Everybody. Welcome to the Embit podcast in which we discuss entrepreneurship, finance, and technology. Today, we'll be whipped up a riveting episode for you guys. Daniel Goldman will be joining the podcast to discuss his company unbanked. So, thank you, Daniel, for taking the time to hop on the podcast. How are you doing today? Shame, brother. Thanks for having me. And it's gonna be riveting. Yes. It is. I was gonna say that. I I'm very excited about this.
Yeah. I appreciate you taking the time to some quick background here. You started off at 17 homeless and 20 years later, as we mentioned before, it's quite a time difference, but still an accomplishment to be building a multimillion dollar business But before we get into too deep into the things, quick disclaimer podcast is not financial or investment advice and is not a research report. But to start off here, how did you get started in the financial services industry. Let's start with unbanked.
So we started unbanked. We used to be called Ternio And we originally had used blockchain technology. We had a 40 page white paper to use blockchain technology to solve a problem for the supply chain and digital advertising. We had one page in our white paper focused on our Visa debit card. You could spend crypto. Right? And that became the business. It's one page out of 40 pages. It evolved into unbanked, which is really just like a crypto neoback. And I'm really super proud of it.
Now I had worked in financial services, several years back many, many, many years ago. And I got some insight into, you know, how that industry works. Frankly, I think it's a bit of a it's a predatory industry in some some ways, not always, depends on the on the actor and the and the space. But, But I think that it's clear to me that, you know, when we talk about cryptocurrency, people typically think of, like, Bitcoin or, hey, should I buy that doge token?
You know, I hear that, like, all the time. Right? What do you think about doze or Ethereum? That's something they show me like their wallet. Like, I've got this. It, you know, it it it that's like, you know, it's that's that's cool. And I love Bitcoin. I'm a big believer in Bitcoin, but it it's so much bigger than that. So it's broader than that. We're talking about stable coins, people having access to dollars.
An investment to be in a dollar, but I can send you money across the world anywhere quickly and cheaply without having to ask a bank for permission. That's cool. I can pay for services that way. I can connect that to a Visa debit card like what we do. I can then have my funds, my own wallet, I can connect that to a yield product like what we got coming out early April. I'm very excited about that. Earn 20%, you know, yield on on your dollar. I think that's super cool.
And so it's like, those are kind of services that, and, oh, by the way, you know, the fee structure for banks is built on top of how to how to charge you more money. That's their model. It's if you could either provide more value, or you can, you know, find a way to just charge people more money. And and there's a lot of people within, you know, people with MBAs. And I talked to this all the time. It's like, you know, it here's a good example.
McDonald's. I worked at McDonald's 2 not years to talk about McDonald's before. Yep. So McDonald's used to probably presumably have a pretty decent hamburger. I can't eat a McDonald's hamburger right now. Don't think it's a real hamburger. I don't understand how people could eat this hamburger. It's disgusting to me. I don't like McDonald's hammer. I can't stress how bad their hamburger is.
At some point, they had a 100% ground beef, and then somebody, somebody was like, you know, what we're gonna do? We're gonna take 5% of that hamburger and put in fillers, and then we'll save 5% on the cost, and they don't know the difference. It's like, that's genius. And then, you know, McDonald's been around since the, you know, 40s fifties. So then fast forward, fast forward a few years CEO leaves, and then they're like, oh, they got their multimillion dollar package. They killed it.
Meanwhile, they're, you know, subsistence workers making, you know, for, basically, living paycheck to paycheck because they had a genius idea to degrade the product. And then the next CEO was like, you know what? We got 95% you know, ground beef, why don't we just make it 90%? And then that that continues. That continues. Or at a bank, people are just saying, well, we're charging 250. Why would you charge them 3? Right. It's it's all the time.
So at some level, we've gotta, like, say, wait a minute, as consumers and individuals who say, well, this is, you know, we can do better. And and cryptocurrency's gonna allow you to be your own bank and give you more control over your own money and not not have to have the fee structure. When I was 21 or 2020, I was basically getting $200 a month in ATM or, or late fee charges or whatever, you know, like overdraft. Right. 200 a month at overdraft.
