Dan Martell - Changing State Laws with Patrick @ Notarize.com - Escape Velocity Show #27

00:00:00.000 I think oftentimes something that'll get someone to sell is if you say, hey, you know, why don't you let us pay you a fixed price for, say, five or 10 years use.

00:00:09.060 At the end of that time period, we do a balloon payment if we want to keep it.

00:00:12.840 And if we go to business, you get it back.

00:00:14.660 Right.

00:00:14.880 So I generally find that that's an easier structure than a lease agreement.

00:00:19.260 So like, hey, we'll pay you $50,000 to use this thing.

00:00:21.880 And if you think this is going to be worth $5 million in 100 years, like, cool.

00:00:26.980 Admission sequence start.

00:00:28.680 Three, two, one.

00:00:39.860 Patrick, appreciate you coming on.

00:00:41.360 Thanks for having me.

00:00:42.380 Your company sold, I literally screamed at my lawyer one day.

00:00:45.800 I was doing a real estate deal, and he said I had to notarize some paper.

00:00:49.780 San Francisco down, I think it was on Valencia, I found a notarer.

00:00:52.700 Like the shadiest, I mean, it was this convenience store,

00:00:54.920 And it had like, we'll notarize for whatever.

00:00:57.360 They charge me because he said, absolutely.

00:00:59.780 And I thought, this problem should be solved.

00:01:06.080 And he said, no, you legally have to do it.

00:01:08.540 Legally, yes.

00:01:09.240 You figure this out.

00:01:10.580 Yeah, I mean, it largely hadn't changed.

00:01:12.200 If you think about living in a really small town of like 50

00:01:14.720 people, and there was Fred, and everyone trusted Fred,

00:01:18.980 the system made sense that you would go and sign in front of him.

00:01:21.600 But in today's world, it certainly was outdated.

00:01:24.260 What changed?

00:01:25.840 Was there some laws?

00:01:26.680 I think I saw 2018 something happen where you're like,

00:01:30.200 but you started this in 2016?

00:01:32.180 2016.

00:01:32.720 So I had a similar experience as you.

00:01:36.440 I had a notary transaction that went awry.

00:01:40.880 So when I sold my last company, actually, to Twitter,

00:01:43.060 I had to get a document notarized, went in, got it done,

00:01:46.160 sent it off, and it turns out there was an error.

00:01:48.240 And so this whole drama and whatnot.

00:01:52.340 And so that's what sort of got me digging.

00:01:54.640 And I found in Virginia, actually, they had passed a law in 2012

00:01:57.580 that allowed for the presence in a notarization to be established by video call.

00:02:02.720 There's a bunch of other stuff.

00:02:04.000 So that was the initial.

00:02:05.840 Cool, you can do this by, you know, sort of like telemedicine, but for notaries.

00:02:11.080 And then, of course, the question was, could you do a national service?

00:02:13.800 And that was a whole other set of work.

00:02:16.420 And then in the early days, you had three big clients that came on,

00:02:22.840 which is not normal, I guess, in the early days of a startup.

00:02:24.920 Like you had the biggest home builder.

00:02:29.080 Like how did you get those clients?

00:02:31.660 Yeah.

00:02:32.260 I mean, so it's interesting.

00:02:33.540 So I did not appreciate the impact of the company when I started it,

00:02:36.680 just to be clear.

00:02:37.260 Okay, because I feel like it was an ambitious, early, just,

00:02:43.000 and then boom, three of the –

00:02:44.760 Like, if I think of the use cases,

00:02:47.120 it sounds like you nailed them right out of the gate.

00:02:50.400 I mean, we're still figuring stuff out.

00:02:51.780 OK.

00:02:52.440 Please tell me that you're human.

00:02:55.500 I'm coming up on five years doing this,

00:02:57.800 which is wild to think about.

00:03:01.080 I started it.

00:03:01.660 I had a newborn.

00:03:02.400 I'm about to have my third kid.

00:03:03.640 So it's been a chunk of time.

00:03:07.240 And the gist is, I started it because I

00:03:09.700 wanted to solve my own problem, which

00:03:10.980 was that, just like you, I didn't want to have to go

00:03:14.440 disrupt my life and go see a notary again.

00:03:16.560 And it was a fun project, it was cool technology,

00:03:20.260 solved interesting problems, so that was sort of my initial,

00:03:23.260 someone's gonna do this, it might as well be me.

00:03:25.760 Launched the product in February of 16,

00:03:28.380 and immediately the people who called us was just wild.

00:03:32.800 So huge auto insurance companies,

00:03:34.760 mortgage lenders, title companies.

00:03:37.240 You know, if you name a bank or private wealth firm,

00:03:39.280 they came inbound, and we were still

00:03:41.740 this tiny little company of three.

00:03:43.940 And it was the same thing almost every time, which is if you think it sucks to get something notarized, imagine managing that 100,000 times a year or a million times a year and having sort of your business depend on that.

00:03:55.220 So we sort of heard the same thing over and over and over again.

00:03:58.080 And then we sort of ran into a brick wall of cool concept, but could people actually accept it?

00:04:04.300 And if you think about it like Uber, when they started as a company, you could get in whatever car you want and take it to the airport.

00:04:11.860 Imagine you showed up and United Airlines was like, no, that doesn't count.

00:04:14.700 Go home.

00:04:15.880 So even though it was legal and you did it.

00:04:17.980 Yeah.

00:04:18.380 These companies would get it and they'd say, what the hell is this?

00:04:20.640 It doesn't have a raised stamp.

00:04:22.920 You know, stamp.

00:04:23.780 How do you do it online?

00:04:25.380 You know, basically what the hell.

00:04:27.240 And so almost at the same time, the National Association of Secretaries of State, which is notaries report up into the state, secretary of state.

00:04:36.180 So it's their association came out and they launched a task force that they were going to look into this.

00:04:40.400 So we launched the product in February.

00:04:42.040 I think they announced that in March.

00:04:43.760 And they had this June meeting.

00:04:45.440 And so my co-founder and I said, look, we're going to go travel the country.

