Making Financial Health Effortless for Everyone with Ethan Bloch, Founder & CEO of Digit

Ethan, welcome to the show.

Glad to be here.

Yes, excited to have you on here, talk all about Digit and kind of your journey with the company. But for people who aren't familiar, what is Digit doing today, Ethan?

Yeah, so Digit's an app that helps you save money, invest, and pay down debt in a way that requires less effort, less work than you otherwise might think it would take to do those things.

With that as well, so for people who aren't familiar, what, like, to that point then, what is it actually doing? How does it work? What's the experience like when people are using it? I've played with it already and I like it. It's pretty interesting. I'm curious. I'd love for you to explain for people.

Yeah. So, you know, the way it works and the way the experience really is, you sign up for Digit, you download it from the App or the Play Store. And as you sign up, you sort of connect your existing bank account, wherever that might be. And you connect that securely to Digit. And then what Digit will do before you even need to really set anything else up or turn on other features, Digit will just start trying to find small amounts of money that are sort of in your checking account day to day that it knows you don't need and might not feel is missing in terms of how it can blend in with your normal spending or with your bills. And as it finds those sums of money, it just will move it out of your checking account And into your Digit account where you also receive a savings bonus for keeping that money in Digit and you have access to it whenever you want. You can withdraw it back to your checking account. That was sort of the original core product experience, which is all it did. And it really just created a whole new category of financial products around algorithmic saving or automated saving. And it's still today, we hear almost every day how shocking it is about how much money people can save with Digit that they didn't realize they could save. You know, the average customer will save $2,500 per year.

Geez, not bad for automated without them even really noticing it. That's the power of this type of thing. With this as well, I mean, it's such a great idea in terms of how this works, and you've seen different products trying to do stuff like this in terms of helping people save or helping people with finances. But where did you get this idea? Where did the idea come from for Digit in the first place?

Yeah, it's a long journey and story. I'll give you the sort of, as many of these are, I'll give you this sort of abridged version. There was no single sort of, aha, this is the thing I'm going to go do. And the light bulb went off and we built it, it worked, it was great, which usually is rarely, however, Any of these stories unfold, even though it may look like that from the outside, it never really is the case on the inside. For Digit, for whatever reason, I've personally just really been obsessed with finance for a long time, really since I was around 13 and maybe even a little bit younger. I was in a family and I was fortunate enough to be in a family that talked about money pretty early on. I had a checking account. I was selling stuff on eBay when I was And I had like a credit card in my mom's name to use to buy some of the stuff that I was sort of doing that with. I started day trading my bar mitzvah money when I was 13. It's always been a sort of a passion. I know, and that's been— we can go into that another point.

We're going to dive deeper in a second.

And, um, I ended up going to school at the University of Florida for finance, and that's when I started to learn really about behavioral finance and that our brains just really aren't wired for this super complicated world that we've created. I started writing a book in college, decided not to pursue it. And it wasn't until I had sold my first startup, which is actually in a totally different space, it was in marketing, that I sort of had made enough money to really think about what I wanted to do with a large portion of the rest of my life. And I decided to just start again working on finance. And started this exploration really with the question of, what am I going to do that could really have a large positive impact on the financial health of Americans and really worldwide, but focused mostly on the US? This is the abridged version of the story. And within that, I spent a year just thinking about why did I think I could do something differently? What would sort of be my insight? And I started to arrive at this sort of contrarian idea, which was if you really want everyone to have good financial health, you need to build a product or service that does a lot of the work for us.

Yeah.

And that then eventually led to a bunch of iteration and product development that led to a very early version of Digit that would make saving Effortless.

I want to dive into that because I think it's helpful for founders to understand like the MVP, the initial version, what does this concept look like? Oftentimes companies, you know, after they come for years and years, raise funding, things have changed a lot. There's been a lot of different things that have happened. For you then, what was the product at launch when you first launched?

And launch, you mean like sort of totally open it up to anyone to be able to sign up?

Yeah.

So yeah, the original version of Digit we launched almost 6 years ago now. Or a little over 6 years, I guess, is February 2015, was there was no app. So no Google Play or iOS App Store app. It was all, you would sign up on the web and then all of the interactions actually took place over text message primarily. So it would save for you. There were no goals like there are in Digit today. There's no way to connect credit cards. There was a A ton of the features were not there, but it would save in sort of your Digit account and it would text you updates about your checking account and your Digit account throughout the week. And everything underneath that was all compliant in a way, because again, we are in finance. We do move money.

Right.

So all of that was figured out and done in a way that was compliant and low risk for us. And that's what we did. That's what launched originally in Feb 2015.

With that as well then, so understanding you had this kind of big vision for what you're going to do with this company, you have this product you develop. With that process then, what was your thought around customer acquisition early on? How are we going to get into people's hands early on? Obviously, there's different ways to go about that. But for you guys, what was that strategy initially when you thought, okay, how are we going to launch it to people? How are we going to get the word out?