Yeah. I could catch up because every month I pay $200, I could never catch up. It was just a it was a hole. That's the way it's designed. They keep tracking money out of you. Yeah. And they know that. And they know that. They're not stupid. They're savvy. So if they're savvy and they're doing that to people, it's with intent. You know? And if it's with intent, it's malicious. So we've gotta do better. We gotta do better, and we will do better. And I think it's gonna start with education.
That means people need to know it's not just about, like, oh, by the way, crypto can be like gambling, so be careful. So it's not all roses. It can be a lot of negative stuff, but it also is gonna solve a lot of problems, and that could just be digital dollars. It could I believe in Bitcoin. Bitcoin is a great thing. I'm a 100% believer in Bitcoin long term, and, it's gonna be smart contracts.
And what Ethereum is doing with smart contracts and the ability to transfer value without any intermediary without anyone's permission, transfer value is beautiful. So although I would say Ethereum's not made for poor people now, it's very expensive. So, yeah, that's that's how I do the world. How is a crypto and DeFi integrated into your business? Well, fundamentally, the easy way to think about is we have a crypto debit card. It's very easy.
Because if you have cryptocurrency, you gotta go through an exchange and some total hassle because I gotta go, how do I get that money to my bank account or whatever? We literally, and maybe your bank will shut you down for sending funds from Coinbase. That has happened, right, many times. What if you could just deposit your Bitcoin and then just swipe it and spend it on a on a a debit card?
Now, you know, it's converted dollars and the dollars are spent, but the point is seamless seamless experience to where you're effectively spending your crypto in a way where it cleanly converts in the field. We do that. Right? We have bank accounts that let you buy crypto. And then I as I said before, the the yield product where that's gonna be resonated for everyone. People in we have bank accounts in 234 countries around the world.
We'll be able to literally wire in funds if they want to connect it to their wallet and then earn yield if they wish, if they wanna do that, or they can buy Bitcoin if they wanna do that. So that that's me is game changing stuff, giving people more control and the ability to earn money on their own money in a way that they won't get from today, from a bank. By the way, it's not that banks can't do that. Banks do that all the time. It's just that they keep all the money from themselves.
Completely agree. So quick question. So if I were to have an unbanked debit card and I swiped it at a transaction for a merchant, would that merchant be getting paid in cryptocurrency, or would it be in fiat? Yeah. So we're not changing the way that the the system operates. We're just making it convenient for the consumer. So from your point of view, you have funds sitting in an e wallet.
If you wanna withdraw your funds back on the blockchain, you can because now you have the ability to withdraw it without having to go through a third party intermediary. You're literally withdrawing it to the blockchain. No fee whatsoever. Or when you swipe your card, the merchant gets fiat your crypto is sold into fiat on on an exchange. Yeah. So the main reason why banks have a lot of these fees is it's an revenue producing asset.
So if you're eliminating a lot of these fees, what are some sources that you're using to get revenue? Well, we charge $5 a month. I'm a fair believer in the Netflix model. My hope is that, you know, like, if you watched a million, you know, movies in a month, not that you probably could, but you, you know, conceptually, they don't charge you more money in Netflix. They just have your monthly subscription fee. Alright? Whether you watch 5 or you watch 25, it's the same cost.
I I kinda think that's a square deal. It's just it's just kinda like, look, it's there for you and you can use it. And I really I'll give you an example. If a bank does an ACH, We live in 2022. Alright. So bank has an ACH. They pay the Fed a penny to do an ACH. Yep. The money then gets transmitted the next day, but they might hold it for a few days because they wanna keep that for themselves depending on what they wanna charge you. They'll charge you 3.5 or $10. So they pay a penny.
They charge you $10 for almost no risk because they're they're you're the customer and they're sending the money. It's like, very little risk for them. So there it's a it's a revenue generating model for them. Right? I I view a world where you fundamentally have, like, unlimited ACH where, you know, you set a transfer. Great. No problem. Or you wanna use a and ACH and and wires will basically be like the fax machine. Can I use a fax machine in 2022? Yes. Do I need to? No. Because why?
