Alejandro Cremades is the co-founder at Panthera Advisors, host of Deal Makers Podcast, author at Startup Fundraising, and contributor at Forbes.
Lisa Alderson is the co-founder and CEO of Genome Medical which is a telegenomics technology and services company allowing access to genomic-based medicine. The company has raised over $60 million from investors such as Canaan Partners, GE Ventures, Perceptive Advisors, Kaiser Permanente Ventures, Techammer, Casdin Capital, Manatt Venture Fund, and Samsung Catalyst Fund to name a few.  In this episode you will learn: Getting inspiration from other cultures The human element and the human story The future of medicine Why keeping up momentum is so important in a startup Lisa’s two keys to making it as an entrepreneur SUBSCRIBE ON: For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here). Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below. About Lisa Alderson: Lisa Alderson is the Co-Founder and CEO of Genome Medical, Inc., a digital health company bringing genetics to everyday life. Through its nationwide genomics telehealth service, Genome Medical provides expert genetic healthcare for individuals and their families to improve health and well being. Prior, Lisa Alderson served as the Chief Commercial Officer and Chief Strategy Officer of Invitae (NYSE: NVTA), a rapidly growing genetic information company. Lisa Alderson was also the former CEO and president of CrossLoop Inc., a marketplace for technical services (acquired by Nasdaq: AVG). Prior to that, Lisa Alderson was part of the start-up team at Genomic Health Inc. (Nasdaq: GHDX), president of Cinema Circle Inc., (acquired by Nasdaq: GAIA) and the former manager of strategic planning at The Walt Disney Co. Lisa Alderson has an MBA with distinction from Harvard Business School and a B.A. from Colorado State University, where she graduated Summa Cum Laude. Connect with Lisa Alderson: Linkedin Twitter Crunchbase * * * FULL TRANSCRIPTION OF THE INTERVIEW: Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have someone that has quite an incredible professional career and entrepreneurial journey, and I think we’re going to learn quite a bit, and we’re going to learn as well about the different cycles like going from the Dotcom to now, COVID – you name it. So, without further ado, Lisa Alderson, welcome to the show.  Lisa Alderson: Thank you, Alejandro. It is so fantastic to be here with you and your listeners today. Alejandro: So, originally born in Minnesota, but grew up in Colorado. How did this happen, and how was life growing up there? Lisa Alderson: Yeah. I love Colorado. I am an outdoor adventurer and a bit of an adrenalin junky, and Colorado is a great place to do that. You’ve got mountains and great outdoors. Yeah, I was born in Minnesota. My family is there. I definitely grew up with the Midwest niceties and authenticity, and that has stayed with me to this day. So, I love both of those states. Alejandro: Very cool. In your family, was there anyone that was business-driven, or how did you get the influence for business and building companies? Lisa Alderson: Definitely. Actually, my father was definitely entrepreneurial. In fact, the reason we moved from Minnesota to Colorado, we had taken a family trip to Colorado, and my parents fell in love with it, and they’re like, “Let’s move.” So, he had this adventurous spirit and built a number of businesses quite successfully. He was definitely an early mentor for me, and I think put me on a journey of interest such that I was starting companies when I was 19. So, it has been very much a lifelong passion for me. Alejandro: What got you into journalism because that’s what you studied in Colorado State University? Lisa Alderson: Yeah, that’s right. I grew up and went to high school in the 1980s, and somehow at that point in time, I had this spark of interest in television, documentaries, and telling the human story. I became connected with the local cable station, and I was enamored with broadcast journalism and the ability to share knowledge, and information, and insights. That was an era where journalism told both sides of the story. In particular, I loved the human story. So, that was my first chapter of my professional life. I was running the teleprompter, and I was a camera operator on the evening news of our local cable station when I was 16. I’ve always been a motivated and driven person starting at that early life stage. I would say my career experiences have followed my life passion. When I was 16, I loved TV and entertainment, and so that was passion one. Alejandro: How do you think that has shaped the way you have been able to, later on, do your professional career and entrepreneurial journey, the storytelling side, because storytelling is everything when it comes to business? Lisa Alderson: You know, it really is, and in particular, I think one for recruiting and hiring great talent – it’s all about the vision. It’s about the mission. It’s about building culture, but it’s also about the human story. In the case of Genome Medical, the impact we have on individual’s lives and families, so there is this continued theme around storytelling that is so important. I think that passion and interest, the spark for humanity, and understanding people’s stories. It’s also a big motivator for me today. It’s part of what drives me on my current journey is that interest in helping people, and frankly, improving quality of life and health. We’ll come back to that. Yeah, I followed my passions and started with television, media, entertainment, and consumer, and then moved more into hardcore technology. Then, I found my way into genetics and genomics. I think my insights from all that are about how to be an adaptable entrepreneur and listening to those passions in pursuing those passions. Alejandro: Absolutely. We’ll get into where you are now and this incredible business that you’re building in just a bit. But before that, so that we can continue to get to know you a little bit, what happened after school because you got your first break into doing your first business, which was a television production type of entity, but then you ended up living in Honduras. It’s unbelievable, the shifts here that are happening. So, tell us a little bit about this.  Lisa Alderson: The backdrop is, I grew up in Colorado. I went to Colorado State University in Fort Collins, and in part, because I had this passion for journalism and had been part of an International Radio and Television Society Fellowship in New York City, and worked on CBS evening news. I saw some of the highs and lows of television production. It’s a pretty cutthroat industry, candidly. There was a sense of what I loved about having started campus television, which went on to become one of the top journalism programs in the country, in part because it was a student-run and student-produced television program, which I had been a big part of that story in terms of getting it funded and raising money and ultimately had over 100 student volunteers by the time I graduated. So, really set that on its path. I would say the thing that was most instrumental about that for me was this vision that you could conceive of an idea; you could execute on that vision, and then you could build something over a pretty short period of time – in this case, three years, that then had such robustness that it continues on today. This was, let’s say, more than two decades ago. So, as part of that, it became the spark for me around building things that are meaningful that are going to touch lives of others. That really is my first foray into entrepreneurship. But with that as backdrop, I was antsy because, at this point, I was in my young 20s, but I had been in Colorado and Fort Collins, which is a lovely town, but felt like I wanted some exploration. So, I ended up finding that, of course, for the two years that I was in Honduras. Over that two-year period, I had such a wonderful opportunity. I did a bit further in the journalism side of things and covered some breaking news for WTN out of London, and others. Then, I also worked a bit with the U.S. Embassy and really created a further passion in my interest and efforts in helping humanity. In Honduras, it’s really a very poor country. There were such heart-wrenching – again, the human story, where many children were impacted and frankly, dying of dysentery and such preventable health factors. I really loved my time there in getting to know the tremendous richness of the Latino culture and improved my Spanish, and just really loved the ability to discover a new culture. I did make my way back to the United States, and came back and went to business school. It was a wonderful chapter, and I think created an empathy, on my part, of the human element, the human story, and what we as individuals can do to affect and improve life for others. So, it’s always been a bit of a passion for me. Alejandro: Got it. You went to Harvard Business School, and I’m sure it opened your eyes in many different areas that maybe you didn’t even know were there, but out of HBS, there are a lot of people that go out and start their own companies. You went, and you started working for a company like Walt Disney. What motivated that? Lisa Alderson: Part of it was that when I was starting that television station, and then I also helped build a television production company following that, but that was all off of largely instinct. I felt as though I really loved the process of building businesses and saw that was going to be more of my passion and my career, even more than broadcast journalism. But I felt like I needed some more formal training, so that was the impetus for Harvard Business School. Also, the reason that I joined the Walt Disney Company, 1) I still had very much this passion in journalism, entertainment, and media, and of course, Disney is the clear leader, at least in my mind and at that point and time. That allowed me to really be able to join an incredible group in a department called Strategic Planning that led long-term strategy for ABC and ESPN and a number of the cable assets. That allowed us to build that continued training in what was the epicenter and the leader of entertainment and media. I worked with incredibly bright and intelligent people. It was a wonderful time in my career, so I really enjoyed my journey there. Alejandro: It’s interesting how you, during your career, you’ve jumped from media to then tech to then genetics and genomics. It’s really incredible, but one thing that I definitely want to ask you about is, how was the time of living through the Dotcom Boom where you were able to raise 20 million bucks with just a business plan? Lisa Alderson: Yeah, it was a crazy period there. Everybody saw it. It was this time where there was a vibrancy and an eagerness, and it was all about acquiring users. Companies were doing crazy things to build that userbase because then you could monetize the value of those users. As part of that, I definitely witnessed where capital was so readily available but then also witnessed the other side of that. As we came out of the Dotcom Boom, we hit with a real crash landing the Dotcom Bust, where just overnight hundreds of millions of dollars in market cap at many, many companies were just eroded. That was also a very tumultuous time to live through as a leader and manager at a company and to try to navigate such a dynamic and challenging environment. Alejandro: Obviously, this was a very nice segue getting into genetics and genomics. I understand that it was via investors of prior companies, so how did you get into this new segment? Lisa Alderson: As I was transitioning out after that Dotcom Bust period, and looking at successfully merge my company with another company at that point in time, I was looking for my next chapter. I first took some time off and decompressed, but through Kleiner Perkins, which had invested in a prior company, came to be introduced to Dr. Randy Scott, who, at the time, was a CEO and founder of Genomic Health. Genomic Health was one of the first precision medicine companies. Kleiner had just invested in Genomic Health. It was a wonderful team, deeply committed to the science and medicine of building precision medicine for oncology, but at a very early stage in building the business and thinking through the first product and the first go-to-market strategy. We really hit it off, and it became a great opportunity for me to learn a lot more about the medicine and the science of genomics, which I knew very little about. This was in 2000, and we were sequencing the first human genome, so very few people knew much of anything about the field. I’ve always been a lifelong learner, so I found that there was a lot from my business training and how you speak about taking your products to market and building competitive advantage that translated across multiple industries, of course. So it was a strong partnership with myself and working closely with the senior leadership team that was deep in the medicine and science of genomics to really help navigate some of those early days. Again, that was probably one of my most enriching career experiences because it was such a novel concept at that point in time. I’m super excited to have been a part of that early startup stage. Alejandro: Talking about enriching experiences, right before you started Genome Medical, which is your most recent company and probably the biggest one that you’ve built yourself, which is remarkable – and we’ll talk about it in just a little bit. You actually were part of Invitae, which is a company that you helped from the very early beginning being one of the first employees to go in. You were able to also be part of the remarkable journey of taking the company public. How was that experience? Lisa Alderson: Oh, it was such an incredible – it was always on my bucket list, but it’s one of those where – it’s hard to have that actually happen. Genomic Health had actually gone public, but I wasn’t at the company at that point in time, even though I was part of that earlier startup stage of the business. At Invitae, which I joined at a very early stage, it was so rewarding – going back to that story I gave where my first entrepreneurial experience of building something. In the case of Invitae, it was at the concept phase and a very small team, a handful of people, at the point that I was joining. It was an incredible path to be able to – at the time, I was the Chief Commercial Officer, so built out the commercial side of the organization, helped launch the first product into market, and commercialized the approach, build revenue, take the company public. It was an amazing journey to be able to see. And hats off to Sean George, the now CEO, who was president at that point in time, and Randy Scott, who was the CEO at the time of the IPO. Just an incredible management team and such a great, powerful, big vision. The company is executing so tremendously against