How two college friends built Prepay Nation into a $100 million business by exploiting opportunities that only immigrants could see.
Immigrant entrepreneurs Anurag Jain and Ajay Goyal, have built Prepay Nation into a $110 million company in a few short years, making it one of the fastest growing companies in the United States. How did they do it? Of course they worked hard and watched every penny as the company grew, but the most important ingredient in their success is something available to every newcomer that lands in America looking create a new life. We like to call it their “Immigrant Advantage.”
Anurag Jain and Ajay Goyal grew up in India and understand the culture there as well as here in the United States, and that gives them an Immigrant Advantage which has allowed them to multiply their opportunities in America.
The Immigrant Advantage
Coming from another country has its advantages because immigrants see opportunities – or relationships – that others are blind to. With the right idea, it’s almost as if the rules of arithmetic no longer apply. Instead of one plus one adding up to two, the result might be a million times larger. In other words, an Immigrant Advantage can be a great multiplier.
Anurag Jain realized this could be a unique business opportunity — things that native-born Americans probably did not notice, or, if they did, understand their significance. He came up with the following observations:
- India, and other developing nations, often have poor communications infrastructure.When the cell phone revolution began in the 90s, there was only a 10% penetration of telephones in India. But fifteen years later, cell phones had a 70% penetration, twice that of the United States. So today, people in India communicate with cell phones instead of landlines.
- Most people in developing countries don’t have bank accounts or access to ATMs:Banking in India is the same situation that telephones were in 15 years ago. Only 30% have access to a bank, and there are hardly any ATMs. Also. very few people have access to credit or debit cards, so most people use cash for everything.”
- Immigrants and guest workers overseas frequently send funds to their families back home to pay for cell phone minutes and other basic necessities, but wiring cash in small amounts is very expensive and can even be dangerous.If you want to send small amounts of cash to some countries, it’s a problem. Everyone knows where the money is to be picked up and so people get robbed when they go to pick up the cash. Besides, if you’re wiring small amounts — as immigrants typically do — the fees for Western Union and similar services can be prohibitive.
- Funds sent home by workers in the U.S. are not always used for the goods and services intended.One of the challenges that people have is that they don’t have any control over how the money is spent if they send money back home; let’s say $500 to Mexico. The $500 is supposed to be for the wife to buy food, clothing etc. for the kids in Mexico, but the money might get used for something totally different. In the end, the basic needs will still be unmet, and in two weeks the wife would call and ask for more money.
A Game Changing Idea
The founders of Prepay Nation looked at these trends and realized that something revolutionary was beginning to happen, a trend that was “disrupting” the old way of doing things. Says Anurag Jain, “Everybody has a mobile phone, and commerce has started to happen through them. Most mobile operators overseas are now implementing mobile wallets and that’s how commerce will be done in the future. People may not use Visa, Amex or MasterCard, but they will use their mobile phones to buy groceries, clothing and other things.‘
Why did two young men from India come up with this hundred million dollar idea instead of someone at AT&T, Verizon or American Express? Because Anurag Jain and Ajay Goyal grew up in India and understand the culture there as well as here in the United States. Understanding both cultures gave them an Immigrant Advantage which has allowed them to multiply their opportunities in America.