The Executive Interview Series provides readers with exclusive insights from movers and shakers in the payments industry. The Payments Industry is under continuous transformation, as such this series provides diverse perspectives on everything from strategy to payments technology and to the future of the industry.
In this interview, TSG’s Market Intelligence team-member Alex Ferguson sat down with Zuza CEO, President, and Founder Danny Mikhail to learn more about him and his journey as an entrepreneur in the payments space with Zuza.
BACKGROUND: A staunch and passionate entrepreneur, Danny Mikhail started his first business in high school, and has subsequently established and led a successful string of ventures. During his 20+ years in business, he has served in various executive roles such as CEO, President, CRO, Chairmen of the Board, and multiple Board Advisory Roles. Primary industries of focus have been Financial Technology, Enterprise Software (SaaS/PaaS), Real Estate Development, and startups. Currently, he serves as CEO & President of Zuza, a business management platform helping merchants expand their businesses. Zuza has quickly grown across North America, with thousands of users ranging from hotels, restaurants, retailers and health and beauty.
Q: Alex FergusonYou have an interesting career history, tell me about how you became one of the youngest in age to own a Papa John’s Franchise.
A: Danny MikhailI was always an entrepreneur at heart. I began my first business during high school and saw a lot of success, so much so that I held staff meetings during our school lunch breaks. While that business grew I also began investing my earnings pretty heavily in the market. I began skipping class to day trade; online trading didn’t exist, so sneaking out of school to head to the bank wasn’t that easy. Eventually by my senior year in high school I had enough earnings to look forward to my next venture and decided to look into a franchise. Right after high school graduation, I bought a few Papa John’s Pizza locations. In a short time, we owned and managed close to 20 stores before a larger outfit acquired all of my stores.
Q: Alex FergusonSo, how did you get into the payments industry?
A: Danny MikhailWhile owning the Papa John’s, we used to get inundated with merchant service reps calling our stores and walking into our businesses. That, along with the industry’s poor reputation, sparked my interest. I saw a huge opportunity in payments, and I was already on my way out at Papa John’s since we were wrapping up the acquisition. The timing was perfect to transition into a sector I was really fascinated with, and in which I saw a lot of opportunity to improve and make my mark.
Q: Alex FergusonZuza has an interesting sales approach among software-based POS companies, selling primarily to ISOs as opposed to directly to merchants. What advantages do you think this model provides over other competitors who go directly to the merchant?
A: Danny MikhailThe advantages are very clear and simple: we don’t compete, we compliment. We give our Partners – the ISO’s, Banks and VARs – a software of their own by white-labeling the Zuza Platform. They have a unique offering to separate themselves from the ever-increasing competition in the payment space. The most significant advantage is to our partners; it’s a quintessential win-win.This ideology goes back to my vision years ago when I used to be in the payment space before I was again acquired. I remember struggling to find a software company that was about helping out the ISO instead of competing with the ISO. I literally remember thinking, “imagine a software or POS System that didn’t compete with ours sales force, but complimented our salesforce, and we both can reap the benefits.” Zuza was born shortly thereafter on the principle: why sell a competitor’s brand, when you can sell your own?
Q: Alex FergusonMost software-based Business Management and POS systems typically focus on one or two merchant verticals but Zuza has a wider vertical focus. How do you manage and/or implement industry specific functionality for each business type?
A: Danny MikhailLet me first say that focusing on one or two verticals is certainly the easier way to go when developing a software. But like I tell my kids, nothing great comes easy, and nothing easy can ever equate to greatness.The reason we chose not to go the route of focusing on one or two merchant verticals is simple. Unlike most software companies who enter the space, I was already in the space for many years prior to starting Zuza. Zuza was custom-designed and built for ISOs and payment experts within the space.Most ISOs have a diverse merchant portfolio, consisting of everything from hair salons, bike rentals, business-to-business, mechanics, restaurants, hotels, doctors and much more. For these ISOs to learn and then teach their sales agents and partners how to sell and service 30+ software to 50 verticals is nearly impossible.Zuza did the impossible: we created the world’s first software platform for 50+ verticals, with thousands of features that can simply be turned on or off as needed with one click. And, it can be white-labeled for the ISOs and Agents. We make life easier for our partners; they only need to learn 1 software and can refocus their efforts back to sales and growth. Hence, the Zuza slogan: “The only software you need, moving your business forward.”
