Selfies Help 120M Africans Get Bank Accounts & Netflix

Jake Aaron Villarreal: I'm Jake Aaron Villarreal, born and raised in Silicon Valley, and here to take you behind the scenes to share what it's like to be a startup founder, the journey they're on, the problems they face, the products they build in an effort to transform industries. I'm excited to have with us today Mark Straub, co-founder and CEO of Smile ID. Mark, welcome to the show.

Mark Straub: Thank you, Jake. Great to be here.

Jake Aaron Villarreal: Well, excited to have you here. You're the first founder that's come on that we're going to talk about penetrated the African market which I think is really really cool. A little bit more about Mark. Mark is a co-founder and CEO of Smile ID. He has spent much of his career trying to help people in underserved markets access better opportunities through technology and entrepreneurship. Mark was a venture investor for a decade and worked with over 20 companies doing business in the adtech, fintech, healthcare and energy space or markets ranging from the US, China, India and sub-Saharan Africa. Working at Khosla Impact he led investments across Africa including Copia, Branch, Flutterwave, and Bridge International Academies. Love your background. Can't wait to dive into it. Before we do that, Mark, where are you joining us from today?

Mark Straub: Yes, I'm actually at our offices in London. For anybody who's watching the podcast or can see it, I've got uh some folks here in one of our call booths and yeah, excited to share more what it's like here.

Jake Aaron Villarreal: When I started this podcast, I had this vision of going behind the scenes to share what it's like to be a startup founder in Silicon Valley, where I'm born and raised. And weekly, we dive deep in the trenches to find the wins, the losses, and the lessons learned with the hopes that it helps you run a better startup. But here's the thing. If you've gotten any value out of these conversations or been inspired at all, hit the subscribe button. And I get it. Your podcast feed's probably overflowing. But to stay up to date what's going on in Silicon Valley, stick with us because at the end of the day, we're all just trying to build something that matters. And we're better when we do it together. So hit that subscribe button and follow us wherever you find your podcasts. Now, let's get back to the show.

Well, I like the the flags and if you are watching it really, you know, you really can't tell if you're in, you know, the US and a WeWork or internationally, which is the which is great to know that you can really work anywhere. But you are really distributed. I mean, you've got people all over the world, don't you?

Mark Straub: We do. Yeah. I think we've got something like oh I don't know 13 or 14 different nationalities working in 10 or 12 countries around the world. I think eight different African nations plus folks in North America, the UK. We actually recently hired somebody in Mauritius which is a small island in the Indian Ocean. That's an African nation.

Jake Aaron Villarreal: Wow.

Mark Straub: Off the coast of the continent. So we we are very distributed. The offices that I work out of right now are actually in an old train station in London. Um, and we've got a number of people who commute in here. So, it's, it's pretty convenient. And it's only a couple of stops from Heathrow. So, lots of folks who fly in and out from different parts of Africa, we meet them here.

Jake Aaron Villarreal: Yeah. Makes it convenient. Well, I love the fact that you are distributed, but you're actually American. What led you to the UK?

Mark Straub: Yeah. So, it's like like we said, there's going to be a very international theme here. So obviously we're doing business across Africa. I'm currently living in London but originally from the United States and the company itself is US incorporated but we have subsidiaries in half dozen different African nations. So the long story short is I I I spent a lot of time traveling around Africa as an investor uh for a number of years basically a decade ago when I was doing venture capital investing and my home base was Silicon Valley. Uh so I lived in San Francisco and in Oakland for a while and then when I started the company I was still traveling a fair bit but but you know was based in California and I did that for five years with lots of waking up at 3:00 and 4 in the morning to do conference calls with customers and you know it worked because I traveled a lot but then during COVID it was kind of this really interesting challenge because we were growing a fair bit. We had a lot of demand. Uh people wanted to do more things remotely and more things digitally, but I couldn't really travel much and so I was sort of stuck at home in California servicing our customers, you know, 8,000 miles away. When when things finally settled down towards the end of COVID, uh my wife and I picked up and we moved our family to London to be on a easier time zone. And also there's, you know, direct flights from London to nearly every African capital that really matters for us. So it's a it's a convenient place from which to travel and spend time with customers or or learn new markets. So that's that's that makes sense.

Jake Aaron Villarreal: Let's go back a little bit before we get into talking about your company, Smile ID. terms of you, where did you grow up and what what really drove you to really eventually get into venture and and really become a startup founder?

Mark Straub: Yeah, you know, I did not think I would ever be a founder. That was probably not something that I grew up thinking about. And maybe unlike most of the listeners who come from Silicon Valley, like I was not surrounded by entrepreneurship or or those sorts of things growing up. Um, I grew up actually just outside of Washington DC. So I was surrounded by sort of international news was local news, you know, people, dignitaries visiting, you know, big international topics being debated or discussed or voted on in Congress, those kinds of things. But but startups and entrepreneurship was a pretty foreign thing. During the late 90s, um my older brother actually decided to go out to California and work in technology investment banking and he started flying me out to visit him. I guess under the the real thing was we were going to go skiing. But through osmosis and spending time with him, I started getting really interested in what was happening in Silicon Valley, what was happening with technology, startups, the internet. And you know, I was a teenager, but it started to be exciting. And I got the sense at some point that if you wanted to make change in the world, you're going to be able to do it much faster using technology than using, I guess, legislation or politics. So ultimately I decided to follow him out to Silicon Valley and I worked also in tech investment banking and then eventually in venture capital and and that's that's kind of how I found my way to the valley but not where I started.

Jake Aaron Villarreal: Yeah. Well, I'm sure there's some lessons you've learned on the venture side that can be applied to a startup and we'll kind of ask some of those questions later in the show, but lots of stuff you have to unlearn, too.

