The Prof G Pod with Scott Galloway - Prof G Markets: First Time Founders with Ed Elson — ft. Eli Wachs of Footprint

Episode Date: August 28, 2023

This week on Prof G Markets, we premier a new segment: Ed interviews founders to gain insight into the startup market and the experience of founding a company, then Scott then shares his thoughts on the given company’s business model and offers advice to the founder. First up in the hot seat: Eli Wachs, founder of data security company Footprint. Follow Eli on Twitter, @EliWachs. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. This week's number,22 000 that's how many hours e-commerce company shopify is attempting to save by rolling out a calendar on employee calendars that shows how much each meeting costs the company i have a corner office with a view i'm a bus driver Welcome to Prop G Markets. Ed, what's going on today? We've got something new for our listeners this week, Scott. We spend a lot of our time on this show discussing public companies, macro conditions, and other big ticket stories. But we wanted to gain more insight into early stage business and investment. So the team's been working on a pilot of a new concept called first time founders. I've spent the last couple months speaking with entrepreneurs about their

businesses and what it's like to found a company. And we've got the first of those interviews ready today with Eli Wax, the founder of Footprint, which helps people and companies store and manage personal data online. We're going to listen to this interview, and then we'll come back for your reaction, and perhaps you'll give us some advice for the founder. You have started nine businesses after all, so we're hoping to tap into that expertise. Okay.

Last year, we wrote a post on No Mercy, No Malice about identity, specifically online identity. Scott pointed out that the internet is one of the few places on earth where you can operate with complete anonymity. There are few social media platforms that require you to verify your identity. And on many platforms, you can simply pretend to be someone else. This is largely why bots and hate speech are such an issue online. Now, Scott's thesis was that this is a problem, but also a solvable problem. He believes we could fix the internet by requiring identity verification online.

And that's a statement many considered controversial, but also one that 80% of the US population supports. Regardless, if an internet company decided they did want to verify their customers, the question is, how would they do it? Well, I'm pleased to say today's guest is Eli Wax, whose company is answering exactly that question. Eli is the founder and CEO of Footprint, a digital identity and security tool that allows companies to onboard and verify their customers with just one click. Eli, thanks for coming on. Ed, thanks for having me. I was worried if I got dinner with you enough times,

you'd be scared to get to know me. But I'm honored and thrilled you had me on. Absolutely. The dinner was sealed the deal for me. So let's just start with this. What does Footprint do? Footprint helps companies, we say onboard onboard users and offload the cost and risk of storing that data what that also means is we're offloading them storing a lot of your personal information so that's what we do in a nutshell and for people where the last identity form they ever fill out um as you said it'd be really tedious and burdensome of every time you went to create an account you had to to fill along information, fill in your information. Given that, presumably, it shouldn't change.

And we feel the same way. And that's what we've tried to build over here at Footprint. How did you come up with this idea? What was the inspiration? I became really interested in privacy back in 2016, around the 2016 election, Cambridge Analytica scandal. There was a lot of talk around what should privacy look like uh online yeah and i actually disagreed with a lot of the the sentiment you know and there's a lot around how do we legislate away and regulate kind of data um kind of i think there are a lot of people who wanted the world to look like duck duck go and look it's a great platform but to me that is very powerful uh there's a reason why it exists. And I actually became more upset with maybe what Google

didn't do with my data than what they did do with it. Google is probably one of the best predictors in the world of things like Parkinson's, from your recapture test or your finger tremors and your type rate over time. And around that time, I had a family member get sick and luckily caught it early. I became very obsessed with this idea of figuring out how do we put people in control of their data? And that's really what sent me on this path to footprint. You mentioned DuckDuckGo. I'm not sure everyone knows what that is.

Can you explain what DuckDuckGo is? Yeah, it's both a children's song, I believe, and for this purpose, I'm bad with analogies, so maybe it's not. I think it's something like Ring Around the Rosie. And then it's a search engine, which doesn't have any, pretty much, it doesn't collect any data. There are no targeted advertisements.

