One. And welcome everybody to another
smart money Circle show. I'm Adam sarhan with me.
Today is Jason Wilkie who's the founder and CEO of Dave.com and
it's a public train of thought. The Ada V is a thicker Jason.
Welcome to the show. Hey thanks for having me.
I really appreciate it so Dave can sorry.
Dave Jason, can you tell us a little about how you found it?
Dave and your story and how you got to where you are today Yeah,
well, I'm a I'm a lifelong entrepreneur.
I started building companies when I was in my dorm room in
college and that first business was a company called one day
sports which would help to liquidate golf product from
major retailers at a significantly discounted price
in a daily deal typesetting. So we would sell last year's
clubs for 50% off for 24 hours or until it was sold out.
And the next deal would be that the next day or until the other
product sold out. It was a great business model
sort of as a senior in school and sold out.
When I got out of college that Journey led to quite a few
overdraft fees. While I was trying to build a
business pay for all my expenses, traveling back from
San Francisco and I always had in the back of my mind that my
bank is terrible. I've been with them for 15 plus
years. I'm getting hit with all these
overdraft fees and there had to be a better way.
And so Dave was really the Genesis of a lot of personal
pain points related to Consumer Finance and love it.
So, tell us a little about Dave, if you don't mind what you guys
do and the value proposition, all that fun stuff.
Yeah. So today, Dave is a company with
over 8 million members, we are an app that is specialized in,
in next-generation, banking services, for our customers to
avoid overdraft, fees minimum balance fees, and have a much
better platform. Is powered by Rai underwriting
engine and our anchor, feature of our checking account, we
offer to customers is called extra cash and that is a five
hundred dollar cash advance that comes with no interest.
No credit check, which our customers can tap into at any
time to pay for things like rent, gas, groceries.
And we found that to be an incredible differentiator when
it came to watching us versus the incumbents we actually
started off as just a Insights tool and capture van solution
for existing bank account. So you would download Dave
connector Chaser, Wells, Fargo account as opposed to overdraft
to your Chase account and paying them a 34 dollar fee for, as
little as $5 of overdraft, you would come to us for hundreds of
dollars of Interest free overdraft protection.
It was no surprise that our number one, most requested
feature for our members was for us to launch our own checking
account. That was the vision from day one
and we saw such huge customer demand.
We finally realize that Vision last year and launched a
checking account, I'm to all members and it's been a wild
success for us. I love that.
So members come to you, let's talk about the customer
acquisition process. How do you acquire new members?
What are some of the ways that are effective for you?
As far as bringing new members on the platform?
Great question. So, we found that launching a
new checking account, would be very expensive from a cost per
acquisition perspective, Banks. Pay hundreds of dollars about
thousands of dollars to Market their Banks.
They have celebrity endorsers. We never thought we would be
able to compete without raising, billions of dollars to go pay
that several hundred dollar account opening cost we'd seen
many other Neo Banks launched before us and not be successful
either. And so we really want to go to
market with something. That was you Unique and every
person we found this country has had a problem with overdraft at
one point or another. What we found though, is the
unique innovation of Dave. Where was that customers
actually like over Jap? They just hate the idea of
paying a $34 feet of their bank and sometimes upwards of a
hundred dollars per day. Right?
So that's, we basically launched a more of a trojan horse
approach, whereas opposed A launching, the full checking
account and spending, all this money on employees and
infrastructure all that. Just focus on over chapter and
Taxation as our first product. And at the time we launched
there was this brand new technology called Platt which
helps you to connect to people's external accounts.
And I figured by Bank, I'm with him for 15 years, I have enough
transactions going in there. They know I'm a low risk
customer. Why do you have to charge me
such a huge amount of money when they know that I'm good for it,
right? So that was the impetus.
We said we're going to. We're going to give you that
overdraft protection for free. We're going to use your some
data from your account and put that into an AI model to spit
out, effectively a risk. Or if you're good to pay us back
and we've had wild success with that.
