Venture Everywhere Podcast: Daniel Faddoul with Alberto Escarlate
Daniel Faddoul, founder and CEO of Auditive, chats with Alberto Escarlate, co-founder and CTO of Tough Day on episode 86: Listen Up with Auditive.
Episode 86 of Venture Everywhere features host Alberto Escarlate, co-founder and CTO of Tough Day, an AI platform that provides confidential, personalized guidance to employees and managers to navigate complex workplace challenges. Alberto talks with Daniel Faddoul, founder and CEO of Auditive — a third-party risk management platform bringing continuous monitoring to buyer-seller relationships. Daniel shares his journey from finance and data science into entrepreneurship, and how those experiences shaped Auditive’s mission. He also discusses how Auditive is moving beyond static, check-the-box security reviews to real-time, trust-driven engagement that helps organizations in industries like finance, healthcare, and education manage third-party risk more effectively.
In this episode, you will hear:
Replacing static risk questionnaires with continuous, real-time monitoring
Applying AI to bridge compliance frameworks and remove blind spots
Driving transparency in regulated industries like finance, healthcare, and education
Embedding empathy and relationships into risk management practices
If you liked this episode, please give us a rating wherever you found us. To learn more about our work, visit Everywhere.vc and subscribe to our Founders Everywhere Substack. You can also follow us on YouTube, LinkedIn and Twitter for regular updates and news.
TRANSCRIPT
00:00:00 VO: Everywhere Podcast Network.
00:00:14 Jenny Fielding: Hi, and welcome to the Everywhere podcast. We're a global community of founders and operators who've come together to support the next generation of builders. So the premise of the podcast is just that, founders interviewing other founders about the trials and tribulations of building a company. Hope you enjoy the episode.
00:00:34 Alberto: Hi, everyone. This is Alberto Escarlate. I'm the co-founder and CTO of Tough Day. We are an AI platform that provides confidential, personalized guidance to employees and managers to navigate complex workplace challenges.
00:00:48 Alberto: I'm joined today by Daniel Faddoul, who's the founder and CEO of Auditive. Auditive is a third-party risk management platform with continuous monitoring, empowering buyers and sellers to confidently engage with each other.
00:01:01 Alberto: With a background in enterprise risk, Daniel is passionate about building systems that increase trust, transparency, and resilience in complex supply chains. Through Auditive, he's redefining how organizations assess and manage third-party risk, shifting from static reviews to real time insights, enabling smarter, safer decisions across industries.
00:01:23 Alberto: Welcome to Venture Everywhere Podcast. How are you, Daniel?
00:01:27 Daniel: I'm good. Thanks for having me.
00:01:28 Alberto: We're both founders in the Everywhere network, so it's great to have this connection. We connected maybe a couple months ago when we, coincidentally, were talking about the same subject in Slack. We had a great connection. And I think we exchanged some learnings and challenges as founders in the founder journey. I'm very excited to be talking to you about you and your background in Auditive.
00:01:50 Daniel: That's right. We had a great conversation. Excited to continue where we left off.
00:01:54 Alberto: So let's start with the basics. What kind of work are you up to these days? And what type of impact are you hoping to make in the world with Auditive?
00:02:01 Daniel: So as you rightly summarized, Auditive is in the third-party risk management space. For those who don't know, that means that we help companies evaluate their vendors from a risk perspective and at the same time, we help those vendors get through that risk assessment process.
00:02:17 Daniel: In terms of the work that we're doing right now, if you take a step back, this process generally has been very much a “check-the-box” kind of exercise. Whereas our view is we want to do this really about building relationships between companies, buyers, and their sellers.
00:02:31 Daniel: So we're really excited about this. Day to day, that's the impact we're looking to have: ultimately create a better process for both parties and facilitate that conversation between them, not just when they get onboarded, but throughout the life cycle of the relationship.
00:02:45 Alberto: That sounds very exciting. And then we also talked as we developed Tough Day on our end, your type of service is going to be super helpful. So we'll definitely be talking a lot after this podcast.
