Blake Hall - Combat, Service, and Innovation - [Invest Like the Best, EP.408]

0:00 I know firsthand how complex the tech stack is for asset management firms. And seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount, and more risk. Ridge line offers a better way forward, one unified platform that automates away the complexity across portfolio accounting. Reconciliation, reporting, trading, compliance, and more, all at scale. Ridge line is revolutionizing investment management, helping ambitious firms scale faster.

0:25 Operate smarter and stay ahead of the curve. See what Ridgeline can unlock for your firm. Schedule a demo at ridgeline.ai. Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at joincolosis.com.

1:00 Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Some. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Positive Sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc.

1:29 My guest today is Blake Hall. Blake is the co-founder and CEO of IDme, a secure digital identity network with over 100 million members. He was an officer in the United States Army and served our country for four years as a rifle platoon leader, battalion reconnaissance platoon leader. And as a battalion logistics officer. We explore his formative years in the military and transition into entrepreneurship.

1:50 Blake shares powerful stories from his time. Leading scout sniper missions in Iraq. including how his unit achieved a ninety percent success rate in high stakes operations through relentless preparation and learning. He shared the origin and evolution of ID Me, a company dedicated to verifying digital identities to combat fraud and simplify login experiences. We discussed the role of identity in the modern economy.

2:13 Frameworks for building company culture. and evaluating executive talent. I am ridiculously inspired by Blake, and I'm so grateful for him and all the Americans who serve this country. Please enjoy this discussion with the awesome Blake Hall. Blake, I was wondering where to begin our conversation.

2:29 Based on prior ones that we've had. And one place that is really interesting for me and I've always been fascinated by is your experience in the military. And specifically the experiences you've had that have taught you lessons that you think would be pretty impossible to learn. Had you not had The experiences you had.

2:46 in the armed forces. And so maybe you can tell us a little bit about A sketch of what you did. And then I want to spend some time on some of the formative stories that have shaped your worldview that maybe wouldn't have been shaped that way had you not had those experiences. Thanks, Patrick. I think you're always foreign by your childhood first and I grew up around amazing people in my life. My grandfather was a war hero in World War Two.

3:08 But in Landed at Anzio as a seventeen year old Browning automatic rifleman. Standing guard in the Rhine when Germany surrenders won a bronze star with Valor for crawling out in front of three German machine gun nests as he was splicing a line that allowed the Ford Observer to call in artillery that beat back a Nazi counter attack that was about to wipe out his battalion, which today would probably be a different metal, but was a bronze star with Valor and World War Two. And then my dad served for thirty years, West Point graduate.

3:34 was brigade commander. And so I think The lens. I grew up in was really about purpose and around service, like a full appreciation of America that what we enjoy in this country is quite rare in terms of our freedom. Those freedoms are supported by the bravery of young men and women who are willing to sacrifice everything at Omaha Beach and

3:55 Iwo Jima and Okinawa. And so for me, I didn't actually want to go into the military, but I felt I needed to. in order to serve and learned a lot of lessons along the way that we can talk about, but really grateful for that upbringing because I think it gave me a context and appreciation for what we enjoy as far as our way of life that I might not have had if I'd grown up in a different way. And what was the brief timeline of your personal experience in the armed forces? What did you do, where were you paint the picture for us? I went through RTC at Vanderbilt University in Nashville, Tennessee. And in two thousand, it was peacetime. It was just a way to pay for school.

4:30 And then nine eleven happened and overnight. I realized that when I graduated in two thousand and four, I was going to go to war. And I figured if you're gonna go to war you might as well play with the varsity. So I resolved I wanted to be an army ranger and my mom's from Queens. So I grow up my grandfather on my mom's side had driven me around the city and showed me the twin towers and the Chrysler building and everything as a kid. So

4:53 It was super personal to me, as I'm sure it was to a lot of Americans, and I wanted to defend the country after we had been attacked. In that way, I commissioned, I went past airborne school, so to be a paratrooper, ranger school. Had a rifle platoon for five months. Then was selected to be The scout sniper platoon leader, which is the most senior platoon leader position in an infantry battalion.

5:16 Ultimately we deploy to Iraq from two thousand six to two thousand seven. So I fought in Mosul, every neighborhood in Baghdad, Karbala, outskirts of Fallujah and Lake Tartar. So got the full tour. And our mission over there, right before we went into combat in Mosul We had some three letter agencies come in and say, Listen, forget everything that you guys have learned about reconnaissance and precision engagement. You're just going to be running kill capture missions against senior Al Qaeda leadership.

5:43 And we're gonna give you some equipment and some intelligence assets to help you do that. And the next like fifteen months. That's all that we did was run down mostly Al Qaeda vehicle bomb networks. I was twenty three years old at the time. And so it was quite a lot of responsibility. Can you describe maybe Anecdote sounds like the wrong word.

