CLEAR CEO's Mission to Make Your Wallet Obsolete | Ep. 20 | The Inflection Point

New York City is home to some of the busiest airports and most famous sports and concert venues in the world. It's also home to Clear, a company that makes getting into those places easier and safer. As CEO, Karen Simon Becker has propelled a once bankrupt company into a leader in security and convenience.

I believe you will give up your wallet in the next five years.

As a woman CEO, did you ever go in to pitch investors and so and say, why should you be the.

CEO of this one guy leaned across the table and said, what makes you think you can be the CEO of Clear? And I leaned across the table and said, because I am a complete and total animal.

I'm Monica Langley. This is the inflection point. Welcome to the inflection point. So, of course, my first question is, when was that moment in your life when everything stopped and your life changed forever?

So my inflection point was I was in my daughter's kindergarten class, my older daughter, who's now 19. And we were cutting patterns and every other parent is cutting it perfectly. And I'm like, struggling and my hands are stressing over the scissor and my phone's ringing because I'm running a hedge fund and I'm trying to cut the pattern and the market is melting down and Congress is trying to. Trying to figure out how to save America. And I'm like, what am I doing?

What year was this when the market was melting down?

It was 2008.

Okay, so we were in a financial and economic crisis in the United States, and you were a young woman, a young mother, and running a hedge fund.

I was 36 years old. I had been working 24 7, which I love on Wall street since I graduated in 1994. I had three kids. A five year old, a three year old and a one year old.

You were busy.

I was busy, but loving every minute. I thrive in chaos, or I think I thrive in chaos.

When this happened and you're cutting the pattern, do you feel like the music stopped?

I literally had a wtf, like, right in front of me.

Oh, my goodness.

I was like, what am I doing? Right? It was sort of, I don't know, that the music stopped as opposed to I took a breath and said, what I've been doing is amazing. I'm a very passionate person. But I didn't want to do it tomorrow anymore. It's sort of like I just wanted to do something materially different. I wanted to start over in a different place based on everything I had known and seen. And it was this moment of, like, confidence Of I can do it. I'm not afraid. I'm not afraid of failure. I'm not afraid of risk. I've seen other people, from Jeff Bezos to Steve Jobs to Michael Bloomberg build these businesses from nothing. And I've had a front row seat to somebody. I could do that.

So it's interesting that you said you felt confident because I would think you might have felt vulnerable at that moment.

So I think I'm a super type A personality and every day of my life I've never felt like it was good enough. So it's not like at one moment I felt like a failure. I think at that moment I actually had clarity that this has been amazing and then tomorrow it's going to be something else.

Let's go a little bit to what made you have this ambition. What was your childhood like that got you to be such a triple A.

Personality at some level? My guess is you're born with it. But you know, I grew up in a way that you do what you need to do to go forward, whether it be cleaning the gutters or mowing the lawn or raking the leaves or helping your parents with the dishes. Both my parents worked full time. My mom was a super mom and a super worker and put her kids first. And so I just grew up believing you could do anything, you had to do anything and that you had to be your very best. So my parents were very grades and academic focused. Oh, good.

So then what though turned the trigger to you? That I think I want to go to New York and go to Wall street specifically.

Ah. I loved New York. So I knew when I graduated college that I was coming to New York City and I came here with no job.

Really? No job?

No job. My parents were none too pleased.

But you got a job?

I got a job as a junior analyst in Risk Arbitrage. I didn't exactly know what it was. I said, I will be the first in, I will be the last out, and I will be your cheapest employee. And I was definitively all of those things.

And this goes to one of your things you talk about a lot is you persist tirelessly and you have a favorite word.

I do have a favorite word. I used it for my college essay. It was indefatigable and I defined it and used it to describe me, which means persistent and tireless. And it's one of our core values here at Clear. There's lots of no's in this world. And that just means you gotta come back in a different way and never give Up.

So you got to New York. What was that like for you as a young woman on Wall Street? Because I don't think there are that many.