that vision. It really is rewarding to be able to see a company through that exciting stage and build products and services that are so meaningful for patients. This is all about genetic testing and creating easier access to genetics for patients all over the world. Alejandro: In terms of seeing a company that does the full cycle, like Invitae, I’m sure that you were able to get a lot of lessons from it, and a lot of lessons that I’m sure that you’re implementing now at Genome Medical. What’s that one lesson that you knew that absolutely for sure you were going to implement on your most recent company, Invitae? Lisa Alderson: Yeah, Invitae was instrumental in the path to founding Genome Medical. So at Invitae, we were very focused on how we could open up access to genetic testing and built this vision for a one-stop journey for all things genetics. What I saw as the continued market need as we gained success and traction at Invitae was that you have these incredible tasks that are just built on depth of science and medical management guidelines, but it was still a huge impediment in getting those tests to patients. The reason being is that there is a service delivery gap in being able to elevate the knowledge for clinicians in so many different clinical areas such that the clinicians could identify which patients need genetics and genomics and would most benefit, and the clinicians need to know what tests to order. The clinicians need to be able to interpret the results and use that to change clinical care for the patients. So, Genome Medical was really founded with the vision of how do we bring forward access to genetics and genomic-based medicine? How do we democratize that access because there are so few specialists in the field? So we are tackling many of those service delivery challenges in working to bring genetics and genomics to patients everywhere as part of just routine medical practice. Alejandro: Got it. At about 2016 is when you decide to make a shift, a shift of gears here, and start your recent company. Tell us about how you came up with this idea and how you brought it to life. Lisa Alderson: It started with a vision of would this be more of its own company or something that at Invitae could become almost like a service line? There are some complexities because in running and operating a lab, there are actually some regulatory barriers that prevent labs from practicing medicine. Part of that is self-referral issues, and some of that is laws, and there’s complexity there. Ultimately, through some exploration with the senior leadership team, and even the board, it felt like that would need to be its own company, and it would actually be quite a complementary business because you need both molecular diagnostic testing and you need medical services. You need clinicians who are knowledgeable in genetics and genomics to overcome those challenges that I noted. Ultimately, with great acceptance and excitement from Invitae, I launched this as its own business and in partnership with my two co-founders, Dr. Randy Scott and Dr. Robert Green. Randy, as I noted previously, is a visionary in the field of precision medicine, and he can see where the world is headed about a decade before everyone else. Then Robert Green is a leading medical geneticist at Harvard Medical School and Brigham Women’s Hospital. He has been a fundamental force in helping to guide us on our journey in building a business that is effectively shepherding in a new era of genomic-based medicine and doing that in a medically responsible way. Alejandro: What ended up being the business model here? Lisa Alderson: We are a medical practice. We are set up as a nationwide telehealth medical practice that is democratizing access to a lot of specialists, and these are leaders in their field coming out of prominent academic centers and leading health systems. We employ a team of geneticists and genetic counselors and PharmDs, and others that are specialists to be able to create effectively next-day on-demand appointments that are virtual via telehealth, either video consultations or phone-based consultations. It allows us to be able to provide ready access to clinical expertise. We then provide an upfront consultation with the patient. We order testing as appropriate and even do benefit investigations to make sure whether or not testing is covered by insurance. We then get the results, convey those results back to the patient, and now develop a personalized care plan to enable them to utilize those genetic insights for the benefit of their care. That is shared with the patient; that’s shared with any other treating physicians, and we make ourselves available as the genetics expert. It’s like you go into your primary care doctor, and if they listen to your heart, and they feel like you need to see your cardiologist, then they refer you to a cardiologist. Your primary care doctor is still your primary care doctor; you’re adding a specialist to your team. So, we’re like that. We are that specialist. They are the genetic and genomic specialists that interface with other treating physicians to service that patient’s needs and provide the highest quality clinical care to individuals all over the country. Alejandro: Very cool. A lot of people are talking about how Elon Musk has this edge with knowledge transfer where he’s able to apply different things that’s he learned, let’s say via FinTech companies that he started or now space companies or even auto companies, and how he’s able to combine all of that and apply that into his own execution with whatever he’s dealing.  Lisa Alderson: That’s a richness to that, I would say. It’s amazing, and often we silo very industry-specific, and there’s value in being a knowledge expert in a particular domain – no question. To some extent, I’ve built that up over the last two decades in genomics, but I think the more you have this, like patterns of recognition that can cut across industries, particularly when you’re trying to drive innovation. The common theme throughout my entire career has been very much about using technology to drive innovation. In healthcare, we need technology. We need service delivery innovation. We need new pricing models. We need a higher standard for patient care and customer engagement. So, all of these life lessons and richness of my experience is I do feel kind of dovetail into what is now the building of Genome Medical, and I think the richness of experience across industries can be quite an asset, particularly in digital health, where you’re trying to combine those principles of consumer-based businesses and technology-based businesses and healthcare businesses.  Alejandro: That’s amazing because with media, tech, and now implementing all of them in here, definitely, that gives you an edge. So for Genome Medical, how much capital have you guys raised to date? Lisa Alderson: We have raised $60 million since our inception in the middle of 2016, so about four years now. We just celebrated our four-year anniversary. We recently announced a round of funding, which brought in an additional $14 million. That was just announced, so we’re super excited to welcome our new investors from that financing round as well as the continued investment and support from some of our longer-time investors. Alejandro: Lisa, this is pretty amazing, and I need to ask you about this. Obviously, your recent investment was done in the middle of COVID. Lisa Alderson: Right!  Alejandro: How did you manage to raise this money? Lisa Alderson: You know, first of all, I think Genome Medical sets up the intersection of telehealth and genomics. Those are two fundamental trends in healthcare that are going to vastly improve the ease of access to care and the quality of care. Part of it is, we are in the crosshairs of two very exciting broad macro market trends. In particular, with COVID, we really worked hard to support a number of our health system partners in moving more care to virtual care, genetic and genomic-based medicine to virtual care. There was a huge push and an incredible effort across the industry. As an example, we worked with Kaiser Permanente, and they announced they went from about 15% telehealth visits to over 80% telehealth visits, and that was in a matter of a month. That’s an incredible feat for any health system. We did our portion of support in trying to move more to telehealth. I think COVID did vastly accelerate adoption for telehealth, just out of necessity. Now, we are focused on how we can continue to provide access to patients virtually because there’s still a high degree of reticence to come into the health systems and, in particular, for routine medical care. We are seeing cancer screening, so mammograms and colonoscopies have been impacted. They’re down by 90%. What’s concerning about that is that the rate of diagnosis for those cancers, colon cancer, as an example, is reported down 80% in terms of diagnosis. We know cancer did not stop for COVID. We’re simply not finding the patients because they’re not coming in for routine care. So, Genome Medical is now very focused on building a technology platform that can enable us, all virtually, to provide education, assessment of the patient, and care navigation, and identify those high-risk cancer patients, identify high-risk cardiovascular patients. Get them tested, all virtually, never needing to go into a medical provider’s office. Then depending upon the results, if it’s now an individual who is at an elevated risk, understanding the critical importance for now having the mammogram, the colonoscopy, the MRI, and flagging those individuals and bringing them in for that medical care and those screenings because we all know if we detect cancer at an early age, it’s at its most treatable stage. Unfortunately, if we do not, then it is both more challenging treatment regime and also riskier in terms of patient outcomes. Alejandro: In this case, obviously, you guys have come a long way in the business, and for the people that are listening to get an idea of how big Genome Medical is, what can you share in terms of number of employees or anything that you can share? Lisa Alderson: We have just over 60 clinicians. Those are MDs and genetic counselors, most of whom are full-time. We just hired our first pharmacist, PharmD, full-time. We also have a whole network of providers that are contracted and part-time with us. We have seen patients in all 50 states. We see hundreds of patients on a weekly basis, and tens of thousands annually is the pace at which we are now at. Our whole vision is, how do we improve the adoption of genetics and genomics? How do we support the clinician, and how do we open up access to the patient? There are so few specialists that many patients that need medical management guidelines for genetic testing are not getting that testing, they’re not getting access to genetic counseling, and therefore, that is what we are trying to tackle and improve. Alejandro: Got it. Where do you think the space is heading as a whole? Lisa Alderson: I really see first, in certain areas, so for reproductive health, we’re launching a new product there. But virtually every woman of reproductive age qualifies for carrier screening under their insurance plans. The vast majority of patients don’t get that, and if they do, they’re getting it when they’re pregnant, which means the decisions are far more limited. I would love to see a future where just about everybody – and 21 is getting carrier testing and carrier screening. I’d love to see a world where every patient at diagnosis for cancer and cardiovascular disease is getting genetic testing. It helps inform treatment decisions. It helps inform clinical care. It’s like having access to a new technology, to a new insight that we haven’t had that are just so profound that as the costs of testing comes down, the use cases, the clinical utility goes up. So we are marching towards a world where everybody will have some form of sequencing at some point in their life to better inform their clinical care. That’s an exciting world to me. That is a world that is a more informed decision tree. It allows us to start to stratify patient populations and provide the clinical care as more appropriate to those individuals. Alejandro: Obviously, here, after all those years, different segments, different companies, now making a big difference with this business, I’m sure that you’ve had your fair amount of lessons learned. One of the questions that I typically ask the guests that come on the show is if you had the opportunity, Lisa, to go back in time and have a chat with your younger self, maybe that younger Lisa that was thinking about launching a business back then. What would be that one piece of business advice that you would give to your younger self before launching a business and why, knowing what you know now? Lisa Alderson: I would say resiliency and adaptability. Those are the keys. Resilience because you are going to hit highs. You are going to hit lows. It’s being resilient and knowing that even when you hit one of those lows – it’s also a bit of optimism, I guess I’d say. You can power through and get yourself to that next high. Then, the adaptability piece, we work in a world that has a really dynamic environment, and certainly, we’ve seen this currently with COVID and the need to re-navigate and reposition to support patients and what they need at this moment in time. I think there’s the successful entrepreneur can have both a pinch of optimism – more than a pinch is even better. And that adaptability, and that resiliency, and I think that’s the formula for the building blocks versus some success. Having been a long-time entrepreneur and founded or started seven companies at this point, there is a muscle memory, and there’s stuff that you get much more comfortable with – the ambiguity and the uncertainty and the decision-making without perfect information. I guess the last piece of advice I’d offer there is that it’s always easier to tap to steer the ship a little as opposed to if you’re just frozen and unable to make a decision and figure out which way you’re going. You’re starting from a point of inertia, which is a lot harder to build momentum and force. So, it’s better to make some bold bats and make some strong decisions and get on your journey, and then if you need to redirect a little as you go, that’s a lot easier to do because you’ve got momentum behind you. Alejandro: Very cool. So for the folks that are listening, Lisa, what is the best way for them to reach out and say hi? Lisa Alderson: You can follow me on Twitter: @LisaA and @GenomeMed LinkedIn: Lisa Alderson and Genome MedicalI’m happy to have you all reach out, and I’m very assessable. Thank you for the time today. Alejandro: Amazing, Lisa. Thank you so much for being on the DealMakers show. Lisa Alderson: Thank you.   * * * If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at alejandro@pantheraadvisors.com.
