Early Days—Episode 9: Esusu with Samir Goel

Did you know that nearly 45 million Americans don't have a credit score, and most are immigrant families that struggle with lack of access to basic financial services because of this? In Episode 9 of the Early Days, Samir Goel shares how watching his parents struggle with lack of access to basic financial services inspired him to build Esusu.

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Did you know that nearly 45 million Americans don't have a credit score, and most are immigrant families that struggle with lack of access to basic financial services because of this?

Meet Samir Goel, the son of two immigrant parents that grew up watching his parents struggle as they tried to get access to services most of us take for granted, like mortgages to buy a home, and financing for a car.

Samir took this early lesson, combined it with an absolutely relentless optimism and work ethic and built Esusu. Esusu is a platform that lets landlords report tenants rental payment to credit agencies, helping those who need it most get access to one of the most important numbers in American life - a credit score.

In 2022, Esusu broke the Unicorn barrier with a Series B led by Softbank.

Highlights from the transcript

SPEAKERS

Tyler Norwood, Samir Goel

Tyler Norwood  00:00

Hey everybody. I'm Tyler and this is the Early Days podcast. I created this show as part of my work as an investor at Antler. I wanted to talk to the world's best founders and pick their brains on how they went from zero to one, building some of the most important companies in the world. Today's episode, we have Samir Goel, who is the founder and still the CEO, of Esusu. Esusu is a fintech company that allows landlords to report rental payments to help customers build credit history. The idea originally came from Samir's upbringing, the story of his family coming here at a very young age, and really seeing his parents struggle to financially integrate into their new home, particularly build credit, which gives people access to a lot of the financial services that we're used to having like buying a home, buying a car, getting a job, etc. Samir has an incredible story, some of the most exciting grit I've ever seen, from a founder that's been on the show. He's got a great story of living in a Harry Potter like room underneath the staircase of a friend's house, while Esusu was still finding its legs. Fast forward to today and, in 2022, Esusu broke the unicorn barrier. They raised a Series B led by Softbank Ventures, and the company is doing really well. I'm super excited about this episode. Samir is an absolute inspiration, both from a grit perspective, but also just how passionate he is about solving this particular problem, and making the world a better place. Let's dive right in. This is Early Days with Samir Goel, the founder of Esusu.  Awesome, we're live. Samir - it's great to see you. And thanks a lot for being here today.

Samir Goel  01:53

Absolutely, Tyler. Great to see you. And thanks for having me on.  

Tyler Norwood  01:56

Of course. So Samir, you are co-founder and CEO of Esusu. Just to get us kicked off for our listeners, can you tell us a little bit about Esusu? Give us your elevator pitch?

Samir Goel  02:10

Yeah, absolutely. Tyler, that's a great question. And the thing I always like to do when I talk about what Esusu does is share a little bit about why. And that really stems from my personal experiences along with those of my co-founder, Wemimo. And for me, I actually grew up in an immigrant family from India. And our pathway to pursuing the American dream was just harder than it should have been. You know, unfortunately, my father was actually mugged on his first day in the country, we didn't really have a place for shelter, and a lot of my childhood unfolding that way, watching my parents work miracles with no credit, and limited financial resources, so I can have some of the opportunities I've been afforded. And so inspired by that and Wemimo's experiences, our core ethos has always been no matter where you come from, the color of your skin, or your financial identity, it shouldn't determine where you end up in life. And what we do to achieve that is we partner with large owners and operators in real estate and do three things. Number one: when renters pay rent on time, we make sure that those payments are reported to the credit bureaus, so they can build credit the same way that a mortgage works. Number two: when people fall behind on rent, we pair them with 0% interest loans paid to the owner-operator so that renters can keep a roof over their head and we can help the owners with cash flow. And then finally, number three, we have a data and analytics platform that ties that all together. So that's what we do in a nutshell.

Tyler Norwood  03:23

Incredible. What a great mission and attaching it back to your personal journey and lived experience? That's awesome. And I'm actually going through final underwriting to buy a new house and dealing with credit scores and credit bureaus...It's just an absolute clusterfuck of a system here in the US. And that's for someone who was born and raised in the United States, and have had a credit score for a very long time. I'll never get to experience it, but I can only imagine how confusing and confounding the credit score system is in the US for immigrants.

Samir Goel  04:07

Yeah, Tyler. Well, first, congrats on almost becoming a homeowner. But to your point the system is backwards, right? We always like to say it's kind of like you're guilty until proven innocent. So if you don't have a credit score, the system just treats you as though you're a high risk, which means that everything's harder, right? Buying a home, getting a job, getting an apartment. It just makes everything a lot messier and a lot more challenging than it needs to be. 

Tyler Norwood  04:30

Exactly, and not to mention a car, right?  I mean getting a car loan. And I think a lot of people move to the United States and only then realize that a car is really the only useful way to get around in most of the United States. Maybe New York? But pretty much the rest of the country, a car is required.  And to move here, then realize that you can't finance a car unless you have a credit score, so you're gonna have to just buy it in cash is - I'm sure - a pretty scary "aha" moment for people.

Samir Goel  04:33

Exactly. Yeah, you know, it's funny. We actually just started looking into what our vendors do when we help them build and establish their credit. And the first purchase for most of them is actually a car, or a car loan. And so that's step one, right? Because you get a car and then you have better economic opportunity. You can drive to a job, you can go somewhere further, you can bring your kids wherever they need to go. But without that you're at the mercy of public transit, which - like you said - outside of New York is hit or miss.

