In this Prime Talk Podcast Video Sponsored by GETIDA, Alex Sklar talks about financing eCommerce seller growth. Alex is the head of Business Development and Partnerships at Payability, the largest third-party financing platform for e-commerce businesses shares his personal journey into e-commerce.
Growing your business is a goal that all business owners have, whether they’re in e-commerce or not. However, one thing you need to scale up is capital, and that can be a tricky thing to get if you’re not serious about your business. Yoni Mazor of Prime Talk discusses different ways you can use to get the investments you need to get your business to the next level.
In today’s episode, Prime Talk has teamed up with Alex Sklar, the head of Business Development and Partnerships at Payability, the largest third-party financing platform for e-commerce businesses. Payability allows you to secure the funding you need to grow your business based on your current and project e-commerce sales without the need for a credit check. Since 2015 Payability has provided more than $3 billion USD to help thousands of marketplace sellers expand their businesses.
Alex Sklar shares his personal journey into the e-commerce world from his time as a pubic accountant to working with his family’s multi-generational business to working with one of the largest financing platforms for e-commerce businesses. So if you’re an Amazon seller who wants to grow your business but you don’t know where to start looking for capital, then this episode is for you!
Learn more about Payability!
Learn about GETIDA's Amazon FBA reimbursement solutions.
Yoni Mazor 0:06
Hi, everybody, welcome to another episode of Prime Talk. Today I'm excited to have a special guest. Today I'm having Alex Sklar. Alex is the head of business development and partnerships at Payability. Payability today is the largest third-party financing platform for e-commerce sellers. So we're really glad that he took some time to join us today. So Alex, welcome to the show.
Alex Sklar 0:28
Yeah, no, it's, so it's great getting the chance to talk with you. And I appreciate you having me on.
Yoni Mazor 0:34
Our pleasure. So today is really going to be the episode of Alex Sklar and the Alex Sklar story. So you're gonna share with us now Who are you? Where are you from? Where were you born? Where'd you go up? How'd you begin your professional career, all the way to where you are now with the world of e-commerce. So without further ado, let's jump right into it.
Alex Sklar 0:55
Yeah, let's jump in. So, as you were saying, Alex Sklar, head of business development and partnerships for Payability. So I was born in Maryland, my whole family's from New York. But my mother went to college down at the University of Maryland. And they decided to stay down there for 10 years. So I was born in Silver Spring, Maryland, but came back to New York when I was about two years old..
Yoni Mazor 1:17
You said that was Silver Springs, Maryland? Got it. Okay. So, you you stayed there til you were about 10 years old?
Alex Sklar 1:24
Ah no. Till I was about two years old. And then we moved back up to New York, and I've been in New York ever since. Except for the four years I was in Virginia at college, I went to a small liberal arts college, outside of Richmond, Virginia called Randolph Macon, where I studied history. I was a British history major, focusing on British Imperialism.
Yoni Mazor 1:45
What pushed you into that?
Alex Sklar 1:47
You know, it was, um, I knew I was going to get into business eventually. And I wanted to kind of just broaden my horizons and learn about different things. And really, the history department at my school was just so great that I wound up taking a course, taking another course. And before I knew it, I was halfway towards a major. So I decided to declare the major and then what I just decided to focus on, you know, it could be called British imperialism, it could be called British Empire, but...
Yoni Mazor 2:11
Take us there for a moment, just to expand their horizon. What, if you did a whole degree with this, what captured you with the what's the essence as far as you can tell about, you know, but the, the greatness of the British Empire?
Alex Sklar 2:21
So really, I mean, if we think about so much of what we know about the modern world, so much of it was, you know, whether rightly or wrongly, like kind of derives from the British Empire, you know, colonization, you know, again, right or wrong. Um, you know, it had so much impact around the world from things like spreading things like accrual accounting, which I actually went into public accounting, and we can get into that in a minute. But like accounting, essentially derived from ships coming from India, bringing tea, bringing spices, and essentially them wanting to be able to count what they already have on the ships as revenue and things like that. And, you know, what, that's one small piece of like, you know, essentially how the British Empire impacted the whole world, from Australia to New Zealand to America, to you know…
Yoni Mazor 3:08
I just want to point out that we want to put Yeah, we want to put the politics side out of this. Meaning, if colonialism was good or bad to the world, that's that. So you're talking about, we're more channeling this into the commerce of it, yes? The economical aspect of what the economy of the world is all laid down on this foundation. That's why we've you find it and I also find it fascinating with you. So one component, like you mentioned was the accounting and other component that is that global commerce in its early infant stages, where, you know, services and solutions and goods are moved around freely around the world, because no is under one denomination of an empire. Right? And it's spread across the world under one language of accounting and mathematics, but also one language, we speak with the tongue. That's why we're speaking English now. I mean, you so that's what I can handle maybe, correct me if I'm wrong, you're the master of the degree. So go ahead.
Alex Sklar 4:00
Well, you're exactly right. And you know, the nice luxury we have when we talk about history is we can remove politics aside, and we can look at it abstractly, both macro and micro, but we don't have to get, you know, thankfully, we didn't have to live during the time. So they're not directly impacting us. You can look at it more as an arc. And when you just think about the way if you think about Northern Africa, and the way that the country is, you know, different countries are still struggling now, because Britain essentially came in and just drew straight lines on maps. And that impact you know, we still feel that impact today. And you know, I wound up getting interested in it and getting more and more interested in it just kind of sucked me in and I made it my major my focus.
Yoni Mazor 4:40
Got it very cool. I appreciate that. History is a passion of mine. So it's always glad to hear somebody with a fellow passion to history as well. But I guess before we jump into where your college and after college and professional world, you know, growing up in New York, I want to touch on that for a small bit. Which part did you live in in New York? In New York City, was it New York State?
