On today’s episode, host Becca Skzutak is joined by our old friend Darrell Etherington to talk with Nasrat Khalid of Aseel. Aseel started as an ecommerce company making it possible for local artisans in Afghanistan to sell to customers across the world and has evolved into working in humanitarian aid delivering emergency food supplies to people in need in Afghanistan and Turkey.
On today’s episode, host Becca Szkutak is joined by our old friend Darrell Etherington to talk with Nasrat Khalid of Aseel. Aseel started as an ecommerce company making it possible for local artisans in Afghanistan to sell to customers across the world and has evolved into working in humanitarian aid delivering emergency food supplies to people in need in Afghanistan and Turkey.
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Becca Szkutak 0:02
Hello and welcome to found TechCrunch podcast where we bring you the stories behind the startups from the folks who are building them. Today I'm joined by an old friend and a Dear Colleague
Darrell Etherington 0:12
me Darrell Etherington. I was like, I think that's a cue. That was yes. That actually
Becca Szkutak 0:17
was meant for the other person on the call. Oh, I see. Okay. And I'm also joined by Darrell.
Darrell Etherington 0:25
Wait, there's nobody else on the call.
Becca Szkutak 0:29
Good to have you on though. How's it gone?
Darrell Etherington 0:31
Doing great. This is unrelated. But I'm on this weird kick of foldable phones lately. So I got like a bunch of foldable phones over here. And I'm folding and unfolding them left and right. Very interesting. How many is a bunch three, three different folding phones. Oh, so
Becca Szkutak 0:45
you couldn't have said more than several true, unrelated to today's topic. We are talking about today, we have a fun conversation for you with nasrat Khaled the CEO and founder of a seal which started out as an E commerce company to make it possible for local artisans in countries like Afghanistan to sell their handmade goods to customers around the world but has since evolved into working in humanitarian aid as well delivering food and emergency supplies to people need in countries like Afghanistan as well as Turkey. So here is our conversation with Nazareth
Northrup how's it gone?
Nasrat Khalid 1:24
It's going well. How are you?
Becca Szkutak 1:26
I'm good hanging in there. Thanks for coming on the show today. We're really excited to chat about seal. Yeah,
Nasrat Khalid 1:32
really excited to be here. First time on TechCrunch.
Becca Szkutak 1:35
Ah, well, hopefully me and Darryl, leave a good impression we usually do then not always try. We'll try. Why don't we go ahead and get started Nazar. If you want to tell us a bit about a seal.
Nasrat Khalid 1:48
Yeah, I seal is my company. It means authentic, original, and quite a few languages. I started six years ago, and it is a platform that enables underdeveloped countries to join the digital economy. Oh,
Becca Szkutak 2:06
that's a big statement. Maybe if you want to dive a little bit further into that, and what that's looked like so far, and what a seal has been able to do.
Nasrat Khalid 2:14
So part of my story, and as every founder interlinks with what they're building, I was born in a refugee. In Pakistan, my mom and dad are afghan. And when we were growing up, I was not allowed to take part in official universities and schools because we were refugees. So then the internet was coming around that time, around 2001, I started getting on the internet. And it felt like now I'm connected. But as time went by, and these products in the Silicon Valley area were more tailored to Western markets. Somehow, that feeling was then lost. So as more products came in, they had to have some infrastructure built, we started losing more people from the underdeveloped world getting into the digital economy. So think of it as the world's biggest e commerce platforms only support the world's biggest economies, because they have the FinTech and supply chain infrastructure to support that. And so we're changing that we started in Afghanistan, which is probably not the first choice. But if you really think of including a country into the digital economy, I think that should be the first one. And then now we are also in Turkey. In the next five years, we will add 46 Other underdeveloped countries into the digital economy as well. And when
Becca Szkutak 3:51
you say digital economy, what do some of these people look like? Like? Are you bringing businesses online? Are you bringing local services goods? What exactly does this transformation look
Nasrat Khalid 4:02
like? Yeah, so our first market is the artisan market. So think of the biggest artisan marketplace being at sea, but they only support the top 18 World's most developed countries. And while all of pretty much 80% of global handmade production happens in underdeveloped countries, because people have more time in their hand. So our first target when we started was the handmade sector. And since then, we have also joined forces with other organizations to bring on board people who are going through a humanitarian crisis. So those are the two people that we're onboarding right now. And the two sides are called by good and do good by good is bringing on artisans that are left behind and do good is bringing on beneficiaries that are left behind
Darrell Etherington 5:03
