From personal struggle to fintech solution: A chat with True Link CEO, Kai Stinchcombe

In this episode of Fintech Thought Leaders, QED's Head of Early Stage Investments Bill Cilluffo speaks with True Link CEO Kai Stinchcombe.

‍

‍

‍

‍

Show notes

Bios

Bill Cilluffo joined QED as a Special Advisor in the fall of 2014 and became a Partner in 2015. He is currently Head of Early Stage Investments after six years as Head of International, leading QED’s Investment teams in Latin America, Europe and Asia.

Prior to joining QED, Bill spent nearly 20 years at Capital One, spanning several roles and leading several businesses. He spent the first 6 years of his career leading Marketing, product development and credit policy for Capital One’s subprime credit card business; ultimately having overall P&L responsibility, and growing the business to become the most significant player in the market. He moved on to spend 2 years in various new business development roles, spanning the telecom, medical finance and small business finance industries. Bill spent 3 years as Deputy Chief Credit Officer for the bank, playing nearly every role there was to play in the central credit function, after helping build the department from scratch in 2002.

Bill then pivoted his career to general management, leading Capital One’s Canadian, and ultimately International businesses, over the course of 6 years. Profitability of the business grew significantly under Bill’s leadership, through new product and channel introductions, acquisitions, and significant cost take out. During Bill’s last 3 years at Capital One, he led its Co-Brand and Private Label credit card business, building the business nearly from scratch to one of the top few players in the US market, through a series of acquisitions, most notably including leading the acquisition and post-merger integration of HSBC’s US credit card business, which closed in May 2012.

Bill graduated with a BA in economics from the University of Michigan, and competed the SEP program at Stanford GSB.

‍

True Link is a diversified financial services firm offering a range of money management, investment and insurance products, primarily for retirees.

Full transcript

Bill Cilluffo:

You are listening to the Fintech Thought Leaders podcast from QED Investors, your deep dive into the world of venture capital and financial services with today's digital disruptors. QED is a global venture capital firm focused on investing in fintech companies all the way from pre-seed to IPO. Fintech Thought Leaders brings together the most talented entrepreneurs tackling today's biggest problems. If you're looking to learn more about what motivates our founders and team members to succeed, you're in the right place. Hello and welcome to the Fintech Thought Leaders podcast. I'm Bill Cilluffo, the head of early stage investments at QED Investors. Today on the podcast, I'm excited to be joined by True Link CEO, Kai Stinchcombe. Kai, welcome to the podcast.

Kai Stinchcombe:

Thanks for having me.

Bill Cilluffo:

Yeah, it's been a little while since we've seen each other, so I'm really looking forward to getting caught up today. We're going to dive a whole lot more into the details behind True Link later on in the pod, but just to help orient listeners, I wonder if you can start by giving us a short elevator pitch on the company and what it does.

Kai Stinchcombe:

Yeah, for sure. So supposing you have an aging parent with Alzheimer's that's interfering with their ability to budget or avoid being scammed, maybe they're doing impulsive shopping, this gives you a way to help manage a form of payment for them so they can keep on making purchases on their own and you can help keep them safe. And by the way, we do the same for addiction, special needs and mental health also.

Bill Cilluffo:

Yeah, I know the mission behind the company is one of the things that had us initially extremely excited about what you guys are doing, and I know that's so important to what you guys are building, so look forward to diving in in a whole lot more detail to that later on. But just like to pause for another exciting piece of news on True Link. You have very recently celebrated your 10th anniversary, if I'm not mistaken. What an incredible milestone. Most companies out there never get to this point, so congratulations on achieving that. Is that something you ever thought you'd be sitting here today celebrating that milestone?

Kai Stinchcombe:

Well, at some level you got to. There's this reality denial that comes with starting a company where every single one of us thinks we're going to beat the odds, but it's certainly been weirder and more difficult than I imagined. It's sort of like year 10 you hit your year four numbers.

Bill Cilluffo:

Funny how that happens. But look, it's definitely a marathon, not a sprint, and it matters a whole lot more when you end up not necessarily kind of exactly when you get there. So huge achievement and congratulations to the whole True Link team for that great milestone. Let's rewind the clock long before True Link started. You grew up in Evanston, Illinois to two college professors, Northwestern, presumably. Your sister's also a professor. Was education and going down that path part of your early thinking on what you might do someday?

