Invest Like the Best with Patrick O'Shaughnessy - Caryn Seidman-Becker: Rebuilding CLEAR - [Invest Like the Best, EP.432]

Episode Date: July 8, 2025

My guest today is Caryn Seidman-Becker. Caryn is the Chairman and CEO of Clear. She bought the company out of bankruptcy for $6 million in 2010 and built it into the identity platform millions use in airports and stadiums today. Her Wall Street background investing in Apple, Amazon, and Priceline taught her to recognize when products become platforms, which shaped her vision for Clear as the "definitive secure identity platform" far beyond travel. Caryn shares the gritty early days of literally hunting down hardware in airport storage facilities and rebuilding the entire business from scratch. She embodies an incredible "bias for action." We discuss turning around a business, scaling a platform, and why she believes your face will soon be your key to everything. Please enjoy my conversation with Caryn Seidman-Becker. For the full show notes, transcript, and links to mentioned content, check out the episode page⁠⁠⁠⁠ ⁠⁠⁠⁠here.⁠⁠⁠⁠⁠⁠⁠⁠ ----- This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠ Ramp⁠⁠⁠⁠⁠⁠⁠⁠. Ramp’s mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to⁠⁠⁠⁠⁠⁠⁠⁠ Ramp.com/invest⁠⁠⁠⁠⁠⁠⁠⁠ to sign up for free and get a $250 welcome bonus. – This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Arcana⁠⁠. Arcana is the world’s most advanced portfolio intelligence platform, trusted by institutional investors managing trillions in AUM — including market neutral, long-short, long-only, and capital allocators. Arcana enables portfolio managers, risk teams, analysts, and CIOs to drill into exposures and idio, construct optimal portfolios, and decompose performance at incredible granularity. Visit⁠ ⁠arcana.io⁠⁠ to request a demo and learn more. – This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠ Ridgeline⁠⁠⁠⁠⁠⁠⁠⁠⁠. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Head to⁠⁠⁠⁠⁠⁠⁠⁠⁠ ridgelineapps.com⁠⁠⁠⁠⁠⁠⁠⁠⁠ to learn more about the platform. ----- Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠). Show Notes: (00:00:00) Welcome to Invest Like the Best (00:05:43) The Vision for CLEAR (00:09:08) From Wall Street to CLEAR (00:13:42) The Origins of CLEAR (00:14:23) The Bankruptcy and Rebirth of Clear (00:34:41) Building the Business Model (00:47:46) The Future of Airport Innovation (00:48:33) Investing Insights and Strategies (00:52:17) The Importance of Free Cash Flow (00:55:26) Biometrics and Privacy Concerns (00:59:40) Expanding Clear's Vision (01:04:13) Personal Mission and Genetic Screening (01:12:28) Leadership and Company Culture (01:14:23) Future of Technology and Identity (01:25:38) The Kindest Thing Anyone’s Ever Done For Caryn

Most software companies try to maximize your time on their app to juice engagement. Ramp does the exact opposite. Ramp understands that no one wants to spend hours chasing receipts, reviewing expense reports, and checking for policy violations. So they built their tools to give that time back, using AI to automate 85% of expense reviews with 99% accuracy. And since Ramp saves companies 5%, it's no wonder that Shopify runs on Ramp, Stripe runs on Ramp, and my business does too.

To see what happens when you eliminate the busy work, check out Ramp.com slash Inverc. I'm excited to introduce our newest sponsor, Arcana. Arcana is the world's most advanced portfolio intelligence platform trusted by institutional investors managing trillions in assets under management, including market neutral, long short, long-only, and capital allocators. Arcana enables portfolio managers, risk teams, analysts, and CIOs to drill into exposures and idio construct optimal portfolios and decomposed performance at incredible granularity. Arcona is the only real-time intraday system in the market with extensive live scenario analysis, custom screening and tagging, and a slate of one-click lightning-fast portfolio construction tools, mock portfolio trackers, reporting, and single-stock crowding.

This is the kind of tool I wanted when I was managing public equities, and I am sure you will benefit from the insights the system has to offer. Visit arcana.io to request a demo and learn more. Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus Review, our quarterly publication with in-depth profiles of the people shaping business and investing. You can find Colossus Review along with all of our podcasts at joincolossus.com. Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not.

reflect the opinion of positive sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of positive sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc. My guest today is Karen Seidman Becker. Karen is the chairman and CEO of Clear. She bought the company personally out of bankruptcy for $6 million in 2010 and has built it into the identity platform millions used. in airports and stadiums today. Her Wall Street background, investing in Apple, Amazon, and price line taught her to recognize when products become platforms,

which shaped her vision for Clear as the definitive secure identity platform, far beyond travel. Karen shares the gritty early days of literally hunting down hardware and airport storage facilities and rebuilding the entire business from scratch. She embodies an incredible bias for action. We discussed turning around the business, scaling a platform, and why she believes your face will soon be your key to everything. enjoy this incredible conversation with Karen Seidman Becker. So Karen, I think a great place to begin

is to just talk a little bit about Clear first. We're going to rewind the clock in a few minutes and go back to the beginning and tell your entire story. Everyone knows Clear because they've experienced it in the airport or at a stadium or something else. So they know that version of it. I more want to know the version of Clear that people might not appreciate the business and the product, having just experienced it that way. Let us in on a little bit of the surprising elements of Clear the business and the product that gets you excited about it today and in the future. So when we started Clear 15 years ago, what we said is today it's a travel-centric company and tomorrow it's the de facto secure identity platform and leisure access commerce. We didn't say health care. So a kind of

ballsy vision, but one that came from my experience on Wall Street of watching products become platforms. And the concept of identity to make experiences safer and easier physically and digitally was the foundation of Clear. This concept of enroll once used everywhere. As a woman, I'm like always digging through bags for all these plastic cards to prove who I am and what I have access to. And I think that's ridiculous because nobody ever really looks and it's incredibly clunky. It's incredibly expensive and inefficient, not secure in a bad experience. That is the foundation of Clear. We're really at the earliest stages. So when you think of the magic, or the secret opportunity.

It's that over 30 million people today have enrolled. What I love about that is it's privacy protected. It's data secure. We will not sell or share your data. We're here to deliver you amazing experiences. And we're here to deliver our partners, enhanced security, reduced fraud, which has become a big problem. So the basic secret to clear is that identities foundational across so many industries.

and people don't think of identity as a problem. They think of fraud or compliance or frictionless experience, whipping out cards or insider risk now. There's actually a story today in the Wall Street Journal about North Koreans infiltrating workforces, which is a real problem. That's all identity. And bringing it to life both with the government and a public-private partnership in airports and in other sectors, health care and online where anonymity rules and that creates all sorts of problems or to secure workforces, I think is the secret and the opportunity

at Clear. What did you learn about the product to platform switch or flip that happens in companies from your Wall Street days? I invested in a broad spectrum of company, started out in risk arbitrage, and then went on to asset management and hedge funds. And in 2002, we started Ariens Capital, which stood for art and science, which is my view of investing. It's highly quantitative and highly qualitative art and science. We had the good fortune, although every day it didn't necessarily feel that way, of investing in Apple, Amazon, and price line in 2002. And when you looked at Apple, they used to have signs in their boardroom that said five down and 95 to go. And that was their market share. They had candy-colored Macs on this iPod with a big white dial in the middle

that people thought Zoom might ultimately crush. Or you thought about Amazon, which was books, and books, music, and video, then a few more categories. Lots of people think that. thought they were going to go out of business. He was on the cover of Time magazine. I think it was Amazon bust or something of that nature. And then price line was opaque travel and almost went bankrupt after 9-11. And those were all products that you watched become platforms. Priceline turned into bookings and a global OTA offering you a lot more than opaque travel and Apple and Amazon speak for themselves. And I saw unconventional leaders as sort of the old GE leadership when unconventional leaders delight consumers innovate, do really smart acquisitions and capital allocation and create these

platforms of which they could build multiple verticals on top of. And so when I looked at Clear, which was bankrupt, I saw the same thing. I saw this identity platform. Travel was where it died and where we brought it back. And I thought where security, identity, and customer experience absolutely collided, but that you could use it in so many other places and connect you to all the things that make you you. Identity is completely contextual.

I'm always Karen. But when I check in at the doctor's office, I'm Karen with United Health, with an ex-co pay with a medical record that, by the way, I should own and have access to and be able to share anywhere I want. I go into a building. I'm Karen.

