Disrupting Digital Identity with Aidan McCarty, Founder & CEO of Unum ID

Here's a clip from today's episode.

So I think I've always been extremely entrepreneurial. I've always been extremely interested in trying to make products that really change people's lives. You know, obviously that's not something I could do growing up very early on, but one of the core drivers for myself and for Liam is how do you build something that's really going to change things? We're not really interested in incremental change. We're interested in the zero to one. How do you build something nobody has been able to build before? And how do you gain conviction that that's an idea that's really going to take hold? And I think what's so exciting to us about this company and this vision is that identity, even though to a lot of people when you tell them, hey, I'm working in identity and digital identity, they're not all that interested off the bat. Fundamentally, this underlies everything.

Thanks for joining episode 2 of the Startup Scalers Show, Disrupting Digital Identity with Aidan McCarty, founder and CEO of UnumID. Listen to Aidan's story of coming up with an idea while still a student at Stanford and ultimately going full-time to pursue this startup in the digital identity management space. We discuss factors like creating a vision and building conviction creating a team and fundraising, and ultimately entering the difficult market of financial institutions and scaling a business in that space. Enjoy.

Cool.

All right. So, hey Aidan, how's it going?

Going well, Maxime. How are you?

Pretty good, pretty good. How about maybe we start out, if you could just give for the audience like a brief explanation of what UnumID is in a nutshell, and then maybe we can just get started.

Definitely. What we do is we help companies easily and quickly understand who they're dealing with online, and we do that by effectively turning each user's phone into a virtual ID card that securely stores their personal information only on that device under their control. So that they can instantly share it with any company. So a company like, say, US Bank can request information from me, and I can instantly prove that I'm Aidan McCarty and not somebody else. This makes online interactions way more secure, far more private, and a lot easier for all the different parties involved. Mm-hmm.

Yeah, no, sounds good. I think, you know, we had a chance to speak about this you know, a little while ago. And I remember I met your colleague also at a networking event. We were chatting about it. I think it's definitely a pretty big space, uh, with, you know, certain regulations like the KYC regulations, which stands for Know Your Customer in the financial industry. That's been pretty important. But, uh, you know, I think maybe we can start also just on the personal side, a little bit of background. Uh, where are you from?

Originally from Wisconsin, so right around Milwaukee area for anyone that's familiar along the lake in the suburbs there. Yeah, so grew up there my whole childhood. I came out to the West Coast for school. I went to Stanford for a few years, ended up leaving actually after my junior year to go work on this full-time. And the way I came at the problem of identity, I came at it with my co-founder who's my brother a year older than me. Aidan McCarty also went out to Stanford with me. We were working on political technology, and a humongous problem in political tech is trying to figure out who it is that you're dealing with online. There's an immense amount of fraud in terms of people trying to pretend to be others. And astroturfing, you know, is a term a lot of people have heard that's related to that, where you're essentially creating these fake movements to fake regulators into thinking that there's an upswell of people wanting a specific change, when in reality it's really just being funded by big money. So we came at it from that lens, and we started to notice that online identity was an unsolved problem in all sorts of different industries. You know, if you think about interacting with financial service like you were talking about, Maxime, with KYC, they're spending gobs of money trying to figure out, is this Maxime? Is this Aidan? You know, how do I know? Are they on the terrorist watch list? And even when they do figure that out, it's difficult for them to peg that to you through time, which results in account takeover attacks and fraud, things like SIM swapping and behavioral fraud and phishing attacks. And so it's really difficult to know who you're interacting with online. And that really causes all sorts of problems across many, many industries, including financial services, e-commerce, shared economy, you name it, it's a problem. And so what we're trying to do is fundamentally change that. Instead of relying on each company maintaining a database of personal information, we're trying to make it decentralized, put it on each user's device, tie that device to that single person through time using biometrics and behavioral auth to make this whole system work much more efficiently and securely. So, you know, that's kind of the backstory of how I came at this. Mm-hmm.

I'm curious, what was it like when you sort of had that pivot a bit from sort of the civic side and the political problems that were occurring with, you know, these fake identities looking to start certain political campaigns and things like that, and pivoting that towards the more business side as well, like the e-commerce and financial you mentioned. What was that process like?

You know, it was a pretty easy process, to be honest. The interesting thing about identity is the underlying problem is the same everywhere. Right? The core thing is how do you tie the world of atoms, the offline world, to the world of bits and the online world? And that problem persists across every single space, and structurally it's identical. And so taking the technology that we were building for political stuff and applying it to financial services and KYC and applying it to health tech and health records and applying it to e-commerce helping those companies negotiate lower rates, because essentially turning transactions into card-present instead of card-not-present. These sorts of applications are just incredibly logical extensions of what we were already working on. And I think one of the core things that we always look at is how do you take the opportunity space and narrow it down to something that's really concrete and really core and central and focus on that in the short term. And so what we did is we actually looked at all of these different opportunities, some of which I'm just describing to you now, that are in this space and tried to narrow it down to what makes sense for a go-to-market. You know, who has the biggest problem today? How can we solve that problem for them? That's really all that, you know, being in a startup and being an entrepreneur is all about, right? You want to help people solve their problems in ways that they can't on their own. And we looked at financial services as an obvious example of this, right? You talk to any compliance officer at any financial service, they will tell you the biggest biggest point of overhead is KYC. They're spending so much money on it. That's a cost that's rising every single year. And despite all of that, they're losing between 1% and 2% of their annual revenue to fraud. That's the average across financial services. And so there's a humongous problem there, both financially and in terms of time and administrative burden. So, you know, that's how we ended up starting there. I think the transition from political technology to that was pretty seamless. We did it very early on in the company's life cycle. We were never really 100% focused on political stuff.