00:04:49.400 So we went and met all these secretaries.

00:04:52.200 And it's been a two-and-a-half, three-year process.

00:04:54.760 So they're now on board, Fannie Mae, Freddie Mac's on board, these others, everybody.

00:05:00.880 Was there a risk that it wouldn't be legally allowed?

00:05:04.820 Oh, 100%.

00:05:05.440 Yeah.

00:05:06.240 Wow.

00:05:06.960 I mean, we had a lot of money into the company

00:05:10.060 before we got on the other side of that hump.

00:05:12.280 And so that was our bet that we would.

00:05:13.920 Yeah, notarize.com, assuming, is not cheap.

00:05:17.480 No.

00:05:18.000 Yeah.

00:05:18.600 Yeah, I mean, this might be.

00:05:19.420 So there was a bet.

00:05:20.140 There was like, hey, we think it's going to go there.

00:05:23.160 But still, there's some work to be done on the market.

00:05:26.220 Yeah, I mean, yeah.

00:05:27.600 And so I think I've been to 40-some states.

00:05:29.620 As a company, we've testified, I think, in 40 state legislatures.

00:05:33.220 We've changed 22 state laws.

00:05:34.660 we've had to build the product, improve the model, and then go convince the market.

00:05:40.500 I think in terms of the customers, so Lenar, the country's largest home builder,

00:05:44.980 is an investor and customer. Realogy, largest real estate company, they're an investor and

00:05:48.860 customer. And then we've got two top 10 lenders and a bunch of others. And I think for them,

00:05:55.060 most of them came to us inbound. And what they really all said was similarly,

00:05:59.940 you know it sucks to manage this process but really you know they've had multi efforts to

00:06:04.320 digitize their entire company and the way they serve their clients and the notarization is what's

00:06:09.060 forced them to paper and so they've seen us as really being that key to solve that problem for

00:06:13.280 them and and so we're sort of we've been we've been rolled into this digital transformation

00:06:17.660 movement that's sort of happening in every sector and how is how do people in the space of like

00:06:22.900 signature signage like was there a worry that they might add this to their product or how do you

00:06:29.600 how do you compete? How do you position? Has that happened?

00:06:33.480 There's no one doing it yet. We've partnered with some of them.

00:06:38.280 Perfect.

00:06:38.880 Yep. And the gist is most of those companies are pure software businesses, right? And for us,

00:06:44.180 we run a service. And so we have the software and then we also staff the notaries. And some of them

00:06:49.420 are part-time, some of them are full-time. And so if you're a consumer or if you're a business,

00:06:54.300 we've got 24-7 coverage, average connection time in less than 30 seconds.

00:06:59.000 And that's a different skill set.

00:07:01.080 Different business model.

00:07:01.720 Yeah, different business model.

00:07:03.840 We've had, I'll say, struggles and now success

00:07:06.620 trying to figure out how to make it look like SaaS

00:07:08.480 when it's a transactional business.

00:07:12.340 And then the legal, the compliance work, all these things.

00:07:16.060 We now have a system that understands in these states,

00:07:18.960 you've got to do this, you've got to do something else elsewhere.

00:07:22.500 And it's been super complicated.

00:07:23.760 So someone that wants to enter the market

00:07:25.640 is going to have to go do all that stuff.

00:07:26.800 Kind of like the, I know in a lot of the marketplace businesses, there's the identity

00:07:30.980 providers, the ones that verify identity, you know, Airbnbs, they all have to, yeah.

00:07:35.600 So you guys can play and provide a critical component for a lot of these other companies

00:07:40.400 without, you know, they just may not want to enter that and that's fine.

00:07:44.620 And then how do you guys think about like product strategy and roadmap and like, how

00:07:49.620 does this, what's the evolution of Notarize?

00:07:52.680 Yeah, we just had our offsite yesterday, so it's good.

00:07:54.440 Cool.

00:07:54.800 So this is all top of mind.

00:07:55.840 Yeah.

00:07:55.940 Yeah.

00:07:56.220 I think as a company, one of our challenges, we've had to race to the enterprise much faster than a company normally would.

00:08:03.680 Well, I feel like that was like day one.

00:08:05.440 It was day one.

00:08:06.320 And then furthermore, for us to serve our customers, there are other organizations that approve.

00:08:14.040 And so for us to serve a title company, the insurance underwriter has a say in it.

00:08:18.880 For us to serve a lender, Fannie Mae, Freddie Mac, and others in the secondary market have a say in it.

00:08:24.040 And you have to be an approved vendor and go through this process.

00:08:26.780 So before we had actually won a single customer, we went through a SOC 2 audit.

00:08:31.620 You know, we did all this sort of enterprise work.

00:08:33.580 This is crazy for a startup.

00:08:35.600 Yeah.

00:08:36.020 And so, you know, the prize has got to be big enough to justify doing that.

00:08:39.700 Yeah.

00:08:40.600 But we did.

00:08:41.740 And so what's then interesting is we've sort of worked back then and gone out and, you know, focused on winning and serving the market and, you know, making money.

00:08:50.480 But so our product roadmap has sort of oscillated from prove the thing works, right, prove that you can serve the enterprise, to now trying to do much more customer-driven development and talking to our customers.

00:09:04.860 And what we find today, the single biggest challenge we have is people just don't understand how it works.

00:09:09.480 And so you're a small business lender.

00:09:13.100 You're a contractor.

00:09:16.100 You name it.

00:09:16.500 You come to our site.

00:09:17.760 You've never heard of us.

00:09:19.540 Right. So most of the time people search for I need a notary and they come across our site and suddenly it's like video based.

00:09:25.600 Notarization.

00:09:26.220 So like, what the hell is that?

00:09:27.400 That's sort of the first challenge to get over.

00:09:28.780 Didn't even know this was a thing.

00:09:29.760 Yeah. And then we've invented all these terms and concepts for the real estate industry.

00:09:34.340 We call them, you know, we say place an order.

00:09:36.800 Right. And it turns out we call our customers and they don't know what that means.