Yeah, so we early on knew that because we were a financial service, That a big important avenue of growth would be referral. And the reason referrals, I mean, referrals could be important in every business, but especially in financial services, trust is number one in terms of what, the way you need to build the experience, why customers will use it, why they won't use it. And when you're a service in finance that no one's ever heard of, having people talk about it helps you grow. cross that barrier of trust. And so we knew friends telling friends would be key. We had a referral program actually built into Digit before we launched publicly. It's been, I don't know the exact number, but at least half our growth on any given month for the last 5+ years, maybe 30% depending on the month, but 30 to 50%, some months more of our growth in every given month is still through And the other sort of still in the vein of referral, but a little bit different was we talked, we were really fortunate to have an early advocate who had a big finance blog. And it was a guy named J Money from the blog budgetsaresexy.com. And he helped introduce me to a lot of different people in the space. And I talked to them about Digit and I let them try out an early version.

Wow.

And if they thought it was cool or it could be helpful, they wrote about it. And so when a customer would search for Digit in the beginning, there were lots of known financial bloggers talking about Digit in a truthful sort of review, whether it's positive or negative or a combination of both, there were reviews out there. And thankfully it was a great product a lot of people loved. And so a lot of positive reviews in the very early days.

Talk to me more about that referral program though. If that drove so much of your growth, how would you think through that in terms of what that would look like? Because there's different ways to incentivize people. And people are going about this in many, many different aspects or angles. How did you think about that, implement the referral program then with you guys?

Yeah, in the very early days, I'm trying to remember. So before the product was fully launched, we wanted to give some of our early users a link that they could share with friends. And so we built that functionality in a few days. Just, we didn't overthink it. There weren't huge documents and strategy conversations and economic models. It was just like, build a thing that has a referral link that we can give to customers and they can share with friends. Cool. Okay, it's built.

Yeah.

Let's go share it. And that was that. And what actually happened was we told our customers it was there and use it sparingly. And all of a sudden, one of our customers actually posted on Product Hunt. And the next day we woke up and we had 100 new users, which for us was kind of scary because we'd only had like 30 up to that point. And so it just started spreading. There was no incentive yet for anyone. It was just literally an invite link. Before we launched publicly, we iterated the referral program, if I remember correctly, and made it so you, the referrer, would get $5. So this is the single-sided incentive. And that just seemed right at the time. Again, we didn't do a ton of analysis. We didn't, you know, think about it for weeks. We were just like, hey, we should change this. So you make something when you sign up a friend and $5 sounds good. So let's ship that. And since then, we've done a lot of work on the referral program now because it can get really scientific.

Oh, I would love to hear more because I was just thinking of everyone kind of knows the PayPal just burning cash nonstop to grow early on where they're literally just losing like Millions upon millions a week, which obviously grew the user base and it worked. But you mentioned iterating on this, getting more feedback, getting more data. How has that evolved then over time in terms of how you look at the referral program and that driving so much of the growth of Digit?

Yeah, we've always looked at it as one of our core growth channels. And so we treat it like we would other channels of growth, whether that's performance marketing, whether that's again affiliates, whether that's influencers, whether that, and then We'll look at it like a core channel and then we'll ask questions like, how do we increase the number of signups from this channel? And what's the amount we'd be willing to pay per signup based on how it performs? Looking at the retention of that particular channel. And from there, there have been teams at times at Digit that will just focus on the referral program for a quarter or 2 quarters or 3 quarters and they'll break down the whole entire And then work on different parts of it in terms of ways to optimize it and running different incentives and different campaigns and different copy. The referral program has so many different steps in the funnel that you can have a team really probably working on it all the time in some cases.

With that as well, I know you mentioned obviously there's always different channels that you're looking at for acquisition, for growth. Is there a certain allocation you're trying to devote in terms of resources to like a referral program versus paid channels? I mean, because that can go so many different ways. Because I know it's obviously something every startup is going to kind of think about. You only have limited resources. But for you guys at Adigit, how have you kind of thought through that allocation?

It's hard. It's hard. Yeah, we— and it's not just, again, you could think about the allocation of resources, really, of sort of money and people from just sort of the different avenues of growth. But then we also have it from just kind of the overall growth of the company. core product features and product development. And how should we be investing in new features versus investing in the referral program? And so I don't think we have it figured out at Digit. If someone else has a way that they're like, yes, this is the way, please hit me up. We would love to learn. We'll evaluate, we'll sort of evaluate the allocation of money and team You know, in the planning cycle, roughly quarterly, but we'll even look at stuff that's happening during the quarter. Are things changing? Are priorities changing? Is new information coming in? And should we change how we're investing in these different initiatives?

