Ep.121 From Military Tactics to Market Strategy: Building a Digital Wallet That Battles for Privacy with Blake Hall, CEO, ID.me

Joe Toste [00:00:00]:
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Joe Toste [00:01:12]:
Today we have Blake hall, founder and CEO of IDME, soccer dad of three kiddos and happens to be his birthday today. Also, Blake, welcome to Techtables.

Blake Hall, CEO, ID.me [00:01:25]:
Thanks Joe. Appreciate you having me.

Joe Toste [00:01:27]:
I'm super stoked on today's podcast, and I got to give a quick shout out to Jeff Cochrane at idMe, who I briefly met at task in Texas during my presentation behind the mic. And today's podcast is a real blessing because we're going to be jamming with on his insights and lessons across his military experience, IDME and his entrepreneurial journey. And I know a lot of you in the audience love to message me. I will not be able to cover Blake's extensive life in 50 minutes. Trust me. I've got many other questions I would love, but there are plenty of great podcasts out there and articles that I will link to in the show notes. So Blake, we'll kick it off today. Just for those who don't know you, could you just maybe give us a background as an infantry officer leading kill capture missions with your platoon in Iraq in 2006.

Joe Toste [00:02:11]:
Take us back to why you wanted to join the military. If you can cover your grandfather during World War II, your dad at West Point, and then your experience at Vanderbilt with 911.

Blake Hall, CEO, ID.me [00:02:23]:
Thanks Joe. Sure. So I very much identify the military as part of who I am. I'm a third generation soldier. My grandfather was a command sergeant major. He lied about his age during World War II and he landed at Anzio as a Browning automatic rifleman. By the time his career was over, he had a bronze star with valor that he had earned for heroism during World War II where he saved his unit from being overrun by a nazi assault, crawled out in front of three german machine gun nests to splice the line to the artillery that allowed them to beat back the assault, then fought in the Korean War and two tours in Vietnam. So when that's your granddad, pretty big boots to fill, if you will.

Blake Hall, CEO, ID.me [00:03:00]:
And then my dad was a career soldier, enlisted when he got into West Point because they initially delayed him. He graduated the top 10% of his class, finished his career as a colonel, brigade commander of a combat brigade, about 5000 soldiers. And so military was part of who I was and I always wanted to serve and give back. When I went into college, it was 2000, so it was be 911. It was really just a way to pay for college. And then when 911 happened, my mom's dad on the other side had drove me around New York City as a kid. She's from Queens. And the Twin Towers, the Chrysler building, the Empire State Building were a big part of just my experiences with him.

Blake Hall, CEO, ID.me [00:03:33]:
And I knew that we were going to go to war. And so immediately, if you're going to go to war, you might as well play with the varsity. And that's where I resolved that I was going to use my athletic ability and the educational platform that Vanderbilt gave me to be an army ranger. Finished college in 2004, went through ranger school, graduated from there, led a conventional rifle platoon for five months, was selected very early to be a recon platoon leader. So I had the battalion scouts and snipers. And then we went into combat in Iraq in June of 2006. And as we were about to go in, we were in Kuwait. We had some three letter agencies come in and say, forget everything that you guys have learned about reconnaissance and precision engagement.

Blake Hall, CEO, ID.me [00:04:12]:
You're going to be running kill capture missions. And that's what I did for the next 15 months.

Joe Toste [00:04:18]:
That is a very great, and I know, very brief summary of all. There's a lot of details that encompass that one question that comes to mind just on the family front. I mean, first off, your grandfather is like a total legend, your grandfather and dad. Is there one particular lesson that you're like, hey, I took this away from my grandfather. I took this away from my dad. That sticks out with you?

Blake Hall, CEO, ID.me [00:04:38]:
Yeah. My grandfather had three rules and my dad passed them down to me. The first one was I was the first person in my family to be an officer before not having been enlisted. And first thing they taught me was, never think that you're ever better than anyone else, or we're going to kick your butt. Right? So that was number one. The second rule was, if you have an opportunity to go to a unit, pick the one with the worst reputation and the worst performance. So when you leave, you can see the difference that good leadership makes. The third one is more specific to my grandpa's experience, which is like, never let your career get associated with logistics, because when he was fighting in the Alps and they had no cold weather gear, he got tasked on a detail to go back to the rear.

Blake Hall, CEO, ID.me [00:05:18]:
And as they went farther and farther back, he saw folks with the fur line coats and the gloves, and meanwhile, the guys that he was fighting with in the trenches and the Alps had none of that stuff and were getting frost, nip and frostbite. That was more specific. But the first two are universal about humility and also about having the confidence to go in and to reset a culture. I carried those lessons with me throughout my life.

Joe Toste [00:05:41]:
Yeah, I love that. And there are a lot of those themes across the podcasts and articles that I really like, and I think we just need more of in the world today. It's kind of, I think, a little bit forgotten. So I love that we're bringing that up. This was, I think, when I think about when I was going across your life and the research during this military period, one particular, and there was a lot, I think this is why it was so hard to do this podcast. There's just so many things wanted to ask you. But one specifically was Roy. And I know I'm only imagining how hard that period mean.

Joe Toste [00:06:20]:
There's actually several fantastic articles written on this. But Roy was your iraqi translator. Interpreter.

Blake Hall, CEO, ID.me [00:06:28]:
He was.

Joe Toste [00:06:29]:
And his code name was Roy. His real name, which now I think is public, is Mohammed. And I just want you to kind of maybe tell us around, finish your mission. And I guess how it works from when I was reading is the interpreter has to spend a year before they can apply for a visa. And then you were there. I think the period that he jumped in was like, there was nine months. So he had three months left, and then he joined a new unit. And the.

Joe Toste [00:06:55]:
You got an email saying that six troops and Roy were unfortunately bombed. Could you just maybe take us through the process of saying, hey, you know what? This mission is not over. I actually have one more mission left. And that mission is to get this guy's family to the United States.