00:09:40.100 Right. And so we're really now focused on, you know, just usability, frankly, making it dead simple for people to sign up, understand the concept, try, buy.

00:09:49.540 commit. Is there a custom workflow? Do you see a custom workflow per industry based on the

00:09:54.520 lexicon so that for them it makes sense? Like real estate is going to have a certain flow that...

00:09:59.340 Yes. Yeah. Yeah. I'd say we've done a really good job and we've been intentional over the

00:10:03.680 history of the company. We've got one core product and then based on sort of the customer,

00:10:08.520 the geography, it morphs to serve that transaction. So a real estate transaction,

00:10:13.720 different tools, we call them meetings. You connect in a video meeting, different tools

00:10:18.480 present themselves to both the signer and the notary.

00:10:20.860 There's different compliance requirements.

00:10:21.860 Based on the use case.

00:10:22.880 Based on the use case.

00:10:23.760 And then based on the customer.

00:10:25.020 So we do now allow customers to configure.

00:10:28.360 They can pass instructions to the notary

00:10:30.060 for what they need accomplished during that session.

00:10:32.320 And so we now have some customers that

00:10:34.520 were actually not performing notarizations.

00:10:36.400 They're just these real high-value, complicated transactions.

00:10:39.800 So verify identity?

00:10:41.080 We verify identity and then make sure people

00:10:43.220 complete the transaction properly.

00:10:45.120 Interesting.

00:10:45.720 So it's a different use case using the same infrastructure.

00:10:48.480 So you guys have raised a total of $43 million.

00:10:52.940 I think it's $43, yeah.

00:10:54.180 Yeah, 43 point something.

00:10:55.320 That's what our crunch base or whatever says.

00:10:58.160 What have you spent the money on?

00:11:03.420 Because first round was eight, or maybe there

00:11:04.800 was a seed before the A. A was eight or something.

00:11:07.080 Yeah, two and a half, eight took us to 11.

00:11:08.580 And then the rest is in a B. So we've

00:11:11.480 got more than $10 million in sort of lobbying

00:11:14.540 and opening the market.

00:11:15.340 Wow.

00:11:17.120 And then we've got several million dollars

00:11:20.100 into our own legal research and compliance work.

00:11:23.800 And then it's been a lot of educating the market.

00:11:26.080 So for us, we've put a lot of effort into marketing.

00:11:29.880 But that's not necessarily customer acquisition focus.

00:11:32.140 It's more the educational materials.

00:11:34.360 How does it work?

00:11:35.020 Is it effective?

00:11:35.660 Where can you use it?

00:11:37.180 Video training series, things of that nature.

00:11:39.020 And then product development.

00:11:40.760 I mean, we've had a team of more than 40 writing software.

00:11:43.880 Engineers.

00:11:44.980 Yeah.

00:11:46.340 Has the product shifted from the first solution to, like, today?

00:11:50.860 Was there anything core, some assumptions that you made that were just not?

00:11:56.280 Or was it, for the most part, the way it works is how it's worked?

00:11:59.620 It's a great question.

00:12:00.400 I haven't thought about that.

00:12:01.140 I think for us, a decision we struggle with today is how much do we care about our business users?

00:12:09.020 So ultimately, the person we interact with is largely the signer.

00:12:12.540 Yeah.

00:12:12.800 So the borrower, the person buying a home.

00:12:14.960 but our customer is the business.

00:12:17.500 So how much do we care about them using our product

00:12:19.660 versus integrating into the tools that they already use?

00:12:23.280 And I think we're learning it's segment or industry specific.

00:12:27.940 In the real estate market, we've recently partnered with ResWare.

00:12:31.660 And so they're the largest software system for title agents.

00:12:35.280 We can just be a button that they click, right?

00:12:38.180 That's great to get volume up,

00:12:40.020 but we feel in other instances we can provide a richer experience

00:12:42.800 in our core product.

00:12:43.620 It creates more enterprise value.

00:12:44.620 Yeah. Or even we let people join the video session. So if you're a title agent and you want to connect with the notary and your customer, you can do so. So they need to be in our product experience to do that. And I think that's something we're constantly grappling with is how to get the distribution from partnering with folks, make it easier to train their teams and whatnot, but then also provide an amazing product experience.

00:13:09.680 Was there ever a time where a marketplace solution to this was kind of like an idea, like instead of having the notaries work for you, I'm assuming?

00:13:19.540 Yeah, we're going to do that.

00:13:21.200 And so we've already shared with the market that we're going to do that, both independent notaries and then our customers themselves and be more of a platform as a service model.

00:13:32.340 The challenge there is that there's a lot of compliance work that's required.

00:13:36.180 People connect.

00:13:36.860 You have to validate their identity.

00:13:39.000 You try on web, you flip to mobile.

00:13:40.420 There's just complexity in that.

00:13:41.880 And we know how to do it.

00:13:44.320 I build a marketplace.

00:13:45.260 It's tough.

00:13:45.800 It's tough.

00:13:46.960 In hindsight, I'll never do it again.

00:13:48.980 It's like having twins.

00:13:49.840 It's like, yeah.

00:13:51.720 Yeah.

00:13:52.020 Some of our customers, though, it's their delivery model

00:13:55.820 that they require.

00:13:56.820 Yeah.

00:13:57.240 So it makes sense.

00:13:59.200 So it makes sense.

00:14:00.060 And we'll do it.

00:14:01.100 But we want to be sure that the product is nailed

00:14:03.980 before we open it up.

00:14:05.220 Yeah.

00:14:06.100 Spindle.com, acquired by Twitter.

00:14:08.340 Yeah.

00:14:09.320 Notarize.com.

00:14:10.780 Where are you getting these domains?

00:14:13.240 I love-

00:14:14.560 Do you have any other?

00:14:15.940 Did you-

00:14:16.600 Oh, I definitely have other domains.

00:14:18.080 Yeah?

00:14:18.380 Any other, just one other that you're willing to share?

00:14:20.380 Just like-

00:14:21.360 I don't know about that.

00:14:22.240 No.

00:14:22.400 Yeah, keep it to yourself?

