How A Brand New "Ad Card" Helps Digital Advertisers Scale Their Business

All right, welcome back to Bacon Wrapped Business. This is Brad Costanzo, and we have got a fun show today. As you folks know, I've mentioned this many times in the past. I've got the most selfish podcast on itunes and Spotify and all those other platforms, which, by the way, if you're not a subscriber yet, you can subscribe. And when you do, all of your dreams will come true. You can trust me on that. I've seen it happen. But speaking of selfish podcasts, I was mentioning to my guest today, who you'll meet in just a second, about how I only have people on the show that I have a legitimate curiosity about what they're doing, how they're doing it, and not only about what it is, but the kind of the journey they took to get here. Because I think as entrepreneurs, as business owners, executives, and marketers, the journey is oftentimes just as important, if not more important, than the destination. So we're going to get into that today. But today I've got Zach Johnson on the show, and Zach is the founder of Funnel Dash and the ad card, which is a very innovative charge card for your digital ad spend. It so happens that about a week or so ago, I was on his podcast and the tables are being turned. So I'm going to ask him a lot about what's going on and how this will affect you as somebody who sells products, services, et cetera, online. Specifically, if you are running, manage, or responsible for digital ad spend, you're buying Facebook, Google Ads, et cetera, et cetera. You're gonna want to pay very close attention to this because there's an innovation that you may not be aware of, but you will not be able to say that at the end of this show. So, Zach, welcome to Bacon Wrap business.

Yeah, man, thanks for having me. I really appreciate it.

It is good to have you here. As I said, we just spoke last week and now the tables are turned. So.

I know when, when I first saw, when I first saw what you were doing, like Funnel Dash, like, I was familiar with Funnel Dash as a, like, funnel analytics software. Right? That's primarily what it was. When I went back to look at it. It's like, wait, what is this? What is this ad card I want to get into just for folks who have short attention spans. Let's talk about at a high level of what innovation you're bringing to digital marketing and especially media buying. But then I also want to kind of hear about this evolution and how this pivot happened. So, yeah, tell us at A high level. What is the ad card?

Yeah, man. It was basically a charge card exclusively for your ad spend. And really it's basically a card with a basic premise that the card programs that exist today don't really move the needle in terms of helping you grow your business. So Amex points are really pointless when it comes to, or I guess when you're in a pandemic and you know, you really don't wake up every single day going to using your card, you know, thinking about how you can maximize your points, your cash back. It's kind of one of those things that you think about retroactively and the journey of kind of getting to. How the hell did Funnel Dash end up offering financial products such as.

Before we go, before we go to the journey. Tell me a little bit more about. Well, so what do you mean? Like it helps you move your business along. Like obviously, I mean, you know, I use different cards. Other people use cards. Amex and Visa, MasterCard. How does this help me move my business?

Yeah, so we basically came up with a stack of benefits to help drive better advertising performance. So if you put the card on file in your Facebook or Google account.

The whole idea is that through our unlimited free done for you ad copy and creative service, that one piece of creative can help you drive the overall top line number of maybe 20, 50, 100% cash back in the form of better return on ad spend.

And so we also have a billion dollars of ad data and performance data on 5,000 ad agencies now. And so we do again, like this agency and media buyer matching and recruiting service with advertisers where getting matched with the right media buyer with the right network is worth more than your AmEx points are really worth more than any rewards that exist because it's ultimately going to help you grow your business. So there's other benefits for.

Things like issuing unlimited virtual cards for every single ad account, ad campaign and network.

Those virtual cards can be really helpful, especially if you're trying to have you have multiple ad accounts or you get mad accounts shut down, which is just a part of doing business.

Right.

If you haven't had a, like a Facebook ad account shut down, you're not buying any media, but totally.

And if you're like, if you're in, I don't know if you're either doing affiliate offers or if you're in some aggressive market like cbd, a really good best practice is just to use virtual cars anyway so that you don't get stuck, you know, and your card gets banned from Facebook. And then you have to wait a week or two for them to ship you out a new employee card. That's a great way to kill a business and kill your cash flow. And so, yeah, there's just really practical things like that.

And then you combine that with.

Our, you know, our performance ad audits and some of the other things that we're doing from optimizing their ad perspective is like, hey, this is hopefully more valuable than a concierge that's going to book you a flight.

Yeah, exactly. Never used my MX concierge once. I use them once and it was such a pain in the butt, I had to go through the whole thing. It took me like 10 to 15 minutes to get through the concierge, and I could have done what I needed in that time.

And so if we just look at like the Amex black card, right, the holy grail of card products, the bar is actually really low, if that's the best. And what you get with a black card, by the way, is. Is a social Equinox gym membership, a Tom Ford leather card. You get a private. You get to go like a. There's a private spot at LAX that you can go, but it costs like three grand to use the private flight, like waiting area. And I mean, maybe like a couple hundred dollars in Travel credits and $1,000 to Saks fifth. Right. All things that are like, like, they make no sense in terms of paying the $10,000 initiation fee and the $5,000 annual card fee. But the big light bulb for me was on my path to finding the ultimate monetization model. And then I looked at card programs and capital programs as a new way to monetize.

And that was kind of discovered from my early days of funneledash. As we're figuring out, like, where's the real opportunity here to scale this thing to a really big business?

Okay, well, explain that. What do you think? What is the real opportunity?

Well, in the early days, like, we were.

We were a closed loop analytics solution. And the.