So, um, yeah, no, I was wondering just because I had seen, I believe, a TechCrunch interview you were doing where you were chatting about the political side there. But, you know, I did see that all the parallels there with what you're doing now in terms of verifying people's identity were pretty much in place. So it was more of switching the go-to-market strategy than switching the product.

That's exactly right. One of the core things that we're focused on right now is making this entirely white label in the background. So this is enterprise software. We want to be a little bit— you can think of it almost like Shopify as an analogy. We want to power all sorts of different businesses to give a great customer experience to the end user. Without the end user having to know that we exist. We want to be providing them with security and privacy and ease of use without them even knowing that UnumID is the company that's powering all of this in the background. That's a slight transition from our very early go-to-market strategy, which the TechCrunch video was pointing to, which was more user-facing. We don't think that's a great go-to-market, primarily just because users don't really care enough. People care at a high intellectual level about privacy and security and these sorts of things, But when you actually ask them to take action on it, most of the time they don't. They prefer the better user experience. So what we're really excited about with the current product is we can deliver a better user experience than exists today with better privacy and better security. And all of that can happen without the user even having to know that we exist. So that's what's really exciting about it right now.

Right. I've seen a few different privacy and data management companies coming at it from either the enterprise side or the user side, and it seems like it's difficult maybe to get users to actually, for example, pay for this. I mean, most people care about their privacy and that their identity, for example, is also the same. And the thing is though, it's like for, for some things like data privacy, they aren't willing to necessarily pay for it. So coming at it from that enterprise side of companies that are actually regulated there can be a good strategy. But I'm curious, like, what's the— how is it to actually try to work with some of these larger organizations?

You know, the sales cycles are long, obviously. You know, there's an unfortunate correlation in some sense between the, the companies that are regulated enough for this to be a huge issue for them and the longer sales cycles and tougher markets to enter. But at the same time, you know, those companies are having huge issues here, and they don't really know how to solve it. And so in a similar way that something like Shopify, you know, a platform that's being built for an ecosystem of organizations, can build software that none of those organizations could do themselves, we're hoping to do the exact same thing for some of these bigger financial services. Right, so enabling things like instant onboarding using shared KYC. So if you're already a customer at US Bank, or Bank of America, why not instantly onboard to SoFi and BankMobile and these other kind of fintech companies, Coinbase, Kraken, all these other companies you might want to sign up with. And so really what we envision ourselves doing here in this space is working with those big companies to do things that they want to do, but just don't have the resources to go out and achieve themselves. So we want to relieve some of that administrative burden that they're feeling. And I think they've been extremely receptive to that. So, you know, the early signs here are very, very positive for the space as a whole. And I think the long-term future is even more promising. So, you know, one of the exciting things that you can do here as you move forward, and I think where a lot of these bigger institutions are looking, right, they have 5-year, 10-year timelines that they look at these things through, is emerging regulations are going more and more privacy-centric. Something like what we're building at UnimID enables new forms of regulation that actually remove liability from those companies. So your financial service today, for example, needs to store some certain personal information just by regulation. So I'll talk about the US because I'm much more familiar with the regulation here. You know, they have to store something like your driver's license or whatever you use to prove your identity, your home address, you know, and some contact information and a few other pieces of data. That is very high liability information, right? If that gets stolen, you can get into financial services accounts, you can get into all sorts of other accounts that this individual has, and that's a really bad thing. And, you know, we've seen financial services get hacked, get breached, and they're incredibly worried about that. So in a future with UnimID or products like it, what you can do instead is store all of that decentralized. So if an attacker wanted to get that data about your users, they'd have to hack a million or 10 million different independent devices databases instead of one database. And this sort of technology, by adopting it sooner rather than later, they can enable that regulation to take place and actually remove liability from themselves in the long term and deliver a better user experience. So there's all sorts of reasons that these big companies are looking towards solutions like ours to try to move into the future.

Do you see any sort of changes in the space with regards to like the current situation that's happening with COVID Has it affected your future vision at all?

Honestly, I think it has only accelerated our timeline. So COVID obviously has made knowing who's who online an extremely high priority for all sorts of different companies, both for their customers and also for their employees, right? There's lots of people that are at home using their own devices. They're not in this gated ecosystem that they're usually in at an office. And the same is true for customers, quite frankly. You know, nobody's walking into bank branches today to, you know, make transactions or anything like that. It's all being done online. And so the levels of fraud that are being experienced online are just increasing massively due to COVID. And we've seen things like, you know, increases in phishing attacks and all sorts of other ways that attackers are trying to get into people's accounts and access their money. So I think this has only accelerated the timeline for us. It's actually also opened the door in the shorter term to other opportunities, right? So you can do things with this technology like having antibody tests stored on your personal phone. So like, let's say you're traveling, you could prove that you're actually immune, or you can prove that you've had it and you've recovered, or you can prove that you tested negative recently. There's some interesting use cases like that as well that take this and really show the power of it, not only in the online world, but also in the offline world.

You know, one question sort of on the business side that I wanted to ask about, uh, you know, to give a little context, I recently read this book called Startup by Jerry Kaplan, focusing on how he was trying to build the first pen computer with Go Corporation. And one of the major roadblocks that stopped him was like Microsoft learning about his idea, coming up with something similar, uh, Apple developing the Newton, which was almost like an early version of the iPad. And, you know, the competitive landscape became so difficult so fast when he first came up with this pen computer idea. Eventually they weren't able to break through due to like the, uh, technology and market just not being there. But I'm curious from your side, just what you've seen, how like fierce is competition just either in the KYC space or just in the startup landscape? And how does that affect your planning?