when you talk about that second category. So like, how did you establish the business? When you're thinking about, you know, like, balance versus? Well, I mean, generally, is it a for profit business overall? Or, you know, is it a, like a non governmental organization or like a benefits Corporation? Or how did you kind of think about that part of the business,
Nasrat Khalid 5:23
we're a startup, just like all other startups, we're a C Corp, Delaware. Initially, with the handmade part, it was pretty straightforward. It's a double sided e commerce marketplace. Throughout the process. When we went to Afghanistan, and we were onboarding vendors, we got to about over 100 vendors. And then the country collapsed, if you might have seen it in the news, people, you know, jumping off planes, and that whole horrific scene, it was more of an addition at that point, given that we did have an infrastructure built in that country, it was very easy for us to decide and say, Hey, we're also going to help people. Now an important element of that is, how do we onboard these artisans. Initially, when we were planning, so there's a lot of work we did in that area where an artisan, the reason Etsy wouldn't onboard them is because they don't have digital literacy, they don't have the ability to accept payments, digital payments, so even if you buy their product, they can't get paid for it. And then they don't have the ability to ship their products to you. So lack of infrastructure, both supply chain and fintech and digital literacy. So we refactored this gig economy, Uber Eats drivers are a TaskRabbit sort of platform. And we call that the heroes and the heroes platform is just everyday young people going out there and onboarding vendors to our platform, and they get paid per vendor per product. And so when we went to do do good, and do good is now also tested in Turkey with the earthquake. And it's doing pretty great. We use the same heroes to now go and distribute those packages as if you would get your Uber Eats delivery to your home. So it's getting the last category of people first, I think if we're able to do that, on a massive scale, is going to put us in a great position to take over that other part of the world that Silicon Valley isn't even fighting for anymore.
Becca Szkutak 7:39
And so I'm curious about cuz you mentioned that so many of these people were left off of these platforms for various reasons to begin with. What was it like bringing them onboard? Was there a education element? Was there a trust side of it? Did you run against any hurdles like that, trying to bring these people online?
Nasrat Khalid 7:57
One of the first things I noticed with the first six vendors that we onboard, it was this difference in price. And it was crazy to me where I was like, hey, this shouldn't be right. So we're looking at, for instance, carpet weavers, where usually you would go out in physical space to your shops that are around California or in DC, where we are headquartered, the carpets would cost a six square meter handmade carpet would costs like three to $6,000. With the artisan, we would get a price of 600 to $800. And that difference, in addition to you know, putting all the supply chain and filter cost into It was eye opening to us. It just came to us that these artisans they haven't been looked into, they have not been supported in whoever is in the process, getting their carpets and selling them in the US gets the three times profit that the artisan actually deserves because they've been doing it for a long time. So the price was a major element. There certainly was a lack of trust in the buyers side where they were like, Am I really getting this from Afghanistan? How is that even possible? That sort of came in with time where we gave the vendors their own shop where they were able to then through the heroes engage in take custom orders, people really started to believe that the same was the case on the duvet part where you would go to our platform, what I think is a magical experience to go to a seal and buy a $38 food package and get it delivered to a family. A lot of people were we did identification with these cards that we call or made or hope ID cards so you would get an order occasion just like Uber where your order is received, your order is being delivered by hero so and so your order is delivered to hope ID so and so. So when people started looking at those numbers, they couldn't really relate to it and say I give money to say UNICEF or WFP, and they send me a thank you email, we were giving me this domain ID, I don't really know if I can trust that. So we added a video element to it, where the hero now when he leaves home, and he's delivering your order, starts recording the video, and you actually get a video feed off your donation going to a family, I find that magical, I see that all day long. And orders come in, and the heroes go locally pick up the food items, and deliver it to people that are hit by an earthquake that, you know, you can see they don't have a home that they are living in. And so we had to go beyond what a usual platform would go through. But by going beyond what are usually platform, giving you a text based delivery update, or a push notification on your phone, by showing them that distance part of the world where their contribution is making a difference, make them fall in love with our platform. And we take pride in that now, even though if it's a lot more work to be able to create them a platform to record a video and get that uploaded, and then the user sees it.