Blake Hall, CEO, ID.me [00:07:15]:
Yeah, sure. So just first, like a note on interpreters who, local nationals who supported our armed forces in both Iraq and Afghanistan. When you do the numbers, there's 120,000 soldiers, give or take, or military personnel in Iraq. Of those, only about 20,000 go out of the base regularly and actually interact. And so in my unit, where I had, with attachments, about 32 scout snipers and attachments that were tied to it, you have one interpreter, and you're basically illiterate, right? You can't read the Arabic, you can't talk to the locals. And so these interpreters are your eyes and ears and really, like, your lifeline to the culture. I mean, really, for all the education, everything else, going out into a city where you can't read or understand any of the cues that are around you. And so the relationship with your interpreter becomes really important.

Blake Hall, CEO, ID.me [00:08:01]:
I was, like, 23 and a kid and a bit of a wild man. I was very aggressive in combat. Now that I have kids and stuff, and I realize what some of my ncos are going through, I have no perspective on life. But when you consider what the interpreters risk, they had to go back to their families on vacation and stuff. And if the insurgents in al Qaeda saw them coming from the base and getting into the cab, they wouldn't just execute them, they would often execute their families, too. So just the amount of risk that they take is really breathtaking. They weren't allowed to carry a weapon in combat while serving alongside of us. The casualty rate was unbelievable.

Blake Hall, CEO, ID.me [00:08:35]:
From two years back of interpreters, of 22 that had been serving with the unit, like before us. I think 19 of 22 had been executed over a 24 month period from the files that we were reviewing. So when I saw Roy, I mean, he looked. You could just tell when you first looked at him. He'd never shaved before in his life. And from there, I was like, oh, my goodness, who is this? Like, little. He's out with my scouts and snipers. And I like to say he looked like a water boy for a varsity sports team, but just had that.

Blake Hall, CEO, ID.me [00:09:03]:
He was just a good kid. One of the first time I walked up to him, he threw his cigarette down, he stomped it out with his boot because he knew I was a lieutenant. And just that little sign of respect and deference was endearing. And he was so brave and so good. But the had to serve a year. And he joined us when we had gone down to Baghdad during the surge and fought all throughout that city. Went down to Karbala to hunt some of the al Qads proxies down there, too. And so I never forget one of my sniper team leaders who I love to death.

Blake Hall, CEO, ID.me [00:09:29]:
He said, hey, sorry. You care about Roy now. He goes, when you get back home and you're not around him every day and you're not here in Iraq, you're going to forget about him. And that happens a lot in the other units. I just remember that was a great gift because I love that sniper team leader. And I was like, I'm not going to forget. I was like, I'm going to bring all my guys home. And I was very blessed to bring all of my soldiers home to their families.

Blake Hall, CEO, ID.me [00:09:51]:
But I had one more to bring back, and that was Roy. And it felt wrong to leave him. He'd only served with us for, I think joined us in December, and it was like September of 2007. So he'd been with us for about nine months, but he had a few more months to go. And the unit that replaced us, he was just really nervous. Any new unit, they're working out comms issues and tactics. They haven't been operating in theater like we had for 15 months. So the very last thing he told me before I left was, I'm scared, and I'll never forget that.

Blake Hall, CEO, ID.me [00:10:20]:
So I was actually filling out his visa paperwork in December at my buddy's apartment in Chicago when I got the news that he'd been killed in a house that was rigged to explode, along with one of the scout teams for the unit that replaced us. And it was just terrible. So I felt numb after that. But then I said, you know what? I made a commitment to him, and if I can't fulfill it, I'm going to bring his family over. And so I'm just so grateful for all the help along the way. I wrote a collage essay I met at Tom Rick's, the author, at a wedding where I was a plus one. It was totally like kind of God and a universe thing. And Tom Rick sent the essay to David Remnick at the New Yorker and Carlos Lazada at the post.

Blake Hall, CEO, ID.me [00:10:59]:
Carlos Lazada and the Washington Post gave me 3000 words in Sunday Outlook. I found Roy's mom through a reader who happened to be a three star general and knew the head of contracting. So got her phone number, was able to call her for the first time, and I was afraid she would hate me, but she didn't hate me. She forgave me. And so that set off like a multi year journey where I had to write another op ed for the Washington Post. I was on Public Radio International's the World with Marco Worman several times. And then finally in 2013, right before ISIS swept across Iraq, I was able to, with a lot of help and folks from the iraqi refugee Assistance Project, which is a wonderful organization. The lawyers from Morrison Foyster and law students at Cal Berkeley who took on the case like pro bono were really wonderful.

Blake Hall, CEO, ID.me [00:11:46]:
And so with all that support for this one family, they arrived in California in 2013, and I met them there in San Diego, and now they're all thriving. The mom and the dad, they live in Texas now, Abdullah Sukaina, and they're doing great. So I have an iraqi family now in addition to my american family. And one of the great joys of being successful at entrepreneurship is I'm able to support them financially as well.

Joe Toste [00:12:12]:
Yeah, I love that. Also. One of the things I like about entrepreneurship. Yeah, no, that is a great story. And just, I think a really, I don't even know how to express it as far as toste for words, but thank you just for your service and obviously for your team's service. And you can't really pay that back, but my father served during Vietnam, and I obviously was, like, not alive yet, but his unit was bombed and he was the only one left, so that left a lot, but he got dragged out. I've got a hard spot for folks who have served.

Blake Hall, CEO, ID.me [00:12:47]:
God bless those Vietnam vets. I think that generation said they were treated so poorly, and I think the whole country, but also a lot of the veterans who served, I certainly have interacted with a lot of them. They're like, we're going to make sure that you all are never treated the way that we were treated. And that part of it was amazing to be surrounded by support, even though a lot of folks opposed to the obvious sort of, like, political blunders that were made to just know that the vast majority of the country had your back and those Vietnam vets were a big part of that.