Alex Sklar 5:02
So I had family in New York City in the Bronx, Manhattan, and Brooklyn and Queens actually all the boroughs but Staten Island, but I grew up just over the line in southern Yonkers. So Southern ….
Yoni Mazor 5:14
That’s about 10 minutes away from me. I'm in Teaneck, New Jersey, 10 minutes away from George Washington Bridge. We go visit Yonkers at times. Sorry, mom to the casino. Because it was a casino there now that we have
Alex Sklar 5:26
I grew up maybe about a 10-15 minute walk from the racetrack.
Yoni Mazor 5:29
Yeah, the racetrack. So got it. So that was kind of your entire environment. And your parents, what kind of industries were they involved in?
Alex Sklar 5:36
So my mom is a teacher. She was a special ed teacher for 40 years. And my father was an entrepreneur and small business owner. He, at one point owned restaurants. He had about five restaurants in the DC area, as well as a nightclub. And then when he came back up to New York..
Yoni Mazor 5:51
Night club, wow. So the restaurants were a chain like McDonald's, stuff like that, or something he created on his own?
Alex Sklar 5:56
Something he created on his own. He was down at U Maryland, and essentially New York kid from the Grand Concourse in the Bronx. He got hungry at two in the morning, asked his friends where they could get something to eat, they all kind of laughed at him and said, there's nothing open this late. And he was like, Hey, we should open a place that's opened up late. So my father did the pizza. His partner from Philadelphia did the cheese steaks and they opened a pizza and sub shop. And then the one took off. So they started a second, then a third and a fourth. And they went up with about five of them.
Yoni Mazor 6:25
That's great. And so good. And then I wonder what happened after they ate their dinner, like what to do at night? Nightclub, we should probably open a nightclub. So one thing led to another right?
Alex Sklar 6:32
Well, it was also like the 70s. So like, discos were like, you know, the really big thing. And they, you know, they were enjoying their 20s and having fun doing it. Um, it became, you know, around when, when my sister and I were born, it just became too busy and hectic the life with multiple restaurants in the nightclub to be able to raise children. So that's when they moved back to New York. And my father started working for our family's company, which is carpet cleaning, restoration, and then eventually became a master technician and then took over the business. And it's a four generational carpet cleaning company.
Yoni Mazor 7:05
Right, so you’re saying, as a family talked about, you know, the family business. Now you're saying four generations. And so what was the origins of that in a nutshell?
Alex Sklar 7:12
Yeah, so my great-grandfather started it in 19...
Yoni Mazor 7:14
From your father or mother’s side?
Alex Sklar 7:16
My mother's side. So they started it...
Yoni Mazor 7:16
So your father kind of married into this business, right? You can get say?
Alex Sklar 7:21
Yeah, married into the business and then essentially bought it, instead of inheriting it from my grandfather. But my great-grandfather started it in 1944, essentially, as a way to help my grandfather out, who had just come out of World War Two, be able to start to build a family and build a business. So they started the business there, and it's been running ever since.
Yoni Mazor 7:41
In the Yonkers area?
Alex SklarS 7:43
So technically, it's now in..based out of Long Island City, but it started in Yonkers then moved to Mamaroneck and because so much of our client base is based out of New York, based out in New York City it’s in Long Island City now.
Yoni Mazor 7:53
Got it. Small tip to you, I don't know if you've maybe seen the show or not but there's a small miniseries made by HBO about Yonkers, based on real story about the mayor there who got elected to mayor and tried to turn the place around but it didn't go well and it's really good really good acting. I think Isaac, Isaac Mizrahi...not him….uhhhh...a very famous actor. I'll let you know later. But there's an HBO, any miniseries about Yonkers, that's the one I'm talking about. I seen it was really well made up for just the names are not coming to me, but I learned more by Yonkers, which is only a few minutes away. Alright, so we're up in the Yonkers area, went to school, you know, did all your degree and British colonialism British Empire? And what year did you graduate?
Alex Sklar 8:40
So I graduated in 2003, from undergrad, and then started working. So right out of school, I actually started my own business in stone restoration. Kind of like piggybacking off of what my family's business did, we'd always gotten requests that we do more than just carpet and furniture. So when I came out of school, I basically went back to the family business, and then created my own company, doing stone restoration, marble restoration and masonry work.
Yoni Mazor 9:08
So what was a typical client for you who calls in? Is it a contractor, is it a consumer?
Alex Sklar 9:14
So we were a little bit of a b2b place. So we worked a lot with designers, decorators architects, and on the carpet side with the mills that actually manufacture the carpet. And then they would recommend us to work on their customers' stuff, and then essentially, the customer would call back and follow up and want us to be continuing work, um, probably had somewhere about 10-15,000 clients over the years, but we were a very, we weren't really like a union shop. We were more like an artisans Guild. We worked on very fine fabrics, and very high end stuff. So the market was small, but the market was lucrative. And it's, you know, it's still around to this day.
Yoni Mazor 9:48
So that business that you founded that is still around?
Alex Sklar 9:52
Well, the stone business I sold after about I did it for about two and a half years, built up a big Rolodex. And then sold..I had a handful of employees..and then I sold the business.
Yoni Mazor 10:01
You sold for a major exit? Was it life changing, or was it something modest?
Alex Sklar 10:05
It was nice in my pocket, it was the life changing part was, you know, not working 110 hours a week anymore. But it wasn't, you know, it was, um, you're kind of selling the Rolodex or you're selling the expertise. It's not like, like a software, it's something that you can sell, and that they turn on. But um, it was nice as 24 years old. Not life changing.
Yoni Mazor 10:25
So you sold it when you were 24 years old you said? Or that's when you started?
Alex Sklar 10:29
I started when I was 22. And I sold it just about 24-25.