Darrell Etherington 11:33
Yeah, speaking of sort of like their work involved. And then just the overall model like I imagined it has to be a difficult conversation we are going to investors depending on who you're talking to, right, like traditional investors would probably have a lot of questions about, Oh, isn't this very high touch? And then also, you're talking about the difference between like the traditional retailers in the markups, like a lot of investors will be like I like those markups, though, right? Because they mean, profit for me. So is there a lot of difficulty in explaining the business model and explaining where investors can benefit? And how do you face those challenges? Yeah,
Nasrat Khalid 12:08
so what why a market for us exists to start with is this misconception and investors mind that the underdeveloped countries are a risk. I mean, obviously, Afghanistan would be a huge risk to any VC. But we think the opposite of that. And we think whoever thinks that these 46 underdeveloped countries are not worth it. We don't think that VC is right for us to start with. We are the most bullish on underdeveloped countries, because these markets are not touched. And while marketplaces in general, are very competitive in developed countries, there isn't much in many countries that we're competing with. So we're very bullish on that. Within the first year of me starting the company, obviously, there was, you know, went through the whole YC model can get 500 Startups and so on, and really learning what the Silicon Valley thought processes, the things that I learned from that were amazing. And I still follow that same model. But my background was with the World Bank, where I had worked for seven years with the United Nations, and the US State Department where I worked on international development projects. So that misconception exists in the market. And I think it's really good for us. For those that don't believe that. We tend to, in the first conversation understand what the thought process of the investor is, and we walk away from the people who think that these markets are risky. I think it would be about time that they really understand and and by then I think it might be late for them. Was it hard to convince investors to come and join a company like a seal? Initially, I think the harder point was because I was pitching and pursuing this startup as a marketplace as just another platform that's coming out here. It was only when the country of Afghanistan collapsed. And within six days, we were able to use our infrastructure to deliver humanitarian aid where the UN and other institution couldn't. We've gotten to be chaired by Time Magazine, and everyone was really talking about does that I realized that I was talking to the wrong people. So the easier way now that really works is if I talk to an investor and they really think that there is a new frontier For the expansion of the digital economy, and they want to join us, that puts us in a very different category than, say, a marketplace that is coming into a smaller market within the US and wants to create a new product. So once somebody does believe that, hey, there is 46, other underdeveloped countries, and they are all ready for us to go and capture, then it's very easy. And they usually listen and they they invest with SEO.
Darrell Etherington 15:34
So it is basically like you don't bother trying to convert or evangelize to people who have that skepticism, because there's there's other fish in the sea, essentially, that where you don't have to do that work. Because that kind of a fair summary.
Nasrat Khalid 15:47
Yes, I think it also goes on to the thought process of when I come in, I'm like, Hey, I am a refugee born raised, self taught computer engineer who worked with the World Bank in the UN, do you think I can build a big company that is going to be, you know, successful, versus, hey, I studied, I'm a YC graduate, and I studied in Harvard. Now, I'm not saying a Harvard graduate, who goes to YC is not able to create a big company. But if that's the sole thought process of an investor to think that those people are successful in this field, then I would love to challenge that. And that's sort of our mission as well, is to get more people from underdeveloped countries to really believe that tech is about your computer sitting there, wherever you are creating solutions versus this really a small group of people who have always been using the same formula to keep creating successful ventures.
Becca Szkutak 16:55
I'm curious, because when you guys got started, and you were going to focus on the artisans and sort of bringing people online in these countries, of course, that is a mission in itself and a mission driven company. But adding on everything you've done with this extra layer of the humanitarian aid definitely adds $1 dynamic of what the mission of the company is. And I'm curious, what was that like for you personally, adding on this almost nonprofit side to the startup, especially because you were a young startup at the time. So growing, looking to raise the first few rounds of funding? What was it like adding on almost this whole second aspect to the business? A
Nasrat Khalid 17:33
simple answer to that would be, I was very, very scared. And pretty much you know, I had 25 people in that country at the time. And all my staff, they were crying, I can remember every single call, whoever I was talking to within my team was crying. And that was because the whole country had collapsed. But if I take a step back, the reason I left the World Bank where I worked for seven years, and for those that don't know, the World Bank is supposedly a really huge institution that is supposed to end poverty globally. But the reason I left my job with them was because they were not looking at building this digital infrastructure. And that was something that I pursued for a very long time. But I wasn't able to get enough of the bureaucratic old mindset to really think that way. So in terms of the infrastructure, it wasn't a big pivot. Because since we started, we knew what is stopping the artisans to onboard the digital economy is their ability to sell their products get paid, and ship, so the infrastructure. So when we started, even on the handmade part of a seal, we were building the infrastructure, we will able to pay vendors, we will able to ship their products, then that was the main sort of building block on which we built the humanitarian side of a seal. So I think the smarter move at the beginning, when we have built the company was not to say, hey, let's create a marketplace for artisans. Instead, it was let's create the infrastructure for underdeveloped countries. And let's go to the hardest country, which is Afghanistan. And then if we did extend this infrastructure there, we'll be able to do this into all of the other 46 underdeveloped countries as well.