Mark Straub: Yeah. I'm assuming. Yeah.

Jake Aaron Villarreal: I'm assuming. And I I can't wait to hear that too. And we could share that with a lot of, you know, earlier stage startups founders that are trying to figure out how to raise capital and yeah, you know, what to say and how to get there and those type kinds of things. But, you know, let's talk about Africa. You know, it's, you know, what is it 1.2 billion or over a billion people?

Mark Straub: Yeah. 1.45 billion, something along those lines. Another way to think about it, just to put this in your head, you know, it's about 1.4, 4 billion people and there's 54 countries so it's very very diverse continent very big continent there's about 60 million new Africans born every two years that's about that's like adding a France every two years something like that.

Jake Aaron Villarreal: Wow that's incredible lots of growth there what was it...

Mark Straub: Very young continent very young continent lots lots of growth happening there

Jake Aaron Villarreal: What was it that you know inspired you to say, "Hey, look, you know, I'm an American. I could build a product and a company, but what did you see that you felt like was underserved there that you thought you could make a difference by launching a product and continuing to build, you know, internationally over there?"

Mark Straub: Yeah, I had a very unusual story that sort of goes from Silicon Valley to India and then to Africa and sort of ends up with me starting a company. But the the thread here is that and you talked about this in my bio. So I worked for a fund that was focused on emerging markets and we were investing in businesses that we thought could serve large consumer populations in India and sub-Saharan Africa and in financial services and I was personally interested in that because I was I've always been interested in economic development. I've been interested in helping people improve their quality of life and not doing that through a charity approach, but doing it through business and capitalism. That's always been more compelling to me. I guess I got to that point because after a couple years of investment banking, I I didn't find it particularly compelling, but I did understand the value of the skill set like being analytical, being rigorous, being quantitative, you know, understanding the value of companies and and and and the impact that companies can have around the world. And so that was always a more interesting means through which to to make impact. But I was more interested in driving up or seeing what I could do to impact you know incomes for a person than I guess stock prices on the NASDAQ. I just that was more compelling to me maybe especially growing up in Washington DC and reading a lot about international affairs.

And so that was the basically the the way I ended up doing stuff in Africa was I was investing in these companies. I I decided on my team I was going to carve out a thesis around what was going on in Africa. I'd spent a little time traveling just as a tourist. I went to the World Cup in South Africa, had a fantastic time. I went to Mozambique on a on a trip. I went to Kenya on a kind of vacation. And I each of these trips I had such a great time. Had such a great experience. I kind of wanted to keep going back and seeing more places and learning more. And so I got hooked as a, you know, as a tourist.

[Journey to Africa and Market Insights]

But then a couple years later, because I'd started spending time and most of the people I knew in Silicon Valley had not spent any time looking at these markets, never been, I started developing a thesis and I I also saw that, you know, with the rise of Facebook and and and mobile payments and all these digital channels that the next logical place that these things would go would be the frontier markets. And it was almost like having a time machine. If you could go back in time and invest in things that would would grow fast and would would would digitize countries like you would do that. And to me, emerging markets were almost like being able to do that. And the the real click for for for Africa was a number of the types of businesses that we wanted to invest in in India for one reason or another they weren't possible in 201... call it like 2012, 2013 because the regulations wouldn't allow things like mobile payments for cash in cash out um they didn't have they didn't have the ability to do that because the central bank in India wouldn't allow it but we could do those things in in different markets in Africa and particularly in Kenya and in Nigeria.

And then fast forward a couple of years, the Indian government created in in conjunction with civil society this new national ID system which became known as Aadhaar. And once that system was in place, the bank allowed people to do these transactions, these cash-in, cash out type transactions that previously they were afraid to allow because of fears of terrorism, fears of money laundering. So this piece of infrastructure allowed the regulators to loosen up and open up the economy and you really saw India take off over the last you know five seven years. There's a lot of things going on there. It's a whole another podcast we could talk about but the the kernel of of kind of truth that was interesting for me was once I saw the national ID system's impact on India and the speed with which digital channels and digital payments grew. I knew that that was a key piece of infrastructure and if you only have those kinds of digital ID systems in in African markets, you could have potentially similar positive impacts. So that's kind of how I got interested in seeing if we could take some of the lessons from India and apply them in some of the markets where the companies we were working with in Africa were were growing but but needed additional infrastructure, needed additional solutions like like identity. So that's a long long kind of windy road. a lot of airline tickets, a lot of, you know, airport lounges, but yeah, that's kind of how I got to where I am. It's a it's been an interesting journey.

Jake Aaron Villarreal: Yeah. Well, it sounds like a fun journey, too. Africa, you know, for those that have never been, is, you know, really just a different world in in Africa. What are the what are the markets that you're serving? So let's talk a little bit about Smile ID and specifically what it does and then who are the customers that are using your product that are seeing some benefit from it.

Mark Straub: Yeah, we work a lot with financial institutions and it started off six, seven years ago with FinTechs. So up-and-coming startups making payments or making loans available. We worked with companies like Flutterwave, companies like Paystack. These are payments platforms for merchants and consumers. But over the last two three years, it's evolved to now more traditional financial institutions as well working with banks or insurance companies and even large platforms like ride sharing businesses which we can talk about. What we do is we allow a business to onboard a user and verify the identity of that user. This is very similar to the process you might be familiar with if you've signed up for a digital bank account with like a Revolut or a Monzo or Chime or if you've signed up and had to verify your profile with like LinkedIn or Airbnb. So we provide that kind of a service.