Okay, so you talk a lot about this idea of KYC. That's a big mission statement for the company, which stands for Know Your Customer. Can you give us like the general picture on what KYC is and why it matters on the internet? KYC, it strangely kind of stems from the Patriot Act in a way. So it comes from almost a national defense bill, or at least the definition that we use today. KYC stands for know your customer. Essentially, it's this idea where if you are a fintech or if you're a bank, and if you're a fintech, you're probably using a bank..s wants to make sure that people who have access to banking rails and the ability to move money are quote-unquote good actors they're people who can be trusted they're people who

aren't going to be using it to launder money they're not on any sanctions lists and that's how it started and i think kind of a level down was it was seen as a way to kind of do we trust the people who are letting to use your platform i think we've seen his in the past maybe 10 to 15 years as there have been companies that have really stepped up to solve kse we saw them really just be a checkbox yeah they confirmed that the identity entered matches identity in a database that's not really solving the real issue um whether it's what you spoke about at the intro around are we trusting the people who are on twitter are are real people and it's not really solving the problem of

are we trusting uh that my uber driver right uh or is it is a trustworthy person all we've really confirmed is that the information they used to sign up matches information in the database yeah and that's kind of what we saw was really wrong. To me, it's strange that companies that were verifying people also weren't fraud detection companies. That seems disjointed to me. And that's what it's done, and it's led to what we say, this world looking for bad actors, which is inherent.

Know your customer. It's like a Sherlock Holmes mystery to find the bad people. The problem is that it's never ending. There's an infinite amount of fake identities to be made. Conversely, there's a finite amount of real people. Two of us are talking right now. We know how many people live in New York. We know how many people live in this country.

And what's cool about Fulbright is we're trying to make this closed loop ecosystem so that we know the moment a second ed appears, one of you two has to be lying because only one of you can have that identity. And once you've established that source of truth then you can do other things without needing to fully reprove that again yeah i mean when you look at the way that the entire world works it's like your identity is crucial for literally everything you do right it's like if you want to buy a car if you want to drive a car you got to register all of your information and they put it on a card and then you got to show them the card if you want to drive a car you gotta register all of your information and they put

it on a card and then you gotta show them the card if you want to get a drink you have to prove that you're a certain age if you want to buy a house if you want to open a bank account they have to do a credit check they have to learn about who you are why is it that when the internet was built that we decided that we don't care about that so much? Why is that such a crucial part of the rest of society? And then for whatever reason, on the internet, we don't like to think about identity. We don't want people to have to prove who they are. It's a really good question.

And I would even extend it a step further. In the real world, you kind of described more as a happy scenario where you're trying to rent a car for the summer or you're trying to buy a drink. There's also a scenario where I steal a car. And presumably or fraud's about 50 bucks that's how much it costs to get like a pack of fake identity trading cards on the dark web and that's the other thing i'd like to say that you know everybody's very naive and they just didn't think about this and the footprint team came to save the day i don't think that's true i i think people have thought about this i think that the technology hasn't really been there to be able to accommodate it. And that, you know, Footprint, we're known for bringing one-click KYC, or the ability to verify yourself once,

and then going forward, you just use Face ID on your phone. That's only possible, though, if you have secure auth. And pretty much the standards we tap into, it's FIDO2, which comes from WebAuthn, without getting too nerdy, it's kind of this alliance of Google, Apple, even Microsoft. And they finally agreed to this common standard, essentially of Q4 of last year. So it's not even that long that we've had it. What's interesting is the underlying protocol of WebAuthn, Google implemented it back in 2008.

And at the time, Google was struggling with phishing attacks. And since they implemented it, they had no internal phishing attacks. And why that's important is that when people used to ask me about maybe like, why aren't you doing footprint on blockchain? To me, it's like, well, I don't want to accidentally send my identity to the wrong person. And then it doesn't really do me good that I can see who I sent it to in the ether because they have my identity. I think you actually do need a strong centralized arbiter here, but you need that strong real. And that's kind of what past keys have unlocked for us in the past kind of seven months. And we do that in conjunction with some other things that enable us to kind of have that fidelity. Because like you said, it's strange

that the internet shows me about undoing monotonous tasks that we normally have to do but identity seems to be the opposite of that like there's so many things we have to prove our identity for online that we don't even think about in person yeah so a few things one you talked about blockchain and it feels like the whole point of blockchain one or one of the key, the central points of blockchain, was to remove the need for KYC, was to remove the need for basically having to trust someone, like you're describing in a transaction.

