In part two of this edition of UpTech Report, John takes us through the initial inspiration behind Vouched, and he shares his thoughts on the importance of holding off on outside funding and why it’s key to let yourself fail.
More information: https://vouched.id/
John Baird is the co-founder and CEO of Vouched. Vouched is a patent pending AI focused on Identity Proofing & Verification. Vouched is founded and developed to help you detect fraud in real time with unprecedented simplicity, trust & safety, providing easy, developer-first API’s.
Prior to Vouched, John was Director of Brand Strategy at Blue Nile an online retailer of high quality jewelry. While at Blue Nile John identified the need for a fast and easy way to verify a persons identity when making large transactions online. Vouched has always aimed to improve the experience of companies and customers needing identity proofing & verification.”
TRANSCRIPT
DISCLAIMER: Below is an AI generated transcript. There could be a few typos but it should be at least 90% accurate. Watch video or listen to the podcast for the full experience!
John Baird 0:00
You have you have hypotheses. You have theories, right? Of is this going to work? Or how is it going to work? But you’re probably only 10% Right? And 10% probably pretty darn good.
Alexander Ferguson 0:22
I’m excited to continue our conversation here with John Baird from Seattle, Washington, CEO of Vouched. Again, Vouched is a patent pending AI platform focused on identity proofing and verification. In our first part, John, we were talking about, asked what would you wish you knew two, three years ago? Before you started vouched? And it was interesting to hear your perspective, I’d love to dive a little bit deeper of, okay, you got to move fast. But how do you do it effectively? How do you grow effectively? And keep that rate of speed going?
John Baird 0:54
Yeah. I mean, I know I touched on this previously, but I cannot emphasize enough the importance of failing fast, right? The I fundamentally believe that there is an inverse correlation between depth of planning, right, and your ability to plan quickly implement, test fail and learn, right? And what I see where I see companies just really get stuck is they spend so much time on the planning, right? They have these perfect plants, perfect plans. They spend months on it. And there’s so many examples of this, right? Like I am by no means the first person to say this. And then they go to market with it, only to discover nobody wants that. Right. And now you’ve spent months a year, millions of dollars potentially, only to discover, yeah, there’s no demand there. Or you made your website pink, and you made all the buttons green. And it turns out, right, that everybody wanted a green background and pink buttons, right. And so I think it’s so important to ingrain in your culture, a safety, right, it is okay to fail, we are giving you permission to fail, right? And you actually want to reward your employees for doing this. As long as there’s intentionality around it, right? Like what comes out of that failure? Is this great is a is a learning that makes you fundamentally better. Right? If you made the to go back to my example, you know, if you made the website pink and the buttons green, and it’s actually supposed to be the opposite, you better learn it’s supposed to be the opposite, right? Like failure is not the end. It is the beginning
Alexander Ferguson 2:54
of a process. It sounds like it’s it’s not something you say, Okay, we got the plan. It’s executed, we’re done. But that knowledge that you have to just keep failing, failing fast. Yeah. Your your story, I’d love to hear more. Go back to the beginning of the end before. How did you get to where you are today?
John Baird 3:10
Yeah, the beginning. How long do we have? I was very fortunate to work with some really great companies, both as clients and in house. Early on, I work with Amazon, an amazing client just late and talk about a company that you know, can really move, fail and learn quickly. Jeff Bezos always says it’s always day one, right? They they almost 30 years on now, they still act like a young startup. So that was an amazing experience. Then I was fortunate enough to get recruited to come in house at a company called Blue Nile that sold jewelry, it still sells jewelry on mine, we grew that company very quickly IP owed successfully. It was just an amazing company to learn that because super detailed, and one of the key pieces that would eventually lead to vouch at Blue Nile was we were selling very expensive fine jewelry online, even 15 to 20 years ago, every day, we’d have multiple purchases of 30 to $80,000. So you can imagine we spent a lot of time studying for fraud, right? Is that a real person? On the other end, the challenge was with this, that there weren’t great systems in place at the time to be able to automatically review that end user. So we had a lot of manual processes that would create friction, right in the conversion and process I
Alexander Ferguson 4:38
can lay the seed for you to be thinking about change,
John Baird 4:42
and customers would get frustrated, right? And you don’t you want to remove all the friction, all the barriers, right to enable that customer to purchase and just have a great easy experience. And so thought a lot about that the friction that created the annoyances to the customer, then fast forward if you For years, I was fortunate enough to do a tremendous amount of work with autonomous autonomous cars. And the combination of these two things, there was a third thing that had happened, where I was becoming extremely frustrated by technology, starting and stopping at the edges of the screen. Right? I was like, we need to go beyond the screen, right? And so when I really started thinking about autonomous cars, self driving, cars, their ability to see, I was like, oh, okay, this is a massive and fundamental shift in how we work with technology, and its ability to really change the world. Right? And so it was at that moment, I didn’t wasn’t really thinking about identity verification yet. But what I was thinking was, this is key if we can enable technology to see and cite, of course, is we is our most powerful sense, right? We use it for the vast majority of our decision making, what clothes you’re gonna wear, what clothes you’re going to buy, who you’re going to date, what are you going to eat? on down the line? Who is that person? Right, standing across the room? Do I know them? Can I identify them? That got super exciting to me. And we really dug in to artificial intelligence and computer vision. And the end result of that was vouchers. And as we talked about earlier, you know, being able to verify someone’s identity can fundamentally change the world, because it gives them access to those things that, like banking, that fundamentally make your life better
Alexander Ferguson 6:37
people need Yeah, what year did you begin that initial research and development of algae?