00:02:55 Alberto: But if you look back on your journey, what were the big moments that helped you, put you on your path? So how did you end up as a founder at Auditive of all things?
00:03:06 Daniel: My journey has been somewhat atypical in that my career started in financial services and then transitioned to tech. But really, I actually wore many hats throughout my career. I had technical roles, less technical roles, and I started from sales and finance to then trading at Goldman Sachs, and then transitioned to managing a team of data scientists at Meta. After which I transitioned to products at smaller start ups.
00:03:34 Daniel: This entire time, I kept asking myself, what's my specialty? I seem to be doing very different roles throughout my journey. Ironically now, looking back, I felt like that was actually the best foundation to be a founder because as you know all too well, Alberto, you wear so many hats even in any given day. And so having learned all those different skills along the way has really helped me a ton. And that's, I would say, from the trajectory perspective.
00:04:01 Daniel: I certainly also want to call out that I've been blessed to have very good managers throughout my career. It really helped me think through areas of improvement or being supportive and things like that. There's quite a few. I won't mention them on this call, but they know who they are.
00:04:15 Daniel: And then finally, I've been lucky enough to have had great investors, including the Everywhere team. Especially early on in that journey, you're looking for investors that are willing to bet on you and take a gamble. And so that in itself also has really been a great step in getting to where we are today.
00:04:31 Alberto: That's awesome because people seem to think the founder journey is a straight path. So there's so many hurdles and roadblocks coming from financial all the way to risk management. It's a long path.
00:04:42 Alberto: Skipping now to the moment, what's been the biggest professional challenge you're working through right now?
00:04:47 Daniel: As a founder, the challenges change pretty often. But I would say right at this point in time, we work with a lot of large enterprises. Being such a small company, the biggest challenge is beyond proving the value of your product, how do you also have them build confidence in such a small company at this stage?
00:05:05 Daniel: So for us, it's really thinking about all the levers we need to consider to make sure that we provide that confidence for them to say that they can work with such a small company.
00:05:14 Daniel: Because they love the product, the question is how can we make sure that they also have trust that we’ll be here, we’re secure, and all the things that they typically see in larger organizations that we make sure to have even at this stage of our journey? So I would say that's the main challenge. How do you get through those hurdles for those larger organizations?
00:05:33 Alberto: Do you think you've found a strategy for tackling this problem? So is there a way that you as a small up and coming startup can get in front of them and they say, Okay, here's exactly what we need and regardless, you're not being a very large big tech company, that's who we want to go with?
00:05:49 Daniel: I think this is true for many smaller companies or even in sales generally, the first thing is to make sure that they feel heard and understood. We make a point of not just pushing our product. But instead, when we meet somebody, really engaging, understanding what are the main challenges they're facing right now as it pertains to third-party risk or procurement. That's the first step.
00:06:10 Daniel: The other piece is, to me, generally, business is still very much a relationship entity. And so really thinking about fostering actual good relationships with individuals and not just seeing them as a potential sale. I think that's really important. Once you've done that, you've built that level of trust where you can start having open conversations.
00:06:31 Daniel: And it goes without saying that at the point where we feel like we have a product that meets their needs… obviously, the product has to be good as well. It needs to be a product that is so much better than anything else they've seen that they want to continue the conversation and then dive deeper into what a partnership looks like.
00:06:49 Daniel: So I think to summarize, it's really understanding their pain points if they feel heard, building a genuine relationship, not just seeing them as a sale, and then finally making sure that you actually qualify them and don't just try and push something that doesn't make sense to them. But if it does, you can showcase your product in a way that really shows them what it can do.
00:07:11 Alberto: Definitely having a great product is table stakes and the fact as you navigate through these large organizations, finding the champion, the person who is feeling the pain that you address. And it's not always simple. Sometimes you're in the same organization, you meet with a lot of people until you get to that right person. So Tough Day, we feel the same, the same process and cycle.
00:07:32 Alberto: So about your industry, the risk management, so what makes you unique, and what type of challenges that you're trying to solve for your customers?
00:07:41 Daniel: It's interesting because the space we're in right now more than ever is a very hot space, meaning a lot of folks are seeing that there's a lot to be done and really redefining or at least using AI for compliance across the board.
