Transcript

How I Built Resilience: Daniela Corrente of Reel

Hey everyone and welcome to How I Built This Resilience Edition from NPR. On these episodes, we're hearing from entrepreneurs and business leaders about how they've been building resilience into their businesses during this very challenging year. And today we're gonna hear from Daniela Corrente, CEO and co-founder of Real. It's a digital platform that makes saving money easier and helps people make big purchases like furniture or electronics or clothing. Without taking on credit card debt. Think about this. As a society, we've always been told that shopping is fine. Right.

When you're in stress. You shot. When you wanna have fun, you jump. Savings it's scary. Right, savings it's for people that have a lot of money. We haven't been

to see the potential of our own cash flows. People are driven by emotion, right? You and I, we all like to believe that we're rational beings, but when it comes to numbers, a lot of the decisions that we make come from an emotional place, and that's really where where we all came to that. We're using that behavioral knowledge to bring an experience of saving. That's relatable for people.

So it's a savings platform, but can you explain how it works? Yeah, of course. So let's say that you want a new microphone. This microphone is amazing. This one, eh, not so much. Great. You know, you want a new microphone, let's say that it's three hundred dollars, right? You come to our website. And we tell you, you know, if you put five dollars a day, you can have it in this amount of time and you play with it. connect your bank account and we automatically start moving money.

from your bank account towards your goal. As you're saving. We're sending you a lot of reinforcement. We tell you, God, you're amazing. You're great, you're gonna achieve your goals without going into that. You can share it with your friends, you can boost that.

If there is a deal on the microphone, we notify you. And once you complete saving All that you have to do is come from your chip in address and we place the order on your behalf. So it's a full circle. from the moment that you wanted your microphone to the moment that you're interviewing me with your microphone. And you guys partner with some big

Name brand. businesses like Bloomingdales and Some others um and Is that how it works? Like you basically go on your website and you identify

products on the website that you need or maybe you don't need, but you just want, and that's that's what you start to save towards. So look, you can come into the website and start saving for whatever you want. And that's actually connected with the 2020 story that I'm sure we'll get into soon. We also aggregate inventory from thousands of stores. So we serve as an aggregator where we, you know, scrape the web and present you with possibilities of items based on what you have like. before And we are

starting to do direct partnerships with retailers to be part of the point of purchase. Instead of putting something on a wish list and not taking action. And to actually start saving. for things uh there are shopping. Danielle, how did you come up with the idea?

He was born of a personal fascination with consumer finance. I was the first one in my family to move to the States. I move here for college and you know, in the early two thousands, if you had a polls, you got a credit card. And that wasn't where it was, right? We didn't know any better. I got my credit card, it was a two thousand dollar.

I loved it. I thought I was two thousand dollar reacher. Yeah. I even I mean funny side story, I even sponsored. A child. Right, I thought I had so much money that I went to unisept.com and sponsor a child for eighteen dollars a month. I was just like I

Yeah. Got two thousand dollar limit. Oh, of course. I had no idea what it was, right? And then really quickly understood what The high interest. That I had men. I want it easy.

to pay laid um And became fascinated with financial psychology and why as humans we make the decisions that we make because we associate happiness with a certain lifestyle and to have that lifestyle is connected with money. That was a a fascination that I had. For years, but I didn't do anything with it. until you know a couple of years ago.

And that came out of just uh working in advertising in New York. a client brief that who's now my co founder was working on. And you know, we were chatting one day. And he told me, Hey. Do you actually know?

And millennials are avoiding. credit card. And obviously this is 14 years after my$2,000 fiasco. And I'm like, wait, hold on? What? What happened?

What happened in these years that I haven't been paying attention to consumer finance? And I put up a survey monkey. And um Send questions as a marketer, I'm curious.

Not with the intention of starting a company, just with the intention of understanding the market. And you know, but really fascinating answers about people telling me like Yeah. I don't know how to say. I wanna say, but it seems too complicated. It seems too stressful.

With the years of just selling products to consumers more on the retail side. I started really thinking about How can we connect? He's feeling those excitement. with savings.

And everything started rippling from there. I I had to go to South by South West. For work and my co founder too. And We were talking about this idea. And I was asking every single friend at the time, how are you paying for things?

What's going on? What has changed? And I remember vividly just having dinner and telling my go founder, hey If we're going to South by South West. There are a lot of big people there. I can put a squares page website. and print business cars and we can go and talk about these and see if people would like it.

And that's how I got my first The investor meeting. When you started to meet with investors and pitch the idea As every person who's been on how I built this is described.