Darrell Etherington 19:41
But I'm curious about that infrastructure building part because I think that's it is definitely the key right to like why you're able to do this versus other players and the difficulty has been, you know, things like Stripe or whatever, don't serve So how hard is it standing that up to start with and then how do you find the talent or whatever and navigate Get the I guess regulatory hurdles and things like that. And then once you have it set up, how easy is it to extend it to the other markets? Like you said, you know, you're gonna be able to do after crossing that hardest hurdle of Afghanistan? Yeah,
Nasrat Khalid 20:13
I usually answered that with it depends on how greedy you are. So so if you create the infrastructure, thinking of when stripe, for instance, was created, it was one infrastructure created for the most of Western world. So if you're thinking of extending this to other underdeveloped countries, if you're really greedy, and you think I'll create one solution, and I'll extend it to 40 countries at once, that is not happening, because your solution has to be built based on every country. And we love that because A, once you create that solution for a specific country, tomorrow, even when stripe wants to go back to that country, they will have to do exactly at least exactly the same amount of work as we have done. And it will be very hard for them to replace us. So we knew that limitation in advance. And then second was given that we're not really looked into or counted as in this is not just me, as an Afghan American entrepreneur, but there is all these underdeveloped countries where they have entrepreneurs, and they are not looked into, you know, they're not under pressure to create the next big thing as soon as possible, then that really helps us because our country in itself is pretty big. So if we're able to get one country, which in our case, initially, for instance, on the FinTech side, went from cash deliveries, to mobile payments to integration with, you know, mobile payment gateways to creating our own solution with the vendors. And then the Omega ID card, which is an identification tool that we use soy, our payment options to our vendors, compared to et Cie are very different, we might be able to top them up on their Omega ID card, which some of their community might use to get aid from other people that they know when other countries are nowadays, we also use domain ID cards for NGOs, in large scale international institutions to send aid to them. So it needs to be built per country, it takes time, but it's worth it. Because you have that country with you for a long time. And other people can't really come in easily and take that away from you. Make sense? Yeah,
Darrell Etherington 22:47
building them out as you go.
Becca Szkutak 22:50
And now we're gonna take a quick break, but we'll be right back in a second.
And noting that you guys are based in DC, what is it like especially it's funny to think about now, because such a big conversation in startups in Silicon Valley is the remote work hybrid work in person, everyone's like, Oh, we do our best work when everyone's in person or everyone's together. And in your company. You guys are based over here. But of course, the majority of your work happens over in Afghanistan in Pakistan, and a lot of your team members are over there as well. How is it like for you leading a company that is so far away, and unlike some distributed teams, you couldn't just every day or every week or something just like hop on a plane and go and visit everyone in the same way a company slipped between New York and San Francisco could What is it like leading that type of a company?