00:07:55 Daniel: It's frankly a very competitive space. But when you look at the players or generally the approach that's taken, a lot of it is still, “Oh, how do we automate an existing process?” There's almost like a race to just automate the process as it has been for years and just add some AI to it. That may have some benefits, but it doesn't fundamentally move the needle in our opinion.
00:08:19 Daniel: Speaking about how we're unique, take a step back. We say, what is really trying to happen here when you think about that buyer-seller engagement? It's not just about sending questionnaires back and forth. It really is about the buyer trying to understand what is their risk exposure as it pertains to this vendor or seller or third-party. And equally, it's really about that third-party trying to give at least the essential information to provide that buyer with the comfort they need.
00:08:43 Daniel: And so with that in mind, we spend a lot of time redefining the process. But really, the idea is we want to make it seamless for both parties. And not just at the point of assessing when you're onboarding or assessing that vendor, but actually throughout the relationship.
00:08:59 Daniel: The idea is, “Yes, great. Everything looks good. Let's work together.” But most companies, if not all, then forget about it until the next year, and then they do the exercise again.
00:09:11 Daniel: So if you're using AI just to do that, you still have a huge blind spot between that first assessment and the year later. So the question becomes what can you do along the way to make sure that you have that transparency and the vendor is also in a place where they're happy to share that information on a continuous basis. And that's what we're focused on.
00:09:29 Alberto: I'm curious. When was the foundation, when it was formally established as a company?
00:09:34 Daniel: Oh, in 2022.
00:09:36 Alberto: Since then, I'm sure the industry has been through lots of changes. Have you found that your specific space has been changing as fast as everything? Or buyers are still trying to find same solutions and you're trying to bring something that's unique, continuous monitoring rather than just one offs every year. How has the industry changed to make what you offer compelling now?
00:09:57 Daniel: That's a great point. I think if you look at the industry the last couple of years, overall at a higher level, there's definitely been a lot of investment, a lot of focus, a big push on leveraging AI or even integrations into systems to accelerate that process.
00:10:13 Daniel: I think it's when you go one level deeper that you start seeing the nuances. So, for example, if you think about small companies, start ups, or vendors trying to get their SOC 2, that's been very well served now if you think of companies like Vanta, Drata, etcetera.
00:10:28 Daniel: But then when you start to break up compliance into its different elements, so third-party risks and other types of elements, there's quite a bit to go there. But I will say, particularly in the last year or six months, even that area, people are starting to understand there's a lot to do there, and I feel like we're somewhat ahead of the game in that regard because it's an area we've been paying attention to a little bit longer than the majority.
00:10:51 Alberto: That makes a lot of sense. Looking back, it's great for us to get perspective. But looking forward, so what's next? What are the big goals, aspirations? What are you planning as a business?
00:11:02 Daniel: Ultimately, for us, the goal is to be the de facto place where companies, buyers, and sellers can engage and build, not only trust with each other, but also better relationships. That to me is the end state.
00:11:16 Daniel: So how can we get to a place where this whole concept of an RFP or a security questionnaire or any type of risk assessment is less of a check-the-box exercise that everybody's frustrated to do, but instead, we transition to a world where when companies are about to work together, we facilitated the entire process in a way where it feels transparent to the extent it should be transparent. Of course, some things remain private. But at the same time, it's also eliminated that friction that can start to exist between these businesses.
00:11:48 Daniel: So sometimes everybody's excited, they're about to close a deal, and then they receive this questionnaire or some follow-up questions, and it creates a bit of tension between the two parties. Our view is how can we unlock all of that frustration, get rid of it, and instead foster an environment where companies are actually excited to engage together and it's a much more seamless experience.
00:12:11 Daniel: And like I said, not just on day one, but also throughout the relationship. So what that means more tangibly is we want to be the platform where companies automatically come to when they know they're about to work together or even start the RFP process.
00:12:25 Alberto: That makes sense to me. And looking backwards, looking forward, in the moment, there's always something happening. So there's always a challenge. What's the one thing that keeps you up at night about all this?
