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So it was cool, got through it all, made some money... Then I was like "Well, I've never had money before. What the crap do I do with money?" And I'm like "There's got to be a site somewhere --" |
**Adam Stacoviak:** "I've never had money before..." \[laughter\] |
**Drew Wilson:** I was like "There's got to be a site that says what to do." I'm looking around... I'm like "Oh, there's no site." The closest you'll get is The Points Guy kind of stuff, but that's a totally different scale. And so I'm like "What the heck do I do? I have no idea." I'm like "I'm sure other people are in... |
**Adam Stacoviak:** "I could make a bank..." |
**Drew Wilson:** "There's a bunch of old people making banks... I could do it." |
**Adam Stacoviak:** Is this literally right after the acquisition time frame? The three months are over, the acquisition goes through, all cash, you're an employee, then Letter? Or is it like a year down the line? Help me understand that compressed timeline bit. |
**Drew Wilson:** It's all at the same time. |
**Adam Stacoviak:** Really? |
**Drew Wilson:** So I could be very optimistic... As an example, when I was going through the transaction, this was not a done deal. But in my mind, I'm like "I could see this totally being a done deal." And we're still like a month and a half out of what would be the end date. The thing is, you don't start a process, ... |
**Adam Stacoviak:** \[laughs\] |
**Drew Wilson:** \[42:22\] And "I promise, I promise it's there." I have no idea why they just were like "Okay, sure." But they took the thousand bucks, and they took that, and I was able to get the house. And it came down to the point where, "Okay, now you've got to pay for the house." And I'm like "I just need like a... |
I'm trying to remember your original question... But I think it was around - yeah, Letter, when I started. So that kind of shows you my mindset. So I got the house, I'm an employee of the company now, I'm working at GoDaddy... I think it was probably six months or so before I came up with the idea for Letter. And I wan... |
So like purely a code thing. And then we turned into this more like branded bank sort of thing. And I applied to YC. It took me four tries to get in. YC calls me and is like "Hey, we think we want you in, but we're not sure, so we're going to have another partner talk to you. Are you available in the next two minutes?"... |
**Adam Stacoviak:** What was the pitch? I don't want to interrupt you, but I do want to hear this pitch. If you can like maybe even earmark that... I want to hear whatever the pitch was to these four people, or some version of it. |
**Drew Wilson:** To be honest, I have no idea. It's been so long... I don't remember if I pitched them the banking as a platform, or if it was at that point the branded bank. I think it was the branded bank, and the pitch was just like "High net worth individuals --" Okay, so high net worth individuals are 2% of the po... |
It's been so long. But it's an enormous amount; vastly outnumbering everybody else on the planet. |
\[46:06\] And I was like "There's a huge market here. No one's going after this. We're going to go after this and we're going to win, because we're modern, we'll have an app..." Literally even now, other than Letter, that doesn't exist. There's a reason why, is because, like I said, that demographic just doesn't care. ... |
What's funny is... I was in YC for three months while working at GoDaddy, and had a huge team at GoDaddy, built up the payments team... I think we were at like 16 people was my team at that time... Plus other teams assisting us. And then I'm doing YC at the same time, and then demo day is going to come up, and I've got... |
**Adam Stacoviak:** Well, that was only a few months after the acquisition, though. Didn't you say you had to stay as an employee for a bit? Maybe a year in? |
**Drew Wilson:** Yeah, so this was -- so I came up with the idea maybe six months or so after, and then there was a whole bunch of rigmarole about figuring out how to set up the bank, what to do. I started the company, ran the company I think for like a year before we jumped into YC, or something like that. So yeah, th... |
**Adam Stacoviak:** What was the company doing while you were preparing for YC? Like, what was the company, running the company? |
**Drew Wilson:** So it was building the product... Like I said, first we thought we were going to be a banking as a service kind of provider, but then ultimately decided we didn't want to do that. There was already a couple of other players in the space. It seemed horrible to do. And it is. And if you'll talk to those ... |
Yeah. So we were in the middle of building out this idea of a banking as a service provider, and then we switched and we're like "Okay, we're going to be the retail bank." Because what we were going to do is build banking as a service provider, and then have our own pretend sort of active, sort of not retail bank to gi... |
**Adam Stacoviak:** What's the hindsight on that? I mean, so Letter didn't succeed long-term. I'm assuming -- I don't know why it didn't succeed. Why did it not succeed? |
**Drew Wilson:** \[49:48\] It ran out of money. It ran out of money. That's the practical reason. The real reason is, is we approached the market incorrectly, and we didn't have the cash to correct. By the time we learned how to correct... And anyone who's in that industry, they know this stuff just takes forever. Thes... |
So we raised a pre-seed, and then I raised a seed round, and then I ended up spending all my money, way too much money on this bridge round, essentially. It wasn't really a bridge round. It was more just an open access to Drew's bank account to pay for the company, to try to get to this A. So what we did is we had this... |