Yeah, there's new data coming in constantly. I mean, so it's something that I'm sure every, every company's gonna be looking at. And as you grow and you get more and more data, then you're getting more data more frequently. And then, yeah, there's just so many different things that go along with that, which makes it interesting to decide how you're going to allocate that capital. And I want to take a step back because obviously any startup, it's not gonna be one person involved. Who was the founding team? How'd that come together? I want to know more about the team side of it building this because that is, that's the company, the team is the company. So how has that gone in terms of you building that team for Digit?

Yeah, so we've had, and going sort of all the way back, I had started working on Digit in what would've been what's characterized as like a solo founder, which I do not recommend doing. It is lonely.

Any reason why? Yeah.

It's really helpful to have another human to be talking to about what's hard and how you're thinking about things. And I had sort of friends and advisors, but someone who's like really in it with you. Then I had someone join me pretty early on who was a designer. And we sort of worked together for 6 or so months. We ended up parting ways after that, but it was a super helpful partnership to get through some of the earliest days of Digit. And around that time, we had one of our first, or what would've been our first, not including me, engineers join. And then our sort of our, what was for a long time our head of support join. And then who is still our CTO, Michael Murray, joined. And so those are the initial 4 or so people that were on the team that took the product almost all the way from getting to a rough prototype to product market fit to ready to launch. And then another one of our engineers who's still on the team today, Nathaniel, joined like a month before we actually launched the product. And when we launched the product, I think we were 5 people or something like that.

Wow.

And that's who I would characterize as sort of being the founding team, myself, Todd, Chris, Michael, and Nathaniel.

And then from there, then the growth, how has that been for you in terms of hiring and dealing with growth of the company? That's something that every founder is going through as they go on. It's a new thing for them. What's been helpful maybe for you along that process in terms of hiring and kind of growing the company?

I think the most important thing The thing that's been most helpful is finding really talented— and it depends what stage you're in, but if you're at a stage, if you're at the stage where you're ready to start really growing the team because you have product market fit and you need to grow the team in order to really capitalize on the opportunity you're unlocking, I think one of the most important things is your ability to attract and hire talented leaders.

Yeah.

You also need really strong individual contributors still, especially that early, and you always need them. But having, again, depending how you're going to be scaling, having people that can start to grow teams, people that are really experienced and talented, it's going to directly translate into your ability to capitalize on the opportunity.

Is there any way in particular you've vetted those people or looking at your process for hiring, anything that's in terms of looking at people? I mean, there's so many different ways to go about it, but I would be I'd be curious as to hear how at least you have approached that digit.

For me, can I curse on this podcast?

Yeah, absolutely.

Absolutely. Yeah. Okay. It's noted. For me, the learning process was sort of fucking it up a few times. That's one thing for sure, which we're all gonna do. I mean, even, I think Ben Horowitz will say something like 50% of your sort of executive hires won't be successful. That's normal. That's par for the course. It's really painful.

Yeah.

And so that's one. The other one is, especially if you're a first-time founder or you're someone who hasn't really grown teams before, leveraging some of the folks that are around you, your investors, your advisors, to help you vet candidates is really helpful because in my case, I hadn't I had sold a company prior to Digit, but it never got very big. And I was in a leadership position in the acquire, but never really grew a big team. And so I was inexperienced and it's just really helpful to have people that have done it before to help you see what you should be looking for, how to evaluate. And you still, as a founder, should trust your instincts. You kind of have to, right? Because who else Can you blame when it doesn't go right? You're just you, so you got to trust your gut. But I think really leveraging the people around you is essential, I think.

Yeah. And one of the things I want to get to later on is going to be kind of your reading process. And I know you're a big reader, so I want to get to that. But before we get to that, I want to know on the investor side of things, to that point then, so raising capital for this, this was something— this company has grown much bigger than your last company, more people, everything with that. The funding side, how— let's take you through that process. So like the first funding you got for Digit, and then I want to go through kind of each round if we can, just because I think it's helpful for people who are at different stages. I remember interviewing some people who were like, hey, can I get an intro to that person because they were at the Series B? I'm like, happy to do that. I would love to hear your thought from like the first kind of funding until your most recent funding round as well.

Yeah. So we raised, I think, a total of about $65 million in a total of 4 rounds of funding, I think, going all the way back to the original pre-seed round.

Yep.

The most recent round was a Series C. So going all the way back, the original round was a sort of pre-seed round, and I think we raised like half a million dollars. So it was a very small round. This would've been like in 20— 2013. It was really even before we had— we had a very early prototype of Digit. It was not able to move money yet. It would send you text messages and you could connect your bank account. And we— yeah. So do you want me to actually go into how we pulled it together and how it came together or what level of detail would be helpful?

Yeah, I would love to hear how it came together, maybe the timeframe around that, because Because it can be ranges on that. And then even how you looked at which investors to bring on board, because some founders are going to be obviously pursuing angels, maybe they'll get institutional capital pretty early on, a lot of ways to go about it, but everyone kind of has a different story. But even like for each round, and I'm okay with taking some time on this, because I think it's important to hear this, because it's a hard part of being a founder is, you know, sales, hiring a team and fundraising. So it's like, I would love to hear the details you can provide on that. Yeah, sure.

