S11E5: Innovating Financial Inclusion and Pay Flexibility with Jason Lee, Founder of Salt Labs and DailyPay

They had tried 85 things before us to try to get people to stay. None of it worked. The willingness for large companies to work with an innovative company like ours, yes, it says something about us, sure, but it also says something more profoundly about the problem.

Welcome to The Room Podcast. I'm Claudia Laurie.

And I'm Madison McIlwain. We are on a mission to open the door to the room where it happens, sharing the stories of some of the world's most iconic founders and funders. We're recording this introduction the week before our 11th season launch at the Forbes 30 Under 30 conference in Cincinnati. After making it onto the 2024 list for media, we've hit multiple milestones, including our 100th episode and our first ever all-day conference, Inside Summit, with over 120 attendees July of this year.

Authentic storytelling is core to our community as Madison and I are both founder and funder. It all started as two best friends who met in the heart of San Francisco as product managers in 2018, then realized as we were making career transitions into myself founder and Madison funder that we wanted to talk to the entrepreneurs that had built great companies. Since starting the podcast in 2020, I founded Pryve, a commerce payment startup raised venture capital, and faced a ton of challenges that I ask our guests. Madison became a partner at Defy VC and was the first institutional investor in my startup and is now at HBS and is a Pear VC fellow, bringing the funder perspective to the table.

Scroll back to find our conversations with the founder and CEO of Zillow, Spencer Raskoff, to Michelle Zatlin of Cloudflare, Grammy Award-winning artist Ciara, and the creator of Next.js and CEO of Vercel, Guillermo Rauch. Everything from consumer to enterprise, we've got you covered. The best way to get to know our community, both online and offline, is by subscribing to the podcast and our newsletter, which you can find at theroompodcast.com. Before we dive into today's story, we have a few short messages from our sponsors. Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator, offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscoie.com.

This podcast is brought to you by Mercury. The banking platform businesses like The Room Podcast use to simplify their finances. It's time banking did more than hold your money. Now it can. With Mercury, you can pay bills in seconds, close the books faster, and even send invoices. Not only does Mercury do away with a patchwork of tools, it eliminates guesswork, giving you complete and accurate visibility into your business's finances, all from one account. Apply in minutes at mercury.com. Welcome back to The Room Podcast. We're excited to continue our journey this season with a compelling conversation featuring Jason Lee, CEO and founder of Salt Labs. As a pioneer in the fintech space, Jason's insights into the evolving landscape of employee rewards and financial empowerment are both timely and transformative. Salt Labs emerged as a game changer last year in 2023, focused on enabling frontline workers to capture the long-term value of their labor. Frustrated by the financial challenges faced by hourly employees, Jason envisioned a platform that mirrors consumer loyalty programs, allowing workers to accumulate rewards for every hour worked, an innovative approach that has quickly gained quite a lot of traction. In just over a year, Salt Labs has made significant strides in reshaping how companies incentivize and support their employees. With its flagship product, Salt, users have reported remarkable improvements in savings behavior and reduced turnover rates, showcasing the platform's impact on workplace stability and employee engagement. Since recording this past summer, Salt Labs was acquired by fintech company Chime to accelerate growth through the employer channel. With the acquisition, Chime will be able to partner directly with employers to reach millions of consumers. In today's episode, we'll explore Jason's inspiring journey from Wall Street to founding Salt Labs. Discussing his vision for a future where workers can achieve greater financial freedom and long-term wealth creation. Key topics in this episode include disrupting traditional employee benefits, the role of technology in enhancing financial wellbeing, and a behind-the-scenes look at building a fintech startup that prioritizes the needs of everyday workers. Let's open the door. Jason, thank you so much for joining us on The Room podcast today. We're thrilled to have you.

I am a huge fan of the show, so thank you for having me.

That is so kind. Before we dive into all of the incredible things that you're doing with Salt Labs, we really love to start at the beginning with all of our guests and hear about the very early founding story. Let's start with where did you grow up and tell us how that shaped your view of the world.