Brandon Krieg is the co-founder and CEO of Stash which is a New York-based digital investing and banking platform. The company has raised over $300 million from top tier investors including Founders Fund, Union Square Ventures, T. Rowe Price, Greenspring Associates, Coatue Management, Entree Capital, Valar Ventures, Goodwater Capital, Breyer Capital, and Lending Tree to name a few. Prior to this, he co-founded Edge Trade (acquired by Knight Capital Group). In this episode you will learn: The process of giving up a successful corporate career for a startup How big Stash is today The key ingredients Brandon says it takes to connect with fintech consumers How to get free stock in the shops you shop at SUBSCRIBE ON: For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here). Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below. About Brandon Krieg: Brandon Krieg is the CEO and co-founder of STASH – the financial platform revolutionizing the way millions of Americans save and invest for their future. Prior to co-founding STASH, Brandon Krieg spent over 15 years in financial services, most recently as head of electronic execution for Macquarie Securities Group. Brandon Krieg co-founded EdgeTrade, one of the first and largest electronic trade execution and algorithmic software firms. When Knight Capital Group acquired EdgeTrade, Krieg became their head of electronic sales. Brandon has been recognized by Goldman Sachs as one of 2018’s “100 Most Intriguing Entrepreneurs.” STASH was highlighted by the Wall Street Journal as one of the “Top Tech Companies to Watch in 2018.” Connect with Brandon Krieg: Linkedin Twitter Crunchbase * * * FULL TRANSCRIPTION OF THE INTERVIEW: Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a really exciting founder, and I think that we’re going to be learning a lot about fintech, building, scaling, financing, and a story that is fueled with adrenaline for five years, and you name it. So, I think we’re going to learn a lot. Without further ado, I’d like to welcome our guest today, Brandon Krieg. Welcome to the show. Brandon Krieg: Awesome. Thanks for having me. I’m excited to be here and to chat about all things fintech. Alejandro: Quite an interesting upbringing. Born in New York City, and then raised in Eurocell, and then you happened to end up in South Florida. So, how was life growing up? Brandon Krieg: It was a lot of learnings. I grew up in a great home with great parents who had some big financial struggles when I was reaching my teen years. We ended up moving to South Florida and lived a different type of life that I look back on now and really value. I think it framed a lot of my current views in the world. It was great. I wouldn’t change anything if I look back. I liked living in Florida, and I loved living in New York, as well, and I’m happy to be back in New York now. Alejandro: I’m sure that you miss the sun of Florida, especially during winters in New York City. Brandon Krieg: Yeah, I definitely do. I’m not a big fan of the cold. Alejandro: I hear you. At what point do you decide it’s time to move back to New York City? Brandon Krieg: I graduated from high school, and I had no idea what I wanted to do. I was confused and ended up going to culinary school, and then decided that wasn’t right for me or what I wanted, although I now know how to cook, which is cool, but I ended up going to school. Then I decided that I just wasn’t doing enough with my life down there, and I wanted to move to New York and get into financial services and work on Wall Street. I moved up to New York in 1998, and I got very lucky. I met two guys that had just started a company called EdgeTrade and joined them in 1998. I was early in the electronic trading world. Ultimately, they made me a partner of the business. Yeah, I think moving back to New York is definitely an amazing thing that I did early on. I’m happy that I did it. Alejandro: Now, when you say electronic trading, you get a sense and a glimpse of that, but back in ’98, probably a lot of people were like, “What is it?” Brandon Krieg: Yeah. A lot of people that I have working at Stash only know electronic trading. Back in the day and what you see in movies now, the NYC Exchange Floor with all the guys and screaming and yelling and passing paper around. We looked at that and were like, “That’s insane.” Computers could do it more efficiently. Computers can do it in a way where the customer is put first. And it’s not about how big you are or how loud you are on an exchange floor, but how much work you’ve done or how much prep you’ve done to own a stock or to sell a stock. We started in serving computerized orders since the market and ultimately built a very large business that got acquired by a firm called Knight Capital Group in 2007. It was a really cool ride because we had to innovate everything and build everything, but it wasn’t during a time when there was AWS – there was, but in the early days, there wasn’t. So we literally had to put racks of servers in a closet and write everything from scratch. It was a lot of work, but it was really fulfilling seeing now, everything’s electronic, and when we started, it wasn’t. So I feel like I did my small part in changing an industry, which is cool.  Alejandro: It’s amazing because you were with EdgeTrade for quite a while, over nine years, and then you even stayed with KnightCapital for five years after they did the acquisition, which I’m sure it was an exciting outcome because I see that it was publicly disclosed that it was $60 million. For you, the first type of rodeo like super interesting to see it all the way to the finish line. Prior to the acquisition, if you had to go back and think about all those 9 ½ years of building and scaling a business, what kind of big lesson did you take away from that experience?  Brandon Krieg: It’s the same lessons that luckily, I’m able to carry into Stash now. Every day you’re learning, and you have to listen very attentively to your customers. When you listen, and you learn, your customers will ultimately tell you what to do. If you ask enough of your customers, and you really hone in on a pain and understand a problem that you’re solving, and you’re solving a real problem, not making one up, then you could ultimately build a really great business. I learned early on that sometimes when I put my ego into things like, “I know what the customer needs. I’m not even going to ask the customer. I’m just going to build what I think they want.” Those things never really worked. But when you ask your customers for feedback, things go great. That’s an early learning that I had in being consultative with your customers. That business at EdgeTrade and Knight was a B2B business. It wasn’t a direct-to-consumer business, as now, but the same principles apply: don’t try to invent a problem but be a pain killer to a big problem that exists. That was a big lesson I learned. It goes to grey-hair theories. Pay attention to mistakes that are made. Learn from mistakes because I believe that micro-failure is a really good thing. If you fail at something, if you fail at any little thing, as long as you learn from it, you’re going to be great. You’re going to be okay. It’s when you constantly make the same mistake over and over again and have the same failures over and over again, where things become problematic. We were able to build that straight up and innovate while we built this business, and it had a great outcome. I stayed at night for over five years because the culture was great, it was a great place to work, and it was really cool because I got to see that little baby that I helped create and grew up. Knight was trading almost a little bit over a quarter of the U.S. Stock Market every day. It was crazy. So it was a great seat to have and had a great time. It was a lot of fun, but ultimately, I had to move on. It was a cool run. It was like almost 14 to 15 years that technically I was at the same job. Just wild considering nowadays, that’s not normal. Alejandro: From the time at Knight Capital Group, you probably learned, as well, about integration because you go through the acquisition, then you stay for five years with them. Maybe you got a lesson or two about integration. What would those lessons be? Brandon Krieg: Integration in what regard? Alejandro: In M&A, in an acquisition, integration is a beast. Integration is super difficult, so maybe as the acquisition actually happened, and you transitioned, the business was under that umbrella of Knight Capital Group, maybe you learned a thing or two as to how you do that integration with flying colors. Brandon Krieg: Yeah. I don’t know if any integration is super simple. They’re all really hard, but when we integrated at Knight when they took EdgeTrade over had a lot of systems that they ran. They were a really big firm, and making our system work there, it took time. Luckily, they gave us a lot of time to do it. I think it took us about a year to a year-and-a-half to fully integrate everything over. One of the things that they did, which I thought was really cool, is that they were good at integrating our culture because from ’98 on, we were a true startup, and we acted like a startup. We moved really fast; we tried to be lean; we tried to ship software quickly; we tried to iterate quickly. One of the concerns that you always have moving a business into another business is, is the culture going to break because if the culture starts breaking, then you not only have problems with your customers, but you start having problems with your employees. Any good acquisition keeps its employees, especially the employees you need to have around. Knight was able to work with us to make sure that happens on both dimensions that from a technology an integration perspective, it was easy and seamless to get it in, although it took a little time. But also that we were able to keep the important things that the employees cared about. At Trade, they got to keep those important things at Knight. I think that’s really important in any integration. It’s not just about the product; it’s also about the key employees that you want to keep and have them continue to be a big part of the company. That EdgeTrade business is still going on right now, and a lot of the original employees that were there in the early 2000s still work there today, which I think is really cool. Alejandro: That is. That is really cool. Then after spending five years here after the acquisition, then you go to Macquarie, and you had a big-time job there, and you decide to give that up, but at least it was a pivotal moment because here you met your co-founder at Stash. Tell us about that segue, especially this short stint at Macquarie, which only lasted for a little bit over a year. Brandon Krieg: Macquarie was a really cool place. I not only loved working there, but I made a lot of great friends there. They had reached out to me after I left Knight and said, “Do you want to come to Macquarie and build a global electronic trading business that kind of looks like your old startup.” I said, “Well, yeah. I do. It’s really awesome.” One of their amazing employees, Ed Robinson, who was located in London – Ed and his wife moved to New York, and Eddie and I partnered up to build this new business. I was there actually a little over two years. What I learned is that although we’re able to accomplish the things we wanted. There was a great story that happened about a little over a year in. Somebody who worked at the bank giving advice out to customers walked to Eddie and I saying, “I have some extra money. What do you do, Eddie? What are you doing with your money? Where would you invest some extra money?” Eddie and I looked at each other, and we said, “You know, we’re in electronic trading. Why is he asking you, Eddie, this question?” One day, we walked outside, and we just decided to ask someone else in the street the same question. We walked over to someone in the street, and we said, “Do you invest? Do you save? Tell us about it.” I’ll never forget this. The person was like, “Oh, no. I really want to invest. I just don’t do it.” We said, “Why don’t you invest?” They’re like, “Oh, I don’t understand it. It’s so confusing.” I was like, “Really? Why else?” “I’ll invest later when I’m rich.” I said to the person, “What’s rich?” The person said, “I don’t know, but it doesn’t matter; I’ll do it later.” I was like, “Oh, my goodness. That just happened. That’s interesting.” This is around the same time that a lot of consumer fintech companies were launching into the market. We didn’t do anything right away. Some founders would say they had an immediate lightbulb that went off. We didn’t. But we knew that there was something going on here. It took us some time to figure out that we wanted to do something, Eddie and I, in consumer. To really truly do something in consumer, we couldn’t do it while we worked inside of a bank. We couldn’t. It wasn’t fair to our employer; it wasn’t fair to our families or our time. So, ultimately, we spoke to Macquarie, and we both resigned. The first thing that we did after we left was go right back to the street and just start asking everyone that would listen to us and talk to us, the same question. Alejandro, I’m telling you, every single person that we asked said the same exact thing. “I really want to invest. I don’t understand it. It’s so confusing. I never learned about this at home. My parents never taught it. I didn’t learn about investing or money at school. So, I’ll do it later.” But we never had anyone say, “I’ll never do it.” It was always the kick-the-can down the road game. So, we said, “All right. I think we know what we need to do here. We need to build a new type of private tech. We need to build a wealth manager for the non-wealthy, so basically for 80% of America. That’s the very condensed story of how we got from meeting each other at Macquarie to literally just walking up to strangers in the street. Those conversations that we had just with so many amazing people that would talk to us, and I’m talking hundreds of people, set what we’re doing now at Stash in motion. Alejandro: How do you guys arrive to hitting it on product/market fit? Read More: Hanif Joshaghani: From Living In A Refugee Camp In Iraq To Raising $52 Million For His AI Startup Brandon Krieg: That’s a big story. We had to do a few things first. We had to open a bank account and get some money. So Eddie and I used a lot of our own money, and a lot of our friends and family wanted to support us in building this new type of financial company. I think we raised a half a million bucks in total, and we put it in the bank, and we wanted to approach investing and financial services or fintech in a consumer-first way, but in a way that was led by solving the biggest pain in the customer’s head. If you remember back to what I just said, what we heard when we asked people about this was, “I don’t understand it. I never learned about it.” That was the first thing that we realized was that to build a financial services company that’s going to do well and do well by its customers, we had to lead with education. We needed to build a financial education platform in addition to an investing platform, in addition to everything else that we’re building, that we wanted to build when we launched. That was the first thing. The second thing we learned – and we studied an industry that most people don’t relate to