We've had over 65 million. People are sorry, 65 million,
cash advances taken out from Dave.
Since we launched five years ago across, our eight million
members, and we are resonating billions of dollars per year to
help people, and are saving customers billions of dollars in
the meantime. That approach of focusing on
overdraft protection, right. Led to us having a CAC of about
fifteen to twenty dollars compared to the hundreds of
dollars at a bank. God, yeah.
Someone engages with our overdraft protection product,
their likelihood of want him to open up in and use our checking
account is very strong. So, just so that our model is so
much more efficient than the incumbent sit at Mazda, to keep
our cost structure low and keep our prices.
A fraction of the incumbent Banks, which is Were being so
successful. Yeah, no.
That makes perfect sense. And then you also offer other
things as well as the side hustle and things of that
nature. Can you speak to that a little
bit, please? Yeah, so we sensed a theme
around the things that we were building, we are really helping
save and put more money back in people's pockets.
Me think about the 34-hour over Jackie's on average about four
hundred dollars is what our customers were paying in
overdraft fees per year to their Bank.
Wow. Find with minimum balance, these
it was all about really helping people do a better job between
paychecks. So we launched a couple
ancillary products to help people that one called side
hustle, which helps connect our members to the gig economy.
We found many a remembers through our data that they were
driving for places like uber and Lyft.
So we decided to expose all the other opportunities out there
from doordash to instacart and it doesn't other opportunities
out there. I think we have 35 different
places now and that helps our members make more money, put
more money back in their pocket and we found that to be a great.
Great addition. Now you also in addition to
extra cash and that the checking account, we have a goals account
which is a savings account where you can set up multiple.
Target's to help you achieve certain things in life like
paying off your hospital bills or saving up for a house, you
name it. So if we hope move that we feel
are very full-featured now at this point, but we're still
going to Market with that extra cash differentiator which brings
customers in the door cheaply and get some highly engaged.
Yeah, no that's makes perfect sense.
So let's talk about you mentioned wrist so that's kind
of perfect segue to my next question.
Can you talk a little about risk management?
What mistakes you see, people make From a business standpoint
consumer standpoint, any direction you want to go.
I'd say risk is very important, which is why we've spent a lot
of time on our underwriting engine.
When we first started the business, we had this amazing
value prop, obviously, which is, hey, we'll give you free money
as opposed to your bank, which is charging you like, but that
did come with a cop's we were losing about 25 cents on the
dollar for what we were giving out to members.
But pretty quickly on after we started developing our engine,
we've gotten those loss rates down onto around 2%.
And we're doing that at massive scale.
And we've been able to 5 x the limit, we can give out to
customers to protect them between paychecks.
So I would say really focusing on the underwriting to be in
long term in an efficient is helpful and then certainly
making sure that you're paying close attention to things like
fraud and other parts of risk management, I love it.
So Jason, you've started many businesses and you're now in
running Dave, you have a really, you have a lot of experience.
So what are some timeless? Lessons.
You'd like to share with the audience, please.
I think about that. So, you know, I'd say that one
of the things, the biggest things for me is to be a really
calm leader. And I think especially going
through times of uncertainty we're living in a very uncertain
world and I find that people look to you for sense of
security. So, having a really strong
Mission Vision strategy, which you can always point back to,
and really not. Yeah, not getting too anxious.
In the moment when things aren't going your way because
entrepreneurship is such a life of ups and downs.
You just have to be pretty calm through it.
I find that to be one of my strengths with regards to
leadership. I love that.
And then what are sometimes mistakes.
You see people make and how to avoid them.
I mean, there are plenty of plenty of mistakes and I'd say
the first one is really around hiring.
I'd say, there's so many different mistakes you can make
into hiring, using your sort of gut judgment, or using your
being sort of trick by someone's personality.
You really have to have a very clear job description and make
sure you're hiring. The person that best meets that,
that job, there are lots of things that keep people
distracted and make the wrong decision.
And then the second mistake on the back of that, I think.