Yoni Mazor 10:33
That’s good business experience, you know, right out of college. So 2003 until 2005, maybe 2006. That's when you sold it. Right?
Alex Sklar 10:41
Yep. And that's when...From there I wanted to try some different sales jobs. I worked for my family business every summer my whole life. And so I wanted to try some different things, kind of get out there. And I did a handful of different stuff. I was a marketing manager for a an aloe drink, that I still drink that aloe to this day.
Yoni Mazor 10:59
Aloe for Aloe Vera?
Alex Sklar 11:00
Yeah, exactly. And did a couple different sales jobs. I was a recyclable commodities trader for a summer, which is essentially a scrap trader, you're buying scrap in like Georgia and you’re buying it for 10 cents in Georgia, you selling in China for 44 cents, about eight to 10 cents is your shipping cost. And that's the rest of the spread is your profit. Gave me really interesting insight in how the recycling markets actually work versus how we all think they work. But we could probably have a whole conversation on that.
Yoni Mazor 11:32
So you’re saying there’s a whole global trade with garbage and recyclables. And much like the British Empire, you know, it's far reaching?
Alex Sklar 11:38
It's really far reaching. And it's really interesting that um, you know, when you're talking about the municipal dumps and things like that they weigh whether or not they should recycle it or just put it into landfills, when they can put into a landfill, they can recapture the methane. So we were getting them to divert it from the landfill to be able to go into the recycling chain, but a lot of nuance in the whole recycling world didn't do it didn't do it for very long, but it was interesting, and it was a lot of hustle. It was a lot of...
Yoni Mazor 12:07
A way to expand your horizons. Yeah, exactly. Wow. So 2006 until which year was that you were kind of bouncing between this position. So you had did a little marketing for aloe vera company, and then the recycling business?
Alex Sklar 12:20
Yeah. And so then right around like 2007 ish. I decided I wanted to go back to school to go into a little bit more of a professional career. So I basically studied for the GMATs, and I went back to the family business. And as my father was getting older, I wanted to create a retirement for him. So I spent the next three years working at the family business, again, turning it into a franchise. And at the same time, taking the GMAT and then going to business school at Baruch, where I did a dual major MBA in Accounting and Finance,
Yoni Mazor 12:52
Baruch College, double major MBA with accrual accounting and finance. Wow. So you're in college getting all that plus, scaling your family business into a franchise? Wow. And so what was the next station after that? You started this track in 2007. And what was the next station?
Alex Sklar 13:11
Yeah, so in 2011, cuz I was going, you know, full time, but part time, cuz I was working full time as well. came out of school, finished coursework, I think 2011. And then I went into public accounting for two years, where I spent two year, two years in public accounting, as an auditor.
Yoni Mazor 13:31
An auditor of what? A small shop, a big firm?
Alex Sklar 13:34
Big firms. So my average client was anywhere from like 50 million to 500 million in revenue. So like, mid size or very large, small, however you want to think about it, but um, mostly like my sector is commercial. Like commercial business. I did a little bit of not for profit over the summers, but I'm mainly focused on commercial manufacturing, commercial businesses, um, some financial like some small hedge funds, a couple of FinTech companies, which they needed...
Yoni Mazor 14:03
But you did it as an independent with your own office or as a...?
Alex Sklar 14:06
No. I was at a firm that was called Holtz Rubenstein Reminick. Right in Manhattan. I was about 300 people at the firm, and then it got acquired by the 10th largest firm in the world called Baker Tilly.
Yoni Mazor 14:18
Baker Tilly. Got it. So a small question for you. So if you got your degree and you're creating this franchise for your family business, what was the logic? You had this intention in mind of getting a degree in accounting and go into that industry? Or was there other dynamics? Because you know, if you're growing a business and creating franchises, maybe if...what was crossing in your mind? Wasn't there a temptation to say this franchise we're going to blow it up and create a massive business? Touch a little bit on that.
Alex Sklar 14:49
So I think when it comes to the family...within the family business as I was kind of franchising out I think it's something that I will try to work on again down the road. I think there's a couple different avenues of being able to take almost 100 years of knowledge and turn it more into a course. Because the truth is people have been moving away from carpet. And that's why our business got so concentrated in New York is due to the different types of Co Op and condo rules, you have to keep about 80% of your floor covered with carpet. Because of the new types of construction, it's about noise, right? No one wants to hear the person upstairs walking and clicking on the floor. But now with some of the new construction materials, they're a little bit more soundproof, the rule still exists, but people don't really adhere to the rules unless you're in like a high end Co Op or condo. And we just saw like, generally the market started to contract where our business through the architects and decorators was still really great. But people are now buying cheaper rugs and they're buying them online and are you going to spend $1,000 to clean and repair a rug that you only spent $500 to buy? It started to become an uneven balance where our market was still good, but it kept kind of shrinking.
Yoni Mazor 15:56
So as the actual party became a commodity it was so cheap just to get a carpet. Servicing it became kind of a non issue, non you know, it diminishes your ability. Almost like the TVs. TVs back in the day they used to repair it, it was I don't know, a thousand plus dollars, your repair it, costs maybe a couple of 10s of dollars or whatever. But now, TVs are 100 bucks, 200 bucks, and you get flashy, whatever happens wrong you just buy a new one. So it kind of diminishes the service aspect of the industry because of commoditization and making the price point so low, so it's almost like everything is disposable.
Alex Sklar 16:29
Exactly right. And I think um, people have also kind of moved away from floor coverings in general, people want area rugs on top of wood floors, and we did area rugs as well, too. But it's the quality of materials people buying now, like you see people don't, you know, people don't buy that one sofa that they have for 20 years, and they keep it in great shape. You buy a sofa, you use it for three to five years, you get rid of it, you buy another one and you buy another one.
Yoni Mazor 16:55
And consumerism is at its finest. Yeah.
