[00:00:27] Jay: Hi everyone. Welcome to The First Customer podcast. My name is Jay Aigner today. I am lucky enough to be joined by Cody Eddings. He is the CEO and co founder of Snap Refund. he lives in Philly now. He's not from here. He moved here recently. We were talking before the show. He's got a connection to a bunch of people that I do.
so I'm very excited to learn a little bit more about Cody. Cody, it's been a long time coming. How are you brother?
[00:00:48] Cody: I'm good, Jay. I appreciate your hospitality for having me in your digital space here.
[00:00:52] Jay: My digital space. Yes. I like to think of it as my locked office away from all my children. So, it is a very sacred space to me. so tell me, where did you grow up, man? And did that have any impact on you being an entrepreneur later in life?
[00:01:06] Cody: Totally, yeah, man. I grew up in lovely St. Louis, Missouri. south side St. Louis. that's my old, my old haunt, as they might say. yeah, huge impact on me. You know, I grew up from pretty humble means and I always wanted to find ways to Make something, you know, worthwhile to people that would ultimately help me get to, you know, places of like stability in my life and help my family. And I mean, I think going back when I was like super young, I think that started off with me wheeling like our lawnmower around door to door, knocking on my neighbor's doors and asking if I can cut their grass for like 10 bucks. And then, over time, you know, I really learned a lot about the financial system and, like just the day to day experience for people who are. Living, whether they were underbanked, et cetera, and I think a lot of that foundation is what led me to what I'm doing now with SnapRefund.
[00:01:58] Jay: Beautiful. So what about in between? I know you were a developer. you would, you know, some pretty big places as far as like, where you stopped along the way and some smaller places. what's the kind of snapshot version of, you know, you out there knocking door to door, cutting grass to, where you are today.
[00:02:14] Cody: Yeah, well, I'm number one, first and foremost. It's a massive nerd, proudly. So I played a ton of World of Warcraft back in the day, and I used to always wonder why the game looked so trash on my computer. And I was like, man, why is my framerate so low? Like, I'm watching, like, proto YouTube videos of people playing WoW back in the day, and I'm like, It looks a lot better when they're recording it than when I play. So I would go to Best Buy all the time, and I was like, ask the people, the geek squad there, what I could do to my computer, make the game, you know, run faster and look better. And then I realized that I just really liked computers and technology and I started like building my own custom rigs. And, you know, back in the day I thought like replacing my Ram would like make my frame rate better, but I just didn't know, like, you know, I was learning.
So by the time I got to high school. I was really just like huge into tech, and I got a job as a cashier and then eventually like an IT, consultant at Office Depot in St. Louis. And I knew I wanted to be a computer engineer, so I started looking for colleges that had a computer engineering program, and then I, hopped on a plane for the first time in my life when I was 18 to go to college as a freshman at Lehigh University, and that's where I got my Bachelor's of Science in Computer Engineering, and then became a software engineer building. Supervisory Control and Data Acquisition Systems called SCADA Systems for wind farms and solar farms. And then from there, I ended up, I wanted to do something that was a little more in the hands of the everyday person. That was pretty, you know, like industrial programming. And I taught myself how to write Android apps and became a mobile developer.
And that was actually around when I was doing my first startup. It was called Guitarsim. And from there, I knew I really liked startups and I liked mobile development. So I started looking for a job. And that's when I found a job at Roar for Good, and I moved to Philly to be their Android developer back in the day. After that, I actually worked as the lead Android engineer at Urban, the parent company of Urban Outfitters, and helped launch their brand newly, which, you know, my, Android systems help run their warehouse. they do like over a hundred million dollars in, ARR, if I'm not mistaken, now, and we're using, you know, probably millions of sessions, lifetime, already happened in the past few years over the Android apps that I wrote for their warehouse.
So all that is kind of the primordial stuff that happened before, I, I became, you know, the version of me here in your digital space today.
[00:04:34] Jay: Beautiful. what. What problems did you see that led you to found SnapRefund and obviously in that answer tell us a little bit about what SnapRefund is and who that serves.