financial services. We studied the weight loss industry and studied it closely. We looked at Weight Watchers. Weight Watchers has a very interesting good model, which is you don’t tell someone you need to lose 30 pounds overnight. Instead, you help them lose one pound, and you celebrate them. Then you help them lose two more pounds, and you celebrate them again. You make them feel good, and you make them see that they can reach those huge milestones by having little, small, incremental wins. So, we said, “How do we replicate that with investing and saving?” So we decided to build something called Auto Stash, which basically helps people save small amounts of money on a regular basis. We can talk about how these products are doing now. I’ll give you a recap of that after, but they’re, quite frankly, incredible now, and they’ve changed a lot of lives for a lot of our customers over the years. We also didn’t want to be like a robo-advisor where you give us the money, and we invest it for you. We wanted to be there with you on the investing journey, but we wanted you to invest with intent. We wanted you to choose what you invested in, and we would give it to you in a super simple way that wasn’t written the way of Wall Street, but written the way of Stash, which is, “We’re going to give you the information that you need to make a choice; we’re going to teach you and educate you about all the things you need to understand like what’s an ATF? What’s a dividend? What’s an expense ratio? But we’re going to do it in a way where we’re not going to take someone else’s content and just put our name on it. We went out and hired teachers. One of our early employees, I believe, was a 2nd or 3rd-grade school teacher, and she joined our team to help us teach investing to our customers as they were investing. It looks like STEM, basically, and you tinker as you learn engineering. You are investing as you are learning investing, and you’re learning to save as you save. The last thing is, we heard a lot when we were talking to people on the street that, “I need to be rich to start.” We said, “What’s rich?” And no one could answer that question. So we said, “We have to get rid of this whole hurdle. All the hurdles that Wall Street has typically put up that you need to have a lot of money to start. You need to have this huge minimum.” We said, “We’re going to have to build a fractional investing platform, and we’re going to drop the minimum to $5.00.” We went on now to drop the minimum to a penny because we can’t have anyone say that they can’t afford to do it because the biggest obstacle that people have is, they’re not starting. But once they start, they start building that good habit, and that’s what we put together as Stash, and we launched it October 15th of 2015 in the market. We very quickly opened a couple of thousand accounts the first day from a launch list that we had, and then it got quiet. Then, Apple, out of nowhere, featured us as the best app in the app store our first week, and we were not ready for that, by the way. We opened another huge wave of accounts, but then things settled down to numbers that weren’t good – less than a hundred new accounts today, in the early weeks and months. We realized that great, we built a prototype and MVP. We got it in the market. Now, how are we going to actually find product/market fit and scale this thing? Alejandro: So, then, what was that moment because when the feature of Apple goes away, it’s like you’re in the desert trying to find your way. So how did you eventually find the way to get to where you wanted to be? Brandon Krieg: Yeah. During this time, we had raised our first professional institutional investment round, so an amazing venture investor named Chi-Hua Chien, from Goodwater Capital reached out to Eddie and me and said, “I’ve been watching your progress, and I’d like to talk to you.” We ended up raising our first seed round from Goodwater. We proceeded to have the entire team get on the phone and call customers constantly. We just called and called and called. Our engineers started iterating. The process of iterating started about a week after we launched in 2015. We’re still iterating today the product just as much. We have a much bigger product now with a wider feature set, but calling customers and iterating is just so critical. In the early days, we did that. We probably iterated the product 100 or so times. And all the sudden, the 50 accounts today became 500 accounts today, which became 1,000 accounts today, which then became 2,000 to 3,000. There are days we open lots more accounts than that in a day. I think it was around listening to our customers and understanding that even though we set out with this MVP, and we had this really good idea, what we had in our minds didn’t perfectly portray into the software, so we had to start the process of changing the software. As we did that, we started finding that, “Wow. We’re really solving a problem that our customers have, which is they never felt that they could invest.” They never felt that they would be given a vehicle to learn how Wall Street works or how long-term investing works. I think it was just so powerful to know now, looking back at Stash’s founding story, there was no silver bullet. There was no grandstand homerun that we could step up and hit. It was just hitting singles and singles and singles, and continuing to listen to our customers and develop the product that way. And that was great. Another interesting learning that I’ve had is that founders sometimes go into things with preconceived notions. My Wall Street background of 15 years before Stash, I had a lot of things that I thought everybody knew. I’ll give you an example: I thought everyone knew that when you sell a stock, the money is held up for two days in unsettled funds. I never thought that anyone wouldn’t know that. So, when we were building the original product, we put in “Unsettled Funds, two days.” Then we started seeing app store reviews come up going, “Why are you locking my money up? Why are you holding my money back for me?” I was like, “Uh-oh, I guess people don’t know what that is.” So those preconceived notions, in the early days, they are what they are, but over time, we had to strip anything that we thought we knew about finance and reframe it and repackage it in a way that the 80% of America that we look after can understand. Those are all things that led to the real success of Stash. Alejandro: Without a doubt, the importance of listening to your customers, so hopefully, people that are listening that are right in it right now and trying to find product/market fit, hopefully, they got really good insights from that. Right now, how much capital have you guys raised to date that is publicly disclosed? Brandon Krieg: We’ve raised north of 275 million dollars now into the business. We just did our Series F round. Alejandro: I was going to ask you about your latest round in the middle of COVID. How do you do that?  Brandon Krieg: It was a lot of work. It wasn’t really that it was hard to raise the round. It wasn’t because we had a few amazing investors come into the round. We had started those conversations before COVID, so it wasn’t about the difficulty of raising the round. It was just like doing all of this over Zoom and Hangout Calls was new. I could tell you that, but Lending Tree is an amazing company. They came and invested in a round, and then funds managed by T. Rowe Price also came into the round. We’re able to add more gasoline into the Stash fuel tank, which has been great for the business. We’re continuing to accelerate, and we’re continuing to grow. The story, though, if you really think about where we started, was just a straight-up micro-investing platform. We’ve grown up so much over the years because all of that to what you just said, Alejandro, is like, “We have to listen to our customers.” As we listened, more and more posts the first year of the business, we heard, “I want to put money in a retirement account, but I don’t understand how that works.” Or “I didn’t think I could ever have a retirement account because I didn’t have enough money.” So we went out and built a retirement platform for our customers so they could open up Rothe and traditional IRAs on the platform. Then we started hearing, “I want to do this for my kids, but I can only have one account on the platform, so I’ve got to pick between my kids or me.” So, we said, “Okay. We need to build a custodial platform.” So, we built Stash for children so that parents could open up a custodial accounts for their children or friend’s children, and that’s been a wild success.  We heard from a lot of our customers through our call center asking us about insurance. “Can you help me with life insurance? Can you help me with renter’s insurance?” We said, “Why? Why are all our customers asking us about this?” We started calling customers and learning, and what we learned is that there’s a ton of confusion over life insurance. That is something that everybody should have. It’s just that people think it’s way too expensive, or the policies that they hear are way too big, or the industry just confuses people, so you have to use a broker to do it. So, we went out and became a 50-state insurance broker and integrated insurance sells into our product, which has been a huge success, not only for us but for our customers. Lastly, we wanted to be the core bank for our customers, so we went out and found a partner bank and integrated banking into Stash. We just crossed over a million bank accounts opened after a year on the platform. We could talk more about that because it’s really cool what we’re doing on the banking side, but I think it’s all about listening. Our customers have almost, in some ways, formed our product roadmap for us by telling us where their pains are. Alejandro: So, you were listening to the customers; you developed all these different ways of giving them what they were asking you, but I’m wondering: how do you maintain simplicity all across the board, and especially when you go through different types of market conditions as well? Brandon Krieg: The one thing I’ve learned over the years is, it’s really, really easy to add a bunch of new features, and it’s really, really hard to keep the product simple. I think it comes down to having amazing employees. My partners in the business – we have 270 employees at Stash now that listen to the customer and understand who our customers are. Our customers are the aspiring Americans, but not the wealthy. There are a million options for people out there who have a lot of money – not a lot of options for 80% of America. So, we have to know who our customer is and who we’re serving, and then keep continuously reminding ourselves that we have to build products that they understand and that they could use, and they could make a bit part of their life. You have to do that through following almost a principled approach to building product, which is: just keep it simple. Keep it simple. Simple in copy; simple imagery; simple in design. Simple doesn’t mean a bad product. Simple just means understandable to the customer, and that’s something that is a big focus point of ours, and we have to constantly go back and keep looking at our products to keep refining them and making them better for the customer. Alejandro: I hear you. Imagine, Brandon, that tonight you go to sleep and it’s an amazing snooze. You wake up like five years later. Then you wake up in a world where the vision of Stash is fully realized. What does that world look like? Brandon Krieg: That’s a great question. I do go to sleep thinking about this. I’d like to see Stash have north of 25 million customers. I think we’re going to do that – banking, investing, and saving on Stash. One of the things that we’re proud of is something we built called Stock-Back. Every time you spend on the Stash card, you get stock wherever you spend. So if you go to Walmart and spend on the card, you become a shareholder in Walmart. If you take an Uber or Lyft, you become a shareholder in Uber or Lyft. Get gas at Chevron – get stock at Chevron. I love this concept of building a portfolio that mimics and mirrors how you live your life. So, I think that everyone in America should be doing this because everyone should be an owner in the brands that they spend at, and everyone should receive not only great products that they spend at, but all the lifetime benefits they should get through stock ownership. I think that we’re in an incredible spot. I think that we’re starting to think a lot about the liability side now – how to make and bring transparency into lending; how to make sure that our customers are aware of their credit and their credit score and how their life changes affect their credit score. I don’t think we’ve scratched the surface yet on how much we could do for our customers, but we’ve literally opened over 5 million customers to date. We did that in about four years. I think yesterday we crossed over 5 million open customer accounts, which is really cool, and we haven’t scratched the surface. Alejandro: Wow! Congratulations. Brandon Krieg: Yeah. Thank you. It’s so cool. Alejandro: That’s amazing. So this is your second rodeo now with Stash, and I’m sure there are a lot of people in the audience that are waiting for me to ask you the question that I typically ask the guests that come on the show, and that is if you had the opportunity to have a chat with that younger Brandon – that younger Brandon that perhaps recently moved to New York City and that was thinking about starting something, what would be that one piece of business advice that you’d give to your younger self and why knowing what you know now before launching a business? Brandon Krieg: I’d tell myself to shut my mouth more and listen more.  Alejandro: I love it. Again, that’s my same thing I would tell myself. I love it 100%. Would you mind expanding a little bit more on that, Brandon? Brandon Krieg: When I was younger, I thought I knew a lot, and as I get older, I realize that I didn’t know ****, and I needed to just listen and learn and keep learning and listening. I’ve grown so much since I moved to New York and got into startups. I think that’s really important advice: keep listening. Everything that I think I’ve done in my career, and I know I can speak for Eddie on this, is about listening to your customers and then learning and then being able to give them back real solutions to the big problems they’re having – not trying to make up a problem and solve it. I think that listening is what yields that, and I think it’s one of the reasons we’re doing really well at Stash and why and hopefully will continue to do really well. Alejandro: I love it. So, Brandon, for the folks that are listening, what is the best way for them to reach out and say hi? Brandon Krieg: I would love for people to write me. It’s brandon@stash.com. We just bought our domain, by the way. After years, we bought our domain. Alejandro: Oh, you did? Brandon Krieg: Yeah. Alejandro: Very nice. Any action on social media, Brandon, on Twitter, LinkedIn, or anything like that? Brandon Krieg: My Twitter name is @brandonkrieg1. Alejandro: Amazing. Well, Brandon, thank you so much for being on the DealMakers show today. Brandon Krieg: Thank you so much for having me.   * * * If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at alejandro@pantheraadvisors.com.