Early on in my career, I worked with this guy, Mike Koenigs, and he always said, what's the fastest path to money and follow the money. And so that was like always a grain in my head. And we very quickly got to several thousand ad agencies and a billion dollars plus in ad spend on the platform. And I was like, the money is in the B, where there's a B number in your business. Like, just be obsessed with, like, how you can tap into and monetize that flow. And so I thought it was always through, like, how can we tie into.

Different billing models? So, like, during my time at LeadPages, we made the biggest mistake that a software business could make, which is not having elastic billing. Right. We had like oprah.com using leadpages paying $37 a month. And it's like, the beauty of technology is that there should be no limit or cap to what your customers can pay you. That was really the impetus of, like, there's something beyond the rainbow of just charging SaaS subscription fees to ad agencies for better insights. And the basis of why we're even doing this in the first place was with the goal of helping advertisers scale. And part of our stories, Brad, is going way back in our career where financial services was kind of in my blood. And so bringing this finance element and this math element into marketing has always been my secret weapon. Both, you know, in ontraport days, leadpages days. And I thought that if I could just give people better numbers and better metrics and better attribution, that that had a direct correlation to changing a behavior which is being more aggressive and actually investing more aggressively into their ad spend. Yep. And I think still to this day, there's many people that are chasing that rainbow and hoping that attribution leads to more dollars investment. And there was a big epiphany several years in. This guy Chamath came out and basically said that 40% of venture capital is spent on paid advertising. This guy runs social capital. He's deployed a couple billion. And that just like, absolutely blew my mind, but made all the sense in the world, in the sense that I just saw LeadPages raise $38 million and I had seen, you know, other tech companies raising all this money just so they could get bigger and bigger marketing budgets.

You know, that's interesting because I know who you're talking about, Shamath, but I never saw that where he said that 40% of VC is spent on paid media. I actually would have.

My.

My intuition would have been that it was a lot less. And I'll take. And I'll just tell you why just to rabbit trail off here because like, a lot of VC goes for tech, right? And then. And I know a decent amount of tech founders and engineers, and they all seem to hate advertising. It's weird. Like, they hate it. They're like, no, if you build just a better product, and this is true, but if you build a better product, the people will come. It's word of mouth, et cetera. So that, like, I would have thought that they would have poured more money just into engineering and product development, et cetera. Because a lot of the big VC companies, I don't, I don't actually see them doing as much ads. Now granted, they may be doing it in a different way, but yeah, that's actually surprising to me that the number is like 40%. But that's really cool that you tapped into that and paid attention going, huh, well, if I can, if they're spending all that money on there, maybe I can get a piece of that.

Well, yes, and it was also a pain point for me personally being in SaaS. Payback is a bitch, right? If you're in SaaS, you're in subscription and you're, you're not like E comm in the sense you're breaking even, you know, in 30 days your typical SaaS or subscription business.

Has a six month payback period, right? Maybe a three month payback period if they're good. If you're click funnels, you're the fastest growing private SaaS company ever because you're profitable on your lead generation. But for me, it was like I relentlessly was thinking about customer acquisition in terms of payback period. Because if you're spending 100 grand a month on customer acquisition and you have a payback period of three to six months, that's 300 to 600 grand of operating capital that you've got to support, which is maybe not like that much, but let's just say it's 600,000. If you want to grow by 3x next year, that's 1.8 million. And then the next year is really when you're giving away 20% of your company because now you're talking 5, $6 million in the sense that you're beyond kind of your own, your cash flow means for most, most businesses to carry that level of float. And so that was really the problem statement of like, okay, I thought if I could help people understand their payback period and their analytics and their attribution.

That would then allow them. But it ultimately just became a conversation at the end of those analytics of like, okay, well where do we go get the money? And I was like, oh, I can't help you there, sorry. Like, all right, cool, cancel our final subscription. Like, we'll just go talk to Amex or like, whatever. So that was kind of the, the very early impetus of it. And we didn't know it was going to come out in terms of card program and how we were going to execute on ad capital by any means. And it's been a long journey, you know, to get it to this point. But I think, I think it was probably one of the best decisions I made, but also the most difficult. For sure.

Yeah. When did you guys, when did you start this, the ad card?

Actually, like just recently. Yeah, I mean we started, we started the process of ideating this two years ago.

Okay.

And it was originally my, my, my kind of project pseudonym was called Fun My Ads. And my very first meeting.

I like, I like how you say it fast. It sounds like fund my ass, please somebody fund my ass.

Yes.

This is not a PG show.

It's funny. It's actually. There was a. We actually have typos on the site where that actually happens that I regularly have to fix.

Yeah.

So anyway, yeah, so you guys, I needed to do that and then. Yeah, like, I mean whenever you're getting involved in financial technology like this. Yeah, there's a lot, I mean everything from tech to regulatory hurdles, etc. I'm sure you probably had to do a lot of things that were out of your zone of expertise and just figuring it out as you go.

Yeah, it's brutal. You know, one of the things that now that we have ad card in the market.

We'Re just kind of exist in this space where it's a me too movement.

With entrepreneurs. And we've had more interest of people that are interested in co branding ad cards, launching their own capital divisions because they've seen what Shopify has done. You look at Shopify, those guys are just the king of SaaS. Right. They make $600 million a year in SaaS subscription, but they make 900 million a year in what's called merchant solutions.

So crazy.

And that's payments, that's Shopify capital where they're funding their merchants. That's soon to be like Shopify is going to have like their own freaking bank accounts and credit cards. And so that's a real profit center. And we're seeing a ton of partnership opportunities where let's say a.