Tyler Norwood  05:30

I think car is a necessary ingredient in pursuing the American dream, unfortunately. 

Samir Goel  05:36

Absolutely. 

Tyler Norwood  05:37

So Samir, the point of this podcast is really to dive into the early days, as the show name implies. So I'd love to start off really first with the team. Can you talk to us about how did you meet your co-founder? How did you guys decide that you were gonna build this company together? What did that whole process and evolution look like from the time you met to the time you guys signed all the paperwork and said, "we're doing this together"?

Samir Goel  06:12

Tyler, wow, you're bringing me down memory lane here. My co-founder and I actually met at a conference called the Clinton Global Initiative. And funnily enough, we both actually attended the same university (which was NYU), but we didn't know it until we went to this conference. And the conference basically brings together young entrepreneurs who are passionate about building something that can better the world. And at the time, we both had separate startup companies. And so we just actually became friends first, respected what each other was doing, made some introductions, and became conference buddies. So we would move together at conferences around the country that were relevant for us and just became really good friends. And, from that, we both took a detour out of startup land and spent some time in corporate America. Myself, I was over at LinkedIn for a few years. While Wemimo, my co-founder, he was over at PWC and Goldman Sachs. We ended up reconnecting and meeting at a famous chocolate shop, Max Brenners (for those of you in New York).  It's basically a chocolate shop in Union Square in New York City. And there we had this great conversation around the fact that while we were learning a lot in corporate America and we were making money for the first time in our lives, it really wasn't what we wanted to do with our lives. We really want to build something bigger than ourselves. And so we started noodling on Esusu while in our corporate jobs, built on the side for a couple of years, and then in 2018, when we had some traction around the product, we quit our jobs to focus on it full time.

Tyler Norwood  07:40

So for people who are thinking about becoming an entrepreneur, that was sort of the high level version. I'd love to double click down into the specifics of the conversation. It sounded like you guys both wanted to be entrepreneurs, and that was clear, and you got to know each other as conference buddies. Did you guys ever sit down and like have the tough conversation? Like, how did you guys get from "this is really exciting" to all the things that we need to discuss to become co-founders? Did you guys talk about anything? Establish any frameworks? How did you decide on how things were going to work? All the nitty gritty of the actual operations of being co founders -- how did you guys get through that?

Samir Goel  08:24

You know, it's funny. So Wemimo and I actually operate as  co-CEOs, which is relatively non-traditional, but I think the thing that we walked into this with was mutual respect, right? And the fact that, you know, we see each other as peers and equals, and are always going to operate in that way. And so when we initially incorporated the company, we did it 50/50 , we're co-CEOs, we're  going to be in this together. And we both made similar financial contributions. So every paycheck we got we put into the company. Every Sunday for literally years we'd go to one of our offices and just work on Esusu for hours and hours and hours. And, I think, we both took a leap of faith, right? So it was kind of like - look: I could invest a lot of time and you could totally drop the ball. But I'm just going to have that faith that you're going to be in this with me and through that process, seeing it every day. Let's say in this case, Wemimo will send an email at 2am. And I'm like, alright, this guy is as committed as me in this as I am. Or, you know, me doing something else that was completely a stretch, right? But watching each other make the personal sacrifices, the financial sacrifices, the time sacrifices, built that trust. And, to be honest, we've been through everything. We've lived in multiple countries together. We've had to share beds, sleep in diners, do whatever it takes. But that sort of stuff is what built that level of trust where I had previously just trusted my wife. That takes time and repetition, but I think we both just put 100% in and, even if that doesn't amount to anything, we're going to lead by example here. And we both chose to do that. And it reinforced being in this and doing this as equals and doing it together. And there was never that sort of imbalance that was created.

Tyler Norwood  10:10

I love that. Samir - do you know about the types of fun matrix?

Samir Goel  10:18

Not necessarily. Tell me about it.

Tyler Norwood  10:20

So there's three types of fun. (1) Type One Fun is fun while you're doing it. (2) Type Two Fun is fun in retrospect; it's not objectively fun while you're doing it, but it's really fun in retrospect, when you think back to it fondly. And then (3) Type Three Fun is basically not fun. Type three fun is neither fun while you're doing it, nor, in retrospect. It's the opposite of fun.  And there are really interesting studies about Type One Fun is very superficial and actually doesn't help build connections between humans. Type Two Fun is the most powerful way to build really strong bonds with people. So I'm thinking about it, I have a group of friends from college, and we do a Type Two Fun trip every year. And the thinking is, as we continue to grow as adults and become husbands and become fathers and this and that, it's really important for us to continue working on the bonds of friendship and Type Two Fun is the best way to do that. So, you know, we've hiked the Appalachian Trail. Next year, we're going on a four day canoeing trip; we're going to sleep on the banks of the river, etc. So while you're mentioning sleeping in diners, and sharing beds, and doing all these things where, it may have actually been fun while you're doing it. But I'm sure there's been some tough days or tough nights where you're just absolutely racked. And, you know, it's not really that fun, but you look back on it so fondly, and it's so cool to hear you guys building such a strong relationship off of a foundation of shared trust: we're both in this, we both care about what we're doing, and we're both willing to give it everything that we have to make this work.

Samir Goel  12:06

Absolutely, I love that framework. I hadn't heard Type One and Type Two Fun, and I guess Type Three Fun also. But I definitely think building a startup has to be Type Two Fun. Because the thing about building anything is that it keeps you really humbled. Because every day something good happens. And every day something really shitty happens. And you just gotta roll with it. It's inevitable you can have the best day - it could be the day that Esusu raised its Series B and, I guarantee you, ther'd be a fire drill five minutes later. It just is what it is right. And to be able to go through that with someone is probably one of the best forms of Type Two Fun you can think of.