Yeah. So one thing I'll just reference is there's different styles people have, I think, when they fundraise and it's somewhat personality style, but also like who you learn from. I was really fortunate that in my last company, which was called Flowtown, I built marketing software. Our first investor was Travis Kalanick, who then went on to co-found Uber and be the CEO of Uber.

Yeah.

And I know nowadays he's looked at in, I would say, a sort of negative light in most cases.

Sure.

But holding some of the behaviors that people deem sort of negative around Travis, I think he probably had one of the best fundraising playbooks of anyone I've ever worked with. And he wrote a blog post. I don't know if you could still find it on his old website, which is called Swooshing It. And it was like the playbook on how to raise a seed round. I think Naval back in the VentureHack days was another— Naval and Nivi were other big influences on how to fundraise as well that I then have always carried forward. So that's one thing. And the TLDR is treat it like any other sales process. You have a pipeline, you have your spreadsheet, and then it is not done until the money's in your bank account. Yeah. And don't ever sit down thinking it is, right? Like you could have verbal commitments, you could be there and you're like, should I still take this call to this other investor I just got introduced to tomorrow? I already have the verbal commitment. Absolutely. You keep going, right? You want to, you want, like you keep going until it's done. Don't stop. So anyway, that's, that's a little bit of a preamble. In the case of Digit, I was really fortunate because I'd already sold— I had a sort of small acquisition in my last company. Our biggest investor then was Baseline Ventures, run by a guy named Steve Anderson. And as I went and started Digit, we sort of had a phone call. It was a 15-minute phone call. And he's like, I'm in. And he even said to me in the call, he's like, how about that? 15 minutes. And it's that easy. And it was— I was still stressed, by the way. It's stressful fundraising, even if you have the relationships.

Yeah.

So I was fortunate to have those relationships. And so Steve came in. Then my former sort of CEO at Demandforce, a guy named Rick Barry, also came in early. And then some friends that I've had for a while at Freestyle Capital, Dave Samuel and Josh Felser, also came in. And that was basically the whole half a million. And then I had some friends and family put in some money. That came together pretty swiftly. Yeah. Do you want more detail on that or?

So then going from that round, so that round, you obviously had some contacts already, which was helpful. You had the last company, so you had some already VCs you knew of at least, which was obviously really helpful. For someone not starting, I mean, you have to start building those relationships, figure it out. I mean, that's just the name of the game. But from that then, so there's always different milestones or targets that kind of align with different levels of fundraising. At that point, so you said, where was the product at by that point when you raised that half a million?

We sort of have an early prototype that you can sort of sign up for and text message. It didn't actually move money yet or save money. That was all stuff we still needed to figure out really from both access to move money, but also from a compliance perspective, how we would actually do it. So it was very much still like a vision, quote unquote, vision round. There was no traction really to speak of yet.

Yeah. And that's, so that's 2013 too, which is much, again, different environment just in terms of how venture has progressed. Things change over time. Uh, people realize how many more funds or how different it goes, how big the rounds are. I mean, a lot of different things change. Um, so that would be called, I mean, that'd be like a pre-seed. I don't know what you want to call it now. Uh, at this time, the rounds are so huge, it's kind of insane. From that, then get that first funding, move on. What was the next, if you remember the sequence, the next round? Or how big that round was and how you approached that.

Yeah. So the next round was basically a seed round, and I think we raised $2 million, and that was led by Steve at Baseline and with really close participation. I forget the exact breakdown from Freestyle Capital. And then that's when we also had Upside Partners join as well as Google Ventures join. And the folks at Initialized join, I think, were the key sort of institutional investors in that round.

So with those investors then, with those people, again, you mentioned having the spreadsheet, being more, you know, very methodical about the process. Why those investors? I'm curious. And were there other ones maybe you were targeting? Or I'm just curious as to how you're kind of going about that from a strategic standpoint of— and then it's a lot of like, you know, reaching out to a lot of people, but I'm curious Curious as to you, like where your head was at in terms of that next round of funding of how you're approaching that.

Yeah. So I, it's actually hard to fully remember what was going through my head then, but—

Years ago, I know.

Yeah. So we had, so Steve committed, that was a bunch of money. That was a very straightforward process. He left room for some additional folks and then Freestyle committed. They were already investors. And so it just made sense. to quickly raise most of the capital from them. Once I think they were in, I had had a relationship for a long time with MG Siegler, who at the time was, and still is, at Google Ventures. MG is one of the top, sort of, at least in my experience and opinion, just product thinkers in our space, going back from the time when he was a journalist.

Yeah.