Is when you find, those are Misfit in a higher making a move
faster to correct it and parting ways of that, that person when
it might not be a fit for you, or for them the longer you, let
it go on to be nice or you're actually, you know, actually not
doing either either of the parties of favor, right?
So that you see a mistake, basically it's not working fast,
you deal with it better. So it doesn't turn into Godzilla
and eat the whole thing. Yeah.
And I can't tell you how many other people gave me that same
advice as well. It's great.
It's a really, really keep you. Lots of small.
I mean it's just it's great advice is feeding for trading
and investing, same thing applies.
Yeah, Jason, let's talk about leadership.
You mentioned staying, calm? What are some other attributes,
that make a great leader? Well, I think it really comes
down to building a great team and a really great team that
cannot only execute on a plan, but is really great at planning,
we spent a lot of time in the company, developing our okay,
our strategy, which takes a really good amount of time to
get set up. But once you have it going, the
Cadence, you have of really checking back on your goals and
giving people a framework to come up with their own ideas and
execute on their own versus being a top-down leadership
organization. I think a good leader can really
set a high level strategy. A high level vision and Mission,
but ultimately it can't be up to you to go out and build all
these things on your own. You have to have a great team
and feels empowered and you'd be surprised when you get people
that the ownership, the types of great Concepts and ideas they
come up with. Yeah I love that.
So let's talk about that for a second.
If you don't mind, how do you deal with the different
personalities and building? A great team is such a huge,
huge, huge part of winning, and part of the equation.
How do you deal with it with person?
At like the pot in her office politics and personality clashes
but making sure everyone stays true to the mission.
Like put we above I so to speak. How do you handle those
situations? Well first we have great
check-in, so we'll have a weekly Business Review that kind of
goes over our Arty statistics but more important than that.
We have a quarterly Business review or everyone kind of does
a retro on what they learned from the quarter and also
doesn't look forward on what they're going to do for the next
quarter measured by their their objectives and their key
results. I think it's important to have
that. The second component I believe,
is having a directly responsible individual within your
organization and we made an important change in.
Our company a few years ago to make the product team that the
dri and we thought that that was very helpful to have really one
person responsible. We previously had a GM model,
where GM is sort of responsible for the strategy, but they have
no ownership on the deliverability of things.
We found that giving product the power to own things ended.
And it was a really strong way to execute and plan and it's
been a game changer for us or lost on a scope.
Of Years and love it. And what is the if you can pick
one of the best lesson you've learned about leadership or some
of the best lessons if you want to use more than one, I'll say
it's not a race and I think everything's ever since you're
young, you know, you want to be the best, you want to get there.
The fastest but really building things for longevity is
important and the other part of it's not a raise is that you can
often times get very distracted. By what VCS are investigating,
what your competitors are doing. But oftentimes you find that you
wake up in a few years of realize it, those guys are not
even correct and you waste a time chasing something.
And so I'd say you really have to Two can go back to that
strategy. Find what really fits within
that doesn't help impact your long-term vision and really ask
yourself is this a potential distraction?
Am I just being you know sideline by something that may
or may not be a fad. Yeah, that's really, really
powerful. Like bank is basically keeping
your eye on the ball and making sure that he understands like an
infinite game. Opposed to where's that?
Where are we next quarter? And then staying aligned to the
long-term goals, you know, actually Warren Buffett talks
about that Jason and his annual Sure, he just published, he
calls the great, a, the American tailwind.
And he gives, you know, basically the stock market, the
economy is up the last 50, 60 years.
Since you've been running running a Berkshire Hathaway and
he gives all credit to the American Tail wind.
But most people don't even look past the next quarter.
Let alone position themselves to the next decade or several
decades. So, that's a really great piece
of advice. Thank you for sharing that.
Let's talk about adversity, I know, great leaders, great
successful, people overcome adversity, most people do what
they hit a wall, then they stopped because it's painful
only they fail. But successful people like
yourself overcome adversity, can you give us an example of some
kind of obstacle you've overcome and how you handle adversity,
please. Yeah, well I think going back to
the origins of Dave. I was semi-successful founder,
right? I just sold my most recent
company for a great return for my shareholders.