Kai Stinchcombe:

I think that was always the assumption and it's funny because I think dropping out of Stanford at one point in time was part of the Silicon Valley punch card. If you hadn't dropped out of Stanford, what are you doing pitching venture? I ended up dropping out twice. So I think it was surprising to everyone. I remember when I started my first company, a lot of people were like, "So it's funny that you're working on a software company, but who writes the software?" And it was almost like, well, I kind of kept it a secret, but I'm able to write software.

Bill Cilluffo:

That's awesome. So when you dropped out the first time you did it to start a company, then decided to go back to school, then dropped out to start the next company. Is that how that all went?

Kai Stinchcombe:

Yeah, I was horrible at it. Like why'd you fail all your exams, Kai? Well, I moved to DC with my company and so I didn't show up for them and it's like, wow, you're not great at this student thing.

Bill Cilluffo:

That's a minor detail. Kind of being there in class. I learned that one the hard way myself as well without dropping out so I managed to stay in and recover a bit. But as you look back, are you happy with that serial dropout decision that you made?

Kai Stinchcombe:

I really think I would not have succeeded in academia. It's interesting because I once got criticized for, it was a history class when the professor was like, you're not looking at reality, you're just trying to prove your hypothesis right, which I think is sort of the story of entrepreneurship in a way.

Bill Cilluffo:

No, that's true.

Kai Stinchcombe:

Deny what's out there in the world and try and come up with something different I suppose.

Bill Cilluffo:

You definitely have to have unwavering commitment to what you're doing, that's for sure. So look, I'd love to explore this career journey. You've been a multiple time founder, you've been in nonprofits, obviously you're doing a for-profit enterprise now, but with a very strong mission orientation, pharmaceutical sales software, you've had quite the journey. So I wonder if you can take a brief walk through the background of Kai for the listeners. It's a wonderful story.

Kai Stinchcombe:

I think I end up surprisingly frustration motivated. You look at something that ought to exist in the world and you're like, "Why does this not exist?" And I think that that's maybe part of the entrepreneurial journey for so many people is there's something that you think about a handful of things every day and then there's one thing that you wake up in the morning thinking about for a couple days later and you're like, "Ah, I just can't shake this idea that this thing ought to exist."

Bill Cilluffo:

No, that's cool. So what were your prior startup experiences?

Kai Stinchcombe:

So when I was in grad school at Stanford, we started a nonprofit called the Roosevelt Institution, which was this interesting moment and a walk down memory lane here. But when George Bush had started the Iraq War, there was a state department plan to rebuild Iraq and a defense department plan to rebuild Iraq and the State Department plan was a hundred times as expensive, and so they were like, ah, we won't need an expensive plan. This will be easy. We'll be greeted in the streets with flowers. And so they went with the defense department plan and basically everybody from the state department went and got a graduate degree at Stanford. And so I was surrounded by the would have been team that was managing the rebuilding process and watching the debates on TV. It was like, why do we not have a way to connect the scholarship inside universities to the policymaking process?

It's just like anyone who understands the policy there knew that both candidates were getting it wrong. So that was the impetus was how do you get graduate students and undergraduates involved in policymaking? Obviously we probably did more at the local level than the national level. It's not like Donald Rumsfeld was Googling what do the kids at Stanford think about Maya Rockmore? But if you can come up with a reasonable way to help artists move into Detroit or transition New Orleans to clean energy after Hurricane Katrina or set up a financing program for municipalities to replace light bulbs, stoplights with more efficient ones. It's that kind of stuff we were really able to do.

Bill Cilluffo:

Oh, that's a really cool idea there. What caused you to decide to start that in the first place?

Kai Stinchcombe:

Frustration, man. I mean there we are throwing our shoes at the TV while they're debating what to do about Iraq.

Bill Cilluffo:

That's pretty awesome. Had you had any kind of policy background or this was all through osmosis with all of your classmates?

Kai Stinchcombe:

Surrounded by smarter people than I was.

Bill Cilluffo:

That's super cool. So you did this nonprofit and got that off the ground. You then got yourself into technology. Can you talk about that journey? You already referenced a little bit of secretly teaching yourself how to code.

Kai Stinchcombe:

Yeah, my life would've been different if girls wanted to hang out with me in middle school, I never would've learned so much about computers. So pharmaceutical sales management never really thought I would be doing that. We had this theory about, this was at a time where prediction markets were a big thing and we had this theory that actually markets, markets were a really good way of efficiently allocating goods and services both within a firm instead of outside a firm. And so we were like, how do you distribute anything from xeroxing services to IT budgets? And it turned out we knew nothing about Xeroxing or IT budgets inside firms because we were a bunch of college kids basically. But it turned out that we'd found some fit in the sales organization where they were like, can you allocate leads in a smarter way or allocate sales territories and at pharma companies that was a place where they had lots of leads and lots of territories and complicated problems and we were a bunch of math whizzes looking for somebody who wanted to hire us to divide something up.