Joe Toste [00:13:13]:
Yeah. And I know you're in Washington, DC. I love history, actually, my grandfather taught history at UCSB for 50 years, so I kind of just grew up with it. But do you have a favorite memorial? Is there one that stands out to you in DC that you're like, hey, I always love going to this one to go see the wall.

Blake Hall, CEO, ID.me [00:13:30]:
The memorial is just, I think, so touching, just the way it's done and just all the names. It's unbelievably powerful when you're there. And I think symbols, they're all moving in their own way, but that one is just really powerful. And to see how it impacts people who had friends that were lost over there as they visited. It's a really special place.

Joe Toste [00:13:49]:
Yeah, I love that. I don't know how I make this transition. I'm just going to have to make it.

Blake Hall, CEO, ID.me [00:13:53]:
I don't know how I made it either. I mean, I went from being 20 to 23, 24 maybe psychologically, at a point where you don't get to when you're 70 or 80, you're worried about whether you're going to die. Every day your friends are dying and the all of a sudden you come back home and I'm like 25, and where do I go on Friday to hang out with my friends and drink? And I don't have to worry about these problems for another 40 or 50 years. It's completely schizophrenic.

Joe Toste [00:14:18]:
That in itself is a whole nother podcast on how to deal with that. No, seriously, as hard as it is for me to move on, there's just a lot of questions and maybe we'll have you back on for another round. But sure, I want to jump to Idme. The kind of tagline is IDMe helps simplify how individuals securely prove and share their identity online. I'm a fan and you might be thinking, Joe, when's the last time you used idme? Let me tell you, when I paid my quarterly taxes to the federal government last week. So I hopped on the IRS website, verified my identity. It was pretty great. Then it's like one of those where you start seeing the company and I'm like, oh, wow.

Joe Toste [00:14:58]:
It's like I'm doing this with credit cards and other things. So IDME is everywhere. It's funny, I didn't really put it together and now I'm like, oh, wow, this is great. Yeah, almost sure that's only one part of your business. Could you maybe just walk through what IDME is all about and kind of the next mission that you're on today?

Blake Hall, CEO, ID.me [00:15:16]:
Yeah. So IDME is fundamentally a digital wallet, and we exist to empower people to control their own information. And by doing so, we take a lot of friction out of these experiences of logging into websites and proving who you are. I think the definition historically of digital wallets is like payment wallets is incredibly short sighted. We all have physical wallets as consumers, and those wallets can hold a variety of credentials, your government photo id, your payment cards, your loyalty cards. So the notion that a digital representation of your wallet would only have payment credentials is really quite silly. Totally understand that. Yeah.

Blake Hall, CEO, ID.me [00:15:54]:
For ecommerce it makes a lot of sense to have a payments wallet, but your actual wallet can do a lot more than that. And when you think about credentials like your educational degrees, it would never fit inside of a physical wallet. One of the cool things about a digital wallet is that it can hold as many credentials as you want to put into it, because you don't have those limitations when you're talking about databases and things like that. And you can also apply like privacy filters to obscure data fields that aren't relevant to the context of a transaction, right? So the classic kind of example is you're going into a bar and you're not only showing your proof of age that you're over 21, you're actually showing your raw date of birth and your address. And maybe if you're an attractive girl or woman and the bouncer sees where you live, that's not safe. And so one of the very cool things about digital identity is that you can say, well, your address isn't even relevant to this at all, so it's not going to be part of that. And no one needs your actual date of birth. They just need to know the claim that you're over 21.

Blake Hall, CEO, ID.me [00:16:49]:
And so by putting those privacy filters, you can not only take friction out of people's lives to get them access to things, but you can also make it safer and more privacy enhancing while they do it. So that's what we do. And I think you're seeing this new class of consumer centric wallets emerge like clear in the airports is very much trying to do the same thing. They just started with hardware and the physical channel. Apple Wallet obviously is trying to do this as well. IdMe is unique among these digital wallet providers in that we can also directly issue an id card into our wallet that I think eleven federal agencies in 34 states recognize as legal proof that you are you. Almost like the digital equivalent of your state id or a driver's license. And what's really cool is once we know that Joe is Joe, it becomes really easy to say, is Joe the host of tech tables and things like that, and the basketball coach? And you can begin to add these various credentials into your wallet on top of it that might be useful in different contexts.

Blake Hall, CEO, ID.me [00:17:51]:
So where we get excited about is when we see, like in the gig economy, where drivers have to create a login and prove who they are and then go through a background screening and drivers record checks. In our model, you would only have to do that once, and then you'd have single sign on where you could just consent to release those credentials everywhere else you go. So our motto is, never make the same person do the same thing twice. We do a lot of community verification, like of nurses and military and veterans and students, because there's a lot of consumer brands and nonprofits and even government agencies that give special services to veterans. And then you might have healthcare providers that are interacting with HHS or with other agencies like VA or CMS, where it's not sufficient to be you. It's, are you a licensed medical provider? And so our wallet is able to bind credentials as needed so that once you've proved that you're a medical provider, our goal is not only to help you log into prescription apps, but also to log into insurance companies and healthcare systems, which maybe one provider needs to interact with a lot of them and bring their own identity with them, instead of having to register with each organization or government agency directly. So we're solving the password problem, but also a lot more than the password problem, like the notion that your data is locked inside of an enterprise silo and controlled by an organization. Our goal is to put you in control of your own information so that it just moves with you across the Internet and certainly across experiences later as well.

Joe Toste [00:19:14]:
Yeah, that is absolutely fantastic. How big do you think the market is? I feel like the market has to be. I don't even have a word for it. I'm going to use ginormous. There's just so many great use cases across the world that I think are just absolutely fantastic. Again, just piggybacking off your example, directly issuing an id into your wallet. This is great. I lost my wallet, I think, on an airplane two months ago.