You know, a large payment processing companies, you know, Funnel builder companies, SaaS companies, influencers that have an audience are looking for, you know, kind of the next offer and the next way to really ultimately expand their ltv. And the most interesting VC quote this year has been one by Andreessen Horowitz. They came out with a whole post called Embedded Financial Products. If you Google it, it's an amazing article. But basically their whole thing is if you embed financial products into your SaaS business, or really any business, it can 2 to 5x your LTV.

Yeah, I believe that.

And really the, you know, the main core products that exist, you know, in terms of embedding finances is like capital. In terms of like funding, Square Capital is, you know, one of the largest small business lenders. And then you have payments and then you have cards. And in some cases it makes sense to be, you know, rolling out bank accounts, things like that.

Yeah, the. Do you foresee, because this is not like for instance, merchant services, but do you foresee that as something you guys kind of want to or maybe want to offer as well?

I don't, I don't think so.

You know, it's a whole other ball game.

Right. It's a whole nother ball game. And I feel like that's really, that that play exists and there's some pretty established players there on the what's called merchant acquiring side, which is where are you going to accept those credit cards? But if you're an entrepreneur, you're thinking about what's the best way for me to monetize my customers. The first thing to think about is where do they spend all their money? Right. This was my thing. I'm like, they're spending a billion dollars here on ads. And like here I am just like small little funnel dash, not too old. Like we don't have a huge footprint. And if you look at what are the top one or two or three biggest line item expenses, creating card programs and financial products that really are tailored to that and deliver on that. If you think like your Nordstrom card, your Neiman Marcus card, your Amazon card, we're entering into an area of long tail financial products. And I think that as entrepreneurs we've just said what can I accept more credit cards for? And, and then, and really there's this whole other side to like monetizing where people are actually spending their money.

Yeah, yeah. So the.

Like I love the co branding angle. I think that's really powerful. So give an example of how that might work. You don't have to use any companies that have reached out to you already. But like let's say that I've got a, let's say I've got a company.

That is another SaaS or something. Like an example would be, I mean what would be a good example? A shopping cart company or.

Yeah, let's just, yeah, let's just say like a WIX or a Squarespace.

Sure.

Those are easy, you know, solutions.

And, or really you. Maybe there's like a mastermind, you know, component. Right. Let's just let's just say you're not like in SaaS. Maybe just sell like a high level mastermind. You've been thinking about selling a high level mastermind.

Yep.

I think that.

Positioning a card program, like one of the easiest ways to kind of enter into card programs and capital programs is creating your own company's amex black card equivalent. You know, it's like I'm pretty sure you can deliver. I mean, how many $15,000 masterminds and $15,000 coaching programs or exist out there that are going to bring more business value than what you get with an amex black card? Plus there's also, I think, an element to creating this level of loyalty and status and elitism that ClickFunnels has done through plaques and rewards. I think that you can really create that through.

Card programs just as, just as effectively.

Okay, so let's run through that. The idea of a mastermind. I've had a mastermind.

I've.

I'm. No, I'm not currently running it. Probably will bring it back but. And it was $20,000 a year, et cetera. So how might that work? Let's say I've got 30, 40 people in the group.

Right.

And I, it's, let's call it the BradsterMind.

The Brad card. The Brad card.

Bad card. So.

Okay, so yeah, let's just, let's just walk through this. Probably people right now who have masterminds. I know other people I can obviously explain this to. Okay, so now this would be the bradstermind ad card, right?

Yeah.

They would get all the benefits that you guys bring from all this other stuff. Obviously my name would be on it. And then.

Besides that, what do you see? Like would I add extra benefits to that? Would they receive extra benefits from me? Like. Yeah, walk me through that. Because this is a, this is. I love innovative ideas like this.

Yeah. So with the enterprise value of a mastermind is. It's not much. Right. It's, it's, it's very, it's just the cash flow and it's the network. It's really more social equity than anything. Correct. How do you really take that and create some enterprise value? So part of that is, okay, how do you actually bill and the logistics of like just, you know, accepting 20 can a credit card or a bunch of ach transfers, like that's pretty much the logistics of it. But to really productize.

The program is I think done through the, you know, the Brad. You know, let's just say the BRAD Mastermind Black card. Right.

We'll Call it the BRAD card.

The BRAD card. The Bacon BRAD card. Alright, so.

Part of that is there's really three monetization models here to really help with the folks in the Mastermind. Okay. So the first is the initiation fee. If you're really just going head head with a black card, it's 10,000. Then there's annual card fee, you got 5,000. The third monetization model is where are your clients spending money that you can earn a percentage off? So our partnerships and our co branded cards, we basically share in the economics and our card partners get 1% of all their clients spend.

So a card partner would be like a mastermind. Exactly.

It would be. The BRAD card would be a. Basically a partner. So let's just think about, you know, Brad's Mastermind, you got 50 people in it or so these are fairly high level entrepreneurs. My guess is these folks are probably spending at least a million dollars a year in terms of their marketing budgets, maybe more. And part of the value of your typical mastermind format is there's the group element, there's generally a set of audits that you're getting. Like if you go to Perry Marshall's Mastermind, you're getting an ad audit, you're getting a funnel audit, you get a cash flow audit and then you can basically book these set of calls. Yep. So when you really wrap that up onto the BRAD card, it's really a function of here's the entire program, here's the initiation fee, here's the annual card fee. And as people spend more money, you have baked in this elastic billing model. Right. So if you have a mastermind of somebody that's doing like $100 million a year business now, you're not pulling off a leadpages equivalent right. In oprah.com and you're charging $37 a month, you're charging the guy that's doing 100 million a year, like that guy, if you get his ad spend on your co branded card, you know, and he's spending 10 million, 20 million a year. You just took your $20,000 mastermind fee and now you're making 100,000 or $200,000 in addition to your initiation fees and your card fees.