There's one big difference or one big twist for what we do. So most of those other services rely on documents, meaning the user is taking a photo of a document and maybe their face and then they're onboarding onto that platform. We do that as well, but what we're really known for is being able to integrate into national ID databases and large corporate databases across Africa so that we can verify pieces of information against a digital source of truth. And this is faster uh more reliable and cheaper than using documents alone. And it requires less information from the user because all you really need to do is give us a selfie and typically an ID number. And with those pieces of information, we can check your identity against a source of truth. Um, so we do that about 10 million times a month and we do it primarily in Nigeria, South Africa, which you'll see the flag behind me today. Kenya and Zambia are the largest markets. We also have traffic in another 15 countries. So we have users that are using the service in Cameroon and Rwanda and Sudan even where there's a currently a civil war taking place. We're serving a lot of users in a lot of different countries, but the big ones are the ones that I mentioned at the front.

Jake Aaron Villarreal: Got it. That's really cool. So, taking out the friction of the process, if you have a mobile phone, which most citizens of the world have today, you can take a picture and with that send it and then you can onboard to like an Uber service or verify with the bank that you are who you are.

Mark Straub: That's right.

Jake Aaron Villarreal: And be able to do transactions.

Mark Straub: Yeah. And it and it ranges from things that were, you know, pretty universal like uh a bank account, you know, opening up a bank account or in some cases remittances, you know, being able to send money across countries. We also do driver onboarding for some of the platforms you mentioned. So for Uber and for Bolt in select countries and then there's often use cases that involve reauthentication. So there's really kind of two sets of use cases. One is onboarding into that account and the second is reauthenticating that you are who you say you are and that might be important when you try to log into that digital bank account but you do it through a new device or you try to change the password or you try to do a large cash out event. All of those events are potentially high-risk transactions and typically the financial institution that we're working with would want to do some sort of second factor authentication on you before they approve that transaction. So roughly half of the the volume of of transactions that we power today are onboarding events and the other half are essentially reauthentication events.

Jake Aaron Villarreal: Wow. Well, 1.4 billion people, that's a lot of people. How big is the market that you're going after?

Mark Straub: Yeah, I mean we talk about this the numbers get really big uh and it's it's kind of mindboggling. I mean we've done we we've done over 20 I think 40 million verifications to date since starting the company and we did about a hundred uh 120 million last year just in the calendar year. So to put this in perspective, we did basically half of the volume we've ever done as a country, as a company we did last year and and where the company's eight years old. So you can kind of imagine the exponential volume curves. Now to put that in perspective, you know, 200 million people, 1.4 billion people in the continent. You know, we're still like we haven't gotten to, you know, whatever 8% yet of the whole continent, right? So we're still like there's still a huge amount of of of people of countries of transactions that we're not yet powering that you know are still very much ahead of us and ahead of the ahead of us in the journey but you know we're at huge scale and yet we we're still like only really serving like 10 less than 10% of the market. So, I think that gives some perspective on where things are.

And I think the other thing to keep in mind is that it's not, you know, and we should probably talk about this in in in more detail, but it's very it's alluring to talk about Africa as a market like this one big continent of 1.4 billion people. And it's exciting and certainly that's, you know, that's the that's the story we we love to talk about because it's true. But in terms of the actual execution of getting things done day-to-day, it is different countries and each of these markets is very different from each other and serving banks in you know Nigeria versus in Uganda versus in South Africa quite different in terms of the the personalities, the products, the integrations, the um the local use cases and the regulations. And so it's there are large parts of the continent that we still haven't even really scratched the surface of just because it is it is very different as you go from region to region. And so we're beginning, you know, we we've kind of we've done a lot of work in three big markets. We've got done some work in another sort of four or five. And yet there are still huge countries that we have only begun to explore and that we know that there's a lot a lot of work left to do.

Jake Aaron Villarreal: Well, when we talked a few weeks back, one of the things you brought up which I thought was interesting was you kind of felt like it was in the 1970s when you were going to go into a new international market. Like you first have to go to the country and then figure out if there's an opportunity and then launch a product or a service and then figure out and learn what you can. But you really have to do that in every single country in Africa that you're penetrating. It's not one market strategy is going to work across the continent. It's almost like you have to have multiple marketing teams focus.

Mark Straub: Yeah.

[Understanding SmileID and Its Impact]

No, that's definitely been one of the hard kind of realizations. We've learned that. I think I think there's it's it's strange because you're doing both things at the same time. There are businesses that are pan-African that do want to work across the continent and they they really just want to be able to plug into a set of APIs and just have it work. And so that is definitely what we're trying to do with the product. You know, like the the I think there was a there was a Facebook executive that I I spent time talking to and and he his family was originally originally from I think they were from Uganda and basically he was describing it as like you you wish that you could lay down a pane of glass or a circuit board across the continent and have everything plug in but in reality it doesn't work that way. Each of these different countries is its own circuitry, its own kind of mainframe. And so you have to go in and and understand and really, you know, build relationships, build partnerships, build trust in order to be able to execute effectively.

And I think in the early days of the company, that was me. I was going to countries and just spending a lot of time having coffees, you know, meeting going into a government ministry like five days in a row to sit down to wait to get a meeting with somebody and then on the fifth day you get the meeting and you talk for 30 minutes and you learn something and they teach you know you teach them something they they teach you something and you just do that over and over again. But of course that's very hard to scale. So over time what we we've done internally is really build a team of people where there's a lot of people in the company who can kind of do that who have empathy who understand that there's nuance who understand that that local localization matters and then you start building systems internally so you can handle you know the the variety that you get you know this API works this way this VPN you need to if you if you want to integrate into this database you need to use a VPN and you're going to have to document it this way so You start building the muscles inside the company such that you can handle the the variety and the diversity and that you have empathy for the variety and the diversity of of each of these different markets but that for the customers you try to deliver an experience where it feels like it's just one set of APIs or one set of SDKs and that is the that like that is the ultimate tension in the business. It's like, you know, hyper local from a an operation standpoint, but but international and pan-African from a service standpoint.

