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About BillGuard

BillGuard, formerly CrowdSpot, alerts users to hidden charges, billing errors, misleading subscriptions, scams and fraud on credit cards.

BillGuard Headquarter Location

54 W 40th Street 8th Floor

New York, New York, 10018,

United States


Latest BillGuard News

Expert Interview: Building and Scaling a Multi-Million Dollar Fintech Startup

Sep 16, 2020

CMO at “How can you make a startup successful?” That was my main question when I sat down with  Yaron Samid . He’s a multi-exit founder whose companies have been acquired by the likes of Microsoft and Cisco, to name but two. Yaron is a regular lecturer at Stanford and Columbia business schools. He is the founder of  TechAviv , one of the largest founder clubs in the world. reactions reactions So he was more than happy to tell me the story of how he built and scaled his fintech startup BillGuard. reactions From the number of actionable tips and insights in this interview; it’s easy to see why BillGuard became one of the most popular fintech startups in the world. reactions But before we get into that, let’s go back to the beginning, starting with how Yaron started his entrepreneurial journey. reactions Q: Did you always want to be an Entrepreneur? A: I always wanted to be a Founder and a CEO. I was very inspired by my parents who were both very entrepreneurial. reactions reactions I got fired four months into my first job out of university. They said I was: “too creative”. reactions This was back in ‘95 when the internet was getting started and I knew a little bit of HTML. So, instead of doing the job the way I was supposed to do it I came up with a web-enabled way of doing it. reactions reactions I was very young and brash and I didn’t take that very well. They fired me the same day. reactions Which was the best thing that ever happened to me, because I started getting into the internet business. I joined a startup company and learnt from the CEO how to build companies and that’s how it all got started for me – being a bad employee. reactions Q: What was your “A-ha!” moment that made you realise you needed to start BillGuard? A: So BillGuard was an accident. reactions My wife got our credit card bill and there was a transaction she didn’t recognise. She came to me and said: “Honey what is this charge?”  reactions And when your wife comes to you and says: “What is this charge?” you’re like: “Oh God!”  reactions But I didn’t recognise it either. So I googled it and saw a lot of people were complaining about the same charge. reactions That gave rise to what I call a lazy man’s idea: What if there was a way to harness all that collective human knowledge about bad credit card charges? Then use it to notify other people who had those same charges? reactions That would be a nice service that I could benefit from as a person who doesn’t check their credit card bill. reactions I had already built two companies before BillGuard so I had some experience with crowdsourcing technology and data science. So I set out to build a fintech startup to solve a problem that I had. reactions reactions Q: What was the market vision that helped you shape BillGuard? Did it evolve over the years or has it remained the same since its inception? A: When I started working on BillGuard the vision was to become a security company. Our tagline was literally “Antivirus for our bills.”  reactions To advertise to consumers we said: “This system will check your bills for you and notify you if it finds mistakes or fraud.”  reactions reactions We were building a “Set & Forget” security product. This requires a lot of “FUD” Marketing – Fear, Uncertainty and Doubt. reactions “We had to convince consumers that, without our app to protect them, they would lose money to fraud.” It’s a very expensive process. Big security companies spend hundreds of millions of dollars a year to scare people into buying their products. reactions For a fintech startup, it was too cost-prohibitive. Early on, we realised our Cost per Acquisition (CPA) was going to be too high; so we pivoted to a B2B model. reactions Banks approached us because they were interested in the technology we had built. Banks didn’t have a way to crowdsource knowledge to find bad charges. reactions So we tried to sell the technology to the banks. However, the sales cycle for banks is very very long. It’s painful. The kind of pain I wouldn’t wish on anybody. reactions “Simply, we were not set up to just sit there and wait for the banks to deploy.”  So, after two years of investing in a B2B marketing and sales team, with pilots in major banks, we made one of the hardest decisions we had to make. To pivot back to a consumer app. reactions This meant letting go of some amazing talent we had brought in to sell to banks. They just weren’t the right fit for a consumer business model. It was heartbreaking. reactions reactions We completely redesigned the product. It was no longer a “set & forget” website. It was now a mobile app that would help you identify ways to save money and protect you from fraud. reactions reactions It grew very quickly. Our product team did some strong product development, UX and design work led by my amazing co-founder and CTO, Raphael Ouzan. We were able to build one of the fastest-growing finance apps in history. Within a year and a half of launch, we grew to 2M active users. We were regularly ranked the top finance app in both the Google and Apple app stores. reactions At that point, we were acquired by a $2B unicorn company; while we were still growing rapidly. reactions “We completely redesigned the product. We were able to build one of the fastest-growing finance apps in history. Within a year and a half of launch, we grew to 2M active users. We were regularly ranked the top finance app in both the Google & Apple app stores." Q: Before pivoting, how did you validate the original idea for BillGuard? A: We did a few things. reactions First of all, to validate the idea before we had a product or even a team, I went out and did surveys. reactions I asked people: “If we build a free product that would check your bills for you and notify you if there was a fraudulent charge that your bank missed; would you use it?”  reactions Almost 100% of people said: “I would absolutely use it, I never check my bills, I know I’m losing money. I would love something to check for me – especially if it’s free.”  reactions That kind of question is a “yes question.”  