Oh, you won't need to trust them because it's verified and it's on the blockchain. Now, we've sort of seen this play out. That didn't really work. There's probably no industry more fraudulent than the crypto industry. But it still raises this question of, it's a shame and it's a pain and it's annoying that when you transact with someone on the internet, you have to somehow trust them. And it's easier when we transact in real life where, you know, you're face to face with someone, you look at the store owner, you pay them the cash,

or in any other transaction where there's maybe in banking where you feel like maybe there's some institutional credibility, you believe that the transaction is real. But you're basically saying to customers, at least, you can trust us. So my question would be, why should customers trust you? It's a great question. So when you say customers, it could mean two people. It can mean the businesses that we sell to, and it can be their end customers. I think that second question is one that we will never be able to fully be happy with. And that is something we have to prove every day. I say they come to us built on trust. I publish my very long philosophical investor updates that nobody asked for. But I say, if you're going to trust me with

your SSN, you deserve to get to know my rambling thoughts of love and light, the shadow self. You likely won't like what you find, but I think you deserve a chance. We publish our pricing. We publish pretty in-depth articles about our technology. I think it's something that we try to operate with transparency there. You can log in and it's not going to be that interesting, but you can see which company accessed your data for what reason. We actually find that companies like that more as they know everything they do will be recorded to an audit log and they like that both for accountability and for compliance reasons but i think that's one then on the other for why can companies trust us you know i guess going back to what you said to start there like i feel more comfortable ruffling the crypto feathers

now that like i feel like i don't have to be in like a hushed voice talking about it me too i feel like back into 2021 it'd be like you'd have to say like the password to be in like a hushed voice talking about it me too i feel like back into 2021 it'd be like you have to say like the password to be like oh this person also doesn't believe in doesn't uh now now we can be more more about it yeah exactly and i think like at the end of the day you had to understand that uh if you're verifying someone's identity regardless of you know it or not experian lexus nexus and the Social Security Administration are probably involved. And good luck convincing those folks to start going on Ethereum. From the start, there wasn't a change in my opinion.

And I think the second is that you have to rerun the verification each time. We even say we don't make KYC portable, we make PII portable. I think that's a very key distinction because we really view ourselves as a data operability platform. So why do companies trust us? I think it's twofold. One is that we do things which become much more valuable than just a checkmark. We work with some companies where they maybe feel like locked into a payment processor and they'll use footprint. We don't do KYC. We collect information. We give them a flow. They have more options of where they end up going.

I think that the next step I'd go is, and this may be a fun line for a podcast, but I say, and I'd like to qualify this by saying, this is an anti-NRA line. This is it. But I say that to steal a line that the NRA uses improperly, I'm about to use in context. Businesses and bank accounts don't commit fraud. People commit fraud. That's not a lot of what we want to hear. I don't like them. We need to ban them.

But what I think is important is that it's kind of crazy that if you go and speak to Ramp or Capchase about the fraud, the vast majority is fake three-person businesses, which means it's somebody who created a fake three-person business with the insurance community. and rental car companies, like oftentimes like do multi-month moratoriums of Chime cards because people will just create a Chime account. They'll rent the car with the deposit and they'll pull the money in advance. ACH fraud is a fascinatingly kind of easy thing to do because there's no repercussion. Your Chime bank account gets shut down.

Guess what? We're in the world of FinTech. You can create 20 more accounts the next day. What's more about footprint is we link those accounts back to the identity. We'll be right back. Hey, it's Scott Galloway. And on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you?

And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics,

how and when to use AI. A special series from Pivot sponsored by AWS, wherever you get your podcasts. Hello, I'm Esther Perel, psychotherapist and host of the podcast, Where Should We Begin, which delves into the multiple layers of relationships, mostly romantic. But in this special series, I focus on our relationships with our colleagues, Thank you. We begin sponsored by Klaviyo. Who are your clients? Like what kind of company wants to use Footprint? Yes, I mean, companies that we've spoken about today,

you spoke about renting a car. We work with a company that helps you lease cars. We work with companies that are investment companies, whether you're looking for real estate, whether you're looking for stocks, all the way through to marketplaces, which you may not even think about. Even though they're facilitating payments, they're more so verifying people to establish trust of the people inside their marketplace. Because as you said, we're transacting with people and now we're doing things like getting in their car, staying in their home.

And you probably want to make sure that there was a bit of a check done. You're going to be in for a surprise if you end up in my apartment. You're going to be sad that I wasn't vetted. And that's not just because of the construction going on above. And what's interesting is we scale up and scale down.

And that is a very light sentence. Let me maybe add something to it. When you scale up, your footprint grows. So if you sign up for a footprint to, say, get a credit card, you probably entered your name, your date of birth, your address, your social security number. Cool. Let's say you then go to rent a car. You're going to need to spend a driver's license.