Nice. Okay, so walking back through this, just logically, I've got, okay, launching the program, $20,000 a year, people come in and with that $20,000 a year, you also. Now granted, I'm sure they have to qualify in one way or another for it, but they also receive access to the BRAD card, which is the co branded ad card with you guys. And this is how they hopefully like ideally discover it. Right. So now in essence it's co branded, but then I also as a referral partner get, basically run the program.

Right. So you actually wouldn't be a referral partner. You would basically be the card manager. Like it would, it would not be an affiliate relationship. Like, and it wouldn't be like, hey, it's a mastermind and then you get the card. It would just be, you're getting, you know, the Brad Black card. Okay. And as the benefits of the card is the mastermind and as you use the card, here's everything that the Brad Mastermind is going to do to help you drive better performance on the spend that you already have in your business. And yes, the value that Brad and his mastermind and all these things can do is far worth more than the millions of AMEX points that he's sitting, you know, that your clients are sitting on right now and not pulling in their business.

Okay, cool. So yeah, so I like that like if you get the card, you, you get the mastermind is one of the perks.

Yes.

Interesting. Okay, cool. Now if you're already in the mastermind, then you can get the card as well. Right. And then that.

And if they get the card, I could add additional perks if I want.

Right.

Like I could do something else of that nature, obviously, then I would also be getting the perk personally of a revenue stream based on what they spend.

Exactly.

Okay.

And the whole premise, the value that you would be bringing of like. Okay, why would, why would Brad, you know, launch this whole program? Well, dude, you're like the, the dream, you know, cmo, right?

I'm very dreamy.

Super dreamy. But like the whole idea is like of if you kind of pull out this long tail of the value that you can bring from your, your strategies, your advice in terms of how. And you're making recommendations on how they're deploying their marketing budget. You know, like, absolutely. They should be putting out that card. So one, you can have insight into it as the program, you know, partner. But also you can, you know, contribute in terms of the overall business performance.

Okay, so what kind. Yeah, so what kind of optics or analytics do I have on what? Like do I see some spending? Okay, so like let's say. Yeah, Joe, Joe, Joe Smith is my, is a cardholder, a Brad card holder.

Right.

So I can't see every single purchase. Right. That's not like that. Or can I. Yeah.

So basically he goes to our car yeah. So for our program.

And he wants to use the ED card.

Yeah.

That's funny. So the way that we would basically have is a data sharing agreement and that we don't take lightly at all. Sure. But if you look at the opportunity that exists right now is the long tail of card programs that exist and capital programs that exist. So the card that I used, let's say in college is not the card I use today, the card that I use even last year. Cards are this evergreen.

Element. Right. And so let's just say that they're not going to use the BRAD card like forever, but they're going to commit to working with you for a year and they're going to spend their marketing budget on it. So part of that level of partnership with us is we want to expose that data to our card partners so that you can continue to provide value. Now obviously there's personal identifiable information and all these other things from a compliance standpoint that like we're not going to share, but business data such as like advertising performance, cash flow insights.

Transaction volume and growth rates, even, even QuickBooks and Xero. And so depending on the extent of what we discover, I wouldn't say this is kind of a blanket. I think this is kind of on a.

The sensitive way to handle data is like, what do you need to really fulfill and drive value? And it's a, you know, it's a, it's a partnership conversation and that we need to support you through. But I do think that if you look at the amount of data that some of the financial companies that exist today have in order to even extend credit or even to offer a card program or capital program. It's, it's insane. And it's really, if you think about it, it's all the data that you would need as a marketing consultant, as an advisor or somebody who's running a mastermind to keep a pulse on those 50 subscribers, you wouldn't have to have somebody show up to a one day mastermind and then be like, all right, all right, Brad, like you're on the hot seat today, tell me all your numbers. Right. And there's just a lot of airy fairy stuff.

It's like, I have those numbers.

Yeah, exactly. You'd be like, hey man, well like we saw all your numbers, your growth rates down and now you're getting right to the meat of how you can provide more value and, and have a real, more honest, like transparent conversation.

Okay. One of the things I didn't ask you kind of, I love this by.

The way I like, we're down in the rabbit hole.

Very innovative thinking now. This is the kind of shit I love. Okay, so back to the card. Like first of all, is there an annual fee to the card right now or a startup fee or anything of that nature?

No, there's not. The way that I think it's really shaping up to be with the ad card is.

The very first conversations we had. All these agencies, right, all these agencies are managing 10 million, 100 million a year in spend and we were just like, hey, you should refer your clients over to the ad card and you'll get a commission, right? And there were for the most part they're like okay, cool, cool, cool, cool. And then we're like alright, well what if we basically just opened up everything that we had and said we're not going to keep everything for ourselves here. What if we brought all these resources and we did a co branded card for your ad agency that's managing a hundred million a year in spending and it just was like night and day difference in the sense that like oh that would be so cool. Like you know that would if you're an agency like that is literally a difference of doubling their profit. The, you know an ad agency charges 10% of spend, they get 10% margins on average. It's really crap business.

So 1% is your profit of your total client spend in an agency.

That's beautiful.

