Prof G Markets: First Time Founders with Ed Elson — ft. Eli Wachs of Footprint

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

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 1:00Scott Galloway?

  This week's number, 322,000. 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.

• 1:28Scott Galloway?

  Welcome to Prop G Markets. Ed, what's going on today?

• 1:32Ed Elson?

  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 of 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.

• 2:14Scott Galloway?

  Okay.

• 2:17Ed Elson?

  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,

• 3:02Ed Elson?

  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.

• 3:21Speaker 05

  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. Honored and thrilled you had me on.

• 3:31Ed Elson?

  Absolutely. The dinner was sealed the deal for me. So let's just start with this. What does Footprint do?

• 3:39Speaker 05

  Footprint helps companies, we say 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. For people, we're the last identity form they ever fill out. As you said, it'd be really tedious and burdensome if every time you went to create an account, you had to fill in all 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.

• 4:10Ed Elson?

  How did you come up with this idea? What was the inspiration?

• 4:14Speaker 05

  I I became really interested in privacy back in twenty sixteen, around the twenty sixteen election Cambridge Analytica scandal. There is a lot of talk around what should privacy look like uh uh online.

• 4:26Ed Elson?

  Yeah.

• 4:26Speaker 05

  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 and regulate kind of data. Um, kind of, I think there are a lot of people who wanted the world to look like DuckDuckGo and look, it's a great platform, but to me, that is very powerful. Uh, there's a reason why why it exists. Uh, and I actually became more upset with maybe what Google didn't do with my data than what they did do with it. Google's probably one of the best predictors in the world of things like Parkinson's. Uh, they know it from your recapture tests or your finger tremors and your type rate over time. And around that time, I I had a family member get second luckily, got it early. Maybe I became very obsessed with this idea of figuring out how do we put people in control of their data? And and that's really what sent me on this on this path to footprint.

• 5:07Ed Elson?

  You mentioned DuckDuckGo. I'm not sure everyone knows what that. Can you explain what DuckDuckGo is?

• 5:13Speaker 05

  Yeah, it's a both a children's song, I believe.

• 5:18Speaker 05

  For for this purpose, I'm bad with analogy, so maybe it's not. Uh, I think it's something like Grandmother Rosie and then it's a it's a search engine which doesn't have any, pretty much, it doesn't collect any data. There there are no targeted advertisements.

• 5:29Ed Elson?

  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?

• 5:45Speaker 05

  KYC, it it strangely kind of stems from the Patriot Act in a way. Uh, so it comes from almost a national defense bill, or at least the definition that we use today of it. 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. The US wants to make sure that people who have access to banking rules 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 who are letting to use your platform?

• 6:21Ed Elson?

  Uh huh.

• 6:22Speaker 05

  I think we've seen his in the past, maybe ten to fifteen years, has there been companies that have really stepped up the solve K I C? We saw them really just be a checkbox.

• 6:31Ed Elson?

  Yeah.

• 6:32Speaker 05

  They confirm that the identity entered matches identity in a database. But 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 are real people? And it's not really solving the problem of are we trusting uh that my Uber driver?

• 6:52Ed Elson?

  Right.

• 6:52Speaker 05

  Uh, or or i i is a is a trustworthy person. All we've really confirmed is that the information they used to sign up matches information in the database.

• 6:59Ed Elson?

  Yeah.

• 7:00Speaker 05

  A a and that's kind of what we saw is really wrong, kind of. To me, it's strange that companies that were verifying people also weren't fraud detection companies. Uh, that seems disjointed to me. And that's what it's done, and it's led to what we say is we're looking for like bad actors. Uh, which is inherent, like know your customers, like a a Sherlock Holmes mystery to find the bad people.

• 7:20Ed Elson?

  Yeah.

• 7:20Speaker 05

  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 and what's cool about it is we're trying to make this closed loop ecosystem so that we know the moment a a second. Ed appears, one of you two has to be lying because only one of you can have that identity.