Bill Cilluffo:

That's really cool. Is there anything you learned from these experiences in particular you can point to that you took later on in your time at True Link that was particularly valuable lessons?

Kai Stinchcombe:

Oh my gosh, yeah, life-changing lessons. The first thing was our initial idea at the company that became Aktana was just so stupid. Nobody wanted it, and it took us four years to realize nobody wanted it because we were so stubborn. We thought we were so smart. And I think adopting that learner's mindset, and if your customer doesn't want it, just listen to them and believe them and come up with something that they do want. And it took us running our credit cards down to zero before we were like, "Okay, these guys want to pay us to do this other thing. Fine, I guess we'll do it." And that became the actual company. I think there was a second thing which was just never do enterprise sales. It was just like four years before we earned our first dollar of revenue. I sometimes look back at True Link and think that we should have started by white labeling our software to banks rather than becoming a neobank ourselves. But I just almost from a personal perspective, I wasn't going to put myself through that again.

Bill Cilluffo:

Yeah, well I could see the battle scars on that one in lots of people, that is a fascinating lesson, the early one on being willing to pivot and the willingness to listen to the market, which is always a tough trade-off. You talked earlier on about at some level entrepreneurships about having unwavering commitment to a dream that's by definition got low probability of success. So knowing when to listen to feedback, when to move off that is not the easiest thing. But we've certainly looked within QEDs portfolio, most of the successful companies aren't doing exactly what they started out to do. So most ideas get something right, but not the whole thing and you got to learn by doing.

Kai Stinchcombe:

Yeah, Frank, I don't know if he's quoting somebody else, but he often says that you have to fall in love with the problem rather than with the solution and that it's a very beginner thing to be like, here's what we're going to build rather than here's what we're going to solve.

Bill Cilluffo:

Yeah, that makes a lot of sense. One last question for you before we get into the True Link story. I've heard you say that you can be irritating about research methods and considering different alternatives was a big part of your upbringing. What does that mean and can you walk the listeners through that?

Kai Stinchcombe:

I think from a parenting perspective, both my parents were research professors and at some level doing research is based on a belief that the conventional wisdom is wrong and you can figure out a different way to think about a problem. So there's sort of a challenge or mentality, but both of my parents at various times taught research methods, and so there was just a rigor in why do you think that's true that I took for granted? And then the number of times some poor soul on the marketing team is like, oh, we ran this experiment and I'm like, "Aha, that's not an experiment." Experiment means something different. We tested the two things and this one works better. And I'm like, "Are you sure?"

Bill Cilluffo:

So I'd love to ask, has this rigor in research methods as you've applied it to the entrepreneurship world, what have you learned there? Has that really been able to be a successful tool in the toolkit? Have you found you've had to modify that? I'd love to just hear your thoughts as you cross these disciplines of different parts of your life together.

Kai Stinchcombe:

The interesting thing is that I think it may in some cases have been an inclination to less rigor. That if you say this result isn't statistically significant, for example, out of a marketing experiment and you're like, but is it good enough to act on and weighing how good is your evidence about something. Doing something new you're always balancing, you hear one story and you can't quite act on that, but you hear it from five out of five people, that's one in 32 odds of being a coincidence, that's probably good enough, 97%. Just listen to it five times and you're good to go.

Bill Cilluffo:

Yeah, that makes sense. It is, at least for me, one of the more challenging things to learn in business is my instinct is almost always about the 80/20 rule, figure out good enough and go with it. There are times when solving for the hundred percent solution is absolutely the right answer too. And how do you know when to apply either one? And that's probably one of the more difficult judgment based things in business I find.

Kai Stinchcombe:

Both of them are painful teachers. I feel like there's definitely people who were sort of like something at Facebook or Uber, you see these resumes and they're like, "Oh yeah, when I was building Uber," and you're like, "You learned too much from being right there. I think Uber would've been fine without you. Go fail at something and then come back with your resume."

Bill Cilluffo:

No doubt, no doubt. Well look, let's really dive into the True Link story. In particular I love hearing company's origin stories. I know yours is deeply personal and one of the more interesting ones out there that I've heard. Wonder if you can walk the listeners through the True Link origin story.