Joe Toste [00:19:40]:
And God bless the California DMV. I love them, but it took about three weeks for me to get a new driver's license, and I had to go prove my identity, which was me trying to go print out a utility bill. They didn't take my Verizon cell phone bill, so I had to go find some random stuff I don't even own. Going to. I'm going to Fedex Kinkos to print off some stuff just to prove I am who I am, which is pretty funny. Yes. And then when you're driving around and you don't have a driver's license, even if it's valid, you still get. So, yeah, that's crazy to me, but that's a different conversation.

Joe Toste [00:20:22]:
So I think there's a lot of really great use cases for. I love this. Not having to do it multiple times, like having this SSO. That's set up that you're able to access a consent to release. I think that's absolutely fantastic. But I don't need to tell you that you're the guy running the company.

Blake Hall, CEO, ID.me [00:20:44]:
And especially as you learn more about how data brokers function and how they aggregate your data and they file you and you've never heard of them, and you're like, oh, my goodness. Our model. And this is why NIST, which is an agency that's part of the department of commerce, we won over $5 million in grant funding, I think, all the way back 2013 and 2015, if memory serves. It was to advance this consumer centric model of digital identity where people control their own login and their data. And so we don't sell data. We view personal data. Like a bank views money. That's yours.

Blake Hall, CEO, ID.me [00:21:14]:
We're a fiduciary and a steward to protect it, but it's yours. What we sell is trust and convenience. Like visa. Visa doesn't sell your money. Visa lets a cardholder and a merchant who've never interact with each other, like, establish trust in seconds. And so that is our business model, is trust and convenience while you decide whether or not you want to display your credentials with your digital wallet, just like you decide whether or not you want to take an id card out of your physical wallet when it might benefit you to do that.

Joe Toste [00:21:43]:
Yeah, I love that. Trust and convenience. That is fantastic. Now, for those who don't know, you also attended school.

Blake Hall, CEO, ID.me [00:21:52]:
Oh, no.

Joe Toste [00:21:54]:
Did you ever take a class with Peter Drucker? I actually don't know when he stopped teaching, actually, for some reason. I think he's passed away at this point.

Blake Hall, CEO, ID.me [00:22:02]:
Yeah, I think he's obviously a legend. So I've certainly read his writings and his teachings, but never had the pleasure of learning from him directly.

Joe Toste [00:22:11]:
Okay. Yeah, I just looked it up real quick. So he was like, 2005. You look a lot older. Because I feel like you've lived so many different lives. This is why. But he had this when I took a bunch of business classes. I remember reading a bunch of.

Joe Toste [00:22:22]:
Peter Drucker. Yeah, total legend. He had a great quote. Culture eats strategy for breakfast. I really like that. I'm just a firm believer if you can't get the people and the culture right, the whole thing is going to. You're. I know you're big on culture at Idme.

Joe Toste [00:22:36]:
Could you just maybe walk us through the company's culture? Like, how is it actually lived out? And maybe some really great lessons that you like to exude throughout idme on culture?

Blake Hall, CEO, ID.me [00:22:46]:
Sure. So I think Ken Burns, the documentarian, has this saying that history doesn't repeat itself, but it rhymes. And I think there are also these eternal truths about human nature that once they're expressed one way, manifest in similar ways that are just derivative of the core insight, right? So my favorite philosopher is Aristotle. Aristotle was Alexander the Great's mentor as they were taking over the world together. So if there's ever a duo where I could just listen to the dinner conversation, that would be one of them. But Aristotle said, we are what we do. Excellence, therefore, is not an act, but a habit. And that's also what a behavioral economist would tell you as well, that you are what you.

Blake Hall, CEO, ID.me [00:23:25]:
So when you understand that what Peter Drucker is talking about is culture is a set of common beliefs and values and habits. And if you want a single tribe, if you will, then you need everyone to be bound around those common sets of things. And so the next question is, I think the culture only matters insofar as it differentiates one group of humans from another, right? So if you think about the military, when I walked into Ranger school, there's this big sign. It's like an archway that you walk into when you walk into Ranger school, and it says, not for the weak or faint hearted, and you know exactly what's going to be brutal. And guess what? Tens and tens of thousands of young men and women volunteer to go through that rite of passage every year because they want to be part of that very select community. So it's almost what Mimi Moon, who taught me consumer marketing at Harvard Business School, we called a hostile brand. It's deliberately exclusive. And so it's really up to the founder to say, what am I trying to do? And what is the culture that I'm setting here? And to be deliberate about that.

Blake Hall, CEO, ID.me [00:24:28]:
Just Ranger school. Like, it is really hard to do this and to be part of this group. And the standard is not going to change for you. Right. A lot of people want to be rangers and Navy seals and everything else, and then they see what it really is, and they're like, oh, God, ring the bell. And so a lot of it requires self awareness to say, we're building the identity layer for the Internet. That's our goal, is to reinvent the way that people prove who they are and how they log into websites. If we succeed, I want my kids to be like, daddy, you guys really have to create a login.

Blake Hall, CEO, ID.me [00:24:57]:
And every new website you went to. Yeah, but we solved that through a digital wallet that puts you in control and just like people take Visa and Mastercard for granted. As far as the friction it takes out of your life, that's what you want to do. And so once you know that, that's your goal. And holy cow, what group of humans is going to build the identity layer for the Internet? It's got to be folks who are very type A and driven and competitive and smart and able to operate in chaos and ruthlessly prioritize. So you're sort of backwards planning from the job. And then when it gets down to what Peter Drucker is talking about and how you define it, there are so many things that I've learned along my career as a leader in that when I think about hires who worked out and became stars and hires that maybe were toxic to the team were low performers, I treated it like the scientific method was like, why is that person a star? And why did that person not work out? And I think there's some immutable characteristics that you need to screen for. So, for instance, our first company value is don't be a jerk.

Blake Hall, CEO, ID.me [00:25:52]:
And what we mean by that is, I've never had a positive working relationship with a jerk, like brilliant or otherwise. Their net impact is always toxic because they make other people not want to come into work and scared and all these other things. So then we screen for that. Do you have control of your fight or flight mechanisms? We don't want you to be nice, but we want you to be kind. Right? And there's a difference. Like, kindness is telling truth. Nice is telling you what you want to hear. So we want kind people who control their fight or flight response, and then you figure out ways to screen for it.