Alex Sklar 16:57
I mean, it is. So you have to be able to pivot and be able to make moves with it. And so for me, did I want to invest the rest of my life into something that I saw was diminishing? Or did I want to basically be able to take that knowledge, and maybe do something more scalable with it. And for me, the reason I chose accounting is accounting is the language of business. And I'd always been in business, but with that history degree, people couldn't see it directly on paper, that I know how, you know, I know how businesses work, I know how finance works. And so I thought, you know, what better way to do it, then, you know, kind of start fresh, get the finance degree, get the accounting degree, go work a couple of years in public accounting to get the real knowledge, knowing that that was not going to be my goal for forever either. But getting that baseline in there.
Yoni Mazor 17:39
Got it. Smart, interesting dynamics. And so once again, just to clarify this, you saw that, you know, even though you're creating a franchise and trying to grow this, as an industry as a whole, we see some you know, it's contracting, therefore it’d be more prudent to view to set the ground for yourself to enter an industry that is other more secure, even is maybe a cycles where it is going to grow. And it's always going to be needed. So you position yourself into the accounting industry, you started about 2011, you said for about two years, right working for accounting firms. And then you know, mid to large clients, you know, they do 40 50 million a year and up on a commercial side. And what was the next station for you afterward?.
Alex Sklar 18:17
So the next step after that was I actually started up another company, I co-founded a company called S&B Scorecard. And there we were doing credit reports for small, smaller mid sized businesses. Our thesis was that Dun and Bradstreet has a lot of wrong information. And Experian has a lot of wrong information. And when we wanted to do is create a report with better information, but then also one that the actual business owner could flag any information that was wrong, and give us the correct information that we could get that over to the banks. And we had a couple banks actually using us for underwriting. Um, and so that was...we started that in 2013, my co-founder and I, and I did that till right about 2016, um, didn't really get that hockey stick growth we were looking for. We raised some money, a lot of really smart people told us for this type of project, you need a lot of money. And then I thought...
Yoni Mazor 19:12
Why is that? Why would you need so much money if, you know, technically speaking, if you guys, you know, created a good platform for that and the ability to to create more dynamics, when you were trying to, you know, underwrite loans or debt? Why so much money? Give us an insight on that.
Alex Sklar 19:29
So, you know, and it doesn't...it's not that long ago, but there wasn't as much available data. I mean, like API's, you couldn't just go plug into 30 API's and bring in this data, we were building all sorts of scrapers, we're pulling information from public information, as well as the architecture of this data. Right. So I need an admin side to it. But then I also...we were doing it through MongoDB so we can have like these moldable credit reports. But as you're bringing in more information, if you're going to say I have the right information, you need to make sure it's right. So the amount of like just the amount of code that went into it, the amount of like double check and cross checking third party data that's coming in, because you don't want to go out there and give someone the wrong information. And we were doing it like a true credit report, as opposed to like, you know, there's a lot of companies out there now that say, they'll give you a credit score, and it basically is just, you know, a lead gen engine, you know, like, you match up for this, you match up for that, and we were trying to do it, a little stickier than that. And what we realized is we had created a big lead gen engine, we now had information on millions of companies. And when their loan data was coming due, and what type of UCCs they had and what type of court cases they had. And so the conversation started happening with alternative lenders, because they were asking us, like, Hey, we hear, you know, we heard you have all this information, like maybe, you know, we could work together. And I saw a pivot where we could be, you know, kind of like Nav, and kind of like a Fundera, where we're saying, like, Hey, we have all this information...
Yoni Mazor 20:58
Sorry you were saying too, what's Nav and what's Fundera? What's that?
Alex Sklar 21:00
So Nav, basically, they were around the same time we were and now they've blown up. They're basically they're like, kind of like a report, like a report on your business health. And then they recommend different things for you.
Yoni Mazor 21:11
Nav is N A V? And the other company is?
Alex Sklar 21:16
So Fundera, they're basically, you know, depending on how you look at them, they're kind of like an online broker, right? Like you apply with them. And then they have a marketplace of different funders and lenders that they kind of recommend you to, and similar to like a Lending Tree, but for small business. And so that path started to become very obvious. And then my co-founder, and I just, you know, co-founders have disagreements, we had disagreements about which way we wanted to go with that path. And I wanted to go towards what was going to drive revenue. And, you know, my co-founder wanted to stay more true to the mission of creating the credit report. And that's when we started to find out how much money we'd have to raise to do that.
Yoni Mazor 21:52
And always there was a projection on raising? If you can give us a bit of insight on that?
Alex Sklar 21:57
We were raising 2 million, and we were about a quarter to a third of the way there in commitments. And then a lot of smart people that we trusted told us you need to raise like $10 million for a project like this.
Yoni Mazor 22:11
And that was what put you in the junction of where, you know, where do we go from here? Because that's that, right? That's commitments?
Alex Sklar 22:17
Yeah. And truthfully, we've been running the company for about, at that point, about two and a half years, and I hadn't taken a salary yet. And I had poured like, you know, savings into it. And you know, we were doing a little consulting on the side. And that's kind of how I got into alternative finance was from that consulting that we were doing. Because, you know, got to put together...
Yoni Mazor 22:34
Yeah, before we touch that, which is the next station. So as far as I can see, from my perspective, is that what was straining you and slowing the growth is it's very strange, because so many data points in data sources, they're not uniform, but critical decisions nevertheless, are need to be made based on you know, the whole company and our composition of that data. So yeah, that's why tremendous funding will be needed to handle the strain. Yeah.
Alex Sklar 23:00
And think about even this. So like, we had to create our own fuzzy matching logic. Because you might be, let's say, GETIDA. on one platform, you might be GETIDA comma, LLC, on another information, you might be GETIDA no comma LLC, so we had to come up with a way to take apart the words, measure the spaces, as well as the characters that show us the...