• 7:42Ed Elson?

  Yeah.

• 7:42Speaker 05

  And once you've established that source of truth, then you can do other things without needing to fully reprove that again.

• 7:48Ed Elson?

  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 wanna buy a car, if you wanna 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 wanna get a drink, you have to prove that you're a certain age. If you wanna buy a house, if you wanna 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, why isn't that a, why is that such a crucial part of the rest of society?

• 8:30Ed Elson?

  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.

• 8:37Speaker 05

  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 the happy scenario where, you know, you're, you're trying to rent a car for the summer or, or you're trying to buy a drink. There's also the scenario where I steal a car. And presumably if I did that, I wouldn't be allowed, it'd be tougher for me to, you know, step within a hundred feet of a Ford dealership. But, but the internet said there's, there, there are really no repercussions. I'd say fraud's close to free.

• 9:01Ed Elson?

  Right.

• 9:02Speaker 05

  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, we're known for, for bringing one click KYC, where 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 FIDO two, which comes from Web authen, with, which I'll getting too nerdy, is kind of this alliance of Google, Apple, even Microsoft.

• 9:48Speaker 05

  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 Web authen, Google implemented it back in 2008. And at the time, Google was struggling with phishing attacks. And since they implemented it, they, they had no internal phishing attacks. And why that's important is that, you know, when people used to ask me about maybe like, why aren't you doing footprint on blockchain?

• 10:14Ed Elson?

  Yeah.

• 10:14Speaker 05

  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, they have my identity. I think you actually do need a strong centralized arbiter here.

• 10:27Ed Elson?

  Right.

• 10:27Speaker 05

  But you need that strong re auth. And that's kind of what pass keys have unlocked for us in the past kind of seven months. And we do that in conjunction with some other things that, that enable us to, to kind of have that fidelity. Because like you said, it's strange that the internet's supposed to be about. Undoing monotonous tasks that we normally have to physically. But identity seems to be the opposite of that. Like, there are so many things we have to prove our identity for online that we don't even think about in person.

• 10:53Ed Elson?

  Yeah, so a few things. One, you talked about blockchain and it feels like the whole point of blockchain, 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, 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

• 11:35Ed Elson?

  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?

• 12:07Speaker 05

  It's a great question. So when you say customers, it could mean two people. It can mean like 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.

• 12:24Ed Elson?

  Yep.

• 12:25Speaker 05

  I say the company is built on trust. I publish my very long philosophical investor updates that nobody asked for. But I say, you know, if, 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 that 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 know, even you can log in and you can, 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 is like a, 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.

• 13:08Speaker 05

  And 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.

• 13:22Speaker 05

  I feel like back in the 2021, it'd be like, you have to say like the password to be like, oh, this person also doesn't believe in this. Now, now we can be more, more in public about it. Yeah, exactly. And I think like, at the end of the day, you had to understand that.

• 13:38Speaker 05

  If you're verifying someone's identity, regardless of you know it or not, Experian, LexisNexis and the Social Security Administration are probably involved. Yeah. And, and good luck convincing those folks to start Ethereum. Yeah. It's like from, from the start, like, it was like, there wasn't a, a, a change in my opinion. And, and I, I think the second is that you have to rerun the verification each time. So we even say, we don't make KYC portable, we, 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 two-fold. One is that we do things which become much more valuable than just a checkmark. We work with some companies where they maybe are, are feel like locked into like a payment processor.

• 14:20Speaker 05

  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 like the next step I'd go is, and this may be a fun line for a podcast, but I, I, I, I say, and I'd like to qualify this by saying, this is an anti-NRA line. This is, 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. Yep. And, and I, this is, that's not a long word, it's a word up the air. I, I don't like them, we need to ban them. But what I think's important is that it's kind of crazy that, you know, if you go and speak to Ramp or CapChase about the fraud.

