Desiree Vargas Wrigley, TechRise

Thank you for tuning in to today’s TL;DR episode of the Breaking Changes podcast. I’m your host and Chief Evangelist for Postman, Kin Lane. With Breaking Changes we explore topics from the world of APIs, but looking at it through the lens of business and engineering leadership. Joining me today we have Desiree Vargas Wrigley, CIO and Executive Director of TechRise by P33 Chicago, and she’s also the founder of GiveForward and Parachute. Desiree really opened my eyes to the innovation that’s occurring within Chicago, and I helped widen her view of the role that APIs play in empowering local startups to make a bigger impact. Well, let’s dive in, and let’s start with the basics. Who are you and what do you do?

I’m Desiree Vargas Wrigley, and I am the Chief Innovation Officer and Executive Director of TechRise by P33. But prior to that I was a two-time founder. I am one of Chicago’s few Latino founders that have raised over a million dollars, I think there’s only three of us. My first company was GiveForward, it was one of the first crowdfunding platforms, we helped people raise about 200 million dollars and ultimately joined GoFundMe. And then my second company, Parachute, is a kids’ activity marketplace that some people may have seen on a Shark Tank a few years ago. So lots of startup experience.

Exciting, yeah. The startup world and enabling folks to build that next generation of tech is pretty key. I think a lot of people associate it with Silicon Valley, but there’s a lot of energy and momentum in doing it locally, right?

Yeah, in Chicago really. Our national reputation, I don’t think, is keeping pace with what’s actually happening here, and that is that we have just an explosion of funding and startups. I think we did seven billion dollars last year in venture capital in Chicago, and I think we were the fastest-growing venture market in the country, which most people just don’t realize. And then, I think more importantly, we actually are the number one city in the US for early-stage funding for Black and Latino founders, with, I mean it’s only 13%, but compared to the rest of the country where it’s like 1.9%, we are seeing meaningful growth.

So what type of tech companies are you seeing emerge?

So Chicago historically has been kind of a fintech, SaaS, and food-delivery place, and so anything consumer was tough, anything that kind of served an audience that wasn’t the typical one percent or kind of cool white male audience was difficult to fund. But now we’re seeing a range. There’s definitely a lot around consumer fintech in Chicago just because of our history with the Board of Trade and how many banks we have in Chicago. There’s also a lot around logistics and supply chain, which now is extending into clean tech and ag tech. So I would say we are kind of a silent but aggressive space for anything in climate and sustainability. Actually Valor’s fund just has a new sustainability fund that they’re doing in partnership with Starbucks, and that’s I think a 200 million dollar fund here in Chicago just focused on sustainability, so lots happening there. And then we’re actually the number one place for quantum research, and so we’re thinking about what does it look like a decade or two decades from now to be potentially the world leader in quantum, what does that mean from a startup perspective, from a funding perspective, and from the type of corporate partners that we’ll see come to Chicago for that work.

So it sounds like that’s quite a spread of building on the existing base of what Chicago is serving, the needs of what real-world Chicago folks need, but also an eye towards the future, investing in quantum computing and other areas. That sounds like a pretty sustainable spread of investment.

Yeah, we hope so. And it’s also really exciting just to see that, I mean, 35% of our startups are started by women. Women are 45% of the working population, so we still have a way to go for parity on that, but it really is becoming a very representative and inclusive startup ecosystem, which I think means we’re going to see a lot of new scaled businesses that are in consumer, in health tech, and fintech focused on women, that are going to come out of Chicago over the next few years.

Those real-world needs that women and folks from underserved portions of the population are going to need when it comes to fintech and healthcare, what are some examples of that that you’re seeing on the ground?