[00:04:48] Cody: For sure. Yeah. And thank you for asking. I appreciate you, Jay. Snap Refund empowers insurance companies to send claim payments effortlessly. And we do that through flexible instant payment technology. And through deep analytics that expose insights to help claims teams run more efficiently. This all started when my co founder, Anise Taylor, had approached me and said, Yo, Cody, you know, I see a problem.
A lot of people in underserved communities, people in certain areas, tend to lag behind financial technology adoption that their peers have, as well as lower financial literacy. And we set out to find ways that we could implement FinTech technology. for the betterment of people as a whole. So our mission that we set out with was to financially empower people and give them greater control over their money. We didn't really know what that would look like at the time, but over a lot of market research, we came to realize that business to consumer payments in this country are more antiquated in general than peer to peer payments, and there's a lot of spaces where people typically have slow or low access to payments that a business owes them. So I'm not talking about payroll, right? beyond payroll, like reimbursements, those kinds of things are often paper checks, or maybe if you're lucky you get like a gift card in the mail. But, in insurance, we found, pretty quickly, it's over 60 percent of all the payments, even today, in like 2023, are still sent with paper checks. And that's a huge problem because that's very important money for people to have. I mean, usually it's tens of thousands of dollars on the line and someone needs that money to do whatever it is their life is disrupted from doing before they file the claim. So that's how we learned about this space and how SnapRefund ultimately came to be a provider for financial empowerment and control of funds in it.
[00:06:32] Jay: Wow. Tell me about the market research phase. What did you guys, I mean, how do you take a very altruistic, you know, concept and dig into it to figure out what's a profitable angle and who's underserved and like, how did you guys start and how did you end up with insurance?
[00:06:56] Cody: Yeah, so, we ended up with insurance ultimately having come first from peer to peer payments. So we started out thinking, okay, these instant technologies exist. How do we utilize them in a way where more people have access to them? And our first thought was, cool, let's be, you know, like Venmo or PayPal or something like that. But we learned in that space that our mission wasn't really being served because those apps actually do a pretty good job today of exposing that instant cashout option you have, for example, in some of them. So we started thinking, okay, if this isn't the space and we're really only in this space because we thought it was a good idea, How do we actually validate that things really aren't good ideas?
And that's a huge learning experience as an entrepreneur. and that's not to say that the idea wasn't good, it's just that there were better places for it. And sometimes, picking the right place to devote that energy into kind of determines your ceiling, you know, right away. The insurance space, you know, we had pitched a lot of VCs, so that was, that app was called Dime back then. We never actually launched it, but Dime became SnapRefund. If we were talking to VCs, and this was, you know, back in like 2020, 2021 timeframe when we're watching all these companies get like millions of dollars thrown at them for pitch decks and we're like, okay, well, now let's be next. But the reality was we weren't really solving a big enough problem, right? or rather maybe the problem is already being solved is a better way to say, we didn't have a differentiator, but VCs are saying, Hey, is there a better way you could use this instant payment technology? Have you thought about other verticals? Like for example, insurance. Now, we started out thinking, okay, how about e com refunds?
Because back then there was an average of 7 to 10 days to get your money back for a return when you would send like a pair of shoes back, you know, to an online merchant. And this instant payment tech could make that happen in a few seconds, right? But, even that, we realized there were problems with it. So, when the VC said, have you thought about insurance? We thought, well, it's worth looking into. And then I mean, I'm going to shortcut this in like a sentence or two, but just know it took a very long time and a lot of effort. We had probably about 200 conversations with people in the insurance space to really identify and understand what their pain points were and how we could possibly aid them in a solution to that.
So the market research angle was just the thing that you have to roll up your sleeves and do it. I mean, it's not everyone likes it. I'm certainly more the person who's like ready to be over with it as soon as possible so I can go to build something. When you do that too soon, it can be disastrous. So we really learned the value of market research through our segue into the insurance vertical.