When you go to do that, we're going to bypass collecting name, date of birth, address, social. We're going to go right to driver's license and you're going to spend that. Then let's say you're going to trade stocks. You need to answer your income, your risk appetite. You're going to answer just those questions. You don't have to answer any of those things ever again. Now, let's say you then go and create just something in a marketplace where they actually don't really care about the other things. They just need access to your name, your email, your date of birth. We can do that. You'll only grant access to those three things, but it's with that fidelity badge that Footprint's verified the rest. So that marketplace,

that social media company, they don't need to know that. They don't have access to it, but we've already linked that to a real person. And let's go off of our technology. We know how many identities are on your device. So if you try to sign up for a second with a second identity, that's a flag to us. And that's how we think about it. And how do you make money doing that? Who's paying you?

So companies pay us. If you're onboarding someone, you need to do KYC. So we get paid each time you verify someone. And then we get paid for storing the data. We're a security company. We offload that storage. We like to think that eventually we're moving KYC from part of your customer acquisition to very small tax of the LTV of the consumer net. We boost conversion a lot, both with trust, by removing friction, by increasing security. And where in the business trajectory would you say you are right now? How many employees do you have? How much do you think this thing can grow? Where do you hope to land in the next few years or so? We're a 15-person company today. We're about

16 months old. We've now been live for about four and a half months. We're growing pretty quickly, double-digit customers, revenues ramping up a good amount. We now have our line of sight to our first million plus portable identities. And to me, that's always been an extremely arbitrary number I picked as like, let's see if we can get here. I think next is the goal of, to me, if we're having this chat in, you know, double the company history, let's say we're, uh, you know, in another 18 months, I like, I want to have line assigned to 10 million portable identities, another arbitrary number. I'm plucking them to the sky. Um, to, to, to, to me, I've said, you know, obviously a lot of the appeal to footprint is this network effect.

And I think people said from the beginning, how do you think about a cold start problem? And my honest answer has been, I don't go to bed agonizing about a cold start problem. I go to bed thinking about, you know, how do we build the best onboarding experience? And how do we build the best security for data operability? And that's what our goal is. We want to be like a type form for onboarding and we want to be like a segment for your data and do both of those best in class. And if we can do that,

that's when I get very excited about, you know, being an identity layer to the internet for both businesses, what it means for them to be able to really trust the people they're letting in, be an onboarding platform for all of fintechs and connect, collect all of that in just five lines of code. And then for people, you know, I think that there's a lot of long-term stuff that I get really excited about from kind of

putting people in control of their identity. I think in the short term, we think footprint kind of at scale becomes like this built-in life lock as a service. And that we know when somebody is trying to take your identity. I jokingly call it the duel. I've said that we'll send everybody a jousting uniform and I'll get to prove that I'm the real Eli. But there's billions of identity theft a year. It often happens to the elderly.

It often happens to more vulnerable. That number should start going down. I really view it as a big failure that there are all these big companies in the space that have been operating for 10 years, and their revenue may be going up, but identity theft is also going up. Yeah, exactly. I don't know another industry where their cardinal metric keeps going up and they view what they're doing as successful. And I say that I think it's an incentive issue.

I think that KYC companies are fraud detection, not fraud prevention companies, because when they detect fraud, they sell you more products to find more fraud. Footprint, by contrast, because we're doing the security too, we're a data operability platform, we're an onboarding platform. We play with different incentives. And I think that's important because at the end of the day, we're serving people. And it's also to me, by building that trust and by being open and transparent,

this becomes a much more solvable numbers game. By the time we've done 300 million verifications, we should know who's who, not in a big state way, but just in a who should be allowed to open accounts way. There's so many companies in the United States that have done far more verifications than that, but they don't know that because in a way they're not even incentivized to.

Yeah. One thing that it makes me think about is, I mean, earlier you were mentioning the idea of face ID on our phones. And there's this big sentiment among people right now, which is, oh, don't give your data over to big tech platforms. You can't trust them. But then at the same time, we are literally using our biometric identity to open up our iPhones every day. And now we're putting our credit card information into our phones and we're uploading our wallet information.

We're using our phones as basically a tool to do everything. And the only reason that we can do that is because we have decided to trust Apple with our identity, which is a long way of saying, do you fear that Apple could eat your lunch here, basically? That they're just going to double down on storing everyone's data?