Tyler Norwood  12:43

Exactly. So now you can use that framework. And you can just say - I always say to myself when I'm in it - I'm like, "Type Two Fun, this is Type Two Fun, right? I'm miserable." We did a section of the AT last year and we took a wrong turn. We only figured it out 15 miles down the wrong trail that we were going to have to backtrack and effectively add 15 - well actually, add 30 miles - to our trip. And on the way back, which was uphill, it started to snow, and you couldn't see in front of you or whatever. And I just remember going, "what are we doing out here"? But then you add it to the library of greatest memories with friends that I'll have for the rest of my life because we went through it together. So that's cool to hear.  So Esusu just raised a Series B, you guys have joined the unicorn club, you guys are doing really, really well. And congratulations on all of that. How do you guys manage the day to day relationship as co founders and co-CEOs? (So from the initial excitement of we're going to start a company together to now, which I'm sure there's still excitement, but that initial honeymoon period has worn off and you guys are really settled into what seems to be a very successful and practical relationship.) For someone who's got a co-founder or thinking about bringing on a co founder: what sort of practical tips and practical frameworks do you guys use to keep that relationship working effectively?

Samir Goel  14:25

That's a great question. And interestingly, I did a podcast episode on this topic recently. But you know, I think the interesting thing for us is some of the best parts of building Esusu - even today (and we now have almost 200 employees; we're growing and scaling) - still some of the most fun parts of building this company is just he [Wemimo] and I together in a room brainstorming about solving a problem, or figuring out what's next or, where to go as a business. I actually wouldn't trade that time for anything; it's some of the most fun. Because we've been through so much together and build so much of that history. Funnily enough, we're both getting married this year; we're both the best man in each other's weddings. So we've been able to traverse that relationship, both professionally and personally. But in terms of practical tips, I'd say one thing you need is trust. Fundamentally you need to be able to walk into a room with your co-founder, whether or not they're co-CEO, and know that anything that they say, is with the best of intent, right? But the minute you lose that trust, is when things go wrong. Because then you're like: okay, why is this person saying that? Is there an ulterior motive? Are we on the same page? So I'd say, first and foremost, you got to have that baseline trust. Number two: don't avoid difficult conversations. If there's something you disagree with, or don't feel great about, bring it up, address it, discuss it, and make sure that you're on the same page. And then the third (we always have this mentality and it's one of our cultural values) is forward together. If we have a topic of discussion, and we have different points of view, and we come to a consensus, we are both 110%, bought in. So let's say that we have an idea.  I have a perspective; Wemimo has a perspective. And we go with my perspective and it ends up being wrong. Wemimo we will never say, "Oh, you made the wrong call, this is your fault." Instead it's "we made the wrong call, we fail together, or we won together." And that sort of stuff really helps. And, as you're building an organization, I think of it like parents, right? If we aren't on the same page, then the organization will feel that. And fortunately, that's not true. But what I'm seeing is more with like a leadership team, right? If people aren't necessarily on the same page about something, then everyone else in the company sees it. And that starts at the top. So really just making sure that we're on the same page, and we have those difficult conversations upfront, and continue to invest in the relationship, and create space for each other to grow. Kind of like you talked about with your friends, right? You do the trip every year, we always try to do at least some sort of travel or personal thing every year where we build our relationship regardless.

Tyler Norwood  16:55

Yeah, I love that. Jeff, my partner, and I disagree and commit. So for forward together, we say disagree and commit, which is -

Samir Goel  17:07

Very Amazonian. That's one of Jeff Bezos' favorites.

Tyler Norwood  17:11

Yeah, exactly. So Jeff developed this bread metaphor, which not baked to fully baked. So when someone shares an opinion about something, you ask, how baked are you on this? Is this an idea that had last night that is still very malleable? Or is this something you've been thinking about for two years and, no matter what I say, you're not going to change your opinion. And if the answer is this is what I think we should do, I'm fully baked on this, and I've thought through every single thing. Then it's like, okay, then let's do it. And so we also have this bread scale.

Samir Goel  17:55

Alright, Tyler, this has been great. I've already learned two frameworks, the Fun Matrix and the Bread Scale.

Tyler Norwood  18:00

There you go. This is slowly transitioning into Tyler's frameworks podcast. Yeah, it's helpful, too, because sometimes when someone shares something with you, you don't know off the bat, like, is this a brand new idea that's open to suggestions? Or is this something you've been thinking about for years that you're just not going to change your opinion about because I don't want to waste my time trying to change your mind if you're fully baked. And so we've developed a common language where now like, the other day, Jeff, and I were arguing about something and he says, "This is my area. I'm fully baked. Let's talk about the next thing." And I'm like, "Alright, fine. Done." Transitioning, so great insights on team. I'd love to talk about the actual business. I mean, you gave us a quick recap. But effectively, what Esusu is doing is helping report credit payments to the credit bureaus. I'm sure you understand all the technical details that go into making that happen. I can assume that there are a decent amount of fairly technical steps and there's a lot of...I imagine talking to credit bureaus and getting all of that to actually work was a pretty long and arduous process. What you guys are doing doesn't strike me as something that you could slap together in 24 hours, push out to the market, and just start testing. Getting commercial apartment companies to report to credit bureaus and credit bureaus allow that to be reportable, etc. probably took a long time. So I'm really curious about: how did you guys test? How did you get started? Did you just say, "well, we both know this is a problem, we're just gonna go off of our lived experience assuming that every immigrant has this, and we're just going to put our heads down and build it, however long it takes, and we know there's a market out there? How did you test and validate is it worth actually solving this problem?