And by simply changing how you bill and like getting your clients on the car, the agency most of the time gets to dictate the payment terms. Let's be honest, right? And by simply having this, this age, this co brand agency card, it not only elevates their brand, gives them strategic value and strategic positioning is building more enterprise value in the agency than their contracts, their cash flow. At the same time it's doubling their profits. There's like a ton of wins across the board. And now we're starting to see just the last few weeks expand beyond just agencies to SaaS companies to influencers, to masterminds. We're seeing all kinds of long tail use cases pop up here.

Okay, so a couple other popcorn questions. First of all, does somebody need to be spending like are there qualifications if somebody's spending $500 a month, can they qualify for this or is there a minimum level of qualification?

Yeah, so it's really in how you want to design the program. Okay. So the way, and I'm not talking.

About the co branded, I'm just talking about.

Okay, yeah, well.

So if there's really two Sides to it. Right. For ad card alone, you know, we're really going after somebody that's spending a quarter million a year, you know, on advertising and, you know, the 1%, you know, that we're essentially earning there, we're delivering value in exchange for. And that that person's worth about, you know, 20, 2500 bucks a year at $250,000 in spend. And.

Part of the way you look at card programs is there's a ton of people that would also qualify. I'm just gonna come back to the black card for a second. Right. To get the black card, you have to spend $500,000 a year and you have to get this, like, elusive invite.

You're talking about the amex, right?

Yeah.

Not the Brad Black card.

So black Brad card. Yeah.

Yeah. So you have to spend $500,000 a year. I know plenty of people that would absolutely qualify for the black card, but that are not spending $500,000 a year on their Amex.

Sure.

Tons of people. And so this is really where card fees come into play and annual card fees come into play. And so this is generally $100 to $600 a year. But I think when you apply this to B2B and you change the value equation away from flights and travel to what can I do for your business? And that is kind of wrapped up into the long tail of card programs. That is when I think you're going to see a wide range of.

Quote unquote card fees, program fees, things like that that are all going to kind of usher into this.

Right, okay, but. So right now, if somebody wanted to, like, if, say, but add card right.

Now, as it stands right now, we don't have an annual fee for art.

Are there any quality besides like credit, etc. Are there any qualifications? Like you have to spend X amount or have to be spending X amount? Yeah, like it at the lowest level. Because I don't. I don't want people who are like, hey, I'm spending like $500 a month to rush out and apply if there. If there's no chance of them getting qualified for a card. So are there any minimum?

Yeah. So for us, we're really targeting on people spending at least ten grand a month on ads.

You're targeting that. But do you accept people who are doing less?

Yeah. So, okay. Yeah. So if you want to go down to. Sorry, I understand your question.

One is what you targeting?

But if somebody got it, yes.

Like, hey, I'm spending $2,500 a month right now.

Like, hope but yeah, so we. Yes. So we want people that have been advertising for at least 90 days that have a significant history of ad performance, which is a part of our risk model. Right.

It's not just like a marketing image. It's baked into, hey, we understand advertising. And this, I think, also honestly, was what took us so long is like, trying to explain advertising performance to Wall street and banks. Like, bro, that. I just feel like I fell on my sword for the entire industry from going through that pain, man. It was brutal. But, yeah, like, we're looking for, you know, you and I both know that the first money in on an advertising campaign is, like, the least profitable. Right. And so that's not really where we want to be.

And then it's really only for US Companies, you know, incorporated entities, you know, bank accounts, you know, been in business for a year. Those are. Those are if. If they're overseas. This is kind of interesting. If you talk to anybody overseas, like, they're totally jealous of, like, all the card programs that we have here.

Oh, yeah, I get it.

And so what we do for any, you know, a lot of people in Australia that spend a lot of money or, like, want to take advantage of the credits that you get over there.

We have a bank partner for a couple hundred bucks. They'll. This is like, super cool. They. They will become your registered agent here in the US they will spin up a llc and they'll give you a business bank account and an ein. And so you can basically take advantage of all the benefits of, you know, basically being here in the US and all the corporate cars and stuff like that without having to be, you know, U.S. citizen, Social Security number, things like that.

I'm very familiar with that. Yeah.

Yeah. Super, super cool.

The.

Okay. And then the.

I'm just trying. I'm trying to think here. So the payment terms are they. Is it like. Is it like an AMEX card that it has to be paid off every month, or does it have to be. Or is it like extending credit like a Visa MasterCard?

Yeah. So part of kind of regulation and compliance is a card. It's a charge card. Right. Gotta be paid off within 30 days.

Not a credit card, it's a charge card.

Yeah. The second you get into a credit card, you have apr, you need lending licenses, the credit facilities. The bank partnerships for those are much more complex.

Okay, so it's much more like just a traditional AMEX in that state.

Exactly.

That's cool.

Now, you had mentioned on your page that I was on here. I saw earlier something about potentially 90 days. What did I see here? Potentially, like a 90 day permit.

So we have add capital. So add capital is if somebody wants. So this is basically our.

Kind of bolt on capital division, if you will. That would be the equivalent to like a square capital. Shopify Capital, PayPal on bill, you name it. Right. But really, the particular sweet spot is the use of funds is specifically for scaling up your ad spend. And so the fees on that are. They're a fixed fee product, and we're essentially buying future receivables at a discount.

And then loading those funds up onto the ad card. Okay.

Yeah, so it's like receivable factoring.

All right.

I'm just making copious notes here. So sorry to my people. If there's. If I'm out apologizing to the folks listening, it's like, okay, Brad's not talking. What's he doing? He's writing. Damn it. Got my stylus.

So one of the things that we look at is.