I didn't notice. So I loved the movie with Melanie Griffith, working Girl. I had my fake coach briefcase. I had my coffee. I had my journal. And, like, in I went. And I was just. I must have blinders on. But I thought I was the luckiest person on the face of the planet. And I found, as a woman on Wall street, that nobody thought of me differently.

But then you started your own hedge fund. Yes, in 2002. Tell us the name of the fund.

So we named the fund Ariance Capital, which stood for Art and Science, because my view of investing, and it continues to be so, is it's part art, part science. Right. It's the quantitative and the qualitative. And went about raising money. Not that many people wanted to invest at first, but one individual did, and his name is Bill Miller from Legg Mason. And so he invested $50 million, and we launched a few weeks after I had my first daughter.

And did you feel pressure at that time, either from peers or from yourself, to get the investors?

I felt pressure to be successful. I felt pressure for the results. I felt pressure to be right. I felt pressure to show them that I could do it. So I wore a green sweater on the first day of investing because green meant go. And, like, literally didn't leave my seat that day.

As a woman CEO of your fund, did you ever go in to pitch investors? And so it's like, how do you think you. Why should you be the CEO of this? Why should I invest in you?

Yeah. I've had two moments as a leader, as a female leader, where people clearly showed me that maybe because I was a woman, they were not as believing in me as perhaps I would have liked them to have been.

What did they say and how did you react?

One was, I was 29. So before we launched, I was pregnant with Olivia. I was probably eight months pregnant. And I walked in not feeling my most fashionable self to begin with, but here I am talking about my stocks. I love stocks. I'm passionate about them, and thought I did great work. And the guy said to me, why should I believe you'll come back? And I was like, I don't even understand the question. I'm sorry. Would you be asking that to my husband, who was going to have a baby, too, in a month? The whole thing was very puzzling to me. And ultimately, when he wanted to invest, we did not take his capital hmm.

Interesting. What was the other?

We were raising capital for Clear, and we were out on the west coast, and one guy leaned across the table and said, what makes you think you can be the CEO of Clear? And I leaned across the table and said, because I am a complete and total animal.

How did he react?

He leaned back, and I kept a picture of him in my photos just for a little inspiration and motivation. Let the haters be your motivators.

Now let's go back to Arian's. And you ultimately did close your fund from your inflection point moment. And what was that like for you?

I wanted to make sure that we placed all of our people, so we had 20 people and wanted to make sure that they all ended up in the right place, because that was a decision that reflected me and I think, as a leader. Right. I think the saying is, jump first, eat last. And so making sure that everyone was well taken care of was really important to me, and it was hard to tell them. So I think that really pained me the most. I think afterwards, I definitely had moments that I felt like a failure. And when I would be at a dinner and someone would say, what do you do? And I didn't have an answer, and they would literally pass right over me to then talk to my husband, and I was like, I'm still the same person. Like, that really bothered me that you were defined by what you did as opposed to who you were.

Well, then you found Clear. And the interesting thing is you had been all your life on Wall street making bets on companies, and suddenly you turned, and now you're the CEO running a company that people are making bets on, Correct?

Yes.

How's that?

Because she was on the other foot.

Yeah.

Well, one of the reasons that it took us a while to go public, I kept saying, I don't want a shareholder like me, and because I thought, rightfully so, that I owned the company. So I would, like, sit in the front row, Right. Horse Shack. You know, I was asking all the questions. But, yeah, that was opening myself up to that kind of conversation on a daily basis. And that understanding, I understand what it means to be a fiduciary, and it's a very serious responsibility.

And the investors, though, would be happy because on the day of your IPO, it soared 30%. Right. And shortly after that, your stock went up 50%. So the bets have paid off, one would say. But do you still feel like you look at your own company as, you know, from the outside in sometimes or more as the builder?

I look at it as the builder. But again, when we were investing, that's how I looked at it. I said, where could this company be in five years? What are the secular trends? How could we build it? It's way harder than I thought to build a company from a culture, from a competitive landscape, from how the world works, but also really exhilarating.

Well, let me say I love Clear. I can walk up to the airport line and I see all these frazzled travelers, they're out of sorts. And I go up and I show my eyeball and one of your people escort me to the front of the line. How did you know it was going to turn in to be such a seamless, easy and safe experience?