Samir Goel  20:22

It's interesting, Tyler, we actually learned that through interacting with our customers. So we actually didn't start out with the product that we take the market today, we actually started the business with the savings app. And we created a way for people to save in groups together. And that's something that our families did, and we're like, cool, you know, how do we take this kind of age old savings style, digitize it, and use it to help people kind of establish a savings base and build credit? And really, we learned two things pretty quickly. First, this was a direct to consumer product and direct to consumer in fintech is extremely expensive and challenging. Because you need to go to people, build trust, and ask for all their personal information upfront. And it's just really hard to do without a crazy budget. So, you know, Tyler, we just met on this podcast or something like that. Hey, Tyler, what's your social security number? What's your bank account details, right? Like, it just doesn't work the way you think it does. And so that's why cost of customer acquisition is so high in direct to consumer fintech. And then, the second thing we learned is we were solving the wrong problem. People said, look we all know we can save money. But when we hit a financial emergency, there's no where we can go get debt, there's no where we can borrow money, we don't have any credit. And that kept coming up as a theme. And that's actually what drove us to shift our model to one: a B2B approach, where we partner with landlords and two: really focusing on solving the credit problem. And the thing about credit is, there's about 45 million people in this country that don't have any credit score, and maybe about 100 million that are what you'd call credit challenged (so low credit score or very thin credit score). And so it was a pretty big market problem that we were able to stumble into. And to your point, we couldn't test, but we did have enough validation from our consumers and our customers, we had third parties saying like, hey, you know, there's this really interesting idea called rent reporting, can you help us do this, etc. And what really happened was in 2013, or 2014, the regulators had enabled the inclusion of alternative data into the credit system. And so the regulators were excited about it, the credit bureaus were excited about it, the landlords were excited about it, because they thought it would drive increased payments. Renters were excited about it, because they can build credit. And so all the stakeholders were there, but nothing was happening. And the reason was because nobody's willing to build a really unsexy middleware that just connects all these different properties and software companies to the credit bureaus. So that's actually what we took a couple of years to build was just infrastructure that can integrate with property management companies, take that data and essentially ingest it, transform it, and then report it to the credit bureaus in this format that's called Metro Two, it's super esoteric, you would have no reason to know it, unless you're deeply involved in credit. We had to build all that infrastructure out, we call it the plumbing. And that's what's enabled us to then kind of scale because doing all that in such a highly regulated and esoteric industries, it takes a lot of work.

Tyler Norwood  23:10

Yeah, I've never heard of that. I only just recently found out that there's like nine different FICO credit scores. Because I was talking to my lender, "the score that you said I have is not the score that he shows." And he's like, "Oh, that's FICO Two. We're using FICO Nine." And I was like, "What the fuck are you talking about?" And he said, "There's lots of different credit scores that are weighted for different things. And it's really all built for underwriters. It's not really made for you to understand." And I was like, alright, well, that's cool.

Samir Goel  23:40

That's why you see what you have in Credit Karma, right? And then it's actually not what you'll see on your home loan application.

Tyler Norwood  23:45

I guess that's a vantage score, which is not really even a FICO. And then there's like nine FICO scores it's, it's crazy.  So, okay, super clear. I love this, it's sort of like a Trojan horse use case, which I talk to founders a lot about: the problem you want to solve in the next seven years may not be exactly the first product you build. This Trojan horse - or foot in the door - concept of like you need to build something that gets you into customers hands, allows you to start generating revenue. And that opens up the ability to start thinking about more complex problems like this one that you can't just cold start. I'm assuming you and your co-founder weren't just sitting on $50 million to take three years with no revenue to just go out and build all the plumbing to make Esusu work. So can you talk about that progression? How did you guys... So the Trojan horse, you had the savings platform, was that  generating revenue and growing?

Samir Goel  24:53

Yeah, so it was generating revenue and growing. And actually the real challenge of the saving product was that it wasn't venture backable and not that there wasn't a market for it. So what we ended up doing to create revenue with that was we started licensing the technology out to nonprofits and community banks that were already trying to help low and moderate income consumers save more money. And we just became an extension of what they were doing. But as you can imagine, small nonprofits and community organizations don't have huge budgets. And it's a lot of one-on-one services. So it didn't have the features of what you think about when you're thinking about a venture backed business. But what it did do is give us access to customers, helped us talk to people, learn about their needs, and really refine our hypothesis for the problem to solve, and give us time to build the right reporting platform. And, the other thing, Wemimo and I were just super scrappy. So we outsourced our engineering, we didn't take salaries for a long time, we racked up over $100,000 in personal credit card debt, all of those sorts of thing. So we didn't have the cash. But we just tried to really be scrappy to make sure that everything that we were making on the savings product was really going into the R&D for the reporting product.

Tyler Norwood  26:07

So that was my next question. So how did you guys finance all that? You were just using personal credit cards?