[00:09:32] Jay: And did you, was that, was the idea to go interview 200 insurance companies, something that you learned through? You're kind of VC pitches and like, where did you even go? How the hell do we start? Right. Cause I mean, that's a lot of the problem that entrepreneurs, people who have great ideas run into, and you alluded to a little bit there.
And I feel the same way, even running a service business is market research is terrifying. It's boring. It's long. It's like every bad adjective. how did you guys come to. Which version of market research you were going to do, and how did you know it was going to be, how did you know enough was enough?
How did you kind of get, was there just like a moment where you're like, okay, we've heard this enough times we validated this pain point. That's what we're going to go after.
[00:10:24] Cody: Wow, that's a great question. It's really hard to know when enough is enough, and I think that looks different for different businesses and different verticals. a few things, because you said so much there that is super, super relevant for people to know and hear, is that number one, we didn't know in the beginning that it would take as much research as you. We ended up doing, you know, again, I'm a super bullheaded person when it comes to being ready to move. Like let's go. But the reality is I did that too soon because I didn't really have a good enough understanding of the space yet. I just knew, okay, insurance claim payments suck a lot of times and people want their money right away.
Cool. Let's go build a solution. Give them the money right away. But that's, you know, jumping the gun. So I was really, I learned from the market, like, okay. There's more here that has to be considered before anyone will actually buy this solution. Because the solution has to ultimately solve some tangible, measurable outcome for those prospects before we actually can get anyone to agree to use it. So initially, we're thinking it's just an instant payment piece, but then we learned, no, actually, to get the insurance company on board, you really have to provide them something that speaks to their existing workflow better. something that improves their claims operation. customer experience reduces churn, right? And we learned that over time. Yeah, as it relates to how many it takes, I mean, I thought, you know, after like five conversations in the beginning, I was so naive. I'm like, oh, cool. Five people said that like, you know, this could be a problem. All right, boom. That's a business. The 200 really evolved along the way where the whole time in the beginning, and this is my word of caution, entrepreneurs don't do this. The whole time. I'm already thinking that the idea is validated from the first, like, five conversations. So as I'm building and pitching to the next, like, 20 people, 50 people, 100 people, I'm thinking, like, cool, I already got it figured out. One of these is going to be a sale eventually. But when I actually step back and realize, you know, like, after all that time, wait a minute. The reason why these deals haven't converted into sales is because we're not actually solving things they care about, or we're not solving it well enough, or the thing we're trying to solve isn't a big enough problem. And that's when, getting to the point where we're at now, where it's very scientific and we try to be very diligent and measured in our approach for de risking things we build. We got there through the hard earned lessons of knowing it's really easy to assume too early. You get what they call happy ears. You talk to five people, you're like, oh bet, alright, that's a billion dollar company right there. Five people have the problem. Five whole people, Jay, have the problem. We have a billion dollar business. It's not how it works.
[00:13:05] Jay: Yeah, you. Made some really good points there, and was there a moment where you felt like you would talk to enough people and heard it enough, or was it kind of just, okay, we've done this long enough, what was the end marker for that, you know, very daunting, I say that because I hear it over and over again, I feel it all the time, it is a, it's gotta be, Up there in the list of things that prevent people from moving forward with the business is that market research phase, because it's such a nebulous phase and it could mean anything and everything.
So I'm just very curious. What was the end marker for you? Where did you go? Okay, we've heard this X number of times from different places from different pieces. We know we're providing value. Like, where was your exit ramp off of the market research phase into building?
[00:13:58] Cody: Yeah, that's a great question. so I'll say it. And I think the best way to say is the market research phase never ends. So even when you start building, there's still more to learn and you can gain product market fit, but you could also lose product market fit. I mean, it happens all the time. So the things that people are attracted to your solution for today. Might not be the same things that matter to them tomorrow, because things change. so much can change. Industries move on, new technologies get invented, regulations come down. that point for us, I think, once we went to our first couple of insurance conferences, we were able to talk to, you know, like a couple dozen insurance carriers back to back, and aggregate all that information and actually break it down, you know, into like a, Google Doc. And then you can even feed that back through like chat GPT if you want to try to like pull insights out of it. It's like a little hack to try to process it a bit faster. Be careful about that though because it's not infallible, so sometimes it'll miss things that you might have discerned as a human.