That that is something I think when I started the company, I you know, I did not have a true appreciation for, but now like people ask me like what have you learned? Like Africa is not a country. Like it's silly. Like of course I knew that. Everyone knows that if you if you're sort of you know if you if you're a sixth grader but but it it's easy to say that it it's another thing to go live it and to spend the time like in the airports and in the office buildings and the and you know really understanding why and how these countries you know work. um and sometimes sometimes why they don't. And then trying to build solutions that that allow allow businesses both local and globally to to do what they're trying to do, which is, you know, get on with their lives, get on with their businesses. So that's the that's the journey that we've been on and and that I've been I guess that's the education that I've had.

Jake Aaron Villarreal: Yeah. Really cool. You know, if you look at now you've been there for eight years. sort of big picture, what is your vision as you see it for success in Africa?

Mark Straub: There are so many fantastic entrepreneurs of of all types whether it's small businesses, restaurateurs as well as the more you know the tech-savvy folks you know entrepreneurs who are building technology businesses, technology scale businesses and they have this tremendous ability to create impact in in in each of there are different markets. The challenges often are that you when you're building something you have to like you can't rely on all these other enabling environment factors. So if you think about Amazon in the United States, you know, Amazon can exist because you have drop shipping, you've got UPS, you know, you've got these other sort of things that you can rely on. And then if you're building something, you think about this like you're you're you're a tinkerer, you're going to build machinery or hardware, like you can go pick up your pieces from Fry's Electronics. You can order whatever you need off Amazon. Like you can kind of you can put together what it is in a day or two with all the enabling things around you.

I think about the markets we we work in. And when something goes down, someone's got to get a part. That part might have to get shipped from some other country. It's got to go through customs. Now, now a server can get back up online so that a national ID system can function so that you know a solar lantern company can do an ID check so that somebody can get piece of solar like a you know a solar home loan. So like there's so much enabling environment that is very brittle and fragile and so what happens is that a lot of the great entrepreneurs end up building their own stack sort of from scratch and it's not terribly efficient but but you end up having to build this whole stack from scratch.

And what I would my my hope and certainly part of the vision of our company is that digital infrastructure like Smile ID and like some other companies that are out there, some of the payments companies I mentioned that that that that digital infrastructure becomes increasingly available and reliable and that that physical in infrastructure also, you know, gets to some level of par to meet it and that you have a healthy enabling environment because I think once the enabling environment is there, you will see more exciting success stories um from across the the continent both at the not just at the individual level but like the country level which is what we really really want to see.

And so, you know, I get excited when we have a chance to sit down with the Minister of Technology or the Minister of Information or whatever from a particular country that is focused on building up their infrastructure and we can share with them, "Hey, here's the insights. Here's what we're learning. Here's our annual fraud report. Do you want to read it?" And sometimes we get audiences with them and we don't really ask much of just, you know, "Hey, can we have your time? We'd like to share what we've learned and we'd like to get your feedback." But when we have those meetings and occasionally we we meet very forward-thinking folks in public policy or in public private partnership and I think those people particularly the ones who are you know under the age of 50 the on the ones who are younger have an enormous ability to impact positive change in the continent and we want to be like part of that solution. So our our vision is like you eventually have that really healthy enabling environment not just physical infrastructure but digital infrastructure too and we want to be one of those key pieces.

Jake Aaron Villarreal: Yeah. Well that's great. You know you mentioned a couple times the word empathy which I by the way am a huge fan of whether it's empathetic to the needs of your customers or your employees or just in general the people you deal with understanding them a bit better. You know being an entrepreneur is hard internationally. there's maybe some different challenges for you. What have you learned about yourself and how to surround yourself with capable teams?

Mark Straub: I think I have gotten way humbler in the last eight years than I was when I started the company. And I I've started to appreciate the things that I'm good at and accept the things that I am not the best at and then try to find people that can complement my skill set. And I I think now kind of going from, you know, being a raw startup to now more of a scale-up, what I try to do is is work with emerging managers in the company to help them see those things as well. Okay, here's the things I'm good at. What are the things I need to surround myself with? And to have humility about that.

And I think early on I assumed I assumed because I'd worked in very small deal teams like in investment banking adventure I kind of assumed that like high performing people were all kind of like very similar and and now what I realize is when you're building teams you you can have people are very very talented but actually quite different from a personality standpoint from the way they work and if you're you know if you're not one of the FAANG companies like you have to be able to recruit people from from wherever and then set them up for success as long as they're they've got good talent.

So I think for example that I have I've realized like I'm I'm pretty good at seeing patterns and synthesizing pieces of information right like okay this thing happened in India if it happened in Kenya the following things could happen these these companies could grow faster these markets would accelerate you know GDP income per capita would go up and I can see how those pieces can fit together I also have increasingly an understanding of like I am not the most disciplined when it comes to, you know, organizing a sprint schedule, right? Or or looking at the the details for how a page should be laid out in a thoughtful design pattern or thoughtful design schematic for like wireframes for, you know, the portal or whatever it is, right? And so recognizing not just that like there are other people who are talented out there who can do that, but also that there are ways of putting teams together so that they work really efficiently to do that.