Yeah, we’re seeing everything from like an insert, a sports shoe, one of our students here at IIT is developing a smart sole that can help student athletes better train but also avoid pain and injury. So we’re seeing the hardware side of things. We’re seeing things in hydrogen storage and making that more efficient for the trucking industry. We’re seeing something like Crypto Mom, which is bringing crypto, basically kind of doing what Stash or Acorns did for the general population but making crypto more accessible for young women. We’re seeing a lot happening in mental health, actually. So Alchemy is working on mental health support for Black Americans, and Stigma is doing asynchronous video support for Gen Z and millennials to have better on-demand health and mental health support. So there’s so many, we work with like 250 startups. Rendering is a really cool new tool, basically you can film yourself on Loom but then you can get crowdsourced feedback on your pitches, so you can use it for your startup or for your sales pitch or anything that you need to refine over time.

Yeah, and as long as there’s value in what’s being delivered. We’re getting food to our home from a restaurant, from a grocery store, we’re getting the entertainment, the experience, things that matter to us, that matter to us locally I would say, in our actual everyday lives, then we’re fine paying those fees and seeing how it works. But the apps are going to have to figure out how to democratize this a little bit more than I think the last round, so I’m hopeful, if we get the right founders, that we’re going to be able to find that balance.

I agree. One of the things I’ve been really beating a drum about lately is, we have this American Express kind of shop-local Saturday, we know about shopping on Main Street, but in a city like Chicago we actually don’t know what startups are here to buy from, and we’re not buying from our local startups. And even if the startups just bought from each other it would amplify sales so much. So we’re working on something that’s not built yet but called ShopShy.org, where people can just easily see what startups they can purchase from in Chicago, from consumer to B2B SaaS for their businesses. So actually you guys help in figuring out how to make that a streamlined experience, so maybe.

Yeah, no, it would be interesting to see. This is another one, so aside from the show, you and I have been kind of brainstorming on other ways of telling the story of not just local Chicago startups but the existing APIs or solutions that can be used and leveraged. So calendaring, you mentioned some of the video and social aspects and influencer, I think there’s a huge opportunity to showcase existing APIs and existing tools, but be more transparent about who the founders are, where they’re located, and have that solidarity among founders, and whether it’s B2B or B2C, encourage folks to support each other.

Yeah, absolutely. And one of the trends that we see for first-time founders, kind of moving into this topic more, is that we see founders thinking that they have to build everything from scratch, like they have to build a calendaring tool like it doesn’t exist, and so I’m going to build this app to solve the problem, when really the truth is that you need a great developer who knows about all of the different resources, as many as they can, or is willing to do the research to figure out what APIs and third-party tools are out there that you can put together, especially at the MVP stage. But then I would also argue that as you continue down your product roadmap, looking at third-party tools to speed up the process and lower your costs, it’s just getting more and more affordable to build new things when you do it this way. And so we’re really trying to encourage our founders to think differently. In fact, we have a grant from Verizon to help founders, you have technical consultations and think about what existing technologies are out there already, but also how can they think about things like 5G in their build and not be constrained by the old capacity limits that were there.

I think that’s an important one. So we’re working on a calendaring narrative right now for this other storytelling, but I think building directories or networks where people can A, learn about the existing APIs that exist, because you should not be reinventing the wheel. Some wheels you can’t reinvent, mapping, that’s a tough one, you should use Google Maps or Mapbox or one of these others. But then also, what are the core resources that you should be using when it comes to payments and other things that aren’t always available locally? But then what are the local resources that you can use that are going to maybe augment these calendaring apps and make appointment and scheduling much easier or more specific to whatever industry you’re working in? So what’s the local component, and then where are the gaps, and give voice to these local founders a little bit more to go, man, if I just had something that would aggregate my calendaring or do my payments in this way, and then give opportunities for other people to step up and fill in those cracks locally and provide those solutions.

Yeah, absolutely. Those gaps end up being really big businesses when people fill them in, especially when it’s B2B. So just from a new business creation perspective, or a new product element, having that conversation is really smart. You’re giving me a lot of ideas, I’m actually going to now organize something with our startups, what problems are we solving manually still that we could be better solving with APIs and existing technology.