Because I also don't use a carrier pigeon. You know, I have email, and I have other you know, sources of communications nowadays, text message, and a million other things. Why would I be using a fax machine unless I'm using probably some government agency, frankly, that's still using fax machines. So I think YRCH are fundamentally gonna when when you look at it 10 years from now, say, well, they're still around. It will still exist, but it will be as fundamentally, it will be the the 8 track.
I mean, you're still young. Have you ever seen an 8 track in your life? Nope. Okay. Well, the funny thing is if you look it up, the a track was the premier, technology when NACHA was created in 1973. So the same technology we're using for the banking system, okay, Yep. The a track was the was the top of the line of the technology that existed, and that's what you're using today for banking. Wow. That's crazy.
I think that's one of the key things is that not only is your company on banks solving a problem for customers, but it's also making it frictionless. And anytime you have a combination of those 2 things, it's setting it up for, large amounts of potential success. Because you're making it easier for the customer to do business. And I was talking to a venture capitalist the other day, and that's one of the key things that can help build successful businesses.
Is not only solving a problem, but reducing the friction for the customer. But you hear that a lot. Especially from VC, it's not it's not untrue. Reduce friction, you can do that a lot of different ways. It can be a final change. It can be just a, you know, better user interface, make it so easy. Apple Pay is so easy. You know, it's just so easy. It's just like, I remember the first time I did Apple Pay. I was like, that's it. I don't think that was beautiful. That was amazing.
So, like, you know, they didn't change. There's a lot of tech underneath that. Right? And they had to build a whole bunch of stuff. Of course, apples. So they've got a lot of a lot of money, but, in capabilities, but they made a really beautiful user experience. And I think the more and and you don't need crypto to make a better user experience. So, by the way, if you use web you hear web 3 a lot or default, there's still a long ways to go. When it comes to building the Apple Pay of key 5.
Like, there's still a long ways for us to go. Right? But to your point, reducing that friction, You make it easy and convenient for people. There's a reason people go to convenience store and pay $2 for a pack of gum when they don't need to do that. It's because it's just so convenient. You walk in the door. You give it two bucks. You're out, and you're done. You go to the grocery store. You gotta park further away. Blah blah blah blah blah. Right? 100%.
When we're talking about you guys raising capital, one of the questions I've had is what what was your thought process when you're choosing to raise capital on Republic? Versus going to other VCs or angel investors? Well, I like the folks a lot, frankly. They're connecting to a bunch of investors. They already have a huge investor network. So by working through the reg CF and doing a safe note, you're familiar with the safe notes, I'm assuming.
Yep. Yep. Okay. I like to say no. It's very rare that you'll meet in a VC. Raising capital is not easy. It's very rare that you'll meet you'll meet a VC, and they'll suggest the safe, though. Because it's the fairest terms you can have Right. For everybody. And I've dealt with enough, VCs to know that, well, depending on the 1, right, some of about the mission. But at the end of the day, coldly, they have a job. Their job is to make as much money as possible. Right? That's the bottom line.
You shouldn't I don't hate him before that. But when, you know, we had an offer, like, let's say, for example, in December to to, you know, in the millions. But the terms were dissatisfactory to us. And so we were not willing to to give into shitty terms just so we could have some cheap, you know, some quick quick catch. Right. And we're very careful. So at least with the going with the Republic type of offering. You're setting the terms. It's transparent to the marketplace.
You're saying here's what we're offering everyone. You're giving people protection on the downside. You're also giving them protection on the upside as well, and it's a square deal. And so plenty of VCs will invest in a in a rec CF, and plenty of angel investors will will invest in rec CF and, I've I've always been a big fan of Republic. We did our one last thing.
We just got out of the test of Waters campaign where We've from what we've been told, which is the best Tesla Waters campaign they've ever had. We're raising 5,000,000 on a 20% discount safe note with a 115,000,000 cap. And in the 1st 2 weeks, we raised $1,500,001,600,000. So it just went live. We were finally starting to able to actually market it where we in the test of waters campaign, we couldn't. So I'm very optimistic about our round.