Q: Alex FergusonWhat is one thing about Zuza that you wish more people knew?
A: Danny Mikhail30% of our partners white label our software to focus on a specific niche. For example, one of our partners focuses on pet groomers, animal hospitals, anything animal related, and his organizations app was specifically branded around that vertical. Another partner of ours branded there app completely around Thrift Stores across the country, since they are a consulting group that only focuses on that vertical.A lot of people come to us needing a software branded around a specific niche and not necessarily their own company. Very niche markets with our solution have seen tremendous success primarily because of the way our software platform was designed and built.
Q: Alex FergusonBuilding a software company of any kind is a difficult task, what has been your greatest challenge in getting Zuza to where it is today?
A: Danny MikhailYou’re right, Alex, software is a beast and we certainly have had our ups and downs. However, I would say the biggest challenge has been building a complex software while ensuring it remains very user friendly. When you have features such as calendar and appointments, invoicing, time and attendance, loyalty and rewards, advanced inventory, customer management, marketing, true cash discount and surcharging, and much more, you can imagine that it’s not an easy feat. Our biggest challenge is also one of our biggest successes.
Q: Alex FergusonWhat do you view as your greatest/most impactful accomplishments at Zuza?
A: Danny MikhailOften times we sign a merchant in a very specific niche that has used multiple software before but felt like those had failed them. They inevitably gave up until they discover our solution. Most recently, we had a client that was a bike rental/repair service who also had a monthly payments option model for long-time clients. What he needed was a very complex business management software. Within a matter of minutes, we configured the software around his needs and got him up and running the next day. Few days later, the owner called saying we solved a 20-year battle and issue, and he can finally run his business stress-free. We get calls like that all the time and knowing are helping our partners achieve success helps us all appreciate what we do for a living. It’s the best feeling.
Q: Alex FergusonGenerally speaking, where do you see the payments and POS industries going in the next 5 years, especially amongst the COVID 19 crisis that we are witnessing?
A: Danny MikhailIronically enough, even prior to this pandemic I had gone on the record saying that the landscape of the payment space was going to look completely different in the next 3-5 years. Now that COVID-19 struck, the landscape will evolve to the next stage even quicker than expected. Gone are the days of the ISOs and agents who want to sell terminals, legacy software and anything that doesn’t offer true value to the merchant.If all you’re looking to do is sell payments, you will struggle finding interested merchants.And the same can be said for those merchants who are unwilling to change with the times. Zuza has seen surge in sales over the past couple months during this pandemic. Features like curb side pick-up and delivery, invoicing and contactless payments, cash discounting and surcharging, calendar appointment for mobile trade services, and much more, are all in high demand. The merchants who had already using our platform simply turned on these features as they needed them. The merchants who were using a brick terminal or a simple software struggled to adapt.Things will never be the same again; companies like Zuza who can scale with the merchants and their evolving needs are at a strong advantage.
Q: Alex FergusonAlong those same lines, the M&A payments space was quite active last year. With the current crisis, any thoughts how this environment (M&A) will play out for the remainder of 2020?
A: Danny MikhailEven prior to the COVID-19 situation, I think a lot of people were expecting a market correction and a slow-down of some sort. So, whether it was COVID-19 or something else, a correction was bound to happen this year or next. That would inherently result in a slow-down in the M&A space.However, even though I think we will see a massive slowdown in M&A activity in our space for a couple years, I don’t think it will completely disappear. I still truly believe FinTech is one of the most essential sectors around, no pun intended.