• 15:04Speaker 05

  It, it's the vast majority is like.

• 15:08Speaker 05

  Fake three-person businesses, which means it's somebody who created a fake three-person business with the interest in your product.

• 15:14Ed Elson?

  Right.

• 15:14Speaker 05

  If you, there are fascinating stories about how hotels 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 in XA. What's more about Footprint is we link those accounts back to the identity.

• 15:47Ed Elson?

  We'll be right back.

• 15:56Scott Galloway?

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• 16:56Scott Galloway?

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• 18:12Ed Elson?

  Who are your clients? Like, what kind of company wants to use Footprint?

• 18:18Speaker 05

  Yes, I mean, it, 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. They're not, 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, you know, make sure 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.

• 19:02Speaker 05

  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. What's going on footprint is your footprint grows. So if you sign up for a footprint to say, hey, get a credit card, you probably entered, you're like, 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 submit that. Then let's say you're going to trade stocks. You need to answer like 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.

• 19:46Speaker 05

  Now, let's say you then go and create just like on a marketplace where they actually don't really care about the other things. They just need to 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 footprints 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 on footprint as our technology. We, 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. Uh, and that's how we think about it.

• 20:20Ed Elson?

  And how do you make money doing that? Who's paying you?

• 20:23Speaker 05

  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, we, we like to think that eventually we're moving KYC from like part of your customer acquisition to a very small tax of the LTV of the consumer net. We boost conversion a lot, both with trust by removing friction by increasing security.

• 20:49Ed Elson?

  And where in the business trajectory would you say you are right now? Like, 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?

• 21:00Speaker 05

  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 like our line of sight to our like first like million plus portable identities. And to me, that's always been a extremely arbitrary number I picked as like, let's see if we can get here. I, I, I think next is the goal of, you know, 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 of sight to 10 million portable identities, another arbitrary number. I'm plucking out of the sky. Um, to, to, to, to, to me, I've said, you know,

• 21:43Speaker 05

  Obviously, a lot of the appeal of footprint is this network effect. Yep. And I think people, starting from the beginning, how do you think about a cold start problem? My honest answer has been, I, I, I don't go to bed agonizing about a cold start problem. I, 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, for, for data operability? And, and that, 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, and, and do both of those best in class. And, and, 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.

• 22:24Speaker 05

  Being an onboarding platform for all of fintechs and connect, collect all of that in just five lines of code. And then for, for people, you know, I, 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, in, in the short term, we, 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, I jokingly call it the duel. I've said that, you know, we'll, we'll send everybody a jousting uniform and I'll get to prove that I'm the real Eli. Uh, but i- it's, you know, there, there is billions of identity theft a year. It, it often happens to the elderly. It often happens to more vulnerable. That number should start going down.

• 23:04Speaker 05

  Like, I really view it as a, 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. And to me, I, I don't really, I don't know another industry where their cardinal metric keeps going up and they view what they're doing as successful. And, and I say that I think it's an incentive issue. I think that KYC companies are, are fraud detection, not fraud prevention companies. Cause when they detect fraud, they sell you more products to find more fraud. Yeah. Footprint, by contrast, because we're doing the security too, we're, we're, we're, we're a data operability platform or an onboarding platform. We, we play with different incentives. And I think that's important because at the end of the day, we're serving people.

• 23:46Speaker 05

  And like, it's also to me by building that trust and by being open and transparent. This becomes a much more solvable numbers game. Like 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 like, who should be allowed to open accounts way. Uh, there's so many companies in the States that have done far more verifications now, but they don't know that because in a way they're not even incentivized to. Yeah, one thing that.

• 24:11Ed Elson?

  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, don't give your data over to big tech platforms. You don't, 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,

• 24:53Ed Elson?

  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?

• 25:10Speaker 05

  If Apple decides they want to do this and really invest, tough day for us at the office.

