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U-M Ross Business + Impact
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Socent Spotlight: ePesos

Last year Business+Impact introduced a new series on U-M alumni who have created social enterprises and continue the work of entrepreneurship after graduation. Previous Social Enterprise Spotlights included Thawra and FoodFinder; now we focus our spotlight on ePesos, a tech platform expanding economic inclusion to the population least affiliated with the banking system in Mexico.

Ariel Olaiz, BBA ’07, has come full circle — from studying business at the base of the pyramid at the Ross School of Business to fostering economic inclusion in Mexico. Olaiz says his U-M education comes into play every day in his role as co-founder and chief financial officer at ePesos. We caught up with Ariel to learn more about his experience running a company in the FinTech space.

  • Describe your business.

ePesos is a FinTech that gives workers in Mexico early access to their wages. We’ve found that there are three huge problems we are solving for:

    • Wages are extremely low. 80% of workers make less than $1,000 USD a month. Families living paycheck-to-paycheck don’t have the savings required to face financial emergencies.
    • Wages can be very volatile, especially for workers in Hospitality and Manufacturing. There is unpredictability in the amount a worker will receive because of tips, productivity pay, bonuses, etc. If you don’t know how much you’ll make next month, how can you plan your finances?!
    • Timing of pay is beneficial for the company but not for the employee. Why do workers need to wait to get paid? Employers have funds tied up for no good reason. We let the employee access his/her entire wage whenever it’s convenient for the employee.

When an employee decides to access his/her payroll before payday, they pay a small commission ($1.5 USD) and their employer will automatically deduct the appropriate amount in their next paycheck.

  • What is your biggest recent discovery about founding a fintech company?

One of the great things about entrepreneurship is that you have to build everything from scratch. It’s sometimes painful, but the reality is that in large companies, someone, at some point, had to go through the effort of building a lot of the things (e.g. processes, products, structures, customer portfolios, etc.) that existing employees take for granted. And so, there are several insights that I have picked up along the way. Here are a few:

    • In entrepreneurship being a generalist is critical to scaling a company. When I started my career in asset management, I remember the concept of a “T” — start broad and then pick an area where you want to focus, which makes a ton of sense for some careers. However, building a company requires a different approach. As a startup, you must first get to Product-Market-Fit. To get to that stage you must learn to draw from a diverse collection of knowledge (e.g. finance, ops, marketing, etc.) in order to see connections and correlations that others might miss.
    • There is no substitute for hard work. Entrepreneurship is a world in which the highs are very high, but the lows can feel extremely profound. What I have found over the years is that one of the few things that will get you over a tough period is simply focusing on the task at hand — whatever the most important thing is at that moment — and powering through. Focusing on the process and on little details will help you deliver small wins consistently over time, and in order to do this you need to rely on good ol’ fashion hard work!
    • Customers have no idea what they want! The conventional wisdom is that you need to listen to your customers in order to deliver great products and services. It turns out that customers have absolutely no idea what they want! If you just ask a user what they would like to see in new features/functionality you are likely to get a standard answer. The true magic in product development and innovation comes from deriving insights from your users without them knowing. This is super hard to do! It requires a special skill set to tease out these nuggets of insight. Check out “The Mom Test” by Rob Fitzpatrick if you want to learn more about this.
  • How has the landscape of fintech changed since you started your business?

Everything has changed after COVID-19. I’ve been on the entrepreneurial journey for 5 years and it is crazy to see how fast the industry has changed in such a short timespan. I’ve basically seen changes in the following areas:

    • Investment. Global venture funds are much more comfortable making investments around the world. LatAm is a great example of this — before 2020, investments from funds such as Softbank, Tiger Global, and a16z were extremely rare. Today, I see deals like this being done every month!
    • Geographic expansion. One area that I am super excited for is that country borders are also becoming less relevant from an operational standpoint. I’ve seen so many tech companies expand beyond their home market at a super early stage — that was something only large companies did prior to COVID.
    • Talent Acquisition. With work-from-home becoming the standard, the traditional way of thinking about hiring has totally changed. Where you are based has become less relevant than what you are working on and what your skills are. Hiring people in other cities or other countries is now easier than ever before.


  • What from your Base of the Pyramid studies or instructors has been the most valuable to you?

There is a misconception in the business world that businesses can not be profitable when they serve low-income customers. In fact, most traditional financial institutions will avoid this segment altogether because it’s higher risk and because margins are lower. To be frank, this sounds logical — why would you serve a riskier segment that hurts your bottom line when there are plenty of other customers out there that need your products?

What we have found is that those institutions are asking the wrong questions. Instead of asking, who is most likely to pay me back? Or, how can we extract the most economic value from a particular user segment today? What we ask ourselves at ePesos is, what happens when you introduce new technology that can lower your cost structure — would that allow us to serve a wider group of people? Can we adjust our business model in order to reduce consumer credit risk? How can we serve “unattractive” customers today but grow with them over time so that our lifetime value is optimized? This requires a mindset shift that is not easily made by companies that have built their success on mitigating risk.

My academic journey of Business at the Base of the Pyramid has taught me to challenge assumptions and to ask better questions.

  • Ariel Olaiz with ePesos co-founder Oscar Robles

    What advice would you have for current or future Ross students?

Learning to slow down is a skill. We live in a world where everyone wants something right away. People want their products delivered the same day. People have access to information on a live basis. People want to see ridiculous results YR1 (think about VC valuations and growth expectations). The reality is that there is tremendous power in slowing down. Slowing things down allows you to make better decisions…unsure about a certain decision? Sleep on it and let time give you more clarity of thought. Slowing things down allows you to nurture relationships in a better way. Slowing things down allows you to put your head above the water and think 2, 3, 4, 5 years from now. Slow and steady wins the race.

Think Big, Start Small, Act Now. Students and professionals in general, need to have a bias for action. Whatever it is – launching a new product, starting a new company, learning a new skill. We need to have the confidence to think big and the courage to start with a simple action, whatever it is. I’ve seen this a bunch, what starts out as an idea, can morph over time into something amazing with small and consistent effort, but you have to start!