Venture Everywhere Podcast: Tim Hsia with Scott Hartley
Tim Hsia, co-founder and CEO of VetraFi, chats with Scott Hartley, Managing Partner of Everywhere Ventures on episode 96: Operation Military Banking.
In episode 96 of Venture Everywhere, Scott Hartley, co-founder and Managing Partner of Everywhere Ventures, sits down with Tim Hsia, co-founder and CEO of VetraFi, a modern banking platform built specifically for military service members and veterans. Tim, a West Point graduate who served two tours in Iraq, shares his journey from platoon leader to founding VetriFi. They help users build credit, save wisely, and achieve long-term financial health through tools like secured cards and high-yield savings accounts. Tim also discusses how VetriFi’s mission-driven approach is empowering enlisted service members to take control of their financial future.
In this episode, you will hear:
How VetriFi serves the 80% of enlisted service members traditional banks overlook.
Building financial fitness through non-patronizing guidance and earned wage access.
The power of the veteran community as the most connected network in America.
VetriFi’s mission-first culture and approach to customer acquisition and brand identity.
Lessons from West Point on preparation, discipline, and leadership in building a startup.
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TRANSCRIPT
00:00:00 VO: Everywhere Podcast Network.
00:00:14 J: 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. I hope you enjoy the episode.
00:00:33 Scott: Hi everybody. I’m Scott Hartley, co-founder and managing partner of Everywhere Ventures. Super excited to be here today with Tim Hsia. Tim is the founder of VetraFi. VetraFi is basically a modern banking solution for service members, for veterans, really reinventing and recreating what’s been there in the form of USAA over the past many decades in a modern twist with all the bells and whistles that service members and veterans deserve with a modern banking platform.
00:01:04 Scott: Tim is also the founder of Context VC. Tim is a service member himself, obviously went to West Point, served two tours in Iraq. You were in Mosul with the 25th Infantry Division. Tim, thank you so much for both your service, for all the things that you’re creating with VetraFi. Super excited to have you here today.
00:01:25 Scott: And I have to say, you’re one of the founders in our portfolio who brings the most authenticity and the most passion and the most energy to what you do. We absolutely love what you’re working on and having you as part of the portfolio. So welcome. Thanks for being here with us today.
00:01:40 Tim: Thank you, Scott. And very grateful that Everywhere Ventures is an investor. Very grateful that you’ve been with us since day one. And we sincerely hope that we can be one of the best, if not the best for you in terms of mission and money. So more to follow, but that’s our goal.
00:01:57 Scott: As somebody who doesn’t have a service background, but has always deeply respected and peripherally part of the community through family members who have served in the army, I have such deep respect for the bravery and the choice that you made as a very young man to enroll in West Point, to get your education there, serve for a number of years, and then go into the reserves when you basically left active duty going to Stanford Business School for graduate school.
00:02:25 Scott: Maybe walk us through your journey and I guess what gave you the courage and the motivation to make a fairly difficult choice, I think as an 18 year old to jump into that world when a lot of kids are really not at the maturity level or at that foresight at the beginning of your career to think about what this means. It’s a very courageous choice.
00:02:45 Scott: And I think that it’s led to an incredible set of leadership tools that you have at your disposal now as CEO and also as a venture capitalist. Walk us through your early childhood and what led to that decision and what put you on this path now to founding VetraFi.
00:03:00 Tim: Absolutely. I went to West Point when I was 17, I am 43. And so I’ve been with the US Army for that entire time. We like to say at VetraFi, we live, swim, breathe, walk the veteran ecosystem. And when I joined at 17, I had no idea what I was getting into. So background is Taiwanese-American, grandfather fought in World War II with the Nationalists.
00:03:24 Tim: Unfortunately, lost and in 49 fled to Taiwan. A number of excellent, obviously Taiwanese CEOs, Jensen Huang being the foremost one, but there’s many others. When I went to West Point, it was actually in the year 2000. So this was when we were talking about Bosnia, Sarajevo, and not even necessarily talking about global war on terrorism, which obviously happened in 9/11 and really spanned all the way until 2020 when we left Afghanistan.
00:03:50 Tim: And West Point was an incredible education experience, incredible leadership experience, still learning lessons from my time there, strive to be the leader that they teach you to be. There’s values of duty on our country.
00:04:05 Tim: At West Point, fell in love with infantry. Infantry is the tip of the spear, boots on the ground. We like to think of the army as the purest form of leadership. It’s you and 44 plus soldiers going on patrols, sometimes combat, sometimes non-kinetic. So I was a platoon leader in Iraq.