• 25:16Speaker 05

  I'm, I'm, 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, I wrote my whole senior thesis in history about like the history of Apple and private data.

• 25:30Ed Elson?

  Oh, wow.

• 25:31Speaker 05

  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? And I think like the common thought is like Facebook, everyone's like did the election stuff. Facebook does nothing. They, they know that, they know that I clicked on like one rogue ad.

• 25:47Ed Elson?

  Yep.

• 25:47Speaker 05

  Apple has my health data, they have my payment, uh, they have credit cards, but we trust them. And, and it's because they've really invested in that. And Apple, they just used the privacy as iPhone commercial as their legal defense against Epic and it worked. I mean, it, it worked. The Apple, Apple claimed that they need to charge people a 30% cut because that's privacy, that's iPhone. It, it, it's, it's remarkable.

• 26:14Ed Elson?

  Totally.

• 26:15Speaker 05

  Now, what I'll say is, I, I, In the spirit of transparency, I wrote a whole investor update called 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's many things. It is currently not an enterprise security company. And that's what the other part of this is. You know, it's not just the account creation. It's in, does Apple want to proxy data on behalf of a credit card company to Fiserv? They may be okay with that. Is it, does Apple want to proxy information on behalf of a broker 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

• 26:59Speaker 05

  having the option to go into a space and purposely not doing it so they can do the bigger space. Hundred percent. I think Apple cares a lot more about like Apple banking and like owning that than owning like the onboarding ramp to it. Yeah. Like it's similar to like, I think Apple cares more about like selling Apple devices to enterprises and owning mobile device management. So they can claim that they don't own everything that they touch. Yeah. And I think, then the other thing to keep in mind is Android still has 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. Yeah. And that's something that, you know, just will need to be solved anyway.

• 27:44Speaker 05

  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 drivers 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, let's call it app clips, is we can go out and fetch them. Yeah. 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. Yeah. 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.

• 28:25Speaker 05

  So it's, it gets into just waters that I think they prefer to stay out of. Yeah, exactly. It also feels like

• 28:33Ed Elson?

  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 it's sort of like you've found the right incentives there. At least I, from a consumer perspective, would, would rather be giving my data who's, to, 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?

• 29:15Ed Elson?

  And I want people who are considering becoming a founder to sort of understand what, what type of journey they're embarking on. So let's start with, you mentioned that you came up with a business plan in college and then two years later, you actually started a business. Why did you decide that you wanted to start a company in the first place?

• 29:37Speaker 05

  I did not always think I was going to start a company. I tell a very clean narrative of how I started a company, 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.

• 29:54Ed Elson?

  That's a great way to put it.

• 29:56Speaker 05

  And, and I think it's why, you know, when, when I see people and they say, I really want to start a company, I'm not sure if that's the, 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. I, I said it more so as like, if you're just doing it because it, it seems fun, like I, I think you're in for a bit of a surprise, like I will be when Apple releases its identity from. Um, I, I think that I was just interested in the space and, and kind of. I remember back my junior year of school, like I I got very interested in GDPR and like I signed up for like a very nerdy like law class about it.

• 30:39Ed Elson?

  Could you just allow, you just explain what GDPR is for the listeners?

• 30:42Speaker 05

  Yeah, this isn't making me seem fun. Uh, but yeah, GDPR, it it was passed in 2016 and it's Europe's uh, like data privacy laws essentially.

• 30:53Ed Elson?

  Exactly.

• 30:53Speaker 05

  And it was, if 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 it did some things right. I think it did a lot of things wrong. I then was working in VC and I saw all these, like, when I found like very checkboxy GDPR compliance companies, that kind of bothered me in that, like, their goal is to make money by locking away data. And like, they weren't solving anything too. Like, I I didn't think that, uh, like, if you want to lock my data, like, why, like, I I started selling a a spring called Tech Fights Dobbs after the Dobbs decision in the 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,

• 31:36Speaker 05

  great. But if you want to lock away like an SSN in a fintech app, like, that's hurting everybody.