00:14:24.160 Yeah.

00:14:25.080 How long have you been fascinated with domains?

00:14:28.360 Oh, I've loved domains for a long period of time.

00:14:30.760 I mean, I bought a bunch of domains in college, which then I let expire.

00:14:35.780 In hindsight, I shouldn't have done that.

00:14:37.600 I could have bought my last name, .com, and I ended up with the .org because I just didn't pull the trigger.

00:14:43.440 So I love domains.

00:14:44.960 Interestingly, I've got a different take on sort of the strategy, which I've shared before.

00:14:50.400 And I think, you know, number one issue trying to buy domains is that the seller's not serious or they're not – don't have realistic price expectations.

00:14:59.280 So I just try to suss that out really quickly.

00:15:01.300 And so Spindle, ultimately, if you go online,

00:15:04.700 there's people who have massive domain catalogs.

00:15:07.840 I reached out.

00:15:08.800 I said, look, I've raised $2.5 million.

00:15:10.420 This is the product concept.

00:15:11.460 You told them right now.

00:15:12.380 Yeah.

00:15:12.940 Usually I hide that stuff.

00:15:14.440 Well, yeah, exactly.

00:15:15.140 People normally don't.

00:15:16.540 Because they want to know that you're a real buyer.

00:15:18.420 Exactly.

00:15:18.900 And I want to know if they're a real seller, frankly.

00:15:20.840 That's a good, yeah.

00:15:21.700 And so I said, this is the general concept.

00:15:23.900 I said, we take unstructured data.

00:15:27.820 We put it through a system that structures it.

00:15:30.040 And then we provide a search experience and ultimately timelines, right?

00:15:33.300 And so I explained the general, you know, concept that we were focused on.

00:15:37.660 And I said, is there anything in your portfolio that you think might fit the bill?

00:15:41.760 And I got responses.

00:15:42.680 I think I reached out to five of these people.

00:15:44.580 I got responses from all five with proposals and prices.

00:15:47.520 And then they all agreed.

00:15:48.900 And they, you know, they were reasonable.

00:15:50.540 I think I paid $40 or $45 for Spindle.

00:15:53.060 And then for Notarize.

00:15:55.380 Which is great for a one-word domain.

00:15:57.240 Yeah, it's great.

00:15:58.060 Yeah.

00:15:58.200 Wow.

00:15:58.760 Yeah.

00:15:58.960 And then I tried to buy mix.com.

00:16:01.800 I tried to buy a bunch of others.

00:16:03.120 And they all wanted a million bucks.

00:16:05.160 And Garrett Camp has since bought a lot of these domains.

00:16:07.800 So I wonder what he's paying.

00:16:10.060 He's also, he's a, I respect his domain game.

00:16:13.700 Oh, so good.

00:16:14.960 Yeah, he might be the best.

00:16:17.280 And then for Notarize, similarly, I reached out.

00:16:20.120 It was actually a private equity firm that owned it.

00:16:22.220 They bought some huge portfolio.

00:16:23.940 And they were a motivated seller.

00:16:26.280 And I think I got that one for $42.

00:16:27.740 Oh, my gosh.

00:16:28.740 Yeah.

00:16:29.140 Oh, I was thinking six figures.

00:16:30.480 No, the crazy thing about Notarize is actually I get the domain.

00:16:34.580 I got the Twitter account through a connection.

00:16:37.040 And then I go to the app store, and it was totally unclaimed.

00:16:40.620 Just registered it.

00:16:41.500 Just open and ready to go.

00:16:42.900 Yeah, so it goes to show people weren't thinking about online notarization.

00:16:46.540 That's cool.

00:16:47.480 So do you do that up front?

00:16:49.260 What else do you – because, I mean, sometimes it's just like you've got to get lucky.

00:16:52.880 Like you've got to –

00:16:53.760 Oh, you've got to put –

00:16:54.880 Yeah, there's time.

00:16:55.800 It's tons and tons.

00:16:56.680 I still do it today.

00:16:57.380 I'm on the internet, and I'm looking at stuff.

00:16:59.380 The artist is just searching for the deal.

00:17:01.520 Yeah.

00:17:01.940 And then you can find, generally speaking,

00:17:04.400 if someone owns a domain and they're not sophisticated enough

00:17:06.600 to hide their identity, they're probably

00:17:08.780 someone that would take an offer.

00:17:10.280 Yeah.

00:17:11.580 Have you ever seen people negotiate?

00:17:13.620 I think Dropbox did this when they get Dropbox.

00:17:15.880 And that guy I heard was running affiliate offers

00:17:18.360 to their competitors on the .cos.

00:17:20.060 He's like, I really need to.

00:17:21.300 So either equity or leasing, or what

00:17:24.880 creative ways that you've heard or you've done to acquire a domain without a large cash output?

00:17:31.340 Yeah. So other companies I've been associated with. So you can do a lease agreement that

00:17:35.520 I'm generally...

00:17:37.860 Lease to own, essentially.

00:17:38.380 Yeah. Lease to own. I'm generally not a fan of those. I think oftentimes something that'll get

00:17:42.740 someone to sell is if you say, hey, why don't you let us pay you a fixed price for, say,

00:17:48.180 five or 10 years use. At the end of that time period, we do a balloon payment if we want to

00:17:53.360 keep it.

00:17:53.940 And if we go out of business, you get it back.

00:17:55.940 So I generally find that that's an easier structure than a lease

00:17:59.180 agreement.

00:18:00.520 So like, hey, we'll pay you $50,000 to use this thing.

00:18:02.920 And if you think this is going to be worth $5 million

00:18:04.960 in 100 years, cool.

00:18:07.500 You know?

00:18:08.000 That way they're not losing the asset.

00:18:09.340 Yeah.

00:18:09.840 And I think that generally gets the conversation started,

00:18:11.980 and then it leads to a sale.

00:18:13.600 It gets someone sort of to think about.

00:18:15.300 Ah, gets them in that. 0.67

00:18:17.220 They're in market now, and then it's like, OK, let's talk terms.

00:18:19.880 Exactly.