And if so, how do you overcome that? If Apple decides they want to do this and really invest, tough day for us at the office. I'm going to be honest about that. Apple are the most brilliant privacy copywriters in the world. And I mean that complimentary and begrudgingly. I wrote my whole senior thesis in history about like the history of Apple and private data. And I think what you said is really interesting, which is that if you were to walk up to someone on the street and say, who has more of your data,

Facebook or Apple, I think like the common thought is like Facebook. I don't want to say like did the election stuff. Facebook has nothing. They know that I clicked on one rogue ad. Yep, exactly. Apple has my health data. They have my payment. They have credit cards, but we trust them. And it's because they've really invested in that. I mean, Apple, they just used the privacy as

iPhone commercial as their legal offense against Epic. it worked i mean yeah it works the apple apple claim that they need to charge people a 30 cut because that's privacy that's iphone it it's it's remarkable what i'll say is i i in the spirit of transparency i wrote a whole investor update called uh about apple last fall and it's my whole argument laying out why they totally could do it, but also I don't think they will. And I think there are a couple of reasons. I think one is that Apple has many things. It is currently not an enterprise security company. And that's what the other part of this is. It's not just the account creation. It's then, does Apple want to proxy data on behalf of a credit card company to Fiserv? They may be okay with that. Does Apple want to proxy data on behalf of a credit card company to Fiserv?

They may be okay with that. Does Apple want to proxy information on behalf of a broker deal to IRS at the end of the year? It's stuff that they haven't done yet. More so, I think that Apple is really smart about having the option to go into a space and purposely not doing it so they can do the bigger space. I think Apple cares a lot more about Apple banking and owning that than owning the onboarding ramp to it. Yeah.

It's similar to, I think Apple cares more about selling Apple devices to enterprises and owning mobile device management so they can claim that they don't own everything that they touch. And I think, then the other thing to keep in mind is Android still is pretty decent market share. And globally, Android has far more market share. So if you're a company, then even if Apple really goes into this, you're going to need then a vendor for the non-iOS people. And that's something that just will need to be solved anyway.

And I think that's why Apple doesn't present the full solution. I think that they're going to become an increasingly important part of it that we're excited for. I think what Apple is doing with mobile driver's licenses is fantastic. It's going to be a huge milestone for the company. It's why, like, we from the beginning have really looked forward to and built what's called AppClips is we can go in and fetch them. So I think Apple is going to make the identity industry a lot better. If they decide

to crush us, that will not be a fun day in the office. But I think there are reasons that they're not going to, because the other thing is Apple as masters of PR, they don't want to onboard the wrong person or they don't want to block the right person so it's uh it gets into just waters that i think they prefer to stay out of yeah exactly it also feels like you know the incentives from the from the consumer perspective or do you want to give your data to the company that's trying to sell phones or do you want to give your data to the company who has a financial incentive to protect your data and And it's sort of like, you've found the right incentives there. At least I, from a consumer perspective, would rather be giving my data

to a company whose incentives are aligned. But company aside, I want to move on to just you as a person and as a founder. And that's sort of what this podcast is ultimately getting at, which is what is it like to be a founder? And I want people who are considering becoming a founder to sort of understand what type of journey they're embarking on. So let's start with, you mentioned that you came up with the business plan in college and then two years later, you actually started the business. Why did

you decide that you wanted to start a company in the first place? I did not always think I was going to start a company. I tell a very clean narrative of how I started to read a book in ninth grade. And then I cold emailed the author and I started a company and then I went to Stanford and I started a company there. And the dots are really clean in hindsight. They were not clean in real time. It's a great way to put it. And I think it's why, you know, when, when I speak with people and they say, I really want to start a company. I'm not sure if that's the right mindset in that it's tough. And like, I think that's good.

I don't say that as a pity thing. I do believe in life that we mostly are what we want and like we choose what we want. And, uh, I said it more so as like, if you're just doing it, cause it seems fun. Like I, I, I think you're in for a bit of a surprise. Like I will be when Apple releases. Um, I think that I was just interested in the space and kind of I remember

back my junior year of school like I got very interested in GDPR and like I signed up for like a very nerdy like law class about it could you just explain what GDPR is for the listeners? Yeah this isn't making me seem fun but yeah GDPR it was passed in 2016

and it's europe's uh like data privacy laws essentially and it was if you're mad about cookie consent banners or if you're happy about them uh shout out gdpr it's interesting it's like gdpr is semi uh i think did some things right i think you did a lot of things wrong i then was working in vc and i saw all these like what i found like very checkboxy gdpr compliance companies that kind of bothered me and that like their goal is to make money by locking away data and like they weren't solving anything too like i didn't think that uh like if you want to lock my data like what i like i started selling a spring called tech fights dobs after the dobs decision us and it was to like help women like who like want want to sign up for like female health apps not have to like give away their data like if you want to

lock away that data great yeah if you want to lock away like an ssn in a fintech app like that's hurting everybody yeah uh and so that's maybe answer two and answer three is i have no idea what else i would be doing. And maybe that goes back to answer one. But I spend a lot of time with myself, with my friends, with my therapist trying to discuss why kind of I decided to put up. And I don't know what else I'd be doing. It does. I like the challenges it presents. And I never would have guessed half the stuff going into it.