When you had mentioned the founding story, I didn't realize it would be the founding of me as a kid. But I appreciate the question. So I, I grew up in a very vanilla town in a very vanilla state in New Jersey. My parents were immigrants to the United States. By ethnicity, I'm Korean. So I'm a Korean American. And so I'm a first generation immigrant and they came to this country with about $800 in their pocket. My father had a very unusual career back then. He was one of the very few immigrants who actually want to get a PhD. In the United States, which back then wasn't really a thing that people did because not only is getting a PhD hard, you also had to learn English to get the PhD. And so level of difficulty was definitely exponential, but we landed in North New Jersey and as I said, they came over with about $1,000 in their pocket and somehow we made a life for ourselves. One of the most remarkable things that I probably learned in growing up in the household that I did was I never knew the socioeconomic status of our family or my parents at the time. That's a very complicated way of saying I never felt rich and I never felt poor. We just made it. And I, I'll tell you, that's really informed a lot of my perspective in terms of how it is that I think about building great financial products for all different types of demographics.

That's such an incredible just origin story. We've had a lot of first-generation immigrants on the podcast, and it's always fascinating to hear how those early days have really informed your thesis around building something. And so I'm excited to dive a little bit deeper there. Did you always think you were going to become a founder?

I've always seen the world very differently than others have, and I don't know how consistent that is. Claudia, I know that you are a very successful founder and I know that Madison, tons of founders coming in and out of your hallways, but I've always seen the world a little bit differently. And that might be a blessing or a curse. Folks were moving left and I would always kind of move right, or just the way in which I would analyze problems. I was unfortunately that kid in math class who would not follow the instructions. There was a very linear proof that one would have to make in either some kind of algebra or calculus class. And I would always take in a very orthogonal way. And the answer, hopefully more often than not, would be correct. But I was always the kid who the teacher would say, that's one way of getting there, but why don't we do it the other way? And, and I took a fairly mainstream job after leaving college. I went into Wall Street, but even within the world of investment banking, I happened to pick literally the most esoteric, weird, highly structured product because 99% of people who did that job either advise companies on how to raise capital or how to do mergers. And I happened to pick this thing which said, hey, this is a really weird product that we invented, you should do it. And 1 out of 1,000 companies would wind up doing it. And so I always knew that I saw the world very differently, and that naturally led me into entrepreneurship.

You always zigged while others zagged, which I think is also a very pervasive trait of great entrepreneurs. Let's dive a little bit deeper into your experience at Goldman. You mentioned, I think what's so interesting is most people go to a Goldman or an investment bank, sit there for 2 years and then move on to something else. Tell us what attracted you to stay in that role for 16 years and how that informed who you are as a founder.

One of the things that's really important as a founder, really for anyone, but certainly in the world of entrepreneurship, is to really be self-aware, to understand what you're good at and frankly what you ain't good at. And if you can pair up what you're good at with what you're passionate about, well now all of a sudden you've got 1 1 100. That really is the magic formula for success, building great products, delighting customers, I stayed because I really enjoyed it. You know, I had found a very esoteric part of finance that happened to cater to my skills. And those core skills were number one, identifying very unique opportunities for our clients that they could go do some highly structured transaction to go figure out and to get some kind of benefit. But then alternatively, it was also really fun to be able to explain those things. And that was really the foundations of great UX. It's, hey, how do we take a very complicated concept, abstract it, and turn it into something that is highly digestible and highly understandable for the end user?

Finance is such a broad bucket of career paths, and definitely investment banking is one more traditional route, although you carved out a niche for yourself even within that. But going all the way to the other end of the spectrum with what became DailyPay, what was the leap for you or aha moment that went from this incredible career path at Goldman to, I actually need to leave this job, which some might say is a little cushy, done it a while, you know what you're doing, to like this really unknown world and an entirely different part of the finance sector.

One night I was ordering pizza, and I imagine both of you have either spent time in New York or live in New York. At the time I was ordering, uh, Domino's pizza, which happens to be my favorite pizza. And at the time I was ordering off of Grubhub. Which is the predominant online ordering system here in New York. And Grubhub did not list Domino's Pizza. So it was impossible to get Domino's Pizza off of Grubhub. It sort of irked me. I wanted Domino's. I wound up going onto their website to order the pizza, and then I ate the pizza and, and life went on. Anyways, a few weeks later, I, I sort of still thinking about that, thinking, why can't I order Domino's on Grubhub? And at the time, I knew that Domino's was owned by a very, very successful private equity firm called Bain Capital up in Boston. And I said, these guys are clever guys. There must be something about the online ordering system that is detrimental to their business. So I walked across the street to the bar owner who was a friend of mine and, you know, he's got some bar food. I said, hey Joe, let me read your Grubhub merchant agreement. And I sat at the bar and I read the merchant agreement. I said, is this right? We as consumers, we order food. Like today, and we pay for the food, but it looks like based on what this contract says, that Grubhub holds that money and they don't remit it to you, the merchant, for 45 days. And I said, isn't that killing your business? And he said, of course it is. 30% of my business is coming from online ordering, and I have to pay for the food, prepare it, pay for the chefs, pay for the delivery people, and I'm not getting that money. For 45 days. And I started to pull on that thread and realized this is a problem that can actually be solved through, at the time, what I called structured credit. This is a payments and funding problem. This is actually very similar to what I do for institutional and wholesale clients. Why don't we bring this to people like an individual who's waiting for their pay? Not even a restaurant. I'm talking about an individual. Who's saying to themselves, hey, I actually worked all week, but I'm not being paid for a couple of weeks. Isn't there a way that we can solve that problem? Really, it was through my lens of I've solved this problem for really big corporations, Russian oligarchs, wholesale clients. Can we actually bring that out of Wall Street into All Street and bring it to individuals? By the way, if you were doubting that I was in New York, you now have the evidence of that.