It's a great question. Yeah. The way we view this is honestly, there are very, very few companies doing anything close to what we're doing. The sorts of value that we can provide by the way that we've architected our system are really unique and open up new opportunities that current existing companies simply can't go into. So, you know, we've looked a lot at the space of big companies especially, right? You look immediately to the phone manufacturers, right? Apple and Samsung and Google, and look at, you know, how could they enter this space? Because obviously, you know, that would, uh, you know, be a significant challenge to have to overcome. Well, the reality there is that oftentimes these companies look to smaller startups to go build the technology that they then later acquire. So for example, one of our early investors is Samsung Next. So, you know, we're a Samsung Next portfolio company. They see the value in what we're doing. They're interested in moving towards having the mobile phone be the center of your identity, but they don't exactly know how to make that happen. They don't have a big enough market share to deploy it to every single user. And so there's use cases that aren't immediately available to them. So the way that we view ourselves is, again, a platform that's providing software to an ecosystem of companies. That just simply don't have either the market share or the resources to go pursue that on their own. And specifically, the problem that we're solving is this identification problem. How do you know when you're interacting with a new user who that person is? And once you trust that that user is Maxime or is Aidan, how do you then tie that identity to them through time so that you can trust every single time that they're interacting with you, it's that same person? And so That's a problem that's really unsolved. A lot of companies have kind of given a shot at it in the past. It's uniquely possible to do that today. You know, one of the core things here is timing. Like, why is it the right time to do it? There's a great TED Talk all about how timing is the single biggest factor in startup success. Here, timing is perfect. So we have, you know, 5 billion people today on a mobile device. More Americans today on a mobile phone than have a driver's license. That's really not been true for even the last 5 years. It's kind of uniquely true today. Modern mobile phones have really good biometrics. They have secure elements where you can store things like a private key that can be used for PKI in a decentralized way. And we have blockchain technology that's starting to reach a penetration stage where you can actually start to use it for enterprise use cases. You know, big companies like Samsung and IBM are actively using blockchain and proof of concepts, building their own blockchains, and most Fortune 500 companies have a blockchain strategy. So all of these different things are coming together to make this vision uniquely possible today, whereas even a couple of years ago it wasn't possible, right?

But you're not really seeing— I was just gonna say, but you're not really seeing too much competition doing exactly what you're doing. I know, you know, there's some big companies in the space like Onfido maybe doing mobile Authentication and KYC and a few others in the space, but you're kind of going for a slightly different area in the market. I think maybe that specialization is important and kind of how you think about that.

That's exactly right. So Onfido is an example of a verification provider, right? They do KYC verifications primarily. I mean, obviously it's a big company, right? So they do a lot of different things, but we view companies like Onfido actually as great partners of ours. You can think about what UnumID is as an identity layer that ties many verifications that are done about a user together into a single identity that can be reused through time tied to that same person. So essentially, on FIDO and a bunch of other companies that do other verifications, whether it's background checks or other driver's license scans matched to a live photo, or it's verifying your home address, or you're verifying that it's a voter, or you're verifying whatever piece of information you're interested in, about that user. We help you tie all of that together and make it robust through time so that you can prove, hey, all of this information ties to Aidan McCarty and not to anybody else. And so that's what's interesting about what we're doing. We're sort of a layer below those verification providers. So our core thesis here, uh, with respect to those sorts of companies is they're incredibly important, but those are spaces that are very competitive that are constantly in an arms race between companies that are building better AI algorithms to figure out, you know, is this the correct driver's license, and fraudsters that are trying to build better fraudulent driver's licenses to make it look like it's a real one to that algorithm. And so inevitably what those companies have to do is spend lots and lots and lots of resources continuously making that product better and better than their competitors, better than the fraudsters, and they don't really have room to move into a space like ours. So again, providing software to an ecosystem of companies that they can't do on their own. And in this case, they can't do it on their own because of this, right? Their core business is built around the verifications, not around tying those verifications to a single person through time. So it's sort of a different layer of the stack.

You know, kind of, I just, I remember jumping back and we talked a little bit about working with large corporations from the buyer side. It's they can have really long sales cycles and can be tough to break into, especially those ones that are highly regulated. But it's interesting to hear that you're able to partner with Samsung NEXT on the investment side. So maybe could you talk a little bit about what that was like?

Yeah, I mean, I have nothing but great things to say about NEXT. You know, they're great people. They're really brilliant and bright. We view them as a highly strategic investor. We would of course love to be deployed widely across many different smartphones and devices, and our product works across all devices, which is one of the key advantages here. It's not too easy to go make that happen, but if you can make it happen, it's obviously very valuable for a financial service especially. You know, you need to know that this is going to work for all of your users across all of the different devices, whether they're 5 years old on some sort of Android device or it's the newest, you know, iPhone X, iPhone 11. And so, you know, I think Samsung Next has been, you know, the ideal partner for us, quite frankly. They're the biggest— Samsung, not Samsung Next, but Samsung is the biggest smartphone manufacturer in the world. They're really interested in blockchain. They're doing all sorts of innovative work in that space, and they have a bunch of different business units working on various projects that are related to UnimyID. So I think we view them as extremely strategic moving into the future. We'd love to work with other smartphone manufacturers as well directly But regardless, the whole point of UnumID is it's cross-platform. It works everywhere without the user needing to know that it's UnumID in the background.

Right. I'm sure it's not easy to become that sole provider for a company as big as Samsung, but being part of their ecosystem, that's definitely the right place to be to try to make that happen in the future.

Exactly, exactly. You know, obviously it's difficult to actually get deployed out to the devices. But it's the kind of thing where it shows the clear interest from those smartphone manufacturers in this sort of technology. And so when we start getting some broader enterprise adoption, it could make a lot of sense to just integrate it into the operating system effectively. That's sort of our vision of where this goes.

Got it. So, you know, one thing I wanted to touch on as well is more on the team and the people side of what you're doing at UnimyD. So just wanted to you know, ask a little bit about the way that your team is built. I mean, how did you kind of think about yourself and Liam think about creating a team where you have like all of your bases covered, whether, you know, on the sales side or marketing or development? And just what was that process like for actually building out the team that you needed?