Blake Hall, CEO, ID.me [00:26:23]:
We don't hire pessimists. To inspire people with your passion is a core value. I've never had a positive working relationship with a pessimist, ever. I mean, imagine Apollo 13 happens and somebody's like, we're all dead. There's no way. You're like, come on, man. We need the duct tape on the scrubber, and let's go. And you'll never put the world in the window like you need to.

Blake Hall, CEO, ID.me [00:26:41]:
And if you're just the burn, we're going to end up in space. That's the very last thing you want. You want people who are quite aware they're critical thinkers and they're skeptics. That's great. But they're fundamentally can do positive because you don't change the world without optimists. And, like, optimists lift people up and they see the world as glass half full so critical thinkers who are optimists and you're not going to change those immutable habits. If somebody is approaching you to get hired and they're in their twenty s, the habits they've developed in terms of optimism, pessimism, have they learned to control their fight or flight? Are they protecting this fragile ego as like a narcissist and making other people feel bad? I've got a couch in my office, but that couch is not to change somebody's habits that they've developed over decades. I do not have time for that.

Blake Hall, CEO, ID.me [00:27:22]:
So you want to screen for those immutable traits that make for really good teammates. And the once you've done that, then the other things like, are you smart enough for this position? And do you have the skills for this position? Are really the critical differentiators. And that's where Google at work has done some great. So I think the manifestation of our culture has been about aligning the habits that lead to success and recognition and promotion at IDME, and then also figuring out what habits are not aligned so that we improve our selection and retention process. And if you do that, then the sign it's working is when I get feedback from new hires and I'm like, blake, I've met so many people here, and I haven't met a single person yet who's not kind and has been welcoming to me. And I love hearing that it's not all great. You have to sort of pull your weeds and pay attention to your culture to make sure that what is written down is lived. But I think we're doing a pretty good job.

Joe Toste [00:28:14]:
Yeah, no, I really like that. You've mentioned that a couple of times on several podcasts. And I think one of the things great leaders do, going back to the optimism is just they see something in that individual before they see it in themselves. I think it's like the supremely optimistic point of view. And I do this with high schoolers all the time. Sometimes they just walk in the locker room like, we're going to lose by 30 tonight. And I'm like, okay, no, we're not. Let's take a step back, guys.

Joe Toste [00:28:43]:
We're not losing by 30 tonight. Kind of build up that belief. But, yeah, I love working with optimists. I am the quintessential optimist, so I totally love that.

Blake Hall, CEO, ID.me [00:28:57]:
Yeah.

Joe Toste [00:28:57]:
So something that I found that great leaders do is on the optimism front, is they see the best in others, sometimes before they even see it in themselves. And I see that with high schoolers all the time, especially the locker room, it's actually kind of funny. You walk in and they're like, hey, we're going to lose by 30 points tonight. And they come back, end up winning. Mainly because I refuse that mentality of we're going to go lose by 30 tonight, and you need that culture. And the locker room is a little bit different than, I guess, than the work environment. To some degree, I feel like the locker room with the high school boys is a little more like motivational ra on game day, but kind of same concept of, we are going to actually believe that we're going to come out here and execute the game plan and we're going to play as a team and no one's going to be a jerk and we're going to go do this. So, yeah, everything that you said right there, and you've mentioned this on actually multiple podcasts, and I really love the core values that you.

Blake Hall, CEO, ID.me [00:29:56]:
Yeah, there's great examples of that, too. I mean, when Duke beat university Kentucky in that classic march madness matchup that they had together, I mean, the first thing that coach K did when it was like 2 seconds left is he grabbed all of them. He grabbed Grant Hill and Bobby Hurley and Christian Leitner, and he looked into each of their eyes. He said, we're going to win. We're going to win. We're going to win. And then he said, grant, can you make the pass? And Grant said, I can make the pass. And he goes, christian, can you make the shot? And he goes, if Grant can make the pass, I'll make the shot.

Blake Hall, CEO, ID.me [00:30:23]:
And just great leaders build confidence in you. It's a force multiplier. Right. They can increase your odds of winning. I think in that scenario, obviously, the odds are still stacked against them, but he changed the probability of success in a meaningful way, and that is the job of coaches and of captains of teams, is to change the odds that the team will still go on without you. But for your presence and for your leadership qualities, the odds of their success are better for you being there. And that's true for teachers. There's so much research that shows that just high expectations for kids leads to higher achievement, that when kids feel that confidence and they know that they're held to a higher standard, the performance improves.

Blake Hall, CEO, ID.me [00:31:08]:
Right. Whereas if you're. I think the study was like they were told, a class of kids who were randomly selected were honor students. And when the teachers came in with that mindset because of what they believed to be true and the expectations those kids performed outperformed classes where teachers did not think that they were honor students and things like that. It's definitely this balance of being self aware, like understanding what the strengths are of a particular person and then figuring out how to build them up so that they can play to those strengths more effectively.

Joe Toste [00:31:39]:
Yes, I've got nothing, but I love that. That's great. Okay, so now onto your third life. That's intertwined, I guess, with the second. You know, I know you're a passionate and passionate about entrepreneurship, obviously, big time entrepreneur. And I had a similar conversation with Rob Lucasio, who's the founder and CEO of live person. He's also a fantastic guy if you haven't met him. He's one of those rare breeds where he's still the founder and CEO, and he's been doing it for 25 years or something.

Joe Toste [00:32:13]:
So he was really great. But I had a couple of questions that I would love to ask you, especially lessons that you've learned from raising money and building your venture.

Blake Hall, CEO, ID.me [00:32:22]:
Sure.

Joe Toste [00:32:23]:
And so I kind of have four subtopics. Kind of. Point number one, at what point did you feel was a good time to start accepting investment?