Kai Stinchcombe:

Yeah, so my grandma was in this category of affected people. For her it was often charitable contributions. She had worked as a missionary in Africa teaching at the church school. A cause close to her heart she would donate $10 every month from her school teacher pension to feed the children or whatever charity it might be. And she ended up on fundraising lists and started donating very frequently to charity. And the point is she didn't remember, it might be 10 times a day that she was donating to charity and she just didn't remember that she had just done it. And of course she didn't remember that because she had Alzheimer's. And on the one hand, it's her making a mistake there. And then on the other hand, you got to imagine that these companies know that they're calling repeatedly the same 85-year-old person asking them for money and that if somebody is donating every day, it's probably related to memory loss.

Meanwhile, there I am in San Francisco, my mom's dealing with this and I was talking to her. It was a very difficult time for my mom. I was talking to her on the phone every day and I'm sort of like, look, there's 11 million people in America with Alzheimer's mom. Somebody is solving this problem and I guarantee to you they're making tons of money doing it. And eventually she's like, "Okay, you're so smart. It seems like a lot about taking care of somebody with Alzheimer's and managing their money. You're in charge, go at it." It was a wake-up call about the topic in general and how few resources there are for caregivers, but it was a moment where I was like, this really, I couldn't shake the idea that this was a solution that ought to exist and also a big enough market that you could build a really good company in the space.

Bill Cilluffo:

Yeah. Now were you able to find partial solutions to the problem problem or really just completely nothing and no one was really out there trying to help this audience?

Kai Stinchcombe:

It's an interesting blind spot for banking because there's the legal, either you're competent or incompetent, and the reality is all of us are somewhere in between. Some decisions we can make alone, other decisions we need a helper with. And you can approximate it at a hundred percent for most of us and 0% for some of us, but for somebody with Alzheimer's, there's some decisions that are great to make. Do I feel like eating a Snickers bar and other decisions that you can't make, which is like should I donate $10 to this charity and it's super individual, but if you call a bank and describe this problem, it's like are they incompetent? If so, their signature is worthless, they can't sign a credit card receipt, they can't agree to the terms of service, they can't have a bank account, you have to shut it down.

On the other hand, if they are competent, then there's no problem. They sign the credit card receipt, they authorize the transaction, their problem, not ours. If they don't want to sign that credit card receipt, tell them not to. And so it's this funny blind spot. What ends up happening is you call the bank and you're like, "Hey, I saw this thing on my mom's credit card statement." And they're like, unfortunately, we can only talk to your mom about this. And you're like, the first time you're like, well, she's 87 and has Alzheimer's, so she's not going to, and then you're like, okay, I'm not going to fight this fight. And so you call back and pretend to be your mom. And so every bank has no data about how many people call about their mom's bank account. It's literally, it's like erased. It's like they can't hear it. That's like I think the kind of aha on why nobody had been able to tackle this.

Bill Cilluffo:

You're describing a bunch of probably real issues regarding the legalities and the compliance topics around here. I assume that was one of the big areas that you had to dive into in terms of developing some of these solutions. I wonder if you can walk the listeners through maybe not the super detailed version, but at least the high level of what were some of your solutions to these obstacles?

Kai Stinchcombe:

We didn't know a thing about banking. There was like a, oh, you probably need something that will pay for some things and not others. And that was like an early leap. That was what my mom needed was some things approved, other things declined, and I was like, okay, who declines a Visa card transaction? I think it's Visa, so maybe only Visa can solve this problem and maybe I have to go persuade Visa. And then it turns out, actually it's your bank that declines the credit card transaction. And I was like, well, I think we have to be the bank, so let's go persuade some bank to do this.

And then you're like, okay, this is the enterprise software route. Can't do that. They won't listen. And then I was like, can you be a bank and that was like, well, technically yes, but if I was like, "Hey guys, I have this amazing idea, walk into the QED office, I need you guys to buy me a bank so that I can help people with disabilities." It's not going to happen. And so it was just that process of trial and error where ultimately all we wanted to be able to do was decline a credit card transaction and we ended up having to build a whole challenger bank around it.

Bill Cilluffo:

That's pretty stunning. You talked about one particular, I guess I'll call it a use case that your grandma had of donating to charity and one of the examples, I imagine there's dozens of instances here where people have real world challenges that the listeners might not even be thinking about. I wonder if you can just share one or two more because I think it's, as you mentioned, 11 million people that have real day-to-day challenges that you're helping solve. I wonder if you can put even a little more color behind this.

