Interview with Matt Hamilton, Early Engineer at Venmo
This article is part of a series revealing the stories of early employees from the most successful tech companies of the past few years. You’ll walk away having learned about what these individuals experienced, what they wish they knew, and the advice they’d give to others joining high-growth startups. Key takeaways are at the top and you can find the full interview below.
This interview is with Matt Hamilton. Matt was one of the first engineers at Venmo. He spent over five years there and worked on a number of things including the iOS app, Venmo Payouts, the P2P API, Pay with Venmo and many other products. Below is an edited version of a conversation he had with us here at Compound.
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- On how Matt first found Venmo – “We decided to keep working on it and one day while me and my co-founder were having lunch in Chelsea, we saw a guy walking down the street with a Venmo shirt on. We asked him, “do you work for Venmo?” He said, “yeah I’m actually the CEO.” We had randomly run into Iqram [Magdon-Ismail] on the street in Manhattan.”
- On changing roles at Venmo – “I really just followed my interests. Originally, I was uneducated in iOS and was interested in learning so was glad to be assigned there. Over time, I developed an interest in building out APIs which dovetailed really nicely with where Venmo was looking to go with things. We saw a real opportunity to create a developer API where we could be a platform for others to build on top of. It worked out well that my interests lined up with what the company was doing.”
- What made Venmo’s culture special – “People were constantly sharing new things and open to applying concepts to what we were working on. All of our conversations were about social payments and fostering the magic that made it as simple and easy as possible. That dedication was really important.”
- A tactic that helped drive viral growth – “...developing the flow so that if I paid any phone number or email, they would immediately receive a message saying “Hey you have money waiting, signup to claim it.” That was huge in solving the problem of “I need to pay someone immediately so that I don’t owe them money.” And then it’s on the person who receives the money to actually sign up for the service.”
How did you first find Venmo and what made you want to work with them?
I started working at Venmo pseudo-randomly.
Back in college I was majoring in materials science engineering and I slowly realized I didn’t want a career in materials science engineering. This was around 2008 and was about the same time when the App Store came out and the iPhone became a thing. My friend and I started brainstorming apps and I got really into software development.
I immersed myself in startups – I started reading TechCrunch, I got an internship at this startup called Angelsoft. There was this guy named Nate Westheimer who came to the office all the time and he ran the New York Tech meetup. I followed him on Twitter and he started tweeting his Venmo payments – how I was originally exposed to Venmo back in 2010.
I started a company in 2011 but got rejected from Y Combinator. We decided to keep working on it and one day while me and my co-founder were having lunch in Chelsea, we saw a guy walking down the street with a Venmo shirt on. We asked him, “do you work for Venmo?” He said, “yeah I’m actually the CEO.” We had randomly run into Iqram [Magdon-Ismail] on the street in Manhattan.
We got dinner with him and some other team members and shortly after I started doing part-time work for him. 6 months later, I joined Venmo full-time.
What was your first mandate working at Venmo?
The very first product I worked on was called the Social Register. The idea was to create a register from the future – kind of like a social / Venmo take on the Square Register. I built out an iPad app which used the Venmo API to show Venmo payments.
We launched it with a party where people had to get in by paying with Venmo, and we used the Social Register app to accept those payments (it was very slow as I was a new iOS developer). We eventually shelved the product but it was fun to work on.
What was unique about the early Venmo culture?
There are a few things that come to mind.
First is that we were all open-minded and had a culture of learning and curiosity. People were constantly sharing new things and open to applying concepts to what we were working on. All of our conversations were about social payments and fostering the magic that made that as simple and easy as possible. That dedication was really important.
A lot of time management at companies might field new ideas but ultimately prioritize projects that directly impact the bottom line. We had the flexibility to experiment and actually have our ideas be implemented.
The other thing that was important was we had a ritual of going into a literal “magic room”. It was a windowless room and people would go in there for hours to discuss problems (philosophically and tactically) and they would always come out with new ideas and approaches.
You worked in several roles at Venmo – how did you think about your career at that time?
I really just followed my interests. Originally, I was uneducated in iOS and was interested in learning so was glad to be assigned there. Over time, I developed an interest in building out APIs which dovetailed really nicely with where Venmo was looking to go with things. We saw a real opportunity to create a developer API where we could be a platform for others to build on top of. It worked out well that my interests lined up with what the company was doing.