Blake Hall, CEO, ID.me [00:32:32]:
Yeah, I think it goes back to the model of what do you need to prove or disprove to know whether you've got a viable idea for a business, one that could scale. And so once you figure out what those experiments are, then the next question is, what resources do I need to run those experiments to figure out if I'm onto something or if I'm hallucinating? And to the extent that you can be scrappy and get it together and bootstrap, I have so much respect for that. To the extent that you need engineers and you need some support to run that first experiment, then that's where you need to go out and raise like, a seed round friends and family and some of the seed funds and stuff like that to put it together, to create, like, a prototype, to get feedback. And so I very much look at it as, like, stages that young companies, what big companies have is like, proven product market fit. They know their positioning, they know where they exist in the world, they know what problem they're solving. The business is pretty predictable. That's kind of the most salient characteristic of a public company. Startups have none of that.

Blake Hall, CEO, ID.me [00:33:30]:
You don't even know if the problem that you're onto is a real problem, and you also don't know whether your solution is an actual preferred solution for that problem. And so it's fundamentally much more a science experiment, just Edison and everything else, like testing out light bulbs and things like that, where it's, does this work or not? And so what I love, and I think startups should get rid of the five year plan that shows $100 million in revenue, because obviously that never works. It's more, okay, the market is pretty big and we have a novel approach and we want to run a few experiments to see what works and what doesn't. And the results of those experiments will inform whether or not we should raise a series a. Raise a series a. That's where you're kind of bringing on salespeople and marketers for the first time. So everything starts with what stage are you at? How much certainty do you have in the problem and the solution? Are people willing to pay you for your product? That's a great indicator of success. And then you go from there.

Blake Hall, CEO, ID.me [00:34:26]:
I don't think that there's like a one size fits all rule, but I do think that there's principles and a framework that you can run through to then figure out what your capital needs are once you've figured out the problem in your early experiments, to seeing if you've got a good way to solve it.

Joe Toste [00:34:39]:
Yeah, this is fantastic advice. If anyone's actually secretly wondering, hey, Joe, why are you really asking all these questions? I run a business. I know everyone thinks I just run the tech tables podcast, but people don't understand it does require capital. And I am currently bootstrapping this, but I think we are in this stage where we are some very interesting opportunities. And I was like, oh, talking to my wife last night, this is great. Just going to go ask Blake all these questions I'm asking the other folks right now. We'll get some great advice. Looking back, was it a good idea, the timing, reflection, anything that maybe you would change from when you went into the marketplace?

Blake Hall, CEO, ID.me [00:35:16]:
I think the timing was actually amazing in the sense that smartphones like the iPhone came out while I was in business school, and it was fundamentally changing the way that the web worked and mobile web and the rise. And now our economy is digitizing at kind of record pace. And the pandemic was an accelerant. So I think building the foundations for what we're doing now at scale. But as far as learning, I mean, it's remarkable that if I have one superpower, it's that I am not afraid to call BS on myself. And I'll admit mistakes when I'm wrong, because I've approached building this business like the scientific method, I'm like, I didn't fail. I just wanted a way that didn't succeed. But everyone screws up with hiring.

Blake Hall, CEO, ID.me [00:35:56]:
The main thing is that you learn from the hiring mistake, and then you codify what went wrong, and then you build in feedback loops to make it better. And if you do that over time, you get a little bit better every day. I mean, it's unbelievable. That's how I led my team in combat, where we went from one of the worst units to by submetrics, the most high performing unit, depending on what metric you were looking at in terms of the missions that we led. And so, through that lens, the way I always thought about it, is, as long as I don't run out of money and I control my cash, burn that. If you bet on me for long enough with my team, I will find a significant problem in the market that isn't being solved in a way that's satisfying to customers, and I'll build a business around. Think. I think that's maybe the most important mindset to have going into it.

Blake Hall, CEO, ID.me [00:36:43]:
And I think, obviously, Paul Graham at Y Combinator, I read a lot of his writing, his advice, it's better to build something that a small number of people love versus something that a lot of people are lukewarm about could not be more appropriate. That all the really good entrepreneurs that I talk to that want to build something big, they start with weirdly specific customer profiles of who they need to serve. Like Facebook was like a hot or not for Harvard. And Uber started with affluent riders and black car drivers right before it expanded to the mass market. These are companies now that have hundreds of millions, billions of users, but they started with very specific profiles. Obviously, I wish that I could know what I know now, what I learned. But as far as the process and the approach to learning in a deliberate and systematic way, very grateful for folks like Paul Graham and Steve Blank, who really created a scientific. And Jeff Moore crossing the chasm like a scientific approach to building a company, to finding product market fit, to organizing the market by segments, and that there's early evangelists and the early majority, and the late majority, and the laggards, and really dividing and segmenting the market that way.

Blake Hall, CEO, ID.me [00:37:53]:
Those folks, it's like standing on the shoulders of giants when you internalize their lessons learned, you get the doctrine, and then it's just a matter of having the grit and the fortitude to actually weather the storm on the way through.

Joe Toste [00:38:05]:
Well, that was great. Wow. Yeah, that was fantastic. What trappings of taking investment should entrepreneurs look out for?

Blake Hall, CEO, ID.me [00:38:15]:
Oh, man, there's a lot here. I mean, the first thing that I'd say even before you get to investment is always make sure that on the founding team there's vesting. Because if one person decides to bug out, and this happened to Robin Chase, like Zipcar, I think, where somebody, one of her classmates put in some money in the initial thing and it was like, I'll take half the business. And then later she got removed as CEO after she built Zipcar to like this. It was just like personally devastating. So the first thing is make sure the founding team dynamics are set up right, investing. The other thing is make sure that your co founders do not have the same skills as you. That always leads to really nasty divorces.