Jason Gardner is the founder and CEO of Marqeta which provides infrastructure and tools to help companies build and manage payment programs. The company has raised over $500 million from top tier investors which include Daintree, Granite Ventures, Coatue Management, Lone Pine Capital, Greyhound Capital, CommerzVentures, 83North, Geodesic Capital, Visa, Spark Capital, ICONIQ Capital, Vitruvian Partners, and Greylock to name a few. Prior to this, he founded Vertical Think, and PropertyBridge (acquired by MoneyGram). In this episode you will learn: How to integrate teams with different DNA His top advice for new founders  The key to creating a business that lasts decades The power of refusing to accept no for an answer SUBSCRIBE ON: For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here). Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below. About Jason Gardner: Jason Gardner is the founder and chief executive officer of Marqeta, Inc. Under his leadership Marqeta has defined the global standard for modern card issuing, developing an industry-leading issuer processor platform that now powers the world’s most innovative companies. Prior to Marqeta, Jason Gardner co-founded PropertyBridge, which became the leading rent and lease-related payment and transaction integration platform for multifamily real estate. PropertyBridge was acquired by MoneyGram International (MGI) in 2007. Before PropertyBridge Jason Gardner founded Vertical Think, an IT management company that worked with start-ups and larger organizations. Jason grew up in New Jersey where he had numerous businesses that included making and selling tie-dyed T-shirts. Jason Gardner was a G.O. at Club Med in Paradise Island, Bahamas and a constituent liaison for Senator John McCain in Arizona, primarily working as a contact between McCain’s constituents and the Armed Services and IRS. After attending Arizona State University Jason Gardner made it to California where he began to pursue his passion for technology. Jason Gardner holds a Bachelor of Arts degree in Political Science from Arizona State University. Connect with Jason Gardner: Linkedin Twitter Crunchbase * * * FULL TRANSCRIPTION OF THE INTERVIEW: Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have an awesome founder. He’s done it multiple times, and with his last rodeo, what a ride! I think that we’re going to be learning quite a bit on building, scaling, and of course, exiting too. So without further ado, I’d like to welcome our guest today, Jason Gardner. Welcome to the show. Jason Gardner: Alejandro, thank you for having me. Alejandro: Originally born in Washington, D.C., but you grew up pretty much in New Jersey, so tell us about your life growing up. Jason Gardner: I grew up in Fair Haven, New Jersey. It’s in Monmouth County for those folks from the tri-state area. I was pretty much a beach rat. I spent most of my time surfing, even during the winter. I had a great life. I think growing up in New Jersey, in a small town, is a lot of fun. I had some pretty interesting times. I grew up with my mother who has been married four times; my father has been married three times. I was growing up in Fair Haven with my mom and my stepdad, Chris. My mom was a court mediator in Freehold, New Jersey, and my stepfather was a stockbroker. I spent a lot of my time growing up like most kids, running around, and hanging out with your friends on a bike. I started working when I was 14 years old. My first job was at a store called Video on the Ritz doing VHS and Betamax if you remember Betamax back in the day. It was a lot of fun. It was a great place to grow up. Alejandro: How did you get this love for doing business? Pretty much all over high school and college, you were the kind of kid thinking about how to create value and extract value, so how did you get that influence? Jason Gardner: If I think about being an entrepreneur my first time when I was about five years old, I recognized that I could hustle people for money, whether it was picking your weeds or shoveling your driveway. I actually really enjoyed work, and I took pride in the fact that I could use my own skill to do a job and get paid directly for it. There’s something that I really enjoyed about that when I was a little kid. Then I had my job at Video on the Ritz when I was 14. By the time I reached high school, I was a busboy, waiter, and a cook in multiple restaurants. I also worked at a surf shop called Island Style Surf Shop for those of us who grew up in Monmouth County. My first business in high school was a tie-dye business in my junior-senior year. My sister was making tie-dyes as the time. She connected me with a company that sold the dyes, and I would make tie-dye shirts and sell them on New Jersey Transit heading to Madison Square Garden to see the Grateful Dead Shows. That turned into tie-dying school tee-shirts and all kinds of stuff. It was actually a nice business, which I brought to my first year of college. Alejandro: That’s amazing. You always had this thing, as well, in you that there was something going on in California. Why did you want to move to California?  Jason Gardner: When my parents got divorced, my dad moved to Manhattan. He lived in Manhattan for about ten years, and he was invited to open an office in San Francisco for the company that he was working with. I had been someone who had loved technology since I was a little kid. I think the first coding class I took was when I was nine years old. I had a Commodore 64. I had an Atari. I had the earliest Nintendo’s and SaGa’s. I was a gamer back when gamers weren’t really known. All I wanted to do was go visit California. When I did visit California, I asked my dad. I hadn’t traveled anywhere outside of the tri-state area. The place I had been to was Canada. As a little kid, I had been to Toronto but really hadn’t been anywhere else. I jumped on a plane with him and my two sisters. I was a middle child. I said, “I want to see Silicon Valley. I want to visit Apple, HP, and Intel.” He drove me down 280 and up 101, and we visited all these companies. This was when I was 13. All I wanted to do was move to California. After high school and college, I backpacked in Europe for four months, then packed up my car in Springbreak, New Jersey, where my mom was living and drove to California. That was in 1994. Alejandro: That’s amazing, and there, you went from account executive to business development manager for different companies. Those are all nice segues that led you to build your first business, which was quite a humbling experience.  Jason Gardner: Yeah. My first company was called Vertical Think. It was an early Elance (now Upwork) type of business where we were connecting web developers with smaller web development projects. I would consider it more a lifestyle business. We had talked to VCs about potentially funding us, but it was not something that was certainly fundable, at the time. It wasn’t technology-based. It was more professional services-based. I learned a lot. It was headquartered at 679 Bryant Street in San Francisco, south of Market. This was before any of the buildouts you see today were there. At the time, I think the ballpark was being built. It was a lot of fun. As someone who is young in their 20s, I was certainly more interested in having fun than actually building a business. So, it ultimately failed, but I learned an extraordinary amount about what it means to go build a successful business. I took what I learned in a failure and turned it into a success in my next endeavor, which I co-founded with four other folks. Alejandro: And as they say, once an entrepreneur, always an entrepreneur. I’m sure that from this experience with Vertical Think, there was at least one lesson that you knew that if you were to start another business, you would definitely implement that lesson. What would that lesson be?  Jason Gardner: Running a business is not for the faint of heart. It’s both mentally and physically taxing. I was more interested in having fun. I didn’t take the idea of building a successful business seriously. You have to enter it with this thought of; I am preparing myself to go and do this. I’m a professional, and I know the things that I need to. I need to hire the right people; I need to have the right vision; I need to have the right infrastructure; I need to have the right materials. There’s a lot of planning that goes into it. I was more enamored with being a CEO, at the time, and building a business and having fun than taking it seriously. When you want to go build a business, especially with other people’s money, the people you’re hiring are spending a lot of time with you. Today, I take that very seriously and take it very much to heart that they’re spending their time with me to help me and our company and our customers build their businesses. So, I didn’t have that level of maturity at the time. I learned a hard lesson in it to help me for what was next. Alejandro: What was next was your next rodeo, and that was PropertyBridge. What were you guys doing a PropertyBridge?  Jason Gardner: Yeah. Between Vertical Think and PropertyBridge, I took another sales job for a company in San Francisco. I needed to earn money. PropertyBridge got started – actually, interestingly enough, at the time, I was planning to move to Australia to start a Java Juice type chain called Crocodile Cooler with a friend of mine. I was at a kiddie concert at Sherith Israel, a temple in San Francisco. My wife and I were part of the congregation there, and so was my friend, Ryan Gilbert. We met him and his wife, Nicki Gilbert, at this kiddie concert. He was an entrepreneur and had a business before that wasn’t successful. He and I were getting together every Friday for what we called the Entrepreneurs’ Breakfast. He said to me, “I’m thinking about this idea of paying rent with a credit card.” I said, “How many people pay rent with a check? Probably everybody.” He said, “Yeah. Imagine paying rent with a credit card.” I was blown away by the business idea, so I dropped that Crocodile Coolers thing and joined Ryan and three other folks to go build out PropertyBridge, which would allow you to pay rent electronically through different means, whether it was ACH check, which we scanned through remote deposit capture devices and then acquired it – being able to accept credit cards at a property for rent-related payments. We started that in 2004, we sold that in 2007 to MoneyGram International for 28 million dollars. That was a big deal for all of us. I ended up staying under contract with MoneyGram for two years, and then after that, I founded Marqeta by myself. Alejandro: And it was a big deal for investors, too, because they invested 2 million, and then you get this 28 million exit, so quite the 10x return that they go after. I think that for you, too, this was probably a great experience to see a company going through the full cycle of building, scaling, financing, and exiting. Did that give you the full picture of “This is how it works – this is actually possible” kind of thing? Jason Gardner: Yeah. I learned a lot about scaling and hiring people and the impact of bad decisions, especially impacted by decisions around hiring people and what it meant to be focused. What it meant to be overeating or doing too much – having a grand vision, but wanting to execute on way too many things at the same time. We learned a lot. I, along with my co-founders, by the time we sold the company, we were ready to move on. Multi-family real estate, at the time, was only 19.8 million units in the U.S., and the rental of real estate is a global phenomenon. But it was very much focused in the U.S. We didn’t have the multi-billion-dollar company vision. It was something that was much smaller than that, but when I finished my run at PropertyBridge and then MoneyGram, what I wanted to do next was, I wanted to go with generational. That was hard to find an idea that I really wanted to do until the Marqeta idea found me. Alejandro: How did the idea find you? Jason Gardner: My friend Sukie Singh, who also had a company in a multi-family real estate space. He and I had become good friends through building a business. He sold his company about a year after I sold PropertyBridge. He was on contract with a company called Realpage. I was eating dinner with him in San Francisco at a sushi place. I had gotten together with him specifically, and I said, “I have all these ideas. I want to bounce these ideas off of you.” He said, “I have all these Groupons in my pocket. It’s silly that I have to walk around with all this paper. How about trying to put all of these Groupons onto a card? You’re a payment nerd.” I wanted to do a payment business, and it was very much like a shock to my system. It was something that really, I was speechless for about 30 seconds because my brain went into full overload, and I knew this was what I had to do. I said, “That is a really good idea. I want to go solve that problem.” So, literally, that night, I began searching to see how this would be done. I knew nothing about issuing and processing. I knew about the payment card industry, but specifically about acquiring, which is what you do every day, which is paying into an interface, whether online, inserting your card or tapping your phone, but I didn’t know how the cards worked themselves. So, I immersed myself in the technology, talked to a lot of people about the technology, and recognized that we had to build an issuing processing system from scratch and then began to map the architecture out and what that would look like. I worked with some really smart people from PropertyBridge, who joined me for Marqeta, and the rest is history. Alejandro: So, it seems that you were, obviously, speaking with a lot of people and bouncing ideas with a lot of people, so why did you decide to go at it solo as a founder? Jason Gardner: By the time I finished PropertyBridge, none of the co-founders got along or wanted to spend time with each other at all. In fact, I found that through the process of building PropertyBridge, we all had different ideas of the things that we wanted to do, and you felt that because you were a co-founder of that business that I have a say in the color and the size of things; I have the say in where we go and what we do. It was something that we probably should have done from the very beginning, which is, “You’re responsible for this. You’re responsible for that. You are solely responsible for these decisions.” I think this is one of the issues that co-founders make in the beginning is they believe that it’s equitable, so everybody has an equal share, and everybody has a say in what’s next. That is the wrong way to do it. That’s the way we did it at PropertyBridge. Yes, we were successful, but by the time PropertyBridge ended, I was exhausted and wanted to, in my next business, be able to call the shots and decide what we were going to build and what the colors were and what our values were and what our vision and mission was. I was really ready for that. I didn’t want to share that with anybody else as a sole founder in the beginning. Now, obviously, as you build a business, you build a business with people. When you work with a lot of really smart people, they bring you a lot of really good ideas, but ultimately, it’s up to you to parcel all this information coming at you and find a path forward. Then part of finding the path forward is convincing others to join you in that journey. I learned a lot from PropertyBridge and then being a sole founder of things that I had to get done. But I would never have done it any other way.  