Yoni Mazor 23:23
Basically like a search engine like Google, you're thinking like Google, what is all the variations of the phrase in the word that's relevant? So just because you get a gig, you can probably to get all the data is easy, but then screening and filtering, that's what becomes a bit more tricky, more dicey.
Alex Sklar 23:38
And then how do you measure which data source it comes from to give the priority to? Is this data source better information than this data source? Do you supersede that data? Do you append it? Do you and so like, and then you're getting the...
Yoni Mazor 23:50
The quality of the source, which was the ultimate authority for you guys. Same thing like Google, because it wants to dictate on the search what is the best authority for a certain keyword or a phrase or anything like that? Wow, that's very hard. You know, Google wasn't cheap to develop, and it's still developing every day. So it's kind of, if you probably think about it, even if you raise this, whatever you raise, you probably have to keep on refining and refining and improving it. So it's a never ending process. Okay, so it put you in a junction and a fork, we decided to, you know, go to the next station and take us there.
Alex Sklar 24:20
Yeah, so the next station after that was one of the companies that I was consulting for, I was consulting with, with another with another person over there. And they had a funding company, and they were doing small business funding. And we were doing some consulting for them. And they just, you know, at some point, they looked at us and said, you know, you guys sure seem to know a lot about this. If I give you an investment, do you want to start a new funding company up in New York because this funding company was in Florida, and we both looked at each other and said, Yes.
Yoni Mazor 24:49
Hold on, hold on. Let’s step back a little. So this was the year 2016? Okay. And you reach out to who?
Alex Sklar 24:57
Well, we had been consulting with a couple different owners that...
Yoni Mazor 25:00
When you said ‘we’, your partner with S&B?
Alex Sklar 25:02
No, not my partner with S&B, someone else I just met through the industry.
Yoni Mazor 25:07
So you meet with somebody new from the industry, because I want to, you know, unpack this and understand the components. So, so Okay, so you met somebody from the industry that you team up with, for the purpose of what?
Alex Sklar 25:20
basically helping a funding company grow, tighten up their underwriting, as well as drive more demand because I had just come from a world where I'm basically finding out all these lists, and I'm building data scrapers, and I'm basically creating leads. And so we came in there to make it more profitable, grow the lead side, grow the sales side, as well as like, kind of tighten up the underwriting side. And through that process, the owner of that funding company, who's you know, as well-to-do gentlemen said, you know, you guys seem to know this a lot, but you keep having to come down to Florida to do it. If I give you the funding...
Yoni Mazor 25:54
So you dabble with the gentleman who has a lending company, probably formidable, in Florida, and you guys were working for him, he saw the vibes, your ability to really underwrite and drill down the risk potential and making things happen. And he opened up an opportunity both?
Alex Sklar 26:09
Yep. And that's, and that's when Simply Funding, which is still around today, kind of started. And the thought there was, you know, small businesses need capital, we think that we can, you know, there's things that people aren't looking at, there's ways to make offers to people that others aren't making offers to. And that's really what we were doing there. It was down in the financial district in New York City.
Yoni Mazor 26:38
And that was established in 2016? 2017?
Alex Sklar 26:41
Yeah, 2017.
Yoni Mazor 26:42
Alex Sklar 26:45
Simply Funding.
Yoni Mazor 26:46
Simply Funding. So you are the founder?
Alex Sklar 26:49
I'm...so sorry, I was kind of like a founding member. But I wasn't actually a co-founder, I was more...there were two investors, and then two people who were operational, and I was one of the operational.
Yoni Mazor 27:00
And what was your position there? COO or…?
Alex Sklar 27:03
Director of Finance and Director of Business Development
Yoni Mazor 27:06
Got it. Alright, so what was the next station for you after that?
Alex Sklar 27:10
So after that, I went over to a company called Fin Market. That is a marketplace, that's a tech company that is also a marketplace lender. So essentially, they operate on two sides, the consumer side, and then I helped to build out the small business side. So on the consumer side, it was a lot like, like, like a Lending Tree, essentially, it's one application. And if you're familiar with Kayak, how Kayak works for airlines, one application, you get a bunch of offers back and what separated Fin Market apart from all the others was, you could get offers back in like two seconds on your screen. Because we had live APIs with all the online lenders like Lending Club, Prosper, Marcus by Goldman Sachs and all of those. And then I came in to help build up the small business side as well. And created a network of 75 different lenders and about 10 different types of products for small businesses from SBA loans to unsecured loans to lines of credit to equipment leasing, you name it.
Yoni Mazor 28:12
Got it. Okay, so 2017 that's when you transitioned there? Or 2018?
Alex Sklar 28:16
Yeah. So...20--...I'm having trouble remembering, I believe it's the end of 2017 I went over, and I was there for two years. And then that's when I came over to Payability, to kind of do the same thing that I was doing over at Fin Market, which was drive traffic, you know, work through partnerships and...
Yoni Mazor 28:33
So you basically started 2019 at Payability?
Alex Sklar 28:38
Yep, started in June of 2019. And really, to come in and head up business development and partnerships, and, you know, drive traffic, working through partnerships, as well as provide value to our partners as well. Because, you know, as we've talked about in the past, I like it always to be a two way street. Never want to be a taker, always want give and take and so...
Yoni Mazor 28:59
How did you….what was the what was the route that brought you into Payability? Was the backdrop story for you to switch from, you know, Market Fin you said? To Payability?