I was like, wow, we are live from New York. You can tell. Thank you so much for explaining that aha moment. It's an incredibly real-world example of where your institutional knowledge of how very sophisticated finance firms think about payment terms and what it looks like at scale relative to an opportunity gap for, as you alluded to, the individual consumer. And where actually, with an insight on how to structure payment terms, you can change people's livelihoods and you can ultimately change their being. I believe the insight that really did launch what is DailyPay, which today is a leading financial technology company that helps to provide what you just described as an on-demand pay platform for employees. And some people call this earned wage access. You get paid as you earn it. And this is allowed for these employees to withdraw 100% of their earned but unpaid wages before what we think of on that 2-week pay cycle, or I guess in your local bar's terms, 45-day pay cycle. How did you think about integrating this into existing payment infrastructure? Because you're changing a lot of rules here from how we know this day to day.

At the end of the day, an employee wants to be able to control pay. Very simple. I'm sure all of us would want that, but really, people who are paycheck to paycheck, they really need that flexibility. The fundamental problem is that employers don't want to run payroll every day. Meaning if employers had the ability, the cost structure, the patience, the manpower to go run payroll every day, this business would never have existed and I would still be eating Domino's Pizza off the website. The fundamental issue is one party wants something that the other party doesn't want to give. And so can we build technology that sits in the middle of which gives that party the thing they want without changing anything about the other party? The value of the technology is we enable your employees to get paid every day without you running payroll every day, meaning they get to get daily pay without you running payroll daily. And that was really the magic of what it is that we built. To do that, yes, one has to go build a fair amount of platform-based technology, which enabled us to actually connect into the payroll systems, the HRIS systems, all of the core technology and systems of record that exist within an employer's infrastructure to do that kind of behind the scenes using software, API integrations, lots of kind of sausage that we would have to go build. And then by the way, given my background, to connect that into funding and financing. The reality is if you want to give someone their pay without changing anything about the employer's payroll process, one of those core things that you can't change is when the employer actually pays, meaning the employer wants to hold onto that money for every 2 weeks and every Friday or whatever it might be. So one of the core things that we had to figure out is where do we get all this money from? Who's going to pay for all this stuff? How do we get the funding? And that's really where I was able to leverage a lot of my background to say, hey, is there a way that we can use technology to essentially securitize this interest that the employee has in their pay, securitize that, and then go to Wall Street and say, hey, look, here's a new asset that I created. I created this brand new asset, almost like a mortgage or an auto loan or a student loan. I created this thing that has some underlying cash flows associated with it. Please give me money today and I'll pay you back in a couple of weeks. And that whole thing that we had built is the engine that enables us to then give money out to the end. But all of that requires technology, finance. It's a huge thing to go build. Also, we can prevent the employer having to run payroll every day.

You said a lot there, and I think it's an incredibly sophisticated product and not a typical go-to-market either on an enterprise sales solution or frankly on a fundraising cycle for the business. So, Taking a step back for our listeners, you're not only providing a SaaS software solution to the end enterprise customer and buyer, whether it be a McDonald's or a Target, you're also providing the mechanism and frankly the cash to be able to provide these advances, if you will, on your pay. Do I have that correctly?

That's exactly right.

So in many ways, you're also a lender as well as a tech platform, and you've raised over $800 million in both traditional equity financing, revolving credit facilities, as well as a term loan funding. And you kind of alluded to some of these more unique securitizations that you've gone about building. How did you back into this unique cocktail of financing for this business? What was that process like for you?