I'm sure you got some pushback. I'm sure people are saying, Well why would somebody do that and not just go to a an interest bank account, or why would somebody, you know, do that and not do layaway, or why wouldn't somebody just get a low interest credit card, right? I mean what kind of pushback did you get? You know, the title of the show has the word resilient. And I think every single founder that you've interviewed, uh Fundraising, it's always a full on story on itself, right? Because you get no's more times than you get yes, but you only need A handful of yes in order to change the trajectory.

of your story. And you know, when especially when it's a product that It's not relatable necessarily. to investors, right? Because they don't need to set money aside for upper bots. because they don't need to set money aside for the new microphone or or the new computer.

So data was really important in this journey that has been fundraising, right? Proving that hey, there is a need in the market. I proving that the customer that we're after is a customer that can And can spend highly. So we got a lot of pushback as far as questions of understanding consumer behavior. And

That's actually one I'm very passionate about. It it was very fun and it keeps being very fun to Involved. the story over time with the learning that we're having.

Not only from the hypothesis that we had originally, but for our current customers. I know you raised I think about a million and a half dollars, right? Is that right? No, we've raised close to five. Five. Oh my gosh. I'm sort of. That was was getting that i initial Funding was that

Really hard. Yes. Uh You know, I come from a family of entrepreneurs. So these mentality of

you adapt and you learn and you get feedback and you figure out a way to play on that feedback to make things happen have been really influential on the way that I've evolved the company and that I have gone about. every fundraising round. But I do remember, right, when at the beginning it was like, Oh my goodness, if we get

ten thousand dollars. This is all that we can do. And now it's just like Ten thousand dollars. No, we need to keep growing, right? It was actually the first money that we got came from Outside of our own money. Of course, right. Savings, freelancing, four one case. and just putting our own money and sweat into the meeting that

It came from an accelerator and we went through different accelerators and there was one which is Mocker. that I really, really like because of the way that they structure uh their investments and I remember going to that meeting with one of the managing partners And sitting down and I'm like, Hey.

We're talking with all of all these other accelerator and this is why I like Pase one. And if you're gonna make a decision we need to work into these pretty fast because we have all these other conversations. But build getting to that level of confidence took time. Right, but he was pretty much uh on the face and they believe me now, some they were our first chag and

It just got the whole bad growth. for us. But it took a while. It wasn't It wasn't something that it took two days, three days, not even a couple of it took months because at the beginning, and I'm sure a lot of entrepreneurs listening to this, at the beginning it's sort of like the chicken and the egg question, right? It's like, Well Yeah, this is the idea that you have. Show me proof that the market wants that, but in order to show you proof that the market wants it at scale, there needs to be some level of investment.

So you're playing with that data in order to deliver a high quality story that they can bite into. I mean we live in as you know,'cause I I should mention you were born and raised in Venezuela, right? Yeah. And the United States is like people are, you know, constantly in debt and I don't even know what the numbers are, it's insane and and people have multiple credit cards. On our show, we interview founders who max out their credit cards to start their businesses, right? But the idea behind this is to prevent that. Is to essentially I guess to discourage people from just putting things on credit cards when they don't have the cash to pay for it.

There is that and there is unnecessary debt. And we are highly focused on the debt that is unnecessary, right? Things that you might not need right away. And why are you gonna get into that? for it. Like I'll give you an example. And a lot of our users are first time moms. And when you're a first time mom and you're gonna eat a stroller, you don't need it for another 10 months, nine months. Why are you gonna racket your dad to go for that?

Right, when you need a new computer or outdoor furniture. Or even a trip. We have a lot of customers that have started saying for trip. Why don't you start putting a little bit of money aside every day? So then by the time that you get there, you can achieve your goal. We don't having to go into that. I think You know, as a society, the biggest thing is that

People do not understand the implications. that unnecessary that has in the long term. But that has changed tremendously. After you know, after two thousand and eight. And now we're seeing a lot of that too. Every every financial downturn.

Brings new behavior. When we come back in just a moment, more of my conversation with Daniela Corrente and how adding a service fee to her free platform actually increased users. Stay with us. I'm Guy Raz, and you're listening to How I Built This Resilience Edition. From NPR. Hey, welcome back to How I Built This Resilience Edition, and I'm talking with Daniela Corente, CEO and co founder of Real.

When Real initially launched, it was a free service, but Daniela found herself fielding lots of questions from skeptical customers about how the company made money. When we started the product. we were a free product. And uh the reason I'm bringing it this up because I think like pricing psychology is fascinating. And you know, we were a new company and people would call us, email us, like, why are you free? Why are you free? Where's the gadget? And this is my new Cambridge Analytica. You're. Right. Yeah. What are you doing?