You know, it's been awesome. I love our team. Our team is very well-rounded, especially when you start including our advisors. You know, we've just got some fantastic people contributing, and it's really made a big impact. I think the way that we looked at it very early on is the two of us have complementary skill sets, right? So I've been very deep on the business side. I've done things like run a startup incubator, helped to teach a class at Stanford that's all about bringing innovation into the DOD and the Defense Department. My brother's a physics major. He's much more technical than me, understands how to architect these kinds of systems, can get really deep on that side and understand how it all works. So together we make quite a team. You know, he can lead product and tech, and he's really excellent at design and user experience. He's got a knack for that. And I've got, you know, a lot of experience doing kind of sales and marketing type stuff and putting that together. And then, you know, we built that team out with a really great full-stack developer, bringing on some more developers right now, and a marketing associate who's been with us for a little while as well. So really what we're valuing throughout that entire process is people that work really hard, that are passionate about the work that they do, that are inspired by the mission that we're on to try to help people have a more secure and private identity that they can use everywhere, and bring on people with a mix of experiences, right? We don't want people that are just, you know, born and raised in the Bay Area and startup culture. We want people that are coming in with fresh eyes and trying to figure out how to make a product like this work, regardless of what their background is. So it's been a really exciting experience, building that out. And we're really proud of the team that we have and the people we have behind it.

Right. It sounds like you and Liam definitely have some really good complementary skill sets. And I was just reading on your website a little bit about, you know, your own career process or your hiring process that yourself as a CEO, you interview first every potential hire. So I can tell that team building is really big in sort of your business philosophy, and I think it's one of the most important things for sure.

Yeah, to me it's everything. You know, I want to be the— well, myself and Liam, obviously together, we need to be the face of the company, right? And we need to make sure that we're interfacing with every individual that the company is talking to and really representing the company in the right way. And so whether that's new hires that are coming in and, you know, trying to join the company, or that's, you know, business partners that we're reaching out to, you know, we get ourselves involved in the process very early on because we want to make sure that the company is coming across the right way, that we're treating people extremely well, and that we're, you know, giving everyone a chance to really learn what we're all about and why we think we can, can make this happen in a way that others can't.

Right. You're obviously a really, you know, early and kind of smaller company right now. But company culture is always something that's really big and even pervasive in some of the larger companies. And I think it all starts with just the founders and what you're trying to do at the beginning with your small team at first. What do you think is like the company culture of UnumID?

It's kind of exactly what I just said. You know, it's all about hard work, passion, integrity, and just making sure that you're sticking up for one another. You know, there's no room with us for skirting around the edges, for not taking accountability for your actions. It's all about, you know, if you can work hard, you can take accountability for yourself, own up to your mistakes early and often, and get better from them. That's huge. You know, we love hiring people that have extremely high potential, that respond really well to feedback, because early-stage startup Like you said, it's all about how quickly can you adapt, how quickly can you find and execute on new opportunities. And for that, really, you want people that are going to work their butts off. You want people that are going to come in, contribute new ideas, not be afraid to share them. And when they do make a mistake or they screw something up or they could have done better, own it and get better. So I think that's the culture that we're really striving for. Obviously, at the same time, I think work-life balance is really important. Right, we're in this for the long haul. This is not, you know, we're not trying to do a year and sell out or something like that. The goal here is to build a long-term, very valuable company that's really fundamentally changing the way that identity works online. And so we want people that are going to be with us for a long time. We want to train them extremely well, train them so well that they can leave, but treat them so well that they don't want to, right? So that's really our guiding philosophy. And I think we're doing a pretty good job with it.

No, yeah, it sounds like you're building a solid culture. And I think work-life balance, it's, it's pretty important too in terms of, uh, one thing I learned from a mentor previously when I was, you know, working in the wealth management space. He was saying that it really is a marathon. So, you know, whether you're building a company or a career, you're building it out for years and you don't want to just burn out within 6 months or a year from pulling all-nighters every weekend or something. So it's part like you have to have that long-term vision and sort of definitely be, you know, moving forward on a daily basis, but you want to also just give yourself the ability to be persistent.

That's exactly it. That's exactly it. There's a fantastic podcast about startups called How I Built This with Guy Raz. I'm sure you're probably familiar with it, right?

Heard about that.

I listened to tons of those different interviews and the number one thing that came up time and time again is persistence, right? How can you stay in this long enough that the pieces start to come together? And if you do that, you give yourself the best chance you can really have to make it work.

Right. You know, I was on, I had a, for my first podcast recently, had a guest, Mark Thomas, the founder of Zen Sports. And he was saying that, You know, he's done multiple startups and oftentimes he's felt like it's time to throw in the towel and then he just realized that maybe he could just go a little bit further and then oftentimes there was a breakthrough at the end like his first startup or one of his earlier startups that ended up getting acquired. And so it's, it's definitely just a good— it's something you have to keep in mind. I think It's not necessarily that companies run out of money. It's like sometimes people maybe think it's time to give up and perhaps sometimes it is if it's not the right market, but oftentimes, you know, that persistence really comes in importantly.

I think that's exactly it. Yeah. I couldn't agree more.

Uh, but you know, from your side, it sounds like, you know, you've had a good amount of experience leading, uh, you mentioned on the sales and marketing side as well. And really, just from the way you're speaking about the business, it's clear you kind of perhaps have been a leader in the past. But what's— were you always interested in like starting your own business? What kind of inspired you to even pursue this route?