Very hard. Very difficult. I had a lot of conviction about myself and my business partner, who's the co-founder of DailyPay, Rob Law, we had a lot of conviction about number one, employees needing the service for sure. You just have to go out anywhere and talk to someone who's living paycheck to paycheck to realize this is a much needed service. The problem is, as you probably know, finance generally tends to be formed off of, we want to see some results before we actually give you money. And so look, I'm here in New York to get my first loan. I, went knocking on a bunch of doors and found myself in Midtown Manhattan at a nondescript building in the basement for people that you probably don't want to ever meet. And the unflattering term is it's hard money. And yeah, I had personal guarantee that I had, I had shit outta my own money and my own background into borrowing $1 million to go fund these payments. And I believe deeply in what we were doing and I was willing to put my own personal guarantee But the way it works is, hey, you do that. I think we borrow like a million bucks. By the way, that would cost me 25% a year to do. Okay. And then all of a sudden, you know, maybe, okay, let's up you to $5 million and now it's only 20%. Then you go to some hedge funds and now it's 50% a year. Okay. Now let's go to some more sophisticated hedge funds. Oh, now it's 10% a year. Eventually that thing got down to LIBOR+. That really drives and is reflective of the evolution of the market. Wall Street is a copycat business, and now there's really blue-chip counterparties out there. The Angela Gordons of the world, the Barclays, the Citibanks, these are all blue-chip counterparties who are willing to be in this market, in this asset that we essentially built.

People are equal parts sheep on these things, but also equal parts risk managers. And you've proven that the risk is not as high as it perhaps could have been perceived on the ability to get paid back by these blue-chip employers that you actually have funding the program. So I'd love to talk about some of your customers over the 8 years that you've scaled DailyPay. It includes 80% Fortune 100 companies. I alluded to this earlier, but Kroger, McDonald's, Dollar Tree, Target. Tell us a little bit about how going from taking a personal million-dollar loan out to scaling these types of enterprise-level contracts for a next-gen payment solution.

We, we're blind squirrels and we happened to find some nuts. Every startup any successful startup, there's a huge degree of luck, good fortune, blessing. And we really started out with 120-person amusement park in the middle of Wisconsin, in the Wisconsin Dells, the water park capital of the United States. We started there and it was very hard to do, to build the product. What I would tell you is one of the really positive tailwinds that we had is that this was a very universally no problem, which is there are a lot of people unfortunately in the country who are in fact living paycheck to paycheck. Point number 2, from a macroeconomic standpoint, those folks actually tend to be very unstable at work, meaning I might come and I might work at McDonald's and I might actually quit after a month because I can't get to work. I have a car problem or there's an unforeseen medical emergency and I can't pay it. And so therefore there's all this friction and to be honest, chaos that exists in people's individual lives that starts to bleed into their work life. And so employers not only understood the plight that their employees had, but they also knew it was bad for business. Turnover is a very expensive cost. The cost of replacing an average worker at McDonald's is something in the order of $3,000. So we had those two things going for us, and, and that's a long way of saying People saw the value proposition. They had tried 85 things before us to try to get people to stay. None of it worked. And so I think the willingness for large companies to work with an innovative company like ours, yes, it says something about us, sure. But it also says something more profoundly about the problem, which is this problem is so significant. And Madison McIlwain, I know this as an investor, you look for really big problems, which are really big pain points. Because eventually the technology will catch up with the pain point. And in the early days, no, we were terrible at our job. We were very bad at service delivery. And, but eventually we were able to level up where, okay, you can walk into the office at Target and say, I can credibly provide this service for 400,000 people. And even though we are a 4-year-old company, I know I can do that. And the last thing I might add is during the pandemic, it was very much the difficult to motivate, retain hourly workers. And these were really the essential workers of the country, literally. This really accelerated, frankly, the growth of the company.

This is the perfect transition to diving a little bit deeper into Salt Labs, which was started in 2022, really continuing to tackle these meaty problems that you're referencing here, really around employee turnover, wage access, benefits retention. Let's discuss Salt Labs a little bit deeper. The platform offers employees using the app the ability to earn quote unquote salt for every hour worked, redeemable for goods or services ranging from NASCAR tickets to a trip to Disney, or even savings like a treasury bill. Could you expand a little bit more on some of the early data that Salt has been able to see in terms of solving this problem around employee retention and turnover?