And he was on Digit early, actually giving me feedback using it. And so having someone, having another product thinker around the table was really important to me. And additionally, Google Ventures would give us access to a bunch of different services. We started talking to the sort of like their design sprint team and a couple folks over there. And so it's clear we would get some additional value also from just raising some money from Google Ventures. And then additionally, at the time at Initialized, Gary Tan was sort of the primary partner there and still is, but also was Alexis Ohanian. And Alexis was an early Digit user and was really supportive and would tweet about Digit and was going to help us with PR. And so getting them around the table again to help us launch Digit was really important. And so we made room to get them in the round then. And then an additional investor, Upside Partners, which is run by a guy named Kent Goldman. I had known of Kent, had met him a couple of times and known of him. And then I got introduced to him from another friend and met with Kent, and he sort of just instantly understood what we were trying to do at Digit, really had empathy for the customer. And as I was thinking through sort of raising money from him. We had one challenging circumstance at Digit that I can't go into, but I had to deal with. And at the time, I reached out to Kent to get some help. And this is before he was even an investor. And he gave me some of the best counsel out of anyone I was talking to at that point in time. And so, I decided he'd be someone great to have around the table so I could continue to go back to. Founders need support. And he felt like an investor that would provide a lot of support. And so that's why we decided to include him in the round back then.

Yeah, and I just want to highlight that for other founders out there. I mean, like, if you can be strategic, and if you have options where you obviously are, if your round's hot, especially, you'll have way more options and maybe oversubscribed, but like, thinking strategically about what those investors bring to the table. I mean, I think founders think about that, but like, it really, it really can matter, especially if they're going to help you close a key hire or deal with something that you've gone through. I know I've interviewed number of people who actually have had like Jeff Jordan from Andreessen on, you know, to help them on marketplaces. And so like there's like different investors in particular who have such an expertise in like one area where like that can be kind of a game changer for you if you can get them on board. Um, again, back to the point of angels, even angels even at later rounds potentially just because of their expertise. Or you mentioned Alexis with, you know, getting PR, helping on Twitter, and like that can be really helpful. Um, and then, uh, obviously now, now with Gary and In terms of his kind of content empire as well. Like, I'm watching him on YouTube, I'm just like, man, yes, I'm gonna be coming after you for some— the YouTube game, Gary, watch out. I think it's so helpful to like look at like—

You heard it here first.

Yes, exactly, exactly. So it's helpful to see that, like where those investors are helpful and can be helpful if you have options and as you pursue them, because especially now, I mean, it seems like there's just a lot of investors out there, a lot of money out there. If you can be more strategic around it, It's very helpful, especially in different areas of the business and what stage you're at in the company. So I just wanted to kind of highlight that. And then, and then so you had those investors on, obviously, you're making progress, business is growing. And at this point, I mean, you're farther along than you were at your last company, right, in terms of the size of the company and all of that, or?

Hmm, not in terms of size of team yet.

Okay.

And at that point, when we raised the seed round, Digit wasn't yet even open to anyone to sign up. I think we maybe had maybe 50 active users, but the traction was real and the product market fit was very clear that at that point, again, because we were fintech, we couldn't just launch it. There was additional work we would need to do around securing a bank partner, and a bank partner wouldn't really work with us until we had more capital and more of a commitment from our investors. And so, it was actually much harder to get a bank partner than it was to raise that seed round and took much longer actually.

How long did that take? Just curious.

I think to get a bank partner took 6 months, you know, to actually maybe sort of 3, 4 months to like run the process and end up with a couple of options and then pick. And then, yeah, I can't exactly remember, but I want to say at least 3 or 4 months, maybe 5 months. And then it's actually integration to actually pull it off and get it done. It was a beast.

You know, even hearing that, Ethan, it's like some of these things, and I've heard so many different stories around things that can be, especially in regulated industries, it can take so much longer than you think as a founder. You're like charging along, making progress in your business. And you're like, if you were to know this is gonna take like 6 months or 5 months to even do just like one part of it, like it's so disheartening sometimes to hear that, but it is the realities of, you know, these industries at least.

Yeah, for sure. It's, you know, It depends what space you're going to work in. It's definitely a real cost of doing business. And for many cases, very good reasons in any heavily regulated space.

Yeah. And then once you get past that, obviously, then a barrier of entry. So you are at least already past that for other people entering. And then for you then, so the progress of that, obviously, when you get to later stages of funding, you mentioned, I think you raised a Series C a year or two ago, there's different expectations around metrics around hitting these How did that go in terms of how, as you went to later rounds of funding, obviously much bigger rounds, you mentioned raising over $60 million in capital. That's a different story than your first $500,000. Take me through that. I mean, how did it go for you? I'm curious as to anything that was helpful in that as well.

I think like, you know, the key thing for all rounds, but certainly rounds after the seed round is growth. And then more nuanced sort of sustainable growth or economical growth. I mean, there's obviously way more you're going to look at, like what's the space, what's the team, what's the opportunity, what's unique about this approach. But once you get past that, it's sort of like what's the growth rate and where is it today and where do we think it's going to go and why do we think that's sustainable? And I think that is essential. To raising additional rounds of capital from A all the way to being public one day and beyond. And yeah.