Samir Goel  26:14

So it took a while. But we basically for the first I'd say, year and a half of Esusu, we were basically hustling for lack of a better word. But what ended up happening was for me, I actually couch surfed for a few months. And then for my personal finances, I ended up finding the sort of two bedroom in Spanish Harlem and turned that into an Airbnb. So I couldn't qualify for that rental, but my friend basically signed the lease for me. And it was an apartment that had one big room and a small Harry Potter closet. And so I would sleep in the little closet, rent out the bigger room on Airbnb, and that would literally cover my rent, my food, and my health insurance. So that was it. And then everything else was just like, going on credit cards. I'd get one cup of Starbucks coffee and you just say a cup like 12 times because you get a free refill. All those little things can save every dollar. And that's just how we made it work. I mean, there was a point in time where I was defaulting on every bill; my university sent me to collections. It was just whatever we could do to kind of get there. And it took us about 18 months to raise our first seed round. So we had some small Angel checks, but it was like $100k, or a couple $100k, not something that we could use to pay ourselves or do anything with, other than invest in the business. And so, that's what we did over that 18 month period. And then we raised our first seed round in 2019 for $1.6 million. And that was led by Acumen. So during that 18 month period, we just did whatever we had to and it was, it was tough. It was a really hard time. But I'm glad we stuck it out.

Tyler Norwood  27:50

I love that - Type Two Fun, right?

Samir Goel  27:53

Yes, very much. Now we look back at it, and we can reminisce about it. But at the time, it was absolutely miserable. I got the default on seven bills in like one month...but it's the kind of stuff that makes it worth it, also.

Tyler Norwood  28:08

Just on that...I mean, how did you keep the fire going? Like you're a smart guy, you're a well spoken guy. At any point, you could have gone and got a job making six figures in any number of industries. What kept the fire going when you woke up in that Harry Potter closet, how? I talk a lot about when you first start a company, there's zero gravity. So it's the first time that there's really no external feedback, nobody really cares. There's no grades, there's no paycheck, there's no 360 reviews, nobody cares. It's pure, unadulterated, intrinsic motivation. So when you're going through those times, you're scrapping, you're running, your university is sending you collections, how did you keep the fire going?

Samir Goel  29:11

Yeah, I'd say it's really two things. So one of my core beliefs is that nothing worth doing is worth doing alone. And so having that partner in Wemimo and going through it together, because no matter how shitty every day was, there was at least one person in the world who knew exactly what I was going through.

Tyler Norwood  29:28

Whose life was at least as bad as yours.

Samir Goel  29:31

And so that goes a long way. Because it's like, I'm not just doing this alone. We're in this together, we can talk about how crappy XYZ was or what a big when it was when we got our first ever customer review. Like, every little thing, every bad thing you can kind of have someone to experience it with. And so that was one. And them two was just this fundamental belief that this thing needs to exist in the world. Right? Like, I felt the problem personally Wemimo had felt the problem personally, and we really believed that we were onto something and that's what our customers were saying too. So while we didn't necessarily have revenue or venture capital, and we weren't building a business that was, at the time, really something that venture capitalists were excited about, we knew it was important, we knew there was a problem. And we were hearing from our actual users that this was meaningful for them. And so we just knew it needed to exist and whatever it took to kind of bring it to life. I'm one of those people that didn't want to look back at life and feel like I'd left something on the court. And I think that was one of those moments where until we absolutely cannot go further, whatever damage we do to ourselves in our lives, we will get ourselves out of. But I don't want to look back and be like, "Oh, I, I gave up or I could have done more. Or I just didn't take the shot." And so that also is just a personality thing as well, I guess. But, you know, it was really being able to commiserate with Wemimo, having that conviction in what we were doing, and getting that user feedback that this needs to exist.

Tyler Norwood  30:53

There you go. It's that Desi hustle, man.

Samir Goel  30:59

Yeah, it was nuts.

Tyler Norwood  31:03

I love that. And I mean, obviously, you know, the point about having this belief that this needed to exist, really spoke to like your lived experience as well, like coming over and seeing your parents go through this and seeing how hard it was to land in the United States. And there's cultural assimilation, but this concept of like financial assimilation of actually getting plugged into the infrastructure and how everything works. You can have a visa or green card, or any of the things that let you be here, but that doesn't necessarily mean that you have access to like all the infrastructure from day one.

Samir Goel  31:49

Absolutely, man, no, you know, what's what's so interesting to me is, most Americans, even people that have lived here and grown up here, and all that stuff don't even understand credit. And it plays such a big role in life. It's like you said, cars, it's a lot of jobs actually screen for credit now. A a lot of apartments with good credit. Obviously, you can't get a mortgage without credit, you can't get student loans without credit. And so if you don't have access to that your opportunities in life are super limited. And there's just so many people that struggle with that. And so I got to see from the lens of my family who immigrated here, but it's just a perpetual problem throughout the nation. And we're one of the only countries in the world that has so much emphasis on a three digit number that kind of controls their lives in some ways.

Tyler Norwood  32:35

Yeah, exactly. And just how prolific debt is, right? I mean, debt is such an incredibly powerful tool that, for better or worse, our entire economy runs off of and not to have access to that is really, to not, you're really on the sidelines, like you're not really fully participating in all of the opportunities that the economy has to offer if you don't have access to debt.

Samir Goel  32:59

Yeah. You know, I would say, to point you bring just in terms of like that belief that this needs to exist. I think that's why I don't necessarily encourage everyone to be an entrepreneur. I wouldn't trade being an entrepreneur for anything in the world. But I really don't believe in being an entrepreneur for being an entrepreneur, because you just, it's not easy. And I think people glamorize it sometimes. But like, anytime that someone really believes in what they're doing, and believes it needs to exist, that's when I feel like, go do it, give it a shot, but don't do it just to do it. Because it's not a it's not an easy process, or a fun journey, necessarily. It's, as you said, Type Two Fun, but in the moment, not necessarily.

