a16z Podcast - The Hustlers's Guide to Suing the Man

Episode Date: April 1, 2020

This is the next cycle (Q1 2020) of Hustlin' Tech, a podcast series (from the a16z Podcast) about technology platforms that create opportunities for people. Recorded right before the coronavirus pandemic, these next 3 episodes touch on many things that are top of mind right now: from the profession of nursing and taking care of the elderly and the professionalization of caregivers; to fighting bureaucracy to get money back (and to now get help delaying utility bills and rent payments that are eligible for an extension or waiver of late fees due to the coronavirus crisis).Episode #6, “The Hustler’s Guide to Suing the Man” features:Joshua Browder, CEO and founder of DoNotPay, the world's first "robot lawyer" which helps people automatically fight bureaucracy to get money back, whether parking tickets or hidden bank fees; find other hidden money or cancel free trials; sue others or go to small claims court -- and now also helps people delay utility bills and rent payments that are eligible for an extension or waiver of late fees due to the coronavirus crisis.Makiri Duckett, a small business owner who currently operates an adult on-demand delivery service (and therefore gets frequent parking tickets) and is a power user of the platform;...both interviewed by Ben Horowitz and Shaka Senghor.You can find the first cycle of this series (Q4 2019) -- including more about the what and the why -- here.

Welcome to this episode of Hustling Tech. I'm Ben Horowitz. And with me today, I have Josh Browder, who is the founder, CEO of Do Not Pay.com. We have Makiri, Omar, who's been hustling that platform to great effect. And then with me, as always, I have my co-host, Shaka Singor, who hustled his way out of the joint and is now a leader in the community and my co-host. So welcome. Yeah, welcome. So first of all, I just love the name, Do Not Pay. I want to stamp that on every bill that comes through and just send it out to everybody.

So tell us, what is Do Not Pay? How did it start? So Do Not Pay Today is a platform that helps ordinary people fight for their consumer rights. So getting back money from corporations and governments. And it started out four years ago when I got a bunch of parking tickets. I was admittedly a terrible driver. And I was writing all of these appeal letters to get out of my tickets. And I learned that you can go to a lawyer and the lawyer will say,

I'll get you out of your parking ticket, but I'll take 50% of the cost of the ticket, or you have to pay the ticket. And there must be a better way than that. And so I've researched all of these obscure government documents to find out the top reasons why people get out of their parking tickets. The biggest one is signage. They make the signage deliberately confusing. For example, having a tree cover the sign, having two signs say the opposite thing. And then the second biggest reason is parking bays that are physically impossible to park in. And below 180 centimetres, you can't get any car in. And this is mainly because the lines aren't painted. Beyond that, they make mistakes on the ticket. Then you can't trust them with anything. And I decided to automate that for my friends. And then it turned out was very popular, so expanded it to the general public. And that's actually kind of cool also because coming from where you're from,

Shaka, you know, a lot of guys with cases get taken down by parking tickets. Yeah, absolutely. Clear that right on up and not have to run into the courts when they already got a warrant for other things. And McCarry, so how did you come across the platform and what were you doing with it? So I have a delivery service, 24-7 delivery service.

When you're delivery service and you live in L.A., we have a thing that we like to call parking minges. Those are those are the right. So when you're delivering things and we deliver things at all times of day, an hour, night. So it's one of those things where I literally needed to find a way where I can either help some of my drivers get out of their tickets because places like L.A., like they literally like to stick you,

like a ticket on your window that says $70, $77, all the way up to $177. And the violation can be like, you know, oh, you didn't put your will to the left. Just something really ridiculous. So I just was like trying to find an answer to that. And then I just remember it was just so half the TV was on. And next thing you know, they said, oh, there's an app, there's a robot that can, like, literally take care of your parking tickets and that could really go to bat for you and get you your money back.

I'm like, yeah, let me try to put it to the test. And it literally helped me with one or two of my parking tickets that, like, was a real big problem. So basically, I start using their service. And then, like, later on, I mean, they started adding more features. Well, what were the other features that you started using? So it's one of those things where, like, you'd have people who would actually try to buy a product from you. And then they'll try to say, oh, we never received that product. or they'll do a charge back or they'll try to say whatever the case would be.

