Max Brun discusses why Frank, a lending product that worked, failed to scale. First-time founders focus on product; repeat founders know distribution matters more. Paid acquisition never worked, and the unit economics were too weak to survive.
Chapters
So, you know, going back to Frank, so what were some of the biggest learnings and takeaways as a founder?
I mean, I think it's— maybe it's a little bit of a cliché, but I think first-time founders think about products, second-time founders think about distribution. And so, I mean, the kind of like the longer story with Frank is we built a product, it worked really, really well, it solved all the problems that we kind of like wanted it to solve. We had lots of money going through the system, lots of lending, et cetera, et cetera. We kind of raised money. We decided we wanted to try to scale it. And then what we found was that the distribution wasn't there, that lending money to friends and family is a relatively low-margin business, but it feels very high stakes. It feels very heavy. As a result, basically to get people to sign up, you needed kind of like a very heavy kind of user acquisition motion. Ultimately, there was no way to make that work on a paid basis. The organic stuff was really great. You know, people would recommend it to their friends. Our virality was super efficient, but it was a very slow loop. And so people only kind of borrow money every kind of 3 to 4 years. So we would get this really good kind of like organic loop going, but it was really slow. And then we couldn't get the kind of like paid loops going. just because of the kind of unit economics were so out of whack that it just, it didn't make any sense to do it. So, you know, I think we kind of built the product. We were super excited by the product. We had these like amazing green shoots when it was just in kind of the kind of closed beta of friends and family. When it opened up to kind of the broader community or the broader world, we had really good organic loops, but they were slow. And so just kind of, you know, thinking through not just kind of product, but not just kind of like first-level distribution, but also second, third-level distribution. I think was the biggest lesson I learned from that, from the whole experience.