I'm an employee and I've access to the 10th floor. Or I'm Karen, and I'm a visitor, and I'm going to the 48th floor today from noon to three. But I'm always caring, but I'm having to do all these things. My favorite is when they take your picture, they give you a sticker. This is useless. So this concept of a secure identity platform was definitively modeled off what I experienced as an investor. The old Bill Gates line definition of platform was this idea that more economic value was created on top of the platform than was captured by it. And at that point is when you became a real proper platform or something

like this, it's evolved a lot where there's third-party platforms in the sense that it enables outside businesses to build. And then there's more first-party use of the install-based, fundamental identity layer in your case that you've created through a product that lets you create all sorts of other things. How do you think about that difference? Opening up identity as an API to outside developers versus owning the experience yourself? Here's how I look at it. I like analogies, and I would look at American Express as a vertically integrated financial service company. They have the customer, they have the merchants, they have the bank. Certainly American Express, I think, is some of the best experiences when you lose your credit card or I had fraud on mine

yesterday. You send a new one. The bills go right through because they're vertically integrated. It's a better customer experience. I look at Clear and think we're a vertically integrated identity platform. We have our members on the platform. We have the enrollment. We have the verification. We have APIs and SDKs for our partners to connect into them. We have real estate in airports. We have awesome ambassadors at airports. We have hardware. We have software. The opportunity to have all those assets and be able to use them in different ways is really important. And I would argue it's a little bit open in that we are connecting for our partners and bringing that member to a partner, whether be Home Depot, whether it be LinkedIn, whether it be a hospital, either for the

workforce or the patient. But I like us bringing our different assets. Some of our partners want hardware. They want someone to check in at the front. We're really working on EGates and automated end-to-end lanes in real estate in our airports to drive that end-to-end frictionless, more secure experience. How could we use our ambassadors and our concierge products? I like having the assets being vertically integrated and being able to disaggregate them. that's how we're looking at Clear. It would be fun to break the story 15 years now into chapters and talk about each chapter a little bit.

Now everyone knows Clear. Obviously, you bought it out of bankruptcy. Not everyone. A lot of people listening will know, Clear. We welcome them to the platform. We'll welcome them all. The origin stories are super interesting to me and how these things get started.

So you were a professional investor. I remember the first time you talked, he said, you didn't want necessarily some of your IRA or something to be on your tombstone and have that be the thing you were known for. I didn't want to die and have people say I pick good stocks. That wasn't good enough. So maybe talk about that pure origin of why you went searching for a business in the

first place, how you found this one, what it's like to buy something out of bankruptcy first couple days. So I will say in Medias Rees, bankruptcy is a completely surreal experience. And I talked to a few CEOs who I had invested with through the years, Bobby Kodak, Martin Franklin at Jarden. They said bankruptcy has decided on the courthouse steps and it's true. I definitely believe, and I tell my kids that life is a journey. I started off in risk arbitrage in 1994 when I graduated the University of Michigan. I didn't even know what pro forma or EBITDA was,

but I figured it out real fast. That was the M&A period of aerospace and defense under Secretary Les Aspen. I really got to know the aerospace and defense industry, of which biometrics has been in the defense industry for a long time. So that was my first understanding of biometrics. Also in the 90s, we invested in cable wireless and satellite subscription-based businesses. Again, we were buying wireless spectrum in the 90s. Direct TV was really starting to grow an Echo Star. Cable companies, Microsoft invested in Comcast with a billion dollars in 1997. That was a really big deal and they started to do broadband.

So I understood the power of subscription-based businesses. Also did bankruptcy when I was doing risk arbitrage. So love a turnaround. I like to say happiness is a low bar and there's not a lot lower than bankruptcy. And then you get into the 2000s with after the dot-com bust and the turnarounds that we saw in products that become platforms. incredible companies like Apple and Amazon and price line that were built. I had all that experience, which meant I believed. I saw the art of the possible. I'd also seen giant failures like

Tycoe and Enron and WorldCom, so the thing that everyone thought was going to be great and wasn't. Ultimately, had invested in LaRalle, which got sold to Lockheed Martin, which turned into L3, which was a management buyout of Lockheed, and Lachita stood for Lonza, Lepenta and Lehman. We invested in that. Biometrics were there. LPenta left and started L1, and he was rolling up the biometrics industry, and we helped fund that. Just a big believer in biometrics on top of everything else. It was used in the early 2000s in Brazil for voting, for Asia, for financial services. So the consumerization of biometrics was happening outside the U.S., whereas I had only seen it in

the defense area in the U.S. I believed in the consumerization of biometrics. That is the whole journey put into clear shuts down on June 22nd, 2009. we went to cash at Orient's Capital in September 2008 a little late, not too late. And then investors said, great, you're in cash. When are you going to invest again? We'd never been in cash or either 120% invested, 200%, 80% long, short. We were nothing. I had three little kids.

I had a one-year-old, a three-year-old, and a five-year-old. And I was like, I don't know if I want to do this anymore. I did done it 24-7 for 15 years. I loved it. I thought it was the greatest industry. I met the greatest people as a front-row seat to business. my late husband was in private equity at Apollo and I was like, that looks awesome. Buying companies, controlling cash flows, really able to create and build.

So I was like, I want to buy something that makes the world a better place. My parents were in the government. I'm originally from D.C. 9-11. I was 29 at the time really changed me. I felt responsibility and a moral obligation to help make this country a better place and that we were lucky to be here and that we were all responsible for it as citizens. When I found clear, which L1, the company we had invested in, had been a subcontractor to for the first go-around, I was like product that could become a platform that could make our country safer, make consumers' lives easier. It was biometrics,

which I believed in the consumerization subscription-based businesses are incredible. It was the convergence of my entire professional career. So we being myself, my husband, some advisors at the time my co-founder went into a room in a law office and we're bidding against another group of people who were former employees of Clear and we had money in escrow. You're reading other people's documents trying to understand what you should do. You have a maximum number and we bid $6 million in cash, which I think was a little lower than the existing bid, but it was 100% cash that night given to them. We won and you're in this room going back and forth with the documents. and strategy and talking for like 10 hours, couldn't eat, barely drank, and then you leave,

and it's almost like bringing home a new baby. I want. I have this company now. Shoot, what do I do with it? We had a double-sided five-page list of things to do because it was all shut down and the hardware was in different storage areas and there was 190,000 members who were like, where's my data? And I didn't get service and airports who were mad and TSA who was mad. And at some level here, ignorance might be bliss.

We've got a great idea. We've got some capital. We've built the business model. Makes a tremendous amount of sense. We've seen other leaders. We've seen what to do and what not to do. Off we go. We'll call that the prolog.

Before we get to chapter one, I have a couple of questions from everything else you said. The first is a little bit abstract and away from Clear specifically, but you said that you didn't know what pro forma and EBITA were. You've over and over again in your life and career immersed yourself in new areas and seem to learn quite quickly. What can you say about that experience and getting better at that over and over again and not being afraid of not knowing the perform in EBITA of the other fields that you explore? I'm a voracious reader. I think my team knows I send them articles now from somewhere between 3 a.m. to midnight. I am enormously curious. I grew up. There was no internet, but I read in my room every night from Sports Illustrated to books, magazines, newspapers.

I love learning. I love the question why and trying to get to the bottom of it. I also think when you went to public school in Maryland and the University of Michigan, I was a political science major. I don't know that people had enormous expectations of me. I did of myself. My parents did of me. My grandparents certainly did who were immigrants. So I had no fear of failure because there wasn't too far down to go. My uncle who was an investment banker lived in New York City, his whole life. And I would come here from Maryland and he would take me places. And I just thought he was the smartest, most interesting man. And I love the movie Working Girl and let the river run and the coach briefcase and the coffee and the Wall Street Journal. And that's what I wanted. So that's what I was going to do. And I think I have

blinders on when I'm focused on something. So whether it be pro forma EBITDA or learning the Herfendahl index when you're in risk arbitrage, I believe that everything X a few really scientific things are learnable. And now with AI, I'm not sure what's not learnable. I actually just signed up for an AI design class that I haven't fully immersed myself in yet. But I just think life is about curiosity and I'm a lifelong learner. And I have no fear of not getting it and no fear of asking questions. I was going to ask later, but I'll ask it now because it's relevant about how your ancestors show up in your life.

You said something which was there was high expectations across multi-generations. Can you say a bit more about that? My grandfather, who was my idol, Hyman Seidman, came to the U.S. at 17 years old in 1922. There's actually enormous documentation about him coming here. He almost got sent back. Most of his family stayed in Eastern Europe and ultimately died. He had one sibling who went to Israel and one sibling who was here.

So to come at 17 years old, bottom of a boat, the USS Constantinople, to not speak the language, to have no money, to work in a hardware store that he ultimately took over Sidman hardware, which was across from the Berkeley Center, that's hard. Everything else seems a lot easier when you have that perspective. He used to tell me to pull yourself up by your bootstraps. Keep on moving. That's just very empowering when you see what he'd been through and lost a lot of family and was optimistic, loved this country, had enormous gratitude, positivity, joy, fun, never angry at what had happened to his family. I believed in the art of the possible.