Tyler Norwood  33:39

Exactly. Well, that's why I asked like how you get the fire going, because I think there's something very Darwinian about entrepreneurship, which is like, you can fake it till you make it, you can do it to look cool or whatever. But at some point, the people who really want to be doing it, versus the ones who don't, are gonna get weeded out in the Harry Potter closet, or filling up Starbucks cup over and over again, or having your school send you to collections, like those are real inflection points that separate the people who really want to be entrepreneurs versus the ones who think it's cool. It's in vogue right now. It looks cool on a Hinge profile. To really bring that to reality there's a lot of downside, or there's a lot of sacrifices, too. So tell me a little bit about so you guys went through that period: you had a co-founder who's riding it out with you. When you guys went out and raised your seed round, what did the company look like? What did you guys pitch? Where were you at?

Samir Goel  34:51

So when we raised our seed round...so, yeah, I have a couple great seed round stories. One, as I mentioned, Wemimo and I were couch surfing, bootstrapping, and we started raising our seed round in January of 2019. And, you know, we had, we've had one or two institutional investors that put in a very small check, kind of like a scout check. We did some pre seed capital, right? So like, 25k, or whatever, and, you know, we start talking to them. And they were excited about the business, they wanted to lead the round, and we very quickly actually got a lead check. That's a big deal: 50% of $2 million round. And we thought we were there to put all of the rounds together, and I'll never forget this day: it was March 25, 2019. And that investor reached out to us and said, "we have spent our fund capital and so we're not going to actually be part of the strategy anymore" and they pulled out. 

Tyler Norwood  35:53

Oh no.

Samir Goel  35:54

I will never forget that day in my life. Because we'd been doing this for 15 or 16 months, had no money, it was brutal. I remember just walking up to my apartment after and literally passing out on my girlfriend's lap. We'd only been dating for three months, but I said, "I can't do this shit anymore." So the seed round definitely had its ups and downs. But after that moment, Wemimo and I actually talked the next day and were like - screw it - if these VCs don't want to bet on us, there's still something we can do here. And we actually took a couple of months where we just focused on sales, and the business, forgot the VCs, were focused on the business, we closed a few more contracts, we got a few more sales. And then we ended up just getting introduced to some of the right investors, people who were looking for businesses that had a profile like ours, were growing, but also had a good social return. And one of the firms we started talking to was Acumen and so they were the people who led our seed round. The way we presented it, the business was still largely focused on the savings company. And we put together enough contracts in the past few months that the business profile looked a little more exciting. And we also had started doing some of the rapid reporting and stuff. And I remember VCs hated that. They absolutely hated the idea that we had two products; they said you can't focus on multiple things at the same time. You got to do one at a time. It's hard enough building one business, you can't do two. So that was a total killjoy. And so we started learning from things like that: we don't want to have multiple products, let's focus on one, I don't want people to think that we're too focused or that we're unfocused, really thinking about how we frame traction. While we didn't have a ton of users, we had a lot of good enterprise partnerships. And so we focused on the enterprise partnerships. And we had this iterative process over that time period that really helped us start to present the business in a more a creative light.

Tyler Norwood  37:48

So you said, so - by the way - it's, I mean, it's the cardinal sin of venture capital [rescinding a term sheet]. But is what it is, right? As a founder, it's like it happened. And so you woke up the next day, and you said, "you know, let's go raise money from customers, let's just go focus on sales, let's go increase our sales pipeline, and we're gonna figure it out."

Samir Goel  38:12

100% because, for whatever reason, the VC industry isn't really buying into what we're doing. And we have customers and clients that actually do believe in what we're doing and want to be a part of this. So let's focus on that. The other thing I'd say is, obviously, these days, people talk a lot about diversity and inclusion in venture capital. And the reason I'd say that - one: there weren't a lot of founders who looked like Wemimo and I that were raising money. And that was, I'm sure, part of what was going on. But beyond that - the other thing I realized - is that a lot of VC is just what's in their proximity to the problems you're trying to solve. Like Tyler, I can't tell you how many times I've had a VC say, "who cares about 50 points on a credit score? So I'd use this credit score to go finance an XYZ? A Lamborghini?" It's like, what are we talking about here? And I think the thing that we had to work on getting people to understand is, we weren't solving a problem for the minority, we are solving a problem for the majority.There's more people in this country struggling with data bands and whatnot. And so I think that was a gap that we had to overcome, just in terms of helping folks understand the relevance of issues they might not have experienced firsthand. And that was also part of the pitch that evolved over time.