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Need to hire? You need Indeed. Support for this podcast comes from Klaviyo. You know that feeling when your favorite brand really gets you. Deliver that feeling to your customers every time. Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond. Make every moment count with Klaviyo. Learn more at klaviyo.com slash BFCM. What does success look like to you?

This is something I've been talking to people about. And in a lot of my conversations with founders, first success to them is the idea of raising institutional VC money. And, you know, you did that. You raised $6 million in a seed round from Box Group and Off-Rate to Partners and all these other investors. And then suddenly, the success goal changes. And one founder I spoke to recently said, success is an IPO, just flat out.

What would make you happy? What do you consider to be success at Footprint? It's a great question i'll first default to the answer i said earlier which is like if we if footprint's successful identity types should go down right uh like i said it's like to me like this is the if you start a company to try to work on climate change you're like the north star metric should be like temperatures rise less now what's interesting is uh there can be like financial company success before yeah i want to start at the end like

that and like personally like my goal footprint is like to do things that we've spoken about i'd love it like footprint through the data we have somehow can can try to democratize things like uh detecting disease or it can help women operate more safely despite new rules. Those are things that I'm very passionate about. I think personal success and company success, I try to be very vulnerable about like, like founder mental health or things like that. And I won't lie. It's,

it's a tough paradox. I have a good friend who I was speaking about recently about the idea of how much of your self-worth is tied into the success of the company. And my honest answer is a good amount. I do think it's just the thing you spend so much time on that a lot of your worth is tied to it yep i think you also i care really deeply about everyone who works here who took a chance to work on us and like footprint failing whatever that means is no longer failing me it's failing to people who who took a took a vote of confidence in me and what we're doing here so going back to like what success means it's a great question and i have no answer to it i i tell people that you know there's one day where i'll be happy enough

and they come to me big enough that like i'll i'll take time off and like i'll walk away and like i could do everything some lying piece of everything else I'd say. That may be true. I think that it is something that we keep changing the line of. It's something I kind of accept that. I think I was catching up with a good friend of mine and I said, I think entrepreneurs

are some of the most self-confident people in the world and the ones with the least amount of self-love because we do the crazy thing we said we were going to do. And then we tell ourselves that we haven't done anything and we need to go do the next thing. And I think if this is a talk about founders and starting a company, that is, I think, where you end up. And I don't say that in glorifying it. I say that just being honest about how I often think about things. Yeah. You said you worked in VC for a couple years before you started the company.

How was that transition of being, I mean, my understanding is you worked at General Atlantic, large investment firm, you know, I assume you were sort of low in the pecking order and just reporting to a lot of other people. And at least when you're an employee at that level, you don't have that much responsibility for other people. How was the transition of suddenly being responsible for multiple people, now 15 human beings and their paychecks? Yeah, it's true. I'd be lying if I said I was great at it. One thing I got is I had one real boss at GA. It was Alex Christos i i i really love

him dearly we still text a lot and he really taught me a lot about like people management and how he treated me yeah because you're right i could not have been lower on the packing uh i i tell i tell a nice story in pitches i went to ga i helped lead a lot of our work around security privacy identity now let me say that that's obviously laughable but it's also kind of true because alex would hire people and then he would trust them yeah and it was to me it's the only experience i knew where like alex hired me and he's like you're you're you're really passionate and possibly smart about these things why don't you go do it and tell me you think it's interesting and that's one thing that we brought here, which is bring on people and be like, Pedro, you're the best designer I've ever seen.

You design the homepage as you think, and then we'll talk about it. And that's one thing that I don't, it's feedback we always get in the positive column, which is like, you give us a lot of autonomy. Part of that's me not being smart enough to have an opinion on other things. That is one thing.