He put his family through college. all successful, went on to build families and my dad served in the military. My uncle did to do right by our country. I have gratitude and I have belief in the art of the possible because I've seen it. I think optimism versus pessimism is such an interesting thing. Are you just wired optimistic? I am one of my favorite sayings that I keep on my cell phone. I saw Simone Perez speak right before he died. And he said optimist and pessimists died the same way, but they live very different lives. And I thought that that was a very powerful statement. If you don't have optimism, if you don't have hope, what do you have? Well, you needed it going into the clear thing with your six million bucks.

But I'm curious about what was going on with Clear prior. How did it itself start before your involvement? And why did it ultimately fail the first time? Clear started as a response to 9-11 when Congress at the time stood up TSA. It was a Republican-led Congress. They wanted public-private partnerships. If you look at the founding of the Department of Homeland Security, which I think is one of the largest and fastest startups, I might have these numbers slightly wrong, but it's 250,000 total employees of the Department of Homeland Security, which has all these sub-areas, whether it be CBP, ICE, FEMA, TSA, those are a lot of subsidiaries, if you will, under one corporate umbrella. Congress wanted to make sure that there were public-private partnerships to drive innovation to

expedite the traveler experience. They put this program together called the registered traveler program. TSA gave out a few licenses for the registered traveler program for people to try and see what they could come up with in the world of public-private partnership and innovation. Steve Brill had written a book 9-12, which was the day after 9-11. He received one of those licenses and started clear. And there were a few other companies who started as well. and ultimately he was the most successful. He got into 16 airports. I think he raised about $100 million of capital

and then had some debt on top of that and was building this concept of a trusted traveler program, a registered traveler program with biometrics on a smart card. So it's this one-to-one match. It had 190,000 customers. Then two things, maybe three things happened. one being the 2008 downturn came. So it started in 2003, but didn't launch in Orlando until 2005.

The highest percentage of first-time travelers in America go through the Orlando airport, strollers, balloons, the whole thing. It creates a little bit of a customer experience and security challenge. So that was the first place. People are like, why did you start in Orlando? I'm like, because they wanted us. He launched in 2005, the economic downturn hit in 2008, which significantly hit business travel. And also, he had debt coming due in 2009 in the middle of a lot of other people. people being bankrupt and having debt like GM and Chrysler.

Ultimately, the company shut down. They were sort of before their time from a cost on the tech side, not to mention the economic downturn, not to mention, I think it was probably hard to convince some airports that they wanted biometrics. And so it shut down. It went into bankruptcy at the end of that year. I know obviously it clear is in lots of places beyond airports, but it's the visceral thing that we can all call it to our minds and have probably used.

If I think about the airport, it's such an interesting, physical supply limitation. You mentioned the public-private partnerships and then certain number of licenses. I can't imagine what it would be like to launch a clear competitor in an airport. Maybe it's possible, but there's not real estate. There's a certain number of lines and whatever.

What are the pros and cons of having a business that has such a unique physical supply bottleneck and barrier to entry, but also barrier to scale? If everyone signs up for it, is there like a dis-economy of scale or now the clear line's longer than the TSA line or something? It's such an interesting business dynamic. and I would love to just riff on it as many angles as you can.

Yeah, I didn't know much about airports when we started clear in 2010. You're right. There are these really interesting structures. There's 400 and change in the U.S., but at the end of the day in the world of 80-20, 80% of the traffic goes through the top 60, 80 airports in the U.S. There are these houses and within them are municipal employees, airline employees, federal employees with TSA or if there's custom CBP, local police and fire departments play a role here. You don't necessarily have all the constituents going in the same direction because everybody has their own stakeholders and their own priorities.

Airports are a really interesting place to do business and they are capacity constrained both on runways and physical real estate. We always viewed clear as a force multiplier, bringing technology. in that could help the throughput and enhance the security, not to mention bringing badged and trained employees into the building to help partner. And we viewed ourselves as Switzerland with the federal government to help security, with the airlines to help get their passengers through happily and safely, with the airports and the municipalities to help enhance the experience to help drive revenues because we pay them a percentage of our revenues to create jobs in cities that are great jobs.

So we viewed it as like a win, win, win. And that as the volume grew, both we would have technology, we just launched our NV technology that's five times faster. But over time, you could create new opportunities, if you will. So for instance, we invested in a company called Landline, which is replacing regional jets with buses and able to go to the back of the airport as opposed to. the front door because you're right. You can't put millions of people through the front door. And today there's three million people every day going through airports. Our numbers are by 2030.

You're going to have four million. Another million people a day. And again, most of them are coming through the major buildings. You couldn't put them through today. And so the question is, what other doors can you put them through? Can you do off-site screening and bring them through on buses? We're trying to launch end-to-end automated lanes so you can have greater throughput. Can you privatize the physical screening opportunities so that you can have greater throughput, because oftentimes it's a staffing issue. The equipment is there, but there's not enough people to staff it. And airports are also super interesting because you have these peaks. If you watch an airport, which I never thought I would be doing, but I do. The volume goes from this to this to this. You have to staff for peaks,

which is really hard in a staffing business. And so you do need automation. You do need eGates. You do need off-site screening. You do need people to come to the back as opposed to through the front. There's all sorts of opportunities if you're innovative and creative and partner-oriented to drive secure throughput with a better customer experience at airports. And at any time, you get a little stuck and then you need to move and try new things. What is the NV tech? What is it specifically? So the NVV is our new face-first technology that we just launched. So it is now in all of our airports going back to Chapman. Our first six years were smart cards until we went to the cloud.

And then we went to the cloud in 2016. At the same time, we partnered with Delta. And that was a really transformational moment for clear, both in terms of scale and technology, because you didn't need a smart card. You could enroll and use it immediately. But that was fingerprints and eyes. To us, it's clear that face is one of the really important biometric winners. We are face first with our NVs, which makes it five times faster to verify.

by many people don't have good fingerprints. Little known fact, if you're in teacher, if you're working with chalk, certain ethnicities don't have great fingerprints. Eyes can be a little bit of a chicken dance, even today. Face first is we call it NBN enrollment and verification. How do you think about this problem? There's two things that happen with scale.

I had the experience recently of using Clear at like an NBA arena, and it was amazing because there was this incredibly long line to get in and then I just literally waltzed right in, no line at all. And then the converse is, so many people have clear in an airport that not often, but there's been times when I've been and had to skip the clear line because it was literally longer than the other lines. How do you think about that problem, maybe in airport specifically, that you're a victim of your own success when more people have it because you don't control the whole airport, so you're subject to some

constraints that you can't change? I think there's a really important point, which is working with the government can be hard. The last four years with the Biden administration was really hard. In fact, they put some policies in place that really challenged our throughput and the customer experience, and we're on the other side of that. When you can innovate to drive throughput, when you can leverage technology at the speed that the private sector is capable of, you consult bottlenecks with willing partners. We did not have that in the Biden administration. We certainly feel like we have that in the Trump administration. They definitively care about making airports great.

they definitively care about throughput and the customer experience and security and believe in innovation in the private sector and partnering together to do that. And I've been very public about it, that our customer experience degraded in 23 and part of 24, which caused throughput issues. It wasn't because of volume. It was because of policy decisions that were put in place that impeded the customer experience. What were those? I'm curious. What I can say is that they put in some physical escorting policy so that a clear employee who verified you had a stand with you, which created all sorts of challenges. All of your team members are standing in line. Also, they wanted to recheck at an extremely high level identity documents. And that created all sorts of backups. And I think

that is about building trusting relationships with the public and private sector and being able to communicate. There's a lot of great people at TSA and at DHS who do believe in innovation and public-private partnerships. But as I like to say, debanking didn't just happen in crypto. And it was a very eye-opening experience to be on the other end of that, to not have transparent partners who wanted to work through things together, but instead just wanted the government to do everything. That was very eye-opening. And also, I think, made us better, made us more innovative, and I think has positioned us to work really well with an administration who sees infrastructure as a major need here in the U.S.

and in order to be competitive, you shouldn't have better travel experiences in Singapore, Dubai, Tokyo, and London than you have here in the U.S. When we have the greatest tech companies, I was in Singapore and Christmas. My kids were like, what are you doing? I was taking pictures of EGates and banks of EGates. You go to Dubai.

It's the same thing. You absolutely should have end-to-end automation, and there's so much you can do to transform the travel experience. So on a very personal and professional level, watching our customer experience degrade when I knew we could do so much about, it was horrifying. And not being able to say much about it because they were pretty retaliatory was also

pretty painful. I think we're on the other side of that. And there's so much you can do to drive through. But the airport experience should be and can be amazing. People love travel in the U.S. quite frankly, around the world. And I actually give huge credit to Airbnb. They transformed the travel industry by creating infinite capacity.

And I don't think people have fully wrapped their heads around that. It used to be like, oh, I want to stay at the Marriott and wherever. And it's full. So I guess I'll have to wait. there's always a room somewhere for you if you want to go. You see what's happening with air traffic control. Our systems are rigid and a little bit analog. They have to be invested in.