• 31:40Ed Elson?

  Yeah.

• 31:41Speaker 05

  Uh, a- a- and so that's maybe answer two. And answer three is I have no idea what else I would be doing. Uh, and maybe that goes back to answer one, but I spent a lot of time with myself, with my friends, with my therapist, trying to discuss why, oh, oh, oh, why kind of I decided, I don't, I I don't know what else I'd be doing. Uh, it does, I I like the challenges it presents, and I never would have guessed half the stuff going into it.

• 32:04Ed Elson?

  Stay with us.

• 32:16Scott Galloway?

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• 33:01Scott Galloway?

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• 33:22Speaker 00

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• 33:31Speaker 01

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• 33:57Ed Elson?

  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 did that. You raised $6 million in a seed round from Box Group and Operator 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?

• 34:37Speaker 05

  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.

• 34:45Ed Elson?

  Right.

• 34:46Speaker 05

  Like I said, it's like, to me, like, if you start a company to try to work in climate change, you're like, the North Star metric should be like... Temperatures rise a lot. Now, what's interesting is there can be like financial company success before 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 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.

• 35:27Speaker 05

  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. 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 took a took a vote of 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 tell people that, you know, there's one day where I'll be happy enough and

• 36:11Speaker 05

  they're coming a bit 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 of everything else I 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 gonna do. And then we tell ourselves that we haven't done anything and we need to go to the next thing. And I think if this is the talk about founders and starting company, that's 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.

• 36:50Ed Elson?

  Yeah. You said you worked in VC for a couple of years before you started the company. How was that transition of being, I mean, my understanding, 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 fifteen human beings and their paychecks?

• 37:28Speaker 05

  Yeah, it's it's real. I'd be lying if I said I was great at it. One thing I regret is I didn't, I had one real boss at GA, who's Alex Christensen. 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.

• 37:46Ed Elson?

  Yeah.

• 37:46Speaker 05

  Because you're right, I could not have been lower on the pecking order. I tell a nice story in pitches. I went to GA, helped lead a lot of our work around security privacy identity. Now, let me say, that's obviously laughable, but it's also kind of true because Alex would hire people and then he would trust them.

• 38:01Ed Elson?

  Yeah.

• 38:02Speaker 05

  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 really passionate and possibly smart about these things. Why don't you go do it and tell me what you think'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 designed 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 know how 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 they did that weekend. It's something I tried to do and customize. And it's, it's small

• 38:46Speaker 05

  things, I think, along with just noticing that we're all humans. It's, I don't think that there is a Bible of management principles. I mean, there probably are and, you know, all three of them. I do think, someday, yeah. 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 ninth, I'll be like the only non-engineer at the company. Uh, a- a- and that means that my governor Alex, a lot of the management really falls on him.

• 39:19Ed Elson?

  Yeah.

• 39:19Speaker 05

  Uh, a- and like I, I, I say management for me maybe is, you know, speeches at, at Monday and Friday, like company all hands, or we call them all feet. Uh, a- a- and kind of, you know, catching up with people. I, I think it's like a good note though. If you're running a company like, yeah, I think that, and this is biased because I'm just projecting forward my own experience, but I think kind of a like, a, a non-technical founder, like it, you, you're, you will have more time to grow into that versus I, I, I, I think it's much tougher kind of for like a, a, uh, like the C T M, my, my governor Alex, like he had started a company. He then like was pretty senior at, 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.

• 40:04Ed Elson?

  And we got to 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?

• 40:15Speaker 05

  I'm not going to tell you to start it though.

• 40:18Ed Elson?

  Nice.

• 40:19Speaker 05

  I mean, I, I, I, 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, I think I'm in the minority. I think there's a lot of people who encourage, who say like lean startup, like just go and start and pivot.

• 40:37Ed Elson?

  Yeah.