We got DailyPay to be $2 billion or so. My partners and I, we exited that to a private equity firm in '22, and my venture capital investors backed us on a new project called Salt. And really what our mission is to enable workers, frontline workers, really to own the outcome of their work. And that sounds like a very lofty mission. What does that mean in real life? The problem that we're trying to solve is that hourly workers work very hard, but they often don't have a lot of evidence or a lot of reward for the work that they've done. You have to put yourself in the position of a paycheck-to-paycheck person. So here I am, I work at McDonald's. I've worked 40 hours a week, 176 hours a month, 2,000 hours a year, and my bank account curiously is still zero. Funny is that, like, it is curiously still zero. I've not been able to save money. It's very difficult because I'm living paycheck to paycheck. And frankly, it's a very demoralizing experience for me as an individual. And frankly, that's why I leave. I leave because I'm just not getting what I want out of work. And so we've come at this problem in the following way, which is what if we enabled a worker to actually start to create or earn a new store of value? One that is non-fungible or non-transferable or non-spendable like your paycheck is. In Salt, what we do is we allow people to earn this new asset that we call Salt. They start earning it for every hour that they work, and they start to have the store of value start to build up. Employers fund that, so they're funding that Salt. And all of a sudden employees say, hey, look, I actually have some evidence. I, I have a balance. That I've started to earn. I feel really good about myself. And by the way, this SALT that I've earned, I could actually go redeem it for cool things like the things that you mentioned. But here's the fun part. Here's the really fun part, which is 55% of the SALT is not redeemed. It's saved. Meaning we've taken the savings rate from -2% to 55%. That's a 57-point swing. I want to be very clear. Are what I'm getting at. These are paycheck-to-paycheck people who have this new asset called SALT that they can spend on things in our wonderfully amazing, cool, curated, amazing catalog. But they don't do that. What they actually say is, you know what, for the first time ever, I actually have a balance. I like building it. I like seeing it. It gives me security. It's evidence that I actually worked, and now I want to earn more of it. And so I continue to stay at this employer to start to earn more and more. There's an aspect of loyalty that starts to build probably in the same way that if you fly a lot, you probably try to only fly with one carrier because you like to earn miles on one airline. Like, I'm a United person, so I will always try to go to Newark Airport and fly United. The employees at a given employer who are earning SALT, they're staying 54% longer than those who are not. And that tells us we've unlocked something here, which is someone who never had a balance, their checking and savings account is zero. All of a sudden they start looking at their Salt account growing and growing. This becomes an inherent form of savings for them. And that's really exciting for us.

It's not only a great retention lever, but it's really shifting the mindset around how do we think about the work that we're doing and how we can build something that grows over time and has personal benefit around savings. Progression. That's an incredibly important mental model shift for a lot of these workers. I'd love to dive a little bit deeper into just like the founding of Salt Labs. You mentioned the private equity firm that you had worked with of DailyPay was really passionate about helping you start Salt Labs. Tell us a little bit more about your first fundraise with Salt.

Well, we were very, very fortunate in that some of our original venture capital backers said, okay, you're done with this project. What are you doing next? And I said, well, I'd like to take a little bit of a break. But after that 2.5 weeks was done, I said, well, look, here's a problem that I don't know a ton about, but I see. Hold off, but I'd like to think about it for a couple of months and see if there's something that we could actually do here. And fundraising is a highly subjective process. Even at DailyPay, it was very hard for me to go raise money because there are always folks who said, well, do people really need their money on time? What about this? What about— and it's a, it's a rigorous process. That was at my first company. I was lucky because we had created an outcome at the first company, which made fundraising in the second company a lot easier. But even then, we spent a lot of time working with our initial investors, really trying to craft— there's so many things that we can do here with our relationships, with our technology know-how. With our understanding of HR technology, what's the best thing to do? How do we really package and think about a comprehensive solution here that not only helps your turnover and retention, all those things, but also really empowers and enables the end employee to do something permanently? So people often ask me, is this an extension of your first company? 100%. No. Like, we're tackling a new problem. Because the reality is a restaurant has 17 forms of technology because they have 17 problems, 17 opportunities. I think employers of hourly workers have 17 opportunities. I don't know if I'll be able to come up with 17 companies, but certainly at least 2 to try to solve their issues.

Fundraising is tough. It's very easy to see big numbers and think, oh, you just raise money and build something. But it is definitely a process that a lot of first-time founders in today's markets really struggle with. Given that you've raised over $18 million in funding for Salt Labs over the past 2 years, which is really no small feat given how unpredictable the markets have been. What advice would you have to first-time founders or just even founders broadly who are looking to fundraise early stage today?