We have to partner. Travel is such an important part of the economy. And I think it's also an incredible part of families and experiences and growth and learning and curiosity. I know for my family it's been our best memories and our time together. I feel really fortunate. We're hell-bent on driving innovation to make travel safer. and easier and also learned a lot from our experiences in 23 and early 24 to make sure that we move forward and not backwards. Can we go back to chapter one and no longer have your

six million bucks? You now have clear. What was the process like of figuring out what the business could or should be development of the business model, go to market, all the basic, basic stuff? What did you do and what did you learn in that first chapter? I wish I documented more of it Number one, you had to find where the inventory was. Let's go to the real basics. It was, where's the equipment? And we would go to the San Francisco airport. We were like, hey, where did you put the clear equipment?

And they would take us to a storage facility, and it was all the way back there. One airport threw them away. I was like, you threw away the hardware because in it, we bought $10 million of PPN. We got $10 million of hardware. So I was like, for $6 million, we bought a brand that we were too cheap to change. People were like, why don't you change it? It's really sullied.

I was like, I don't know. I think it's pretty good. And we don't have a lot of money. So people know what it is and we're sticking with it. Ultimately, we changed the logo and I love the name. We bought 190,000 members, biographic and biometric data. They had to opt back in. They had to come back to clear and we would give them whatever months they had left.

I think in aggregate, about 75% of them did come back. And then we bought $10 million of hardware. I also say we bought a hard drive of what to do and what not to do. Bankruptcy is really interesting. You get the hard drives of the company. So you were looking at their old documents and learning. But first, it was finding the hardware that was left. We were going to reuse it.

Number two was actually rebuilding the software from the ground up because we didn't buy software. They didn't own their own technology. And we wanted to rebuild the software from the ground up. Number three was we closed in April and the Orlando airport wanted clear to come back. And you need one person to go first and they wanted to. So we had to win that. So we wrote the RFP for the Orlando airport. other people did too.

And then they protested our win. So you had to go down to the Orlando airport and share with the board and the community why Clear would be good and serve them well. From a marketing perspective, I wrote the emails. I signed my name to them. I was in customer service.

And we said Clear is coming back. It was to 190,000 people. We knew who they were, one of the beauties of being an identity company. Know your customer very well. Know your customer. We told them we were going to do write by them and make them whole. We got some nasty emails back. This one guy said, my grandma had

big balls and you have bigger balls and my grandma. I was like, first of all, interesting. Okay. So I called him. You're an owner operator. And I was like, hey, it's Karen from Clear. I got your email. And he kind of shrunk. And I was like, people will write anything in emails because it's totally anonymous going back to identity. We told people we were relaunching at the end of October and that they could come back. We then hired 20 people in Orlando, 10 for each lane. I had read Setting the Table. It's an amazing book. Danny Meyer, one of my great heroes, and he became an investor in clear, and that was awesome. So we hired Union Square hospitality, I think it was called Hospitality Quotient, to do the training of our team members in Orlando. Okay, I read the book. I like that.

We want to be hospitality and service oriented. I think it's missing in the airports. We've got to rebuild the software. We got to find the equipment. We got to hire some people. I don't even remember how we hired them. I went down to Orlando. I participated in the training. I got to know all the people at the Orlando airport. You're making it up as you go along. And then every day, you're like, fuck, I didn't think of that. We have a playbook now that were in 59 airports and more to go. But you fake it till you make it. I would just keep talking to people. And I had seen great operators and I would ask them questions. Ed Breen is one of my great heroes. We had invested in general instruments, which then got sold to Motorola, and then he became the CEO of

Tyco to turn it around after Dennis Kozlowski. So I would ask Ed lots of questions. And these leaders were so generous with their knowledge and their experience every day. You're just hacking at it. And then I was on the floor of the Orlando airport at 4.30 in the morning when we launched and people would hug us. And then you knew you had something when we were rolling out the old kiosk from storage. And people were hugging us, that we were bringing it back. That was the greatest feeling because to know that it meant something to people, that they were rooting for your success. Plenty of people rooting against your success.

But that gets you up every morning to know that you can make a difference in someone's life. Security is job one. And then that someone could have breakfast with their family because they had a more planful and less stressful trip at the airport. I happened to be a neurotic flyer, so I'm worried about turbulence and terrorism. and I didn't like leaving my kids. And so to know you could change that for someone, that's a giant win. I'm curious to hear a little bit about thinking versus action in your business life.

You exude this intense bias to action. That's one of our core values. I promise I didn't know that or looked that up. It sort of just comes off you. I'm curious when you've needed to stop that, if at all, and like retreat and think. I'm very interested in this dichotomy of Ryan Armstrong from Coinbase. has this great simple phrase, which is that action produces information. And so actually, you can learn faster through action than through thinking.

Say a little bit about action orientation versus stepping back to think. I have a very busy mind. So at some level, I'm always thinking being a girl, the power of blowing your hair gives you 20 minutes to think. I am always thinking my friends will laugh. I can be a little spacey sometimes. If I'm driving, I'm like, oh, I didn't know. How did we get here? My mind was 20 different places.

Bias for action can sometimes lead to impulsivity, and I think you need to guard against that. I have consistently surrounded myself with people, including my late husband, who was like, you got to stop. Just push pause on that for one second. Slow your role. I respond very well to that. But one of my sayings is that every week is 2% of a year. So when someone's like, let's meet on that in three weeks, I'm like, we're going to wait

6% of the year to have that conversation. That's insane. If you believe life is short, and I definitely believe that, I don't want to waste time. I love data. I love information. Working in the stock market makes you more decisive. You're never going to have perfect information. You've got to put together the mosaic.

You have to understand your thesis. You have to see how that is weighing relative to your thesis. And you need to move out. Maybe you don't need to take an 8% position. Maybe you want to start with a 2% position. Wall Street gives you incredible discipline. You better have done your work before you need to do your work. So when I head into a meeting, I'm like, we should know them better than they know themselves.

We should really understand and have war-roomed this 10 ways from Sunday because it's all about the preparation. Kevin Durant, the basketball, all the practice that he does before the game, I do feel that I think a lot, probably too much. And so that actually my bias for action, I'm playing chess in my head all day long. Well, what if? Well, what if? Things are always coming out of left field. I've seen a lot of these scenarios in my head before. What if we do did that and what if we did that and how would that? And then you have the data and you're like, well, that would make that go up by 500 basis points. That would have a negative implication. Over time, that could drive my margin to this. I like to move. Bezos talks about the door and if it's

a really big decision. Yeah, one or two way doors. Yeah. And so I buy into that. My middle daughter always tells me it's just not that deep. Can you go back and change that? I think if you raise your price and then you have to lower your price, I don't think that's good. I think sometimes doing things that would make your workforce feel not stable, so you want to be thoughtful. But one of our other core values is embrace change. I think the only thing constant is change. I'm really good with that. I sometimes forget other people are not as good with it.

So it's something I'm trying to be more thoughtful of. I love it. I won't forget the 2%. It's true. Let's meet in a month. Really? 10%. I'm curious how you originally thought about the tradeoffs in the business model itself.

And maybe just to hear a little bit more about the business model itself of margins and pricing and product. I'm always fascinated by the things left on the cutting room floor that like maybe you almost did but didn't do and you went this way instead. In the early days, as you were thinking through, how could this be a big sustainable business? And I'm also curious to hear about how you financed all this. You started with $6 million, but everything else you're doing costs a lot of money too. What were you working through in those early days as you got your arms around what the business model should be? We had built a model when we started. We'd come from finance. We'd build models, garbage in, garbage out. But we did.

think that this could be a good business if you own your own technology, if you own your own labor, which the other company didn't, it had outsource the labor and the technology, which really impeded the margins. But again, going back to the power of a subscription-based business and cost per gross ad and LTP to KAC. Those things were in my blood and I understood them deeply, understanding what we thought it would take to break even from a subscriber basis, looking at every MSA, understanding Denver and Orlando and San Francisco in New York, what was the volume of the airports? What percentage of that volume did you need? Or what percentage volume of that population seemed realistic? We owned wireless companies, Nextel, actually was one of them. What percentage of the

city is on Nextel and what do you need to break even? I like coming at things bottoms up and top down and sideways. We said that the Tam was 35 to 40 million people that traveled five or more times a year. What percentage of those people did you think you would have? Then looking at the cities, all sorts of different ways. So we thought that this could be a good business model if you got to certain penetrations of certain cities. All that being said, it took longer and it was harder. I did not take a salary for the first five years and got paid in stock. And to me, that was a privilege. We turned cash flow positive six and a half years in and we had burnt through 53 million dollars of cash to get there. We were very cheap, very efficient. Airports are a really interesting

place. Think of it like concentrated shopping malls. I didn't think, oh, I wanted to start a business in an airport. I thought I wanted to build a secure identity platform, but airports are the great place to start a business because you have millions of people coming through these buildings every day that see your brand. A tipping point for us was when we allowed our ambassadors to do the selling for us. Social media is a really noisy place to try to get someone's attention and certainly getting noisier. Having an ambassador who gets a commission so that they can make more money and their awesome people say, sir, would you like to learn about clear? Sir, would you like to be a clear member? Are you coming over and saying it? Sometimes we put out candy bowls. We did different things. Who doesn't want to mint when they're traveling or hand sanitizer in the 2020 time frame?