[Challenges and Opportunities in African Markets]

And I've got I've been able to rely on some really talented managers and ex executives who I've brought into the company who do that really well. And now increasingly like where it used to be that I would stick myself into every single decision, you know, all the time. Like there's probably, you know, two-thirds of the company that kind of just runs without me having to do anything. And yeah, I listen, I get the updates, I ask questions, but it's phenomenal to just like I don't worry, you know, about that at all. And I just know that every week it's getting better and I see the results. And so that's that's been awesome and very rewarding. But I feel like I've along the way to get there, I feel like I made kind of like every possible mistake I could. It's very it's like a like I feel like I've earned this wisdom through a lot of trial and error.

Jake Aaron Villarreal: Yeah. Well, you brought up a couple good points. I mean, understanding the patterns of India to Africa. I think you know just in general studying patterns can help in all parts of the business especially around people like you know who are we hiring and why are we hiring and what's the pattern success will look like because we hired that kind of person and you know operationally patterns within the organization what's working not working and being I think the more you can assess your own experience with those patterns and be able to see the results you can iterate and become a better operator of the company.

But as a founder you know you're really there's two levels you're operating in all the time which you know operating in the business and then operating and seeing the business for what it is and the vision and the strategy. So in it and then on it, right? Operating in the business and working on the business and being able to have the right people allows you to operate uh you know looking at how you can make the company better on the business. And you know it just it's such a relief too when you have the people in there in the trenches doing the work that you don't have to make every decision. Just frees up the ability to scale.

Mark Straub: Well, and you can make better decisions when you have that mind space. That's the thing that you don't see when you're in the weeds every day is you're making so many decisions that you you're not giving yourself enough time to think. And if you did give yourself more time to think and more time to absorb information, you could actually make better decisions. You might make fewer of them. That is really hard when you are, you know, the more complexity you introduce to your company and we certainly introduced plenty, right? We were doing business in a bunch of different African countries trying to build products that combined computer vision with data, you know, structured and unstructured data. I was doing it, you know, with a distributed team during COVID. So, we had we we probably bit off way more than we we should have in terms of in terms of chewing for for our size.

I think the thing that I the lesson that I have learned and and certainly I think the great managers in my company have learned and I wish that everyone could learn including all the people on my team but just everybody out there who's building companies is like if you can't there's a great concept that Amazon has called they call it the bar raiser thing and so every time that they they bring on a new person to one of the teams you have to try to objectively say does this person on average objectively better than everybody else on the team that they're joining. So, you know, in in essence, are they raising the bar? And when you when you have self-confidence and you're not worried about your ego, it's way easier to do that because you get excited about recruiting people and hiring people that you can say objectively, I think this person's better than me, you know, and whatever, right? Some some number of things.

And it's very hard to get kind of junior people or early managers to get comfortable with that. But it's so important because if you don't there there's this kind of regression to the mean which is you end up hiring people who are slowly less and less good because as you promote people they think well I need to hire people who are more junior than me right who are not as good and so so you know of course you end up with D players because the B players have hired C players and so on. But if you're able to really institutionalize that culture of like no no, we want every new person to join to fundamentally impress us and ideally like blow us away, it's very hard to do that. It takes a long time. But if you're if you're able to instill that culture like you just build these superpower teams and I've I've seen, you know, I wouldn't say we're perfect at that, but I think we've gotten way better at it. and and you know the results start speaking for themselves like you know as as you see the the the talent density rise.

Jake Aaron Villarreal: Yeah, I agree with that. One of the things and I know the Amazon framework as well. I think it's great. One of the things that we do is when we bring on new people we go through the interview process and it's pretty hard to get into our company but I like to at the very end take some time to think and say could I see myself working for that person?

Mark Straub: Yeah.

Jake Aaron Villarreal: You've done a great job. You can do the work that we need. The interview went really well, but it doesn't matter so much if I can sit in an airport for four hours and talk to you. I mean, that'd be great, but I just want to know, could you lead...

[Building a Healthy Environment for Change]

...me? Yes. Could you actually solve a problem that I can't solve? Can you inspire me? And those are the things those are those little things that I think are also important. But I I agree with what you're saying. I think it's incredibly important to have the right people on the team. and you know put the ego aside.

One of the things that that I heard a story about a while back was you know one of my mentors was telling about one of his mentors which he was asking him about a problem to be solved and it was a very big decision that had to be made. was acquiring a company and at the end of it, you know, his boss was going to make the decision to say yes or no. And so he noticed on his calendar it said thinking and it was thinking and that's the only thing it said. It was like a two-hour gap in his calendar and it was the time he was supposed to really talk to him. And he's like, you know, we need to talk about something that's really important, but I understand you've got this, you know, date with yourself saying thinking. And he goes, 100%. And he goes, well, why? Because I make less decisions over the course of my day or month or week than most people in the company, but they're critical decisions. So, I need that time to think. And when I have that time to think and carve it out and everyone knows, I come out of there with with much better decisions. So, that was something that I think was great and I tried it and actually does really help. It's It's kind of funny when you see it on the calendar and your employees are running, "What are you doing? I'm solving a problem, but I need some time."

Mark Straub: It's so funny like I I I've gone into these modes where I have time and I have space. And so, I do that and I sort of develop that habit a little bit and then something will suck me out of it. you know, I'll get pulled into, oh, you know, I need to replace this person on this team or I've got to go, you know, solve this particular problem in this country and and you and it's it's it's easy to revert back to bad habits. It's very hard to like maintain some of these things, but it's such a it's such a it's so so true.