So I built out the payouts API into the idea of a more generic developer API vision. I was really keen on that and almost became a technical product manager by building it. I was going to hackathons to drum up activity on the developer API and working with users to understand and build out a developer portal that was usable for them. At the same time, we had a lot of projects that didn’t have a PM on them – we were shipping features, but weren’t following through to make sure that they were real user needs. So Jesse Bentert and I helped establish a product team.
Was there ever a time when you thought Venmo wasn’t going to work out?
Back in 2012 we were running out of money. We were giving away free payments, paying all of the processing fees and weren’t making any money ourselves. We tried to make money (with products like the Social Register) but they ultimately didn’t pan out.
But what we did have was a growth machine. People really wanted to use Venmo because it was so easy and simple to use. It had viral aspects to its growth – we were seeing 10%, 20% month over month growth. At one point we mapped it out where I think we went from 0% to 80% saturation on Stanford’s campus in like six months.
Investors, however, were not being sold on the vision and because we were running out of money we had to find an acquirer, which ended up being Braintree. We sold to them for $26.2m.
How did you drive viral growth on college campuses?
We were keen on having college ambassadors and things like that, but we also really focused on the viral aspects of the app. A transaction is inherently viral, right? You need two people to do it. The big thing we leaned in on was ease of use – making sure that each user became an ambassador so that when they accept payment, they make someone use Venmo because it’s a better experience. We would create these ambassadors either through explicit college programs or just by making sure the onboarding experience was really great.
To accelerate the viral growth, we did a few things.
First, we removed the need for a full social security number. That was the big one as people didn’t want to give a random startup their social security numbers.
The second one was clean money flow – developing the flow so that if I paid any phone number or email, they would immediately receive a message saying “Hey you have money waiting, signup to claim it.” That was huge in solving the problem of “I need to pay someone immediately so that I don’t owe them money.” And then it’s on the person who receives the money to actually sign up for the service.
And the last one was using people’s contract address books and Facebook friends to make it easy for them to find their friends.
Who’s someone that you worked with at Venmo that still inspires your work today?
I learned from lots of people in lots of contexts but one that comes to mind is Jesse Bentert (mentioned earlier) who established the product team with me. He’s a really big influence on me to this day. I learned how to approach problems from him – he’s very methodical and his approach is almost like a scientist. He’s not married to one idea or another and has a good ability to make clear evaluations without being too biased. Additionally, his sense of playfulness was great as well. He took his work seriously but he wouldn’t lose his sense of humor.
Venmo was purchased by Braintree which was purchased by PayPal. How did Venmo’s culture mix with your acquirers?
Neither one really knew what to do with us.
We only had one joint project with Braintree and it was a flop. And with PayPal, there was a big culture clash. They didn’t have a vision for what Venmo was going to be and people on the PayPal side felt that we were threatening to them. They were worried we were going to replace them. Plus, they were a public company focused on profits and Venmo wasn’t very profitable.
Luckily they held on and it all worked out, but it wasn’t without hurdles.
How did you think about equity, taxes and personal finance along the way?
I got lucky in a lot of ways. First, I had people who I reported to who were very generous in giving equity even though I was not smart enough to demand a lot of it (I didn’t really know what I was signing up for at the time). I also got lucky in that my Venmo equity converted to Braintree equity which converted to PayPal and eBay equity – I didn’t have to pay taxes for it to convert. Braintree also issued RSUs (which isn’t common) and PayPal did as well so I didn’t have to worry about exercising options until my next company.
Some people think I’m a multimillionaire, but Venmo was acquired for $26.2m which is a very small price. I love to tell people that while I’m not a multimillionaire it did provide a little nest egg that I’m hoping will help in retirement, but Venmo hasn’t made me “rich”.
But the most rewarding thing of working for Venmo is that people didn’t believe in us when we first started – they thought it was stupid – and that now it’s a household name never gets old. Seeing it in TV shows and movies is amazing.
The views, information, or opinions expressed during this interview are solely those of Matt Hamilton and does not represent those of his current employers, their affiliates and its employees and may not be current.