It was great ways to get the word out and to educate and to have team members who could make more money and to have people bring technology to life. Innovations about bringing people what they did not know they wanted and people don't Google biometric security at airports, specifically not at the beginning. Having people explain the technology, explain the privacy, that was crucial. We believed it to be a very efficient and powerful business model. We run the business for members' bookings and free cash flow. I have said that for 15 years. Members, bookings, free cash. Members, bookings, free cash flow.

Free cash flow is the ultimate measure of a business as a girl who comes from Wall Street. Said like a good hedge fund. It ain't eyeballs. That's how we ran the business. And when we turned positive in 2017, so we raised capital in 2010 from myself, the gentleman who started it with me and some outside investors, mostly here in New York City. And Bill Miller, who was a strategic partner at Orient's Capital and one of my great mentors and partners. He was on our board for the first years. And as an early investor in Amazon,

he was certainly great to get his wisdom and his advice. And then in 2012, we raised some capital from those same outside investors, really individuals, went to Silicon Valley. I came back with zero in 2012 and zero in 2015, which was fine. One of the guys said to me, I won't say the name of the fund. He said, what makes you think not going to? But I do keep his picture in my photos. He's no longer there. So it's fine. Let your haters be your motivators. He said to me, what makes you think you can be the CEO of Clear?

In my mind, I was a good question. But I leaned over the table and I said because I am a complete fucking animal. So that was that meeting. And he still said no? He still said no. Wow. We're creating a new industry and identity. But even before you get to identity, we started here in 2010.

Pre-check started in 2011. People thought that was going to kill us. Little did they know we could integrate. And now we actually sell Precheck. Our view is great. You want to start other kinds of trusted traveler programs. We're a great enrollment mechanism. This is exactly what we do.

For the past year, we have been enrolling people in Precheck, and it's a great partnership, and I think there's so much more to go there. So then they thought Precheck was going to kill us. There's always something else. It's like, guys, guys, people love traveling. You need innovation in airports. You need public-private partnerships. And when you have willing partners in the public sector, you can do great things.

things together. And if you go through airports, they don't look materially different than the past 20 years. Such a huge opportunity to be frictionless from home to gate. What if you knew you at a reserve parking spot or where the Uber should drop you off and a concierge could meet you and you went through an automated end-to-end lane and then you had your coffee waiting for you on the other side or you knew you could get into a lounge. Shangri-La and then you knew that you were on the flight and that it was two hours late and Uber sent the car for you as opposed to everyone doing this when they land. And what if you used it as a mobile key? Those are all the things we're doing.

You said great investors. It was the name of your firm is art and science. It's qualitative, quantitative together. So many investors are trying to analyze things when ultimately the creation of net new value can't be analyzed ahead of time other than in very broad strokes. You're betting on the airport or this you being a complete fucking animal and the airport being a great place to apply that energy. Now having done it from both angles, being the investor and the founder, builder,

or CEO, how would you invest differently than you did prior to the experience? I think about that. And truth be told, I have not bought a single stock since we ended Aureans because if I can't focus and do it, I'm not doing it. And I own a lot of clear stock and have investments in other places, but I'm focused here. I think I would be such a better investor. How? So number one, we invested in Amazon. They announced Prime and it went down. The stock went down. And you're like, oh. And then the shipping and one of the losses. Let's start with the total addressable market of if you had Amazon Prime. Let's start with the art of the possible.

And if those people signed up, and if they were stickier, and if they did more. So what could that be? What could the incremental margins be? I did analyze org charts. I would spend a lot more time on org charts and people and systems. We are in the midst of changing our billing system to Stripe, and we are super excited about it. And the opportunity set there is important. I remember every time someone had an SAP transition, like the stock blew up.

understanding the culture and the people and the systems and the total addressable market and their penetration and then all the second derivatives of that. And at any time, one metric can be a little wonky. The question is, what is your ultimate thesis and is that derailing of it? Nothing is straight up and to the right. Almost nothing. Maybe Open AI is right now. There is a lot of gyrations along the way to understand that those gyrations are part of business. We would go visit Kodak and ultimately under Kmart and lots of companies, they can go away. I live with that paranoia every day for 15 years. You can go away.

You can become totally irrelevant. What are you doing? What is your product roadmap? What is your innovation roadmap? When will you get there? What will the impact be? I think that's really important for clear. I look at subscribers.

an ARPU and say, where can we go? Those are things that I think I did at Ariens, but not with as long a term perspective as I think was required and to really map out the art of the possible and then probability weight the getting there. What can Amazon Prime be? What can the iPhone be in the ecosystem of the apps and then the economy that that's going to create? You can't just be like, yeah, they're creating an iPhone and they're going to set it 10 million or 10 billion. What can that be? And I think to really map that out and then the impact on the margins is game changing and allows a lot more patience. Does that boil down to imagination about market and belief in leader? Are those the two things that you would focus more on as a result of this experience? Yes. And again, I would focus

on free cash flow and optionality, which we did. And I think those two things create that free cash and optionality. Look at price line. They bought bookings and active. Those were transformative acquisitions. But you need the free cash flow or the balance sheet to be able to do those things. And you need the management who has that foresight. I also think you've got to be decently paranoid. I prefer management teams that are humble, nose to the grindstone. The answer to this will be a lesson for every business owner. What does optimizing for free cash flow feel like as a leader? I used to tell our management teams when I was an investor, like, you should just lever up and buy back stock.

I don't know why you're not more levered. The optimal capital structure is X. When you run the business and you're responsible for all the employees and you're wanting to invest in the business or leave cash on the balance sheet for potential MNA or whatever, levering up doesn't necessarily feel like the great thing. Free cash flow and the optionality it creates allows you to think more clearly. when COVID hit, that was a transformative time for Clear. We took $20 million, which at the time was our marketing budget to zero on February 26th or 25th. We took our salaries to zero and we created a leave of absent plan for our ambassadors so that when it really happened on March 12th, we were prepared and pivoted to creating health pass and connecting people to their test information and ultimately their vaccine information and connecting those data packets to professional sports leagues like the NHL so they could have the Stanley Cup, which they've never missed in all of their

history, or to open table and resi for dinner reservations. It allows you to be offensive, not defensive. And that is a massive mindset. I believe in the growth mindset. And so to be thinking offensively about what you're going to build or what you could buy, it's really freeing. I imagine being very levered could be constraining specifically in difficult times. Going back to You get tariffs, you've got pandemics, you've got financial markets. It's incredibly freeing. What are the sorts of things that you've done that have most positively impacted your free cash flow or your free cash flow margins? I think it's an output of the business, quite frankly. We run the business efficiently. It's a capital efficient business. We are really thoughtful on resources.

We continue to get better at that. How do you drive efficiency? How can AI impact member K? We have a little sign like AI to impact every work stream every day for everyone, whether it be legal or finance or HR recruiting or member care or scheduling or coding. It's always looking for efficiencies. And I was a girl who got all A's and a B in. My dad would say, would you get the B in? Every day, I do think we can do better. So how can we do better? How can we rethink that? How can we drive a better marketing campaign? It's everything, everywhere. A subscription-based business model with high incremental margins, generate strong free cash flow. And we've invested some of that back into our enterprise identity platform, which is a here and now opportunity to reduce fraud

and prevent insider risk and drive compliance and efficiency and automation on the enterprise side. It's awesome. What does Wall Street least understand about the business? Where do you get the least credit for in the price or something like that? I think we peaked at 155 million shares and we're at 133. and change. So we've bought back a lot of stock. All the stock that we went public with at 31, we bought back at a lower price, if you want to talk about arbitrage. I think there's a lot they don't understand. I don't think they understand the opportunity in the travel business. I think they think it's like a zero-sum game. We've long known that biometrics were going to go mainstream. That's been our view. There's a TSA report from 2018 on their biometric roadmap. We read it.