Kai Stinchcombe:

Yes. So one example, we have a customer that buys rubber bands every day. He hates running out of rubber bands, can't remember that he's done it any time recently and now he has a garage filled with boxes of rubber bands. That's one of many examples we have for folks who are recovering from drug addiction. A lot of it's about managing access to cash, managing late night purchases, bars and liquor stores, in some cases gambling or gaming sites. We have customers who believed they have a girlfriend or boyfriend in another country. We had one customer, she was so resourceful, she was wiring money abroad to somebody that she believed she had a romantic relationship with, and turns out you can call and get somebody banned from a Western Union. You're like, she's being taken advantage of, she's being scammed. Don't let her wire money. And she literally put on a disguise and went across the street to wire money. You appreciate the impulse that this type of behavior comes from, whether it's my mom trying to help hungry kids, my grandma or whatever it might be.

Bill Cilluffo:

Yeah, no, that's pretty amazing. Can you talk through the True Link solution? What are the products that you've built? It sounds like you've got a big piece of this, which is very technology oriented, probably a piece that's less technology oriented, the example of how do you call and get someone banned from Western Union. But I wonder if you can describe the product or products that you guys offer that really are the core things you're doing to help this group.

Kai Stinchcombe:

Yeah, so the thing that we cut our teeth on, it's a Visa card and there's a web and mobile interface for a family member or some trusted party, and then there's a Visa card that you can use to spend your money. So, one person has the card, one person has the website and on the website it turns out there's an infinite level of complexity in what you might want, but it's also, we've seen it all before. I'll give the advantage of somebody going through the process of checking into rehab. When you are in a residential care situation or let's say partial hospitalization or intensive outpatient, you really don't want to be buying anything after 6:00 PM. It's probably two merchants. It's probably the Walgreens for your razor and shampoo and the smoke shop for your vape cartridge. And if you're doing anything else, you're probably not doing yourself a favor.

As that relaxes you might see at AA meetings, it's traditional to leave a tip basically. And people often do that with Venmo. And so Venmo is both sometimes a great way to buy drugs and also a great way to support your AA meeting. And so figuring out how to set parameters around that where you say only $5 and text this trusted family member or professional every time so that it's not like if you're Venmo-ing your drug dealer $5 10 times in a row that's going to get blocked or somebody's going to become aware of the situation. Whereas if you're leaving your tip every week, we can let that go through. But functionally, we basically understand a variety of customer situations and journeys, and that's the sort of textured UI part of it. And then there's a platform that can accept or block debit card transactions.

Bill Cilluffo:

That makes a lot of sense. Is it fair to say that the stories about your customers are pretty stunning to hear the level of depth of understanding? Is it safe to say that you've got a certain amount of these that are productized and you can handle in an automated way, and then you've also got a more human intervention piece of this, which is dealing, presumably there's no shortage of new issues and new problems and new things you're encountering every day.

Kai Stinchcombe:

We tell folks everybody is unique, but by now we've seen most situations and so we are always learning. There'll be something where it's like, "Hey, here's a Medicare eligibility rule in New Jersey." And we're like, "Okay, I guess we're going to have to learn how to do that." But mostly we've seen it at this point, and so we're always happy to guide our customer through the setup process. And then some of it is just kind of judgment calls. It's like if somebody's at the Publix at 5:00 PM are they getting beer or are they getting spinach and eggs for breakfast? We don't know. We can't see, your bank can't see onto the credit card receipt. Neither can we. That's a good thing in society probably that your bank doesn't know whether you're buying beer or spinach, but in this case, that's really important and that's part of the journey and we're like, how do you create accountability in that moment? And that's a human question, which we don't know the answer, but your family member, your recovery center, your sponsor, your sober coach, whoever that might be does know how to deal with that.

Bill Cilluffo:

So it strikes me that this is a really complex sale because at some level the customer who needs the product doesn't necessarily have the capabilities of making the decisions. You've got a parent or a child or spouse or somebody who is. How do you guys think about product distribution and getting this in the hands of those that need it?

Kai Stinchcombe:

It's something where we've thought a lot about that experience. So when you have this problem, who do you call? And typically it's not us. Nine times out of 10 you call your bank or call your mom's bank really and that's the argument for the white label version is if you are Chase or Citi or whoever you probably a million times a year somebody calls in and functionally asks for our product and you say, "Unfortunately, I can't help you, but if you call back and pretend to be your mom, at the very least I'll let you dispute the transaction or something." And it's a horrible experience for them and Chase doesn't know they're doing it. That would be I think the ideal way to distribute it. In the absence of that, who's your next phone call to? It might be a geriatric care manager, a neurologist, an in-home care provider, senior living, a whole set of folks that you might help, or often it's family members or friends who've had similar experiences. So we get a large amount of word of mouth traffic.

