A Student Startup Builds E-commerce on the Blockchain
On this episode of Future of the Business World, we get serious about the future of finance with two high school students who studied with Wharton Global Youth Program in the summer of 2022. Vincenzo Francia and Daniel de Beer are building Diremo, a platform where you can buy and sell physical products on blockchain and Web3. They’ve developed the idea far enough to capture the attention of Sequoia Capital, a venture capital firm in Menlo Park, California. In a mere two years, suggest Vincenzo and Daniel, we will all by paying with cryptocurrency and doing transactions on the blockchain. And with Diremo, they’ll be ready.
An edited transcript of our conversation appears below. Be sure to click on the arrow above to listen to the podcast.
Wharton Global Youth Program: Hello and Welcome to Future of the Business World, the podcast featuring teenage entrepreneurs from around the world. I’m Diana Drake, managing editor of the Wharton Global Youth Program at the Wharton School, University of Pennsylvania.
One of the best ways we introduce high school students to business and finance education at Wharton Global Youth is through on-campus, online and on-site programs. These experiences give us the opportunity to meet students, as well as draw on the Wharton School community to explore challenging and emerging business concepts and industries.
Today’s guests are a great intersection of these purposes. They learned with us on Wharton’s Philadelphia campus – so we got to meet them in person — AND they are innovators in the emerging crypto industry with a business that harnesses the power of blockchain.
Vincenzo Francia, a senior from the British School of Milan who attended our Essentials of Finance program, and Daniel de Beer, a senior at the American School in London and one of our Leadership in the Business World students, are here to talk about their startup Diremo. Diremo is a platform where you can buy and sell physical products on blockchain and Web3.
Vincenzo and Daniel, it’s great to have you on Future of the Business World! This emerging world of finance gives us so much to talk about, and I’m excited to better understand your brand of e-commerce on the blockchain.
You call Diremo the Amazon of Crypto. Can you tell us more about that? Vincenzo, why don’t we start with you.
Vincenzo Francia: Yes, of course. We are essentially building the Amazon of Crypto. And what do we mean [by that]? We’re creating a platform – a marketplace – that enables you to buy and sell physical products using [cryptocurrency]. We currently have over 60,000 products from over 200 shops and sell anything from Taylor Swift’s latest album to car parts for your new car.
Wharton Global Youth: How has the world responded to your Web3 idea? Are you successfully raising capital to grow your business?
Vincenzo: Web3 is one of the most liquid sectors right now in the venture capital space. I would say that our project has received very good traction from a bunch of folks, including industry leaders such as Sequoia Capital, Y Combinator and many respected business angel investors across the globe.
Wharton Global Youth: Daniel, do you want to add to that?
Daniel de Beer: Sure. The biggest response we’ve gotten is that we’ve seen that shops want to leverage Web3 and crypto. And how can they do that right now? With payment processers like Coinbase and BitPay. We can be so much more than that. We can provide them with these Web3-specific features, such as NFT receipts, so when their users buy a product on our platform, they receive an NFT as a receipt and they have that ownership card. There are endless use cases. We have seen that shops are responding very well to our idea because they’ve been wanting a Web3-specific shopping experience and that’s exactly what we are. And that is what the [Venture Capitalists] have seen too. We just got on a call with Sequoia [Capital] today and we’ve seen a lot of interest. Both shops and VCs think that it’s a great idea.
Wharton Global Youth: You got on a call with Sequoia? Wow. That sounds impressive. What did you talk about? Are they going to be supporting you financially?
Daniel: We’re still in talks with them and negotiating. We mainly talked about the technical side, everything from the currencies we’re going to be accepting, the blockchain that we’re going to be using and the onramp and offramp of customers – moving people from using their normal currencies to crypto. And how we can effectively help users make that transition. Our vision for the company is that everyone in a couple of years is going to be using crypto and they’re not even going to be realizing it, because whatever currency they pay with will be powered by the blockchain. That’s what we discussed with Sequoia and our visions are very aligned.
Wharton Global Youth: Vincenzo, how did it feel to be on a call with one of these big venture capital firms?
Vincenzo: I’d say there’s great amount of pressure to that. A call like that can change your future and the future of your startup. I think as a team we handled it responsibly and well. I’m happy and I know that my cofounders are also happy with how the call went. Overall, a positive start with Sequoia.
