What it is:

Venmo is a SMS-based Payment Platform that helps you exchange money with the people you trust. The company was founded by Iqram Magdon-Ismail and Andrew Kortina and is based in Philadelphia/New York City.

What Personally Excites Me

The people and the platform. This is a classic example of investing in the entrepreneurs (while also loving the idea and the execution of the concept). Gary and I met with Iqram, Kortina, and a friend of theirs, Shreyans Bhansali, late night in NYC back in February. After spending a couple of hours with that group riffing and getting a vibe for their vision, Gary and I were essentially sold. Mind you, at this time Gary and I had little-to-no experience using Venmo. In the days that followed I got to play around with Venmo and showed it to some of the crew at VaynerMedia… that all but sealed the deal in my mind.

How we’re using Venmo at VaynerMedia

Since learning about Venmo I made it my mission to get our whole office on-board. As of today, every employee has a venmo account and I envision this helping the exchange of money for lunch and snack trips in the most phenomenalist (a word?) of ways. Employing Trust between friends is key for this process. Trust, in Venmo terms, is the ability for two Venmo users to freely exchange money without either side approving individual transactions^. Before you run away, it is worth noting that all transactions are reversible and the exchange of money is capped at $500.

^Editors Note (@drzhang): To clarify, you can exchange money on Venmo without “trusting,” but each transaction will need to be approved.  In this example, if Sam had never “trusted” AJ, AJ still could have texted “charge gosam 1.50,” but would have had to wait until Sam confirmed Venmo’s follow-up text before receiving the money.  With trust, invoices will go through automatically and without confirmation texts.

Real World Use Case:

Sam and I made a quick trip to the Hudson Square Cafe to grab some candy / chips / and drinks. During said trip Sam came to the realization that he had little to no cash on him and that the ATM at the Cafe barely works. Using Venmo, I simply bought Sam’s drink ($1.50) and sent this text to the Venmo short code:

Seamless.

* Also worth noting, I would have never asked for that $1.50 before Venmo. I would have simply paid for our snacks and told Sam not to worry about it. +1 for the guy who rarely collects!

What do you think of Venmo?

Would love to hear your thoughts in the comments section below.

Want an invite to Venmo?

If you would like an invite to Venmo shoot me an email at aj [at] vaynermedia [dot] com with your phone number and I will send you an invite ASAP.

As I joined the ranks of the miserable, I grappled with the fact that I had moved clear across the country and spent 4 years of my life, hours upon hours, pursuing this topic. I was good at it. How could I now hate it? Clearly, I had too much personally invested to just quit! Surely things would get better when I finished the PhD, or got that first Post Doc position, or the first real academic job, or finally earned tenure some 6 years after that. This pattern of thinking is extremely dangerous and irrational, yet all too common in life and in business. And it took me months to get a grip on it before I packed up and left.

Behavioral economists call this tendency the Sunk Cost or “Concorde” Fallacy (Concorde after the exorbitantly expensive sonic Jet project undertaken by the French and English governments). When making a decision we ought to be concerned with how best to allocate our current and future resources—be they money, time, or effort. However, as is often the case in Economics, oughts and is’s are not the same. Instead of behaving optimally, we tend to focus on decisions we’ve already made, money already spent, time already elapsed. And we make poor decisions.

This concept itself is far from a new one, but I hope my story will resonate for some of you. When you know in your gut that your current course is doomed, gather the courage to combat this fallacy. In my case it was about changing careers, and as our own Gary V writes in Crush It!, there are options aplenty for anyone who can identify their passion. But I think there is also a broader message for entrepreneurs and businesses. If your website doesn’t convert even though you paid some hotshot a lot of money to make it look snazzy, it’s time to fix it. If you are marketing a product that doesn’t make sense for consumers, move on. If your business model is broken, you know deep down that the little tweaks are not the answer. Re-think it or start anew.

What are you invested in that you ought to abandon?

The round included Sequoia Capital, Ron Conway’s SV Angel, Betaworks, Digg co-founder Kevin Rose and Flickr co-founder Caterina Fake.

VaynerMedia is also proud to announce that we were also a part of this round of financing. We are excited to be working with DailyBooth co-founders Ryan Amos and Jon Wheatley and see a bright bright future for the company.

Congratulations to Ryan and Jon. If you haven’t heard of DailyBooth or aren’t signed up, it is absolutely worth a look. For reference, you can find the official VaynerMedia DailyBooth account right here.

A few more accounts you might find interesting:

Kevin Rose, Ashton Kutcher, iJustine, Brittani Taylor, and our very own Gary Vaynerchuk.