And then what would happen is that it would go into my account. They would take money out of my account, my merchant processor, would take money out of my account. And then it would actually come back to be where I would have now a negative fund in my account or they would charge me another, like, NSF fee. It's money that basically is in your account or they take from you. It's just a fee that they charge you for an overdraft. So they robbed you facilitated by the credit card company?

Correct. The product's gone, the money's gone, and now you're taking more money, because of everything else. So they now have something that basically, like, get your bank fees back. Just like the last week, I got, like, $62 back in fee. So you can't knock it. You know, the banking system is so, I mean, for a small business or kind of a person who doesn't have a lot of money is the most broken thing.

It's something we track a lot here in that if you're me, you pay nothing for banking services. If you're kind of a regular person trying to go paycheck to paycheck, it's like $15 a month. and ATM fees and this fee and that fee and the other things. It's all hidden and under the covers. Yeah, I was actually thinking about if you have a small business, like that can be just devastating to be those, because those fees rack up relatively quickly. So did you have just small businesses mine

or was just in general like this is something that we just need to attack either way it goes? So when I launched Do Not Pay, it was just from my small dorm room and I put up this website for parking tickets. I had a contact form on the website and people didn't know that there was a 17-year-old behind this website and they thought I was some big law firm.

So they actually say, I don't have a parking ticket, but I'm getting like this small business, like charge back, things like that. And so that's where I got all the ideas to expand. And it's a bigger problem than just parking tickets. People are being exploited across the system. I'm like a power user. I mean, it's one of those things where they even have something where if you're going to court, if you need to get money, I have a situation now where I have to deal with a little,

landlord who basically was withholding money because he went and told me that the place I was moving into was this certain size. And he wouldn't let me see it because he was like, well, you've seen the pictures, you've seen this, whatever. I'm not going to lie to you. You know, I guarantee this. I guarantee that. And it was supposed to be a certain square footage. Well, it wasn't. It was like, it was supposed to be 1,272 square feet, but I walked in and I said, this is 615 square feet. And he was like, well, you know, you signed the lease. He took $5,700 of my money. And so, like, I was just like, okay. Where do I go?

What do I do from this point on? So, of course, I went to the legal shield route because at first, that's the first thing you think of is attorney-based. Let me see if I can get somebody to write a letter, like, real quick. That didn't work. And then finally, I was like, okay, well, small flames, here I come. So I did that. But then also, when I did the Do Not Pay at the same time, do not pay, actually came up

with the script that literally was like they researched the whole situation because you type in your situation. And literally, they now have a thing called, that says, what's your problem? and it's like a customer-based, a customer service-based problem area. And it actually goes and it researches similar cases or similar ideas or something that somebody else has done or that have been through the same thing. And it compels your situation together and it gives you the structure of what you need to say and present in court so you know exactly what to say to the judge or not.

That's one of the things that I'm super curious about. I've done a lot of work in criminal justice space nationally. And when talking to people about the legal structures in the U.S. where they think it's just one thing, is one kind of legal. structure, but in reality, every state has its own thing. How does do not pay work across all these per laws and different rules in each city and county and state? Like, how does that work?

So it's four years in the making, and we only focus mainly on consumer rights. There's a lot of national laws around consumer rights that we rely on, and then we've also adapted it for 50 states. But you're completely right, and the justice system in general is like pay-to-play. The more money you have, the more successful you are. And so that's what we're trying to stop. Wow. And how does the system work?

Because my landlord stole my money, I need to get it back. I'm taking them a small claims court. This is my case. And then do not pay says, well, this is your argument. How did you do that? So do not pay will talk to you like a real lawyer. We call it a robot lawyer and ask you questions about your issue. And then it goes down through a decision tree to classify it against like a legally sound way to sue this person.

And in this case, it's breach of. contract. So it applied his breach of contract law to his case and then generated a demand letter and small claims script. And no lawyers are involved in small claims processes. And so you can have the same power as like a top law firm. Right, right, because you've done the legal research. So when you go in court, you're just basically going off the script. Is that what you're saying? That's right. And it even tells you responses to what the other side could say. So if the other side says, actually, I did post it. You say, well, not in the legally correct place. So it gives you even back and forth discussion points.