00:12:36 Daniel: That's right. You nailed it, generally, there's always something that keeps you up at night, and none of that changes as a founder day over day or week over week. So the list changes all the time.
00:12:48 Daniel: But I think if I had to pick one thing that's maybe a constant in the backburner or more top of mind depending on the situation, it's, ultimately, are we building the best possible solution for those customers? Are we really addressing their pain points as effectively as we can? I think that's the undercurrent of everything we do.
00:13:11 Daniel: Now, of course, like I said, one day might be go-to-market questions. The other day might be operational. Third day might be team things. But if you were to ask me on a steady state, what would be the top of the list? I think it would be that.
00:13:24 Daniel: And, Alberto, I'd love to get your take on this. On your side, what is it that's top of mind for you right now?
00:13:29 Alberto: I must say I sleep very well. I hardly wake up at the night and think about work.
00:13:34 Alberto: So I think we have a lot of commonalities, especially being in small companies and trying to get customers in big enterprise industries. And I think it's exactly what you said, finding your champion inside the organization, navigating through and trying to abbreviate that cycle in a way that when you realize you're not going to get anything out of the company, you move to the next ones.
00:13:58 Alberto: So I think efficiency is important. As early stage founders, you mentioned we wear so many hats, and I'm so glad and grateful that I have a great co-founder that we complement one another very much. So there's a lot of things we help and support one another. But still you have to sit on sales calls, and I had to deal with accounting and fundraising.
00:14:17 Alberto: I think all those things add friction to ideally what would be the ideal pace to build the company. But I won't complain because I know that's what I signed for, and that's what us founders do when we decide to move on. So it's not my first rodeo, and so I think it's as expected.
00:14:34 Alberto: You probably saw this question coming. It’s probably a podcast typical question. So let's talk about your superpower. What do people say is your thing?
00:14:43 Daniel: I would say it's empathy. I mentioned early on this call how when we're meeting new potential prospects or companies we can support, it's really important to us to understand their pain points.
00:14:55 Daniel: In this case, I take a genuine interest in understanding what keeps them up at night to use that. So I believe if you were to ask my peers, my friends, colleagues, I think they would say that that's my primary superpower. And so that gives me an ability to really put myself in the shoes of whoever we work with, we partner with. And at the same time, that means that we can really think through the best path for them.
00:15:19 Daniel: On the flip side, they also feel that. Obviously, a great product is really important, but I can't tell you how many times people we work with say, “It's not just about the product. For us, it's also when things go wrong or if something happens, we want to know that we can count on our vendor or whoever we're working with.”
00:15:40 Daniel: That's really important as well, particularly when you think about larger companies where their reputation is at stake. If anything goes wrong, that becomes more important than ever.
00:15:49 Alberto: That superpower, is that your innate trait? Can someone develop empathy? If someone listening now, how can I develop more empathy and follow what you're just saying? Is there any advice for that?
00:16:01 Daniel: This is a funny one because growing up, I used to think that it was a weakness in that when you're young and you're looking at, I don't know, you're watching a movie like Wall Street or something, you're thinking the business world is super cutthroat and you have to be really tough and hard nosed to get by.
00:16:17 Daniel: So it's funny how my thinking has evolved since then and thinking, actually, no. People want to work with people that they feel they can count on. So just a little call out there that my thinking has changed over time around that.
00:16:29 Daniel: To your question around can people build empathy, I really think so. If it's not natural, people can assign themselves very specific… call them tasks or exercises. They might say, okay, on the next phone call, I'm just going to spend the first ten, fifteen minutes listening and just understanding who I'm engaging with. If it's not natural, they might start by just forcing that muscle initially. And then over time, it might become more natural.
00:16:57 Daniel: Now whether somebody who's empathetic and somebody who's not and you can have a non-empathetic person become empathetic by nature, I don't know. It's quite a philosophical question I haven't thought about.
00:17:09 Daniel: But I would say to build that muscle, at least from a client engagement perspective, I absolutely think so. If anything, you'll see the rewards and then you'll just want to do it more because it just changes the dynamic of the conversations.
