A key advantage to developers using Dwolla’s white label APIs is that they get their businesses to market faster.

There are other advantages to big established businesses but this article has precisely nothing to do with that.

Very plainly speaking…

Ease of access for developers with a strong market need means more experiments will be built. More experiments being built means a higher probability of one of them taking off. When one of them does, everyone wins.

Not all experiments work, so in order to find ones that do, we need to make it as easy as possible for experiments to take place.

Experiments really mean: new businesses or business ideas.

Dwolla has made it really easy for companies to build new ideas and get into market with a infrastructure that leverages bank transfers and moves money for free.

Aside from the free transactions part of that, here is what excites me about what I see happening on a daily basis.

When I got started building Dwolla, it took significant time and investment to get it off the ground and it cost me my life savings. Generally speaking:

  • What is cost me: 2 years
  • Team of: 2
  • Cost pre-market: ~$80K

Let’s assume that time is worth $20 dollars an hour at 40 hours a week, which is a lot less time than any of us would put into launching a company.

Call it ~$40K per year, per person. Cost of ~$80K if you really carefully manage the money. It’s easy to spend a lot more.

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It cost me a lot.

It doesn’t cost new companies getting into the market anywhere near that.

  • What it takes buying from Dwolla: 2 weeks
  • Team of: 2
  • Cost pre-market: $3,2K with 2 people.

$3,2K vs. $80K.  2 weeks vs. 2 years. This is a no-brainer.

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The human cost and time savings alone with this type of API is obvious. To some, it’s a simple ACH API and to others it’s a way to get their idea into market quickly.

I’m ignoring competitive risk of someone else getting to market faster than you because they started in the process sooner or were more heavily funded and could afford things that you could not. I don’t know how to calculate that.

Packaging functionality in a way that helps people launching businesses reduce their time to market is pretty easy to visualize.

Reducing the amount of time to get something to market makes creating products and services in that market much more appealing.

This is happening in the FinTech space with suppliers that can connect to every bank account in the US, creating a digital access point to the entire banking infrastructure for the first time. It used to take years. I know because I went through that pain. It now takes weeks. I know because I’ve had the pleasure of being a part of the team that’s brought it to market.

In retrospect, it’s an approach Twilio got right in telecom long ago and it’s fun to be a part of the shift in the financial world.

The thing that is so significant about the shift in the financial world is new technology that enables rapid experimentation in heavily regulated and unforgiving environments. What’s even more amazing is that this experimentation can happen under the purview of regulation. Innovation/experimentation doesn’t have to be riddled with shenanigans to exist in regulated industries if the underlying framework is sound.