I mean, I've been small claims more than once. Many people don't know that when you go to small claims, you are not allowed to be represented by an attorney. You literally have to talk your case out in front of a judge or a sit-in judge and basically, you know, go to back, like go back and forth between the plaintiff and the defendant. You can consult an attorney before you go to make sure that what you're saying is valid and what you're going against is what you are really going to win. And so, like, you can do that, but you just can't have one present with you. So what Do Not Pay does is that basically it takes all that information. I literally wrote out the whole script and it just gave me the definitions of what point I needed to basically

cover. And I need to make sure that, and it even tells you in the whole little paragraph that they give you, you have to make sure that each point is clearly defined and it clearly stated of why this happened and this happened here, or how does this define this? So it gives you an understanding of what you have to tell the judge. I got, you know, I was actually robbed of my money because this man told me that it was one size and in actuality it was not. Here are pictures, here are everything, give my evidence to back it up, and here's what I need to present in order to do so. So once you get that, then you kind of feel comfortable going. Like you're, you're ready. to go. And then also, if the person doesn't show up, for those who don't know that, you know,

that you can win by default if that person doesn't show up, it tells you at the bottom, like, okay, if that person doesn't show up, then you tell the judge this and it tells you a script to read. So the judge will automatically, you know, okay, well, this person clearly knows what he's talking about, because that's what you have to do in that court of law. How does that work for somebody who has challenges with literacy? Because, I mean, like, doing this work in criminal justice, like one of the big issues is that people take very poor deals, largely because they don't understand or comprehend a law. So how does this work? Is there a way that, you know, people can just verbally express their argument, or is it all written?

So it's all verbal, but we're launching voice input. So you can open-ended, say, my landlord won't give me my security deposit back, and it will figure it out for you. We really think about this, making it accessible. Do not pay scripts are in the simplest English possible. You don't have to have an iPhone to use Do Not Pay. You can go on to Do Not Pay.com. comment get access to everything. And even if you're blind, we have alt text and we're fully compatible with like screen readers and stuff. And soon we're going to have voice input. So it's something we really think about. Obviously, we could be a lot better, but we're moving in that direction. Unfortunately, at the moment, robots can't represent people in court. I wonder the law

will hopefully change. So, Josh, you say that, you know, you're adding features based on your customer input and all the things that they want to do. What are some of the things that things. The biggest one is robocall compensation. So there are lots of apps that block robocalls, but none that get you some cash. And we're really excited about this one because we actually give you a fake credit card that you can give to the robocaller and it will get all of their details to make it easier to sue them when they try and run a fake transaction. But in the longer term, once you have five million people using Do Not Pay, it almost gives like group leverage, like a consumer union, to go to one of these big corporations and say, we have

5 million of your customers, you better start treating them better or we'll switch them all to your competitor overnight and at the same time flood you with legal requests. So I think right now the leverage is in the law and the individual, but soon it can be in like collective. And is there a fee associated with that? So right now do not pay cost $3 a month and the subscription only starts if you win. So you can check it out for free. And the most important aspect of that is users keep 100% of what they save. And we're really looking to make it as fair pricing as possible. And you're getting something back in return. Everybody has some type of issue with something or other that wasn't even fair.

And it seems like corporations are taking more advantage of you. McCarrie, tell us a little bit about your entrepreneurial journey. Like, how did you, you know, like what's your background? I've always been an entrepreneur. I basically learned to just work for myself because I've already started working for somebody. Like when I graduated from high school, I worked for the Weather Channel. Then I went and branched off to IBM. And then after that, I then worked for my mom.

And then after that, I did a development company. And then I decided to come out here from Atlanta, Georgia, to great California to actually go to Los Angeles Film School to pursue my dream and film. Oh, wow. Yeah, but that didn't work out too well. So I did a company for business branding. Then that one kind of just went out on the wayside. And then finally, it just hit me, it struck me one time. I guess I was in an adult situation.