Nasrat Khalid 23:44
Yes. So I think a major part, I look into the infrastructure, that's my primary job. And I want to make sure that the infrastructure for Afghanistan, Turkey, which is our second country now, and then the US side of things, is functional, it's working, and it's expanding. So unlike typical CEOs, I don't have the luxury of doing, you know, all those things that they do. And given that we didn't really have a lot of that intersection with Silicon Valley, in a way we will reject it, because it's not like we didn't go and we didn't reach out to people. We did a lot of that. But given that they didn't understand why we're crazy enough to go and focus on countries that other people would avoid. I didn't really get too much entangled into these requirements of, you know, reporting to VCs and doing all of these things that entrepreneurs do, which I don't really find much value. And so a lot of my time is spent on building infrastructure. I spent a lot of time in DC talking to large scale international organizations in turn He talking to vendors and around surrounding areas of Afghanistan talking to refugees. For Afghanistan, we have a country team. For Turkey, we have a country team. And then the US team is mostly that leadership, sort of team members that are supposedly put in place to serve these country teams. So at a large scale, we might have regional teams and country teams, and they would be focused on their countries, while we are focused on supporting them. So it's
Becca Szkutak 25:34
almost like a centralized a little bit, the leadership style, if you're working almost kind of like, No, I don't wanna say the head engineer, because you definitely do more than that. But you're definitely more like product driven than some CEOs. Yeah,
Nasrat Khalid 25:46
we also have this concept of decentralized aid, which came after they do good expansion. So if you look at, for example, the World Food Program, and we look at the World Food Program, as a competitor, the World Food Program is based in New York, and emergency happens, the emergency coordinators sit in plane and they go to the emergency, then they bring in food from other countries. And that is the distribution, which is extremely centralized and very, very inefficient, according to their own reporting. 64% of the funds go to a person that's hungry, and we have decentralized that were locally, the delivery is done by the hero refactoring, Uber Eats model there, and we pick the products from the shops. So we are really big believers of decentralized aid. We're sort of pushing that agenda globally. And we think communities should take part. And while we do provide the infrastructure, and enabling their own community to join the digital economy, if it's the artisans, if it's the heroes, or if it's just our local team members who create local software solutions, based on the principles of that YC model that we closely learn from and implement. So decentralization is a big key, and bringing forward that 4 billion people that are not part of the digital economy yet.
Becca Szkutak 27:20
And I know we've talked a bit about getting the merchants and the artisans and people in these developing countries onto the platform. But I'm curious about the other side, because a lot of it is a marketplace. How would you describe the customer base for a seal? And kind of how do you work to get the word out there to people who can both do the humanitarian aid side as well as buy from these artisans here in the US and beyond? Yeah,
Nasrat Khalid 27:44
so I think a bigger part of creating a marketplace requires a lot of investment, which we were not able to, at our starting point, get from our pre seed round and our seed round. So we had to think of a more innovative way of you know, there's a lot of marketing cost that a marketplace requires in order to be established, especially if you're a new one. And it's not 2002 and 210. So what we did focus on was to find big institutions initially, to partner with us. And as we did that, for instance, obviously, you couldn't go to the platform and send a directly to one family. What we also did was to go to bigger institutions and tell them, Hey, do you want to support Afghanistan? Or do you want to respond to the turkey earthquake, and so they would go and buy 1000 humanitarian packages in our platform, and then deliver it to specific families that they thought they want to support. So certainly, learning from our mistakes, a thinking that the tech ecosystem is very open minded and funding companies wherever they came from. And then secondly, building a platform specifically for all customers, versus later on focusing on large institutions. And now we're seeing that traction come in from our everyday customers as well. So going from b2b to direct to consumers is now becoming a move. Whereas initially, it was pretty hard for us because the ecosystem thinks of us as outsiders. So we're making solid progress on that and our customers love it. We have a 20% overhead for handmade items, whereas in a normal market, a carpet would be a 300% overhead from their side. So the customers love that it takes them a little bit longer than say Etsy or Amazon But when they do get it, they value it a lot more than their, you know, everyday order, which comes in from the US or Europe, for the most part, the more far the more value people give to the item. I
Darrell Etherington 30:15
am like, Just can you just explain a bit more about the logic of like going, because it's so much of you know, if you go to the site, and everything is about, you know, donation and humanitarian work, but as you mentioned, like you're figuring for profit company, right? So like, how do you kind of like, think about presenting that to the customer? As like, Oh, yeah. Like you're helping, but it is a still a for profit business. Right.
Nasrat Khalid 30:39
Yeah. So overhead, and it helps that I came from that space, though. Yeah, I think in the UN and so on, we consider overhead. If it's a nonprofit that has an overhead, we will look at the example of the World Food Program. And my rationale for making you donate to us rather than them is they have a 64% overhead, you would get 64 cents off our dollar delivered to the beneficiary with us, we charge you 16%, which is one, six, then obviously, when in fragile Afghanistan context, that percentage goes to over 50%. When you give money to WFP, you also don't have the option of understanding where your money went. Whereas with us, you have the Omega ID, and now you get that video. And so that totally gives you a different experience. And the customers look at the overhead the same way. So if the overhead in the World Food Program is going to staff members, and you know, people flying in from other countries, in our case, that's going to the local hero, and we charge that transaction cost, we think it's fair, in addition, because we want to grow in all these 46 other countries, that does require this support, we want to keep this and we want to be proud of the fact that we are private, it gives us the ability to expand to bring in more people to grow at the way that these global startups have grown. And so hopefully, for a good cause, we're able to do that. So we haven't really seen that within larger institutions and individual donors. It's only when they give it a try that they really understand what the difference is, and why it makes sense for this to be a for profit venture.