00:04:23 Tim: And then the next role was a company XO, and then I was a logistics officer for an infantry battalion, a really striker battalion for 14-month deployment in Baghdad, Bukuba, Muqaddiya. And my time in the army, obviously very impactful in terms of who I am as a person.
00:04:41 Tim: In 2009, 2010, I transitioned, had a very difficult time transitioning across both employment and education. And after struggling manning a decent job, and it’s probably factors of the great financial crisis that happened obviously ‘08, ‘09, and then an aspect of I’m an infantry guy. So my resume doesn’t speak like spreadsheets or other aspects beyond just kicking doors down and going on patrols.
00:05:06 Tim: Thankfully, with some guidance from my family and some other West Point classmates and friends, mentors, landed at Stanford, did a JD-MBA there, marinated there. While I was at Stanford, co-founded a nonprofit called Service to School that helps enlisted veterans get into our nation’s top schools. So these days, if you go to Harvard, Yale, Stanford, Cornell, MIT, you name the school, almost all the enlisted veterans come through Service to School. I’m still very involved with that nonprofit, on the board, and very proud to be associated with that organization.
00:05:39 Tim: And then in 2014, joined the startup called Pocket. I love the intersection of media and technology and communities/consumers at Pocket helped them on a number of strategic deals, preloads. They ended up getting acquired by Firefox Mozilla. And then in 2016, bootstrapped the company called MediaMobilize that does a lot of advertising across YouTube and email newsletters.
00:06:03 Tim: At that point in time, I started seeding angel investing. Investing Morning Brew, The Hustle, Beehiiv, thredUP, Lyne, Scooter, Workflow. And then in 2021 started Context Ventures. And then one of the first companies we incubated was a company called The Military Veteran. We did that in 2022. That company is now revenue in the millions and profitable. But more importantly, what they do is, they help companies hire veterans.
00:06:26 Tim: So the two pain points I had when I was transitioning around, education and employment are areas that we want to fix. The co-founder there, Brendan Aronson, fantastic Marine Corps veteran. And then the CEO now Jim Lose is an incredible recruiter. We call him the Shohei Ohtani slash LeBron James of military recruiting.
00:06:44 Tim: I mentioned this because my journey so far has first been Service to School with education, helping veterans with education. Then it was Context Ventures with entrepreneurship. Then it was The Military Veteran in 2022 with employment, but it’s finally gone to what I like to say is my Marvel end game and that is earn. And we want to help veterans earn.
00:07:05 Tim: The first three, unfortunately, doesn’t really impact every single veteran. It impacts generally the best of the best veterans going to the top schools or going through entrepreneurship. Cause we’ve funded 30 plus veteran founders, but obviously we’re not impacting everyone. Whereas what we are able to do at VetraFi is help every single service member amongst their financial health and well-being, is core to their identity, core to their transition, core to their ability to get employment.
00:07:32 Tim: So we’re super excited about VetraFi, co-founded in 2024. A year and a half later, we’re even more energized by the opportunity. We are going to launch our product sometime between Q1 and Q2 of next year. Our product will comprise a secure card, a high yield savings account. And those are our two main products to start with.
00:07:53 Tim: The reason we’re so excited is we know with our current bank partner that we can offer a brighter product that our competitors can on day one. And that’s not always the case for financial products because you sometimes don’t have the capitalization or the product mix or the assets on the management table to do this, but we’ll be able to do this.
00:08:17 Tim: We’re really excited for the secure card. We’re also excited because this will help our customers build their credit. A lot of folks when they join the military, like myself, when you’re 17, 18, you have no credit or thin credit. So a secure card is going to help them build their credit, build their credit wisely and help them become thoughtful folks that will save and earn.
00:08:41 Tim: One of the key mottos that we like to convey at VetraFi is we want to be your financial file team leader. So when you join the military, you get a team leader. And my team leader at West Point was incredibly impactful. I think of him several times a month in terms of the leadership skills he gave me. He helped me learn how to be someone, a contributing member in the army. He helped me to learn about fitness, about health, about academics.
00:09:07 Tim: At VetraFi, we want to, in a very non-patronizing, non-condescending way, be your financial team leader so we can help you with your financial fitness. In the Army, your physical fitness is so critical. We always count how many pull-ups you can do, your two mile run, your push-ups, your sprint, drag, carry. Well, we want to have that same attitude when it comes to financial fitness.
00:09:28 Scott: I love the idea of financial fitness. Speaking of language, just in my own few experiences, having gone up to West Point, spent time on campus, done some work with Colonel Christopher Mayer, who leads the history and literature department.
00:09:42 Scott: One of the most amazing things about education, I think, is this mix of both the timeless and the timely in the sense that you’re getting this core historical liberal arts education. You’re reading Thucydides, you’re reading the classic texts, but you’re also modernizing that with a real fluidity around technology tools.