Wharton Global Youth: You two are from different schools, even different countries. What sparked the idea for Diremo and how did you form your partnership and broader team? What strengths do you each bring to the startup?
Daniel: This idea originally came from Vincenzo when he was running his sneaker resale business in Italy. He saw that people wanted to start buying with crypto and he didn’t have the technical perspective to go ahead with it. So, he and Gabriel had a mutual friend that connected them. Gabriel is our other co-founder who lives in Boston. I knew Gabriel because he went to my school in London before moving to Boston. He’s the software engineer. I was really good with hardware engineering, which is why we got along so well. So while he was writing code, I was building computers. When Vincenzo called up Gabriel, he got me into the project too. That’s where the idea was sparked. Why limit the idea to sneakers? Why not create an entire marketplace for this? Why not bring Web3 to every single industry instead of just luxury items or sneakers. Since then, we’ve been building Diremo.
Wharton Global Youth: Do you have an actual prototype built? Is it functioning as a business? I’ve seen your pitch deck and that you are talking to VC firms. How far along has the idea evolved?
Vincenzo: We have an MVP [Minimum Viable Product] launched currently, which enables you to buy and sell physical goods using crypto. It’s very simple to buy. You just go on a product and you can buy anything you want on our website. Currently not all Web3-implemented features are ready. We’re planning on launching them later this year, as well as our new revamp of our site. That’s going to bring many added functionalities as well as a much more seamless and minimalistic design to make user experience the best possible.
Wharton Global Youth: Amazon for crypto sounds like an idea that others might jump on board with or might be creating something very similar. I’m curious how crowded the market is?
Daniel: There are competitors that are trying to bring crypto to marketplaces. But they don’t have the same perspective as us. We originally started competing with these people. For example, Coinbase or BitPay let people pay with crypto on Amazon or eBay. So, our marketplace wasn’t able to compete with BitPay or Coinbase. They were able to just integrate flawlessly with giant current marketplaces. We changed our business model to integrate more of these features that Amazon or eBay can’t use, such as NFT receipts or redeemables, things like that. Now we are seeing the market get crowded with more and more people wanting to bring crypto to products. But we don’t want to bring crypto to products. We want to bring Web3 and blockchain. There’s a difference between companies that want to use cryptocurrencies – for example, bitcoin and ethereum – and us that want to use blockchain – for example, polygon. Polygon is a chain that can be used to transact any kind of cryptocurrency. We believe in the technology behind it, rather than bitcoin and ethereum. When these big cryptocurrencies fall, we won’t necessarily be as impacted since we are invested in the technology behind it.
Wharton Global Youth: I want to break down a little bit of the language of business here and understand, for some of us newbies, things like NFT receipts. Can you explain it in more detail. What is that exactly?
Vincenzo: NFT receipts are the future of your conventional receipt that you get after you buy something at the supermarket. We’re essentially removing that physical piece of paper with no actual value and giving it value and putting it under the form of a smart contract. We’re essentially putting the transaction on the blockchain, allowing it to always be there and removing risk of potential fraud.
Wharton Global Youth: You underscore that it is becoming easier to integrate with the Web3 ecosystem. Are we advancing toward broader acceptance of business on the blockchain? How would you respond to the skeptics out there? Or even to the fearful who are intimidated by the development of an entirely new financial system?
Daniel: I think that it’s very reasonable to be skeptical of cryptocurrency and blockchain. But, in the end, we do believe it’s inevitable that our entire world is going to be shifting to the chain. Our banking system is highly flawed. There are so many inefficiencies and transaction fees, hidden fees that they don’t even tell you about. Yet they’re necessary for these banks to run. With blockchains such as Polygon there are no transaction fees when we transport ethereum, for example, from one wallet to another. We cannot say that for bank transfers. There are always fees and inefficiencies. When businesses and more shops start realizing that we can save time and money they are going to naturally want to move to blockchain in whatever way, shape or form. We are positioning ourselves well right now for us to be the shopping experience. When a company wants to sell on the chain they’re going to look to us because we are going to have the technology ready for them. That’s the position that we’re going for.
Wharton Global Youth: I see this vision clearly. When will this be a reality for you?
Daniel: To be frank, we don’t know. But we are estimating within two years. Within two years there is going to be an explosion and everyone will be using the blockchain. And Diremo.