reactions Everybody will say yes to that. You’re not validating customer demand. More specifically you’re not validating customer action. reactions People had the intent, but when we launched, suddenly nobody stopped what they were doing to sign-up and use it reactions Taking action is not free. People have to make the decision to go get your product. That requires a driving force. reactions Like if you have a headache, you will stop what you’re doing and go and buy some medicine. Unfortunately, we did not have that. reactions People didn’t know or have a fear that they were losing money. So they didn’t take action to get our product. reactions There was something else we did that was also, in retrospect, a misleading indicator. We joined a startup competition called  TechCrunch Disrupt . It’s the biggest global startup competition. reactions “Taking action is not free. People have to make the decision to go get your product. That requires a driving force.” We did very well, we came in second place as the Top Startup of the Year for 2011.  reactions reactions We had Bessemer, Khosla Ventures, Peter Thiel from PayPal and Eric Schmidt from Google, etc. Tier-1 investment funds who all believed in this vision of outsourcing bad charges. reactions reactions When we launched, the product wasn’t converting and the funnel had massive drop-offs; that was the real data. That was real customer validation. reactions The results made it very clear that there wasn’t enough demand for our security product. Hence the decision to pivot. reactions A: We had two categories of consumer that we profiled. We called them: reactions Spotters – Someone who is meticulous about checking their credit card bills. Line item by line item. They’re very nervous and aware that companies make mistakes and they check for them religiously. reactions Slackers – People, like me, who never check their credit card bill. They know there might be some mistakes on their bill, but they don’t care. If they do check they skim for big charges and ignore the little ones. We targeted the Slackers. We said: “Hey guys we’ll check your bills for you; we’ll do the work and notify you if there is anything that looks fishy.” reactions The problem with those Slackers is they don’t take action to solve the problem in the first place. They aren’t aware of how big a problem it is. reactions reactions What we were able to do through our marketing was to find a sub-segment of slackers. They were aware of the problem, wanted a system to take care of it and were willing to take action. But, as I mentioned already,  it was too expensive to market to them. reactions Q: Did the Slackers deal with the problem before your original solution or did they just not bother? A: Most of them would only find out after the fact if they had some big charge on their bill they didn’t recognise. In that case, they would call the bank. reactions reactions How big of a “pain-point” is the problem? How easy is the solution they currently have at addressing that pain-point and is that “good enough”? In the case of bank fraud, the consumer has zero liability. They pick up the phone, call the bank and say: “Look I have this big charge here I don’t recognise, it’s not mine please remove it.”  reactions Easy Solution  If you analyse it that way you would’ve never started that fintech company; you would’ve been dead on arrival. reactions That’s the kind of teaching I do now for other companies; it’s a very important lesson:  reactions “You have to carefully, and quantifiably, address: how big is the pain, how frequently does it occur and what are the existing solutions for addressing that pain.” Q: With that analysis in mind, how did you build a product that would still work? A: We didn’t! We built a product that was good enough for the subset of Slackers. reactions The problem exists. At a macro level, it’s huge. We quantified it,  it worked out to about $14B of unwanted charges per year in the US alone. reactions So the macro problem was big. But each individual wasn’t aware of how big a problem it was for them. reactions Even though we couldn’t afford the marketing; 50,000 people were using the first version of our product. They weren’t paying us anything but it was growing. reactions reactions But the market didn’t have a demand for a personal finance security product; it just wasn’t there. reactions Q: Which KPIs did you set for the people who were using the first version of the product? A: So obviously Cost per Acquisition (CPA) is the number one quantifiable way to know whether people will take action. reactions In our case, there was a high-friction registration process. You’d have to connect your credit cards to allow our system to monitor them; this process caused a huge drop-off in our onboarding funnel because we needed to ask our user’s to enter their login information for their online bank or card accounts. Even though we did not store this information, it was a very scary ask. reactions That was one of the key KPIs. We analysed, very granularly, our onboarding funnel. We knew we had to get our funnel to convert enough for us to support a freemium model. reactions Meaning, you got to use the system for free for your first two cards. To add a third you would have to upgrade to the premium model. In our case, to get that to work, we needed to achieve a CPA of $10 or less. reactions We initially had 50% dropoff in our onboarding funnel. It was almost always when we asked them to connect their credit card; so we could monitor their transactions. reactions reactions “As an entrepreneur, you’re so excited about everything that you get too emotionally tied to your product. You’re not intellectually honest enough to be true to the data.” And the data showed that we had a $150 CPA – it was way off, the economics didn’t work! reactions We looked at the KPIs and our funnel’s conversion rate. We worked hard to build trust with our users and brought our conversion rate up to 75%. Once we had that, we knew we were on the right track. reactions reactions It is critical for any consumer app to get people engaged with the product and to retain them. reactions If people use your product regularly, its top of mind, and if it’s top of mind, they’ll tell a friend. If they don’t, forget about organic growth. reactions But let me give you an example. Nobody in the history of mankind has ever told their friend: reactions “I love my McAfee Antivirus!! Oh my god, it’s SO GOOD! You’ve got to get McAfee!”  