00:17:22 Alberto: That's great. I was in Hawaii for some customer meetings. I was listening to someone who was not originally from Hawaii saying that when he moved to the island, how hard it was when he was in traffic. He always honking, yelling at people. And then he realized that that's not how people do it here.
00:17:40 Alberto: He took this conscious effort to, if on traffic someone wants to cut through his lane, he would just stop and wave and they would wave back. That's how it works. If you have the conscious effort to do things, to pay attention to other people, I think you can evolve that muscle.
00:17:58 Daniel: Absolutely. Alberto, I know you're asking the questions, but can you share your superpower with us as well?
00:18:04 Alberto: I would say, not trying to steal yours, but I think listening, understanding where people are coming from, their backgrounds, and why are they behaving or doing things the way they do. I feel that's very important.
00:18:14 Alberto: Relationship, business relationship, or life relationship is always a two sided thing. So if you're only thinking inwards or looking inwards, it's not going to be helpful. So I think that's one thing.
00:18:27 Alberto: And I think maybe with the AI that may be obsolete now, finding connections in things that are not necessarily explicit. Sometimes talking to someone or in some business situation, I think I can find some hidden connections or data that most people wouldn't realize just from the surface. Being aware of that, I make an effort to really try to find different angles and facets to some situations.
00:18:52 Daniel: I love that. And from the little I've known you, I'm not surprised.
00:18:56 Alberto: Thank you. We are always learning and trying to grow regardless of how long you've been around. So let's get a little more specific about Auditive and talk about third-party risk management. As you touched upon, it has changed a lot over the years. Why is the idea of continuous monitoring a big deal now?
00:19:14 Alberto: From your perspective as a builder and you're creating something that's compelling in this industry, why do you see it as a big deal?
00:19:22 Daniel: It's a couple of things, really. Of course, if you think about even ten, twenty years ago, everybody would say, “Yeah, continuous monitoring, we would love that. That's great.” And there were some tools out there that claimed to do that.
00:19:34 Daniel: The first one is, historically, continuous monitoring was near impossible except for maybe monitoring companies' web pages or public information. The reason is a lot of the other information is somewhat scattered in those organizations. A lot of its also just on prem.
00:19:51 Daniel: And so if you think about it, at that point in time, continuous monitoring was limited up to a point. So you could get very basic data. The rest of it's buried, which made it really hard to make much use out of it. That's the first thing.
00:20:21 Daniel: The other piece of it is if, take security as an example, but this applies to other areas of risk as well, there's different ways to monitor security. You've heard of SOC 2, ISO, and all these frameworks. The challenge in the past was that any given company may want to evaluate themselves or their vendor using a specific framework.
00:20:42 Daniel: Now the reality is there's a lot of overlap in all those different types of frameworks. But before AI, just doing that assessment was incredibly manual because you had to understand they seem to be doing things using this framework. We're using this other framework. How do we reconcile the two? I'm just going to send them a questionnaire.
00:21:15 Daniel: And so if you combine the fact that data is just much more accessible with integrations and the way it's stored, plus AI is able to actually read through any kind of framework or information, all of a sudden, you're in a much more powerful place of continuous monitoring and automated reviews as well.
00:21:33 Alberto: Cool. And I'm curious, are there any particular industries or sectors where you see your platform making the biggest impact?
00:21:41 Daniel: Absolutely. So financial services, for obvious reasons, highly regulated. Plus, it's close to my heart given my background. I spent some time in financial services, like I mentioned. And then healthcare and education are two other big ones.
00:21:54 Daniel: Again, it's really the industries where there's a lot of regulation and also a lot of sensitive data that is being handled. For that reason, companies have to be extra careful about how that data is accessed and managed by their vendors.
00:22:09 Alberto: That makes a lot of sense. And your background in finances, it's pretty handy. Is there any misconceptions about third-party risk that you wish businesses would just abandon? What are the common misconceptions?
00:22:22 Daniel: To me, I don't know if it's a misconception, but maybe a different way of looking at things. So a lot of the times buyers want to get as much information about the vendor. If they're going to assess the risk, they really want to get all the intel they can get about the vendor.