Alex would do even smaller things where he would send people texts on fridays thanking them for the work that is that we can it's something i try to do and uh customize and it's it's small things i think a long way of just noticing that we're all humans it's i don't think that there is a a bible of management principles i mean there probably are and you know i'll read them i do think someday yeah i i do think a lot of it though is just treating people with respect and treating them as humans the other thing i'll say is footprint up until july 9th i'll be like the only uh non-engineer at the company uh and that means that my governor alex a lot of the management really falls on him yeah uh and like i i i say management for me maybe is you know speeches at monday and friday like company all hands where we call them all feet uh and kind of you know catching up with people i think it's

like a good note though if you're planning on starting a company like i think that and this is biased because i'm just projecting for my own experience but i think kind of a like a non-technical founder like it you're you will have more time to grow into that versus i i i think it's much tougher kind of for like a uh like the ctm my co-founder alex like he had started the company he then like was pretty senior at another company like he had managed people before and he does a really good job of it and i'm very i i benefit tremendously from it and we gotta wrap up so i'll just end on this what would your advice be to someone who is thinking about starting a company is about to but isn't sure of themselves? I'm not going to tell you to start it though. Nice. I would say if it's just, I'm going to start this and I'm going to recruit a co-founder and we're going to figure out an idea and we're going to raise money. Okay. It's just, there's a lot more things that you have to do. That doesn't mean, I think I'm in the minority. I think there's

a lot of people who encourage, who say like lean started startup like just go and start and pivot yeah i'm not going to accuse them of being nefarious but i do think there's a different financial incentive to getting like a lot of smart people to start companies like one will one will work out like a point i think i know more stories of people being told to start companies and leaving jobs where they were happy and they were doing a great job and then company not going well company they left being worse off for them leaving investor being worse off because that was money that they wrote i think there's a period where like you would just be like you know what i'm gonna do it and you'd walk around like south park and sf with like a like you know like a docu sign for like a seed round and like you'd get signed like two years ago like i think it's good

that it's tougher now yeah that said like if you want to do it like you should totally go for it like if you've high conviction if you've been spending a lot of time in a space um if you didn't just like go on gpt two weeks ago and decide to build an ai company like i support you and like that's great and like um get ready for a ride of a lifetime and like i truly mean it like i think it's a it's an incredibly rewarding and experience but i think if it's a, it's an incredibly rewarding experience, but I think if it's, I'm on the fence, there may be reasons for that. And like, that doesn't mean you won't get there, but there's no rush. What I would say is like, I feel like there's often like presented as like this rush of like to start something and

an investor, a prospective employee, like you don't want indecision at the same time, you have your most time before you've started it. Sure, somebody could build the idea, but everything looks competitive until you build the thing. Only more questions will be raised. So if you think at the beginning there are three open questions, please answer all three, because that list is only going to grow. That's awesome. Let's end it there. Eli is co-founder and CEO of Footprint,

joining us from New York. Thank you, Eli. Thanks for having me, Ed. Scott, what do you think? I think this is a tough one. I think it's an obvious point. There are a lot of companies in security. The only, and I would need more time with the company,

but my sense is they're going to need to raise a lot of capital and try and sign up and create such a, not only not charge the consumer, but maybe even give them some sort of financial compensation to get, to acquire as many consumers as possible. And then basically buy business on the enterprise side. I mean, they're creating a marketplace for security, right? And the only way this marketplace works is if they have enough liquidity of people who sign up for it and enough companies using it such that there's value to the consumer because, oh, I go to Hertz and I can just use my footprint to expedite the checkout process until there's enough places to accept it. I mean, Apple Pay didn't work for a bunch of years, but they spent

so much money to get acceptance. They basically, my guess is, kind of bribed the enterprise and said, we'll take the lowest fees or whatever on it. He's going to have to raise a shit ton of capital. And if he gets to critical mass, my but just pulse marketing or sample size of one. Every time I walk into a doctor's office, other than having a strange man, you know, I don't know, stick a glove finger up my ass, which I actually like. I actually like. But other than that, the thing I hate the most is them handing me a fucking clipboard and say, fill out this paperwork you've filled out 300 times. And I mean, I don't even feel, I just lie. I've even started like, I'll even put down, I've had seven heart attacks in the last 24 hours just to see if they read it. And that's good. That's good. Or like anything else we should know. I'm on meth. I'm on meth. That's right. That's not funny. That's TSA. I'm totally blown. Again, I love big government, global entry. I don't even put in my passport and they yell Galloway.