I was pivoting to a brand new industry that I had no
experience with which was Vin tag.
Having said that even after we have product Market fit with the
with Dave, it took me over 130 meetings to close our series
day, we had great opening stats but trying to convince investors
who had never had an overage apathy in their life.
That there's something important for American.
Consumers was so painful to get done.
And once we really started to scale significant after that and
other competitors are popping up.
Then all the sudden looks really smart and and so it's easy.
It would have been pretty easy to give up at that point and
recognize it investors. Don't care about this problem.
But yeah, we got the business all the way and is fisa five
billion dollar valuation. We Scale to millions of
customers and we both have a heck of a business.
So everybody who pass on as at that stage really regrets it.
Yeah, for sure. I mean, it's phenomenal success
and that you're just getting started.
I mean you've only been public for a year now.
So yeah, yeah. No.
This is, it's really really, really interesting.
And plus you have so many more offerings, you can offer these
people not just one or two or three, you can monetize that
many, many other ways. Yeah, I'd say that's a key
message for us. Women with investors right now.
We've built a really strong business and we're so we're so
very early on in our monetization.
As of right now mean, we still very much wine or acquisition
engine, which is extra cash and a checking business is still
relatively nascent. For us yet we're still north of
200 million annual run, annual revenue business.
Last year we are shrinking the Gap towards profitability and
there's so many other things in In Consumer Finance, to ship, to
our customers to help them save money.
You would have to be living under a rock to think that we
can grow lifetime value from here.
Even if we didn't, we still have a great business tracking
towards profitability giving, no credit at any future product
opportunity. So, I'd say we are a really
interesting company to take a look at when you think of it of
all the ways that Banks make money, that we are not currently
doing as a today. Yeah.
And you're also not really impacted by the shenanigans
that's going on right now big. Right, that's right.
I think we're too big lesson about people who have over 250
thousand dollars of assets and are in a bad brush to spread
their assets across the country across different asset across
different banks. Right, the average American
Consumer is having a hard time coming up with four dollars for
an emergency. So, we're very much dealing with
like a 1% problem here. And what the average American is
going through, they need a stable, checking account, the
thing. They need to be most focused on
is cutting out fees which is really hurting their overall
cash flow position more so than any investing or putting it into
treasuries or anything that's going on in major Publications
right now. It's not affecting the average
person yet leave, especially with inflation going.
That's a really, really good point.
So, okay. Jason, as we come here, my one
of my favorite question is, what advice would you give your 30
year old self or 20 year old self and that you'd like to
share with the audience? There's a few.
I mean I'd say, yeah, if you have to enjoy the moment as
entrepreneur or even as in your everyday career, I think
everything goes by very fast and you need to acknowledge when you
have some wins because they don't last that long and pretty
quickly up to be dealing with the next, the next issue.
So we're up to try and enjoy the moment.
But we talked about earlier in the call making those hiring
changes faster when you can send something isn't right really
doing reference checks on your your potential Partnerships.
You're going to do I mean whatever career and I'm sure do
come across different people. You're going to partner with
that. Partnerships can slow you down a
lot. And I think we could have
ordered a mop by taking a beat, doing some extra homework,
looking around the industry to see if we were working with
best-in-class partners and especially within Tech, there's
been a lot of smoke and mirrors. With regards to partnership
opportunities. I wish we could have looked
around a little bit further, and we would be an even bigger
company than we are today. Gotcha.
And with the right partner can accelerate growth, even further,
I mean, 10 together. Yeah, it's a really really good
point, but beautiful. Well, thank you so much Jason
for coming on the show. The best way for people to get a
hold of you is Dave.com and they can open up accounts there and
learn more there or yes. Yeah, that's right.
Excellent, the stock tickers davem82.
You everybody. Thank you Jason.
Hopefully, we'll have you on again soon.
Thanks a lot. Appreciate it.