00:18:21.080 And it's easy to say they'd want $200,000 in five years.

00:18:24.400 It's like, what would you take?

00:18:25.740 Yeah, so you essentially get them

00:18:27.260 to agree to their price indirectly as a proxy by the terms.

00:18:30.380 And then you can kind of bring them back down to,

00:18:32.500 let's just do that today.

00:18:34.200 You mentioned that you did your offsite just yesterday

00:18:36.860 or whatever.

00:18:37.800 How do you run, because a lot of founders that watch this

00:18:40.040 are at that scale where they're trying to figure out

00:18:44.020 how do they build the business that builds a business.

00:18:47.180 What's your thoughts on, because I know you sit on a few boards.

00:18:51.060 like the cadence, the meeting rhythms,

00:18:53.980 the responsibility of the CEO to communicate,

00:18:55.940 how do you do that at Notarize?

00:18:57.840 I'm still figuring it out.

00:19:00.140 We've brought in some great leadership this year,

00:19:03.680 which has been impactful.

00:19:04.900 So we had a woman join Liz Graham as COO. 1.00

00:19:07.700 So she's out of Wayfair and HubSpot and Comcast and other companies.

00:19:12.740 She knows what she's doing.

00:19:14.300 She's been helpful.

00:19:15.680 I think she's predominantly setting the cadence for the business these days.

00:19:19.720 What did she do when she came in? 0.99

00:19:22.220 She came in in January, maybe late January, and just immediately like, hey, we're going to have a staff meeting or leads meeting every week.

00:19:29.600 And then she actually shows up.

00:19:31.600 So what a concept.

00:19:33.140 Crazy idea.

00:19:33.800 Right?

00:19:34.060 But for me, you know, between fundraising or customer development.

00:19:37.560 I may be there, I may not be.

00:19:38.660 Yeah.

00:19:39.060 And I think, you know, that we're going to publish an agenda before the meeting and we're going to walk through it.

00:19:43.800 And just it seems obvious, but it takes real discipline to do those things and to think about sort of the meeting structure and cadence of the company.

00:19:51.780 And so for me, you know, I for a pretty big chunk of time tried to change myself and then sort of came to realization that know thyself, know thyself, which, you know, I'm still working on.

00:20:04.360 And so I've tried to then focus on what I think I'm good at, which is more sort of the forward-looking product development, engaging with some of our key partners.

00:20:15.600 And then so it's evolving, right?

00:20:17.760 And I think we've got certain parts of the company that are doing a much better job than others.

00:20:22.280 So were you doing off-sites before?

00:20:24.440 We were.

00:20:26.380 You know, I also, you know, prior to her joining, you know, I went down the OKR's path, right?

00:20:33.400 And I've heard this from a lot of founders that you start to build a team, you read some books, OKRs, yay.

00:20:41.600 And then you start out and you don't want to give up control, so you're very prescriptive.

00:20:45.220 So initially, OKRs was me just trying to find a way to tell people what to do.

00:20:50.160 Yeah.

00:20:50.580 Right?

00:20:51.220 And then we flipped, and then it became me much more focused on the goal that the team set the KPIs, but then really like.

00:21:00.160 Negotiate it a little bit.

00:21:01.120 Yeah, but it didn't really work either because there wasn't necessarily the team.

00:21:05.300 The team didn't feel like it was their own.

00:21:07.340 Yeah.

00:21:08.000 And so we've gotten rid of that.

00:21:09.640 And now what we've really focused, at least in the product org, is on trying to identify problems to solve.

00:21:15.600 We've got the team organized lines of business, so sort of general.

00:21:20.200 Do you have consumer and you have B2B?

00:21:22.120 We've got consumer, we've got B2B, and then we've got real estate.

00:21:24.600 Real estate's a unique beast.

00:21:27.200 Yeah.

00:21:27.360 And so we've really tried to say we can't have more than three.

00:21:29.700 We're going to try to pick three problems for a quarter that have the most impact, get buy-in on those,

00:21:34.820 and let the team have more ownership over the projects that might solve the problems.

00:21:39.940 So we're trying to figure it out.

00:21:41.520 That's cool.

00:21:42.040 And then in regards to KPIs in the early days versus now, is there anything unique that you guys have done?

00:21:49.420 Well, the initial KPI was simply, could we do this?

00:21:51.980 And, you know, there was a very real chance up until 18 months ago that after all the investment and all the product work that the answer was going to be no.

00:22:03.060 So we're on the other side of that.

00:22:05.560 So that's awesome.

00:22:07.720 You know, I think for us these days what we're focused on is really activation.

00:22:11.540 So we have tons and tons of customers.

00:22:14.880 It's very difficult, you know, to deploy.

00:22:17.480 And I think something that we didn't fully appreciate,

00:22:21.460 it's not that the software is difficult.

00:22:22.980 It's a total change in business practice for our customers.

00:22:26.860 So if you're a real estate company

00:22:28.820 and you typically have had people coming into the office to perform closings

00:22:32.580 and now you're suddenly sending them out,

00:22:34.580 we've got to get over these humps where people trust the process.

00:22:38.620 Cultural norms.

00:22:39.460 Yeah, all these things.

00:22:41.680 Because they don't get paid if they don't close a deal.

00:22:44.420 Yeah, no one gets paid.

00:22:45.600 Yeah, so they're like, I know this way works.

00:22:48.420 Yes.

00:22:48.880 I don't know if I want to try this fancy digital thing.

00:22:50.980 Yes.

00:22:51.780 And then in some segments are more accepting of failure, frankly.

00:22:58.040 So if a small business lender, if we can get 95% of people through, that's a massive win for them.

00:23:04.840 It's huge efficiencies and better customer experience.

00:23:07.020 And they've got these few, they're still going the paper route.

00:23:10.920 In real estate, like, loan has to close on a Thursday.

00:23:13.400 The rates expire if you don't do it.

00:23:15.600 So for us, we've gotten into some of these customers.

00:23:18.060 They've started to roll it out.

00:23:19.580 One goes bad, right?