00:10:02 Scott: In my few experiences up at West Point, I would encourage anyone to get on the ferry from New York City, go up for a football game, go up for a day on campus and just see the way that we’re training leaders in America. It’s really exceptional to see what 18-year-old, 19-year-old student, and the maturity that they bring to bear.
00:10:20 Scott: Focusing on Vetri-Fi, we’d love to think about this as a platform. I think over 5, 10 years ago, as banking-as-a-service became more readily available, we saw this slurry and as you, I’m sure, saw on the venture side as well a flurry of neobanks around every different demographic.
00:10:39 Scott: And so the white space around veterans, obviously it’s a huge community in America. It’s huge community globally. Why do you think it wasn’t built out or hasn’t been built out better? How have there not been competitors to the USAA’s of the world already? What do you think is a fragmentation around, obviously you’ve got The Service Academies, The Air Force Academy, Coast Guard, Army at West Point.
00:11:02 Scott: You also have the vast majority of service members coming in through the enlisted channels, through a walk-up where you walk in and sign up as a kid straight out of high school. How do you think about your ICP? You’ve got obviously the officers coming out of the academies, but then you’ve also got all the enlisted members.
00:11:20 Scott: Maybe walk us through the journey in banking-as-a-service, neobanks that were built on top of these rails and why you think today VetraFi hasn’t been built for in the white space and opportunity that you guys saw.
00:11:33 Tim: Great question. And I’m going to break it down into two. What is why now and then who we serve? Why now, I think it’s such a fascinating question. It’s one that we constantly think about and it is why doesn’t this already exist? But before we even ask why this doesn’t already exist, we should talk about the current state of play.
00:11:52 Tim: USAA is about a hundred, three hundred, four years old. In fact, I’ve read multiple biographies about the USAA company. It’s a very fascinating company. And I share that because you mentioned at West Point, you learned the history. And obviously I like the word context. I think before you understand or pursue an opportunity, you have to understand what are the existing dynamics? Why, who are the frenemies, who are the competitors? What’s the product mix?
00:12:17 Tim: The other really good book for us is written by the Navy Federal Credit Union CEO, that we learned a ton about as we’ve been building out VetraFi. And so the current incumbents, what’s happened for USAA is that they have been so focused on non-veterans. They’ve gotten so large that they’re really focusing now on grandkids and great grandkids.
00:12:39 Tim: So when you see Rob Gronkowski ads, it’s not even talking to service members and they’re so focused on insurance. I think the most clear point to show that that is who they are now is their last two CEOs have been civilians. Supposedly this organization is for veterans, but you just need to have leadership that understands, lives, breathes, and knows what it’s like to be in the military.
00:13:02 Tim: And I’m not saying you can’t be a great civilian CEO. Obviously you can. Like Jamie Dimon is someone that we incredibly admire, but he’s not building something specifically for the military. So USAA has increasingly forgotten about its core constituency. Navy Federal Credit Union is an incredible institution. It’s the largest credit union, which shows you how big this is.
00:13:24 Tim: And to further convince you of how big this opportunity is, USAA has 220 billion assets under management. Navy Federal Credit has 160 billion assets under management. And the market size is massive. Every year, there’s 200,000 veterans that join or service members that join. Roughly that same number that transition, retire and leave.
00:13:41 Tim: If you combine the entire services and all the veterans that are, remain active duty National Guard Reserves, you get two million. So those are all the people that are in uniform right now across those three. If you include all the veterans since, and there are still a few that are living since World War II, you get to 18 million. That’s 16 million vets and then two million that are currently serving.
00:14:04 Tim: And if you include the family members, that’s 38 million. U.S., obviously very patriotic country, but also a very large military. And then in terms of why there hasn’t been a competitor to the USAA is primarily because the neobank, Fintech start and wave has rather been relatively recent. Obviously, Chime is a big company. There’s other companies like Current, Vero, Revolut, Nubank. Those are across different geographies.
00:14:33 Tim: But it takes a certain type of individual who wants to do it. It’s going to be unlikely that a civilian will go build it. So then that’s 99% of founders right off the gate that are not going to go build it. Then the interesting thing is we see a lot of military veterans who are building defense companies. That makes sense. That’s their background. Not many veterans have wanted or had the ambition to do it.
00:14:57 Tim: I want to go change fintech because that’s just not where their backgrounds are. But the thing is our investments in other veterans and other fintechs, whether it’s Farther, which is doing tremendously well, Atomic Insights, Confido Legal etc. has given us a better grasp of banking and payments, which gave us a firm belief that there’s a real opportunity here. It’s a big market. It’s underserved because the incumbents have forgotten its core constituency.