Let'S just. Our fees on ad capital would range anywhere from 4% all the way up to 12% fixed fee. Okay. Then the repayment is really daily repayment through a percentage of revenue. Okay. And when you're advertising and you have a winning campaign, you're putting a dollar in and you're getting 200, 300% return on ad spend. You know, that is the, you know, the smart way to leverage debt. Right. That's really where add capital, like, fits in. We're not like, hey, can I go get a SBA loan? Can I go get some inventory financing? I need, you know, to cover a couple bad months that I had in July. You know, we're. We're the guys that's like, hey, man, I have something that's winning, and I need to beg, borrow, and steal to get money to, like, scale this thing to the moon. Right.

That makes sense. Now, if I have a. Now if I have a card and I want to buy a new computer at Best Buy on the corporate card, can I do that as well? Or does it have to be spent advertising networks?

We're starting with the ad networks, so.

It won't even work anywhere else. Is that correct?

Correct. Correct. Yeah.

That's important to know. It's not a general charge card that I can just spend. It's not like a corporate charge card. It's an ad charge card.

So, yeah, it's an ad card. I mean, it's like, literally, you know, where we're focused right now. I do think that there is a path to, you Know, opening up a little bit broader. And we're starting with virtual cards. You know, it's like you don't drive to Facebook to, you know, swipe your car right. Like, you just put it on file and, you know, it's good to go. And so virtual cards is.

Is more functional at these days in a world of a pandemic where everybody's doing touchless payments.

Oh, absolutely. And I notice on your site, like, it works with Facebook, Twitter, Insta, Google, Amazon, YouTube, Bing.

Is that the only place, like, if somebody wants to buy, let's say, native ads on a native ad network, etc. Does it work there yet or no?

Yeah, yeah, yeah. It'll work with native ads. And.

You know, if they have, you know, we're going to be opening up even radio and TV buys as well.

Yeah. And then if, you know, if they're curious, you know, if we support a particular media buy, they can just hit us up in the chat and we'll.

Like, say, for instance, if somebody does.

Like, big email drops, for instance. Now that's not necessarily with a big network that might be with an individual. Like maybe you go to Newsmax, for instance. They're a big seller of that kind of stuff.

Right.

So would it work there yet or.

Yeah, so it would. And we're also. It would also work, you know, like solo ads, you know, stuff like that. Email drops, it would work for those as well.

So if I tried to use this card, for instance, like at a best buy on.com or something of that nature, would I just get a, like, sorry, signed or something like that? That's kind of how you know if it's gonna work or not.

Yeah. Okay, cool.

No, this is all interesting, like, because this is all some stuff. I don't know if you have an FAQ on the site. As I said, I haven't. I haven't scoured it in tremendous detail yet, but that.

Yeah, no, these are killer, man. I appreciate all the questions. We put evaqs at the bottom of every page, but, you know, everyone always has a different one and we're trying to add more to it. Yep.

You also say something that you're powered by the ETH blockchain and ERC20.

Yeah. So this is pretty cool. One of the things that, you know, we.

So tell me. I can buy crypto with this card. I've been buying a lot.

Yeah. So there's a, There's a couple use cases here.

The fun one that I'll just hit on right away is that if you look at Amex points, it's kind of been dethroned this year thanks to, thanks to a pandemic. But if you look at points, they're essentially a currency and they're kind of a crappy currency because they're only, you can only use them with travel and they don't appreciate in value and they actually decrease in value. And so I know a lot of entrepreneurs that are sitting on millions of points, hundred thousand dollars of value. And so we definitely are building a bitcoin back feature where they get, instead of cash back, they can get bitcoin back and get that into a way more flexible currency, one that's definitely just as tax advantageous and also appreciate in value.

Yeah.

It'S practical, but there's even more blockchain use cases as we kind of talk through the technology for a second.

Is really putting a lot of these assets on the blockchain. So one of the things when it goes into.

Ad card and capital is the capital market strategy. You have to go partner with banks and credit funds and people that have hundreds of millions of dollars that essentially want to.

You know, fund your clients. Right. And so that's like a big part of what we're doing on the back end and what.

We see ultimately happening. I mean this is like super forward looking, but we have the early steps of the foundation in place. Now is where we want to put that whole transaction on the blockchain, where somebody could say here's that purchase of future receivables is essentially your revenue and that can get tokenized and that whole smart contract can exist on the blockchain. And there's a ton of other implications like down the road of what we can do. There's also other.

A ton of other benefits in terms of movement of money and like in terms of how we set things up in terms of a wallet and a master account and the moving of funds across, you know, a ton of different cards and accounts and stuff like that. I feel like I won't go down there to bore the entire audience.

Yeah, it's like fully on there, but I like to think fact that it's on the radar because like right now with decentralized finance and you know, some of the developments in crypto world, it's still the wild west, but it's really interesting what's going on and just, just being in having any degree of blockchain aspect to your business can also just for you guys can help the valuation.

Yeah, it's also. So if you look at what happens right like in a typical, like a loan business or capital business, you essentially have the. Have this thing called a loan tape. And this loan tape is generally like this massive Excel file. It has like thousands of rows. And let's say you go partner with a Credit Suisse and they pretty much just kind of spot check your loan tape to make sure it's a good fit. But as you kind of follow the.

Funds, right, Just take mortgages, for example, because it's easy. Everybody understands them, the papers and the loan docs, when at the, you know, at the bank level, when they're underwriting the mortgage. By the time that gets.