Oh, definitely, definitely. Yeah, I mean, Liam and I have had a couple of different, uh, ventures in the past that never really got off the ground, you know, never really incorporated or anything like that, from across different industries, right? You know, we're very multi- faceted people. We were interested in lots of different things. So, you know, we were working in edtech for a little while. We started, you know, doing some dabbling in politics, which ultimately led us to this. And all through, you know, my childhood growing up, I was always very entrepreneurial, you know, doing little things like going across to the neighbors and asking to landscape or, you know, take care of their pets for a little bit of money. And, you know, starting a small photography website and setting that up and trying to figure out different ways to sell the product and find people that were interested in buying photos from a young kid. So I think I've always been extremely entrepreneurial. I've always been extremely interested in trying to make products that really change people's lives. Obviously, that's not something I could do growing up very early on, but one of the core drivers for myself and for Liam is how do you build something that's really going to change things? We're not really interested in incremental change. We're interested in the zero to one. How do you build something nobody has been able to build before? And how do you gain conviction that that's an idea that's really going to take hold? And I think what's so exciting to us about this company and this vision is that identity, even though to a lot of people when you tell them, hey, I'm working in identity and digital identity, they're not all that interested off the bat. Fundamentally, this underlies everything. This is all about human dignity and how people interact with one another. If you think about every single interaction you have with every single entity in the world, everything is underlied by identity. If you buy a coffee at a cafe next to your house, you're scanning a credit card, you're, you know, swiping that credit card, and it's going back to Visa, and they're figuring out that you're Maxine. And that you can be trusted to buy that latte. If you're online and you're on Facebook, they're trusting that you're Maxime. They're trying to figure out, is this actually you or is this somebody else? If you're going and voting for a new president or you're voting for a new senator, they're trying to figure out, is this actually you? Are you eligible to vote? If you're buying alcohol, same thing. All of these different applications are all fundamentally powered by trust that you are Maxime and not somebody else. There are lots of cases around the world in less developed places where identity is not nearly as established as it, as it is here, and here it's far from perfect. And the end result is that people get screwed over. People have incredibly difficult times proving that they are who they claim to be, and that just completely undermines trust in the society, completely undermines the capacity to build all of these amazing things on top of And so the really exciting thing to us is that underneath everything that's going on in the world, identity is fundamental. And if you can change the way that that works, you open up new opportunities across all sorts of industries for all sorts of people to make their lives a lot more productive and a lot more secure and a lot more private.

Right, it's, it's definitely part of being an individual, having your own identity that's secure. And that gives you the freedom to do just a wide variety of different things.

Exactly. Yeah. I mean, to me it really is fundamental. It's one of the very few things that underlies every single interaction you have.

So, you know, one thing I think that was, was really interesting about your story as well was that you were pursuing your education at Stanford. Obviously it's, you know, a really great school. I think a lot of people strive to go to Stanford as well. But then you decided that you wanted to, you know, stop in your junior year, pursue your startup full-time. I mean, that sounds like a huge decision as well, and I think one that not a lot of people might have the guts to pursue. But I'm curious, like, what was that like as well?

Yeah, it's a great question. I think it's exactly the same answer I was just giving you. You know, to me, it's all about how can I affect a huge amount of change in the world and how can I do something that I'm passionate about that every single day I wake up and I'm like, yes, I'm, you know, making an impact on the world. This is why I'm going through this struggle. This is why I'm working, you know, 80 hours a week to make this thing happen. And so I think as soon as I had conviction around that, uh, I just wanted to do it, you know? So we had a little bit of money that we were able to raise at that point. Which let us, you know, go, you know, get an office and hire some initial people and all of that, which made it happen. But the reality is I'd been wanting to do that for a couple of years. And as soon as, you know, you hit an idea that you really believe in and you think has the power to transform things, there's just nothing that'll stop you from trying to go do it.

Right. And not everything can be learned in the classroom in terms of how to run your business, how to build your own startup. It's like you really the most important thing is actually to just to go out and do it. And it's, you know, I was talking to an entrepreneur actually today. Uh, he was working on a really interesting company, but one thing that he was saying, and to give a little bit of context, it's essentially a tool that allows developers to build their apps and websites a lot more easily, facilitating that backend development. So they, it's kind of a low-code environment. And he was saying that, you know, the traditional, like, way that people had to become developers and build something of, you know, going to school for many years, becoming a computer scientist essentially, and then being able to try to produce something is changing because there's people who can even do like a bootcamp for 3 or 6 months, learn programming, and then go out and try to build their product. So I think it's like the model of having to go to that same, you know, university education before starting your startup isn't necessarily true. And, you know, I graduated myself. I went to UCLA. I didn't necessarily have like a startup idea that I wanted to pursue, but I remember, you know, our student incubator, one of the things they said was like, these students who are running these startups, it might not become the best startup, but they're going to become the best people. Like their startup might not be successful, but they'll be successful people. And I was like, I don't know if they should be holding back the students on their startups thinking they don't need to be successful because, you know, a lot of great entrepreneurs did start their companies while in college and then led them to great success from there. So yeah, I think it's, it's always good to see people pursuing something that they're really passionate about. And I think that's one of the most important things.

Yeah, I'm a very firm believer that you are never ready to do your first startup. You're only ready when you think you are, right? It's one of those classic, if you think whether or not you think you're ready, you're right. And, you know, I think that's very, very true in the startup world. You just have to have conviction and go do it, right?

No, that's exciting, man. Um, but as sort of a young team And, you know, younger people on your staff, I'm sure it's important to have that veteran perspective. And I think you alluded to it with the advisors that you said have been helping you out a lot. Advisors, I think something that's really important in the startup ecosystem, but not always highlighted. Maybe could you share a little bit about how these advisors have impacted you and kind of who these type of people are?