But point being, once we saw enough commonality in say, you know, like 20 conversations, 50 conversations, and then as we tried to disprove that something was a viable problem to fix and we couldn't, that's when we knew like, okay, this is worth building. But to be clear, It's not all roses, right? Like, we built stuff way before then that never got used, so it's not even like we had this perfect route through it. It's just that we learned those lessons the hard way.
[00:15:28] Jay: Yeah, I have another question later that we'll circle back to that, but let's go from you're confident that you found a solution and kind of like you said there, it's not always the solution, right? It's a solution and you're working on it. did you guys do from there? how did you go out, set out to build this thing?
In a way that knew it was going to be scalable down the line, because I know a smart guy like you must have been thinking, we can't just build this for today. We've got to kind of build this for later, but not go crazy and, you know, make it the prettiest. Good architecture and everything in the world.
So it's perfect. We need a scalable usable version of this thing to get going now. How did you guys go out and build that thing?
[00:16:11] Cody: Yeah, And when you say how, do you mean from like a technical standpoint, or like a business
development,
[00:16:15] Jay: anything, right? I mean, what was next? you proved it was viable. And then, you know, did you just go home and start coding? Did you start to lay out, you know, architecturally, and maybe it would help a little bit too, to preface that with what are the roles? That you play versus your co founder plays like who does what in the business?
And was that always clear from the start?
[00:16:36] Cody: Yeah, oof, great questions. no, not always clear from the start, because things change, like the needs of the business change even. there's roles that you might not even know you need, and then you end up at a point where you're like, Oh, we gotta have someone doing this thing. So, I'm the CEO and co founder.
My co founder is the COO. And between us, I handle, In the beginning, I was actually handling engineering. sales, fundraising. my co founder handles accounting, marketing, Operations. I mean, he's really super awesome and helpful and the power of having a co founder cannot be, overstated. Like, you really, you really need someone, I think, in there with you, to help things get going. Depending on your experience level or, you know, like, your business type. But it's indispensable to have that person. But those things change over time. and to answer your question of how we built it, right? So I'm going to tell you how I think people should build it, because how we built in the beginning, like I said, we made mistakes in building the wrong things or building even the wrong ways sometimes where things were invalidated. When you say you have 50 interviews, if it's a direct to consumer product, maybe you want to have like 100 interviews with possible customers. You find the commonalities, you ask really open ended questions, like you're never trying to lead them, you don't want to come in and say, Hey, what's the best? way for you to have, a well fitting red hat and you might say like, Oh, I like when it's snap back or I might like it when it's fitted, but maybe the real question should be asking is why do you wear a hat? What matters to you when it comes to putting something on your head and then maybe you'll say like, Oh, you know, maybe I'm experiencing hair loss and then the real solution that helps your problem. Yeah, sorry, I don't know if that's real or not. you look
very good,
[00:18:26] Jay: I appreciate it, but no it's fine if
[00:18:29] Cody: nothing personal.
[00:18:30] Jay: I could thank my father but yes, That is the reason why we're having this podcast
[00:18:34] Cody: Well, it looks great,
but, you know, the point that I think that drives to is if someone's trying to build something for you, right, as a customer, if they're going into it already kind of thinking, like, this is what I want to build, let me hear what I need to hear to say, let me go ahead and hire the engineers to do it. Then they're gonna look for reasons to say, okay, let's build a snapback. Let's build a hat, right? But if they're really trying to solve a problem, they need to listen to you and understand like, oh, maybe we should actually create some sort of like, you know, hair implantation solution. I don't know. To be totally clear, I have no idea about that space at all.