From that experience then, so going through that, you have these milestones you have to hit and obviously, yeah, it's all about growth at that point to raise capital and you've gone through that process then. It's going to be used for something. So that funding goes towards things. We talked a little bit earlier around the allocation of capital and that's That's a huge thing, resources in general. Then coming back to the product side of things, you know, it's like allocation between the product and growing and everything with that. How has the product evolved to today? Like where it stands in terms of like how you look at what you need to implement, what you need to have on there. And obviously it's user feedback and everything, but I'm curious as to like how you're looking at that and allocating your time towards the product side of it. I've played with the product, like I mentioned a little bit, but I'm curious as to how you think about the product today at least.

Yeah, so even way back when, before we even sort of had our first version of Digit, we've had a grand ambition for the product, starting with our mission of making financial health something that could actually be effortless for everyone. And the way in which we're attempting to do that is by building what we sort of call a set of intelligent financial products or financial services that really do a lot of the orchestration and management of your money for you. And this would, if you break this down a little bit more, it's sort of how do you help someone spend the right amount? How do you help someone save the right amount? How do you help someone borrow the right amount? How do you help someone plan in the right way for their future? Those are the sort of the 4 huge buckets of financial health. In the beginning, There's no way we could do it all. Even now, we can't do it all. It's kind of insane. And so the place we decided to start was with this focus on saving. To us, saving's a cornerstone to financial health. It was also a good place to test the sort of hypothesis of, will people trust Digit, what then we really looked at as a robot, to save for you? And if you won't trust us to save for you, you're not going to trust us to do all these other things. And so that's why we started with saving, and we just got laser-focused on making saving effortless. And, you know, to this point in time, I think we shared this publicly, you know, we now saved over $5 billion for people these last 6-ish years. And, and it's nuts. And it— the amount in and of itself is impressive, but what's much more impressive are all the stories attached to it. The number of times, you know, we've helped people get out of a tough situation The number of families we've helped start, whether that's having the money to afford to start a family or adopting, the sort of health needs you may have had and you have that money for, the things you can buy and do for your family, losing your job because of the pandemic and having Digit and money in Digit to help that be less stressful and help that be really less scary like that. And that's why we do what we do at Digit. But coming back to the product, We started to ask ourselves about 2 years ago, around 2 years ago, what more now should we be doing for customers? And so we created the ability for customers to have multiple savings goals. We created the ability to help customers prevent overdrafts, which we know is a really big cost for a lot of Americans. We then started looking at debt as the next big area of sort of stress. And building features around paying down credit card debt and student loan debt. And so to more directly answer your question, the way we've been sort of prioritizing product and allocating resources around product really follow this sort of financial health journey and sort of what are the things we all should be doing to live financially healthier lives. And then that will sort of map back to these buckets and then map to product features actually within Digit itself.

One of the things I wanna come back to, uh, cuz we had talked about it, I alluded to it earlier with reading. How, how do you, with, I mean, there's so many things to, ways to learn and grow, but you mentioned you're a big reader, at least online. You mentioned that I saw the list on like Pinterest or something. I was like, oh my God.

Oh yeah, I got it.

This is a lot. I was excited to dig into that. Yeah, I was excited to dig into that cuz I mean, you can see like this is like a portion of my books behind me, but, um, yeah. To start with, how do you pick what you read?

Yeah, it's really, it's whatever. So there's some themes, but it is whatever's sort of capturing my interest at the time. And so there's sort of 2 ways I'll sort of break this down. On the professional side, a terminology I've used is sort of accelerated learning. And so I'll sort of look out and say, What are the goals I'm trying to achieve this year professionally? And then you can ask the question of, what do I need to get better at in order to increase my chances of achieving those goals? And then from there, what I'll actually do is say, who are the experts I need to go talk to? Who's done this before, done versions of this before? I need to go— I'm going to go talk to and learn from vicariously so I can be better at whatever it is I need to go do. And then another part of that is just within that sort of accelerated learning is then the set of books or materials I'm also gonna read to teach myself how to be better at that thing. And so that can follow any number of themes depending on the year and what you're trying to do. And as you know, there's no shortage of business lit books of any type. There's too many in my opinion.

Yeah.

And a lot of 'em are like, you don't need to read cover to cover. But that is what then, I'll create a list on Amazon and call it Accelerated Learning 2020 or 2021 or 2019. I'll start adding books to it that I want to read this year to increase my chances of achieving the goals I'm setting out to achieve. That's one much more sort of structured way to help me figure out what to read.

Do you go off of just Amazon recommendations or friends' recommendations or how does that work?

It's a mix of both. I'll certainly look at Amazon reviews and those details. I'll certainly ask. I'll get recommendations from friends, from advisors as well on, hey, I'm thinking about this thing. Have you read any good books here? Oh, check out this book. Check out this book. I'm also a subscriber to Blinkist. I don't know if you've heard of that. And they write their own short summaries. I have.