00:23:21.820 And what's interesting is that goes bad, we're finding, isn't even necessarily a fixed concept.

00:23:27.900 So we have instances where the person doesn't complete the meeting, we call it, and everyone gets all up in arms.

00:23:35.700 And then we go and we watch the video, and really what happened is the customer said,

00:23:39.160 hey, my doorbell rang, I kind of run downstairs

00:23:42.160 and reconnect later.

00:23:43.480 And we built our product to support that, right?

00:23:45.780 And so it didn't go bad.

00:23:47.320 It just didn't complete on the first time.

00:23:49.000 On that call.

00:23:49.680 On that call.

00:23:50.940 So we've just really had to focus on providing

00:23:54.340 exceptional service.

00:23:57.400 It's been a grind.

00:23:59.800 And how do you manage the time between venture partner

00:24:03.280 and CEO?

00:24:05.300 Good question.

00:24:06.160 Yeah.

00:24:06.660 Because I wasn't even sure if you were still doing the venture

00:24:08.440 just because, like, I can't imagine $40-some million in capital.

00:24:12.560 Yeah.

00:24:13.300 Like, you've got to build the business.

00:24:15.560 Yeah.

00:24:16.420 No, so I've sat on the boards of two companies,

00:24:18.980 Law about in California and Drizzly here in Boston.

00:24:22.620 And then I'm still part of the investment committee at Polaris.

00:24:25.900 Got it.

00:24:27.080 You know, I think what's interesting and not a lot of,

00:24:28.860 I certainly didn't appreciate is, you know, being on a board,

00:24:30.820 you don't control what happens, right?

00:24:34.100 And so people talk about, like, being an attorney

00:24:36.160 and suddenly your client runs someone over

00:24:38.920 and you're on Christmas vacation.

00:24:40.820 Being on a board can be similar

00:24:42.080 where suddenly there's a deal

00:24:44.400 or there's a drama of some sort.

00:24:46.820 And I think that's the biggest challenge for me

00:24:48.440 is just not being able to control that timeline.

00:24:54.040 But those companies are further along.

00:24:55.500 They're both doing really well these days.

00:24:58.040 So I love it.

00:24:59.140 It's actually really great for me

00:25:00.540 because I get to see things play out

00:25:02.340 and they're a little bit ahead of us.

00:25:05.500 And so how they're dealing with either stock compensation or a key executive that's leaving, and I get to see that play out, and that helps.

00:25:12.600 Did you think you were going to just do venture and just you couldn't get this idea out of your head?

00:25:17.980 How did that come to be?

00:25:19.440 It's funny.

00:25:19.880 Actually, when I was a kid, I wanted to be a venture capitalist, which is really weird.

00:25:22.860 That's so weird.

00:25:23.700 Yeah.

00:25:24.600 How did you even know what a venture capitalist was back then?

00:25:26.840 So I grew up in the Bay Area.

00:25:28.240 Okay.

00:25:28.860 Oh, that, yeah.

00:25:29.760 Yeah, and my dad's best friend is John Hummer.

00:25:33.360 So he's the founder of Hummer Winblad.

00:25:34.520 And then also in his classmates from school

00:25:36.920 was Bob Cagle, Benchmark, Don Wood, Draper Fisher.

00:25:39.780 Stacked.

00:25:40.620 So for me, I just saw my dad's friends who were cool guys.

00:25:44.600 Were venture capitalists.

00:25:45.620 Who were involved in fun stuff.

00:25:46.860 Yeah.

00:25:47.880 And then I think the industry went through a phase

00:25:50.880 where to be a VC, you had to have a JD, MBA.

00:25:54.620 And so that was never going to happen for me.

00:25:57.940 Yeah.

00:25:58.200 And so I've heard a very long time, I was like, that's dead.

00:26:02.180 Yeah.

00:26:03.580 Ambitions.

00:26:04.020 It's deader than dead.

00:26:05.740 And the industry has seen a shift where it's gone now back to people who,

00:26:09.020 not entirely, but operators or product people.

00:26:14.660 There's more diversity in terms of people's background or skill set.

00:26:17.380 So for me, I started my career at Microsoft, built some products there,

00:26:21.500 went and started my last company.

00:26:23.180 Polaris backed that company.

00:26:25.360 When we sold the business, I left.

00:26:28.820 Polaris offered me the opportunity to join as an EIR.

00:26:31.260 And so I thought I was going to start another company.

00:26:34.020 I did a bunch of work, explored a bunch of ideas.

00:26:36.860 It's a horrible construct, I think, to start a company just because you can.

00:26:43.320 And then I found Lob out in California, and I said to the firm,

00:26:46.780 hey, it's a great company.

00:26:49.180 I think we should look at it.

00:26:50.500 And they sort of said, well, why don't you look at it?

00:26:52.960 I was like, okay.

00:26:54.180 Because you were in EIR, and you're saying, hey, this is a cool company,

00:26:56.440 and they're like, go double-click on that and see what's there.

00:26:59.580 Go lead the investment, potentially.

00:27:01.220 Yeah, I mean, at that point, even, it was just explore the company,

00:27:03.760 And then that started some conversations.

00:27:05.460 And so I joined as a venture partner, invested in Lobb, and then in Drizzly.

00:27:09.600 And I thought I was going to be a path.

00:27:13.840 That was my path.

00:27:14.820 And then, yeah.

00:27:16.180 Dreams come true.

00:27:16.940 Dreams come true.

00:27:17.820 Yeah.

00:27:18.500 And then this just happened.

00:27:21.300 So after joining the firm, Twitter went public.

00:27:26.700 I got that document notarized.

00:27:28.120 I had a bunch of drama.

00:27:29.660 I then went skiing in Idaho with my family and broke my leg.

00:27:32.860 and I spent two and a half months on a couch and had a lot of free time.

00:27:37.800 So I came back in March, and I said,

00:27:41.000 hey, guys, I want to start a notary company,

00:27:43.700 which was an interesting conversation.

00:27:46.880 But is it because, I mean, what's interesting to me is, like,

00:27:49.900 you're going to create.