00:15:21 Tim: And increasingly, our view on the opportunity is the DOD budget’s massive. Let’s just say around $800 billion. And of that $800 billion, say 20% goes to R&D, to new technology companies, say like an Anduril, so on and so forth.
00:15:38 Tim: 20% goes to operations and maintenance, which some of these companies can pursue, say Palantir, Anduril, and so on and so forth. But 20% of that budget goes to paying service members. And that’s personnel. That’s the space that we’re playing in. Increasingly, we hear Anduril saying they want to be a neo prime and the primes are Lockheed, Raytheon, Boeing, Northrop Grumman.
00:16:02 Tim: We think it’s appropriate to call us a neobank because the prime in this space has been say USAA and we’re going to go after it and provide better and newer and a more comprehensive suite of solutions over time to help service members. That’s a bit about why now and why there hasn’t been as much competition in this space.
00:16:21 Tim: I think it’s similar to the primes in that they have locked it up so well historically, but there’s been gaps now. Then the last thing around our users, we’re going to be focusing on with the enlisted service members. That’s 80% of the military, not the West Point folks, not the officers, but the 80% who USAA has historically not really focused on.
00:16:45 Scott: Having served with the Council on Foreign Relations and a term membership and getting to go on a few of these trips with military service members, one particularly memorable trip that I did was as a distinguished visitor out to the John C. Stennis aircraft carrier that was on a freedom of navigation mission going toward China.
00:17:03 Scott: We flew out to the carrier off the coast of Baja, spent two days on board, saw about a hundred sorties of jets flying off, landing on the deck, launching up the catapult. And we had a really interesting sit down with the XO and the XO described his role on the ship as the mayor of a small city managing about 5,000 effectively teenagers or young adults.
00:17:28 Scott: And the vast majority of those enlisted folks on the carrier and enlisted Navy members were 18 to 22 years old. Walk us through the journey for an enlisted service member on your first deployment, second deployment. You’re basically getting a paycheck. Your room and board and things are taken care of as you’re out there. What are the things that these folks are saving for as the go-to-market for VetraFi and setting up an account for a young, new enlistee. What are the types of things that you’re thinking about as far as being able to provide these folks with both a conduit for receiving a paycheck, a high-yield savings account, a card that they can use while they’re out and about?
00:18:08 Scott: What are the things that you’re hoping to provide and train these folks as far as financial fitness? I love that line.
00:18:15 Tim: The most important thing I want to convey to this question and to the entire podcast is how much the enlisted force drives the military. They are the backbone of the military, whether it’s Army, Navy, Marine Corps, you name it. So much responsibility is given to 18, 19, 20, 21-year-olds in the military, which is why it is a great place to learn leadership. It’s a great place to learn discipline and the missions don’t happen.
00:18:45 Tim: We might see those planes go up and down from a carrier, but who’s ensuring the maintenance on those planes? Who’s ensuring that the planes are kept clean? Who’s ensuring the training, that they’re well fed? All the behind the scenes work. That’s just like carrier in the Army and the infantry. They are the infantry men. So when I’m in Iraq and I’ve got a platoon, I’m surrounded by enlisted 18, 19, 20, 21-year-olds who are responsible for carrying our foreign policy overseas.
00:19:17 Tim: And it’s incredible mix of human beings that come from all races, all backgrounds, all parts of the country. And there’s a line from Fury, they say “best job I ever had.” Definitely felt that way when I was a platoon leader and when I was with the infantry line and just incredible human beings, incredible Americans, which is why we feel so energized about trying to help them with their finances.
00:19:39 Tim: We lead with mission and we think the money will follow. And in terms of how we want to help them with their financial fitness, it is making sure they spend responsibly. So many people who joined the military and it’s not even just military people, it’s 17,18, 19-year-olds, don’t have a ton of financial education. But the thing about the military that’s very unique is that 18, 19, 20-year-olds don’t have to pay for health insurance.
00:20:06 Tim: The military covers it. They don’t have to pay for housing. The military covers it, whether it’s barracks housing or basic allowance for housing and they don’t even have to pay for food because some of it’s taken out of their paycheck with the basic allowance. So what happens to these folks is they had a huge amount of disposable income. And so many civilians who if they were looking at this market would just overlook and say, oh, their paycheck is low. They’re either a subprime customer and that couldn’t be further from the truth.
00:20:33 Tim: They have a ton of disposable income and so we want to help them learn and earn. But we want to do it in a very non condescending, non-patronizing way because enlisted people do not want to hear from another officer telling them how they should spend their money. No one wants to be told that.