There was there was something else I was going to say when you were talking earlier about this, you know, this concept of bar raiser and the lead, like basically whether you could follow somebody, whether they would be a leader. I have found you'd think that people that you would want to leave that you would want or to feel comfortable leading you well they're they're the more experienced people or the people who are more you know confident or you think that it's some of these characteristics but actually I have found when I started asking myself those questions looking at individual members of our team that it's people who are like really thoughtful and they take time to check their work and They're they're rigorous in terms of you know their thinking and like the it's it's not always that they make the right decision but they make the decision right to quote my CTO meaning like they they go through a thoughtful process to make decisions and I found sometimes those are relatively young people on the team and so when we've gone to some of them like we think you like we think you're doing a great job we would like you we want you to lead this team like sometimes they're surprised they're not confident in themselves and I think to myself like you know it's not always the people who quote unquote the most confident or the most senior who are actually the the natural leaders that you really want to follow. Sometimes it's the people who are they're maybe a little bit unsure of themselves socially, but they're actually their their thinking is actually quite sound. And trying to find those people and then elevate them is actually really important. And it's it's I've seen this pattern now. I've been starting to get better at recognizing my my CTO is getting re he's really good at this. He's been doing it for 20 years. So I've been learning a lot from him. But yeah, the people that you want to that you want to follow sometimes sometimes they they they're not always the people who who immediately, you know, grab the torch and and want to take control of it.

Jake Aaron Villarreal: Yeah. You got to push them push them off the edge a little bit and say, "You can fly now. Lead me, young man or woman."

Mark Straub: Yeah. Particularly young women. I I've I've seen this, you know, I don't know. there is a difference in in terms...

[The Importance of Team Dynamics]

...of the workplace and I I've I've seen a number of very talented young women that are have really good thinking, really good rigorous analysis, good decision-making, good judgment, but then don't always assume that they are cut out for management. And I think that's often just it's an assumption they're making based on some societal cues. But I but it's we've we have found consistently that we we found a number of those folks and we've promoted them and they turned out to be very good.

Jake Aaron Villarreal: Nice.

Mark Straub: And so yeah I mean I you know I obviously this is a bigger issue than than sort of you know us or the company but it's definitely something I've recognized in and at least in my little experience in the world. I I I suspect that this is a trend in in other companies too.

Jake Aaron Villarreal: Yeah 100%. Well let's switch gears a little bit here. You were in venture before you became a founder of a startup where you're having to deliver product into the market.

Mark Straub: Yeah.

Jake Aaron Villarreal: What were some of the things that you learned as you know on the venture side that when you assessed startups or investing that you could share with the listeners that would be helpful? And then I'm going to ask you what mistakes did you make when you became a founder that maybe you didn't listen to what you knew you should have been doing.

Mark Straub: Yeah. from the venture side. My favorite one though because you talked about shipping product is like I remember being in a partner meeting and I was advocating for some company and some whatever that I was trying to support and one of the partners, you know, was like, "Who's on the board?" And I was like, "Well, I'm I'm a board observer." And he goes, "Who's on the board that shipped product?" And I was like, "Oh, I guess you got me there." Put my hand down.

Jake Aaron Villarreal: Yeah.

Mark Straub: It was really I mean you talk about it was s such a pointed way of basically saying yeah I don't actually respect your opinion on this matter because you can't you can't speak from experience. I took that to heart. It was a number of those experiences that I had where I don't think the person who I don't think the the partners who were saying that to me were trying to they weren't trying to personally attack me, but they were really making a point about like do you actually know what you're doing or are you just expressing an opinion but you don't really have to hold the consequences of it. And yeah, I think I think the things that I learned that that served me well were understanding an investment thesis, understanding what you know, markets and and you know, if you're going to if you're going to build a company, you have to have some thesis around is there a market there? How big is it? What it's going to what it's going to take to serve that market. um to being able to kind of hold together a business model in your head, the all the different pieces of it, you know, the the tension between building product and customer acquisition and and competition and differentiation and like having an investment thesis that that was quite valuable which to me now when I when I it's very easy to see when when people who are starting off don't have that because you start asking them to describe the different tensions of the business and they can't really keep it all in their head and and it's not always a skill you have to learn in school like some entrepreneurs just do this naturally. they grew up I don't know you know lemonade stands they just do it organically but that's a skill that I definitely learned from venture

I think the other thing is is understanding the business model of the venture capitalist I think a lot of a lot of entrepreneurs there's this great quote I remember reading like founders get fired for one of two reasons they they either they either get fired because they they like they can't execute or they get fired because they don't understand the VC's business model. So, you could be doing something that is actually, you know, making progress towards whatever goal you have, but you didn't understand the business model of the people you took money from. And so, you're not aligned with them. And so, I understand the VC's business model, which means I understand how, you know, what has to be achieved from from in terms of de-risking a business at Seed versus at Series A versus at B. And like what are the different bets that that venture capitalists are making. Those parts me served me well and allowed us to raise capital probably in times when other similar companies wouldn't have been able to and that certainly gave us the oxygen to you know to survive and and and explore and expand.

I think the other part of your question was like what what do I wish I had what what did I know but I didn't actually right apply. It's funny. It's all the operational wisdom that I would hear other partners who had been founders or executives talk about and I would parrot it like you know oh the team you build is the company you build you know um or you know like the best technology doesn't always win like distribution you know matters too or whatever these kind of you know truism truisms of venture capital that you read on all the the blogs and podcasts I would parrot these things But then I would get in, you know, I get into the role starting the company 6 months, a year or two years later and you're in the chaos of making decisions day-to-day and so you make a hiring decision because you feel like you need to or you know you spend a lot of time noodling on an interface because you think because you kind of you're interested in you think it's really important then you realize like no one's using the product anyway so it doesn't really matter like you don't have any distribution. So like I it was it's easy in the fog of war to focus on whatever is in front of you and lose sight of these kind of pieces of wisdom.