Alejandro: So what ended up being the business model, Jason? Must Read: Orr Danon On Raising $90 Million To Drive Artificial Intelligence To The Edge Jason Gardner: When we got started, we solved the problem, which a lot of people told us we couldn’t do, which was how to figure out how to put a bunch of Groupons on a card. The first product we came out with was a consumer product called the Marqeta card, which allowed you to pay for groceries, and you would get a 5% to 7% return based on paying in advance for things such as groceries, food, clothing, and a number of things. It was moderately successful. In the earliest business plan, in the early days of 2010, I had a strong belief in open platforms. I thought that the engineers and developers, technical product managers, entrepreneurs, were going to want to build their own products on top of platforms using an API. They could choose how to interact with that API to build products that were very different from any other product that was being built. But as an issuer processor, you’ve got to prove the technology works. That was the first product. So, in 2012, Facebook called, and they said, “We want to build this thing called a Facebook card. It’s your birthday – 100 friends want to send you 100 gift cards from 100 different merchants, and we want them to live on one card. We’ve talked to all these issuers/processors, and they keep pushing us to you guys because this is something that you’ve solved.” Which we had. This was the how do you put a bunch of Groupons or how do you put a bunch of gift cards on a single card. So, we exposed our API to Facebook engineers, and we fell in love. We really loved working with other technically-capable people around wanting to build products. I found, through that process, I was having a lot more fun working with engineers and product people as infrastructure versus having my own product. So, eBay was the next company that came that wanted to build a product. We quickly shut down the Marqeta card and worked with several companies and exposed our infrastructure to them. It was still closed; it wasn’t open yet. At the end of 2014, we launched modern-card issuing, which was the ability to build card products. They can be physical plastic cards, tokenized cards, which at that time didn’t exist, but the future would be dropping those tokenized cards into Apple Pay, or Android Pay, or Google Pay, and Samsung Pay, or virtual cards, which could be either server to server virtual cards or server to consumer business virtual cards. That was a huge bet for the company because we didn’t know if we were going to find product/market fit for that. We just knew that we had a lot more fun working with engineers and other companies and bringing them this modern card issuing infrastructure. We found product/market fit, actually very quickly in 2015. What you see today is really the same business, but obviously, much more profound technology and profound business model than it was back in 2015. But today, we’re a 4.3-billion-dollar company. Again, we’re in that first chapter of what we believe is a generational story. Alejandro: Very cool, and talking about the valuation that also leads me to ask you how much capital has the company raised to date? Jason Gardner: We’ve raised 535 million dollars to date. Alejandro: Wow! That’s a lot of zeros there, Jason. Anyone could get dizzy. I want to dive into one of the stories here in that journey, as well, of going from financing cycle to financing cycle because I understand that in 2015, you were literally weeks away from running out of money. What happened there? Jason Gardner: We didn’t hit our milestones. We had launched the open API. We were in the very early days of product/market fit. We were struggling to manage the incoming business. You can create a very well-documented API – it’s not good enough, especially in an area like issuing and processing where people want to go build card products, but the lingo and the information around card issuing – we were drinking our own or eating our own food so much that we didn’t understand the educational part that people needed to go build products. So, we missed some very key milestones. We were weeks away from running out of money. We had a number of investors that wanted to write some more checks, but they wanted me to find some new investors. I did that within five days. Alejandro: Wow. Jason Gardner: I convinced the new investors around the vision and where we were going. The total addressable market or TAM for this business was significant and ended up raising what was our Series C. From there on, the company has performed extremely well. Alejandro: So, that day that you probably signed the subscription agreement, and money was wired, I’m sure that maybe there was something that you promised yourself that maybe you were going to keep in mind as you were continuing in the journey of building this business. What was that? Jason Gardner: Yeah. Those weeks before that round closed were some of the most depressing moments of my career with building Marqeta. It was very, very, very difficult. I couldn’t smile. I couldn’t sleep. I was horribly depressed because I had spent all this time, and all of these people and our customers were depending on me to get this money in. So, one thing that I learned was, not only manage your money a lot better but raise when you don’t need it. Start the fundraising process early; create milestones that you can reach that are important milestones in the company, not something that you’re creating a bar so high that you want to push yourself. It’s almost dangerous to do that in some ways, and I experienced that. One thing was, focus on doing a lot less, having milestones that maybe are smaller in nature but reachable, so it creates a goodness or positivity in regard to the milestones that you’re reaching. The board sees that. The new investors that you’re talking to over the growth of the company see that. Then when you decide you want to do your next round, it becomes more of a process in building the business versus an “Okay, I’ve got to go on a six-month journey to go raise money and spend all of this time and stress to go do this in the hope that I can raise.” If I don’t, then the business – and I thought very differently about fundraising after that experience. It was really hard.  Alejandro: You, as well, you’ve been able to manage not only the professional side, but also the personal side because you had a very supportive family, too, and also a family that needed your attention as well. How did you go about juggling both fronts? Jason Gardner: Yeah. Being an entrepreneur and being a father and a husband is difficult. I have a son who was born with special needs. He was born with a genetic disorder called 22q DiGeorge syndrome. He needed a lot of help as a young kid. He’s 18 today, and he’s doing great. My wife ended up going back to school and got her Master’s in social work, and now she’s a psychotherapist. She actually works with other parents of kids with special needs. She’s very good at what she does. Also, many times a psychotherapist today – I’ll have a tough day, and she’ll say, “Step into my office.” Also, two years ago, she was diagnosed with breast cancer, and she was battling breast cancer for a good year. It was very hard both personally and professionally because – you know this. You’ve dealt with this in your past, too. Alejandro: Yeah. Jason Gardner: Which is, you feel like you’re being torn apart. Your heart is with your family. I saw how my wife was suffering and how much she needed me, and I’m also incredibly loyal to my wife, but I’m also loyal to my investors and my employees and our customers in building the business. It takes an incredible balance. I think, for me, I’m lucky in that I’ve been married to my wife for about 20 years now. We’ve been together for 25. She’s tough! She’s a Jewish girl from the Bronx. She knows what it’s like to work with me. She went through all three companies with me, and she knew what was important to our family and what was important to me. Together, with Ethan and my daughter, Delia, just really balanced things out in a way where we could do it all, and we did it all. She’s cancer-free. She’s very healthy. Obviously, the business is doing great. Kids are doing great. I really couldn’t do this business without her. Having a great partner, whether it’s your wife, your husband, significant other, partner, boyfriend, girlfriend, family, that is really important. It helps you through the very hard times when you’re horribly depressed, and it helps you through the great times when you’re finding success in the things that you’re doing, but they’re keeping you very focused. Alejandro: Absolutely. And honing in there on success, I heard you say that success is not something that you achieve, and that said, it’s something that you’re constantly going after. I’m sure that here, especially when we’re talking about Marqeta and the incredible business that you’ve built, you had to scale yourself too as a professional so that you were able to grow at the same speed as the company. So, how have you been able to do that? Jason Gardner: Yeah. When you’re building a business, you have to grow both personally and professionally; you have to scale personally and professionally. There is a lot to building a business because you build a business with people. There are people, obviously, your employees – I refer to them as my business partners. There are your customers. They’re people too, and your investors are people. When you’re building, you have to have a global view on things. You have to be very focused on the people aspects of what you’re doing. Sometimes, I’ve failed at that. When people came to me five years ago and said, “I want to know what my career path is.” I really couldn’t wrap my head around that. I was like: there’s so much work to do, what’s a career path? These are the scaling things as a CEO. You really have to embrace about what is next in your professional career as a CEO. You also need to be a human being, and personally, you need to focus on, what do I need to be a better person and a better CEO, recognize the things that are going on in my company, have those personal connections so that you can build this business. I’ve said this before, especially about investors: sometimes, you look at investors as just suitcases full of cash, but VCs and investors make very few bets in their life – maybe 20 to 25 companies at max they’ll invest in. When times are tough, and when times are good, you want to be able to have a personal connection with them, so they’re there for you. I’ve done that with my investors. I’m close to all of them. It helps because having that personal connection helps you go build. I didn’t get that stuff in the beginning, and professionally, in building the business, I knew that we had something that was going to be big because I felt it because of the size of the addressable market, and this idea of open platforms. But as you build, you need a lot of help. Like, three years ago, I got a coach. She’s incredible and has helped me a lot to grow both personally and professionally, where today, we’re close to 450 people. We’re a 4.3-billion-dollar company. We’ve raised 535 million dollars, and we’re in what I believe to be the very early stages of engineering our vision. There’s so much more to do, and I couldn’t do it without having that personal and professional view on how the world works. Alejandro: Absolutely. To expand on that, and especially for the folks that are listening, is there anything that you can tell us around the number of employees or anything that gives us an idea on how big Marqeta is today? Jason Gardner: I can’t disclose too much. I can say that at the end of last year, we issued our 140 millionth card. What that means is, we’re easily in the top 25 issuers in North America. We are a global company now. We operate in the U.S., Canada, Europe, and Asia. We started off with Australia, which is very much a card-center culture, and we’ll be in a number of companies in the coming year. Around that, I have offices here in Oakland, California. We just announced our second headquarters in Denver, Colorado, and we have two offices in the UK and have plans to be opening up more here in the coming months. Alejandro: Where do you think that your space is heading as a whole? Jason Gardner: Modern card issuing itself today is a 45-trillion-dollar market if you think about carded volume globally. By carded volume, I mean VISA, MasterCard, AMEX, Discovery, China UnionPay, NICE, Whole Accel Exchange, and there are hundreds of networks around the world that would fit into this carded volume. That’s moving to 80 trillion in the next ten years. Alejandro: Wow. Jason Gardner: That’s the biggest expansion of card processing we’ve ever seen. Ultimately, I’d like to issue a card on every single continent because we see that there’s FinTech’s being built from countries in Africa to Asia to new companies being built in North America, South America, Latin America, and all over the world. It’s been interesting to see how modern card issuing, a category that we invented has grown. There’s still an extraordinary amount to do because based on these companies. At the time, in 2010, many of our customers hadn’t even been invented yet. We still see where new businesses are being invented every day that we can power. Alejandro: We’ve talked that you guys are still at chapter one, and I want to expand on that. Let’s say you go to sleep tonight, Jason, and you have an insane snooze, and you wake up in a world five years later, where the vision of Marqeta is fully realized. We’ve made a few jumps from that chapter one that you’re in today. When you wake up from that tremendous snooze, what does that world look like when that Marqeta vision is fully realized? Jason Gardner: Part of the Marqeta vision, and I’m not going to go into the entire Marqeta vision five years out, but part of that Marqeta vision is issuing a card on every single continent. That card is going to be digital-first. We’ve definitely seen through this global pandemic where this thought of digital-first credentials or maybe three to four years out is happening right now. We’re going to see digital-first credentials in five years being not only a global phenomenon but, in many ways, you won’t be carrying plastic anymore. This is not new. Asia has been using phones to authorize transactions for years. But we’re going to see it certainly more globally. This acceptance of the ability to pay with a phone at the point of sale – Apple pays only in its early days. If they don’t have a significant amount of terminals globally enabled to accept that – Google Pay either. We need to build out this two-sided infrastructure and the ability to pay with phones at the point of sale, and the ability to create tokens. These tokens fit into Apple Pay or Google Pay easily. We did this back in ’16, and we’re the first company to do that. So, today, we see where this is beginning the global phenomenon. In five years, it’s going to be very commonplace where your phone is carrying all your credentials to make payments. You wouldn’t be carrying cards. Alejandro: That’s amazing. One of the questions that I typically ask the guests that come on the show is – you’ve been at it now with Marqeta for a while. This is your third business, so you have your fair amount of lessons, experiences, successes, failures, and everything in that non-straight line, which is entrepreneurship. So, if you had the opportunity, Jason to go back in time, and have a chat with your younger self, with that Jason that is thinking about launching a business, and you were able to give that younger self one piece of business advice, what would that be knowing what you know now? Jason Gardner: Have a vision around technology and what you want to go build. What I didn’t have back then, which I would talk to my younger self about is having a vision around people. So, how you want to hire people and how you want to support people. This is not just your employees; these are your investors as well. I think as the years have gone on, I’ve begun to realize that this is probably within the last 4.5 to 5 years is that companies are built with people. People need a lot of different things, and a lot of different people need a lot of different things. There’s the idea of success and building this great business and great technology and having great customers, but also be focused on the people and what they need, like the career goals that they’re going to go hit, what they need to hear from you from a weekly and monthly basis around communications – that’s a really important part that I would definitely talk to my younger self about. So, there’s the building the business and the technology, but there’s also like building the people and the human aspects of building a business. Today, I handled both in an equally important way. I’m a lot happier as a person in doing that, and I’ve seen a lot more success in focusing on both of those. So, that’s definitely a piece I would talk to my younger self about. Alejandro: That’s amazing and very profound, Jason. For the folks that are listening, what is the best way for them to reach out and say hi? Jason Gardner: They can always email me: jason@marqeta.com. Alejandro: Amazing. Well, Jason, thank you so much for being on the DealMakers show today. Jason Gardner: Alejandro, thank you for having me.   * * * If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at alejandro@pantheraadvisors.com.  