I'm just an example, it's really important to not assume if you want to have like an actual chance at solving a problem that really matters. Like, because that's where products go from vitamins to painkillers. Like, yeah, you might be able to solve, like, a simple lower version of something, but if the real thing they care about is not actually tied to how they're doing it today, then you need to give yourself the space to understand that. Once you do that, so you've talked to 100 people, 50 people, whatever, now you go and you make super low effort but high fidelity mock ups, whether they could be, like, if it's software, like, you know, Figma diagrams or like a Canva presentation. It just shows like the core use case or the solution to the problem. Then you go back to that same 50 or 100 and you show it to them and you say, Hey, remember when we talked before, does this solve the problem? and then they'll tell you like, yes or no. And when the answer is yes, or you've gotten enough yeses, now you can start to say, cool. Okay, so I know this is a real problem.
I know that this solves the problem. Now you can build it. And then those people you interviewed initially can actually be your first sales prospects because. You already know that they have the problem, they're already warmed up to you, and having a solution for it. And I think that's a really powerful approach for any business, to go forward with building something, to answer your question of how.
[00:20:22] Jay: Yeah, no, I like that. and I will kind of split the difference and I'm going to, it may sound like the answer would be the same, but maybe it's not. If you had to start snap refund over again, tomorrow from square one, what would be your first step? And maybe it's not the, how you build it and all that piece, but what would you do differently?
What would you do the same? Like, what would be the first step to go build this product again? If you had the idea in your head.
[00:20:53] Cody: Yeah, it would be to go in not trying to build anything, just to go in to listen and understand the problems in the space. I think the most important thing is picking a space first. we did it backwards, really. We came in saying, Like, we knew there was a problem, like I mentioned, around access to payments and financial tech for certain communities. But, I think the more correct approach, because we came in with that in mind, and we said right away, Okay, we want to be a payments company. It's really the wrong way to do it. And we're fortunate that we had enough grit in us, to just keep going and find the right places to apply that technology. And it became its own thing, even beyond that.
But It's a really easy way to kill your business for you going when you're going in saying I Want to be a blank company Sometimes it works out a lot of times it doesn't If I went in again I would just go in pure research mode and just have as many conversations as possible in a space that I thought was worth you know solving problems within and Then make no assumptions about what a solution is gonna look like maybe it wouldn't even be a payment solution, right?
Maybe it would be Some cloud based, you know, like workflow tool or who knows. but going in not with the assumption would be how I would do things differently.
[00:22:10] Jay: Love that. so what is the, what's next for snap refund? You know, I mean, you guys are, you're building this very interesting product that serves a very specific need that sounds very promising. How are you guys staying focused? And like, what is next? Like, what are you guys trying to do in the next six, 12, 24 months?
Like what is coming for you guys?
[00:22:36] Cody: Yeah, so we actually have our first client up and running, in the insurance space as of last month. So we
essentially relaunched our MVP, thank you. And we got, our first company up and running using it and in the month of August. And that was huge. I mean, we were so excited for that. And within that, we now already gained more insight and learnings. We have two other clients that are coming on board. So we're going to take that and make that success scale to get clients 5 through 10. And that's one of my next goals for the upcoming quarters. And within that, we're also raising our pre seed round, where we're going to be getting the capital we need to really take this thing and grow, next level. The thing about SnapRefund that is really exciting to me and to our clients is we're not just a pure fintech play. There's a data play here that at scale is going to transform the way claims are processed and paid. Because of that, we're looking forward to building out these analytics tools and these reporting functionalities that will start to churn into additional AI powered insights to allow us to have very useful data that is typically not collected By modern insurance companies today that we can then give back to our insurance partners That'll help them better assess risk and price their insurance premiums
[00:23:59] Jay: Beautiful. All right. You don't have to tell me the name. You can, if you want, but who was your first customer? How did you get them?