Bill Cilluffo:

That makes sense. So you started out developing the product really based on your grandmother's experience with Alzheimer's. You referenced you definitely focused on products for recovering drug addicts, potentially gamblers. How similar are these populations versus how very different and very challenging has this been for you guys to serve different needs here?

Kai Stinchcombe:

So I would say that the core platform is basically the same. There's transaction authorization and then there's a permissions model and a user interface around that. And the permissions model is, it's like this sort of surprisingly nuanced thing where you're like, oh, here's your tax preparer or your accountant, here's your two children, one of whom is more trustworthy than the other, and here's the parent with Alzheimer's and here's the in-home care provider. What access should each of these people have to the form of payment? There's a bunch of technical complexity there. Once you've built that, it's configuration rather than writing software in the ideal case. But I think that probably from a competitive standpoint, the customer insight is the hard part. It's the not replicatable part. I can tell you from being in college that we didn't invent declining a credit card transaction. That's been going on forever.

It's just this insight about which transaction does the person want to go through, and it's high stakes. We thought it was likely to be a machine learning problem that you could use AI to figure out if somebody's relapsing or whatever. Nobody wants that. If God forbid, Bill, your son is in rehab and you're thinking about should we allow a Venmo transaction, you don't want us to guess. You know whether he's at his AA meeting or buying drugs. You want to be in charge of that, and you want it to be super predictable rather than having an intelligent guess and we're like, "Oh, sorry, we thought your son was at AA and we let him buy drugs. Oops." It's very high stakes.

Bill Cilluffo:

Yeah, no, that's actually a fascinating issue that's probably going to be true across a whole bunch of use cases the more that AI takes over. Even something like autonomous driving, even if it reduces deaths by 90%, there's still deaths and some of those deaths will be caused by algorithm malfunctions and how does society deal with that? It's going to be one of our more challenging things over the next couple decades to figure out, for sure. So as you look back on your 10 year journey at True Link, what's one decision that you and the team made which you feel like, wow, we really got this right. We're sitting here today in part because we got one decision that we absolutely nailed. And then conversely, I'd also love to hear about, hey, what's one big mistake that you made that you wound up learning from and adjusting from and took another path to get you to where you are?

Kai Stinchcombe:

I think using customer support as a superpower, as an early stage company. The woman that was in charge of our customer support at some of the earliest stages of the company, literally the smartest person I've ever met. I know lots of smart people. She's the one that gets flown to Johns Hopkins for brain studies. She's just really smart. You're like, oh, I guess that's how I would know if I was a genius is people want to scan my brain to figure out how it's possible for me to be so smart and putting your genuine best people in that directly interacting with the customer role and empowering them to solve the problem, empowering them to pull the thread, empowering them to pound on the table and say, "Hey, are we doing right by this customer?" This person called us. They expect a solution from us.

What are we going to do for them? That's how we learned everything we know actually is just listening to customers. What do we get wrong, man? It's funny. When we raised our series B, it was from Khosla. David Weiden was the partner and at the start of the meeting... I mean he has just such a unique style. He came into my office and he basically just started ranting at me about what an idiot I am and how I was definitely going to waste all the money that we raised in our series B. And then at the end he was like, but I want to invest. I was like, why did you spend all this time telling... You don't even know me. I didn't even get a word in edgewise. And he's like, "Yeah, all these founders raise a series B, scale up their growth team, waste all the money that it's not a validated growth motion.

You think it's going to work, it doesn't work. You're just going to throw all this money away, but I'd like to invest." And it's so funny because he was right. We wasted our whole series B on scaling up growth that didn't work, and I wish I had that money back. You think it's going to work? You think you have to grow at this unsustainable rate, and so you're like, I don't know if this'll work or not, but we can't raise another funding round unless we double this year, so let's blow all our money on the best idea we have. It's ironic because our investors were like, "Hey, slow down and spend your money wisely."And we were like, "No, no, no. The investors want us to grow faster."

Bill Cilluffo:

Yeah, I have a feeling that's a learning that has been learned by many, many companies, especially as they went through the boom post COVID and the bust after that. And there's a whole lot of money that was raised that sadly is not still sitting in bank accounts that ironically, given the markets are a little more rational now, might be able to be put to very good use right now, which is kind of the irony.

Kai Stinchcombe:

There were moments later on where it's like we think about something that we spent $3 million on say, and I'm like, if I had $1 million of that back right now, what could I do with that? That's also one of the interesting things as you head toward cashflow positive or profitability, a million dollars might last you a year instead of a month, and that was a useful lesson, especially as the economy was changing where we were like, oh, I think we can just last forever on the money we have, which was a good moment, different mentality for sure.