And the thing was is that basically I literally tried, like, all the different type of delivery services. And none of them would deliver the essential products that most people need when they are in. situations like that. And then when I tried to postmates, I then tried to direct them like, okay, I've already called the store. The product is already on the counter. You don't have to worry about. It's already ready to go. Just pick it up and bring it in. So I created like a 24-7 delivery service for Los Angeles. And it's called Louber. And it was like basically an on-demand delivery service that, you know, do adult retail is what you need, when you need it, and we'll bring it to you. I mean, our slogan is basically we come even if no one else can. So it's just being,

Like I said, being a small business is like you're trying to find every little niche to try to find something that will help you along the way. I've had platform problems with like my websites, with just the customer service or with like, and these are huge companies that literally they do not care if they shut your business down or if they put you on a hold or freeze because of something wrong with their system. And I literally just went through a whole nightmare during like the Christmas season and the New Year season where all of a sudden the platform I was with literally froze my account because they went with a third party developer saying that, you know, I didn't want to renew. my service with them because they were actually ripping me off. And I literally had a problem with trying to, you know, give me my money back or at least open my site. I was not late on my bill. I literally did not want to renew my service. So what they did was they held me hostage or held my company hostage by shutting me down on the most, like, busiest days of my company, which is, of course, the holiday season. So literally, like, I had like inventory ready

to go, everything set to go, and they froze it on Christmas Day, then they froze it on New Year's day and so on. And I was like, okay, I can't deal with this. I even signed up for the big, like, you know, LinkedIn, like the premium service. So I could literally write the head of the company because that's the only way you never get to them. Never got a response. And so I finally did it through do not pay that's at least fighting for me. And I know that if they can't get it solved, it'll at least keep my problem in front of their face long enough that something's going to come of it. And that's what, what it actually did just recently. I finally got access to like my old website so I could get at least my financials and everything off

of it so I can put it on my new website. Do Not Pay? I guess went and did something with either the better business peer or they did something where they actually got a route to them. So it's literally helped my company out tremendously. How do you think about that problem that because you started with parking tickets that people may not know that you're their lawyer of choice for every kind of dispute that an individual might get into our small business? It's a tough problem.

People come to Do Not Pay with this very episodic issue. What we try and do is use the design of the app to nudge them towards saving money in other areas. So maybe in this case, someone comes for a parking ticket, they finish their parking ticket appeal, and then a pop-up comes up as saying, do you want to appeal $50 a bank fees? And then they can just one-click, press that, and move on to their next issue. You can cancel any subscription with Do Not Pay, even one where you have to even mail in, like, a legal letter, just to cancel your subscription. The most popular product is something we call the free trial credit card.

which is a virtual credit card we give you through the app and you can sign up for any free trial and it automatically cancels it for you. So you don't have to worry about giving away your financial information just to sign up for a free trial for something. What we've seen is a lot of power users like what's being discussed as people come for one thing

and then all of a sudden try like 20 different things and go crazy. In your estimation, like what type of lawyer fees are we seeing save? You know what I mean? Like any litigation in America is very expensive. So on an aggregate level, we've saved over $20 million in unfair fees. And lawyers typically charge 50% of what they save, so maybe $10 million of legal fees. And on an individual level, we win cases from a $10 in-flight Wi-Fi refund to $10,000 small claims dispute against Equifax for the data bridge. Anything more than that, we're not sophisticated enough to argue yet, but below $10,000, we've got you.

So when you get into this customer service dispute that McCurry had, because that sounds complicated, okay, it's a website, you know, their hosting service, they've take, they have his data, they're withholding it from him. How to do not pay, figure out how to deal with that? So maybe the consumer wants a refund. Maybe they want access to their information. In this case, it sounds like it's both. So it first finds out the goals and then uses, tries to match you with legal justifications for those goals and then sends it to the exact right place for the people who can get it done. In this case, the customer service is so bad that the only way to actually get their attention is to send them a legal notice

to their legal processing department. And those people are actually efficient at processing their claims and getting the right resolution. One of the things we talk a lot about in crypto world is code as law and it seems like you're ahead of the game on that. You've got software that interprets the law. So how does that all work?