Definitely. Yeah. I mean, I think we look for the same sorts of qualities in our advisors that we look for everywhere else. Very high integrity people that are going to come in and contribute actively to the team and really be willing to be called upon at any time to give their input. So we've got some fantastic people on there. We've got Greg Roston, who's the director of public policy at Stanford, just absolutely fantastic guy, love him to death. Dan Kolkowitz, who's a former CTO of IdentityMind, which is an identity verification company specifically geared towards financial services. Both of those two are on the board of the Stanford Federal Credit Union and have just provided so much input and advice and help over the last couple of years that we've been working on this. As a fun little anecdote for you, Greg actually let us stay in his house when he was teaching abroad in Paris for a little while, when we were totally pre-funding, pre-revenue, and completely broke, spending our own money and just so much time on the company. And then we've just got a slew of other amazing people, you know, Nick Troiano, Riana Shah, John Devados. I don't want to leave anybody out, but it's really been fantastic working with people that have a broad range of experience. We've got technical advisors on there, we've got people with policy and political experience, general business acumen, all the way from pretty young people earlier on in their careers that we just really respect their input and advice, to extremely experienced people that have been at multiple Fortune 500 companies, and grown, you know, hundreds of millions of dollars in revenue for those companies. So it's a really fantastic mix of people. I think we couldn't be luckier in terms of the advisors that we have contributing.

Right. And then for those entrepreneurs listening, I mean, how did you sort of go about recruiting and/or finding those advisors?

I think the key thing is you want to bring them on for a specific reason, right? You don't want to just bring them on to be a face on the team. So every single advisor that we've brought on, we brought on after a period of, you know, kind of free advice, if you will. You know, they were just helping us out because they were friendly and approachable. We probably spent, you know, a few months talking to them and getting input, getting to know them a bit. And once we felt like, hey, this is going to be somebody that's going to actively contribute, they're going to make time for us when we really need their help, and they bring some sort of knowledge that we don't have right now, that's when we wanted to go bring them on as an advisor. Right? So early on you can promise them future equity. Obviously at this stage we're just giving them stock options that vest over, you know, a 4-year timeline, kind of similar to an employee. So I think that's the key thing, right? You have to make sure that you understand why are you bringing this advisor on. You want to bring them on because they have knowledge that you don't, that they're going to actively share with you.

Got it. And then, you know, Touching on your advisors, I wanted to ask, so do you also have like a board of directors going yet?

We do, we do.

And what's that process like? I mean, you know, those board meetings and, and kind of helping get direction from that side of the company.

Uh, you know, it's been good. It's been good. I think, you know, the board in a very small startup is a lot more of just, uh, something that's there, uh, rather than something that's actively making a lot of changes to how the company operates. So typically, the way we've operated with our board to date has been mostly just whenever we're doing something like we're issuing some new stock or we're issuing stock options or those sorts of activities. Obviously, we get complete sign-off from the board. We get input and advice about who we're giving those options to and why we're doing that and everything else. And some connections and things like that as well. But I think, you know, the board as we expand is obviously going to be a much more core part of how we're going about all this. I think at this stage it's a 3-person board. You know, 2 of the people are myself and Liam, and so it's— advisory board is much more impactful. I think that dynamic changes as the company grows, right?

Probably as you, you know, gather additional investors and just additional board directors that kind of can, can help be perhaps even more than advisors can definitely affect the direction there. But I think, you know, touching on the investor portion as well, what's been like the process for you fundraising? I mean, I think that's something that a lot of founders have questions about, and, you know, I can share some thoughts as well from my experience just in the VC space. But from your side as a startup, like, what's, what's the whole process been like for fundraising?

You know, it's been great. I think for us, we went out and started fundraising a little while ago, thankfully slightly before COVID and we're actually just about, you know, we're doing pretty well in that process at the moment. So I think, you know, fundraising's been going pretty well for us. It's obviously a stressful time and a stressful process. It's never easy to get investors to commit to the company. I think fundamentally, the process goes something like this to me. Number 1 is you obviously have to have complete conviction about what you're doing. And you have to believe that it's kind of stupid not to invest in you as a company. You have to believe that you are that good of an investment opportunity. And ideally, not believe that delusionally. So for us, we certainly believe that we are building towards something that's going to be immensely valuable, and that this is a huge, fantastic investment opportunity, and who would not want to invest in it? Right, and that's important for a couple of reasons. Number one, obviously, you know, that's the sort of mindset that it takes to succeed in the first place. But number two is you have to be able to convince people that you're actually going to go out there and succeed. And so if you don't have conviction about that yourself, you're not gonna be very convincing when you go out and pitch. And so, you know, we spent a lot of time very early in the company getting that conviction, and we haven't lost it any time since. And so that's been very helpful in the fundraising process. I think the other big thing is you just have to brace yourself. You're going to be talking to a ton of people and a lot of them are going to be telling you, hey, your idea is kind of stupid. It's wrong for X, Y, and Z reasons. And you just have to take that feedback and definitely take it into account and understand where are they coming from, what is their perspective on this to make sure that you can improve as an entrepreneur. But at the same time, you have to stay extremely committed and understand that most people are going to say no. You have to talk to something like 70 to 100 investors before you get investment. And so you have to understand that the ratio there is extremely, extremely low, and you're going to get a lot of rejection. So if you're not prepared for that at the outset, I think a lot of entrepreneurs I've seen get very discouraged and kind of stop having the same conviction about their idea that they had previously. So in some sense, it's a good litmus test. For whether or not your company is actually ready to get to the next stage. And I think that's exactly what it's intended to be, right? Most companies are not intended to go out and raise a bunch of venture capital. That's just not how it goes.