Bill Cilluffo:

So for the last segment here, I'd love to move in a little bit to you as a person and leadership style, and a couple questions there, a little bit divorced from True Link itself. What would you say your biggest superpower is?

Kai Stinchcombe:

It's funny, it's something that you've touched on a couple of times, but I think being able to be both super optimistic and super realistic, it's like you have to wear two different hats. You have to be there sitting in an office with 15 people and you're like, "You know what? I think we are the best in the world at investing on behalf of people with special needs." And they're like, "That's the dumbest thing I've ever heard. How could you possibly say something so dumb? Look around this office. There's 15 people in it." And you have to believe that. You have to believe that you're literally the best in the world at it.

And then at the other end of the spectrum, you got to be able to go home and be like, well, all right, what's the gap between us and what we need to be able to deliver and how am I going to navigate that? And you have to be able to be pretty realistic about it. Have that kind of depressive streak where you're like, you know what? I think we're pretty effed actually if we don't turn the situation around, whatever it is. And I think being able to see that whole spectrum of crazy optimism and also realizing how effed you are is probably... I think I can wear both hats comfortably.

Bill Cilluffo:

That's a pretty tough one to be able to do. Do you think your early days of your other startup experiences played an important role in that?

Kai Stinchcombe:

Something that I think is often repeated in startups is that you're not as smart as you think you are on your good days are as dumb as you think you are on your bad days. And I've definitely had the days of feeling like I own the world and the days of feeling pretty dumb.

Bill Cilluffo:

That's very easy to relate to, that's for sure. What's one thing you wish you were better at?

Kai Stinchcombe:

I'm not a good manager, and it's a weird thing to realize. It's like you're 35 years old and somebody tells you you're not funny and you're like, what do you mean I'm not, of course I'm a good manager. Look at me. I've got all of these leadership traits. And then you're like, wow, I'm not a good manager, that everybody on my senior team is a better manager than me, by a lot. I could get way better at it and I'd still be the worst. And I think that you have to build a culture that accommodates your weaknesses I think basically if you're starting a company. And so I think it's been neat because everybody on that senior team is just a super accountable, driven, motivated person. And so they're good managers and so they're talking to somebody and they're like, okay, so here's on your plate for the next 90 days.

Here's the things you're really exceeding at, here's what you're struggling at. And I go in and I'm like, "Hey, what's on your plate for the next 90 days and are you succeeding at any of it or struggling with it?" And I don't know the answer. I can barely keep track of what I'm supposed to be doing. And so it has to be somebody who's like, "Well, Kai, here's what I'm doing for the next 90 days. Here's how it's important. Here's who I've checked it with. It seems like I'm doing reasonably well at it. Here's what I'm struggling with and here's what I'm doing about it." And I'm like, "Great, let me know if I can help."

Bill Cilluffo:

What's one thing that you've done to try to compensate? Have you specifically tried to surround yourself with these types of people that are almost self-managed? Do you have someone on your team whose job it is to kind of help you out? Every CEO out there has amazing strengths and amazing development items.

Kai Stinchcombe:

It's a funny thing where before somebody ends up being managed by me, it's like is Kai up for the job of managing this person? They've got to be really good in order to put them in this difficult situation to have an incompetent manager. So I think it has led us to have a particularly high bar in hiring for that kind of thing.

Bill Cilluffo:

So I know True Link is an incredibly mission oriented firm, and you definitely get that going through the creation story and what you're here to do. If I'm not mistaken, you've got just under a hundred people fully remote. How do you keep the mission orientation, the culture of True Link when you're scattered around, you're not together all the time, and how have you thought about that side of the business?

Kai Stinchcombe:

I think it's something everybody's struggling with in terms of remote work, but also just the nature of the job that the company does versus the job that the individual does. So perhaps the company is helping hundreds of thousands of people through the challenges of memory loss or addiction, and that's the most compelling work in the world. And what are you doing? You're making sure that the servers don't go down or doing a security audit or publishing the financials or managing the receipt reimbursement or whatever it might be. And so bringing the customer story to life, we just always try to find ways to do that. So inviting a customer to our all hands meetings. I think our most active Slack channel is customer quotes where people on the support team mostly will just type in some story that a customer shared or whatever it might be.

In our board decks every quarter I have a slide set aside where I grab quotes out of that so that the board can stay in touch with that. And it's funny because every time I'm taking last quarter's board deck and updating it, and I just always want to squeeze in more, and so I end up making the font smaller and smaller with every quarter that goes past. It's like everything else is a nice slide. Like, hey, we had our numbers, whatever it might be, hired some new people, and then in 8.5, here's a million amazing things our customers said.