Blake Hall, CEO, ID.me [00:38:48]:
So Brian Armstrong is the CEO of Coinbase. I think he laid it out really well that you can have technical ceos like Zuckerberg, you can have product and design ceos like Brian Chesky at Airbnb, you can have operational ceos like Travis Kalanick at Uber, and then you can have sales and marketing ceos like Aaron Levy at Box or Mark Benioff at Salesforce and so on, and you just need to figure out which one are you. And then whoever your co founders are, they need to have skill sets that are complementary. If you get two sales and marketing ceos as co founders, it's going to be really messy because you're going to want control over the same thing. And one of the reasons why Tennell Sirhan is our CTO and co founder, it's been an amazing partnership is because we each have complementary parts of the business. He runs the technical organization, has done a masterful job like building IDMe. I run the go to market and effectively act as the chief revenue officer and all those functions. And so the partnership has been really great.

Blake Hall, CEO, ID.me [00:39:43]:
Those things will be fundamental to the team dynamics on the way up and also to culture. And I've learned some of that the hard way. Personally, when it comes to investments. I mean, you've got angel investors, you've got pure financial investors, and then you've got strategics, and you've sort of been there, done that with all of them now. And I think with angel investors, especially in a spot like DC, where there's not a lot of early stage capital, I said I love the idea that I could recruit and retain engineers for longer than I could in the bay where turnover and retention is like 100%. So you lose an engineer every year you go, I'd rather have a financing problem, early stage than an engineering retention problem, which is a much harder one. You lose all the institutional knowledge and so there was that deliberate trade off. But then I'm like, all right, if I need to raise some angels, how do I create a synthetic portfolio of skills that would replicate what a VC would bring me? And so we got three senators, former chiefs of staff, because I knew that public policy and a voice at the table, government affairs would be a significant need at some point down the line.

Blake Hall, CEO, ID.me [00:40:40]:
As we scaled, got folks like David Tish who is the first manager director of Techstars to come in. We got folks like Mark McLaughlin, who's the CEO of Palo Alto Networks, like Verisign public, wonderful person who gave me far too much of his time. It was amazing. Kelly Purdue, who's on our board, is like a big brother to so. So we put that together. Now, when we raised our Series A, we did that with USAA military financial services firm. And the thing with strategics is like they can give you a boost and a leg up, but you also have to be really careful about control of the business. And to USAs, they give us the money, but without any of those strings attached, that could have really diminished our ability to innovate as an independent company.

Blake Hall, CEO, ID.me [00:41:19]:
And so I'm very grateful for the relationship that we have there. And the now viking global investors has led our last two financing rounds, which are north of $100 million. And now we're dealing with crossover funds. And I really love the crossover funds because they don't want like a board seat, so that they want control of a board seat, but they're like, you go find the best independent director for your company. And so they will anchor an IPo because they invest in both the private markets and the public markets. That's why they're called a crossover fund. But it's a really wonderful model where it's, let's go figure out who the best independent director is. And so in terms of diversity, in terms of demographics, but also in terms of skill sets, it's really unbelievable to be able to go out and say, oh my goodness, I can get a product person or a marketer versus maybe somebody who's more financially oriented.

Blake Hall, CEO, ID.me [00:42:02]:
That comes from the PE world. And I've already got a lot of financial folks on my board because of the way that VC money works and board seats from the way up. It's really interesting. I don't know if I did a good job of laying it out. Whether it's angels, vcs or strategics, there's pros and cons to each one of them. I think it's really important to make sure that if you take the money, there's nothing tied to it that would restrict your ability to operate your business. And the last thing is always raise unclean terms. If somebody's trying to give you like a two x or a three x liquidation preference or participating preferred, I'd be like, listen, I'd rather have a lower valuation for my company than that's just a one x liquidation prep and like, straight vanilla.

Blake Hall, CEO, ID.me [00:42:43]:
So if you're trying to give me a number that you think I want for vanity, that's a pure victory for both you and the investor, because the new money that comes in and layers on top, if you're raising like $100 million and it's a three x liquidation prep, they get a guaranteed $300 million return that they're going to want because the earlier capital has it. So you need to avoid, have a real conversation about what do you think my business is actually worth? Let's set the bar there and do it on clean terms that my common never gets buried as my enterprise value increases. And that can lead to all sorts of perverse incentives. So there's a whole lot there. It's probably its own podcast, but hopefully useful to folks who are listening.

Joe Toste [00:43:20]:
Yeah, that was absolutely fantastic. Now, this is a very broad question. Don't know if it's quite going to get the specific answer, but hey, I got you on the podcast. I'm going to ask you what questions should a young entrepreneur like myself ask folks who are interested in investing in techtables?

Blake Hall, CEO, ID.me [00:43:38]:
I think it's not so much the question, it's more what should you be listening for? So, whenever you're giving a presentation, you as a founder, you're a salesperson for everything, right? You have to sell people to give you their money. You got to sell. People leave their jobs and come work for you. You got to sell your product to your audience, and you sell everything. That's your job, and that's what you will consistently be doing. Then you sell it to the public through media, and you storytell and things like that. So what I would listen for is make sure your ask is clear that when you explain the problem you're solving and why you think you're solving it in a differentiated way, and why that could make for a scalable business. There should be a clear ask at the end, always end with an ask.

Blake Hall, CEO, ID.me [00:44:22]:
And a lot of young entrepreneurs don't do this well where it's like they'll give a great presentation. It's okay. I can tell you're passionate. It sounds like there's a problem. It's an interesting idea. What do you want? Do you want money? Do you want advice? Do you want some strategic partnership or capability? What's the valuation? And so if somebody hasn't thought through that, then your Joe is to let them know what you want from them. So that's the very first thing to be very specific on. And then what I'd listen for, thematically, are reasons why people wouldn't write me checks.

Blake Hall, CEO, ID.me [00:44:52]:
So once I saw that, and the I'd be very transparent about that, I'd come back and say, understand this concern? Here's how I think about it. We're running these experiments. This could be true or not. If it's true, this is what's going to happen. If it's not, that's where we're going to have to pivot and be honest about that and figure out what we learned about the world. But now it's almost like the insider version, legal version of insider trading, where you have a secret about the market that nobody else knows, and now you're operating. And so the second and third level experiments are really exciting because they're giving you insights that nobody has gotten yet about the market. What everyone is going to care about is how big the market is if they're going to spend time for you.