Yeah, I mean, first off, it's definitely gonna be a big numbers game in terms of just having to speak to the amount of people to be interested in investing in your company. So many of the factors add up, like the specific industry knowledge that they have, the stages of company they're investing in, and just even where their fund's at at that moment, if they're even making investments. But I think, you know, you see like from the founders that have gone out and like raised several times, they're definitely a lot more concrete in terms of how they're raising. I think sometimes if it's a founder's first time raising money, what I've seen is that maybe they'll feel like they can get a really huge amount just by having an idea perhaps, but it's definitely not that simple as it turns out. I mean, perhaps it used to be like that in Silicon Valley at some point, but it's definitely not easy, I think, to go out and raise funding. So I think, yeah, kudos to yourselves and your team as well who've been, you know, successful at that so far.

I appreciate it. Yeah, I mean, I think you see all these stories of stupid companies that got lots of money like Juicero or something like that, and I, you know, I know a few personally that it's kind of surprising how much they're able to raise. But that is certainly the exception and not the norm. And often there's other factors there that are underlying that maybe you're not taking into account when you see the big headline in TechCrunch. So I think, you know, for us, we look at it as storytelling, right? Ultimately, this comes down to sales. And I think that's maybe the single biggest area I see founders fail in here. Is they start trying to put together this very compelling kind of numbers pitch. And the reality is, especially as an early-stage company, the numbers can be what they are. It's very difficult to build a compelling numbers pitch when you're early-stage because there's so many assumptions that you have to make. So instead, what you need to do is you need to tell a story. You need to tell a story about why is it that you are going to be a $10 billion company 5 years from now. And if you cannot tell that story in a compelling way, you're not gonna get anybody's interest. So what you have to do first is do that, and then you get to the point where you start saying, oh, and then, you know, here are the numbers, this is why we think we can get there, this is the size of the market from the bottom up, from the top down, this is, you know, our revenue projections, this is our current revenue, this is our CAC, our LTV, all this stuff, right? But before that, you need to tell a story. You need to get them hooked on why is it at a heuristic level that you are going to succeed and others will not, right?

There's Venture Deals, a book by Brad Feld, that talks a lot about fundraising, just the terms. He says that at the early stage, the only thing that they know for sure about financial models is that they're going to be wrong. I mean, it's like you can obviously make predictions, and I've even seen, you know, some entrepreneurs, for example, will say like, you know, this is us in the best-case scenario, And then in the worst case scenario, we'll just exit for like $100 million. But it's like you have to realize that there's just— anything could possibly happen. And so the model is probably not as important as the story that you're crafting there. So, um, and yeah, there's, there's a lot of assumptions that underlie the model. So definitely crafting that story and really selling that idea is going to be the first thing. Um, but yeah, what about— I'm curious, have you like, from the actual investments that you've done, have you learned anything about like, uh, you know, terms that matter or things like that that entrepreneurs should look out for, like when they're actually doing the financing documents?

I think I would say two things about this. Number one is talk to your lawyer. Get a good lawyer and talk to them a lot. It's going to cost a ton of money, but it's going to be very much worth it. You do not want to be the one that's looking through all the legal docs and figuring out, you know, which terms make sense and which don't. Because it's just impossible. You know, the law is extremely complicated. There's all sorts of subtleties. A lot of this stuff ultimately comes down to some court ruling 20 years ago that set some precedent that there's no way you would be aware of. So first things first, get a great lawyer, talk to them about it, make sure that they review the documents and that you talk to them about it. Uh, past that, the single biggest thing we always look for in any investor is, are they a good fit with us? This investor needs to be extremely aligned on the vision of where we're going. We need to outline with this investor what the expectations are before they come in the round. What sorts of resources are they going to provide to us? What sorts of advice are they going to provide? What are they going to expect from us in terms of quarterly reports, maybe monthly reports, maybe it's just an annual report? What sort of reporting requirements are there? Some funds have very stringent ones and some don't. So all those sorts of things are things that you need to outline with the investor ahead of time. You need to take time to get to know them. You need to have a few different meetings with them, make sure you kind of jive as multiple personalities, because otherwise you're going to get in a situation where you're not aligned, where there's a lot of tension, where they want you to go in one direction, you want to go in a different direction, and you haven't taken the time to figure out if you even work well with this person. And then that's how startups start to fail. Fail. You know, that's at least one of the many ways that startups begin to fail. So I think the single biggest thing that we look for is, is this somebody we want to work with over the next 5 to 10 years? And if yes, then let's move forward. And after you move forward, get a lawyer involved. Make sure that they know all the different terms and that they can explain them all to you. So I wouldn't point to any specific ones to look out for. I think there's a million and one ways to get screwed, and the only way to prevent it is to have a great lawyer.

No, that's really great advice. I think first of all, definitely getting to know the investors, uh, because it's almost like a marriage, you know, how long these companies last, uh, and that investing relationship is going to go on for a while. So it's really good to be aligned there. And it'll take some money to invest upfront for a lawyer, but if you're, you know, getting financing, you can sometimes try to bake that into the financing, uh, legal fees. But at the same time, it's just going to be so worth it to really know you're getting kind of the deal that you think you're getting. But, um, yeah, appreciate that advice, uh, for, for the founders out there. And then, um, I think one thing that you mentioned, it was like there's kind of a million and one ways that maybe founders or startups can just fail or get screwed over, not necessarily on deals, but what do you think are some of just the biggest challenges that, I mean, founders face, or maybe that you've experienced from your time running a startup?