And what I found was the more that I would have at least some touch points with people who are outside the company who were interacting with other founders and other entrepreneurs, it would remind me of those lessons more more quickly than if I was sort of holed up all alone by myself or with my team working on something. So yeah, I I learned those things in many ways the hard way, especially the team thing. I, you know, we in the early days, I think I just fell in love with anybody who was also excited about what I was excited about. And so, you know, I I got hardworking people. I got people who were passionate, but I didn't always get the best people for the roles that I needed. And and then that's expensive then when you need to then ultimately start making team changes. And so we had to go through several iterations of that. But yeah, that's the stuff. It's very hard.

Jake Aaron Villarreal: Yeah. I don't know. It's like it's very hard to give people advice. I feel like at least for myself, I have to I have to experience it.

Mark Straub: Yeah. That way.

Jake Aaron Villarreal: Well, those are great lessons. And you know with the evolution of AI and ChatGPT and Grok and a number of other ones like being able just to plug that information in now and be able to come out with you know what is the business model of a VC and like what are the things I should be looking at. I think that AI in a lot of ways will be helping you know founders this new generation really accelerate how they're growing and success and it'll be really interesting to see what happens with...

Mark Straub: yeah there's so there's so much I mean all the the sort of wisdom is now available at your fingertips if you're willing to write ask the questions and now I think what gets more critical is like really understanding you know human needs like okay so what is this next thing that humans are going to actually really want or need deciding what to build increasingly gets, you know, gets gets to be important and tricky. You know, actually just building software is increasingly I think like even within a vertical just increasingly gets commoditized very quickly. So yeah, it's man, it's been a it's been a journey. I it's funny when I heard that Jensen that Jensen Huang quote like you know they asked him you know would you have done like going back you college self like would you have started the company again he said no

Jake Aaron Villarreal: yeah

Mark Straub: I've had a lot of those nights

Jake Aaron Villarreal: we all have no doubt well that's really cool I I love your story I love what you guys are building and the problem you're solving just a couple more questions here for you as a leader you Your company's evolved. You raised $30 million. You're penetrating markets internationally. A lot of exciting stuff happening. For you as a leader, what's how have you evolved since you started eight years ago to where you're at today? What's one or two things that you can look at as a breakthrough that you feel others can learn from?

Mark Straub: Hiring very capable lieutenants has has made a huge difference in my sanity and in ultimately the success of the company. And we talked a little bit about that, you know, people who are, you know, just like neurologically different than I am and and can solve different sets of problems and complement me. And I think what's been really good is when you find people who are like that that mean meaning they're different from from you, but they respect and understand your strengths, right? So there's a there's a mutual respect and and affection because you both respect and and have affinity for the the talents of the other person and how those talents can interplay together. that's been a tremendous learning and and an area of of positive development and success for us.

I think that the the other thing I've learned is that the the further along I get into this journey, the more I realize that you have to take care of yourself and your own sanity as well. You cannot have a you cannot sprint through a marathon followed by another marathon followed by a triathlon. Like you can't do that physically. You'll have a nervous breakdown. And so you have to find ways of gaining some control again over your health and your happiness and and your sanity. And I think whether it's through meditation, through workouts, for me it's like if I don't if I don't get like like at least one or two really good workouts in during the week, like I...

[Lessons from Venture Capital to Founding]

...start going crazy, right? And and then you of course everything you make bad decisions, you don't do as much thinking, you know, you don't do those things you need really need to do. So just developing some of those habits has been really important. And I think for a lot of I guess for a lot of first-time founders, you sort of throw yourself against the wall at the problem and you know you'll I'll just do whatever. I'll you know work until 3:00 a.m. and I'll and that's not sustainable over the if you think any really valuable company you kind of need to be prepared for like five seven nine 10 12 years like you can't you can't sprint for for 12 years. So that's been an important reflection uh for me and I'm I'm think I'm way happier and able to continue to to to go because I've I' I've sort of found a cadence that works that is more sustainable.

Jake Aaron Villarreal: Yeah, that's great. Yeah, I I totally agree with that. I think the state of mind and the energy and being able to balance out your life, work, family, health is like so critical. I'm a huge proponent of Tony Robbins and a lot of like his like ability to change the state you're in because you have an event coming up that you got to really be, you know, engaged on or it's just a lot of little tools that are all on the psychological side versus, you know, the physical. And I think the something like 80% of business is psychological and 20% is mechanics and we forget about that.

Mark Straub: Yeah. Yeah, I mean, yeah, I can certainly and if you don't get the psychology part right, you know, sort of the mechanics go out the window. There's a great gosh, there was another entrepreneur who I got to know early on when I started the company because he and I were working off the same shared desks area and he had this man, I used to kick myself whenever something bad would happen. I would just torture myself with it. I'm like gosh, how am I going to come back from this? I'd be navel gazing for like an hour or two and the whole day might just sort of be down because of some you know some piece of technology didn't work or we couldn't get access to some API whatever and he had this great little technique which was it was well how is this the best thing that could have ever happened and I would I'd be like what what are you talking about no like okay so this person quit or like this piece this product shipped and it didn't work or this customer cancelled whatever. How is this the best thing? Like think six months from now when you look back what thing were you able to do because this thing happened, right? And it's the ultimate reframe. And I now try to apply that and it's it's so useful. And in and in hindsight, there's been so many of those moments where I've had something that felt existential and in hindsight like, oh, like it freed me up to do this other thing instead. Or the best part is like, well, it's good thing that that didn't work now because we can fix it now, but once it's at scale, like much worse. So like way better that that thing broke, you know, when when one customer was using it than when 300 customers are using it. So we've had a lot of moments like that and I it's been a that's that's a tool that I bring out from time to time.