Becca Szkutak 32:40
And kind of a follow up to that would be since prior to launching this company, you were working in the humanitarian aid space as a whole with work with the World Bank and United Nations. What has it been like launching your own company in this space, especially with it being a for profit company, what made you decide to take the plunge into this direction, when you were sort of already working in this general space?
Nasrat Khalid 33:03
I think a lot of that it was a big leap because those jobs are very secure. Unlike the tech sector, once you get into a un job, it's very hard for you to get fired. So moving on from that, I think the biggest reason for me was the reason I started working with them was exactly the same. I went through being a refugee, and not a refugee in the US. I was a refugee in Pakistan, which was very hard. And I came back to Afghanistan at the time thinking, I will help build my country. And as I really went in through these institutions, I understood that it is not happening. And so when I then came up to the US, and I really tried to sort of bend those organizations to work in a more digital way in this pre COVID. It didn't work out. So there was really not much of an option for me to look at this really big opportunity for impact and creating a venture and not take it. It was mostly the same reason why I joined the international development institutions that I really had to live working with them. Well,
Becca Szkutak 34:23
cool. Well, I think we have time for one last question. And I'm curious, based on things we've talked about already, obviously building this digital infrastructure for these countries to bring more people online. What's next for the company? I know, of course, things going on in Afghanistan, the humanitarian aid, there probably isn't a short term thing in your plans, at least, but kind of like what are you thinking about in general for the company and what's next? Yeah,
Nasrat Khalid 34:47
so we're trying to expand to five countries. So we have Afghanistan and Turkey, what we call the pickup countries that we're going to add three more countries into that I think bigger shift with then a sealed story is going to come when we convince the Silicon Valley that this shift is worth it. And it's really an opportunity. And it really is, with internet penetration around that 93%. Even in a place like Afghanistan, payment systems custom built and tested, it's a no brainer to really get into these countries. And I think when when they line up, I think that's going to be a good day for us to celebrate. Yeah, so we're still going to go with our mission, and it's 46 underdeveloped countries, once that is done, I think we might really look at the world in a different way, where it's not one sided when we think, you know, innovation is only happening in these Western markets. And we keep on building further on top of what we have built, you know, once we open that other side, and a whole big world, it's going to be a very different world. And we would love to be that company that opens that door, or play a big role in opening that door for the rest of the world to join this digital party that we're at.
Darrell Etherington 36:15
Yeah, I think it's really cool the way that you're taking some of the mechanics and structures that benefit startups and technology innovation companies, and then like applying it to this model that is mired in like, I don't know, stasis for lack of a better word, like, you know, the big inertia laden international aid organizations, so they don't have that quickness. Right. So that's, I'll be interested to watch too, and see how it happens as you continue to apply that model. Awesome.
Nasrat Khalid 36:42
Yep. No, well,
Becca Szkutak 36:43
thanks so much for coming on the show.
Nasrat Khalid 36:45
Thanks so much for having us.
Becca Szkutak 36:54
And that was our conversation with NASA. Darryl, what do you think?
