599: They Rejected Her Idea, She Turned it into a BILLION Dollar Business | Suneera Madhani (Best of Foundr)
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this compelling episode, Nathan Chan interviews Suneera Madhani, co-founder of Stax, who transformed a rejected workplace idea into a billion-dollar fintech unicorn. (00:49) Madhani shares how she went from selling credit card terminals out of her Volkswagen Beetle to building the first subscription-based payment processor, now processing over $25 billion in payments annually. (41:54) The conversation covers her journey from immigrant family entrepreneurship to raising over $500 million in capital, including the pivotal moment when she declined a $17.5 million acquisition offer that ultimately led to an 18x return for early investors. (21:58) Madhani also discusses the strategic rebrand from Fat Merchant to Stax, the importance of building genuine investor relationships, and her philosophy that execution trumps ideas every time.
- Main Theme: The episode focuses on building a fintech unicorn through scrappy execution, strategic decision-making, and the power of trusting your instincts in high-stakes business situations.
Speakers
Nathan Chan
Nathan Chan is the founder and CEO of Foundr, a global media and education company that helps entrepreneurs start and scale their businesses. He's built Foundr into a multi-million dollar platform serving hundreds of thousands of entrepreneurs worldwide through digital magazines, online courses, and coaching programs.
Suneera Madhani
Suneera Madhani is the co-founder of Stax, a billion-dollar fintech company and the first subscription-based credit card processor. She's a three-time founder, Fortune 40 Under 40 honoree, and creator of CEO School, a community of over 300,000 women in business. Coming from an immigrant family background, she built Stax from processing $5 million in its first year to handling over $25 billion in payments annually, raising over $500 million in capital along the way.
Key Takeaways
Leverage White-Label Solutions for Rapid MVP Development
Madhani demonstrates the power of using existing solutions to validate business concepts quickly. (11:34) Instead of building custom technology from scratch with limited capital, she partnered with banking institutions to use their white-label solutions for her first 250 customers. This approach allowed her to test the subscription payment model hypothesis without massive upfront investment. The lesson here is profound: don't let perfectionism prevent progress. By using existing infrastructure, she could focus on customer acquisition and product-market fit rather than technical development, ultimately building the platform with customer feedback rather than assumptions.
Digital Marketing Can Level the Playing Field Against Established Competitors
When traditional payment companies relied on bank partnerships and physical locations, Madhani invested her first $500 in Google PPC and built a website. (13:49) This digital-first approach allowed her small startup to compete with industry giants by capturing online market share that established players had ignored. The key insight is that new markets often emerge in spaces incumbents overlook. By being early to digital payment marketing, she achieved a $1-to-$10 return on ad spend and built a sustainable customer acquisition engine that scaled with the business.
Trust Your Intuition Even When Others Disagree
Madhani's decision to decline the $17.5 million acquisition offer in 2017 exemplifies the importance of gut instinct in business decisions. (22:02) Despite board pressure to accept the deal, something felt wrong about the cultural fit and strategic alignment. Her intuition proved correct when the acquirer retreated to $12 million, and she ultimately achieved an 18x return for those same investors who wanted her to sell. (27:09) This teaches us that data and financial projections are important, but the human element of decision-making—your instinct about people, culture, and timing—often provides crucial insights that spreadsheets cannot capture.
Focus on Execution Over Ideas
Madhani emphasizes that "there is no such thing as a billion dollar idea. It's only a billion dollar execution." (31:11) Her success came not from having the perfect concept, but from consistently executing on customer acquisition, product development, and strategic partnerships. The subscription payment model wasn't revolutionary—the execution was. This principle applies across industries: ideas are abundant, but the ability to execute consistently, iterate based on feedback, and maintain focus while others chase shiny objects separates successful entrepreneurs from dreamers.
Build Investor Relationships Before You Need Capital
Rather than treating fundraising as a transactional event, Madhani cultivated relationships with investors over multiple years before asking for money. (33:35) Her Series C investors were people she'd been building relationships with since her seed round. She compares it to dating before marriage—you need to build trust and mutual understanding over time. This approach not only makes fundraising easier but also ensures better strategic alignment between founders and investors, leading to more supportive board relationships and better business outcomes long-term.
Statistics & Facts
- Stax has processed over $25 billion in payments to date, demonstrating the massive scale the company has achieved since its 2014 founding. (41:54)
- The company raised over $500 million in capital throughout its growth journey, with Madhani noting this achievement as part of building a unicorn-status fintech. (00:49)
- In their first six months of operation, Stax processed over $5 million in payments, showing rapid initial traction despite starting with less than $50,000 in initial capital. (10:42)