00:20:48 Tim: And the secure card ensures that they will and cannot overspend their checking account, keeps them within that tolerance. The other thing that we want to do in the years ahead is earned wage access. So let’s say it’s the 13th of the month and you’re just getting gas, chicken, milk, eggs. There’s no reason why you need to go off base to payday loan. Really, that’s just calling predators who are going to assign crazy interest rates on those things. We’re going to be able to, when they provide you, to front you, so that you don’t need to lose money off of that.
00:21:21 Tim: And then most importantly, we want you to earn and we want to earn you as a customer. We like to say, service members, you earn your paycheck, you’re not, and you don’t owe payday loan folks or anyone else, or your money. It’s money you’ve earned. And we really want to make sure you earn even more by providing great high yields that will help you save for the future. Another line that we firmly believe in is that service members should be better financially than when they joined and we want to try to make that happen.
00:21:48 Scott: In the development of VetraFi, I assume over the course of your many years, as you mentioned from 17 to 43, surrounded by service members, what has been the perennial feedback or the chorus that you heard over and over again that sort of inspired you to want to create this business?
00:22:05 Scott: Was it just that, I guess to that point that USAA has outgrown a real focus on the core needs of the service member in sort of this broader appeal. As you mentioned, the Gronk adds on the NFL games appealing to the great granddaughter of service member versus the enlisted folk today. What was sort of that drum beat that you’ve heard over and over again that gave you the confidence and obviously the focus to want to build VetraFi when you obviously already had a number of things on your plate, including starting Context Ventures only a few years ago.
00:22:41 Tim: Firsthand experience, I used to love USAA. I used to tell people that USAA was another incredible military benefit that wasn’t even part of the military benefits. So obviously we have the post 9/11 GI bill. We had the VA home loan. There’s the Servicemembers Civil Relief Act. I believe USAA hit their pinnacle around 2008 to 2012.
00:23:03 Tim: Unfortunately, it’s been a gradual downhill, in the past year, it’s almost a cliff, like drop in terms of their assistance to service members. And it goes to their products. So they had multiple consent orders, hundreds of millions of dollars of fines, over $400 million of fines. And that’s come to impact customers. Banking is a very sticky product.
00:23:26 Tim: I’ve been with USAA since 2002, 2003. I still use certain elements of USAA, not all of it. But a few years ago, they sold out their investing arm. So no longer was this a one-shop stop. And we want to be a one-shop stop. And obviously I mentioned they don’t really focus on the military anymore. When you talk to military organizations and we do this nonstop, they’re like, we never talk to USAA. No one from USAA has ever talked to us. And we’re just blown away.
00:23:50 Tim: We’re like, you are such a critical nonprofit or for-profit organization within the military ecosystem. And the fact that they never engaged with you in one way or another, is shocking. And so that has given us further motivation, further belief that there is just so much open space for us to help the service members with. Certain times I believe I started the fund to start VetraFi.
00:24:13 Tim: Certain people start companies to maybe one day start a fund. I believe we started a fund so we can start VetraFi. It is our largest check. It is our check that we were like, okay, we think we can really impact positively the entire community. And I know I said this before, like we’ve been able to touch certain, very elite portions of the military, but this will enable us to help everyone in the military.
00:24:34 Tim: Our vision is expansive. It’s not just secure cards, high-yield savings. We want to go on to unsecured card for people who have shown that they can graduate to that and build their credit score even more and build it responsibly and spend financially responsibly. Then we want to go on to loan products.
00:24:51 Tim: One of the things we’ve learned from the Navy Federal Credit Union, CEO book and there’s so many notes we took from it was around the importance of loans, the car loans, the VA home loan. Then we want to go after investing. That’s an arm that USAA, as I mentioned, no longer does. And even one day, hopefully add a commercial bank because we know veterans are extremely entrepreneurial.
00:25:13 Tim: So we want VetraFi to exist throughout the whole lifespan of a service member from the day they join, to the day they get out, to the day they started business as a civilian member and beyond.
00:25:25 Scott: As you think of that transition and having built your career around the space, you’ve alluded to it, but the legacy, obviously in thinking about the 18 million service members who have served or the 2 million that are currently serving, was it roughly 1.6 million of whom are enlisted members.
00:25:44 Scott: The legacy, as you’ve alluded to building a holistic platform that takes care of those service members as they transition. Having been both somebody who served, come out, gone to Stanford Business School, law school, built a number of different things.
00:26:00 Tim: What advice do you have in thinking about these different transition waypoints for veterans and how do you think VetraFi can serve some of those folks in the future? To home loans, maybe small business loans, things that can help get people on their feet, have the confidence and courage to jump into an entrepreneurial journey.
00:26:18 Tim: But as you talk about your Marvel end game of VetraFi, becoming this holistic platform that provides financial fitness. What is that legacy, I guess, that you hope to leave as you build what I think is not just a company, but a movement?