I completely agree. I think law is society's operating system and like it is just code. Why is it so complicated to understand it? Technology is based on rules and it's very good at understanding the different nuances. The best processes are ones that can be submitted online. And I think the most interesting technical angle

is everything comes from the user and there's nothing related to do not pay on the app. So when we started appealing parking tickets, all of a sudden we started sending thousands of appeals to the local government and they just shrugged and said, we're going to start ignoring these do not pay appeals. So in response to that, we decided to randomize all of the letters. So every letter you get from Do Not Pay is different. It's like a denial of service attack on parking tickets. And then beyond that, we use something called device side automation. So lots of the automation and submitting the appeals actually comes from the device, which means. that all of the technical fingerprints, like IP address and stuff like that, makes it seem like an organic user submission. So when someone submits a claim from Do Not Pay, it just seems like they're very knowledgeable about the law. Right.

No, this is mind-blowing me. So how does one utilize it? So we have 150 different features, and I would say they fall into two categories. Either you come to Do Not Pay with a problem, or you're just browsing and want free money back. If it's the latter category, you can maybe connect to data source, maybe link your transactions, and it will go through them and figure out where the money lies.

So I think in the case of the bank of fee appeal, lots of people don't even know that they have these bank fees. They're just being silently collected from their account, and you can connect your bank account, and it will identify all of these opportunities for you. So, okay, so you sign up, like, all your different bank accounts, and the banks aren't disputing that you've signed up for these fees? Like, how is it circumventing that process? So either the bank is making a legal promise to you. So lots of credit cards, if you see an ad for a credit card, it will say no ATM fees.

But all of a sudden you go to an out-of-network ATM that's not owned by the bank and you start getting the fees on your account. And the bank actually has to reimburse you for that, but you have to let them know. So do not pay identifies that and lets them know. Separately, maybe with overdraft fees, sometimes it's the law, sometimes it's customer service where using all of this data that do not pay can compile, it will make the best case for why these fees should be appealed. So, like, say, I've been a customer for X years, I've held X minimum balance, you should

refund the fees. I literally, the day before, got an email saying, congratulations. You just got $61 and 62 cents worth of, like, fees from your bank batting back into your account. I'm like, oh, my God, this is great. So it works in the background. Wait, wait, wait, so you start off with the parking tickets. It's like, well, by the way, let me say you some cash. Well, I had, well, what happened was, as he said before, it starts to bill you, like, when you win your case or whatever. So if you win a case with them, then it started. And I'm like, $3 a month, like, you just literally gave me my money back.

So when you link your bank account to get reimbursed, then it just starts working like, oh, by the way, you got some money over here. That's what it did. It went through my transaction. No other law firm is proactive like that. It does ask you somewhere, but once it's on, it will get you the money back. And because you're keeping 100%, you don't even have to. to worry. I cannot be the only one in this world who, like, literally has, like, so many issues sometimes where it's like, can I not, like, you know, lose to win? Can I not, like, get something done? Well, you know, it's so interesting because financial services are like a low-key criminal organization in that they sell you something. They hit you with print you can't read, things that nobody would ever look at, all this kind of thing. And then they work around all these

law. So, like, you know, they're a usury law. So nobody's going to charge you over that percentage. But the overdraft fee, you know, is way bigger than the interest would ever be on a userist requirement. So they're doing all this stuff. And there's no way to fight it, which is why nobody ever does. I had a small loan. I actually took the money out. I paid it back. There was one point where we kind of fell behind a month or so. And like literally, the next thing you know, all of a sudden they just start taking, they decided what amounts they want to start taking out of your account without letting you know. So I literally have had to use do not pay to actually try to get those fees back or whatever. And it worked for that.

So it worked and getting your fees back? Yeah, it worked. It definitely did because I was able to at least express myself or show to the app itself like this money was taken for this and here where they already took money out. Like you can't charge me an NSF fee and then already take the money out. It doesn't work that way. And so like I've been able to show my bank like, okay, you're double dipping. People, somebody's double dipping here. So it actually went through and actually found like two or three. So Jess, how do you go from like, what was that moment where you was like, okay, this is more than just helping my friends beat dumb tickets to like, oh, this is actually a business model

that can help people, but also that I can monetize. I think the reason it can be a business is because you're creating a huge amount of value for people. And it's a universal need. We have homeless people use our product. We have top VCs who use the product to cancel their expensive Equinox Gym and everyone in between. We have a whole range of people based on socioeconomic factors. So it's really everyone from a socioeconomic standpoint and it skews older. About 80% on iPhone and then the rest on

web. We don't spend any money on marketing. It's all word of mouth and people talking about us in the media and things like that. Also, we post a lot of content on our website and that ranks very highly organically on search engines. So for example, if you search Sue United Airlines with the number one result. It's more like they cancel a flight or you cancel a flight and the refund just never went through. So you never get your money back. And so it's a lot of this stuff. It's not like they won't give you your money, but they'll make you jump through 30 flaming hoops. It's really common. I think it's a business practice. There's this very famous Comcast calls where someone phoned up Comcast and they recorded it on YouTube and they said, I want to cancel my