Yeah, I mean, part of what you’re grooming people to be ready for when it comes to being startup founders, what they need to learn and do and understand, is one of them is, it doesn’t have to be the next Facebook or massive startup, it could be a micro-startup that is connecting the dots in a special way, in a meaningful way that really augments an existing API or solution. So one thing that folks don’t understand about APIs a lot of time is talent acquisition is one of the number one reasons for having an API. Like PayPal, these other companies who are pretty big and established, they have an API because they can watch who uses their API and what they’re building with the API, and they go, well, what you’re doing clearly, you already know our platform or know our product, you seem motivated, you built this really cool tool or plugin or extension that connects the dots and you already have people using it, well, why don’t we just hire you? And so talent acquisition is the number one reason for having an API for companies. And so this seems like an area that we could educate and inform potential startup founders to go, hey, look, just build interesting things in Stripe’s ecosystem, in Twilio’s, and solve a real-world problem that you face in your world, and then someone’s going to notice.

That’s such a good point, and I haven’t thought about it from a talent acquisition perspective, but as you were talking, also from an M&A perspective, it seems, if you want to have a few doubles, singles, triples, and lots of zeros in your bank account, it seems like a very low-cost way to get acquired, so smart.

Well, that’s why Facebook acquired Instagram. Guess who was the number one image platform in the Facebook ecosystem? It was Instagram, so they acquired them. So this is a great way, it doesn’t have to be its own standalone app, it can be a browser extension, it could be a plugin. So getting creative, it’s like you said earlier, we have enough apps on our phone, get creative in how you’re actually solving problems, it doesn’t have to be a full-blown platform or app.

So, yeah, maybe we should explore this as part of our further conversations and see what we can drum up.

Yeah, absolutely. So the kids’ activity platform Parachute that I have, it’s winding down unfortunately, just a victim of COVID and a really messy cap table. But as we’ve been talking before, thinking about, if I had built it first as an API-first tool. Listeners might not know much about the kids’ activity space, but it’s a 170-billion-a-year spend category for families, and there’s no marketplace for it, so it’s a pretty massive opportunity if done correctly. But the challenge of the industry is that, unlike in restaurants where OpenTable or Toast are kind of predominant, there’s no single registration platform or software, there’s about 200 different registration platforms and software, all operating on different code, very few of which have APIs and almost none have open APIs. So to be able to aggregate that data is very difficult, and so it was very hands-on, going and settling with each individual provider. But once we had all the information, if we had an open API, we actually could have gotten so much more volume of visitors through this explosion that is the mom blog sites that have all these calendars on them that they’re all making themselves in WordPress. So if anyone’s listening, you should take this and then come ask me for funding so I can fund you, because I can’t build it right now but I would love for the problem to be solved.

Yeah, that seems like a pretty big opportunity. Like Plaid, in the banking industry there’s not a lot of APIs because, well, there’s a growing number of APIs, but they’re not open APIs as you said, they’re closed APIs, and they don’t want to give access to them because they see the data being critical. So Plaid started doing a lot of scraping, and that’s kind of the dirty secret of the fintech space, is you have to scrape a lot of this from people’s banking account screens and stuff. So it sounds like there would be opportunity like that in this space for someone to come through and connect the dots on some of these providers. But you touched on API-first being a really critical piece. As a startup founder it’s difficult, you’re going to have to pivot, you’re going to have to at some point change and shift and evolve to find that market fit, and if you’re API-first that’s much easier to do than if you just built your identity around a mobile app or something. So being API-first, using other existing APIs, or scraping, or creating what’s called scrAPIs, is a very common way of starting a business until you get some traction, and then you can build your front end and do a lot more. And that’s the Twilio model, that’s the Stripe model, it just needs to be applied in other areas that matter.