Hanif Joshaghani is the co-founder and CEO of Symend which is a behavioral analytics platform that provides customer engagement products to identify customers having trouble with their bills. The company has raised over $52 million from investors like Ignition Partners, Inovia Capital, TELUS Ventures, Mistral Venture Partners, and Impression Ventures to name a few.  In this episode you will learn: Ways to deal with uncertainty personally and professionally How Hanif screens and builds relationships with investors in advance Picking the right investors over the highest valuation His top tip for what to do before you start your own venture SUBSCRIBE ON: For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here). Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below. About Hanif Joshaghani: Hanif Joshaghani is serial entrepreneur who is passionate about building high performing teams that deliver results for clients. Currently, Hanif Joshaghani is focused on growing Symend, an endeavor he believes in passionately since it represents an intersection between disruption, value creation and social good. Hanif Joshaghani background includes 15 years of senior roles in capital markets, energy finance, business development and entrepreneurship in a broad range of industries including investment banking, energy and technology. Hanif Joshaghani has raised about $100MM across the four companies he has founded with several exits to date. Hanif Joshaghani is also passionate about helping other entrepreneurs and is an active angel investor in several technologies companies. Connect with Hanif Joshaghani: Linkedin Twitter Crunchbase * * * FULL TRANSCRIPTION OF THE INTERVIEW: Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a founder that the journey that he’s been on all his life is so inspiring. From being in a refugee camp to landing in Canada, and now to building a hyper, hyper-growth business: building, scaling, exiting. He’s done it a few times, so I think we’re going to learn quite a bit, and I think that the insights are going to be remarkable for all of you that are building and scaling, right now, your own companies. So, without further ado, let’s welcome our guest today. Hanif Joshaghani, welcome to the show. Hanif Joshaghani: Thank you for having me. Alejandro: Originally born in Iran, and I know that your family escaped when you were almost two years old, and that was quite a journey. Tell us about this, and tell us about how was your upbringing? Hanif Joshaghani: Yeah, my family escaped. We actually escaped over the mountains, once I was old enough, using Kurdish smugglers. We didn’t make it very far. We made it as far as Iraq, and we were in camps there until basically, things got real dangerous there. The process got accelerated, especially in the beginning, for the most vulnerable people like young kids to get refugee status and move over to countries that were willing to take us in. So, I arrived in Canada. I stayed with a foster family that the government was supporting in the process, and then my parents came shortly thereafter. Alejandro: How long did it take from the moment that you and your family escaped Iran to landing in Canada? Hanif Joshaghani: Oh, I spent most of my younger years in the camps. From the time when I was 1 1/2 until I was 13 ½, I think I was in camps.  Alejandro: So, 12 years almost in refugee camps. What was life like in those refugee camps? Hanif Joshaghani: Honestly, if that’s all you know, it’s actually not that bad. People only really struggle with hardship. Hardship is a relative concept. If all you know is the camps, then you actually don’t think it’s all that bad. It’s only when you’ve seen better, and then you have a memory of something better, and then you end up in the camps, and it really affects you. Kids that came, like at one-and-a-half years old, I didn’t know anything, but the kids that ended up in the camps or refugee statuses that went through extreme adverse life events, but they had memories of a better time, they struggled a lot more. Alejandro: Out of this experience, how do you think it has shaped who you are today and also the way that you view life and your own personality too? Hanif Joshaghani: I think there’s an element of drive. It’s not just that. It’s the whole experience from the camps, to Toronto, to the hard work that went into catching up in academia and stuff like that, and getting to a point where I eventually ended up with a scholarship to the University of Chicago, to really working hard after Chicago to make a life for myself in capital markets, to getting a full scholarship to the University of Toronto for my MBA. It just became this mentality of never let adversity get in your way and always challenge yourself to do more. I think that the prevailing mentality ends up being something akin to challenging yourself and pushing yourself and fighting is like breathing. You should always be fighting, and you should always be challenging yourself. Otherwise, you are stagnant, and you may as well just lay down and give up. So, it became this mentality that life is about struggle, and life is about never being satisfied and always pushing yourself to do more. It becomes like a mentality. Alejandro: I hear you. Obviously, this scholarship of New York really changed everything for you because that put you on track to also get the scholarship for the undergrad and then also for your MBA. So, how did that scholarship happen? Hanif Joshaghani: My family agreed to sponsor me, and the money got taken care of for me to go to this great high school and just the last part of high school. The experience that changed in that high school was the mentality – every kid was trying to get into a top university, and every kid was taking advanced placement classes. The standards were completely different than the schools that I was exposed to back in Toronto. Not that there aren’t any good schools in Toronto. It’s just I wasn’t going to them, and I was in some rough neighborhoods. It really transformed my life. I went from someone that didn’t realize I had no exposure to anything other than my narrow scope of what the world was all about. Then, I go to this school in New York, and it’s like the status of the families, the businesses that the parents had been involved in, it exposed me to a part of the world that I had never seen before. I immediately knew that I wanted to aspire to achieve and earn a place in that world for myself and for my family. That became a motivational factor from that point on. There was nothing that was going to get in my way after that. Alejandro: Got it. So, after your undergrad and doing some investment banking, then you do your MBA, and this definitely opens you even more to the capital markets. How did you develop this curiosity or this interest into business and economics? Hanif Joshaghani: Honestly, when I first went to University, everybody was convinced that because I could do a good job talking and arguing that I would be a lawyer. I was on the debate team, and the mock trial team, and things like that. I was good in math, as well, and that was my one really strong area, where I was natural at it and didn’t have to work super hard at it. I didn’t realize that I was going to end up in economics and open up the world of finance. That happened at the University of Chicago. It’s a world-renowned economics program, and I decided to dip my toes in it first. I immediately fell in love with it, and I started to explore what the world could be about after that. I started to do internships at the Chicago Mercantile Exchange while I was in school. It exposed me, again, to a whole new world of business and finance. I didn’t know it was going to lead to entrepreneurship at first, but I loved it. I loved all of the stuff I did. The first time I stepped onto the Mercantile Exchange, it blew my mind. I was just like, “Wow! What an amazing – what an extraordinary place.” I worked really hard and focused on math and economics and things like that. I still was interested in all the other stuff. I took a lot of political science, and globalization, and all of these other types of courses, as well, because I felt there was a nice synergy between that and economics. So, that ended up being my main focus area. The University of Chicago has that impact on people. Even though you don’t love economics going in there, you end up loving economics once you’re there. Alejandro: Got it. Then, you go into investment banking, and here you are; you have the safety of having the 9 to 5 and the nice salary too. For you, I’m sure that your family was super proud. Why did you decide to complicate your life and to say no to that and start your own business? Hanif Joshaghani: The investment banking thing was interesting. Honestly, I learned a lot in investment banking, but I didn’t love it. I think investment banking cultures have changed a lot since I worked there. After I did my MBA in Toronto, and I went into investment banking, I learned a lot about business at a much higher level than I’ve ever had before working in capital markets looking at M&A deals, massive financings for public companies, and things like that. But working at an investment bank didn’t seem like it would be good enough to consistently drive my passion. Especially, as an associate or whatever it is – if you’re not a managing director, and you’re not running the show, you’re effectively a cog in a massive machine. While it was great from a learning perspective, and I built some good skill sets there, I knew quickly while I was in investment banking that it would be a stepping stone. No matter how much money was involved, that it wouldn’t be what was going to motivate me to work hard for the rest of my life. It needed to be something about passion. I needed to be passionate, and I had to do something for myself. I couldn’t be a small part of the massive machine. Alejandro: Let’s talk about you coming out of that massive machine and launching CoreWest. What were you guys doing at CoreWest? Hanif Joshaghani: CoreWest was a boutique advisory firm. A couple of us guys got together, and we were going to introduce bulge bracket banking capabilities to smaller deals using a very lean business setup and infrastructure to generate value for small-time entrepreneurs in Alberta, which is a very enterprising entrepreneurial place. It worked. We had some decent success, and what the business ended up evolving to is, as we started to generate [12:18] and build a half-decent business, we decided to parlay those [12:24] into investing directly in some of the deals that we were getting involved in and becoming business partners with some of the people that were coming in the door looking for business support. So, we would do strategic reviews, help bring in lending, and then put in some of our own money as well. That was my first foray into entrepreneurship through the merchant banking process. Then one of the businesses that we got some exposure to, I really liked what they were doing. I thought there was a great opportunity there, and we decided to run with it. I then decided to focus more and more of my time with it to help evolve the business concept, and I brought in some of my close associates. For example, it was a hardware product. We had a vision – it needed software and satellite connections and reengineering. So, I brought in some of the resources to help make some of that happen, and we built a good business out of it. We landed a bunch of contracts. The business was called Aspes. Then we monetized our stake in that to them parlay the into our first true SaaS company, which was initially called InvistaWare. Eventually, it was called Aimsio, and we built that into a decent business. We did a part capital raise, part divestiture, where a family office took over half the business basically. Through that process, I created some liquidity for myself, and I took that liquidity. I had the idea for Symend, and I led our initial round into Symend to launch the business using the initial round, a friends and family round, which I led. Recommended: Jay Bregman On Raising Millions To Help Businesses Thrive In The New Normal Alejandro: Obviously, here, you’re jumping from the advisory side to the operator’s side, and to seeing the full cycle. So, out of Aspes and Aimsio, what were the top three lessons that you took away from those experiences? Hanif Joshaghani: There were a bunch of important ones. I think one of the things that I learned that was super important is that you have to make sure that you have the right team, and you have to make sure that you have an idea that you’re very passionate about. But most importantly, you have to make sure that you don’t let the passion take over the common sense stuff around doing your diligence and validating the idea, and doing the research, and validating the demand and the viability and feasibility of the idea and whether the people would pay for it, and whether it’s doable, what the size of the market is, like really doing your work before you start to build something and then try to jam it into the market. I say this all the time: it’s a lot easier to pivot with an idea than it is to pivot with a product. That was one key part of it. Setting the business up the right way, early on funding it the right way – those were all key lessons that I learned. The other important lesson that I learned, for me anyway, is that, and it works for some where there’s no CEO. There’s no single person that the accountability rolls up to, but I knew that wasn’t going to work for me again. At Aimsio, I had great friends of mine, and I’m still close to all of them. There was a sense of this is an equal partnership between a couple of people that got this business going together. Alejandro: Yeah. Hanif Joshaghani: Sometimes, I always felt like, especially if those people aren’t always in synch, which never happens, it creates a lot of – and now they do have a CEO. It creates a lot of inertia, and it creates some conflict, and are we moving in the right strategic direction? That was one of the important lessons that I learned. The other important lesson that I learned is that no matter what you do in a business, running a business is incredibly hard. No other business venture that I got myself involved in – was I really down to my bones passionate about solving? It was an opportunistic thing every single time. Whereas, with Symend, it wasn’t like that at all. It was an idea synthesized from scratch at a dinner, and it wasn’t like some opportunity was sitting in front of me, and I tried to capitalize on it. There was no opportunity. I came up with an idea, by chance, and then I went deliberately, and I got super passionate about solving it, and I very methodically and deliberately put together the opportunity to go chase it. That north star, that passion for the Why, really, in my opinion, pushes you to work harder, to see a bigger vision, to align people to lead your team to new great heights, to create culture, to all of those things that are, in my opinion, the ingredients of success in a company. Whereas, if the primary driver is just making money and having success, I think it’s a lot harder to make all of those things happen. That’s the key difference between what I’m doing in Symend and everything else. The tip of the spear at Symend for me was my personal passion and obsession with solving this problem that helped so many at-risk, vulnerable people in society get to a better place. That north star didn’t exist for me until I started Symend, and it’s been a huge difference-maker. Alejandro: Let’s talk about how you meet your partner