The advice I have is, number one, I do think it's a numbers game, meaning you have to kiss a lot of frogs because fundraising is really not about convincing. It's not really about persuading. It's not really about selling. It's about identifying. And by the way, I would also say that for early go-to-market, early enterprise selling, for those who are listening who are enterprise sales, you are trying to find someone who agrees with you. You are not trying to convince someone who doesn't agree with you. This is really an exercise in identifying people who actually agree and see your point of view and see the way that you think. And is there a meeting of the minds there? Persuasion is a part of any discussion, but it is, in my opinion, in an early stage, it is an ancillary part. What's more important is, do you guys have a meeting of the minds of how you see the world and how it is that you're gonna go about solving a problem? And to that, I would say it, it is a bit of a numbers game. Claudia, you already mentioned it, but the second thing I would say is when you walk around New York City and you see the Empire State Building, or a beautiful park, no one ever says to themselves, wow, that must have been easy to build. Of course not. Like the end result, just because you can see it does not imply that it was not an incredibly arduous task to go build that thing. And in the same way, the advice I would give is don't be discouraged by the fact that you see some press release and it looks easy. That's like saying, oh, that building's beautiful. I bet that was easy to build. No, it took 30 years to build that with pain, blood, sweat, highly arduous, probably 3 different management teams. It's a process. So I would say block all that out. The last thing I would say is, and this is just my own opinion, is in fundraising, because I often get pitched a lot of ideas now, be an expert. And what I mean by that is you have to be the expert. There's gotta be some je ne sais quoi intellectually that you have to have some insight and some perspective, whether it is because you read about it in the books or because you've lived it, but you need to have that edge that's going to create the outcome. Because the reality is it's only that edge that's reliable because the situation's gonna change. The situation will profoundly change the circumstances, the customers, what you think is the business. All of that is intensely dynamic in the early stage. but the only thing that you probably have is your edge and that alpha and the way that you think and the way that you approach the problem.

Thank you for sharing that. I think the two things that really jumped out for me there, one, identification. I know so many fellow founders that are fundraising for the first time that are like, we'll just talk to everyone and it's a numbers game, but it doesn't help if you're not pre-qualifying if the person that you're speaking to could potentially be aligned with an existing thesis or desire to do a deal. And you're absolutely so right on kind of that alpha. We've had other founders sort of say like, yeah, you can identify that twinkle in the eye. There needs to be that X factor of why this is the person that's going to solve this kind of general problem. So thank you for distilling that for us. Fundraising is often tricky, but the founder's journey is just full of high highs and low lows more broadly. Could you share about a moment in either Salt Labs or DailyPay's lifecycle where things just didn't go quite as planned?

Every founder you ask this question to has a million stories. I'm an enterprise person. I, I worked in wholesale. I like talking to clients. I'm not really a consumer guy. That's not really my expertise. I like talking to CFOs and boardrooms and things of that nature. So I always knew JellyPay would be an enterprise company, but I knew that in order to get to that level, we had to have at least some semblance of a reliable product. You can't just walk into an enterprise company and say, please try my product for the first time. It'll take you 9 months to get your first client, and then you'll probably get fired because you'll mess it up. So strategically, what we decided to do was we actually built a product on day one that was consumer-oriented, meaning we started in a controlled consumer environment. And the environment that we picked was, I said, okay, we're gonna have to talk to a lot of enterprise companies, Is it a payroll-related thing? Where can I find a bunch of consumers who all work for the same company where I don't need to talk to the employer? And that led me to Uber drivers. I said, okay, I don't talk to Uber 'cause they're all 1099. So I'm gonna build an app. Okay. I'm gonna build an app. This is like history, so I think it's fine. I built an app that looked like the Uber driver app. I mocked up an app that looked like the driver app. And essentially what happened was I had drivers logging into my app, giving me their information, and they were logging in, and I was going behind the scenes into their account to see how much money they were making. And we did this all with terms of service, authority, and power of attorney, but essentially it looked like the Uber driver app. And we were going behind the scenes to figure out, oh, this person drove $184.85. and then we were giving them the money before payday. And that was how we tried to get our chops together. Turned out that was a pretty cool product. 25,000 people started signing up for it. The product went viral on the internet and we said, okay, we have something here. And then of course I got my first cease and desist letter from Uber. Now mind you, we had raised $1 million at the time, and Uber at the time had raised $10 billion. Like any great entrepreneur, I took it and I ignored it. Second letter comes in, the temperature's getting a little hotter. And I said, third letter comes in, is very aggressive. I remember looking at my partner, this is why it's great to find a great co-founder. And I said, what do you think we should do here? And he said, let's just go for it. Let's continue to push forward. And he really gave me the courage to say, okay, here's what we're gonna do. We're gonna take the letter. And we're gonna advance our Series A. We're gonna go out to the VCs and we're gonna say, look, I built a product these guys care about. What that's telling me is they're gonna build a product and they are concerned that we are in their system doing this for their drivers. That's my prediction. We took that letter and we went out, raised $5 million of a Series A. We then shut down the Uber product. 3 months later, Uber launched their own product. So I was right. And then we were off to the races building an enterprise business. So the key pivot decision was, do we shut this down now? What do we do? We're running out of money. Really, my partner gave me the courage to go do that. And we're still partners now. He's CTO of Salt Labs now. That's like an example of these things happen, but boy, oh boy, it really matters who's around you.