00:26:33 Tim: I think about regret monetization framework. The whole Jeff Bezos, like certain actions, you say yes or no, because in your deathbed, would you be saying, “I should have done that.” And VetraFi is probably, besides Context, probably the only thing, if not the only thing that would have been like, man, we had an opportunity to so positively impact so many service members. So that’s a major driving motivation.
00:26:56 Tim: I think legacy is unfortunately… I say unfortunately, immature to talk about because we haven’t launched products. And so if there’s one thing that the military teaches you is humility and having humble pie, like let’s see how this goes. Let’s see when we launch how the response will go. Obviously we’ll strive to do well and we do not want to disappoint our fellow service members.
00:27:16 Tim: This is something that, if anything we have the most dread about, like a service member saying, Hey, like you didn’t take care of us because that’s what we exist to do. In terms of the Marvel end game, I use that because over the past decade and really decades, our team collectively has a massive number of allies, whether it’s general officers, whether it’s people on the finance side, whether it is people we know on the enlisted side of people that serve.
00:27:43 Tim: We believe we are at a position now that we can rally all that support. You had mentioned a previous question around why hasn’t this been done before? It’s because it does take a fair bit of capital. It takes a fair bit of not just obviously dollars capital, but social capital. And we have not been afraid or hesitant to exhaust that because we just know this mission is worth it.
00:28:05 Tim: In terms of advice to service members, I say this a fair bit, but I still don’t think certain veterans understand that the veteran community is the most powerful community in the United States. And I say this as someone who is Taiwanese-American, who comes from Tallahassee. I have so many different identities, Stanford Law School, Stanford Business School, and someone from San Francisco.
00:28:27 Tim: But at the end of the day, the community that I have been able to connect with and that has helped me tremendously has been the Military Veteran ecosystem. And whether it’s mentors from the Vietnam War era, folks that are a few years ahead of me, whether it’s founders or VCs, they have always been so generous with their time. And we hope that VetraFi can unify all those guidance, assistance, wisdom, and help people financially because oftentimes for service members, a lot of the stress comes from employment, education, and obviously can they earn?
00:29:00 Tim: I’m not sure if I answered your question, but it would be that veterans leverage your veteran network. Don’t shy away from it.
00:29:06 Scott: One of the slides that I always ask for and I’m sure that you do as well when you wear your venture hat is, any market size, when you point at it from a distance looks large. And the slide of top down, TAM, potential market size of 1.6 million, 2 million, 18 million service members. And then the subsequent slide, which I always ask and drill into, which is the bottoms up. How do you actually go after early customer acquisition?
00:29:33 Scott: Because from a TAM standpoint, of course, everything looks enormous, but billions of dollars potentially available to build a large company. As you think about go-to-market and as you think about where the rubber hits the road, those storefronts in every small town in America where you have an 18-year-old walking in to enlist. How do you think of bottoms up customer acquisition? What is the brand ethos? What is your vision toward being present in those locations where as a service member enlists and walks in, they feel the identity and they feel the authenticity that I think shines through in every conversation I’ve ever had with you.
00:30:10 Scott: And this is something that speaks to culture because I love the line that “culture is what happens when you leave the room and you’re only as powerful as the culture that you create as a leader.” Part of your background in both West Point, running platoons, building all the organizations. How do you think about culture and how do you think about that bottoms up customer acquisition of creating the right culture and creating the right brand that speaks to that 18-year-old that’s walking in there that doesn’t know yet that they need VetraFi? How are you developing that at VetraFi?
00:30:43 Tim: Three points. First is on culture and brand ethos. This is not about me. VetraFi is not about me. Sure, I’m going to help get it started and running, but this is about the team. This is about serving our community and helping people earn more and being a thoughtful financial fitness team leader.
00:31:00 Tim: Second is this is a perfect time to be asking about CAC, customer acquisition cost and lifetime value because over the past 30 days, we really drilled down on our spreadsheets and thinking about is this a $30 CAC? Is it $75 CAC? Is it $150 CAC? What’s the lifetime value of a customer for a secured card versus an unsecured card?
00:31:19 Tim: I’m not saying this because you’re an investor, but we feel so good about the underlying economics and making this work. And obviously to make this work for any business, it is whether or not you can have a thoughtful customer acquisition cost. How we plan to go about this is threefold. One is a ground campaign. So obviously we use most great references all the time at VetraFi.
00:31:40 Tim: And our ground campaign is doing events around bases and right off the bases. Just there’s certain laws about what you can do on or off bases. The interesting thing is over the past five years, we’ve really honed that exercise or that muscle around events. We know how to do events. We do an event once a month across the nation, different cities of veterans.