00:27:51.960 Even if it took Notarize away, like, you're going to build.

00:27:54.720 You're a creator.

00:27:57.100 Was it because it was hard that it was like,

00:27:59.660 I think this is the thing I should go work on?

00:28:01.660 Like, cause I mean, it wasn't obvious in the early days.

00:28:04.040 Like I think a lot of founders that do YC and stuff,

00:28:06.960 they don't realize how like not hard, like worse.

00:28:10.480 I mean, come on.

00:28:11.000 Worst case for a lot of these founders,

00:28:12.180 they're just going to get a job making, you know,

00:28:14.080 200 grand a year at Google.

00:28:15.340 Like there's not, there's not that much risk.

00:28:17.340 Um, but like, you're going to go start something that like may not,

00:28:21.460 may never materialize.

00:28:22.800 Is that why that, that idea was the one to follow more than something else or?

00:28:27.840 No, I, that's a good question.

00:28:30.240 So I, you know, having the experiences as a VC, it really, I spent a lot of time thinking about what made a good business, right?

00:28:40.680 And what would I want to pursue either to invest in or to start?

00:28:45.880 Operate, yeah.

00:28:46.760 And I think ultimately, for me, they're the same decision, right?

00:28:50.300 which is if it's not something that I would spend my time on personally

00:28:55.820 because it's exciting enough or because I can't contribute in some way,

00:29:00.280 why would I invest in it, right?

00:29:03.900 And my spindle, what was interesting,

00:29:05.820 and my father-in-law who's successful in technology,

00:29:08.420 he told me this and I ignored him,

00:29:10.780 was we solved a very difficult technology problem,

00:29:13.920 which is how to build a better social search engine.

00:29:18.520 Awesome.

00:29:18.960 But then suddenly it was like, well, how do you productize it so someone could use it?

00:29:23.840 Yeah, what's a use case?

00:29:24.820 Yeah, and then how do you turn that into a business?

00:29:26.860 And so we had to sort of still climb through all of those hurdles.

00:29:31.200 And we put 95% of the money into solving the technology problem and then had kind of no resources to go to market.

00:29:41.180 And at the time, I was looking at the Ubers and other products that came out.

00:29:45.660 And those were not technology problems, right?

00:29:47.740 That was a feature that they could validate very quickly, determine if there was demand.

00:29:54.840 And they've since become complicated technology problems.

00:29:58.280 And so I was like, if I'm going to start a company, I want to play at that end of the spectrum.

00:30:01.380 Yeah.

00:30:01.700 Where there's an idea that.

00:30:02.720 Real domain.

00:30:03.400 You know the customers.

00:30:04.380 When you can validate pretty quickly.

00:30:05.860 Yeah.

00:30:06.100 Right.

00:30:06.360 And so when this came along, it met that criteria.

00:30:09.080 I'm like, people are either going to notarize documents on the internet or not.

00:30:12.900 But my ambitions were much smaller.

00:30:15.220 I thought, I'll learn a lot.

00:30:17.200 It's cool WebRTC technology.

00:30:19.460 Whatever, I'll get this thing built,

00:30:21.100 and then I'll go try to sell it to someone

00:30:22.620 and kind of continue on with my career.

00:30:24.660 It wasn't until I started getting the phone calls

00:30:26.480 from big enterprise customers saying that, 0.96

00:30:30.340 holy shit, you've stumbled into this incredible opportunity 0.99

00:30:32.280 that I realized that this was my shot. 0.99

00:30:36.640 That's interesting.

00:30:37.560 And looking back, just with the amount of lobbying you've done,

00:30:39.620 I mean, you really, like in the history books,

00:30:42.380 you'll be written about.

00:30:44.340 That's weird to think about.

00:30:45.380 I know, but it's interesting because it's only after

00:30:48.920 when it's actually written about that they cannot not

00:30:51.220 write about you because you were involved in that.

00:30:54.600 Yeah, I've said this to the team, which I don't know

00:30:57.500 if it was motivating or not, which is that we may fail,

00:31:01.040 but we will be the company that has made it possible

00:31:03.880 to buy our home on the internet.

00:31:04.940 Yeah.

00:31:06.060 And what's really crazy.

00:31:09.020 It's like in many ways I look at Salesforce

00:31:10.740 and Benioff's marketing dollar enabled us all

00:31:13.600 to build these SaaS companies.

00:31:15.220 Because people starting companies today

00:31:17.100 don't realize there was a day when enterprises

00:31:19.180 did not put their data in.

00:31:21.420 They were all on prem, right?

00:31:22.960 And so he had to convince a whole market.

00:31:25.300 So you guys have created this whole thing

00:31:27.720 that didn't exist before.

00:31:29.160 Even if the business doesn't work,

00:31:30.980 you lobbied to make it happen.

00:31:33.820 Yeah, it's interesting.

00:31:34.500 First, I give companies like DocuSign and others

00:31:36.780 a ton of credit because in their spaces,

00:31:38.960 they went through similar things.

00:31:39.920 Same, yeah.

00:31:40.280 If you watch, there's a video on YouTube of the founder of DocuSign talking about this

00:31:46.060 and the four or five years and sort of the hell that he had to climb through

00:31:50.240 to get to a similar place to where we are now.

00:31:54.360 But it's funny.

00:31:55.400 In hindsight, Fannie Mae and the CFPB and others did a pilot and a study

00:32:01.400 about digital mortgage before we even started this company.

00:32:06.180 And what they found is the impediments to a digital real estate transaction was the legal acceptance and lack of clarity for digital notarization and then getting things notarized.

00:32:20.560 So had I been going deep in that sector, I may have concluded that this was the thing to do.

00:32:26.060 We just sort of lucked into it from the other direction.

00:32:28.240 Interesting.

00:32:29.720 Three kids now?

00:32:30.800 Five years?

00:32:31.680 I'm about to have your third.

00:32:33.140 Yeah.

00:32:33.400 What have you learned about being a father and an entrepreneur?

00:32:38.160 Because I've got two, six and seven,

00:32:39.760 and I'm always fascinated when I meet other folks

00:32:43.640 doing both the family and the entrepreneurial thing.