So that was the deal. He was running it all himself. And then he brought in a team to run that brand that he had made, because he didn't want to run it anymore. And the team he brought in was headed up by the former CEO of Hulu, the guy who sold Hulu to Disney. And so then I was interfacing with him and his team, and t... |
So yeah, we got kind of hosed there... But we did get to use that guy's money to lend to people. We created our own in-house lending platform, where you get a loan in a few seconds, and it was 100% programmatic, meaning there was no humans in the loop at all... Which is crazy. And I don't know of any other thing or pro... |
**Adam Stacoviak:** \[53:43\] What in the world is involved in building this? I mean, I just look at you -- so I don't want to downplay you. I don't want to say "Drew is just..." But just for the sake of just this conversation, you're the person who taught yourself how to design in Photoshop before there was layers. An... |
**Drew Wilson:** People always get hung up on the bank thing, and think it's so impressive... But I don't know, it's just another business. |
**Adam Stacoviak:** It's just another business, huh? It's regulated. It's more regulated. |
**Drew Wilson:** It's just highly regulated. |
**Adam Stacoviak:** Well, it's just unlike me. I would say that's the reason why it's so remarkable, is that it's so unlike -- like, I don't know anybody who's created a bank, besides you. You're the only person I know. And you're the only person I know that -- well, I think it's actually strange now that I'm realizing... |
**Drew Wilson:** Yeah, I don't think I ever had bank on my bingo card either. Really the reason I wanted to do it is I'm like "No more making little apps. Done. I've done that to the nines. I just want to do something big, that could become a big company." |
**Adam Stacoviak:** A big swing. |
**Drew Wilson:** Yeah. And so that was my big swing. Since then, I've come to realize that, you know, having a big win is such a -- financially, it's so different than having a large cashflow. Having a big win means you can go out and buy a big house and do a bunch of cool stuff and get all this kind of crazy stuff goi... |
So having like a cash cow, like an app that's like just killing it, on a small scale, that lets you not have to work somewhere, that lets you get to experiment and do whatever you want... That is the successful life idea. That's not the successful finance idea, that's a successful life idea. And the ultimate goal for a... |
I gave away my cashflow when I sold my company. I was too inexperienced to know all this at the time. But I did get the windfall, which was great. But now I need the cashflow. And so learning all these things that I've learned - there's always so much more to learn. So I've got to get myself another cash cow, and then ... |
**Adam Stacoviak:** You said words. Well, I think -- okay, so from Plasso, you had a windfall, right? You said it was an all-cash deal. You were able to take care of your investors, plus, so they were able to make their money back, plus a percentage or an X, or however you want to frame that. You paid the employees, yo... |
**Drew Wilson:** \[58:37\] Pure loss. Pure loss. No, no, no, we made money in that there were people paying us money, and money went to our bank account, but we were not profitable. So I lost a lot of money. More than -- |
**Adam Stacoviak:** Like millions, thousands, hundreds of thousands? |
**Drew Wilson:** Yes, millions of dollars. |
**Adam Stacoviak:** Millions of dollars. And this is your own cash. |
**Drew Wilson:** Yeah. For me, it was like a -- the decisioning was "Well, if I stop Letter now, it's going to take me four years to get to the point with any other company where I'm at right now with Letter, so I may as well just keep funneling my cash into this thing, and try to make it work, since we've already gott... |
**Adam Stacoviak:** For sure. |
**Drew Wilson:** But at some point, you know, I'm noticing. I'm 41 now, and you just get sick of it. You just get sick of writing code. You just get so sick of having to design another freaking page... It's like "Gosh, dang it. I'm so sick of it." I've designed every kind of page, so many times. I've written every kind... |
**Adam Stacoviak:** You like that, or -- is that a good thing or a bad thing? |
**Drew Wilson:** I don't want to offend anybody, but no, I don't like it. So I don't know... It just gets old. It gets really old. All these people are 20, and I see them like "Oh, just raised money through YC", I'm like "Dang, you look like you're a baby." \[laughs\] And I'm like "Well, it makes sense." They're young ... |
**Adam Stacoviak:** Just not young anymore. |
**Drew Wilson:** My big attempts overall turned out well, but they were never like big-big. So I still am after my big-big one. You know, I have these ideas, I'm like "Gosh dang it, there's someone out there making supersonic jets. Gosh dang it, there's someone out there making robots. Why can't I freaking do that?" I ... |
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