Wrapped up and sold several times over and is in Wall street, the investors at Wall street have really very little insight in terms of those original docs, right? So the beauty of putting these contracts on the blockchain is that it's going to allow a lot more securitization of assets.

It's going to open a lot more transparency. So when we deploy, let's say a couple hundred million dollars and add capital and we want to go get.

More financing, the financing partners could come essentially in and look at every single detail through those smart contracts on the blockchain versus, like, oh, yeah, it's in our private storage. And you can kind of spot check some of those. And the reason this is the part that I think people will appreciate, okay, the very first meaning I had when I had the idea of fund my ads.

I met the. I met the guy who runs the GSO group at Blackstone. This is like the top guy. I'm like, hey, I just have this idea, man. And this guy runs the largest credit asset management firm in the world. Is.

Like billions of billions of dollars, right? And he's like, hey, this is like, really interesting. You know, I think there's like a real opportunity here. We're obviously like, you're way too small. Like, let us know when you've deployed 100 million, because that's our floor over at Blackstone. And he's like, but, you know, he's like, also come back to me. He's like, I think there's.

He's like, I'm just curious how much opportunity there is to fund people's ad spend. And like, how many of your 50,000 AD accounts are, like, actually profitable versus how many people are actually losing money on ads? And I was like, oh, you're a smart dude. And so he's like, kind of at the very end, he's like, it sounds to me like you could actually make more money betting on people not making money on their ads. So like this whole thing unfolds, right? And he's at the very end, he's like, yeah, I think you should do this, but I wonder if you could do credit default swaps on people's ad spend.

And turns out that this dude is a one trick pony because this guy is literally.

You ever seen the movie the Big Short? Yeah, this was the guy. I had no idea.

Well, he literally was the guy that was the guy.

And I was like, oh my God.

Was he the guy who basically. Was it the Christian Bales guy or the one who called it.

No. So he was the guy that basically wrote Ryan Gosling in the movie. They wrote the contract that allowed investors to short the housing market.

Oh wow.

I'm like, oh dude, no wonder he wants to do credit default swaps on people's ad spend. This guy like whole business is like just hoping that ad card and ad capital just fail miserably.

Let me bet on losers.

But here's the thing is those derivative level of markets and bets on people's revenues and ad streams, all that becomes more tangible and real if you start on the blockchain and those assets are all there. And so it's very, very forward facing. Who knows if we'll ever get to a point where there's, you know, tangible, where the end user is going to be able to see or benefit from it. But I'm definitely excited about the practical.

Use cases.

Of it now you're going to have also.

Well, tell me about the transparency, how this works with. So okay, so you'll know how much people are spending. You won't necessarily know how their.

The.

Revenue they're making though. Right. Like because that's not reported back to the card.

Yeah. So you as the, Are you talking about you, Brad? The.

Let's say. Let's say I'm a card holder.

Yeah.

Period. I'm not even talking about a co branded card like you.

Okay, got it.

Alright. So I spend $20,000 next month on an ad campaign and.

You, you actually don't know if I make 10,000 back from that or if I make 100,000 back from that because I just pay it off. Right. Like it's not tied in to see the actual results, is it?

Yeah. So I mean that's the beauty of a data stack, right. There's multiple data layers, so there's the transaction. But also we're integrated into Facebook ads. Right. So we can see the Facebook ad data through Facebook ads.

Really if you look at kind of credit and underwriting. One of the things that we look at is just consistent payment history. How many ad accounts, business managers you've been into, where it's like, deleted ad account because of failed payment method.

Right. Okay, so that is part of it then, like, you will get optics on the performance of the ad.

Yeah, yeah.

Okay. I wasn't 100% sure how that worked because I hadn't heard about.

Yeah.

We pull in about 50 different, you know, cash flow analytics. We pull in.

You know, all the usual Facebook advertising performance metrics, all your usual, you know, credit.

Metrics.

But you're not necessarily. Are you tying into, like, the merchant account to see how much money is collected as well or.

No. Yeah. So, like, you would. We'll have that here in October. Well, you'll connect up your stripe, your Shopify, your WooCommerce square.

Is there a benefit to me as the user to let you know that data?

Yeah. Higher limits, for sure. Okay, cool. Yeah.

Yes. So that you guys really do become, like, a partner in that. And you can see, okay, Brad is losing his butt three months in a row. He's got negative roas, and that indicates a higher risk. Right.

The other. The other part of this is the whole benefits of ad card is to prevent that from happening, right?

Absolutely.

Since that, like, the rewards are all about driving better ad performance. And there's some basic leverage, right? Like through benchmarking and agency and media buyer matching and creative, like, all that stuff.

Combined, you know, targeted and focused at advertising performance is like, where we ultimately, like, don't want to be.

And then the counter, you know, to that is.

That.

Sometimes you have advertisers that are rotating through cards, right? Like, they are using some hundred grand over here, 100 grand over here. And so that's really why we wanted this integrated solution between ad Card and ad capital. So if somebody's running up their limit on ad Card, they could absolutely tap into ad capital and continue to scale. Because at the end of the day, card products have a certain type of risk profile, and then so does ad capital. And so you're not always going to get.

The most and highest limit just from a bunch of credit cards. Right? Like.

Yeah. So I feel like we're, like, super in the weeds here, but hopefully you're enjoying this bread.

No, I am trying to wrap my brain around it. And hopefully my, like, this is not one of those podcast episodes where somebody's just driving in the car enjoying a leisurely story. But this is. This is good because these are conversations that you Know, they might, you know, want to have to. Hopefully I can help shortcut some of the. You know, here's the thing.

