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