So I have a question for you, slash, I guess the audience, that they can’t answer, but how do founders find experts in APIs? Because they’re not thinking that way, they’re thinking about who can build the vision that I have that’s going to touch the consumer, and they’re not thinking the other part, it’s scary and unknown, and they don’t know if they’re finding someone good. So where do you find a great API expert?

A great question, and I do not have a good answer for you. There is not any good way to understand and find people who are experts in APIs. I’ve spent a decade trying to cultivate folks who are specialists in healthcare or environment, because there’s APIs in many different disciplines, but you need that evangelist, that person who knows, well, you should be using this, or, when it comes to SMS, Twilio is great, but hey, there’s also these providers, and depending on your needs can help you find the solution that you need. And then I really like your idea of the local component, it’s like, well, shop, use your local APIs, or at least regional, that maybe aren’t built in another country or totally out of state. So there isn’t any good way of doing that, and that’s something I need to work on.

Yeah, if you could filter your directory by location, that seems like a first step.

Right, add it to your list of things that you need to do.

So I was very lucky with Parachute that, when we first built, we were using outside devs, but we kind of acqui-hired a competitor out of San Francisco, and the CTO there was on the API team at PayPal prior to starting. So we did tap into a few, including the Groupon API, to be able to bring meaningful content onto the site. But it was so hard receiving all of this data, and things broke all the time, especially with like the Mindbody API that is like 800 years old. So I’m also curious, how do we put pressure on people with these APIs to make them more stable so that they’re truly usable by the community?

Wow, you’re such a great person to interview for this podcast, because that’s the notion of breaking changes. The most popular notion of it is Mark Zuckerberg saying move fast and break things, which is great sounding when you’re in VC circles or young white male circles and you’re building a startup, but when you’re people who are dependent on that API for your local business and you have to keep up with those changes, and then those breaking changes are uncommunicated changes, and it’s actually kind of a strategic tactic. Those who are able to keep up with me as a startup who are dependent on our resources, those are the ones who win, and those are usually the ones who are inside my inner circle of partners. So we’re talking to that group and letting them know, hey, wink wink, our API is going to change and you’re going to have to change your code, but those who are not in the circle don’t get that, and you end up with an unreliable, untrustworthy API. So this is partly technical, and that’s what Postman does, is help people test and make your API more reliable, monitor it and understand it, but it’s also business and politics, and this is what Facebook is being investigated by the FTC right now for, is their anticompetitive practices in their API ecosystem, most notably Instagram and WhatsApp. So this is what we do, and this is one of the areas that I’m trying to focus on, and it’s why I ended up talking to you. How do you build APIs that compete at this level, and build startups that compete with this, because there’s a lot of anticompetitive practices and we need more people in these API ecosystems aware of the APIs, using them, building on them. So I would say for any of your startup founders, one, you and I should work on more storytelling around how to get people more API-aware, but if there’s a resource you need, Google it plus API, the word plus API. So it’s payments, search for payments API, if it’s calendaring, search for calendaring API, look at those companies, do your due diligence on who they are. A lot of these are available in the Postman API Network, you can find them, but look around the community, because there’s usually going to be someone in the community that’s knowledgeable, active on the forums, active on Twitter, identifies in some way, hey, I work on Shopify’s API, and self-identifies, and get to know those people. But I think we need a lot more work to educate people about APIs, why they matter, why they’re important, especially at the local level.

Yeah, no, you’re absolutely right. And something that you said is critically important to maybe a reason that people are scared of APIs, is that the business decisions around opening and closing access. So when Eventbrite took off their API access for anyone that wasn’t Facebook or had a certain level of sales, we lost a ton of inventory on Parachute, which was disappointing to our customers and to us, and there was no other way for us to get, I’m sure that’s not true, we probably could have scraped and did something fancier than I was capable of leading at the time. But going back probably eight years, with GiveForward, the crowdfunding platform that I helped build, we were so dependent on Facebook for our traffic, because that’s how people promoted their fundraisers, and we benefited from Facebook so much because as Facebook transitioned from static posts to a feed, from a wall to a feed, we saw a lot of growth in our business, and so grateful for that time. But when they turned us off, or basically de-prioritized anything that looked like fundraising, we lost half of our revenue in a month. And it’s Facebook, so of course they don’t care about small businesses like ours, I mean, we’re five million a year in revenue, not that small, but it’s small relatively. It can have a really damaging effect, and so knowing who your customers are of your API and thinking about ways to transition them, warn them better, is definitely a responsibility that comes with the power of an API.