at Symend. Hanif Joshaghani: Yeah, Tiffany. Tiffany and I have been friends for a very long time. When I was at Aimsio, she had come in and done some consulting for us, and I immediately built a strong relationship with her, and I immediately saw how talented she was. Over the course of the next six months to a year, I kept coming up with ideas. “Hey, I’m investing in this thing,” or “Hey, I’m doing that thing.” I would keep bringing her ideas, and she said, “Hanif, there’s no Why here.” Unless there’s a strong social good and strong Why, I’m not going to leave what I’m doing today. She was working in a company called TinyEYE to do something else. So, I never quite understood her strong connection to Why, and she can’t get behind any business, no matter how lucrative, unless there’s a Why until I had the idea for Symend, and it finally dawned on me why a Why is so important. The only phone call that I made was to Tiffany. We went out for some drinks, and really on a napkin, I wrote down the business plan and the idea, and we sat down there. She had a job offer to go be CEO of an established company with like $10-15 million in revenue or something like that. She picked this highly speculative business plan on a napkin with me instead of that sure thing. It finally dawned on me how much she meant that stuff that for her, the Why matters more than everything. It’s been an incredible partnership, and we’re incredibly complementary, and I think the rest is history. Alejandro: Then what ended up being the business model so that the listeners can understand Seymend? Hanif Joshaghani: It’s interesting, actually. The business model has been consistent since day one because we did so much work upfront like six to eight months of research before we even wrote a line of code. We were very deliberate about the way we started to build the company, which I think is another important lesson. We built a platform to help orchestrate and execute customer engagement and treatment campaigns that are very intelligent for massive organizations where they have to do that for millions of at-risk customers. If you think about any big company that has a large base of people that are at risk of leaving due to delinquency over retention issues or whatever, say a large Telco or bank, all of those companies are trying to engage with millions of customers every single day, and a lot of it they try to do through brute force on us, like lots of call centers, lots of unintelligent, like the things that don’t learn and iterate and aren’t highly targeted, so they just overwhelm you with a bunch of emails and SMS and a bunch of call center stuff. It’s almost like trying to overwhelm the customer into submission. Instead, what our platform allows them to do is to be a lot more behaviorally targeted, so that you’re getting the right message with the right tone of voice to the right consumer so that they engage back with the right mindset that it’s not about hammering you and overwhelming you and submitting you. It’s about valuing you as a customer and treating you as an individual instead of a transaction so that these people engage back the right way, so that not only do you cure whatever is going to cause them to leave, whether it’s delinquency or unhappiness or whatever, but you fortify the relationship with the brand so that you extend and improve the lifetime value of that customer. If you can do that across millions of customers, not only can you create a bunch of operational efficiencies, but you can extend the lifetime value across the entire portfolio. Alejandro: Got it, and how much capital have you guys raised for the business so far? Hanif Joshaghani: Probably just north of 63 million USD. The reason why I’m guessing is because some of the early raises were in Canadian dollars. Our Series B was 52 million, and before that, we raised about maybe 10 or 11 million USD. So, 63ish. Alejandro: The latest, the Series B, we’re talking about an announcement of early May, so how did you guys pull off a financing round of this nature in the middle of a pandemic? Hanif Joshaghani: Yeah, that was an interesting one. We have a great shareholder base, and that’s been deliberate. One of our top priorities in selecting investment partners has always been the quality and character of the individuals and their reputation through time. So, whoever the lead investor is, we always wanted to make sure that person had the right values and the right character. So, our Series A was led by Ignition, and the GP there, John Connors, is on our board. The Series B was led by Inovio, and one of the lead growth partners there, Dennis Kavelman was the former CEO of Research in Motion. He’s on our board. These guys’ reputations are amazing. In the case of Dennis, who led the Series B, there was a lot of conviction at Inovio about the mission and the problem that we’re solving. We communicated with them regularly. They had given us a term sheet right before the pandemic got really, really bad. When the pandemic got really bad, we were able to demonstrate that, “Listen, guys. The mission that we’re on to help solve this problem of customer engagement for large companies is more important than ever because COVID is negatively impacting call center capability, and the behavior of consumers is changing faster than ever, and the more violent and volatile the change of consumer behavior and consumer risk is, the less reliable backward-looking, risk, and adjudication models are going to be, and the more relevant real-time analysis of consumer engagement intent and behavior from the actual engagement strategies will be. And that’s exactly what our platform can do. It’s like run campaigns, measure intent and behavior, and learn and iterate at a high velocity so that it’s live and dynamic all the time, and it stays up with the change and behavior of your consumers. We made the case that, “Look. Not only are we going to be okay through COVID, but more importantly, the mission that we’re on is now, instead of being on the fringes, is taking center stage. The consumer, instead of being like 10-20% of all consumers that need our help, this could get up to like half the consumers that need our help. The call centers aren’t going to be as helpful as they used to be. So, this is exactly the time that Symend should be well-funded so that it can stand tall and live up to its social mission, which then automatically results in building a great business very quickly.” That’s exactly what’s been happening. Alejandro: And you were talking there about values and getting alignment around the mission with the lead investors. Especially for the folks that are listening, how do you go about making sure that the alignment is for real, because, in many instances, as you know, it’s like the dating phase. Everything looks beautiful, but then eventually, the entrepreneurial journey is full of ups and downs, and you want to make sure that these people are going to be there, and they’re going to roll up their sleeves and jump in if they need to do that. Rather than maybe like treating you as a write-off and going to the next investment. So, how do you make sure that the alignment is for real? Hanif Joshaghani: There are a couple of things. The first thing that I’ve consistently done is spend a lot of time – don’t treat your finances as transactional experiences. If you run a broad-based financing process, and you’re talking to everyone, but you’re only talking to them right when you need money, it’s hard to get a feel for how authentic those relationships are, and exactly to your point, how they’re going to persevere through time. What we’ve always done instead is have a mentality around treating financing as a journey rather than a set of transactions. So, we engage with people. We engaged with the Series B guys right after the Series A, and with the Series A guys the same, and with the C guys the same. We spent a lot of time with each one before we needed a bunch of money, and we made sure of it. The other thing is, we did a lot of diligence into – instead of just taking their references, we went to our network and found either longtime multi-decade friends of theirs or companies that have flatlined and hit hard times. You can go on Crunchbase and be like, “Okay. What did they invest in that didn’t go well? Let’s go talk to that CEO.” It was a very deliberate process of accessing their character over time, their reputation over time, and how they handle adversity, but finding the way to assess those things through our own network. For example, in the case of Dennis, the fact that I knew Dennis was the CEO and CFO of Research in Motion. One of my investors who led our seed round, Myor, who I’ve known for a very long time to the point where he was at my wedding, and he’s become one of my best friends in the whole world. Myor was an institutional equity guy. We used to travel all over the world with the Research in Motion guys helping them raise capital in their high-flying days. So, I made sure that I had really strong references for the character of the individual. And the same thing with Ignition, I went and found companies that “If something didn’t go well, how did they treat you guys?” I took the process of finding the right partner very seriously. And, frankly, the valuation was not even – I always figured that if you find the right person, and you spend enough time with them, they get a non-transactional view into your abilities as an entrepreneur and an executive, and you get a view into them outside of the shotgun financing process, then that rapport, that authentic bond will ensure that when you do get down to valuation and stuff like that, you’re both going to treat each other fairly. Our priority was never to go chase the highest valuation. It was, find the best partner to create long-term value. Alejandro: I love how you say that because, at the end of the day, in a true partnership, everyone wins, and it’s not a negotiation where someone loses, and someone else wins. I like that you touched on that. Hanif, you also were mentioning that times like this definitely have given a nice push to Symend. I want to ask you here, where do you see things heading for you guys and for your space as a whole? Hanif Joshaghani: That’s an interesting question. I think the view of what Symend is – it’s not just a technology company. We are synthesizing at a foundational level in a way that’s never been done before, a bunch of sciences. We are synthesizing in equal parts at a foundational level of human sciences like behavioral sciences, psychology along with computer science, and then lending it all with horsepower with data science and AI. We’re doing it in such a unique way that I think the future will become expanding the user cases of this thing. If you remember what I said, Symend is all about engaging at-risk customers. Today, if we define that risk as people that are past-due, tomorrow, at-risk could be anything. If you think about what Seymend is, we are the world’s best, in my opinion, designer Nyquil for consumers. It’s like if something is ailing you, we can understand what it is and give you the best Nyquil in the world so that it doesn’t get any worse, so you don’t need prescription medicine or a hospital. That’s really the business that we’re in. Eventually, we’re going to expand the definition of that and get into the [32:27] business and get into more and more user cases. We won’t be the only company that does this. I think there’s a big push into this. I’m a big believer in focusing on consumer empathy, which is going to be the new focus of strong brands. So, any company that’s all about lifetime value, that values their brand and use their brand with consumers as a pillar of their overall organization, and they view themselves as a social-good company as much as a profitable company, they’re always going to be about understanding customers and consumer empathy. So, I think the trend that I feel I started to pioneer will start to expand into all parts of these consumer companies. Alejandro: That’s amazing. One of the questions that I typically ask the guests on the show is – now, your experience is remarkable. You’ve done multiple rodeos and now, with Symend, really taking it to a whole other level. If you had the opportunity to go back in time and have a chat with your younger self, with that younger Hanif, that was maybe thinking about starting and doing something. If you could go back in time and tell that younger Hanif one piece of business advice before launching a business, what would that be, and why, knowing what you know now? Hanif Joshaghani: It’s interesting that the key thing in launching a business and having success at it – there’s the old proverb that amazing founders and amazing execution people can take average ideas and turn them into phenomenal companies. But an average entrepreneur or a below-average entrepreneur can take the best idea in the world and take it nowhere. I truly believe that. If I was going to look back to my younger self, the first thing I would learn to do is to a) work for some amazing entrepreneurs. Even if you have to take a massive pay cut or do whatever, I think the value of working for amazing, successful entrepreneurs and being a student of the game, not just doing the tasks that they assign you, but learning and sucking in every – imagine – I am where I am, and very proud of it, but if I had to look back, I would have picked to go work at early days PayPal, or early days eBay, or something like that even if I had to go work for free and bus a restaurant at night. Learning from the best and learning from these high-growth companies, I think, lays an incredible foundation for your future. The second part of it is, don’t chase money; chase passion. If you chase money, you’re never going to achieve greatness, whereas, even if your passion is cutting the best hair in the world, you could end up owning the biggest hair franchise in the whole world, and stuff like that. The thing that fuels you, and the thing that allows you to persevere and to convince other people to join you, and investors to join you, and lead teams, and all of these key things is how much you believe in your mission. Can you get other people to believe in that mission as much as you do? I think that’s a key to entrepreneurship because, at the end of the day, being an entrepreneur is fundamentally being a leader.  Alejandro: Absolutely. And I’ve never done this before. There’s always a first time. I’m going to expand on this question, and if you could go even earlier to that time when you were 13 years old, and you were in a refugee camp in Iraq, what would you tell yourself? Hanif Joshaghani: Hang in there. Things are going to get better. That would be the big focus. Just be tough. I was tough, but I could have – just hang in there and be tough, and things will get better. That would be the advice. Alejandro: Wow. Very profound. Well, Hanif, so powerful. Really, thank you so, so much. And for the people that are listening, what is the best way for them to reach out and say hi? Hanif Joshaghani: Obviously, on LinkedIn is one way. The other way is my email address. I always try to be responsive: hanif@symend.com. Alejandro: Amazing. Well, Hanif, thank you so much for being on the DealMakers show today. Hanif Joshaghani: Thank you very much.   * * * If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at alejandro@pantheraadvisors.com.  
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Creator Details

Location
New York, NY, USA
Episode Count
242
Podcast Count
1
Total Airtime
1 week, 6 hours
PCID
Podchaser Creator ID logo 448379