Jake Aaron Villarreal: Yeah, that reframing is great. I think it's very helpful and you know one of the things that I learned which has been a game changer is there's a biometric change in your body biophysic change when you when you actually move so exercise is great and working out is great you know you Steve Jobs walked you know and the ideas change or you go to the shower and why do you have all these ideas when water's hitting you like there is a physical thing that happens and your mind can change state of mind can change. So whenever we're going through a problem we're trying to solve or maybe something you thought was going to close didn't close, whatever it happens to be and I go for a hike. I live on a mountain here and go for a hike or go for a run. It's like your mind changes. Yeah. And it's a physical and a mental thing and you come back with sometimes solutions or ideas or just in general you look at it differently. And I think it's you can often times be stuck in an office and you're trying to solve the problem you're working on. If if you just get up and get out and walk around a little bit, oh, an idea pops in your head for some reason. It's just it's a weird thing. It's good to

Mark Straub: One of my favorite things to do when I travel is the first morning whenever I've landed in wherever I'm going, I get up and I go for a run and I try to do it outside in the city that I'm in. Uh it's not always easy. Some some African cities can be pretty busy with traffic. But it gives me two things. One, it gives me that little that chance to think. And I get I get sort of just a moment of of kind of losing myself in this environment that I'm now in and reminding myself like the you know people that are around the street these are the customers these are the what are the phones people are using what like what's their day-to-day look like that's that you know that's the grounding reminder of like the market that I'm in the customers that I'm serving the why behind why we're building the company and sometimes that yeah that helps me break out of like what was my to-do list that I was supposed to do. What was the feature we were shipping on that thing? So, I I agree. I love that. I love running as a as a mental refresh. And particularly when I can do it, you know, running around the cities and the in the countries where we're literally trying to make a difference, it's it's like a double reminder and and and refresher.

Jake Aaron Villarreal: Yeah. Really cool. Well, as you look at, you know, we're into almost Q2 of 2025, what are you excited about with Smile ID? what's on the road map that is getting you going.

Mark Straub: We've got an enormous amount of work that we've put into our authentication product. And so this is all around biometric authentication for, you know, reauthenticating high high-value transactions, high high-risk moments in user journey. And um the really cool thing about this, I know I'm kind of it's a little bit of a commercial, but you know, we we we put out this fraud report at the end of the year and we talked a lot about the kinds of trends we were seeing, particularly with the rise of of AI and deep fakes and all of the attempts at account takeovers that we were seeing in the markets that we serve. And we did an a lot of work on our computer vision team building additional checks and additional security measures and leveraging AI that we were optimizing for our own unique use cases and the types of events that we were seeing and we put that to work in a new version of our what we call our smart selfie technology. It's a trademarked technology we built and we use that that liveness check in onboarding but also in authentication and we've just rolled that out at the beginning of the year and we're starting to see adoption and it's really powerful and it it you know it it's certified it's ISO certified dynamic liveness technology basically forces the user to have to do something a little bit random each time but still something that that's easy for them to do on their phone and that is I think going to be a game changer for us and for our clients who are trying to do more and more of their activities digitally you know across channels whether it's mobile whether it's web whether it's WhatsApp even and so I'm really excited about that that technology and that product and I think it's going to open up more banking use cases for us more transaction use cases more payments use cases for us and our clients and really like what we really want is we want to be able to allow anyone in any any one of the end users in our markets to be as trusted as a you know as a global consumer whether they're using a credit card, debit card, a mobile money wallet, cryptocurrency.

[Personal Growth and Leadership Evolution]

We want them to be able to to interact with the digital global economy and participate and not be blocked out. And and it kind of goes back to like when I started the company, I had all these stories of entrepreneurs that I was working with who'd been, you know, they were blocked. They couldn't buy Netflix because they had cards that were issued in Africa and, you know, Netflix wouldn't accept them or their IP addresses were in Nigeria. Netflix wouldn't accept them. I had my personal experience of having my airline tickets canceled because my credit card company thought I'd purchase them fraudulently because I, you know, we've had all these examples of where, you know, bad bad guys get through the system, good guys get blocked or good gals for that matter. And I think like the pieces of technology that we've been building and working on in combination with the clients that we're working with are fundamentally solving that problem. So that's what I'm excited about for 2025.

Jake Aaron Villarreal: Yeah. Well, I love it. I can't wait to go visit Africa and hopefully use your technology as a consumer at some point.

Mark Straub: You like to run, you like the outdoors, go to go to South Africa, man. It's Cape Town, the Western Cape is spectacular. Great running. Great. Uh do a little running. Do a little surfing. Yeah. Yeah. Very cool. Climbing. Do go do Table Mountain.

Jake Aaron Villarreal: There you go. Okay. Yep. Get the gear and make it happen. Well, I I I I appreciate your time here. This is fascinating. I'm excited to hear how things go for you in the next 6, 12, 18 months, have you back on or we'll do some more discussion around where things are headed. But if anyone wants to find Smile ID or find you, where do they go?

Mark Straub: Check out usesmileid.com and you can find all of our products, our documentation, and actually our SDKs are actually open source. So if you're a developer, you can even test them out and play with them and start building something.

Jake Aaron Villarreal: Really cool. All right. Well, there you have it, Mark. Thanks so much for coming on and sharing your story. Really enjoyed it. And for the listeners, for listening, thanks for joining us. It means a lot to me. You spent your time with us today. I'm your host, Jake, Aaron Villarreal signing off for now. We can't wait to catch up with you on the next episode. Until then, Mark, the world, take care. If you like what we're doing, don't forget to subscribe, leave a review on Apple Podcast or wherever you listen, and follow us on YouTube where we go behind the scenes to learn what it takes to be a startup founder.

‍

‍