00:32:45.780 Yeah, it's really hard.

00:32:46.820 I'm sure you'd say the same.

00:32:48.660 I've been very fortunate because I get to pick where the office is and whatnot.

00:32:52.020 So I live in the city.

00:32:55.400 Our office is about three and a half blocks,

00:32:57.280 and then my kids go to school one block from there.

00:32:59.100 Oh, triangulate.

00:33:00.820 Yeah.

00:33:01.220 I mean, the travel is the hardest part.

00:33:03.400 Um, and you know, I think especially it's tough on my wife.

00:33:07.520 We've got these, you know, I've got two boys, six and three years old in there.

00:33:12.400 Did you change your sleep patterns at all?

00:33:14.380 I'm a horrible, I sleep probably four hours a night.

00:33:17.040 Okay.

00:33:17.420 It's terrible.

00:33:18.380 Um, and so I'm, I try to get home every day, five, five 30, you know, sometimes six, um,

00:33:24.200 when I'm in town, put the kids to bed and then I get back online and then in the mornings

00:33:28.380 I largely take them to school and, but it's really tough.

00:33:31.620 I think, you know, the hardest part is then also my older son is very aware of when I'm gone.

00:33:39.940 And it's, you know, you get questions from them and they're tough.

00:33:43.040 So tough.

00:33:44.200 FaceTimes and they're like, where are you now?

00:33:45.880 When are you going to be home?

00:33:47.000 Yeah.

00:33:47.340 Yeah, at the beginning of a trip.

00:33:49.520 And you're like, oh, I still got a few more days.

00:33:51.680 Over the last few years, you know, really your whole career, if you look back,

00:33:55.420 who did you need to become as an entrepreneur to be the person that continues to lead this forward?

00:34:01.620 what are the the mindset beliefs that had to kind of shift that's a good question so i like to ask

00:34:08.160 it yeah i um i'm still struggling with becoming more disciplined and i think i've learned that

00:34:17.400 the way that i run my own life is not conducive to a really healthy well-functioning organization

00:34:24.700 and i'm someone who you know liz in her first week on the job she told me she did your pressure 0.86

00:34:30.000 prompted so i'm the person who pressure prompted pressure prompted never heard that yeah so i'm

00:34:35.620 the person who has a big presentation i've got to give or whatnot and the night before

00:34:39.640 that's when it gets done that's when it gets done but when you have an off-site and the team needs

00:34:45.660 to be aware of what's happening and you gotta get the agenda out two weeks in advance and whatnot

00:34:48.860 you know so that's been the biggest i think that's the high level statement for me and there's a lot

00:34:54.120 of you know sort of sub sub points underneath that that i'm still working on i think you know

00:35:00.020 i think what i've been good at is is maintaining a long-term sort of vision and set of goals like

00:35:06.520 i'm the keeper of what we're trying to accomplish for the company and it's very clear for us what

00:35:11.220 we need to go do sometimes i can get i can get ahead of where we should be you know we now have

00:35:16.960 this great opportunity because we've digitized either the real estate transaction or you know

00:35:22.180 in a different vertical to do all this other cool stuff, right?

00:35:25.740 But we still need to nail that.

00:35:29.660 And so that's where.

00:35:30.720 You kind of get.

00:35:31.920 Yeah.

00:35:32.400 You know, I like building stuff.

00:35:34.120 Yeah.

00:35:35.040 And so it's how do you set sort of the organizational discipline

00:35:37.880 and the KPIs to just make that great and earn the opportunity

00:35:42.600 to do these things.

00:35:43.040 To then unlock these other things.

00:35:44.800 Yeah.

00:35:45.940 And how did you learn to do that?

00:35:49.400 Like, is it just trial and error?

00:35:51.100 Are you an avid reader?

00:35:52.180 Do you lean on your board?

00:35:55.360 I don't know that I figured it out, to be frank.

00:35:58.500 I think for me, I love everything about startups.

00:36:02.340 I have my entire life.

00:36:04.600 In addition to some of my dad's friends, our neighbor was the first or second employee, his son.

00:36:09.740 I've got friends that have started successful companies.

00:36:12.020 I love everything about it.

00:36:15.880 And so it's a constant topic of conversation for me.

00:36:20.260 How are you building your team?

00:36:22.180 What challenges are you solving?

00:36:23.620 I tend to be pretty open myself,

00:36:25.620 and I think that that elicits more honest conversation with other people.

00:36:29.020 You go first.

00:36:29.700 You're vulnerable about, here are my challenges.

00:36:32.080 Yeah, and I think that that's a good way to learn a lot.

00:36:39.740 We have a great board.

00:36:41.540 Dave Barrett at Polaris is a managing partner,

00:36:44.180 someone who's bet on me repeatedly

00:36:45.640 and who's been able to help draw on good folks.

00:36:48.600 We've got this other gentleman, Jack Klink,

00:36:50.540 He's got sort of the enterprise vital services experience.

00:36:52.960 Larry D'Angelo had a log man on the go-to-market side.

00:36:56.680 But it's really, I think, for me,

00:36:58.300 what's made me realize that I need to change in some ways

00:37:01.680 is you, you know, what's the definition of insanity, right?

00:37:06.240 So I've tried the same thing a number of times.

00:37:08.640 And eventually, you know, Michael Jackson,

00:37:11.060 you've got to look at the man in the mirror, right?

00:37:12.460 Yeah.

00:37:13.520 Try something different.

00:37:14.580 Yeah.

00:37:15.000 Patrick, really appreciate you coming on.

00:37:16.440 Yeah, of course.

00:37:16.600 Thank you so much.

00:37:17.460 That's awesome.

00:37:17.880 Thanks for watching this episode of Escape Velocity.

00:37:21.440 Be sure to like and subscribe and leave a comment

00:37:24.320 with your biggest insight from our conversation.

00:37:26.940 Be sure to check out the next episode.

Dan Martell - May 07, 2020

Changing State Laws with Patrick @ Notarize.com - Escape Velocity Show #27

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