I think a few of the biggest things that I've seen that prevent people from succeeding are obviously lack of conviction, right? If you don't really believe that this is gonna be some gigantic company, it's really hard to make this all happen. You have to have deep belief that this is going to work. And so you spend a lot of time thinking about it, thinking of all the different possibilities of things that could fail, talking to potential customers, talking to advisors, talking to people that you respect and getting their input. Is this a good idea? Is this not? And once you have conviction, you just got to go for it. It's not like you should be— sometimes this works, but I don't really believe in this philosophically. I don't think you should be working on this as like a side project, sort of hoping that takes off, right? I mean, I think that's fine while you're gaining conviction, but once you have conviction, you either go or you don't. That's kind of the way that it works to me. It's all about timing, it's all about execution, it's all about moving quickly. And as soon as you have conviction, you got to go do that, or you're probably not going to be the one that gets to it first. I think other ways that people fail a lot of the time is just choosing the wrong people to work with early on. You know, early team is so important in terms of forming the culture of the business Making sure that you're all aligned in terms of who's handling what. You know, if you both think that you're, you know, handling sales, there's gonna be some problems. And so a lot of the time, founder teams that, you know, meet at a hackathon or just don't know each other that well end up falling apart pretty quickly when the going gets rough, especially. And obviously bringing in really bad investors at the beginning— they don't even have to be bad investors, but just investors that aren't aligned with where you're trying to go with the company. And then maybe the single biggest thing is just not understanding how the whole market works. I think the biggest job of an entrepreneur in some sense is to understand the various incentives of all the different people involved. All the way from your employees, to yourself, to your co-founders, to your advisors, and your investors, and your customers. You want to understand where everybody's coming from, what is their perspective, what do they care about, and how can you help them get what they want. That's really kind of the core of what it is to be an entrepreneur. You want to help people get where they want to go.

Really understand what the different motivations are for all the people inside the startup ecosystem you're going to be interacting with, from your customers to your team to your investors. Getting that bird's-eye view, I think that's definitely really important. Yeah, and then I don't really know what to add in terms of what you mentioned about conviction. I think you really made a good point there. Just deep belief that your idea can work. And once you have that conviction, just going for it. You know, I think sometimes companies can work when there's— and obviously there's, you know, hundreds of examples of things that have worked different ways, but conviction is definitely, you know, a strong force when you fully commit to an idea as well.

Yeah, I certainly believe so, especially in startups. right? Where it really is all about timing and execution and speed.

So I think, you know, one issue that I just want to cover last, looking towards the future, I guess, with, with your future with UnumID, what do you think is your, your main like go-to-market strategy or your, your scaling strategy from what you've seen so far? Like what's worked and what are you hoping to implement to scale and kind of get to the next level?

Yeah, so it's in financial services, right? So what we're doing is our product provides a couple of key value propositions. Number one is you can have instant onboarding of new users using shared KYC for financial services. And number two is great fraud reduction. So you can essentially eliminate passwords and eliminate all of the fraud that's associated with those. And so for FIs, that's a huge deal. That can save them a ton of money in terms of increasing the number of customers that actually get through the onboarding process, and then decreasing the levels of fraud for those customers once they're in the door. So that's our go-to-market strategy. We're talking to financial institutions of all different sizes, all the way from, you know, crypto startups through to the biggest banks in the world. And we're also talking to some channel partners. You know, we're talking to players that are, you know, core banking systems and banking as a service providers. So we can integrate this in many financial institutions simultaneously. So I think, you know, that's been a very effective go-to-market strategy for us. If you look at how identity companies have grown quickly in the past, you look at Okta or something like that, it's primarily through channel partners, right? They find, you know, what is a great distribution network for this kind of product, and, you know, you integrate it there and you let it spread out that way and grow from that point. So I think we're very much trying to replicate that kind of go-to-market strategy in what we're doing. Because again, it's fundamentally about providing software to this ecosystem of companies. And how do you get to that ecosystem of companies? Well, you can do it yourself, and that's part of our strategy, is to go and try and do it ourselves. Or you can go to the place where they already get their software and they already purchase it, which is these core banking systems, banking as a service, etc.

I think that channel partners is definitely going to be a pretty scalable approach. I mean, having definitely a well-oiled sales machine and marketing to try to reach these people, like whether you're, you know, reaching them at events or hitting the phones. I think, you know, a lot of competitors are doing that as well, but I think those channel partnerships can also set apart in terms of a good go-to-market strategy there. So appreciate that. Is there any other points you think pretty important to share right now that, you know, we didn't talk about yet?

The biggest one that's top of mind just as advice for everybody that's out there that might be listening, who would be looking to try to start their own startup, is already in the midst of it, maybe much further along even than I am at this point, is obviously, you know, I don't know everything. Nobody knows everything. You're gonna get a lot of input that's extremely negative from other entrepreneurs, from VCs, from your friends, from your family. And the core thing is just have conviction in it yourself. You know, I think the biggest thing I've learned about taking advice here in the startup ecosystem and more broadly is take everything with a grain of salt. You know, listen to everybody, but don't actually integrate that into your core belief system until you actually believe it too. So I think every single piece of advice that you hear from anybody who's gone through it previously or is going through it now, You have to take and see, you know, does this match where I'm at? Does this match where I'm trying to go? And do I believe that this is actually true for me? And if it's not, just disregard it. It doesn't really matter. So I think that's a really key thing to understand and just make sure that you don't just spend all your time listening to advice from other people, but spend a lot of your time integrating that advice into, you know, a few core things that you can take with you in your own journey.

Wow. Yeah, no, that's right. I mean, definitely advice is important. I think that's why everybody has advisors. But at the same time, you know, if you really have conviction on something, you can try it yourself your way. If it doesn't work, you can always change it. But if you switch to something else and that doesn't work, you're gonna be regretting the fact that you never did what you believed in the first place. So Yeah, that's a good point. Definitely something I think, you know, all the listeners should take with them. So I think with that, pretty much we've, we've covered most of what we want to talk about. So I just want to say thanks again, Aidan, for joining, and thanks for talking about UnumID. Really interesting to see what you guys are gonna be doing in the biometric authentication space. So I think we can stay updated. For the users, if they want to check out, it's unumid.org, right?

That's right, it's unumid.org, and you can feel free to reach out to me if you have any questions. It's just Aidan, A-I-D-A-N, at unumid.org.

Sounds good, sounds good. Thank you.

All right, Maxime.