Blake Hall, CEO, ID.me [00:45:31]:
This is why folks like to bet on really good entrepreneurs who are in big markets. I always have four questions that I ask about a business, and if the entrepreneur knows it, it's really helpful. Beyond having a weirdly specific alpha customer profile and insights into who they're serving, one is how many people would your product serve? How often does it serve them? How much do you get paid every time you solve the problem for them? And four is what's to keep a big competitor from squashing you. And so you can analyze pretty much any business that way, right? Like Visa. Everybody needs payments. People make payments through credit cards and debit cards all the time. You get paid, like roughly a quarter every time. Network effects and economies of scale keep other folks out.

Blake Hall, CEO, ID.me [00:46:10]:
You could do, like, four in a different way. Not everyone drives, and people don't buy automobiles, like every year, so the smaller size. And how often are you solving the problem? Maybe only every four or five years. But then when they buy, the sticker price of the vehicle is really high. It's like 50, $70,000. So the deficiencies in terms of how many people you're solving and frequency are offset by the price tag, which is like, you get paid a ton of money when they do come through once every five years or whatever. And what's to keep people out? Well, economy is a scale of automobile manufacturing and everything else. It's not an easy market to enter.

Blake Hall, CEO, ID.me [00:46:44]:
If you know that, then you should be able to do, objection. Handling pretty well. And even if they ask you a question that might trip you up, then you could be humble enough to say, I know this and this. Maybe I don't know that yet, but that's also why I want your money. Because once we figure out the answer to that question, here's what I think are the possible outcomes and where those roads could lead. And then now you're like, problem solving together. And that's what I very much like to do with our investors. And by the way, I don't just take their money because I want their money to become just, like, sitting capital.

Blake Hall, CEO, ID.me [00:47:14]:
I'm like, here's how I think you can help me with that. And that's been one of the most fun parts of entrepreneurship, is where people who are investors are actively involved in building value for the company and doing it with us.

Joe Toste [00:47:24]:
Yeah, no, I love that. I'm talking to a couple of folks who are very excited about the possibilities as I've run both live events and virtual, and then the live events are, there's just a lot of excitement. It's a ton of fun. I love it. Although I am only one person, and literally my team is my wife, and I got a camera team. They come in. Anyway, this is a lot of really great advice. I'm probably going to be listening back to this.

Joe Toste [00:47:46]:
Glad I don't have to wait to release it, because I can listen back immediately. Last final question as we wrap up. Top three books you either gift or recommend to folks in your circle.

Blake Hall, CEO, ID.me [00:47:56]:
Yeah, sure. So my favorite book is once Negle by Anton Meyer, and the military academies teach it as, like, a dichotomy of two officer types like Sam Damon, who's kind of like, leading in the trenches like a soldier's officer. And Courtney Massingale is like, kind of your classic staff officer sort of leading from air conditioned rooms. But to me, it's really just masterful exposition of the nature of power, how power impacts those who are actually on the ground and bearing all the consequences. And whether it's like Russia and Ukraine or like, America and the Iraq war, Vietnam, it gives you a lens on power and how decisions are made. That, to me, was very transformative as an officer is about to go to combat in Iraq. I'm very grateful to my. I did a semester abroad in Australia.

Blake Hall, CEO, ID.me [00:48:45]:
So that was my one job when I was away, before I commissioned as an officer, was to read that book. And it's 800 pages long. It's like the Bible, but it was amazing. And then four steps to the epiphany by Steve Blank. That's the book that David Tish, who's the first managing director of Techstars, told me to read because I was giving him all this business development update. And he goes, Blake, you got to build a great tech company. You need to be really good at product, and you need to read this book because it tells you how to do it. And I'm very grateful for that advice because it gave me a roadmap to how to build a business stage by stage.

Blake Hall, CEO, ID.me [00:49:15]:
And then the last one, there might be two. If I cheat, there's one. It's called just listen by Mark Golston. He wrote the curriculum for the FBI's hostage negotiation. And when you think about fight or flight and how to get through to people, there's nobody who understands that better than these hostage negotiators who go into some of the most stressful circumstances. And so the insights from the psychology of what happens when you're in fight or flight, why do we say the things in fights that we regret afterwards? And then how can we keep people in a state of being able to listen and to communicate effectively without hurting other people is really good. The, the would be Jeffrey Moore's crossing the chasm, which I think for just understanding the market and how you segment customer base and everything else is also equally valuable. So those would be my four recommendations for your audience.

Joe Toste [00:50:00]:
I love it. Hopefully we might be able to get some more. Blake Hall. I will be in Washington, DC next year. It was supposed to be in the spring, but due to hurricane that went through Florida I had to postpone my Tallahassee live podcast tour event. That's going to push the schedule. So we had to push the DC one of the fall. But we already have the spot, the Samsung Innovation center across from the Capitol.

Joe Toste [00:50:22]:
So maybe we'll have to get Blake to come out there and come back on the show with a few other technology folks. My very last question, St. Pete or Clearwater in Florida?

Blake Hall, CEO, ID.me [00:50:32]:
Oh man. I'm going to go. A lot of my buddies, Vandy are from St. Pete actually, but I'm going to go Clearwater. I love that beach.

Joe Toste [00:50:39]:
Okay. I live in Santa Barbara, Southern California. And we are looking at. So right on. This is great. Awesome. We'll link to all of the additional content in the show notes and super grateful to have Blake on today. Blake, any last words as we wrap up?

Blake Hall, CEO, ID.me [00:50:57]:
No. Thank you so much for hosting me, Joe. Looking forward to seeing you in DC. Let's see this in person next time.

Joe Toste [00:51:02]:
Yeah, love it.

Joe Toste [00:51:03]:
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