• 40:38Speaker 05

  I'm not going to accuse some of being nefarious, but I do think there's a different financial incentive to getting like a lot of smart people to start companies and like one will, one will work out like.

• 40:46Ed Elson?

  Point.

• 40:47Speaker 05

  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 was 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.

• 41:16Ed Elson?

  Yeah.

• 41:16Speaker 05

  That said, like, if you want to do it, like, you should totally go for it. Like, if you have 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.

• 41:33Ed Elson?

  Yeah.

• 41:33Speaker 05

  And like, I truly mean it. Like, I think it's a, it's an incredibly rewarding and, and 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, I feel like there's often like presented like this rush of like to start something and an investor, a prospective employee, like you don't want indecision. At, at the same time, you have your most time before you've started it. Sure, somebody could build the idea, but like, everything looks competitive until you build the thing. Only more questions will be raised. So you think at the beginning, there are like three open questions, please answer all three, uh, because that list is only gonna grow.

• 42:13Ed Elson?

  That's awesome. Let's end it there. Eli is co-founder and CEO of Footprint, joining us from New York. Thank you, Eli.

• 42:21Speaker 05

  Thanks for having me, Ed.

• 42:27Ed Elson?

  Scott, what do you think?

• 42:28Scott Galloway?

  I think this is a tough one. I, I think it's an obvious point. I, I, there are a lot of companies in security, the, the only, and I would need more time with the company, but my sense is they're gonna 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 or, you know, 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 that 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. Cause 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.

• 43:12Scott Galloway?

  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 gonna have to raise a shit ton of capital. And if he gets to critical mass, my guess is one of the bigger players might buy him such that they don't have to ask consumers to do this twice. The other thing, this all just screams to me healthcare. And I know there's more regulation there, but it just, 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

• 43:57Scott Galloway?

  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, uh, any, anything else we should know? I'm on meth. I'm on meth. Uh, that's right. That's not funny. That's not funny. That's a, that's a very serious topic. Good. Um, but look, the idea, at some point, you'd think you'd be able to walk up and say, look here, approve biometric here, yes. And they scan your eyes. You know, it's doing a great job as TSA. I, I'm totally blown out. Again, I love the government.

• 44:40Scott Galloway?

  Global entry, I, 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, we know you, we have your medical records. Anyway, the, the pain point here is obvious. It strikes me that healthcare is the place to get out 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

• 45:22Scott Galloway?

  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. But. And also, I just want to add, the reason I'm out of venture capitalists is I hate everything. I hate everything. Every business that's pitched to me, I just like, I'm like, that'll never work. So take it with a grain of salt.

• 45:39Ed Elson?

  Don't you also think that this is kind of exactly the thing that you have been advocating for on the internet? Like, you know, when we talked about Twitter, verification on social media, like, 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, a big tech company? Or do you think they'd rather give it to a security company, which is what this company is?

• 46:14Scott Galloway?

  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.

• 46:37Ed Elson?

  Totally fine.

• 46:37Scott Galloway?

  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 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

• 47:22Scott Galloway?

  small company they've never heard of. And what happens when that company doesn't raise their C round and goes out of business and they have to sell the data?

• 47:31Scott Galloway?

  Who do they sell the data to? So Do you have any advice for Eli? Raise a shit ton of capital. Um, that's probably not that helpful. Go raise a shit ton of capital. That's not that actionable. I would say go, 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 be 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 made 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 50s and 60s and they would, the, the, 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.

• 48:16Scott Galloway?

  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 get, 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 mood, 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

• 48:59Scott Galloway?

  a convertible Cardobo with rich Corinthian leather. So it's, that was good. You're too young for that. You're too, Fernando Lamas, rich Corinthian leather. 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 if you don't

• 49:42Scott Galloway?

  check out, or at least I don't. It's like they 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 as to 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.

• 50:11Ed Elson?

  This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our executive producers are Jason Stavers 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.

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