Alex Sklar 29:11
Yeah. And I still love Fin Market and I still talk with my former CEO there all the time. Um, there was a moment where it became clear that what the market was demanding was a point of sale consumer lending application similar to Green Sky, similar to a firm. And so we moved the focus to that point of sale consumer platform. And, you know, I helped with, you know, I helped with a lot of stuff, I was still bringing in some of the, like, some large strategic partnerships, but my focus was always on the small business side, I wasn't as interested on the consumer side. So when we, when the moment came to double down on the consumer side, I had a talk with my CEO about it that I was still more interested in small business at the same time, um, Payability had actually reached out to me about you know, exploring an opportunity They're too big to bring on like large strategic partners. And you know, kind of manage, run partnerships as well. And it just seemed like the right time and the right fit. And frankly, I just started to get a touch of e-commerce over a Fin Market, and started to get really excited about e commerce and learned that Payability was exclusively focused on e-commerce. I'm bullish on e-commerce for a long time to come.
Yoni Mazor 30:22
You took my next question away, because I was about to kind of illustrate that, up to that point of 2019 and Payability, you're, you know, you're very into providing financing to the business world, right, b2b? But it was probably more of the traditional side. And up to that point of Payability, that's when e-commerce came knocking on your door. That was the moment that e-commerce came knocking on the door and sucks you all in. And I've seen this, this happened to so many where they you know, they're, they're involved in all these traditional industries. And then all of a sudden the e-commerce comes sucking them in and like you just mentioned, you're bullish, and then just a bull ride industry with hyper fast growth. So yeah, I think you did made the right decision for two reasons. One is because obviously, they're b2b, all in Payability, there's no no consumer end to that. So it's perfect that this you know, for you. Second, the industry, like you mentioned, you know, it’s e-commerce. Okay, so to 2019, you start with Payability? What's the goal? What's the purpose? What's the mission for you guys? What is Payability? Give the audience, you know, a dive into the value of the mission, the purpose, the achievements, the goals.
Alex Sklar 31:35
So our number one goal is to help small businesses grow. To do that, our first approach and how to do that was to solve one of the biggest pain points that small businesses have, which is access to capital. And, you know, when you think about when Payability got its start back in 2015, our co-founders, Scott and Keith, they'd come from the ad tech world, and they were solving a pain point initially that they had known in the ad tech world is affiliate, like affiliate marketers get paid very slowly, there commissions from affiliate marketplaces. And so in that process, they were basically...we were doing what we do now with instant access, which is getting people paid faster for affiliate marketers. And then just through conversations, as you're finding product market fit, they started working with Amazon first party sellers. And then that started, they've just had a couple conversations. And people said, Well, if you're helping Amazon first party sellers, and you guys help people get paid faster, you're missing the whole market. There are millions of people getting paid slowly on Amazon that could really help. So that was about 2016 that they had that product market fit eureka moment. And that's when they started to dig into the Amazon world. And so by the time, you know,
Yoni Mazor 32:54
So let me cut you in here. Let me cut you in here. Just to understand. So 2015, they started. They called it Payability right away? Right. And they focus on the affiliate market world, you know, how often do they get paid? The affiliates? What's usually the typical timeframe? As far as you know or remember?
Alex Sklar 33:09
It really depends. It's usually 30, 60 or 90 days, depending on...
Yoni Mazor 33:13
Got it. So over 30 days, that's pretty serious. So the solution was, you know, you get your money much sooner than 30 days. That makes sense. Now, just as a side note, Amazon is humongous in the world of affiliate marketing, just ballistic. Was there any Amazon activity on that level at all or no, for the affiliaters?
Alex Sklar 33:30
I think there was but I don't I can't say definitively.
Yoni Mazor 33:33
Okay, maybe it's early send, early send with because the ecosystem of Amazon obviously, if you do 50% of online e-commerce, I think the affiliate, Amazon affiliates as a platform, you know, tremendously contribute to Amazon's growth behind the scenes without consumers even realizing it, because many websites they put all look at this beautiful product and they put this review when you want to buy it, buy it, get it to give you a link, that's an affiliate link that's gonna make their commission's Okay, so then the second stage was entering into Amazon, but more than 1P side how often do they get paid? The1P side is essentially if you’re a 1P seller, first party seller, you sell wholesale to Amazon, they send the PO purchase order to you, you ship your products to them, Amazon sells it as a retailer. And that's where the story ends. And so how often do they get paid?
Alex Sklar 34:19
Typically they're getting paid every 30 days.
Yoni Mazor 34:20
Got it. So almost the same routine as the affiliate that was kind of the measure here. And then when you realize, Oh, the 1P is great, the vendor central is great, but seller, central third party sellers, that is where everything is really bullish, because the growth has been phenomenal. And what's the...how often do they get paid over there?
Alex Sklar 34:38
For the most part typically, so typically, they get paid every 14 days. But as you know, and probably everyone on Amazon knows, that 14 days can quickly turn into 19 days and sometimes 21 days, but typically they should be paid every 14 days unless they've been selling for like over 13 years where they might be grandfathered into getting daily payments.
Yoni Mazor 34:56
Got it. But I think also even if you get paid every 14 days you don't get everything. They hold something back right? That's something that was kind of happening in the past few years that I've noticed or heard about. Okay, so just to get a bit of more of the context and the nuance of the trajectory of Payability, take us forward. So, you know, after you discovered selling to third parties, in helping assisting third party sellers on Amazon, what happened to the company?
Alex Sklar 35:22
Yeah so really, that's when the company started to scale incredibly. Um, so working with third party sellers, getting them paid faster, working with more and more sellers, organically the questions started to keep coming up, you know, getting paid every day is helping me grow my business, every now and then I have to make a really large inventory purchase, can you make us a loan? I want to spend more money on marketing, can you make us a loan? And so essentially, you know, what, what our founders said was, we can't make you a loan, because we're not a lender. But we can probably come up with a different idea. And that's when we rolled out the instant advanced product, which is very similar to paypal working capital or Shopify capital, where it's not a loan, because the loan is I give you money, you promised to pay back. Here, we're projecting what we think you're going to do next month in sales, and giving it to you upfront, and then collecting it over three to six months, depending on how fast or slow you make your sales.