Darrell Etherington 36:57
Yeah, that was very interesting. I think it's, I think I expressed my concern in the interview. I mean, this isn't to say Nazareth is doing this. But it's always suspicious to me when a company is like doing a lot of stuff that would appear to a casual observer to be charitable, but it's not like a registered charity, or a B Corp or something. Right. But, yeah, it sounds like, it's more for him about avoiding some of the cruft and overhead that comes with being a registered charity. And then, you know, the counter argument for that would be some of that is there for a reason, which, in part is to make sure that nobody in the equation gets taken advantage of on either side, right? No, you
Becca Szkutak 37:45
do bring up a good point. Because stuff like that. I mean, we were just on equity earlier today. And we're talking about another company that is a nonprofit with a for profit arm,
Darrell Etherington 37:55
is it open AI? Remember when they were though, but
Becca Szkutak 37:59
in the same way, but we're kind of just like, Okay, so like, how does that work? Like I don't fully understand like how it comes together in that way. Of course, we should have asked this. But my assumption is, it just wanted to move fast in setting this up kind of thing, because like, I mean, who knows how long it takes to become a registered nonprofit, which, of course, as you mentioned, isn't necessarily a bad thing for it to be a lengthy process to make sure you are weeding out potential bad actors. But I definitely think for profit allows you to be quick and nimble in a way that being a nonprofit doesn't always allow. It
Darrell Etherington 38:32
sure does. Yeah. I mean, it's kind of the same as like a public versus a non public company. But you know, without the additional benefits of that, because obviously, a public company has like, it's still taking profit and stuff, right. But like, it has a lot of the same requirements of like a public company without any of the benefit. But then he added it on to what was a purely for profit business. And that was like, opportunistically, I think I can also help out in this specific situation, using the infrastructure that I've already built for the for profit business, right, or I'm in the process of building. So it is interesting, I think it will, you know, at a certain size or something, he probably would have to do something like what you're talking about where he would split it in two ways. Yeah, I've heard of that in a few different contexts. I'm not sure how one side works with the other there's actually an even just a brewery nearby locally, where they're one beer brand is a B Corp. But then there are other primary beer brand is just a straight for profit entity. And they're a combined entity, which is interesting. Oh, my God,
Becca Szkutak 39:31
you gotta report back you should ask them why? Because in theory, they could just make a beer that donated the profits to something like having them actually like split down like that is right seems complicated.
Darrell Etherington 39:42
I think it I think they started out separate and then came together after the fact. So maybe that's part of it, but Oh, okay. Unrelated.
Becca Szkutak 39:50
I think the thing I found most interesting about this conversation is bringing the artisans online is a very interesting piece of this and it's great that people like that We'll be able to sort of sell to a broader audience, especially because everything happening in countries like Afghanistan, they're just very cut off from the rest of the world. So that's cool on its own. But I think the infrastructure piece of this is really key. Because in theory, you build out a way for them to take payments and them to do orders like that could just apply to so many other areas, which I think is probably where the company will likely see itself heading, just as other people are like, Oh, well, I have this idea. And I need those pipes to run it. Yeah. Which I think could be very interesting. Everything sort of works out as it's heading it. Yeah,
Darrell Etherington 40:32
absolutely. I mean, it's a whole huge economic engine that is essentially ignored by like, the stripes of the world, right. But the reason they do it is risk appetite, right? Like they're like, We don't like the risk associated with this. And I've seen this like a bit. It's funny, because I haven't been a fan at selling. So I haven't had the chance to bring this up. But when I was at Shopify, we dealt with this all the time, there was a category, there's a specific category, and it was hair extensions. And stripe would not allow you to process transactions for hair extensions, because they saw an undue amount of fraud with that category. Interesting. Yes, it was, it was a very complex issue, because it was also seen as like discriminatory, right? Because it's a very specific audience and market that wants hair extensions, mostly. And let's like black women, generally. Right? So there was this whole, it was back and forth, and whatever. And a lot of people were saying, it's not fair that Shopify doesn't allow this type of business. And it was like, No, we actually don't mind that type of a business. It's just that our payment provider won't allow this, right. And then eventually, the payment provider did like Stripe relented and determined that it was an acceptable amount of risk in that category and added it. And then, you know, everybody celebrated, like, oh, we can add this product category to Shopify stores or whatever, right? So those change and evolve, I mean, another also controversial, but in a very different way, sort of like product categories, registered goods, or regulated goods, rather, I should say, so, you know, marijuana, cannabis stuff, and a lot of the payment providers wouldn't, I think, maybe still won't touch that with like a 10 foot pole. Yeah, most a lot. Yeah. And there's like porn stuff. Also, a lot of gateways won't touch it. There are specific payment gateways that will exclusively deal on that, because, again, it's an opportunity left kind of on the table, but people who have the other risk appetite. But yeah, I think, you know, we didn't talk about this either. So part of the reason is, they just don't think it's worth it market size wise. And I think we talked about that a little bit when that's right. But then the other part is like anti money laundering, because they're held to very strict anti money laundering requirements. And unfortunately, a lot of these markets end up potentially being a path to funding of terrorism, right? I'm not saying they do that. But it's like some of these places or places where terrorist organizations operate, and then, you know, they might get a revenue stream through one of these things. And then the payment provider is potentially liable for that based on, you know, North American requirements for AML. And identity protection, or anti fraud stuff. So it's a very, very complex issue. And there are and this is why I wanted to talk more about the investor conversations, because I assume that's what's going to come up more than anything else. And it sounded like, that was where I was, I was like, yeah, like, but there are people who are like, it gets into the conversations that he can tell right away, like, Okay, you're gonna be stuck in all this stuff. And you're not gonna see the opportunity down the road. Right. But like I said, with the example with hair extensions, like those attitudes change over time, and then, right, yeah, if he has all the infrastructure built out, then he's in a very good position as the potential for risk decreases, and the appetite for risk increases, or whatever happens on a global scale? You're in a good spot, right?