And so Me and my co founder, we sat down and we're like, Okay, look, we're spending A lot of time. responding to people and explaining how we make money. And talking to our investors, they were like, Hey Why don't you charge? And what this is not

What we want for our product. So we actually we're like let's A B test these. And we did. And we saw higher conversion when we started charging A fee to use the platform, which was fascinating. So we started charging a fee. uh to use a platform so higher conversion, so higher trust, which makes perfect sense because we live in the era of

Airbnb and DoorDash, right? And people use the service feed. So right now we're currently A B testing. removing that fee again because we want to add value. For customers. over time, and that's something that goes against the belief that we have as a company. We believe that this should be a free product for customers. But it definitely as everything.

Uh. while building a company, it's been a learning curve. Right. How does Real make money? What's your revenue model? Yeah, so we monetize a couple of different ways. So we monetize obviously on the money that we're holding.

On behalf of the users. Right. And then we also monetize through partnerships with retailers because we're driving traffic towards their website, right? We're driving conversion. And so we get paid for that. Daniela, let's talk about two thousand twenty This year has been unlike any year in living memory, obviously.

Um For some sectors it's been really challenging, incredibly challenging, the restaurant industry and travel and leisure. The service industry even retail apparel it it's been really tough. And obviously for small businesses How how have you guys been

doing this year. Um I know you've got a team of about twenty people. So presumably you're working In a distributed way. I mean, what are you seeing? What are I mean are Presumably people can save more money'cause they're not traveling, they're not going to restaurants, for example.

Yes. So there are a couple of things there, right? Twenty twenty has definitely been a very interesting year. I think as entrepreneurs, if every year we We grow at a five X because of everything that we learned this year it's been like a twenty X exponential growth. is not only running your business, but setting new structures or your team to work remotely too, right?

For us because it's save to buy the actually everything that has happened with Covid has accelerated these behavior of people to look for alternatives, right? If you look into data, people are saving now more than ever. And of course they're saving more because they're not going out.

But the underlying there It's the behavior over time. And it happened after two thousand and eight. You could see how millennials had less credit cards than the previous generation. 'Cause they saw what their parents went through.

I Now with everything that's happening with COVID, we're seeing that people are realizing that living paycheck to paycheck is not the way to go. But at the same time. I think you're out of Instagrams and TikToks and you know, there is a lifestyle that you wanna achieve. So finding that balance it's something that is playing very nicely in our advance because of the kind of

product. that we're putting in the market. So we've actually seen a tremendous amount of growth this year, month over month. as far as dollar transacted. And it's also

As a result of us expanding into multiple verticals. We we didn't have to necessarily peev as a company, but accelerate our offerings right when the year started we were offering Perhaps two, three verticals. And then

When these happen in March we sat down as a team and we said, like, hey, look. You know, most of our people are saving for fashion and furniture and things that you know, might not be needed right now. We need to expand. So if they wanna save for For electronics if they wanna say for a pack.

If they want to say for other things, we need to offer that. And we cannot do it in Q three or Q four. we need to do it in our league U two. How are we gonna do this as a team? And so it was a ver a period of being very handsome, down to business. Right, developing sort of alternatives for people to save and it has paid off over time.

I wanna um jump to a question we got from Sandeep via LinkedIn. Sandeep asks, um have you considered offering options for people to save to donate to charity. Actually Great question because we just did that last week. People can

Save for charities that they want to. And that came out honestly from a partnership with some influencers where they asked us, Hey, look. I wanna share these with my following, but I wanna make sure that we also have the opportunity to save for these charities and we open that possibility. So absolutely You can do that.

Here's another question from Sebastian. Um, Sebastian asks, What do you say to people who who ask, you know, w why wouldn't I just open up a a savings account instead of using real, like He asks what does Real offer that makes it a more viable offering? Yeah, so look, savings accounts have been there for ages and ages, right? You can go to any banking institution. and just create a savings account and put a picture of whatever you want.

The reality is that the younger generation doesn't only have friction with certain financial institutions over time, but it's looking for ways to Optimized their their experiences, right? When you if you put money on a savings account. You have to track it.

You have to track the product that you're saving for. Right, you have to make sure that there is enough money on your account every time you make the transfer. If you come to us We facilitate all that for you. Right, if you come to us, you tell us what you want, and we have a team that looks for cells for you. It's very easy for you to share these with your friends. It's very easy for you, Sebastian, if you make an extra fifty bucks this weekend to put it towards your goal. Right. And there is also the aspect of The constant transparency on

This is what you have, this is where you're heading. If you don't have enough money in your bank, we will not make a transaction. So there is a lot of advantages of using us as a service because it's not only that we're helping you safe, we're taking you through that journey to make sure you achieve your goal. It's interesting because um You know, services like Betterment or Wealthfront, these sort of um robo advisors, they have a similar model which is goal oriented, like You've got different buckets where you could say for college or

uh new home or whatever it is Do you think that goal oriented saving is the new model for younger consumers? Yeah, think about it, right? Like as humans, we think about the lifestyle that we want to have. And money is the means.