Yoni Mazor 36:15
Got it. So kind of two solutions, main solutions that evolved over time. The first immediate solution was, you know, instead of getting paid every two weeks, you get access to that cash daily, right? You're investing it daily. And the second that evolved over time is a cash advance. We're saying, you know, we project the next 90 days, you're gonna do a million dollars in sales. Here you go, here's a million dollars. And the next 90 days, we're gonna, from your income, we're gonna, we're gonna take installments, but you know, maybe every month, we’ll take $333,000 plus a little bit for the interest until you know, you know, we pay the loan with interest, and you're done. That's the cycle. That was the second type of product that developed?
Alex Sklar 36:53
Yeah, essentially, exactly right. And that's called our instant advance. So those are our two main products. And we were really still working with Amazon and really just marketplaces that are paying on delayed terms. So Amazon, Walmart, Newegg, Tophatter, you know, like eBay was tough, because eBay didn't pay on delay terms when they worked with PayPal, now that they do manage payments, they do pay on a slight delay, like five or six days. It's, you know, unless you're really selling a ton on eBay, waiting for, like getting paid every day instead of every five days, not necessarily the fit, but the instant advances a good fit for them there. And so we're always...my job is, I'm always finding other marketplaces that can delay terms that have professional sellers, because I think that is a big difference. And you don't have to be the biggest seller in the world. But it has to be your job. Because for a hobbyist, you know, we see this on eBay a lot. They have like pickers, they go to the garage sales, they go to the yard sales, and they pick, finding that product is more of the thrill than actually running and growing your business. So when you're talking about leveraging outside capital, you want to be able to put it to work. And if you're going to put it to work, you're trying to grow your business, because you don't always want to take outside capital, you want to take outside capital when you want to grow. And so like for us, it's really about being where are their professional sellers? And there are a lot of great marketplaces out there. Amazon is still the biggest, they still have the most, you know….
Yoni Mazor 38:21
Traction. Yeah, has the most traction. And I can really connect to what you said. You gotta, if this is your profession, your professional seller, as an as a professional, like any professional should have the mindset of growth, I'm here now, and I want to be in X amount of years there. And then you realize what's around you to help you grow, it might be knowledge, it might be connections, it might be networking, might be funding, whatever it is. So you got to realize, and especially for selling on Amazon, this is your profession, you have so many components to think about the sourcing, the marketing, and the capital in a much more so in terms of the capital, you guys are admitted, you know, turnkey solutions, you know, seller, he realized that everything around you kind of clutch in he’s good to go. But the funding, there's still a deficiency there and having access to more cash and faster will, you know, will pull the needle and will make it effective, and it's going to grow the business in terms of revenue, but even more importantly, the profit. Because if you're gonna take on debt, and make it at the end of the day, make less profit. You know, if you're a good savvy, professional seller, you recognize that it may be not the right approach. But if you know how to drill into the math, like you said, the business language of accounting, you know, to drill that down and recognize the opportunity. You go for it. You go bullish on it. You guys definitely help with that. And it sounds to me, like you mentioned earlier that you guys took leadership on this, this niche, what's your status in the market?
Alex Sklar 39:39
So I mean, there's pre COVID, we were pretty much owning the market of third party finance companies. We have a couple competitors, but I mean, we've deployed over $3.5 billion since 2015. So there's not a lot of other companies that have hit that number. Post COVID, we've seen a lot of traditional funding costs. buddies and financers start to pour into e-commerce because their restaurants and their, you know, strip malls and the movie theaters, everything's closed and they, you know, they need to be able to do what they do. So we see more competitors coming to e-commerce. I mean, I'm gonna sound biased when I say this, we still do it the best when it comes to Amazon because that's, you know, we know it really well. We also can work cross channel. So if you work with PayPal, and PayPal is a great product, full stop. But you can only work with PayPal working capital on your PayPal sales. If you work with Shopify capital, another very good product, only your Shopify capital sales, we can look at your...we can look at your sales at Amazon, we can look at your sales at Walmart, we can look at your sales in Newegg we can look at your sales on Shopify, and create a more, you know holistic look, a more 360 look at your business, and then be able to like you know, assess the risk there and be able to provide you more capital. There's always going to be competitors out there. It's good.
Yoni Mazor 40:59
You guys, yeah, it's better for the customer. There's more and more options. And
Alex Sklar 41:03
It makes us make better products and makes us fight for your business. And it's always good for the customer when you have more competition.
Yoni Mazor 41:09
Yeah, but you're saying as far as you guys are concerned, the versatility that you guys have where the sellers, and the professional sellers I should say, keep expanding, and especially deep into more more marketplaces, you're just there because you understand the marketplace, you know, all the components of the marketplace. And what's the opportunity for you guys to help them with capital with lending, because each market place has its own animal with its own complexities, but nevertheless, you're you guys are a few steps ahead. And you're already playing in those domains, and helping out you know, the growth as well there as well. That's why the headline is that your e-commerce capital, you know, financing company, as opposed to just Amazon, even though Amazon is still the gorilla, the 900 pound gorilla of the industry. But what about you, yourself, Alex, yourself, what drives you to get up in the morning? What is your passion and vision for, you know, for everything that you're doing for Payability? If you could share with us a little bit of that?