[00:24:07] Cody: Yeah, we're gonna have a big announcement coming soon so I have to keep it on the
hush for now
[00:24:11] Jay: it wrapped for now. That's fine. That's
[00:24:13] Cody: But we got an inbound lead actually from their CEO I'd actually reached out to them back when I was like the market research phase You know a while back Over a year ago This is before we even had our MVP live. And they remembered me from then, and they actually came over from one of our competitors because they didn't like the way that the functionality was working over there, and they reached out, it was about five weeks ago, and within four weeks, maybe six weeks from now, within about four weeks of them first reaching out, they were live and using the platform already, which was huge. I think one of the biggest things That they liked is that a we were still around from the first time they met us because so many companies just don't exist anymore And no one wants to sign a bad deal for their company with a vendor that we here today and gone tomorrow So that was a bit of validation being in tech stars is validation like okay You know these people will probably continue to be around still talking about payments And then we had the ability to give them the solution they needed and what that looked like for them was It's a powerful extensible API that was very easy to integrate with, and we didn't have that the first time we talked to them.
So they saw the growth and they saw the way that we had dedicated so much effort into learning about their problems and problems for companies that looked like them. And they knew, okay, if we do this, it's going to be an easy integration, low lift, and we'll solve the problem we're having right away. That's exactly what we delivered to them.
[00:25:50] Jay: That's a great story. all right. Well, now you have me wanting to be one of your seed investors. So I guess that's a separate conversation we can have. You've convinced me that you guys are taking this thing to the moon. all right. One final question, non business related. So it could be about anything.
If you knew you could do anything on earth. And you knew you couldn't fail, what would it be?
[00:26:16] Cody: Oh man. Ha, that's, there's more than one thing, if I knew I couldn't fail, that I'd want to do. But I would say, ensure a basic standard of living, happiness and prosperity for every human on this planet.
[00:26:32] Jay: Beautiful.
[00:26:34] Cody: What would yours be?
God, I hate when people ask me what am I? Cause I hear so many good ones that I, you know, I feel like I have to come up with a different one every time because I do, I have answered this a few times. listeners, they might be, consistent. They're like, oh man, Jay's
saying a new
[00:26:51] Jay: they're like, or they're tired of hearing it. They're like, just stop saying the same thing. I'm a huge space nerd. I do astrophotography. I have a giant print of Andromeda that I shot in my backyard over here. I don't want to move my camera around, but,
[00:27:07] Cody: cluster, man. Andromeda's awesome.
[00:27:09] Jay: oh, it's incredible. agnerastro on Instagram.
If you ever want to check out my stuff, I have a big, 115 millimeter telescope. I think I would, I think I would make space stuff accessible and exciting again. And I think we're getting there. I think we're heading towards it. If I couldn't fail and I could just go out and do stuff, I would, you know, the education in school is one thing, but just like general, like nationwide, universal, you know, worldwide, just how incredible it is.
We're just on this little rock flying around in space. We take. Very much for granted. I think would be something very cool. So that's my answer. But anyway,
[00:27:51] Cody: That's awesome.
[00:27:52] Jay: you are awesome. This was fantastic. I think you just were dropping things left and right. I want to have you back on, as this thing grows and as you guys continue to March forward, you've got a beautiful dog, by the way.
I love
[00:28:04] Cody: Oh, thank you. Yeah,
[00:28:05] Jay: soft
[00:28:05] Cody: he can, he senses when a call's about to end. He like, has like a sixth sense for it. And then he gets activated. He's
[00:28:12] Jay: I love that. I love they're very college of the best if you want to find out more about you or reach out to you directly if they want to find out more about snap Refund, where do they find you guys?
[00:28:22] Cody: Yeah, you can find us at snaprefund. io That's S N A P R E F U N D dot I O Also, Cody Eddings on LinkedIn or Elise Taylor on LinkedIn. We're always open to new connections. Love chatting. Please feel free to reach out. we want to hear from you.
[00:28:37] Jay: All right, brother. You're fantastic, man. Thank you so much for your time today Good luck with everything congrats on your first customer and you know, here's to the next five to ten So I know you'll be there soon. Cheers,
[00:28:47] Cody: I appreciate you. Thanks
[00:28:48] Jay: Cheers, man