Claudia, didn't you work on the driver app at Uber?

No, I, I laugh because this was in 2018, 2019, but I was literally working on driver earnings. Flexibility at Uber. This is a true full circle moment for me. So this is very cool.

There you go. You have the history of what really was going on. We were scraping the accounts and moving all the money behind the scenes and doing all the— and it got to the point where Uber was sending out emails to their drivers, do not use DailyPay and you'll be banned. I think the, the more aggressive, like, management culture that was at Uber back then. And so no one wanted to partner. It was all get these guys out of— and by the way, I understand that. You don't want some random company crawling and scraping your system and blocking the API. We're all cat and mousing this thing. But again, we never intended to be a product for Uber. It was more, can we get the confidence level that we can now go out and talk to Kroger, McDonald's? Can we actually do that in a performant way?

And Travis would have done the exact same thing. So I think as a founder, you got to do what you got to do. That's incredible.

The problem is I admire him. He's an amazing entrepreneur.

So I love that. That's an incredible story. Thank you for sharing that. Looking forward a little bit, now that we're firming past the pandemic, 4 years since 2020, what do you see as the key trends and challenges in hourly frontline worker market that will shape the evolution of Salt Labs' core product and business?

Look, I think companies are really facing a real issue here. Employers have a real problem on their hands. And whether or not you want to admit that as an operator, I think two things are going on. Number one, the workforce has shrunk. I mean, mathematically, since the advent of birth control, smaller families, urban-based family growth, the workforce has literally shrunk. And there are fewer people to replace baby boomers who were working. And so literally the workforce has shrunk, which is what creates pressure on employers to fill their ranks. By the way, that's one of the reasons why I think mechanized operations, artificial intelligence, that's one of the reasons why I think that's being accelerated. But number two, the workforce obviously has changed. To say it bluntly, nobody wants to work. And that has been a cultural shift that's occurred not just in the US, globally, but in particular here in the US. And I don't think we're going back from that. I think all of us probably have this experience where, you know, when I started in the workforce, I was thrilled to have a desk to sleep under when I was pulling an all-nighter. And that type of mentality really doesn't exist anymore. And folks will just up and leave. So we have to find a way to connect with the workforce in a real personal way. And that's really what Salt's trying to do. We are trying to give essential workers, folks who don't really get a lot of attention paid to them. We want to give them a piece of the pie. We want to say, hey, look, 6 months from now, you still have evidence of the amount that you worked. Why? Because you got 1,000 SALT. That's evidence of the work that you did 6 months ago. And now you are free to make a choice. You can go redeem that for a savings bond yourself or a trip that you would've wanted to save for. Or just grow a balance. So finding ways to create longitudinal relationships with the workforce, that's so important, I think, in what's going on in the labor market today.

Yeah, thank you so much for unpacking a little bit about what you're seeing working with frontline workers. And we spend a lot of time thinking about making productivity better within— inside of enterprises, but you're really looking at those individuals who are servicing all of our daily experiences that both were putting their lives on the line in the pandemic and then have continued to maintain the growth of consumer needs outside the home. And so just a really salient point and distinction from some of the conversations we more typically have on this podcast, frankly. And I'm encouraged that there's products out there that are really giving credence and giving opportunity to people to experience that. To its fullest for all that they do for society as a whole. So I'm curious, as you're continuing to grow this product, and have been in this space now for almost a decade, what's next for Salt Labs as a business? And then what's next for you personally, Jason?