00:32:01 Tim: Now we’re just going to do them near bases and with current serving folks. So it’s a very logical transition. That muscle’s already been exercised. And so it’s being where service members are. There’s more to follow around the type of events we’re doing, but we’re very excited about the brand identity we’re going to have with those. It’s going to be fun. There’s going to be fitness involved, physical fitness.
00:32:22 Tim: There’s going to be maybe some like football, wrestling, some activities, so on and so forth. The second one is the online campaign or the air campaign as we like to say it. And that is speaking authentically digitally across the military. That’s leveraging people in the military. There’s a whole genre and number of fantastic military veterans and current service members who are influencers.
00:32:46 Tim: We know those folks, we connect with those folks, and we know that USAID doesn’t. They’ve forgotten about this group. And so between our own content we’ll create, our own content marketing, and our partners, we feel good about this. And then the third unlock is the recruiters. And so we have a good game plan. I want to keep it close to the chest in terms of how we’ll be leveraging recruiters, but obviously banking and financial products are very sticky.
00:33:13 Tim: When they come in, recruits come in, they need to provide a bank account. Not everyone has a bank account. And so we are developing ways and have tactics, as I say in the military, tactics, techniques, and procedures to be there when they need a bank account. And then there’s another chance we can grab people.
00:33:31 Tim: Obviously it’s in the military when they’re in the military, but there’s also a funnel when they transition out. And over time, we’re going to think about thoughtful ways to engage with them as they transition out.
00:33:41 Scott: It probably is something that you’ve learned at West Point and would love to hear the nuts and bolts of the things we talk about a lot, even in pre-seed investing is being, not needing to know the future, not having predictions, but being prepared in your conversation about CAC and modeling out all these different components. It’s not about predicting every nuance of the business, but it is about being prepared.
00:34:04 Scott: What are some of the things, very tactical things that you learned, whether it’s putting your boots at your bedside or first thing in the morning, you’re ready to go. What are some of those techniques that I guess you’ve developed and habits that you’ve developed over the course of your military career that enable you to be prepared like this?
00:34:23 Scott: Not necessarily being able to scout the future, but when we push founders to have an operating model, have a financial model, oftentimes they eye roll and look at us like, I can’t predict the future. I don’t know how I go from 0 to 10 million in ARR. We say, look, it’s not about predicting the future, but it is about being prepared and about knowing every little nuance of your business and having thought through the sensitivities, having thought through the inputs.
00:34:49 Scott: So maybe if there’s anything tactical in your background that you’ve learned over the course of your 20 years of service that’s kind of enabled you to have that mentality.
00:34:58 Tim: I think you have to have the core fundamentals right to fully even start the model. This is the qualitative aspect. Are you in a good health mind space? Can you wake up, whether it’s five, six, seven, eight, to just go wake up and you’re ready to get to work. Taking care of your health is making sure you have enough sleep. I call it brain juice. There are certain times of the day where my brain juice is so potent that you are not going to take that away from me.
00:35:22 Tim: I just need to make sure that I am like putting it to the highest ROI possible. And then it’s obviously like family and social connections. You need that to be in a good spot too. And then there’s the finance aspect of it. And the finance aspect, it obviously ties into VetraFi, but it is about making sure that you have runway. You have runway as a person, you have runway as a business.
00:35:44 Tim: And before we jumped into the conversation, Scott, I was like, we have runway. And when you know you can live, you just have to know baseline. Are you going to live? Then you can start to take certain chances. You have to live in a very scrappy way. You have to live in a way that it’s the army mentality.
00:36:00 Tim: You hope for the best, but you plan for the worst. I’m not going to assume. I don’t want to talk about legacy. I just want to talk about us launching products. You and I have talked about VetraFi for over a year and a half, and I am even more energized, but I’m also increasingly feel this weight of responsibility because we have investors, we have customers we can’t disappoint. We have a community that we really want to bring value to.
00:36:22 Tim: But in order to even do that, we have to be alive. And so we always need to make sure we’re thoughtful about our spend. And whether that’s a personal side or on the business side. And I think it’s just being very scrappy and it’s something that you learn in the military. It’s something that you can sometimes forget, but it’s something that founders definitely need to embody.
00:36:44 Scott: I was having this conversation with another portfolio founder a week ago about these three levers of running a business. You’ve got debt, you’ve got equity, and you’ve got revenue. And you’re basically running toward the cardinal rule number one of a startup, which is don’t run out of money. And tinkering with these three different levers to run the business.
00:37:02 Scott: And obviously, the way that you guys have established the company and the way you’ve been able to fundraise around the vision and the story and the backgrounds and the community that you’re enlisting around VetraFi. We’re really excited to be a very, very small player on the cap table and support what you’re doing.