And you know, when you're competing against well funded competitors and we're expanding and we're doing a lot of stuff on the regulatory side and the big big dreams and plans and stuff we're doing, We've only ever raised $1,400,000 since we started 4 years ago. So you you have to have capital to be competitive in the space. And we need we're about to go through we've proven product market fit, but we wanna go through a hyper growth stage. And and that means putting a little gas on fire.
And, when analyzing your previous history as an entrepreneur, you founded ad 3, amplify social media, and multiple, digital media companies. How did those go? And what are some of the most important lessons you learned finding those companies that you will or already are applying to unbanked? Well, yeah. I mean, all of them were fundamentally digital. I really enjoyed all of them. So I always like to do whatever I do, I do something that I enjoy. Amplify was very political.
Did a lot of stuff with the democratic party driving political messaging and campaigns that, you know, help them with ACLU, SEIU, AFL CIO, Nancy Pelosi, DNC, DCC. I did a lot of work. You know, I've I've do the stuff I like. And, you know, with, some of the digital media companies, it was very frankly, Madan a lot of money. It was democratic politics again. But for specifically, like, you know, media. And so I made a lot of money there very successful.
Ad free media was an ad tech company, which is why we started looking at Ernie. I was being a solution for using blockchain and digital advertising for my co founder, Ian, he was my he was a chief private officer there. And so, you know, we did that. And then also I had one failure that was actually a tremendous success but it was a failure financially because we didn't know how to monetize it.
And I thought I bet on monetization that we didn't quite figure out So I actually lost enough money on on that. I had never lost money on any project ever. I was very proud of my streak there but it was very successful from a standpoint of driving, views and getting, like, getting a lot of visibility and had we monetized it, it would frankly be worth a lot of money, but but we couldn't monetize it. And that was a really important lesson for me.
And and and anytime you're an entrepreneur, you're always taking a risk. Yep. You know, you're you're putting money forward. You're putting in a lot of work. Even if you have a low amount of money, capital you put in. Like, your podcast is probably not labor or capital intensive. Right? Not at all. Yeah. But you gotta put in the work. Yeah. Time. Yeah. Time. Time and effort, time and effort.
And so imagine a world where, like, at when we started on banks where for the 1st 2 years, you're putting in all the hustle and you don't have anything coming in. There's only work and and your exporting efforts and you're getting nothing financially and you're taking all that risk. And you still gotta pay the bills. You still have to pay the the the the water bill and the electricity bill still has to get paid. The mortgage still comes in every day, every every month. Right?
You still got the car bill if you have a car bill. So so like, you know, you put food on the on the table. It's it's a stressful life when you're building a business if you don't have the funding and we bootstrapped, so we didn't. And it was very hard but, boy, am I proud of what we've done? We really we really like hustle. And and I'm very proud of the fact that we're unbanked I'm very proud of where we are with 50 employees.
And I'm I just really proud of what we've done so far, and I don't think our story is just so like, there's so much more we have to do, frankly. Yeah. I completely agree with you. And congratulations, by the because I respect the hustle. There's a lot of work that it takes. I know when I started my podcast, back in November of 2020, the only person I had listening was probably myself and, like, one other family member. So pretty much nobody. I know. I know.
It was like that for, like, 6 to 8 months, and I was spending, like, tens, if not, over a 100 plus hours producing the content, doing the research, and, basically nothing was happening. And I kept on going, and then I ended up figuring out through a lot more time on research strategies that I could use to make it grow. And then I ended up doing it eventually, but it takes a lot of time and a lot of time of nothing and those who can surpass that stage end up going really far.
But, yeah, it takes a lot of time and effort, but, the those who do definitely pays off. And that's why you have to really like what you do too because you have to be a little crazy. I mean, you think about it. You take all this risk. You're putting all all the effort. Even if you're not financially risking anything, right, he's like, okay. I'm gonna do a podcast. It's low cost, low capital. Alright. Great. That's good. That's a smart model.