Right. When you talk about your trip next year with your friends, you're thinking about the experiences that you're gonna have. Not the perhaps the thousand dollars that you need to Side. to get towards that trade, right? So definitely

Understanding That The majority of consumers there is perhaps you know five percent of customers that feel very comfortable a bank account, feel very comfortable With numbers.

And and then they can go and set up savings account with a bank or a savings account with a product that is very numbers driven. Then if you're talking about masses. Right, masses are used to being targeted with the lifestyle. Right, but not on how you achieve. that lifestyle.

And so definitely Colorienta is the way to go. when it comes to savings, because it aligns with the reality of a digital world. where we're consuming the lifestyle that we want twenty four seven in our devices. You mentioned how you responded to consumer demand by creating new verticals for new categories of products. Um because obviously people have been saving more this year. What has been the financial impact?

of the pandemic on your business. Has it have you seen a drop off? Have you seen an increase in revenue? Wha what what have you seen so far? So look, we saw a big increase on daughter strength bed. And the reason why that's very interesting to us is because by expanding to our verticals we started also getting more of the share of wallet from the customers that we also already had. So not only attracting new customer base,

But also telling our customers, hey, you know, now You can start saving for your Christmas budget with us. Not only. You know, they

the T V or not only the computer. So we started seeing more of a three sixty into the life of our customer. As far as purchases, well, what's very interesting for us in March, which was something that made us sort of Rethink.

The way that we see the business in certain ways is that When going happen. Who we saw people. That started. They kept saying. But they didn't want to place the orders.

Right away. And that was fascinating to us because we saw The savings transacted. kept the same and then on the contrary, they increased tremendously. Like November was twenty four percent higher.

than the previous month, right? So it's increasing at a very rapid pace. However, the cell People are like, you know what? Actually instead of placing that order of the shoes Can I try for these? to a computer. It's gonna take me a little bit longer to get there.

But I wanna see. those things. Can I transfer these to furniture? Furniture and electronics was something that increased tremendously on the platform. As well as travel because obviously it's new, right? So But we saw that behavior of people moving money around more than ever. In fact, over twenty percent of the items that people save for um, they transfer. in between items because there is this element of gamification on your statements that has resonated really good with our demographic. We have a couple of minutes left and I want to get to um at least one more question um from our listeners.

The uh this one is from Robin Davies um by Facebook. Robin asks, What's been the biggest driver of awareness for real? What are you how are you reaching new customers? How are you finding You know new people to use your service,'cause that's the most expensive part of a startup is right, is user acquisition. In a time when we're all kind of Stuck at home and everyone's now using digital marketing, how are you reaching customers?

So there are a couple of different ways. I think one one thing that I would put out out there for every entrepreneur, it's think about organic loops. How can you leverage your own customers to Fred. The words. Two others.

So how how do you leverage The fact that they like your brand. that they can tell others and begin having that ripple effect. So we've capture customers different ways, obviously because of the nature of our savings platform. We promote her. Product.

through Instagram, right? We promote our product through Facebook, to places where people are looking for aspiration. Right. In fact, we have a customer who's great, like one of her reviews, she called this her actionable Pinterest. She's like, and Pinterest, I put things on my board with you guys. I'm actually putting money towards what I want, uh, which I love that. And then besides paid, obviously our own channels, email, it's a great source of conversion for us. And then all of these organic loops. And then as we look into 2021 and expanding into distribution channels. We have a couple of really great partnerships that Are coming into play. I cannot say

Now, but then we'll start being more at the point of purchase and that unlocks Are you friendly to you to channel for us? That's an excerpt from my live conversation with Daniela Corrente, CEO and co-founder of Real. To see our full live interview, you can go to Facebook.com slash how I built this, and if you want to see all of our past live interviews, you can also find them there or at youtube.com slash NPR. If you want to find out how to join us live for the How I Built This Resilience series, or you want to find out how to join other virtual NPR events, you can go to nprpresents.org. This episode was produced by Liz Metzger with help from Fera Safari, JC Howard, Bruce Grant, Al Mannion, Gianna Capadona, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. Thanks for listening, stay safe, and I'll see you back here in a few days.

I'm Guy Raz and you've been listening to How I Built This Resilience Edition. From NPR.