Well, here's the thing. Like.

If I go down, I actually put together this list here. Right of here is everything. I mean this is actually making this, this podcast is gonna be like the ultimate pitch for a co branded card. But I can't because what we're essentially talking about here, I did a list of everything that like we had to do the last couple years. Right. And so I want to read this list to you and then you'll appreciate how easy is to like spin up a program with us. Okay. So we had to go lock in a bank partner. We had to do a processing partner to actually like be able to issue a card. We then had to go choose whether we were going to do like an Amex, Visa, MasterCard partner. We'd have a capital partner, you have a program manager and you do bank integrations to be able to do card issuance, credit reporting agencies, more bank cash flow insight data ACH and processing backup ACH and processing fraud integrations and fraud checks. KYB KYC for compliance and know your business, know your customer. 12 payment integrations, 123 plus accounting integrations, 10 AD integrations. Then an actual credit model that predicts a probability of default. Loan tape, asset tracking, reporting, loan process provisioning. I'm only halfway through, dude.

You've got a nice competitive moat of other people trying to copy you.

And the thing is you have to rinse and repeat that whole list for every single country, every single. Whether it's debit card with a credit card, whether it's capital program and then you have like a slew of other things that we won't get into. But that is the beauty of how we're looking at you bringing this in. And how does somebody be able to embed financial products into their business with. In a B2B setting. Right. Like within a week. Right. And the fastest path to doing that is leveraging co brand. And yes there if you wanted to go white label, you could definitely go do all these integrations and you know, build that tech stack and say several years and spend several million doing it. But I. Yeah, hell no. Like why, why does like at some level you have to have a, you have to hit a level of scale. Right? So like MasterCard isn't going to partner with you unless you Brad, the BRAD card is gonna bring in at least a several billion in spend over the next like three to five years.

They might just because it sounds Cool.

And if there's anybody that could sell it, it's you, Zach. Jack.

Well, I'll tell you Zach, this is, I mean this has been awesome. It kind of brings us to the, this is like the tail end of the show here. But I think that this has been absolutely an amazing.

Insight into like a really innovative development. Like, I love innovation and I love this kind of stuff and I think what you've done is very notable. And like, huh, I'll be damned. Let me ask this, what other. Okay. What are some of the biggest nuts you're trying to crack right now? So obviously you want people to sign. I mean this is active, this is not in development. People can sign up today.

Correct. Cool.

So you want people, potential co branded partners. What other nuts are you trying to crack? And that could be people you're trying to hire, money you're trying to raise, skills you're trying to learn, markets you're trying to break into. Anything. Like this is where myself or my listeners get to put our brain power to work to go, oh, I might be able to help him out.

Yeah, yeah. I think the biggest thing that I've been kind of shutting down for like the last six, nine months. I was telling you this before the show that I've become more open to and receptive to is all the different use cases of co branded campaigns. Right. I feel like we've laid the foundation for the credit partners, the capital partners, the bank partners and.

Finding people that.

Love this idea of wanting to be able to have their own brands equivalent, amex, Black Card and be able to do that in a heartbeat and partner with us to do it. That would be amazing. Right? It would other also be obviously like influencers that have a broad reach that are looking for kind of that next offer. Right. And they want to really I think beat, beat the market. I feel like there's a lot of people in the info space that you know, could really level up what it means to be part of a mastermind or coaching program by bringing this all together under a card and a capital division. Same thing with SaaS. And so I feel like it's all B2B to start and it's all really focused on.

Advertising to start and business to start. But I think that.

This is, I think this is actually even bigger than that. But that's just where we're at today.

I love it. Okay, so people can go to funnel. Is it, is it Funnel dash?

Funnel dash. Yeah, yeah.

I'll put a link in the show notes here for that. And Then they can figure that, you know, they can apply, etc. They can get in contact. Give me the real basic requirements. For anybody who's made it this far in our show, what are the real basic minimum requirements? Like, we love you, but please don't apply unless you meet the following criteria.

Yeah, I would say, you know, spending 10,000amonth on ads, you know, incorporated in the US business. Been in business ideally for two years minimum. One year. And really. And you care about performance, right? Like, if you really want to drive business performance, you know, then, like, I think that the value stack that we bring with ad card can outperform, you know, any straight cashback or point system that you're working with right now. And. Yeah, I think that's it.

I love it.

Do you ever. You also have a referral program, right?

Yeah, yeah, totally. Yeah.

Because Johnny, man, any of these turkeys want to jump on, I want to wet my beak a little bit. We'll talk offline about that. I ain't afraid to cash checks. Let's just say that. Well, man, Zach, I really appreciate you taking the time to just explain all this. This has actually been a lot more enlightening than I even expected because there's a lot of cool innovations that I was like, huh? Like, I didn't. I had no idea you could go that way. I thought it was going to be much more about it as the new credit card or charge card that just has better benefits. But this is really, really, really innovative. So congratulations on that.

It's.

It's rare that I come across something that makes me kind of sit up and really take notice. And I'll see if I can help crack some of those nuts for you here. I love it for all of my loyal listeners and subscribers, by the way, if you're not. If you're only a listener and not a subscriber, go to either get on the newsletter or jump on your favorite podcast app and hit subscribe, because there are extra benefits when you do that. I'm not going to tell you what they are. You're going to have to just find out as a surprise. That's because I haven't created any extra benefits for you.

I'm just.

Hopefully they appreciate my honesty. That being said, Zach, thank you so much for being a guest, and I know we will be talking quite a bit here in the near future.

Thank you so much, Brad.