. And because it's cheaper, there are more customers, and Dwolla makes just as much money as expensive money-moving companies.(5 votes)
- "Volume will be followed by revenue"? Really? So it's just automatic? In the end though, Dwalla is no different than existing online pay services, only they supposedly charge less. Is THAT what you mean by changing an industry?(3 votes)
- Specifically, Dwolla is taking an industry based on percentage and offering it at a fixed cost. The provider side expense of transferring $25 is the same as it is for $25,000. The consumer side cost is vastly different. Mr. Milne is simply saying, with his company, that it should not be. One could apply this same method to any percentage based market and some realtors do just that. Time and the market will determine his success.(4 votes)
- I mean it really nice because it talks about exchanging money and stuff.(1 vote)
- How does Dwolla deal with banking regulations that inherently limit this kind of business? Correct me if I'm wrong but didn't PayPal start off by trying to solve this problem and didn't they have to fundamentally change their business model to appease the banking regulators?(1 vote)
- Why is there no % on anything but Math now?(1 vote)
- Is it not similar to bitcoin?(1 vote)
- No, it is not similar to Bitcoin. Dwolla is basically trying to do the same things in a slightly different and cheaper way. Essentially, it still comes down to using the same archaic systems that are still in place today. Bitcoin aims to replace all of the outdated methods and start over. Dwolla used to be a deposit method for Mt.Gox until Gox got all its US accounts seized for not being a licensed money service, including a Dwolla account.(1 vote)
Video transcript
- My name is Ben Milne, I'm CEO of a company called Dwolla and Dwolla's kind of
core purpose in life is to allow anybody with an
internet connection secure access to their money and allow
them to exchange it with anybody else who can receive it without paying interchange costs. So I had another company before, and essentially all the
product we sold we sold online. I was loosing about $55,000
a year in credit card fees and I started getting really obsessed with I could get paid through my website without paying credit card fees. And so ended up evolving from that was doing some research about how money moves, kinda talking to a bank about theoretically how it could move, how we could pull it off. And the beginning of it was it was just what makes me really angry? And the fees made me really angry so how can I have a transaction where I don't have to pay fees? The transaction costs
will never come down, and the security will never get better, and the problem that we
see will never be solved by utilizing anything
that currently exists. So now we just have to build it and figure out the moving pieces. Dwolla's a pretty straight
forward business model. When you use Dwolla you pay
for what you do on Dwolla. More transactions means more revenue, they're equally correlated. We just really stick to growing that and ultimately if we're
successful in facilitating a lot of exchanges in a
30 trillion dollar market, volume will be followed by revenue and that will work just fine. The most satisfying moment in my life is every time we create
something brand new that fundamentally changes
the way everything works. So the first time we're
able to hit send money and $1000 moves over the internet, and we just cut out a 30 year old problem for the entire market,
like that is awesome. I think it starts with an
overarching vision of what you're actually trying to do. If I said I want to paint this
room purple, how I do that is I need paint, I need people,
I need a few things right. Well if I want to change the
way the world moves money, I need different things. My job then is to go find
people who have the answers and ask the right questions
and honestly celebrate their brilliance. Discovering that this idea
is real and you get to see it work, that's hard to
describe, that's a high that you just want to keep discovering
which is invention leads to more invention. Failure is like an entrepreneurial
tattoo I mean you get better over time at not
failing as much, but it's still this element of luck and
how you found yourself there with the right people to make
something really brilliant happen and I just think that
failure it's predictable. I failed at a million things
right, but what people ultimately end up remembering
is probably a few of your successes and that's kind
of the things that I think we all strive to leave at the world.