Holder Steen's the co-founder. I had him on the show.

Oh, it's awesome. So yeah, I don't need to tell you. Yeah. So I will use that also to check if I then want to read the book. In some cases I'll stop there. In other cases I'll use that as my entry point then actually into the book itself. Well, I was going to say the other track is just following interests. So people could mention a book that I'll find interesting and I'll go read it. And then there's sort of the next one within here is I I read a lot of biographies. I just really, especially at night, I just love history. I think it's really helpful to just surround ourselves with what the past is like to be able to appreciate the present and/or see what's still wrong or different or could be different about the present. And also to just kind of start building your pattern recognition of, well, this looks like Ray Dalio says another one of these. All this shit's happened before. Just in a different context at a different time, a different name. Exactly. So, that's another avenue I'll read. And then science fiction is another avenue that I'll read, but less science fiction still. I'm not necessarily reading new science fiction books, some, but still reading the old ones that are great.

For you then with that, so you have these themes each year, which I love. I love having that. And kind of your accelerated learning was something I first learned learned of from, uh, from Tim Ferriss in one of his books, uh, around accelerated learning, kind of getting a process for that. Uh, you have this theme each year, then when do you typically read? Like, when do you make time for that? Or how does that work in terms of where you fit that into the week? Because it's a lot of times I've talked to people who it's like, oh, I don't read, I'm too busy doing, but there's always like, you get so much from taking a step back and reading and like processing. So for you, how do you handle that?

Yeah. So for the accelerated learning, I try not to read that at night. Or before bed. That's when I reserve reading really biographies or really biographies aren't fiction, but for my mind, it is in some ways like that because it's a story and there's characters and there's some narrative. For the other books, I'll try and read during the workday, either in the morning, I'll read a bit during the workday. I'll actually block out time. I'll take time off, whether it's vacation or sort of these think days that I'll take. And I'll be reading for a lot of those. When I take that time off, I'll be reading for a lot of that time as well. But yeah, and so that's where I treat it like any other project or task you have to get done as a founder or as an executive. It's a part of your job. And so I'll treat it like that.

Yeah. And you're investing again, it's all about essentially time allocation, your asset allocation. Time is one of your assets. And And so it's like, where do you spend that? And do you invest that hour, 2 hours per day, week, whatever on a book learning that way versus something else? And it can definitely have huge payoffs. I've definitely gotten way more into biographies, I think in the last few years. I think the life cycle of like an entrepreneur or someone, like you start with kind of the classics and then you get into other ones. It seems like everyone I talk to starts with the classics and makes their way to biographies at some point. So like I'm working my way through Edison, which is like a 600, 700 page book. And I'm like 400-some pages in. And to your point, like it's history and it's just so fascinating how it does have a cycle and you see the same things he's struggling with, other people struggle with. And then like you see all the accomplishments, it's just like insane. That's a highly recommended book, by the way. It's great. I love it. Are there any books for you then that— this is gonna be an impossible question— that stand out or are your favorites or even recent favorites? Anything. I'd be curious to hear about that.

I'm like thinking through now, like what, you You know, what's been— oh, like, what's, what's one of the most influential books for me versus recently really liked?

Yeah, one you just mentioned was Ray Dalio. So you did mention that. I'm just buying you time right now. Uh, that Principles— Principles was a good one by Ray Dalio.

Thank you, appreciate that. Uh, for whatever reason, one book that really had a profound impact on my life was Ben Franklin's autobiography. It's pretty short. I read it when I was like 20, I think. And kind of just in some ways changed my life at that time and helped me more specifically orient around what would matter to me in professional life and how I would treat it in terms of the seriousness and diligence and how I would show up each day. And reading his story is inspiring. And I originally got that as a recommendation, not directly, but through the internet from Charlie Munger and Warren Buffett, who were big Ben Franklin fans. And I was like, well, those guys think he's worth reading. I should check this out. And I read it. I was like, this is amazing. I had no idea Ben Franklin did all this shit.

Yep.

You get the really glossy version in school. You don't get the detail. And his autobiography was profound impact, had a profound impact on me.

You mentioned Charlie Munger, Warren Buffett then. I saw again your reading list on Pinterest and saw there's a number of books there from Charlie Munger. A lot of people talk about him. Have you implemented, used the mental models, the frameworks that he's talked about, are there any that stand out to you? Or maybe not. I'm just curious if you have just from that.

Yes, certainly. Not nearly to the degree of rigor like Shane Parrish will write about and talk about. And sort of, I think now there's—

Great domain.

Yeah, agreed. There's also like the lattice work. I'm forgetting the domain right now. I just came upon another individual. It's like classifying all these mental models. which I think is fantastic. I don't do it to that level of rigor, but I see them.

Yeah.

