How a $75 sneaker bot became a $300M/Month financial engine - Steven Schwartz [Whop]

Whop gives away payments to win the creator economy

Whop is a storefront where anyone can sell digital products, and it grew out of two teenagers selling a $75 sneaker bot on Facebook. Its bet is that payment processing has become a commodity, so Whop gives it away and earns on cards, advertising, lending and investing. Tether's investment points to where that leads, an open stablecoin network for the many people banks turn away.

Takeaways

• Tether's investment anchors Whop's stablecoin bet. Schwartz calls Tether the biggest stablecoin company in the world and the predominant currency for almost 10% of the globe, with roughly 550m monthly users. The two connected through mutual relationships and Tether agreed to invest in Whop.
• Payment processing is a commodity to give away. About 50 companies can process payments, so Schwartz wants that margin pushed to zero as fast as possible. Whop instead earns on Bitcoin and tokenised securities, cards, advertising and buy-now-pay-later.
• Nearly 40,000 people earn $300m a month. The platform sees about 50,000 sign-ups a day and tens of millions of hits a month, and each business brings 10 to 20 users with it. A construction worker in Alabama now makes $180,000 a month running private communities.
• Keeping everything in one place beats lock-in. Whop refuses to be white label and does not sell domains. Its embeddable chat, checkout and wallet components each carry a powered-by-Whop badge, and Schwartz says people want things fast and easy.
• Most of the team were founders themselves. About 70% of Whop's staff had run businesses before joining, everyone is paid well with long-term equity, and some teammates have made around $100m in liquid cash and still love the work. Schwartz says culture is existential.
• Anyone should be able to make money. Whop's mission is to let everybody earn, not just the smartest people who are already savvy. Nurses and gamers use it, along with services businesses such as tax consultants and marketing agencies, and Schwartz is most excited about clipping and content rewards.
• Most new businesses fail because owners quit. Schwartz says nobody who has worked on a business for two years is unsuccessful, and advises founders not to get tilted or blame the world. He credits Whop's success to persistence above everything else.

How Whop found its first vertical

1. Cameron posts on Facebook looking for an iOS developer, and the pair build an app that watches Nike's Twitter and buys Yeezys on release.
2. They sell the bot for $75 inside Facebook groups, Schwartz's first money on the internet.
3. Whop's first vertical is desktop software sold with license keys, in the same niche downloadable-software world.