Becca Szkutak 43:49
No, and the risk profile piece is super interesting, because obviously, the rest of you just mentioned are totally valid. And things you definitely have to worry about when building in these countries that don't necessarily have the same guardrails that took us a while to build on themselves. But the other thing with risk is I there's this one investor I talked to, he has like a $50 million fund, and he exclusively invests in companies in Pakistan, and well, you get some of the same potential risks there. He was saying the other thing you get on the flip side is, if you were to back, say, a company, like a seal there, you have no competition, right? So it's like, if it works, none of the other big guys are trying to come in and build there. And you'd have to have another entrepreneurial team tried to tackle the exact same issue to have competition. Yeah. So like, that piece of the risk is totally different as well. Yeah. So it's like you could definitely see getting an early even if the company not that I think they will pivot but say that they do. Having this basis. It's like they already are building without competition. Yeah, which definitely makes a big difference and allows you again, also to be more nimble, if things do end up changing or you need to implement something else or take something a new direction. It's a lot easier when people can't just be like, Oh, well, I'll go to x instead. Yeah,
Darrell Etherington 45:00
it's like anything else, any other business building where you're like, Okay, I'm gonna assess all my risk in the one column. And then I'm gonna assess the opportunity and the other column. And then if the opportunity outweighs the risk, in my estimation, like, I'll go for it, basically. Right. But I think what helps Nazirite is he's there, like he understands the market very well. And there's a lot of these, like a stripe of the world is like, I don't even understand that market. So the my risk, my assessment of risk is going to be very different than someone who like understands it very well, and probably won't, he's going to have a lot of time to do what you're talking about in the advantageous sense of like building his thing, and building his moat, without fear of large incumbents, because that risk thing is not going to change for them for quite a while, right? It's gonna take a lot for them to get comfortable, especially now at the size they're at. Right? Like, they're like, We got to eat this fucking buffet over here in North America. We can't worry about the potential buffets elsewhere, especially when you know, there's other things about it that we're like, kind of like not sure about.
Becca Szkutak 45:57
Yeah, and just the concept of getting a country like that just more online and like more connected to the outside world, just in general, is a good thing. Yeah, for both Afghanistan and some of the other countries they're targeting. Because it is crazy. Because like, even you and I like our view of how things work over there and stuff is limited, because there just aren't as many people to tell us. Yeah, about how things are like so it's, it is kind of crazy to even think about that. Because it's like so removed from even when we talk to like, oh, emerging tech markets and emerging tech markets like Poland, right. Like, that's a very different country, a very different scenario. So it is interesting to think of like how large of a scale of a problem this is tackling, too. And
Darrell Etherington 46:36
it's a chicken and egg problem to like you mentioned, right like, it's like, you actually don't get improvements in that risk profile unless there's investment into the place, right by building that stuff out there setting up the economy for massive potential growth down the road. And they're willing to do it when other people aren't, which is amazing,
Becca Szkutak 46:55
for sure. Separately, snooping around on the website. I was like, that's a place that I would buy. Oh, that's where a guy would buy. Oh, yeah, definitely do some browsing.
Darrell Etherington 47:05
Did you make some do some holiday shopping yet or something or not? No purchases yet? Not yet. Okay. All right. Keep us posted. Keep the fan community posted. Oh
Becca Szkutak 47:15
yeah, I'll do a review. Found is hosted by myself. TechCrunch Senior Reporter Becca Skuta. Alongside Senior Reporter Dominic Midori Davis founders produced by Maggie Stamets with editing by Cal our Illustrator is Bryce Durbin phones, audience development and social media is managed by Morgan Liddell Alisa stringer and Natalie Kreisman TechCrunch is audio products are managed by Henry pic of it. Thanks for listening, and we'll be back next week.
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