You're still putting in all the work and at some level, like, you have to find a way. If you don't love what you're doing, it will show because you have you have to go through all the grind. And and the best advice I give to people when they're trying to be, you know, start a company is find a way to make your 1st dollar. Because if you can figure out how to make a dollar, which is, you know, it should be in theory. It should be an easy thing to do.
But in practice, when you're building a company, it's not always. But if you can do a dollar, you can basically do 10 and you can do a 100 and then it can become a 1000 and then you figure it out. No problem. And that's the most important thing. And it reminds me of and I've told the story before, but the the closest thing I can I it really resonated with me was there was this energy bar company? They started up as a at a Chicago, and there's these 2 college graduates.
And they're basically talking about all the stuff they're gonna do making this amazing energy bar And then they're like, oh, we're gonna need a corporate office. And then they're like, we're gonna have they're planning all this shit. Right? Right. Sorry. And then they're planning all these costs And then the the dad says, you guys just need to shut up and sell a hundred bars. Which was so on the money. It's like just just go sell some. Forget all the big vision for a moment.
Just make some of your energy bars. And going subtle. And then that was like the impetus of, okay. We got off our butts, and we put in we put in the work And then it it it became a business. It may have been small. It may not have been profitable, but it was a start. And then they just had to keep doing that over and over again, and it became a $1,000,000,000 company. Yeah. A lot of people when starting a startup or building a business end up just going straight to it being, like, exactly.
As you said, I need an office. I need this. I need that. And then before you know it, they have a bunch of expenses and they haven't produced 1 single cent of revenue. And you gotta do that revenue first before you even start to think about anything else. That's what I was so right. And that was actually on the the business of mine that failed. That was one of the the things that we didn't do is that we didn't start the the the and another example of that would be Hyundai.
So Hyundai, makes pretty decent car. But they when they first got into marketplace, they were, like, the cheapest, worst built car in the market, basically. Like, a Hyundai was not a good car. And then they had just kind of they were cheap, though. So if, you know, if you needed a cheap car, it may not have been high quality, but it was high high quality. Right? Ranger overs are you know, very nice, but they're like the worst when it comes to fixing them. Keep that in mind.
But but they basically built on top of success. So they took a a a a low quality car, and then they learned how to build a higher quality car. Now they make a very nice car. Right? And that's something I would drive. So, and they do it affordably. And I think that's the Shamus. It's the same concept. Of how to start from low cost, get some money, reinvest, build on top of that. And before you know it, you do you got something special. Yep. That's right.
And, to wrap it up here, what would you say is your mission over at unbanked? And, what should the audience take away? Well, you know, we fundamentally are connecting, you know, Defy and cryptocurrency to traditional systems. Like, you wanna spend money, crypto on a debit card. We can do that. Bank account that lets you connect to a yield product. We're doing that. Like, we're connecting for the the hybrid model connecting crypto and and and legacy system.
I say that the the mission, the underlying mission as we've and it's even more pressing now that we've sort of been a post COVID world where people are appreciating having the ability to choose for themselves, which direction they wanna go in life. Right? Having been locked up for a couple of years and having things that we take for granted, not being any more kind of like available sometimes.
When you're dealing with money and people having the right to control their own money without having to ask for permission from a bank, I think that that's really important. So fundamentally, you know, we believe financial access and control is a fundamental human, right, that that that's our mission. And and I think that that that ethos is gonna carry with us for quite some time because people will choose to unbank themselves.
They will choose to become their own bank and then still have access to to banks for for services, but they'll have more control and they'll choose what they fundamentally wanna do. And we hope unbanked will be, well, will be one of those, companies that helps them. Yeah. It's awesome. Best of luck. And I I do love the name, by the way. It's perfect. Very simple. Continued success to you and your company. But alright, everyone. That wraps it up for today's episode.
Thanks for tuning in to the Evid podcast. And thank you, Daniel, for taking the time to hop on the pod. It was a pleasure. And thanks, bro. Disclaimer. The podcast you just heard is not a recommendation to buy or sell any stocks, holdings, or securities. The podcast is also not meant to serve as the basis of any investment decision.