John Baird 6:44
Yeah, we started actually in the spring of 2016. So we spent a couple years just doing r&d, the biggest challenge of vouch essentially the biggest but one of the biggest right, is voucerhs, to react to real world conditions as to be able to see like you and I in real world conditions. And so if you think about traditional software, right, you have your all the variables are the vast majority of the variables are removed, every time you put two plus two into your calculator, you’re always going to get four, right? Because it’s very well defined. Well, for vouched, you have to think about things like, what’s the lighting, where I am versus the lighting where you are, right? So those are things about has to contend with things like glare, things like the sophistication of the camera on my device, versus someone else’s device, distance to the ID, right? So these are all the things that you are working with. And that’s just on the visual, the ability to see the ID and see the ID accurately. Right. So that’s number one. Number two, the ability to understand and differentiate between all these IDs, and variations of an ID, right number two, number three vouched also has to be able to understand visual fraud. Right? So it’s a big, it is a massive, massive undertaking level. Yeah, exactly. So we’ve spent a couple years just in r&d, before we really started testing about with our first customer,
Alexander Ferguson 8:25
obviously, to be able to take on this endeavor of going through all those multiple levels of variables, building up that this the type of algorithm that is able to work with this, you need the right funding to do that. For you. What kind of lessons learned Can you share as far as funding goes, what or what’s the biggest mistake one could make when seeking funding? Wow.
John Baird 8:50
You know, we started by bootstrapping, the company. My partner and I personally both invested early on, didn’t make a salary or anything, because it was our own money going in. Right. So I think that’s, I think for many companies, that’s super important. And I think the reason why that’s so important in the beginning, and then we can talk about raising money in just a second. But I think it’s so important in the beginning, because number one, it forces a culture of valuing every single dollar because your dollar, right? I’ve seen companies very, very well funded companies and they’re gone in six to 12 months because they thought they had infinite money to be clear other people’s money, right and it builds the wrong habits within an organization. On the flip side, I’ve seen fast growing, well funded companies that valued every single dollar so much, they were extremely frugal it became part of their culture and Companies all, in my experience always correlate to success. So anyway, so start there. It also forces not only frugality, really valuing how you deploy capital, but it also forces you to go fast to iterate fast to fail fast, as we talked about earlier. So I think that’s very much. Where do you start?
Alexander Ferguson 10:19
How do you know? Yeah, what’s the tipping point? Like? Alright, now we do need to bring in the funding, what was the trigger for you?
John Baird 10:27
Customers? Right? Like, what? Look, I mean, we all read the story, right? In Fast Company, in, you know, TechCrunch, about the founder that showed up with a single slide, right, and somebody handed them $50 million in funding. The reason those stories get told is because there are exceptions, they are not the rule. And like any amazing story, right? That’s the things that don’t generally happen. The rule is, if you have customers, if you have revenue, if you have demand, you will have investors. And so you, when you start to see true traction for your product, that’s the time right if you if you need funding, to go out and get funding now, I will say there’s a delicate balance here. Right. So I would advise people not to over index for the statement that I’m about to make, but in a perfect world, you would never take funding, right? Because funding is not the end goal funding is it’s a necessary evil, right? I don’t want to put too much emphasis on the evil part. But again, it’s not perfect, right? Because if you could own the whole company, yourself, you and your founders, right, without having to give up equity to investors. That’s exactly the way that you would do it. Right. You take the funding, because you need to scale the business in a way that you can’t do on your own. But you know, if you could,
Alexander Ferguson 12:15
that was a good reference, you wouldn’t need to do it, getting those first few customers. Any tactics you can share that you found that had worked?
John Baird 12:26
Yeah, I think, you know, in the beginning. There’s so much you don’t know. Right? You have you have hypotheses, you have theories, right? Of is this going to work? Or how is it going to work? But you’re probably only 10%, right? And 10% is probably pretty darn good, right? If you’re 10%, right? You’re probably on to something, maybe it’s 15%. I’ve never measured this. But the fact is, you don’t know much. You have to be extremely consultative, right? In b2b SaaS, it’s not about what you want. It’s about what the customer needs. And so if you can get 10% 15% of the way there, and then they can fill in that other 85% with their individual needs. Now you’ve got that first customer, right, I think you have to be an amazing listener. Right? You have to be problem solving hand in hand with that customer. And I think probably the third most important thing is you really want to figure out where that need is acute, right? Because more the more acute the need is, the more willing they are to be able to work with you. And then once you start to understand that, then the flywheel comes later, right, once you’ve really figured out that product market fit in the beginning, listen, and really work closely with that customer to build a solution that works for them.