00:37:19 Scott: I wanted to jump to our little speed round, a lightning round. You’re obviously a prolific reader. You’ve got five or six books that you’ve pulled up and shown me today. What is a book that you’re reading currently or a podcast you’re enjoying that you’re gleaning a lot of insights out of?
00:37:34 Tim: So there’s three books that I’m reading right now. This is my second time reading it, Banking as a Service. It’s everything you want to know about neobanks inside and out, the past, the history. Jason Mikula, he writes a newsletter. It’s a good one. This one I’m rereading and actually want our 15-year-old to read, but he’s only read parts of it and it’s the Psychology of Money by Morgan Housel. It’s a classic just about how to think about money.
00:37:57 Tim: And the third one is with My Military History ROTC. So I’m an instructor and it’s a book about conflict, about conflict since World War II. And it’s a good one. I love reading, but I will say one of my favorite all time history books is I, Claudius by Robert Graves. He was a World War I veteran. He also wrote, I believe, Goodbye to All That. An incredible writer. He also wrote Claudius the God.
00:38:21 Scott: Amazing. I’ve got to put some of those on my Kindle. or my physical book library like you. If you could live anywhere in the world, other than San Francisco, Tallahassee, and the various other places that you’ve lived around the globe, what would be your number one, maybe just as a fun place to spend some time?
00:38:38 Tim: I’m a big fan of Hawaii. There’s a lot of military bases in Hawaii. There’s so much military history in Hawaii. So when we took the kids to Hawaii, it was obviously seeing the USS Arizona, the USS Missouri, the Pearl Harbor Museum, which is by the USS Arizona. And then the environment, the people. People say sometimes I look Hawaiian. So Hawaii is a great place.
00:39:02 Scott: You’ve got that really chill surfer vibe. For an activity hack, I’m sure you’ve got a hundred of these, but I feel like you’re a good person to look to for somebody who’s done an immense amount in a very short amount of time.
00:39:13 Tim: Time is so precious. One of the reasons I went to Pocket was there was like a media productivity app that lets you save content for later. One is, I mentioned brain juice. Just be very cognizant of when you are in peak mental state and safeguard that time to do thinking. I’m a firm believer in do, do, do, but there’s also that great Warren Buffett quote, which is make time for thinking.
00:39:37 Tim: And every now and then I’m like, man, I just need to reserve more time to think and process. The other one is I’m a big fan of walk and talks. It’s so easy to be sedentary. It’s so easy to just be in front of a screen. But if we have to do a good meeting and one that’s like this nuance and we need to catch up, let’s walk and talk. Let’s get cardio and oxygen in our head and let’s get some steps in because it’s very hard to find time to work out.
00:39:58 Tim: And always have a water bottle by and hydrate. Hydration is clutch. And then the last thing I would say is naps. I believe one day I’ll write an essay called “sleeping my way to success” because it’s a joke. If you’re not in peak cognitive mode, almost for certain meetings that are so important, almost don’t show up. You need to bring your full self. And so there are certain times between like two o’clock to four o’clock where I’m like, man, I feel like I’m 60% of myself and I should be at a hundred percent. That 20 minute nap, I feel like I get a second charge. So those are some ideas.
00:40:34 Scott: I love that. And finally, where can listeners find you online?
00:40:38 Tim: I’m definitely on LinkedIn and I try to go to events when possible. And if you’re a veteran, definitely connect. Not just because I’m self-serving and I want to talk about VetraFi, but no, I want you to reach your full potential and you’ve served our country. And I think veterans have so much untapped potential but I’m heavily on LinkedIn.
00:40:58 Scott: With Veterans Day coming up a week or so from now, what is one way that folks can participate or get engaged or express their gratitude for those millions of members across the country that have served and are currently serving?
00:41:13 Tim: First is thank you to the American people. We have a great military because of our great economy, because of our great people. The military is only as strong as the people it draws from itself. So we are Americans. Sometimes I feel there’s too much of a conception that it’s the military and civilians, know that the military is an extension of the civilian demographic.
00:41:34 Tim: The next is veterans are folks who are hardworking and want a chance. And so if you get a chance to work with a veteran in any capacity, give them a shot because they’re willing to put in the work. And the last thing is just really grateful to be part of the veteran community and really grateful for all the opportunities America has provided me.
00:41:56 Scott: Tim, thank you so much for being with us today for all the work that you’re doing with VetraFi. We’re super excited to be a small part of the journey and thanks for being on the podcast.
00:42:05 Tim: Thank you, Scott.
00:42:07 Scott: 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 pre-seed 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.