Comcast. And the Comcast representative held them up for an hour rather than just canceling their service. Do Not Pay actually has a product called Skip Waiting on Hold that allows you to abort weights on hold for it transfers it to you. So I literally just got through moving. You have to change your license. You have to change everything else about everything. And they actually have a thing where it says,

I think it's like fill out government papers. So like you click on that and then it says it gives you like CSA, DMV and like two other like items or whatever. Well, of course I need the DMV. I also need the, you know, get my plates and everything changed over because Los Angeles is very anonymous for basically like pulling you over and say, oh, I'm sorry, this doesn't fit the car, this doesn't feel whatever, or they'll try to find something on you. And so basically, I just like to try to stay on the up and up when it comes to that, especially being a delivery service.

So I was able to actually do that. They actually made the appointment for me to actually go in and actually do the thing for my plates to change address or whatever. But what's the difference between you just called and making an appointment yourself? I don't know. Have you ever called the DMV before? To even get to a person on the phone, you have to wait the longest time ever. So, like, literally, it actually will sit up there and do everything for you. It'll wait on hold the whole time for you.

And then it'll ring you and let you know, like, hey, you know, you pick up the phone and they're like, hi, you've been on hold for such and such. How can I help you or whatever? And it's like, it took your place. So it does the work for you. I mean, you're clearly ahead of the bureaucracy. Do you think they'll try to catch up to you in any way or are they just like hopelessly slow or how do you think about that? I think that in the long run

we're actually doing them a favour and that might sound a bit crazy to say but when Do Not Pay launched in Los Angeles for parking tickets someone asked the head of the Los Angeles parking enforcement what do you think about all of these appeals that all of a sudden come from Do Not Pay and he said that

well it's actually quite good because at least when they come from Do Not Pay it's standardized people write such gibberish in their parking appeals it saves us processing time and I think that Do Not Pay can actually help in the long run by siphoning through the legitimate cases and getting those people refunds quickly

and then also siphoning through the gibberish and making sure everything is fair. So hopefully a better, more efficient society is good for everyone. So speaking of that, I remember when I was in prison, like guys were literally filed lawsuits for any and everything. How have you seen any just kind of like extremely ridiculous cases of people just being like, oh, I want to litigate this or litigate that? or is there some type of way that it can kind of rule out just frivolous, like, lawsuits?

So we haven't seen really any of that. And I think the reason is that the crazies already know how to abuse the system. And really, this is a tool for people just entering in to get their access to their rights. The only frivolous lawsuit that I can think of is when people try and test out the sue product against us to get their $3 back. And we just refund it in those cases. Probably lawyers from the big financial services firms. Yeah. So, Josh, one of the things that really stood out is when you talked about how, you know, do not pay as helping people establish their rights and really get to understand it. How does that work in a broader context for people who may not, you know, on a normal circumstance, know that they have a right to certain things as opposed to just being disruptive? So I think that the system is stacked against everyone. Like bank fees alone is $20 billion a year plus, and that's more than all election spending combined.

and so there are so many ways to get out of these fees so many laws that exist that have been created to protect consumers but nobody knows about them so there's the small claims court process where you can take companies to court for under $10,000 and lawyers are banned there's the chargeback process where you can refund from your credit card or when companies are taking money out of your bank account

like we saw with the case we discussed earlier within 60 days you can get that money back no questions asked based on their laws around ACH. And so all of these laws exist and the infrastructure exists, but people don't know about them. And so do not pick and help fight and get consumers their rights. So Josh McCurray, thank you for being here. Thank you all for joining us today.

We're really excited to see where the platform goes. Thank you. Thank you. Thank you.