Wharton Global Youth: Vincenzo, how will you measure success with your startup?
Vincenzo: That is a very difficult question to answer. I would say there are two big factors that allow me to measure success: the amount of users that are happy with our product and to which we provided advantages to their everyday transactions, and the amount of people we were able to help with Diremo.
Wharton Global Youth: You both had unique experiences with us this summer in our Essentials of Finance and Leadership in the Business World programs. When you’re so passionate about a startup and you have that entrepreneurial energy, how does it fit into the experience? How did Diremo factor into your learning experiences two and three weeks this summer? Did you share your startup with your classmates and instructors? Was there curiosity about what you’re trying to build?
Vincenzo: Whenever we are learning, we think about how we can apply the knowledge we’re learning to our startup and how we can make it better and scale it further. In my case the Essentials of Finance course had a wide range of different topics, including some elements of entrepreneurship and scaling companies, balance sheets, and much more. I’d say that every time, every topic, every lecture, I was thinking how can I apply this to my personal use case in Diremo and what can we do better to optimize our company and scale further.
Daniel: In my case in the Leadership in the Business World program, the most applicable field that we learned about was operations – not specifically for Diremo, but for the shops we’re going to be powering. It was very useful to learn how they run their operations and how we can fit into those operations. So, in the supply chain, if we want to have these NFT redeemables, where you trade around an NFT and at any point you can cash in that NFT, that means that the shop has to have inventory, which will increase their inventory costs. That’s just something for us to think about – handling the shop lower rations. Also, learning from the peers around me. There were countless other startups within my program, so [I appreciated] learning from them and inspiring others.
Wharton Global Youth: One of the questions I like to ask all our guests on Future of the Business World is if you could change one thing in the world, what would it be?
Daniel: Going along with the theme of our youth and entrepreneurship, one big trend I see is that I see these brilliant minds who are hungry for whatever they can get their hands on. And they dedicate their drive and passion towards these arbitrary goals that we as a society have set upon ourselves. For example, just putting their entire effort into getting into a specific college or to create an organization that they’re going to drop off as soon as they leave high school. I think that something that should be instilled in all of us in our education is using our power and our drive for good and that is going to make change. I don’t think we have to start that in college or after college. I think we can start that from the day we are born — doing what we are passionate about and making sure it has a good impact on others.
Vincenzo: On my end, a change I’d like to see in the world is similar to Daniel’s in the world of education. I’d like to see fairer possibilities for everyone across the globe into succeeding in life. There are smart minds and smart people all across the globe, and very often depending on your geographical location you might have disadvantages in comparison to other people. Bridging that gap in years to come is incredibly important for the next generation of people our age.
Wharton Global Youth: Okay guys, let’s wrap up with our lightning round. We’ll have some fun with these questions.
Daniel, what was the last thing you bought with crypto?
Daniel: It was a board game.
Wharton Global Youth: Vincenzo, an NFT you wish you had?
Vincenzo: World of Women NFT.
Wharton Global Youth: If not crypto, your new startup would be in what industry?
Daniel: Metabolics.
Wharton Global Youth: Vincenzo, same question?
Vincenzo: Either environmental sustainability or fintech.
Wharton Global Youth: Daniel, what is the next thing you’re excited to learn that you don’t yet understand?
Daniel: Consumer psychology.
Wharton Global Youth: Vincenzo, something about you that would surprise us?
Vincenzo: My hair doesn’t get wet in a pool.
Wharton Global Youth: Daniel, you are the new host of a business-themed talk show. Who is your first guest and why?
Daniel: I’d have on Peter Thiel, the founder of Paypal and Palantir. He started his journey in entrepreneurship very young, he has a very good perspective and he wants to inspire the next generation of entrepreneurs.
Wharton Global Youth: Vincenzo, same question. Who is your first guest and why?
Vincenzo: Mr. Steve Jobs. Steve Jobs has always been an inspiration to me and when I was younger the dream was to be Apple CEO. Steve Jobs has always been an inspirational, motivational driver for me.
Wharton Global Youth: Thank you both for joining us today on Future of the Business World and I wish you luck with your startup.
Conversation Starters
What is Diremo? How is it different than just using cryptocurrency like bitcoin to pay for something on Amazon?
Do you agree with Daniel and Vincenzo that we will all be paying with cryptocurrency in two years? Why or why not?