And I'm also much more of like a visual just thinker. And so I know quite— it depends on what decision I'm making, but in most cases, they're just in my head and I'll be thinking about them as I'm working through the day or looking at a circumstance or looking at sort of an outcome. set of experiences that are occurring in front of me or observations. And so I use them all the time, like we all do, whether we know it or not.

Yeah.

In business and making business decisions, certainly some of the basic ones are always helpful to keep in mind, like this sort of sunk cost fallacy. Loss aversion, and and so often those will just be like driving some thought in your head. And when you can check that, it just changes how you look at the problem in front of you. Look at the decision in front of you, and those come up, you know, all the time.

I think yeah, no, I agree. And to that point, you mentioned Shane Parrish. The Knowledge Project is his podcast, and Farnham Street's their their website fs.blog. And I that's one of the best, I think, blogs, websites out there. And I love their podcast. I wish it came out more frequently. It's like every other week or something. I always like wish it was more. I have, I think the book. Yeah. The Great Mental Models book behind me.

Nice.

Yeah. And so like the mental models are so helpful. And I, after, after reading that, you know, you know of some of these things and you've maybe heard of some of these things, but it's like rereading and keeping those top of mind of like, oh, okay. First principles, back to first principles, thinking inversion, like thinking from the end first before, like all these different ways of thinking. It's like, That's a superpower. Like if you can invest in that, the way you think, you make decisions all the time. Founders, you know, VCs, whoever investing in that type of learning and research is so helpful because it impacts like everything you do. And like when I think of learning and growing and like hacking the system, like one, talking to entrepreneurs and like VCs themselves, because you've gone through this, is a shortcut. It's just like reading the book in some ways, but then also books like that about thinking and about decision-making. And so I love like mentioning that whenever I can on the show for other people who are trying to improve. It's like people have done it already. It's helpful to have that.

Totally. Totally.

And for you, as we kind of wrap things up, I know we're almost out of time here. I'm just curious. I always ask founders this especially. How do you unwind? How do you step away from work? And you mentioned reading, taking days off to read. Anything else that helps you play the long game and continue on as a founder? make sure you can perform at your best?

Yes, there's a few things for me. I'm always iterating like all of us, but having running almost every morning or some form of exercise every morning is essential for me to be at my best mentally and to be at my best for my team. The other one would be meditating each day, even if it's a small amount. At some point during the day and be able to center back and center back. And so I can stay present even in times of extreme stress or challenge. Those are 2, like the running and meditating. If I'm not doing those most days of the week, I'm just going to be a less effective human in business, but also even with my family. And then I really need, for me, a set time each week to just reflect. Reflect for several hours is essential. The way my brain works, and so I'll hike alone every week for an hour to two hours, and I just use that time. It provides like contrast on the week, and I can just like think through everything that happened that week, everything that's in progress, everything that's going to happen. And I'll take notes on my phone in like a notes app. I'm not solving anything; I'm just like taking notes, and it's such an essential. Part of my weekly process to clear and reflect and get stuff out of my head. And I do that usually on Sundays as I'm coming into the week, and then it'll go into this system and how I'm like organizing my actual week.

Yeah, I think that's one of the, the best things to have some type of reflection period, whatever it may be. I've used journals for, for years, uh, 5-Minute Journal. I've used a One Line a Day, which is a daily prompt, just a daily like few lines, um, like 2 and a half years in and it's 5 years. So it's, uh, yeah, it's like, it's like 5 different chunks each day. It's a small little book, but I find that at the end of every single day, then I have that reflection regardless of what happens, which is so helpful. And I think the longer ones as well, when you have to just kind of write freestyle, uh, whether it be in a journal physically, which is great. I'll go to a park and do that. Or like using Notion, uh, when I just have my computer, wanna do that. But like that, like timed, like kind of just like defragment, debug, and then, and Think of what you want to do, and then to your point of running, like I feel like my max day for people who are listening are gonna be able to see this. But my max day, I'm pulling my hand up, is like if this is like a hundred day, like the best day possible. If I don't run, I'm automatically below. Like I'm automatically like like twenty percent. Like my max day can only be twenty percent good as like it could have been if I didn't run. That's how I look at like that type of thing. So like people define that for them, like whatever that is for you that gets you to the potential of having your hundred percent day. Do that as much as possible, which is always helpful for me.

Totally agreed.

And just to wrap things up then, where's the best people, best place for people to learn about Digit, connect with you as well if they'd like to?

Yeah, best place to learn about Digit is to come to our website digit.co. Digit.co. We also have the app in the App Store and the Play Store. And then for me, it'd just be my Twitter account. I'm just @ebloch, E-B-L-O-C-H, on Twitter.

Perfect. Well, thank you so much. I'll be sure to link that all up in the show notes, justgrind.com/podcast. Ethan, thank you so much for taking the time to come on the show today, man.

Justin, thanks so much for having me. This is a lot of fun.