Tyler Norwood  39:22

Yeah, exactly. I think that's incredibly insightful. And I totally agree. I think that I personally have never met anyone in the venture capital ecosystem who explicitly - or even seems to implicitly - be making decisions based on race, or ethnicity, or any of those things. I see all the time decisions being made from - what you just said - which is lack of perspective on socioeconomic strata. Look the reality is that most VCs live in New York, or California. And they live in affluent neighborhoods and they have very poor - it's not even understanding - it's they don't have any emotional connection to the problems that so many other regions and socioeconomic groups within the country, or even globally, are experiencing. And so to me, it's not even, it's not that they're lacking a rational understanding, they don't have any emotional connection, it doesn't trigger that spark of like, "wow, I really feel that." And I think it goes two ways. One is like Esusu: you guys had a real uphill battle because you're pitching for a socioeconomic strata that's not represented in venture capital. So you're never gonna get that emotional connection. You have the other side, which we're starting to see later implications of, but these companies that were funded for the opposite reason. Like Calm, for example: for a phone app that plays guided meditation to have raise venture capital dollars, there's a real lack of an understanding of how far up the scale of needs guided meditation is for the general population of the United States - or globally. Or, Allbirds is an interesting example, right? Yeah - cool, sustainably created shoes that you can run in, go to the office in, that are really popular with investment bankers, blah blah blah. But the majority of the country is buying their shoes from Target or Walmart. Because they're cheap, and they're there, and that's where they shop anyways. And so if Allbirds are not in Walmart, then you're - by default - not getting access to the middle of the bell curve in terms of the population. And I personally think, so I'll tell you...I've talked about this before: there's two things that automatically get me excited about founders. Number one is first generation immigrant. And that's for a lot of reasons, but one of the main reasons being just the representation of a larger set of diverse problems from just a socioeconomic or lived experience perspective. And like you talked about - those are big numbers. 45 million people in United States don't have a credit score; 100 million people are credit challeneged; those are huge numbers. And they represent - especially over the course of the next 50 years - if you map out the average economic growth of an immigrant family in United States over the course of 50 years, and you apply that to every immigrant family in United States that hasn't been here for 50 years, the amount of economic growth driven by that cohort of people is incredibly large. So diversity of those lived experiences is number one. Number two is moving to another country. So I've been an immigrant the opposite way. I've lived in Vietnam for four years; I've lived in India; I've lived in Singapore. So it's not exactly the same thing, but I've had the experience of getting thrown into a totally new culture where you don't know anybody and you don't know anything, whatever. I think that moving to a new country and experiencing all of that is actually really good preparation for being a founder. It is as close to that no gravity experience I think you can have: everything's new, nothing is the same, you're starting from scratch. And then the second thing is if you've ever sold Cutco knives. If you've ever sold Cutco knives, I automatically add one letter grade to your founder's score. Because, I'm like, if you can do that, that's like how... 

Samir Goel  44:03

Did you sell Cutco knives? 

Tyler Norwood  44:04

I did sell Cutco knives, yeah. That's how I got through college. I think it's one of these like bread and butter things where like we get I think we get like, really? I think there's a, and I don't know generally what it's caused from, but I think we tend to obfuscate the really first principle things that matter when it comes to building a business. And to me one of the things is sales - are you good? Do you understand how to do sales? And are you shameless enough to just tell somebody "hey - in my head, our product is absolute dogshit and it barely works, but I'm going to tell you it's going to solve all your problems." And then I'm just going to go through the process of making sure that that's true manually - I'm going to be here with white gloves anytime. Can you do that? Number one are you shameless enough to do that? Number two is like do you just understand the psychological mechanics of sales? And for me, it's as easy as if you've gone door to door and sold Cutco knives, I know for a fact that one you're shameless. And number two is that you've actually been trained really effectively in the psychology of sales. And I do this with the founders all the time. It doesn't really matter what you're selling, I'll walk you through the six or seven things that you need to say in any sales pitch, whether it's an email, or phone call, in person, etc. And so yeah, Cutco is a huge...Cutco gang.

Samir Goel  45:30

Tyler - there's a lot that you said there that I resonate with, but I couldn't agree more with you on the first point around it's not necessarily intentional exclusion. It's just you know what you've done. And you make decisions based on the experiences you've had. And a lack of diverse set of experiences, it's ultimately in my opinion, just an economic miss for VCs that want to invest in businesses. Because you're gonna invest in a lot of homogenous businesses, the market cap on that is limited. But if you're able to broaden that, and to your point, the immigrant experience is a unique one. And I think it also increases - you know - part of being a founder is like the amount of, honestly, bullshit you can tolerate. And that's a big part of sales too. And it kind of increases the amount of stuff that you can deal with on a daily basis. And you know it's funny you mentioned Cutco and I think about my friends in high school who sold Cutco knives and I  couldn't agree with you more. And both Wemimo I were not technical founders. And I think a lot of VCs didn't really love that. But if there's one thing that we can do, it's sell. There's nothing I love more than selling. And that, to me, is the heart of the business. And we're both New York people versus Bay Area people. And I think that's a difference you see sometimes in that market. Sales is what, to me, builds a business. You don't have revenue, you don't have customers, you don't have people actually buying your product, or who cares how nice it looks, or how smooth the technology is. At some point, that catches up with you. But you can't have a great product and expect people to come to you. I just I've never subscribed to that.

Tyler Norwood  46:58

Yeah, exactly. And I think it's a balance, what I tend to see is venture capital - or just the startup zeitgeist - swings back and forth between the balance. So it's like, "three engineers and $100,000 can build anything." And then it swings back to being very commercially focused; it's all about distribution; we just need salespeople - this bread and butter version, like dad's startup company, where it's just a bunch of sales guys in suits that fly to Dallas, or whatever.

Samir Goel  47:26

That's what real estate looks like today. That's literally the real estate industry. 

Tyler Norwood  47:31

Yeah, but I think they're both required and I think a lot of founders will self select examples where sales wasn't necessarily required, like Facebook, for example. But the reality is to actually make Facebook what it was, there was an incredible amount of sales that were required. Getting it off the ground? Yeah, it was a couple of engineers that built it. Or WhatsApp. I mean, WhatsApp is always a great example of just 10 engineers and they build this huge global messaging platform. But founders will sort of self select those examples to make themselves feel better that it's scary to go out and do sales. It is. It's scary. Because one, it's takes shamelessness; you just have to lay on your sword and be willing to go out there and hock knives. But number two - and I've only recently started telling founders this - is that it's scary because it's the first time you're actually facing the music. When you're behind your computer building, everything is fantasyland. Everything is like we're going to change the world. We're going to do this. When you go out and start talking to customers and they tell you, "No, that's dumb. We don't want that." You are faced with an objective judgment on what you're building. And there's obviously an incentive for founders to avoid that, to their dismay. I think the longer you avoid that, the less chance you have of being successful. You need to go do that. And that's what going out and talking to your customers up front is like; you shouldn't really be building anything that people are telling you that don't want. It's tough, it's tough to go out and say, "Hey, I have this amazing idea. Look at how smart I am. My ego is so pumped up by how excited I am about how I'm gonna change the world." When you go out there and tell the people that you think would buy it from you and they're like, "No, we don't want that." It's like, "Fuck, I'm not as smart as I thought it was."