reactions “Nobody is excited about their security products.“ You don’t engage with it on purpose! You’re not supposed to. What you’re buying into is peace of mind. I set up McAfee and I know I’m safe – I don’t need to think about it anymore. reactions So we needed to change the discussion from security to saving money: “Do you want to pay full price for that coffee? Or do you want to get a notification on your phone that gives you a 25% promo code as you walk into the coffee shop?”. Everybody wants that product! reactions reactions If you see someone standing in front of you in line getting 25% off their coffee the first thing you do is say: “Hey, what’s that?” and they say: “It’s my BillGuard savings alert. It shows me that there is a coupon here I can use and automatically downloads it to my phone.”  reactions Boom! Everybody standing in line is suddenly downloading the app for the coffee they are about to buy. reactions That drives massive organic adoption and growth. When we did this and made other UX tweaks to the mobile app, it brought down our CPA to less than $2 per newly registered user. reactions “We needed to change the discussion from security to saving money. When we did that it drove massive organic adoption and growth. Our CPA was less than $2 per user.” Q: So you pivoted to B2B with banks, then back again to B2C with the personal finance management app. How did you coordinate your team to deal with this tectonic shift? A: First of all we had the painful decision to let go of the team we had when we were selling to banks. They didn’t fit with what we were trying to do on the consumer front. reactions Luckily, the core team were all B2C, personal finance, data science and UX experts who knew how to build great apps for consumers. Which was also my background as a product-centric founder and CEO. reactions That’s another big lesson for founders: you want to stay true to your DNA. Don’t try to be something you’re not. reactions I’m not the guy who puts on a suit and tie and tries to sell to banks. It’s not what I love and it’s not what I’m best at. It wasn’t my passion. reactions So, when we pivoted back to consumers, it was almost like: “Fantastic, now we are back home, doing what we love.”  reactions In the end, we just needed to figure out how to do it right, because we were doing it wrong at the beginning. reactions Q: The technology for your startup’s MVP must’ve been complex. What were the most important features that you included in that MVP? A: So the very first MVP was a very simple website. reactions You would go on and register the cards you wanted us to monitor. We would scan it for you and send you a weekly email saying:  reactions Transactions 1-20: Ok Transaction 21: We don’t recognise this charge in our system. Please check this charge and let us know whether it’s ok. That was it. The way we got the analytics for knowing whether or not a charge looked ok to us was through: reactions Scanning the web and message boards for scam charge reports. Asking the few “spotters” we had using our platform to click every transaction. We gave them a tool so they could go through checking yes or no on everything. About 2% of our network were Spotters. reactions To put it in perspective that’s the same percentage of users as content contributors on Wikipedia. And in their case, 2% of users contributing equals the most accurate encyclopedia in the world. reactions So we leveraged the spotter reviews, this gave us early analytics. We then used that information to provide the other 98% of our users with reports once a week – “Set & Forget”. reactions A: The absolute most important thing when it comes to product development? reactions “Don’t infer that there will be a demand for the product you’re going to build. You have to quantify customer action – not the intent.”  Before you decide to build an MVP, write a line of code, onboard your team or reach out to investors you should: reactions Run some ads, drive some traffic to that page. See how well it converts to whatever your Call to Action (CTA) is: Register, give us your email – whatever it might be. Get your target users to sign up before you build the product. Then follow-up with: “Thank you for signing up, we’re working on the product now. You’re going to be among the very first to hear about it when we go live.” reactions That will give you a rough idea of how much it costs to acquire a customer based on the value proposition that you think is so wonderful. reactions What you will most likely find out is that your value proposition isn’t that wonderful and that it’s far more expensive to acquire a customer than you thought. But that data will enable you to iterate on your value proposition:  reactions Your optimal marketing channels  You’ll be able to keep tweaking this until you get to a point where you will have a much better handle on your ability to acquire a customer that takes the action that you want them to take, and cost that works for your business. reactions reactions “Will customers want my product enough to take action at a cost that would enable me to run a sustainable business?”  