00:22:35 Daniel: Now that makes sense, of course, but the challenge is there's only so much intel you can get. Some of it just can't be shared and some of it, the vendor's reluctant to share. So what do you do in those situations?
00:22:46 Daniel: And to me, the idea is that's one element, but you should also think about how do I manage my risk with limited information. So another way to put it is, instead of just focusing on how can I get as much information as possible but also think about with the information I have, what can I do as a buyer to mitigate my risk?
00:23:05 Daniel: And this is where sometimes I see quite a few individuals miss that second piece. They're always focused on what data can we get, but they don't really think about how do we make use of the data to adjust our own position and knowing what we know.
00:23:19 Alberto: Great. As it gets to the end of this awesome conversation, we're going to do a speed round, a few questions in general. So we'd love to hear your answers.
00:23:28 Alberto: First of all, is there a book you're reading now or a podcast you're enjoying at the moment? What's the thing that keeps you at night, not because of work, but because you're enjoying reading or listening?
00:23:38 Daniel: Right now, I've been following Steven Bartlett more, the UK entrepreneur. I think his podcast with all these different CEOs or successful individuals has been really interesting. I'm a big fan of the questions he asks. He really likes to unpack things, so I've been a big fan of that lately.
00:23:54 Alberto: Cool. And channeling that Everywhere Venture spirit, if you could live anywhere in the world for a year, where would that be?
00:24:01 Daniel: Japan. Hands down. I've been a few times. I've always enjoyed it. I'm a big fan of a lot of the way they approach different things. So I would definitely spend a year in Japan, most likely Kyoto.
00:24:13 Alberto: Very nice. That's awesome. And with all these new AI services and tools, there are so many that supposedly will make our lives easier and enhance our productivity at the work. Do you have a hack?
00:24:26 Daniel: My hack is fairly basic, but it works wonders for me. There's no AI involved. I just like to schedule my to-dos in my calendar as opposed to having a to-do list. And the reason is the issue with to-do lists is you try and squeeze things in when you can. Even if you prioritize them, you may not necessarily follow that order because it depends on the window of time that you end up having.
00:24:48 Daniel: Whereas if you schedule them, you're going to be much more committed to actually get them done. And you also are quite thoughtful about how much time you're going to spend on them by scheduling them.
00:24:57 Daniel: So you can use tools also like Pomodoro type of tools where you can allocate time. But really the main thing is to make sure they're scheduled. To me, that's been really a great way to improve productivity.
00:25:09 Alberto: That's a great tip. And last but not least, if people listening to this podcast want to follow your work or get in touch, what should they do? What's the easiest way to do it?
00:25:19 Daniel: For now, LinkedIn's the best. I'm quite active on LinkedIn, but I'll be sure to share more places to find me on my LinkedIn as that happens.
00:25:26 Alberto: LinkedIn, aren't we all there? Couldn't live without it. Daniel, it was so great to catch up with you. I'm traveling to the Bay Area next month, so maybe we can catch up and grab coffee. And thanks to the Everywhere network for making this possible.
00:25:40 Daniel: Likewise, Alberto, always a pleasure. Excited to meet in person. Let's definitely make that happen. And thank you for taking the time to chat today. It was a treat. I appreciate it. Thanks, Everywhere team as well.
00:25:50 Alberto: Yeah. It was a pleasure. Thank you.
00:25:52 Daniel: Thank you.
00:25:54 Scott Hartley: Thanks for joining us and hope you enjoyed today's episode. For those of you listening, you might also be interested to learn more about Everywhere. We're a first check preseed fund that does exactly that, invests everywhere. We're a community of 500 founders and operators, and we've invested in over 250 companies around the globe. Find us at our website, everywhere.vc, on LinkedIn, and through our regular founder spotlights on Substack. Be sure to subscribe, and we'll catch you on the next episode.
Read more from Daniel Faddoul in Founders Everywhere.
Listen to Katherine Von Jan, co-founder and CEO of Tough Day on the Venture Everywhere Podcast episode #41 Goodbye Tough Days.