Alexander Ferguson 13:56
What would you say are kind of top marketing tactics people should be thinking about in the 21st century? Going forward?
John Baird 14:04
Yeah. Yes, I think, look, the popular view of marketing is the splashy, creative commercial, right. And there’s a place for those right? If you are Coca Cola, you’ve been around for 150 years, and you are literally on every convenience store, every restaurant, every fast food joint. If you are ubiquitous. Sure, you can do that. Right? For the rest of us that aren’t Coca Cola. Marketing is analytics. Right? It is being ridiculously smart about every single measurement that produces the ROI. Where do those customers live? What are those customers care about? What are the words that they are responding to? What are the images, what are the messages, all of those things, and then measure those to the nth degree, right? That will give you a lift and will give you an accuracy, it will give you an ROI that any other form of marketing just can’t deliver. And I think the biggest challenge is people still think, Oh, I’m going to go do a flashy TV ad, or I’m going to do set up my sales and marketing the way that it’s, I hate this phrase, the way it’s always been done. And I’m like, that’s fine. You go do that. And that’s, I will take your market share.
Alexander Ferguson 15:41
Two quick questions. We’ll, we’ll wrap up this section first, any top books, audio books, podcasts that you would recommend that you go to often or have enjoyed?
John Baird 15:52
Yeah, um, so I love Reid Hoffman’s masters of scale. That is very much my go to books. I mean, there’s so many, so many great books. I think the one that cannot, there are two that are that I believe, can’t be read enough. One is. Ben Horowitz is the hard thing about hard things. Right. And I think every startup founder should read that book, because because most stories and we alluded to this earlier that you’re going to read are the popular stories. They the guy with the showed up with two slides and you know, raised $50 million, right? Like, that’s not reality. I mean, Ben Horowitz is one of the most successful startup founders VCs in history. And you go read that book, you go, Oh, this stuff is hard. Right? So really helps to be ready. You know, for that. That’s one, the other one that I just think every business person should read, certainly, every marketer should read. And it’s extremely counter intuitive. And I think that’s why it’s important. I also think that’s probably why it’s elusive. To most people is Daniel Kahneman. Thinking Fast and Slow. It gives you great insight into the way that we as humans are wired. It also will make you question. So called common sense, right about a lot of things, conventional wisdom, the way we approach things. And when I really look at those two books, in tandem, I think you come up with a blueprint for how do you reach your customers in a really effective way?
Alexander Ferguson 17:45
Powerful. Last question for you, John. What kind of tech innovations do you predict we’ll see in the near term, next year, so and long term? 510 years?
John Baird 17:53
Oh, man. It’s funny, I used to be a lot better at this when I wasn’t, you know, neck deep in my own technology company. You know, um, I think the biggest thing is despite some of the tech backlash that’s been happening over happening over the past couple years. And sort of the isolationist trend that we’ve seen in the US and other countries. I think the reality is, the world continues to benefit in a massive way from technology, the world continues to get smaller, there’s better communication that there ever has been. And I think some of the negative sentiments that have bubbled up in the media might be much more about the tail wagging the dog, then the reality of all of the advantages and benefits and the beneficial ways that tech is changing our lives. So, you know, what I think you will continue to see is, and this is the thing that I get so excited about. And this is core to what we believe at vouched, is the ability to help the people that need the most help to fundamentally make their lives better. I know we’ve talked a lot about identifying people that are invisible today. But let me just give one very specific example. Think about a a woman, you know, in a developing nation that has historically lived a cache existence, right? Which means that you know, she gets paid a few dollars, that’s her entire livelihood. She is unbanked because she can’t be identified. Right? Which means that she has that cash in her mattress or somewhere in her home or on her person. And if anything happens if she gets robbed if there’s a flood if her house burns down everything she has worked for saved for right that everything that her life is about dependent upon is suddenly gone. If we can use technology if we can use vouch to verify that person and that person is suddenly banked, their life gets fundamentally better. And I think that’s one small example that relates to what we’re doing. But I think you will see myriad examples of this around the world. And it will fundamentally help the people who are most needy.
Alexander Ferguson 20:25
I really appreciate your insight both of this future that we’re headed towards, but also the journey that you’ve been on. I’m excited to see where that goes next. I think everyone for joining us also a sponsor today is TeraLeap. If your company wants to learn how to better leverage video, go to TeraLeap.io. And we’ll see you guys next time. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you’re subscribed to this series on Apple podcasts, Spotify or your favorite podcasting app.