Alex Sklar 42:01
Yeah, so I mean, what wakes me up every morning is, you know, frankly, like our customers. If you look at any of our customer testimonials, or our videos, like on our YouTube channel, these are real people that were maybe doing three, four or $5,000 a month in sales that are now doing 50, 60, 70,000 a month in sales. They're real individuals, they have real lives, they've been able to grow real businesses and do things that they couldn't do, because they just didn't have access to capital. So that's still always what wakes me up is genuinely the customer, is helping the customers. The challenges and the excitement of e-commerce though, like for me right now, and why I'm so bullish on it, COVID is a horrible thing that happened. And it's there are a lot of people really struggling. It's, you know, in e-commerce, it's different, but it is not. You know, you'd be crazy to think that like everyone is doing as well as e-commerce right now. But what COVID has done is created a tectonic plate shift that we haven't seen maybe since like World War Two, where in World War Two, you know, we saw this shift of like, you know, like processed foods, canned foods, and all these things that we needed for the war effort, make its way down the line into our consumer lives. We have taught people what we've all known in e-commerce for a while, which is convenience. When things open up again, we're all gonna go out to the restaurants, we're all gonna go out to the stores. And we're...and that's gonna be you know, right off the bat, but we're not going to forget is we've taught people how to shop online. My mother shopping online, people and their children are shopping online...people, hopefully not too young children. But you know, people in their late 70s 80s 90s people who never thought they would buy anything online, people who were afraid to put their credit card into a computer. Everyone's buying online now. And we have...
Yoni Mazor 43:52
So what you're saying online saved the day during the covid 19 crisis?
Alex Sklar 43:57
Not only am I saying that, which I am, I'm saying that you would need an event like this to happen to change the mental shift of an entire world at the same time. The whole world knows that they can buy things online now. And we're gonna watch that market grow and grow because people are not going to want to give up convenience. Yes, I want to go to the restaurant. I'd also like this delivered to me. And yes, I don't mind going to the store to pick it up. I'd really like it if it's curbside and that that's not going away. Contactless payments, things like that, that we needed that in necessity now are going to be used going forward for convenience.
Yoni Mazor 44:34
Yeah, I agree. Because ultimately a lot of the consumers are realizing and you know, very easily that what is superior and what is inferior in terms of experience. And humans always choose the superior because if it wasn't, you will still be using horse carriages instead of cars or airplanes or other other types of mechanisms. Alright, so Alex beautiful, I want to kind of package together the whole story. So what we got so far so we can start heading to the final round of the episode. Okay, so born and raised, actually born in Maryland, but raised in New York, close to New York City, near Yonkers, and then finished your degree in British Empire and colonialism at around 2002 and then right out of college, you opened your own business with the stones, right? And then in 2004, you make an exit, then 2004 until 2007...What were you doing? Remind me again?
Alex Sklar 45:28
I was a marketing manager for an aloe company and doing some different sales jobs here and there.
Yoni Mazor 45:32
Right, and then 2007 you head into the family business, alongside you know, getting your master's degree from 2007 until 2011. On the business side, you help your family company create a franchise, right? And then 2011 once you get your degree, you turn into the world of accounting from 2011 to 2013. And then from 2013 until I believe 2016, you entered, you had S&B Scorecard started, and then 2016 you into Fin Market.
Alex Sklar 46:06
I was doing Simply Funding before then.
Yoni Mazor 46:08
simply funding right. So 2016 where were we again?
Alex Sklar 46:13
2016 Simply Funding and
Yoni Mazor 46:14
Simply Funding until 2019. Right?
Alex Sklar 46:17
Till 2017. 2017 to 2019 I was at Fin Market. And then Payability ever since.
Yoni Mazor 46:23
that so two thousand uhhhh….you hit Payability 2019. Right? Or 17-19 That's it. Okay. All right. So that's what we got so far. And then you guys are rocking and rolling in the e-commerce industry so you're an industry that is you know, bullish abou. Plus you're still, you know, helping businesses which also passionate about plus your ability and accounting is undisputed working, you know for big firms, eventually became a top 10 big firm, beautiful, I learned so much. I appreciate it also on the history side, which is always great. Now to close down the episode, I want to focus on two things. The first one will be the first one will be if somebody wants to connect with you and learn more about you, where can they find you. And the last thing will be is what is your message of hope and inspiration for entrepreneurs listening out there.
Alex Sklar 47:05
So if you want to find me individually, you can find me on LinkedIn. I'm there. It's not Alex Sklar. It's F period Alexander Sklar. That's my full name.
Yoni Mazor 47:14
What? How is it?
Alex Sklar 47:17
Yoni Mazor 47:19
F P? Uhhh F dot you mean? Got it. Dot Alex Sklar?
Alex Sklar 47:26
Yep. And then if you want to find Payability, I would say check us out at www.go.payability.com/GETIDA and that way they get a, you get a little sign on bonus for having seen this podcast. And you know, the first first fees are on us. And as far as words of inspiration, I would say, you know, um, you gotta get after it. Like, you know, like, I mean, don't think that anything you're doing now has to be what you're doing for your whole life, you can make your own individual situation better, you can change your situation, you can, you know, but like, before you get to that point, make sure that you've tried whatever you're doing as hard as you possibly can. Because the one thing that we can't ever get back, is the regret...like is the time and the regrets. Like, you'd never want to look back in life, or at least I don't ever want to look back in life and go, could that have been more successful if I just tried harder, or if I had just put in a little more effort. And so for me and everyone who works on my team, you put in all the effort you can all the times you can and, you know, our rule internally is never be rude. If someone else is rude to you, you kind of blow it off the light, you kind of brush it off, like work your damn hardest at all times. And then if you succeed, amazing, if you don't succeed, then you'll know that it wasn't from your effort. It might have been because it's something else. Be quick to pivot, make moves and just keep going after it. There're so many stories of people who don't have their success until their 50s or their 60s and it's like they never stopped. And that's what I would tell anyone just never stop if you want something.
Yoni Mazor 49:05
Love it. Never stop if you want something. Beautiful. Alex, thank you so much. I hope everybody else enjoyed this episode. Thank you so much for listening. Stay safe and healthy. Till next time.