And because they've used some sort of facial recognition, they bomb me out. So why can't they have that same sort of facial recognition in the doctor's office where they go, okay, this is, come on in. We know you, we have your medical records. Anyway, the pain point here is obvious. It strikes me that healthcare is the place you could have the most value. And it seems to me like this is a capital play. They've got to raise just a shit ton of capital to create liquidity, to basically buy the business for a few years and create liquidity on the consumer end and on the enterprise end. And the prize is big here if they can get

enough people signed up such that Apple, Amazon, or Cigna or some hospital network decides they have to get into the space. They basically just acquire this company for the consumer set and they might pay a big fee for it. And also, I just want to add, the reason I'm not a venture capitalist is I hate everything. I hate everything. Every business that's pitched to me, I'm like, that'll never work. So take it with a grain of salt. Don't you also think that this is kind of exactly the thing that you have been advocating for on the internet? When we talked about Twitter verification on social media, this is exactly it. And you mentioned the idea of you love big government. Well, most of America doesn't love

big government. And the question is, which entity are the American people going to be down to give over their sensitive personal information to? Do you think that they would rather give it to the government? Do you think they'd rather give it to Apple or a big tech company? Or do you think they'd rather give it to a security company, which is what this company is?

Consumers talk a big game about privacy. The CDC knows your HIV status. Google knows everything. Google knows everything about you. We've decided that Google can be trusted to the extent that, I mean, literally, imagine this hack. Your name, your picture above every Google search chronologically. Imagine that data being released.

Everything. Totally fine. You that data being released. Everything. Totally fine. You're fine with that. Well, the thing is, if everyone was released at the same time, it wouldn't be a problem because everyone has their freak flag. But the discussion around privacy is just such a false flag because consumers every day, especially younger consumers, spend so much time forking over everything about them. The question is, are you making the requisite investments to secure that privacy? With Meta, you know they're not. With Twitter, you know they're not. I would argue big tech,

government number one. I do think people do trust the government mostly around technology and privacy. And they mostly, if you look at their behavior, they mostly trust trust big tech so i don't know if in where the rubber meets the road if people are screaming out for a different privacy solution from a small company they've never heard of and what happens when that company doesn't raise their c round it goes out of business and they have to sell the data who do they sell the data to so do you have any advice for eli raise a shit ton of capital. That's probably not that helpful. Go raise a shit ton of capital. That's not that actionable.

I would say go really niche. Find an area where privacy, where the pain is really large for consumers or the company spends too much time. For example, in the rental car business, that seems to me really interesting because I've been molesting the earth for the last 30 years, basically renting my brain to rich white guys. That's what I've been doing. That's how I've met a living. The CEO and the CMO in the nineties and the aughts, I was running strategy firms and consulting firms. And the CEO and the CMO was, I was a white guy in his fifties and sixties. And they would, one of the many fucked up things about being in the services industry is when

you're the servicer, you get to fly to wherever they live. And so when the CMOs of Samsung and Audi would say, and this happened to me in the same week, we'd love to speak to you, I would have to be in Ingolstadt and Seoul in the same 48-hour period. So I've been traveling a shit ton. I always rent cars, or I used to always rent cars. And one of the big innovations was Hertz had this gold thing where you see your name. Remember, I don't know if you've done this at Hertz. You see your name on a board and it says Galloway F3. And you go to the parking spot F3 and the key's in the car. And I end up with some like white rabbit that infuriates me that looks like something out of the worst movie, like the lamest guy in the world.

And I have to go back to the counter and say, do you know who I am? I'm a baller looking for a random sexual encounter. Give me something a little cooler here. Give me like a convertible Cordoba with rich Corinthian leather. So it's, that was good. You're too young for that. You're too, Fernando Llamas, rich Corinthian leather.

It's right over my head. It was so ridiculous. So ridiculous. Anyways, another big innovation. I cannot for the life of me figure out why I ever need to check into a hotel room. Why do I need to check in? I'm going to LA with my boys. I'm going to stay at my favorite hotel, the Beverly Hills Hotel. Why do I need to check in? Why don't they send me a QR code on my phone saying, here's the room you're in. I'll get an

adjoining room for my boys. Here's the QR code. Here's the room number. Knock yourself out. Call us if you need anything. And because they did away with the checkout, now you just leave. You don't check out. Or at least I don't. It's like I have my credit card. They'll figure out a way to charge me for the three ginger ales I had at 3 a.m. thinking that would help with my hangover.

So I think there's a ton of innovation waiting to happen with shared information or what have you. Long way away, so going niche. I don't know if it's rental car companies, the specific crowds out the general. I'd find a very specific industry and try and own this type of application in one very narrow part of the economy and then grow out from there.

This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our executive producers are Jason Stavis and Catherine Dillon. Mia Silverio is our research lead and Drew Burrows is our technical director. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Wednesday for office hours and we'll be back with a fresh take on markets every Monday. Lifetimes You held me In kind reunion

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