Those two things are tied together. I'm a very uninteresting person. I have no hobbies and my family. We think we can be at the vanguard and really at the cutting edge of this changing future of work. I spend all my time talking to HR thought leaders, CHROs, CPOs, sometimes CFOs, and everyone is concerned that we don't know how to communicate and talk to the new workforce. And I'm not trying to make this an age thing. I, I really am not. But there are very clear generational differences and clear value differences between those who are managing the workforce and those who are in the workforce. And we see ourselves as a bridge on that. Yeah, we got this one product, but we also think about the second, third, and fifth products that will then really start to meld those folks together. You know, I, I give an example. All of a sudden you got a bunch of people who are walking around with 1,000, 2,000 SALT. It's actually been collateralized, pre-funded by the employer. Hold on now. All of a sudden that's a store of value that otherwise previously had not existed. Maybe that person should have a relationship with BlackRock or with Fidelity or with TIAA. Those companies have no need to ever interact with someone who's paycheck to paycheck. But all of a sudden, can you create a system which is a lot more equitable and a lot more fair where all of a sudden, yeah, I got a bunch of salt, but that could be actually exchanged into my first $300 ETF, Barclays ETF index, whatever. Out of the Fidelity retirement account, boy, now all of a sudden you've created a system which actually creates and manufactures money. That system has effectively created new money for that paycheck-to-paycheck person who otherwise would have zero in her bank account for the next 20 years. And so we think a lot about that. What type of change can we affect at the core societal level because in effect we are creating for the first time a new store of value for someone who previously had zero or frankly negative 2%. So we love that. We love the idea of becoming that sort of connective tissue between large existing players. We know hourly workers, we know frontline workers. That's all who I spend my time with. When I go travel for business, I make sure I carve out hours to go hang out in payday lending shops. Hang out in parking lots. I was just down in Florida at the gun shop. I don't like guns, but hanging out at the pawn shops, understanding exactly what is motivating someone to engage in this type of financial behavior. And we need more people doing that type of work and then building great technology to go solve those problems. So we see ourselves at the forefront of that type of product development.

We'd love to have you back on as this vision evolves to check in on how it's changing and hopefully we'll see and hear about this shift in society and how we think about access to wealth creation in the coming 5 years. So with that, we have our closing question for you, Jason, which we love to ask all of our guests for our over 100 episodes, which are about to surpass that milestone, which is, who is a woman in your life that has had a profound impact on you and your career?

Who comes to mind immediately, who I actually think about quite often, I consider her to be a real role model for me and a, a mentor is Donna Shalala. Donna Shalala currently is the chancellor and president of the New School down in Miami, but she was kind of an entrepreneur and a trailblazer in her own right. She was the secretary of HHS, Health and Human Services. She was instrumental in a number of different social service programs that were passed in her administration. She was a congresswoman. I believe if memory serves, she was the only woman to serve on the Municipal Assistance Corporation. That's very near and dear to my heart 'cause that actually saved New York City out of bankruptcy in the mid-'70s. I don't want to mention her age, but she is still going. She's not slowing down. And the best part about her, she has an amazing sense of humor. I mean, she is literally one of the most accomplished persons I know. Great sense of humor and a great listener. Just sits down and look, I, I had her in to do a talk at DailyPay in front of our 1,000 people, and I tell you, she did more listening than talking. That is a secret right there. She just captured what success means. She's constantly learning, constantly innovating, and I'm really proud to know her and to really get advice from her.

Well, thank you so much for sharing that and highlighting her unique background and how it's inspired you to do all that you're building with Salt Labs today and in your career path to here. So Jason, thank you so much for joining us today here in The Room.

Thank you so much. I loved being here. You guys are great moderators. I'm glad to be here. I'll be sure to check out the next podcast.

Thanks so much, Jason. Thank you so much for joining us at The Room Podcast. If you want more from The Room every week, subscribe to our newsletter at theroompodcast.com/newsletter. Newsletter. We'll be back next week with a new episode and inspirational guest Tuesday. See you in the room. Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator, offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscoie.com.

This podcast is brought to you by Mercury, the banking platform businesses like The Room Podcast use to simplify their finances. It's time banking did more than hold your money. Now it can. With Mercury, you can pay bills in seconds, close the books faster, and even send invoices. Not only does Mercury do away with a patchwork of tools, it eliminates guesswork, giving you complete and accurate visibility into your business's finances, all from one account. Apply in minutes at mercury.com.