Well, this is something you and I are going to have to tackle in the storytelling we’re doing outside of this show. There’s the last wave of API startups or tech startups, it’s all, as I see it, APIs have been built on the backs of, so think of it like the early environmental and mining and extractive resources, so trees, mining, these large companies went around to small towns, mined their forests, hired the people, built up these communities, and then left, and left a lot of people destitute. So what’s happened in the digital economy is Google Maps went around and said, hey, we have this open and free service, please everyone use it, put your data in it, local communities, embed your map. Oh hey, Facebook, yes, build your networks, build your groups, do your calendar. And Eventbrite, hey, manage your event. So all of these went around and got local people dependent, doing the work, building that data that made them a platform, that made them a growing concern, and then when it didn’t matter anymore, you just turn off the switch to those people and you focus on the partners that matter. And so one of the things that I’ve always been a big advocate for, and I would like to do more, is the local ownership and the local stewardship of startups and what your fund and what you’ve been representing, but at an API level, is we should own the local data. We should own all the mapping, all the business, all the events, all the things that should be available via APIs that are locally owned and operated, maybe using open source software like Eventbrite but open source, or some sort of social network but open source, but then local stewards own that, run that, and then the big companies who want access to it can come and pay those local providers for access to their data and use it. It should have happened in the reverse, but it didn’t, because we didn’t really see it coming. And so I think that’s where I would like to go with you next as far as storytelling is, continue that and really get that solidarity among local Chicago folks understanding this, that what’s needed here.

That’d be great. Maybe I can bring on one of the founders of Eventnoir, who is a competitor to Eventbrite and specifically focused on Black community culture and arts, and I don’t know that they’re building with us in mind, so maybe we can kind of real-time discuss why this is necessary and just get their perspective and have that aha moment, if they haven’t already started thinking about it.

Yeah, no, helping founders understand this, it seems like that’s going to be my mining-years mission here, coming out of this relationship, but continuing educating about the local nature as well, and the importance of local ownership and stewardship, and then APIs being part of that. There’s a lot of predatory, and there’s a lot of good businesses, I don’t want to be wrong, but operating at a national level, that would like that information they have in their database and as part of their platform, and they should be charging for that, they should be using that to fund their own startup, their next generation. So yeah, let’s line up a conversation around that.

That would be great, sounds great.

Well, this has been super fun, I love drifting with you, these topics going wherever we go, but sticking around APIs. I mean, I would have never thought I would be having this conversation.

Also thank you for reminding me how often I’ve touched APIs and used them in creating my businesses. No, this is great, I’ve appreciated having you on the show.

Because you’re asking me questions, which I really like, I don’t like it just being me interviewing and asking questions, so you’ve been a great guest on that front, and then everything else that we’re spinning out from this. So, to be continued. I don’t think this is the last conversation we’ll have. Thank you for coming and joining and having this conversation with me.

Well, it was a pleasure, and if anyone follows up with you with an idea for this API for the kids’ space, let me know.

Yeah, definitely. Well, enjoy the rest of your day, have a good weekend, and we’ll be in touch.

Sounds great, you too, bye.

Thanks again to Desiree for stopping by. You can find more about P33 at p33chicago.com, and you can find Desiree on LinkedIn. You can subscribe to the Breaking Changes podcast at postman.com/events/breaking-changes. I’m your host, Kin Lane, and until next time, cheers.