Understanding that we believe biometrics are going to be everywhere, the question is what kind of experience are you going to build around biometrics? Biometrics are a feature, not a product. The product is the experience. Biometrics going mainstream is like new news to people, not to us. I don't think that they believe necessarily in our enterprise identity business. And that's fine. I appreciate show me. When we were on the by side, we called that evidence-based investors. When you show them the evidence, they get excited. And so in the meantime, we buy back stock. We have a dividend and we just keep building. So in fairness, and I laugh a little bit in that I was on the by side and I think I haven't done a great job telling the story or on the IR side. And I think

we can do a better job of creating consistent metrics that we can be measured on. We have to execute and we have to do a better job of sharing good metrics that people can measure and value the business on. What is the bare case on biometrics, the extent to which there is one? I think there's quite a few, quite frankly. I think privacy and data security are a big one. You see some folks on Capitol Hill negative on the government doing it. I think there's certainly a concern about Big Brother. Estonia is a leading country on biometrics. India with Adhar, Brazil with voting, China. There's biometrics. But I think that that also has another side of it, which is concern about privacy, concern about big brother, concern about data security.

So I think that's a big one. And us being so transparent about privacy and data security and our ambassadors sharing the story, us having a privacy policy that is very transparent. You can control your own data. You can purge at any time has been really important. I think that's the biggest one, frankly, which is also why I like being a private company doing it. But from some countries and our history would say,

that it can go awry. What is the biggest thing in between us today and a future where my face just does everything for me, where I can pay with my face and I can opt into not taking stuff out of my pockets and just move through the world and get what I want with my face? I don't think a lot. Look at your iPhone or your Google phone, Samsung. First touch ID started, I think, in 15 or something of that nature. And then face ID.

I don't think there's a lot in between that. I think it makes perfect sense. I think you need trusted companies to do it. But I think the level of fraud has gotten so high, whether it be financial fraud, you look at peer to peer, who are you, who am I? You look at telehealth. Who are you? Who am I?

A document is not an identity. An ID is not an identity. You need total identity integrity. You need identity with depth. You need connecting you to all the things that make you you. As this anonymous online world rises, which creates all. all sorts of problems. I think as the world goes more digital, we just did this partnership with DocuSign. Of course, pushing enter is not a secure thing when you're wiring a million dollars or

getting a title or a deed. That doesn't make sense. Your face should be it. When it makes that much sense and when it's that feasible and when you're doing it in other areas, it's a here and now moment. And I think as long as it's opt in, if you want to do it, if you don't, do it the old fashioned way. And that's a choice. It's like my mom cash checks at the grocery store for a really long time. I still don't think she's used an ATM card. We're working on her. So I just think it's a moment. Used appropriately and in a trusted way, look at crypto.

How can you get locked out of your account if you can't remember your 12 divot hash? These things just don't make sense. And then you look at the workforce side of the house and people are coming in the front door with fake credentials or credentials that aren't there as real credentials because they got it from the call center. They did it through other scans. You've got to know who people are and what they should have. access to. And you need to make people's experience more frictionless in so many different ways.

I think the next five years will be transformative. I would love to talk about where the business can expand to physically next and is. So airports, I talked about the NBA Arena experience that I had more recently. What is currently happening and where will that proliferate in the coming couple of years? First of all, I think there's a lot more we can do in travel, going for an end-to-end experience what we call home to gate is the opportunity, whether it be a reserve parking spot or your Uber, whether it be the ambassador in our new concierge program taking you either to our automated lanes, which we're working on or ultimately to the gate. I know when I had three little kids and all the suitcases, all you want is somebody to help you. Putting together that journey

is still an opportunity in travel, creating off-site screening, privatized screening, lots of opportunities to transform travel. In stadiums and arenas, with the World Cup, in a year and with the Olympics coming two years after that, I think that there are some big opportunities to enhance the experience and enhance security in stadiums. We're partnered with the clippers where you can use your face for age verification to buy a beer. Steve Bomber did build the arena of the future,

and I think there's a lot to be learned from that. But why should you need anything when you go into a stadium? You're a guest and you should have a great guest experience. There's long lines to get a hot dog, long lines to get a beer. You pass your driver's license and your car. credit card down, that's super private, to have it come back. None of that makes sense. And so creating better and safer experiences in sports stadiums ahead of the World Cup, but certainly around the World Cup, we have this new capability to read your passport and the E-CHIP.

That's both real ID compliant, which is a little bit of a hubbub out there, both for domestic but for international fans as well. We want to be welcoming for all the fans who want to come and create safer and easier experiences. But then after that, I think health care, is an extraordinary opportunity, both for workforce and for patients, to create safer and easier, more compliant, more efficient experiences at check-in, at trying to recover your account and get the information on digital health records. I'd like to say in health care that it was professional, it became personal, and my husband was diagnosed with cancer. Trying to get his health records, you had to go to the fourth floor to get a CD-ROM at Memorial

Sloan Kettering, you then brought the CD-ROM back to your office so you could digitize it so that you could send those scans to other hospitals, whether it be Hopkins in Baltimore or in Israel or Japan or Italy. And it was so incredibly hard. I thought this is crazy. This is his data. This is our data. It was so hard to get on the portal. If I lost my password, it's maddening. It's insanity. And once you've seen it, you can't unsee it. So I think the opportunity to transform health care, employees, who it takes minutes to log on a system because there's different systems and they have to do it multiple times a day, those are times that they could be helping their patients. Not to mention you look at cyber attacks on health care data. There's so many ways to transform the workforce and the

patient experience. Medical bankruptcy is a big problem because you don't know what you have coverage for. You don't know what you're going to be out of pocket for. It's crazy. My husband passed away 20 months ago, I still get bills. Such a bad experience on so many fronts. And it's 20 months later. I know that our health care system needs extraordinary help to create safer and easier experiences and to connect it all. You think about telehealth. You think about rural areas. You think about, are you the doctor? Do you have those certifications? You think about temporary staffing. You just keep going for the opportunity set for a secure identity platform that is not a point solution but can be used in multiple ways in that industry.

It's an industry that operates on pretty slim margins. Clinical trials. I always said, I would love to put my husband's data up there and you find us versus I go find you. It is a maddening experience to go through NIH.gov, which has thousands of clinical trials to see which ones could apply to you, only to find out that he had a procedure or something then meant it couldn't apply to you.

the opportunity for transformation for better outcomes in a more cost-efficient way are here and now. Identity is foundational across so many industries. We want to make sure we're not boiling the ocean. So there's a few areas we're really focused on right now. But I think over time, they continue to expand. How were you able to lead through the experience with your husband and COVID? How did you do it? Sometimes I ask myself the same thing.

I have these blinders on and I'm very focused on what's in front of me. For COVID, you saw 9-11. People are like, well, how could that happen here? You saw the financial downturn of 2008. You see challenges every few years. Going back to embrace change, you saw the dot-com bus. Every few years, it's different. This is it.

What are you doing about it? I don't get wrapped up in the how could this be. It just is. shit happens in the world that you would not expect on the positive and the negative, I believe that it can and I believe that you need to be prepared. And I seem to do best under pressure and stress, which I should probably try to flip that. And so I am prepared for crisis. I guess also working in the stock market, crisis is all you know.

People, they're like, can you believe in the market's down? And I actually sent my son a few weeks ago, he's 17, a list of stocks that for the first I thought were interesting because I wanted to show him the buy, low, sell high. It was down during the tariffs and everyone's freaking out. It was like, this is the moment. And it happens all the time. They only are happy when the stock market goes up. That's not the rule. COVID, it was just head down and have your priorities, which is, first of all, lead from the front. Take your salary to zero. Put that money in a fund for the people. I think that sets a tone from the first day. We're going to make it through and we're here for you. We're also going to have to make some hard decisions.

communication key. My husband, that was a different kettle of fish. I'm the paranoid one who was like, is this lump? Do you think this is cancer? Do you think this cancer? And he was like, stop. And then it was, but it wasn't me. In the heat of the moment, it was fixing him. There's a 3% chance of survival with pancreatic cancer. So going back to blind optimism, why can't we be one of those 3%? We can be 49 and a half years old, incredibly healthy. So there's that. There's being there for your children, which is your job. Got to be there for them. This isn't about you. So I think I like helping other people, blinders on. This is the mission, and we're going to tackle it, and failure is not an option. We didn't win that one. And then it's, well, how are we going to make sure that other people

with the BRCA genetic mutation are aware of it? How are we going to honor Mark's spirit and his life? And how are we going to make a difference in the world? I send my kids off to school every day with the saying make the world a better place, I think that that's all of our jobs. And so really now fighting for genetic screening and really wanting everyone to be genetically screened. In Finland, they screen umbilical cord blood for 75 cents when a child is born and tell them their genetic situation when they're 21. That's smart. We should be doing that here. I'm very mission-oriented. I care about people deeply, the clear people, and especially my family, I feel like you have to be a difference maker and you got a lead from the front and you just do. Thanks for talking about it and