You still won’t have metrics around engagement and retention, but you’ll have a sound starting point and a good indication of whether or not your product idea will be dead on arrival. reactions There are great tools for doing this. One of which is  QuickMVP . You can create placeholder landing pages, run advertisements and get quantified results on your onboarding funnel. How much it costs, where people drop-off etc. It allows you to constantly iterate and A/B test. reactions If you go to angel investors, for example, with that kind of quantified data, they are going to know you are a serious entrepreneur. They’re going to see that you:  reactions Before building anything; you’ve quantified that people will take action on your value proposition. If we had done that at BillGuard, we would’ve saved about four years worth of time. reactions Perhaps we would’ve jumped straight to the personal finance value proposition – rather than a security or bank product. reactions reactions Q: Do you have any advice on raising startup capital based on your experiences with BillGuard? A: BillGuard was my third company. So, when it came to raising money, you have to take into account I was a repeat entrepreneur and a well-known entity. reactions Investors were happy to back anything I was doing because I had a good reputation and track record. reactions “As a seasoned entrepreneur, it’s a lot easier to raise money.” My main advice to first-time founders is to create a network with investors early. Reach out and build relationships with investors before you ask them for money. reactions Tell them what you are thinking of building. Ask them if, based on your KPI goals, they would be interested in investing in the future. Find out what KPIs they would like to see based on your vision. reactions And they will tell you. They’ve seen hundreds of companies and thousands of pitches. They can see the signs of a company that is going to have compelling growth. reactions Collect this information from a few investors. Then go out and execute those KPIs by scraping together some friends and family money. reactions If you succeed you can go back to the investor with facts and figures rather than just a story. Then you can start talking about a proper early-stage venture round. reactions reactions They’re going to look bad not investing in your startup if you did what they said they needed to give you some capital. reactions Second, it makes you look exactly like the kind of founder they want to back. It makes you look credible and your business predictable. They don’t know you; their biggest fear is you’re just somebody who’s selling them smoke & mirrors. reactions So, when you tell them you are going to do “A, B, C” they may doubt you. But, six months later when you have proof you did “A, B, C” you tick a box in their brain. You show them you’re a responsible, credible entrepreneur they can trust who has a good grasp on the growth levers of your business. reactions You mitigate the number one risk for an early-stage startup investor; the founder:  “Early-stage investors back great founders. They know that everything else is going to change. The product, the market, the competitive landscape will all change, but they’re betting on you.” In short, developing the relationship and backing it up with credibility will get you a check. reactions Q: Last question, what advice do you have on hiring for a startup based on your experience? A: The most important decision is your co-founder. I can’t stress this enough; it is literally the most important decision you will make as a founder. reactions Most startups fail because of some sort of HR dynamic. The vision might be good, the market might be good but if your team can’t execute against it then you’re already one foot in the grave. reactions You should find a co-founder who you feel absolutely confident to go to battle with for the next decade. reactions When it comes to looking for both your co-founder and your first hires, your ideal situation is to work with people you already have a relationship with. reactions Those first 2-4 startup employees are almost going to be co-founders. They are taking a huge risk betting on you. So, hopefully, you can pick from a group of people that you know. reactions “The most important decision is your co-founder. I can’t stress this enough; it is literally the most important decision you will make as a founder.” The same advice goes with startup talent as it does with investors. You should be developing relationships with talent well before you launch your company. reactions reactions Say you are passionate about sustainable food tech and you want to start a company in that sector. reactions Months before you should be a part of that community. You should be having conversations and contributing content to that community before asking anybody to join you. reactions “If you are in communities relevant to your startup, you’ll not only find talent, you’ll find customers – and maybe even investors.”  When you hire your team you must focus on startup people. People who can take volatility and work for lower salaries than the market. reactions They need to understand the value of the startup equity that they’re going to be getting. And you should be generous with your equity on your first few employees. reactions When hiring for a startup, I would optimise on intelligence and learning fast on the job over fancy degrees from fancy universities. reactions reactions If you’re building a consumer product and you suddenly decide to pivot to a B2B model you need to have software engineers who can pivot with you. reactions reactions You don’t want someone who just knows how to do Javascript or a consumer web app. You want broad people. reactions Over time you’ll hire specialists but in the beginning, you want to hire very brilliant generalists. reactions Q: Is there any other advice you have for first-time founders that we haven’t covered yet? A: Find a seasoned entrepreneur who can mentor you on the basics. Like how not to fall into term sheet traps from predatory investors. Add these mentors to your startup’s advisory board. Give them equity; at least 0.25%. reactions

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