Bill Cilluffo:

That's awesome. If you ever had to squeeze in more, that's a great thing to squeeze in. Hey, so I've got to dive into a couple of fun personal stories here to close us out. So we had the chance to speak to your wife, Julia, and probably the best story we heard is an anecdote of you drinking out of a puddle on the Great Highway shortly after you guys started dating. I have to hear more about what this is all about.

Kai Stinchcombe:

When I met Julia, I was pretty sure that was it, which is lucky because this was early pandemic, so I think we moved in on our fourth date. She mostly dated for an activity buddy, I think historically. We didn't meet online, but metaphorically, some people's dating profiles are like, I love to ski, I love to play tennis. I love to run. I love to whatever. And I didn't do any of the things that she did. And so I was like, all right, I'm going to go for a run with her.

And I probably hadn't run since middle school. If I was being chased by a tiger, I would run otherwise walking is great for me. And so I went for a run with her and she's training for a half marathon, and it's been 20 years since I've run. I felt like I was going to die and it was raining, so I wasn't overheating, thank God. And there were these big puddles and my throat is parch and my lungs are burning, and I waited until she wasn't looking and then drank from a puddle because I thought I was going to die otherwise.

Bill Cilluffo:

But of course there was no way you were going to quit because you were on a date and you thought Julia was the one.

Kai Stinchcombe:

I was in it to win it. Yeah.

Bill Cilluffo:

Oh, that's awesome, man.

Kai Stinchcombe:

I think in a way she wasn't fooled at all, but was happy that I was putting in the effort. Nothing says effort like drinking out of a puddle on a San Francisco street.

Bill Cilluffo:

Have you continued to run?

Kai Stinchcombe:

No, that was it. Thank God for the lockdown. It was literally illegal for her to hang out with anyone else, so at that point could let go of the running thing.

Bill Cilluffo:

Perfect. Perfect. We also had the chance to speak to your mom, Carol, that I know you've already featured in this podcast a little bit.

Kai Stinchcombe:

I can't wait to hear what you're about to say.

Bill Cilluffo:

So she had the chance to share how appreciative she was of you that during the pandemic you bought a portal and set it up for your extended family to stay in touch during the pandemic, and she talks about how that made such a big difference in her and your family's life. So I thought that was a really touching story, but the question that she insisted that we ask you here is that she's getting older, someday she's going to need taken care of. She wants to know what's on the product roadmap at True Link or outside of True Link that's going to help you successfully take care of her as she gets older.

Kai Stinchcombe:

It's going to be a, I guess, bittersweet story to tell. But my dad died of Alzheimer's also, and when he realized he was dying, he was talking about how proud he was to have left behind two children, me and my sister, who were going to take such good care of our mom with her being so compassionate and me being so practical, and I was like, what? I'm the practical one. Come on dad. I'm compassionate. I'm a nice person, but I think he nailed it, that my sister has the medical power of attorney and I have the financial power of attorney, and there you go, right? I'm the practical one.

Bill Cilluffo:

Well, I can tell there's a lot of compassion in you, so if your sister is the compassionate one, that probably just shows how incredible she is, if that's her relative forte, so that's a pretty awesome anecdote from what I'm sure was an incredibly difficult time. So hey, Kai, it's been amazing getting the chance to reconnect and chat here for an hour or so today. Really appreciate all of the insights to our listeners. We really like ending with the same question for everyone. Hopefully we have a number of prospective entrepreneurs listening to this. You've been through a multi-stage entrepreneurial journey. What's one piece of advice you would give to aspiring entrepreneurs?

Kai Stinchcombe:

The thing I would say is you're reasonably likely to fail and you might fail after two years, or you might fail after seven years. And so do something that's worth it even if you fail. Don't kid yourself that it's going to be easy. And look if you're ready to marry the problem that you're solving.

Bill Cilluffo:

Yeah, that's wonderful advice and I think you've articulated quite well how you've learned from the early entrepreneur journeys and applied those lessons to True Link so thanks so much, Kai. I really appreciate having you on. And to all of our listeners, thanks for listening. Take care. This has been the Fintech Thought Leaders podcast, your window into the world of venture capital and financial services with today's digital disruptors. QED is proud to provide the best fintech advice you can get. To learn more or to read the full show notes from today's episode, check out qedinvestors.com and be sure to also follow QED on Twitter and LinkedIn at QED Investors. Thanks for listening.

‍

‍

‍

‍