What don’t you understand about the future of finance? Do you find it intimidating or intriguing? Both?
Great foresight
While various factors contribute to a company’s success, from solid investments to cooperative teams, there is one indispensable element that holds the biggest significance. As Vincenzo says “Whenever we learn, we think about how we can apply what we’ve learned to our startup and how we can improve and scale it further”. I highly agree with quote of Vincenzo. The statement reveals a powerful element that underscores the essence of successful businesses: the ability to learn about the problems and meet them with smart solutions.
I believe establishing and raising a personal business is a significant challenge. Therefore, succeeding in entrepreneurship requires more than just ambition; it necessitates the ability to analyze the environment, recognizing both obstacles and opportunities. Successful entrepreneurs strategically gain entrepreneurial triumph by gaining a deep understanding of the challenges within their industry. This insight, along with an effort of finding effective solutions, differentiates a company from its competitors and allow it to sclate it further.
Since I am a huge fan of MMA (Mixed Martial Arts), I’ve noticed a significant issue within it. Despite MMA being one of the top ten sports globally, the fighters receive an incredibly small amount of money, compared to athletes of different fields. UFC, the biggest organization in the world, pays its fighters around $150,000 on average, which is totally scarce considering the revenue. This is because the UFC occupies more than 95% of the industry. This makes it hard for fighters to negotiate for better payment, stopping them from receiving adequate salaries. As a student who dreams of running a business, I want to advance the MMA industry through what I’ve acquired , just as Vincenzo did for the stores that were in need of help for using Web3.
I believe that creating an MMA organization that can rival the UFC can solve the problem. I know this isn’t easy to identify, but with only 15-20% of the revenue of UFC spent on paying fighters, there is plenty of room for improvement. My future organization will set a goal of passing half of the revenue on to the athletes, which is higher than traditional sports organizations. Although there would be struggles at the beginning, the salary would still be appealing for some players. As the size of the corporation grows and the proportion remaining, the wage would increase, eventually surpassing it of the UFC.
“Whenever we learn, we think about how we can apply what we’ve learned to our startup and how we can improve and scale it further”. The quote indicates several essential factors for entrepreneurial success: studying the problems that lie in the industry, seeking innovative solutions, and improving the industry with an effective solution. These steps would lead a firm to success.
I found this article about Vincenzo Francia and Daniel de Beer’s startup, Diremo, incredibly fascinating and inspiring as a high school student interested in entrepreneurship. Their innovative approach to integrating blockchain technology with e-commerce demonstrates that even teenagers can have a significant impact in the business world. I think this resonates with my personal ambitions as I work on launching my own dropshipping company. Often, high school students starting their own businesses are not taken seriously and are dismissed as ‘children’ incapable of innovation and leadership. However, I feel like this podcast breaks that stereotype, showcasing the achievements of young entrepreneurs that most adults can’t even achieve, proving that age is no barrier to success. Vincenzo and Daniel’s recognition opens doors for other high schoolers, giving us an opportunity to compete in the business world on the same level as everyone else.
As I continued to read the podcast, one aspect that I truly admired and stood out to me was their experience speaking with Sequoia Capital. Vincenzo candidly shared, “I’d say there’s a great amount of pressure to that. A call like that can change your future and the future of your startup.” This resonated deeply with me. Not everyone gets the chance to talk to such big investors, and it’s amazing how they took full advantage of the opportunity. Their ability to handle the pressure and clearly articulate the value of their startup shows how prepared and confident they are. Their experience underscores how crucial it is to be ready for these moments and to make the most of every opportunity that comes your way. This inspires me to continue pursuing my entrepreneurial ambitions with confidence and determination, knowing that with the right mindset and preparation, significant achievements are within reach.
Diremo’s vision of integrating blockchain with e-commerce is compelling, but to truly stand out, the platform should focus on enhancing user education around Web3 technologies. While the concept of NFT receipts is innovative, many consumers might be hesitant to adopt it without a clear understanding of its benefits, especially after all the fuss regarding NFT scams. By incorporating user-friendly tutorials and resources that demystify blockchain and it’s security, Diremo can bridge the knowledge gap and accelerate broader adoption. This educational approach could not only differentiate Diremo from competitors but also build trust and confidence among new users, ensuring long-term success in the evolving world of digital finance.