Samir Goel  49:26

No, it's real. You know I love the way you describe that experience right where you're going out there, you're selling something that's half baked, and if someone wants to buy it, you just kind of have to fill up the pieces. And we do phone support. Phone support is me calling your renters, in this case, or your customer. Yeah, we do automated email? That's just my Gmail account. There's a lot of duct tape that goes into building solutions, but when you get that customer it is amazing. And I'm also a big subscriber of if people don't want what you're building, ask them what they want, and go build it.

Tyler Norwood  50:07

Exactly. And to your point, I think a lot of people get too focused on thinking that their customers are ever going to care how it works. 

Samir Goel  50:15

As long as it works.

Tyler Norwood  50:16

The reality is I just care about the value. The example I always use is airlines. Why do you buy an airline ticket to get from A to B? Right? Nobody goes on to Delta - Delta doesn't have a website where they explain how their airline operations work. And, rightly so, because they're probably terrifying. Absolutely terrifying to actually see how this whole thing works and how vulnerable it is to human mistake.  But you don't care; you don't care how the airline works; I don't care how this plane works; I don't care how the airport interaction works, none of this stuff. I just care that I'm gonna get from A to B. And whatever other selection criteria I have. Some people care about price; some people care about this. And that's what I tell founders all the time is: look - you're spending too much time trying to explain to your customers how an airline works. And they don't care. What you need to tell them is, "if I could fly you from New York to San Francisco for $150, would you buy that ticket? Yes or no?" That's what you're trying to validate. Do they want to buy what you're trying to sell? It doesn't mean it all has to work right now. Because the cool thing about building a software startup is it's not an airline. A software startup can't fall out of the sky and kill 150 people.

Samir Goel  51:32

You don't need to do that kind of CapEx. And you know I couldn't agree more. Even though even taking it down the stack a little bit. I think one of the mistakes that founders make - and I've definitely been guilty of this -you build something that starts working and you think people want it to be fancier or sleeker. And actually, that's such marginal value. And people actually just want it to work. If you just do what you're supposed to do and it works that's 99% of why people buy. The bells and whistles are great, but it's not actually why people are making the decision, to your point. Sure - I would always take a first class seat over one that's economy. But at the end of the day, I'm still gonna go to the place regardless of that choice.

Tyler Norwood  52:20

Exactly. I mean - back to the airline metaphor - Ryan Air exists. And they have ads on the overhead bins and you have to pay to go to the bathroom.

Samir Goel  52:31

It's 20 bucks and I'll do it, you know?

Tyler Norwood  52:33

Exactly. Samir - this has been awesome. We're coming up on the hour. And you're running a billion dollar company so I want to make sure that you can get back to it. I want to wrap up with two things. So first question I ask everybody: who - for aspiring founders, etc. - do you follow? Who are the people that you follow on Twitter? Just thought leaders that you think founders should be listening to?

Samir Goel  53:05

That's a great question.  So number one, Tyler Norwood. Everyone subscribe and listen. But beyond that, having worked at LinkedIn, I've always been a LinkedIn junkie, and I've read everything Reid Hoffman's ever put together, and folks like Jeff Weiner, etc. So I definitely enjoyed learning about the PayPal Mafia, but that's pretty cliche. I also enjoy learning about industry leaders outside of technology as well. So whether we're talking US presidents, or CEOs of Fortune 500 companies, or one example used popularly is Phil Knight from Shoe Dog, but just in general, people that have built things and have passion for them and what their journeys have been like.

Tyler Norwood  53:07

Besides me.  Nice. And then last question: books. So what's on your bookshelf? What have you read recently?

Samir Goel  53:54

Good question. So one book that I always recommend, it's called the Color of Law. That's a great book about why we do what we do. It's written by Richard Rothstein. And then. looking at my bookshelf over here...I'm trying to think of a book that I really enjoyed recently. You know, I've actually been reading some of the Netflix culture books that I thought were really good. So there's a few there.

Tyler Norwood  54:20

No Rules Rules?

Samir Goel  54:22

Yeah - that's a great one. And there's one by - not Reed Hastings, but his co-founder that I picked up recently that I started diving into. So that's another one that I've enjoyed.

Tyler Norwood  54:36

Nice. Awesome. Well Samir, this has been great. Thank you so much for coming on and sharing all this incredible insight. And I wish you guys the best of luck at Esusu and really, really excited to see that there are founders out here who are trying to solve problems as important as the one you guys are solving. So good luck with everything. Please stay in touch. Let me know if there's anything that I can do to help you guys and again, really appreciate you coming on.

Samir Goel  55:03

Absolutely. Thanks so much Tyler. Great to chat with you.

Tyler Norwood  55:05

Hey everybody, it's Tyler again. Thanks so much for listening. If you're interested in building a venture backed company like the one you just heard about, we would love to help. To learn more about our founders studios that we run around the world, please find more information at antler.co 

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