So the benefit of buying a company in bankruptcy, out of bankruptcy is it was around, right? It was around for five years and there was a history to study. And so we believed in biometrics as solving the great problem, which is in a post 911 environment, that which made you safer became less easy. And that which was easy made you less safe. And that biometrics were the.

And now explain what biometric means.

So biometrics are the things that make you uniquely you. So your fingerprints, your eyes, your face, your voice, they are uniquely yours. Nobody else has them. Humans and zebras both have biometrics. No specific stripes are the same. But my belief was that we could change the way people live, work and travel. Because if you look at all of these physical experiences, from an airport to a cruise ship, to checking in at a hotel, to getting into a sports stadium, to going to the hospital or the doctor's office, to coming into an office building, they're all full of friction. And so we had this view that Clear could be a solution that could really change customers lives, make them far more productive, make them far happier and, and make our country safer. So it was this Shangri La platform.

And you are a nervous flier.

Yes. Look, I think part of Clear was solving a lot of my personal issues. And I think that's probably how businesses start within your own vision, which is I'm always running late, I'm super busy, I'm a stressed out flyer. I was stressed out before 911 from turbulence, after 911 from terrorism. And then when you have to start leaving your kids and traveling and it just becomes a whole lotta lotta.

Clear had 190,000 customers before bankruptcy. How many do you all have today?

Today we have over 10 million members.

Wow, you've gone big.

This has been a really big year. And I think both between us helping Businesses come back better and people are coming back to travel and expecting frictionless experiences. We've been growing an enormous amount in the airport, and we've been growing with our Health Pass product and other products in other verticals, whether it be sports stadiums, music festivals, offices, restaurants. And so it's a real moment. It's never been a better time to be a secure identity platform. And the vision that we had in 2010 is absolutely becoming a reality.

Let's talk about privacy. How can you ensure that people's data or their fingerprints or their eyeballs or whatever stays private? That is a big question for so many consumers right now.

If you look at the email we sent in 2010 to members, when we restarted Clear, we had a customer pledge. And in that email it says, we will guard your privacy. That was a pledge unto itself. That was when there were three of us in an office. So we actually think privacy done right is part of the clear ethos and something that we're really proud of. I'd like to think that we build that trust every day, but you gotta wake up and rebuild it. And so the world changes, circumstances change, and you gotta keep doing it, you gotta keep saying it, and you gotta keep living it.

So now you are clearly expanding into all kinds of areas and you've called it the convenience economy. Tell me about that. Where is cleargoing?

So it was always part of our initial thesis. If you look at day one, we said, today we are a travel centric company. Tomorrow we are the de facto secure identity platform and leisure access commerce. So that was part of the vision almost 12 years ago. And it's what we had been working on before COVID which is people want frictionless and trusted experiences into sports stadiums, office buildings, et cetera. Certainly Covid helped accelerate that vision. It was probably five years of business development smushed into a few months. My view is job is to look around corners and understand where the world's going. That's what I did as an investor. And we thought that there would be another card in your wallet. And that was going to be. Which turned out to be true, which turned out to be correct. Innovation is about bringing people what they did not know they wanted. And that's our job as leaders. That's our job as clear.

What do you think is going to be the game changer for you when you can say, we are now pervasive?

I believe you will give up your wallet in the next five years. Why would you be carrying around pieces of paper and plastic to represent who you are? And stuff about you. Your passport represents your identity and your citizenship. Right. Your vaccine card represents your identity and your vaccine. Your credit card represents your identity. Because conceptually, it's you. Even though my kids take my credit card all the time, you should be able to walk out of your house and have your entire day be frictionless and nonstop. You shouldn't have to be pulling stuff out.

So I can throw my thick wallet away within five years?

I think so.

I mean, who wants to have to, right? Schlep that stuff.

Yes. And it's in their back pocket and it's thick and it's in a rubber band. It's in a clip. Making the world a better place and safer and easier. Yes. That is the vision.

I love your vision. Thank you so much for being here today.

Thanks for having me. It's been fun.