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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 going to hear from Daniela Corrente, CEO and co-founder of Riel. 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 stressed, you shop. When you want to have fun, you shop.
Savings, it's scary, right? Savings is for people that have a lot of money. We haven't been taught 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 Riel came to life. We're using that behavioral knowledge to bring an experience of savings 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, not so much. Right. You know, you want a new microphone. Let's say that it's $300, right?
You come to our website and we tell you, you know, if you put $5 today, 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, yeah, you're amazing. You're great.
You're going to achieve your goals without going into debt. You can share it with your friends. You can boost it. If there is a deal on the microphone, we notify you.
And once you complete saving, all that you have to do is confirm your shipping 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 Bloomingdale's and some others. 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 don't need, but you just want. And that's what you start to save towards. So look, you can come to 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 liked 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, to actually start saving for things as they are shopping.
Daniela, how did you come up with the idea? It was born of a personal fascination with consumer finance. I was the first one in my family to move to the States. I moved here for college.
And, you know, in the early 2000s, if you had a pulse, you were a credit card. And that was the way that it was, right? We didn't know any better. I got my credit card.
It was a $2,000 credit card. I loved it. I thought I was $2,000 richer. I even 25 years...
Sorry, I even sponsored a child. I thought I had so much money that I went to UNICEF.com and sponsored a child for $18 a month. I was just like, I... Yeah, got a $2,000 limit.
Of course, I had no idea what it was, right? And then really quickly understood what the high interest that it had meant. Right? What it is to pay late.
I 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, it's connected with money. That was 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 working in advertising in New York. A client brief that was now my co-founder was working on. And, you know, we were chatting one day and he told me, Hey, do you actually know that millennials are avoiding credit cards? 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 SurveyMonkey and sent 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, with really fascinating answers about people telling me like, Look, I don't know how to save.
I want to save, 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 this feeling of excitement with savings. And everything started rippling from there.
I had to go to South by Southwest 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 co-founder, Hey, if we're going to South by Southwest, there are a lot of tech people there. I can put a Squarespace website and print business cards. And we can go and talk about this and see if people would like it.
And that's how I got my first investor meeting. When you started to meet with investors and pitch the idea, as every person who's been on How I Built This has described, I'm sure you got some pushback. I'm sure people were saying, Well, why would somebody do that and not just go to an interest bank account or why would somebody 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 resilience. And I think every single founder that you've interviewed 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, especially when it's a product that is not relatable necessarily to investors, right? Because they don't need to set money aside for a pair of earbuds.
Because they don't need to set money aside for the new microphone 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, right? Proving that the customer that we're after is a customer that can spend and can spend highly.
So we got a lot of pushback as far as questions of understanding consumer behavior. And that's actually what I'm very passionate about. It was very fun. And it keeps being very fun to evolve the story over time with the learnings that we're having, not only from the hypotheses 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 raised close to $5. $5?
Oh my gosh. That's amazing. Was getting that initial funding, was that really hard? Yes.
You know, I come from a family of entrepreneurs. So this 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 $10,000, this is all that we can do. And now it's just like $10,000.
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, of savings, freelancing, 401ks, and just putting our own money and sweat into the business. It came from an accelerator. And we went really far in accelerators.
And there was one, which is MCA, that I really, really liked because of Presumably, people can save more money because they're not traveling. They're not going to restaurants, for example. Yes. So there are a couple of things there, right?
2020 has definitely been a very interesting year. I think as entrepreneurs, if every year we grow at a 5x because of everything that we learned, this year it's been like a 20x exponential growth. It's not only running your business, but setting new structures for your team to work remotely too, right? For us, because you save Dubai, actually everything that has happened with COVID has accelerated this 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 2008.
You could see how millennials had less credit cards than the previous generation because they saw what their parents went through, right? 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, if you're out of Instagrams and TikToks and you know, there is a lifestyle that you want to 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 dollars transacted. And it's also as a result of us expanding into multiple verticals. We didn't have to necessarily pivot as a company, but accelerate our offerings, right? When the year started, we were offering perhaps two, three verticals.
And then when this happened 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 they want to save for electronics. If they want to save for tech, if they want to save for other things, we need to go for that. And we cannot do it in Q3 or Q4.
We need to do it in early Q2. How are we going to do this as a team? And so it was a period of being very hands-on down to business, right? Developing sort of alternatives for people to save.
And it has paid off over time. I want to get to a question we got from Sandeep via LinkedIn. Sandeep asks, 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 want to share these with my following, but I want to make sure that we also have the opportunity to save for these charities. And we opened that possibility. So absolutely, you can do that.
Here's another question from Sebastian. Sebastian asks, what do you say to people who ask, you know, why wouldn't I just open up 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 sort of optimize their experiences, right? 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 sales 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 $50 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 save, we're taking you through a journey to make sure you achieve your goal. It's interesting because, you know, services like Betterment or Wealthfront, these sort of robo-advisors, they have a similar model, which is goal-oriented. Like, you've got different buckets where you could save for college or a 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 a means to an end, right? When you talk about your trip next year with your friends, you're thinking about experiences that you're going to have, not the perhaps $1,000 that you need to set aside to get towards that trip, right?
So definitely understanding that the majority of consumers, there's perhaps, you know, 5% of customers that feel very comfortable connecting a bank account, feel very comfortable with numbers, and then they can go and set up a 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 goal-oriented 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 24-7 in our devices. You mentioned how you respond to consumer demand by creating new verticals for new categories of products because obviously people have been saving more this year. What has been the financial impact of the pandemic on your business? Have you seen a drop-off?
Have you seen an increase in revenue? What have you seen so far? So look, we saw a big increase on dollars transacted. 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, the TV or not only the computer. So we started seeing more of a 360 into the life of our customer. As far as purchases, what was 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 COVID happened, we saw people that started, that kept saving, 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 24% higher than the previous month, right? So it's increasing at a very rapid pace. However, the sales, people are like, you know what, actually, instead of placing that order of the shoes, can I transfer this to a computer? It's going to take me a little bit longer to get there, but I want to save for 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 20% of the items that people save for, they transfer in between items because there is this element of gamification on your savings that has resonated really good with our demographic. We have a couple minutes left, and I want to get to at least one more question from our listeners.
This one is from Robin Davies 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?
Because that's the most expensive part of a startup is, right? It's 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 thing that I would pull out of there for every entrepreneur is think about organic loops. How can you leverage your own customers to spread the word to others? So how do you leverage the fact that they like your brand so that they can tell others and begin having that ripple effect. So we've captured customers different ways.
Obviously, because of the nature of our savings platform, we promote our 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 our reviews, she called us her actionable Pinterest.
She's like, in Pinterest, I put things on my board with you guys. I'm actually putting money towards what I want, 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 one at the point of purchase. And that unlocks a different distribution channel for us. That's an excerpt from my live conversation with Daniela Corrente, CEO and co-founder of Reel.
To see our full live interview,