telling us about it. I'm fascinated to learn more about genetic screening and you mentioned before we started recording that there's this strange ignorance, bliss tendency that we have around our health. Maybe you can say just one degree more about what you've learned about that and how we might change it. I'm incredibly curious and I was not curious about the BRCA mutation. I didn't know much about it. Besides, I had heard about it from Angelina Jolie a while ago. My husband's brother was diagnosed with pancreatic cancer in April of 2021. And it was the first time we found out that he was Braca positive. So my husband was screened and I remember he peeked his head into the study in June of 2021 and said, I'm BRCA positive. And I was like, okay, we're going to deal with this. So we went and we had him

scan for skin cancer. And we had a cat scan to make sure that his organs to baseline it because he was 49 and a half. His brother was eight years older. It all came back good in July 2021. Turns out they missed it. And he was diagnosed in January 2020, a stage four pancreatic cancer that had metastasized to his liver. What we learned about the BRCA mutation at that point was that were Ashkenazi Jews, that 2.5 percent of Ashkenazi Jews are Broca positive. That is one out of 40 people. That was a shocking statistic to me. We had no idea. And to know that if you are genetically screened early, you can monitor it, you can be on top of it. There's all sorts of things you can do. It significantly raises a woman's chance of ovarian cancer and breast cancer, skin cancer,

pancreatic cancer, and for men, prostate cancer. Mark's dad had prostate cancer 17 years ago, maybe more than that, but nobody bothered to test him for BRCA. Our family is on on a real mission with our Warrior Mensch Foundation in honor of my husband and his legacy to get the word out on genetic screening. We bought 2,000 kits for our synagogue, thinking if we just give them to you, you'll go home. All you have to do is spit and send it in.

Easy. And so we bought 2,1,3,300 were picked up for the high holidays and the rabbi who was a dear friend of my husband's, my husband was chairman of our synagogue, spoke about it. We had little flyers on everybody's seat. I mean, what else are you doing on the high holidays? You could read it.

I mean, you can also, pray. 320 or so have been turned in. Only 25% of the tests that were taken have been turned in. Of those 320 and change, seven of them are positive, which means that two and a half percent is actually there. And of those seven that were turned in, then somebody had their sister tested and she was positive. Somebody had their kids tested and they were positive because you have a 50% chance of passing on the Brockham mutation if you have it. Right now, I think the count is 10 or 11 people who will be proactive in their health screening and can hopefully avoid cancer or get it really early, which is the name of the game. But for the thousand people who didn't turn it in, we made a video,

including my son. I thought, well, if they see an incredible kid without a dad, they'll be motivated. Her rabbi has spoken about it, but to think that a thousand people took it, $250,000 of capital that went into it, and that they don't want to know after that two and a half percent, that means that 25 people have it and haven't done anything about it. That's devastating. So really figuring out ways that people can save their children, save themselves, early intervention. Genetic screening is so important, not just for cancer, but for other things. I don't think ignorance is bliss. I think people think it can't happen to them. And I understand that feeling. I used to look at people who lost someone and be like, oh, that's so sad. They lost someone. And now my kids and I laugh, that's us. People look at us that way.

And we don't want to be victims. We want to be change makers. I have this question I did not expect to ask. What is the most powerful idea or ritual derived from your religious tradition and faith? Two things. It is the morning and night prayer that we do with our kids. Mark led the way on that the best way to sort of ground ourselves in the morning and to help go to bed in the evening. The other thing is Shabbat dinner, bringing people together on Fridays for, Shabbat. When I grew up, it wasn't that much fun. It was like the four of us at a table. But we have lots of people and lots of fun and flowing wine and we do high lows and act of kindness. So everyone goes around the table and talks about the best part of their week, the worst part of their week and something nice that they did. Some people call it happy crappy. That's been a great way to get our kids to talk, to share our own vulnerabilities with each other. When my husband died, our friends all created a sign up and everyone hosted at Shabbat. And it held my family up in a really hard time.

Incredibly beautiful and powerful. Hard to know where to go from there. I know. Back to biometrics? Back to buy. Back to free cash flow. EBITDA. What do you got?

Pro forma. You met the guy at that VC fund. Yeah. Maybe the right question is the power of relationships in leadership. One of the things about you that interests me most is this incredible energy. that you bring to the situations that you're in. You've now led this business for a long time. You've led a lot of people. You've led them through really hard times. You've led them through a lot of success. Maybe the fun way to ask it is what you respect most in other leaders. I'm sure you've also spent

time with so many of the great leaders. What do you most respect when you see leadership in others? I do love energy, positive, big, daring energy. I love leaders who are also can take that energy, stay quiet in a room, and empower others to speak. When you went to Amazon or when you went to Apple back then, there were other incredible leaders who would share their stories. Ron Johnson was running the stores at Apple. When he spoke, he was the man. You felt like, God, there's so many big brains around the table, the power of a team. I love sports. I used to want to be a sports reporter. I thought Brent Musburger was all that. My wife did too. That was her original ambition.

I went for the Michigan Daily, but I never quite got to football. I was more on the club soccer. in volleyball. The power of a team, the joy of winning as a team. I marvel when somebody screws up. I actually couldn't watch the end of the next game last night. And they just help each other up. They cheer each other on. I aspire to do that as a leader. They're tough and they're dedicated. They're creative. They're nonconformist. Those are the leaders that I like. And I think if you look at Breen and Jeff Boyd, Bob Milod and Jeff Bezos and Steve Jobs and a bunch of other leaders, They're all very different. I don't think there's a cookie cutter way to be a leader, but I think it's authenticity and humility and big thinking and discipline and the 5 a.m. thing.

And I love it all. And I love that each one is different in what makes them tick. As you think about the future and having to lead through maybe the biggest period of technological change that's ever happened, certainly that we've seen, how do you process that challenge? I know you're wired for this, that you love change and are going to be on your front foot. But when you're facing something this seismic with everything that's happening with AI and lots of other technologies too, in medicine and everywhere, how do you think about making sure that you benefit from it and don't get destroyed by it? That knowledge that you could be destroyed by it is really important because you've watched companies be destroyed by it. We used to say to Kodak, are you worried about digital? And they were like, oh, no. I was like, really? And that was a great company. They're logos everywhere.

And so to know that you could be destroyed by it, I think is really important to get real curious on it and continue to learn, trying to learn every day. Also to know that through these periods of change, there's a lot of noise in the world, there was in the internet. So keeping your feet on the ground, staying really smart and really curious and really paranoid, putting it to work quickly on some low hanging fruit where it can help you, being not afraid to test and learn and shut it down. and pivot, that is a whole orchestration as well. But also to understand for us that in a world of AI and synthetic identities, true identity is more important than ever. The fact that we have witnessed identities, we've seen people at the airport, we know that you're a real human actually creates a lot of power for clear. It's all of that. It's understanding the risks and the opportunities. It's putting it to work. It's testing. We have some really interesting meetings today.

bringing in lots of people to keep learning and staying ahead of it, but also to keep the noise in perspective. From a health care perspective, I think it is massive. I do think it changes radiology. I do think it changes clinical trials. I do think it changes drug delivery. I do hope it helps cure cancer in the next 10 years and makes a big difference in our society.

There's a good place for humans, but all humans should be using AI. I remember when I started on Wall Street, they didn't want to use email. We were still getting faxes because they were worried about security. You've got to be thoughtful to it all. I have a couple questions about company building, a retrospective on 15 years of doing this. What have you learned about hiring?

I'm not as good at it as I would like. I'll say more about that. I assume historically that everyone wants to win and that. It's wired like you. Of course. I have three kids and I show up at the field trip and I don't miss a soccer game at a birthday party, but I'm also sending emails at 2 a.m. So, of course, you can make it all happen.

you want to. You just want to run and you're curious and it's not just a job, it's a way of life. And I'm often disappointed and I go in with that bias. And I don't ask the right questions because I go in with this positive bias that you want to live it and you want to do it. And customer says jump and you say how high. And I'm not right. And that is consistently disappointing to me. And so I'm working on that. I do like Ace Greenberg at Bear Stearns. So poor, smart, hungry, whatever his saying. PSB or whatever. That's a, that's particularly rich.

Not an MBA, right. I'm attracted to people who have humble beginnings, who have overcome adversity, who don't fear failure, who want to be a team player, who are a straight shooter and non-bureaucratic. Clear's the biggest company I've ever worked at. Hiring those people, great success, but I need to work on my bias of everyone wants to do it my way. Also, I'm on the Home Depot board, and I have learned so much about growing people internally from Home Depot.

Incredible leaders, an incredible company. They grow people internally in the most magnificent way. They take talent development really seriously. And so I've learned a lot from that. We have great success stories of Clear at people who have been here eight and 10 years on a 15-year-old company started. In one place, I've had five different jobs and our significant leaders at Clear. And so I love those stories. But people are motivated by very different things.

And you have to understand their motivation and their incentives than where they fit in the organization. You don't want everyone like me conceptually. Do you have a theory as to why more people aren't wired in this way? I don't know how to describe it. This is not a drill type attitude towards life. Were you always like this? Was there like a moment or a precipitating thing? I know no other way.

My kids don't get it. happily, they're all sort of wired like me and Mark. Life is for the living. This is a great country. I have a lot of gratitude. I didn't start with much of anything. My first job, my salary was $24,000 a year. My sister was FedExing me cash because I didn't have enough to pay my bills.

So I don't know any other way. I used to watch the last lecture by Randy Pauch, and we talked about Tigger and Eeyore. And one of my anniversaries, my husband bought me a Tigger stuffed animal. energy, positivity, be ticker. Who wants to be around the wall? Life is full of challenges. Life is full of disappointments. I've experienced more than my fair share.

And I have gratitude and optimism. And I also think when you see the other side, this is it. So live your best life and make a difference for others and pay it forward. Be a change maker. I don't know any other way. And I don't understand others who don't. Nothing gets me more energized than someone who cares and loves the thing they're building so deeply, Jim Styson just was making the rounds on the internet for an eight-minute

keynote. He's 70-year, 80 years old or something about his hair dryer vacuum guy. And the guy loves his products more than a kid loves candy. There's something beautiful about the marketing advantage that comes just from the passion that oozes off these people creating these things. And I get that from you. That's part of the answer. It's just care deeply and love the thing that your building. What else have you learned about marketing? Since you're running a consumer subscription business, you have to reach a lot of people. What are the good and bad lessons that you've learned about what to do and not to do in marketing? I would say the same thing for genetic testing that your biggest competitor is inertia. Getting people to do anything. Again, the test was free.

All you have to do is spit. Not hard. Save your life. Save your kids life. Really freaking hard. inertia is really a tough thing to overcome. So trying to incent people to move and to do things takes a little bit of time. You got to cut through the noise. I do think having humans bring it to life like we did with our ambassadors. Word of mouth is powerful. But also, it's a fragile world we live in. So a fund manager used to say it's the staircase up and the elevator down. We've experienced that. Somebody tweets something negative. It's wonderful. person's opinion in a moment in time goes viral and that's the story. It's fragile. I could do a better job of sharing our story and telling our story and humanizing our story. I certainly think we have

opportunities on that. It is hard and it is fragile. I also think you live in a consumer world of what have you done for me lately. I used to say with Nike, they changed the game. Like there used to be one sneaker every, I don't know, year. And then they started speeding up innovation. And it was like, What's the new sneaker? Consumers want to be surprised and delighted. All the time. What have you done for me lately? And so living in that world, you have to be launching features and products.

You have to have an accelerated product roadmap. You have to talk about it. Uber and Airbnb have done a really good job of having two launch points a year to talk about their products and innovation. We just sort of put it out there. Somebody was saying the other day, the heavenly bed that I think the Weston did. They did some event in Times Square and it was a big deal. They said, we have better. beds and some of our of hotels, but we didn't tell anybody. You've got to capture people's attention

and you've got to surprise and delight them. And you also have to apologize when you do wrong and make it right. What have you learned about making high product philosophy possible in a business? That's a great question and something, quite frankly, we're in the midst of. We have a new chief product and experience officer who actually joined us. She was head of trust and safety at Airbnb. We are rolling on our product roadmap right now because we've changed the foundation of our technology and have the capability to launch more products in a more flexible and expedited way. We were stymied over the past few years on doing what we wanted to do, but we've also changed our internal foundation in order to do it more quickly.

What did Bill Miller teach you? To not be afraid to be contrarian to look to the future. His vision on companies like Amazon were really incredible. So he could see the future. He could talk about it. He could understand how that was going to play out in the financials. Again, going back to the qualitative and the quantitative. of little story, which is Bill bought the name Ariens from me for a dollar. After we closed it,

he loved it and he bought it. He named his boat it. So sometimes I think people see this beautiful yacht sailing around the Mediterranean and think it's mine because it's Aryan, which is fine. To not be afraid to buy low, to stay with your conviction and dollar costs average down, Bill's a philosophy major, as is my daughter. She's a history and philosophy major. He brings a lot of history and philosophy to investing. And I think it's both incredible. incredibly interesting and very relevant. Anything you've learned about investors that's interesting to you being a company rather than a colleague?

Sometimes I'm surprised at the lack of big picture questions. We're right here. The long term's made up of a bunch of near terms, but I feel like you would want to understand the long term to understand how the near term fits into it. There's a lack of questions on free cash flow and how we spend the free cash flow. I don't even know that one looks at the cash on the balance sheet. People tell me that I wouldn't understand how people invest today because there's all these pods and quants and that wasn't there when I left 15 years ago. So I was a value-oriented investor, which means different businesses have different return and growth characteristics and should be valued accordingly.

That's how I looked at it. So I thought Apple, when we bought it for $14, but I think $9 a share of cash on the balance sheet was a value stock. And the street thought they could earn 60 cents and I thought they could earn a dollar. And then from there, here's where we go. apparently that doesn't happen as much. But I still think that long-term value-oriented investing is the thing that yields the greatest fruit. I had the pleasure of sitting with Charlie Munger two years ago in his backyard mesmerizing. I believe that that is how you create long-term value. What most stood out from that day? What did he say that most sticks in the year? I mean,

probably the fact that he still lives in that house. And he was just in his backyard. His grandchild was in the house, the stories that he would tell, the crispness of his mind, his humor and his humility for someone with that kind of storied success, he signed his almanac. I think it was his humility and his curiosity. Like, tell me about your company. Tell me about what you think biometrics can do. What can the margins be? What's the total market? Could it go global? He was just grounded in basics and he was funny. I felt lucky. I guess I want to ask the same question. Two more questions for you. The first is, tell us about your company. Where could this go? If you really put your dreamer hat on, what happens in the next 10 years for and because of Clear? I think the world is safer and more frictionless for consumers and for enterprises. We should have triple digit members on the platform using it for various use cases that contextual identity is really powerful and identity with depth what we call totally.

identity, integrity is unlocking all sorts of experiences and that you could actually leave your home with nothing, not even a phone, and be able to really transact in the world. That makes companies more compliant. It makes costs more efficient. It drives automation. It reduces stress. It delights people. And everyone is more productive. I think so much of what we have in this world is because we don't trust each other. I think identity is about building trust physically. and digitally, both in the U.S. and outside the U.S. for Clear. What part of the next 10 years for you personally gets you the most excited? You're going to be leading from the front. Which aspect is the most energizing?

I would say, too, making Clear's vision a reality with awesome team members. We're spending a lot of time on enterprise leadership and one team, one dream, and that is very energizing, working with really smart, dedicated, motivated, high integrity, creative people who all come together with different skill sets. I think that's awesome. And then I get excited on the art of the possible with travel because I think travel is going to continue to boom and we are really going to start to unlock innovation to transform it. And on enterprise identity, I think the way you apply for a job and then onboard for a job and then reset your password and get onto your computer and transact is going to be transformed. And I think that that is a really important need in a world where cybersecurity

challenges have risen significantly. So I get excited about the people that I'm doing it with and the fact that then I can be open to doing other things. I don't have to be sending the emails and talking to the guy about his grandmother. I can do more. What is happening in the world in the next couple of years that most opens us up to innovation that entrepreneurs could take advantage of and make us better as a country. I think the World Cup is a real forcing function for our country and it's only one year away. It was in Doha last time, Middle East. I think the opportunity to bring it to the cities in the U.S., major cities in the U.S., L.A., New York, Atlanta, Miami is huge. That creates a real need in travel. It creates a real need in sports stadiums and ticketing to make

experience is safer and easier. I think we want to be a showcase for the world on what we can do, how we can entertain, how we can drive security for the World Cup. Then two years later, it's the Olympics in L.A., which just had these incredible fires. And so how we drive mobility and security and hospitality in L.A. for the Olympics, I do not think is any easy feat. I think it will require real leadership and innovation. And I think those are forcing functions. You need forcing functions to galvanized people say, we got to make it by this date, not to mention the 250th birthday of the United States, which comes at the same time. I think that we have not moved fast enough on innovation in this country. We need reasons and pushes to move faster to drive private sector

innovation and private sector capital. I think it aligns with the needs right now. And I think that those will really create opportunities for great companies. I think you're right. We're lucky to have people like you driving this innovation. I think that VC investor was right, or you were write what you told him, I should say. And I find you to be a total force of nature. And this is a total blast and a privilege. When I do this, I ask everyone the same traditional closing question. What is the kindest thing that anyone's ever done for you? Probably the letters that my husband left me with. Beautiful. Thank you so much for your time. Thank you. If you enjoyed this episode, visit join colossus.com where you'll find every episode of this

podcast complete with hand-edited transcripts. You can also subscribe to Colossus. Review, our quarterly print, digital, and private audio publication featuring in-depth profiles of the founders, investors, and companies that we admire most. Learn more at join colossus.com slash subscribe.