6:00 like a story within the story of that fifteen months that pops most immediately to mind. Uh Zoom it in on a specific episode just to understand what you were doing. I think leadership starts with caring.

6:13 I remember when I got to Mosul and I still to this day I'm just terrified of letting my friends down. And so when you I had thirty two scouts and snipers, I'd met their wives and their parents and their kids and If you make a wrong decision in combat. You could lose like a fourth of your platoon, just like bam, your suicide belt, just gone. And so the first thing I did actually is I got to Mosul and I went up on top of a hill and I got down on my knees before God and I said, There's a verse from Isaiah that says, No weapon formed against me shall prosper. And so I claim that promise for my men and God it was just amazing to us over the next fifteen months.

6:48 But the mission set my first firefight was in a neighborhood called Tareer. And as we were going through it's a northeast Mosul, it's I think the same mosque that was there where Baghdadi made himself the caliph of ISIS of the Islamic State. And we had a high value target in the neighborhood. And as I'm getting my guys out of the trucks, we're in these strikers or twenty-ton vehicle. They have eight wheels, they could do about fifty-five miles an hour. So it's I think to a layman, it's almost like a lightweight tank with a fifty caliber machine gun on top. And it's got The sound signature.

7:19 F one fifty is great. Pretty quiet. And as I'm getting out the three letter agency attachment is like, Hey, sir, he's like be careful. This commander is marked as extremely hostile and dangerous and I was like, What Al Qaeda Commander is not? Extremely

7:33 Like anything else, as see as you get a little cocky. I was in a courtyard talking to some of the folks and then Just had

7:42 A K rounds like hit right over my head. The cinder block was 'Cause the rounds were that close. to where I was at and we were immediately into a firefight. That was my first firefight. I'd thought a lot about Will I be brave when it counts? And will I care more about the team and my job than about myself? And so

8:01 We basically it was these three Al Qaeda fighters that were shooting at us. I put my snipers up in Overwatch. I got the team aligned. I was running through an alley as we were getting shot at. felt like my heart was literally beating out of my chest. It's really hard to describe just how loud combat is and the adrenaline. But we were maybe five or six minutes into the firefight before I realized that it wasn't a training exercise. There was just so much

8:23 muscle memory that is drilled into you through repetition, that I was like, Oh wow. This is a two way range. And we were just deploying so we ended up assaulting that house, taking it down. That was like the first firefight. A couple of days later, we were just driving down a street. I was with the outgoing platoon name was Duke Reim. He was like orienting me to Mosul.

8:42 And as we're going, we saw this utility pull. You could see the line going to the asphalt and it was clear that the asphalt had been altered. And it felt like slow motion. I was trying to toggle my mic to call back to the truck behind us to go. Break right ID.

8:59 And before I could toggle it, just Boom, black smoke. It was a pipe bomb, it actually breached the hull of the striker, this armored vehicle. shrapnel went into the compartment where the driver was sitting in the front. But he just miraculously between his body armor and the back.

9:15 And this display that kind of wrapped around his head and neck. All the shrapnel hit that instead of him. But that was like day two in the firefight. was just a few days later and I just remembered being like That's the first week I've got

9:29 We didn't know we were gonna go stand it. I was like I've got fifty one more in front of me. At that moment in my life. It's amazing to have this conversation because I was just so focused on what was right in front of me to keep my men alive and

9:41 Hopefully myself too. But that's maybe an introduction to first week in Mosul. I wanna come back to you said something there which reminds me of what you're building now, which is The fact that you got extended from twelve months, I think, to fifteen months. And I'm putting a pin in that because that's gonna become a relevant detail when we talk about the origins of the business in a little bit. I'm curious in that stretch of time, what did you learn about yourself that you didn't know? Prior.

10:04 I think the thing you can't know is just if you're gonna be brave. Everyone's scared. when you're over in combat, you're not normal if you're not scared. But character is about Pushing all that down and doing the right thing.

10:16 For the men that you lead. When the chips are down. And honestly, every firefight is different. For me Just in terms of becoming a man and as a rite of passage.

10:25 Will I be able to do my job when it counts? And you just don't know that until you're shot at. And it changes over time. The military's done a lot of research now to show that over the course of your deployment at like month six or seven. You go into God phase that you've survived enough of combat. that you actually will take extreme risk.

10:44 And when we hit That time, Mark, when we were down in Baghdad, we got into firefights where other captains would come out with us. And ride and I'd be walking around, my snipers would be walking around laughing, pointing, shooting. And they were like, You guys are just absolutely insane.

10:59 But then as you get closer to coming home You start almost like sports, you're playing like not to lose. And so it's really interesting is you take the most casualties. at the beginning of your deployment when you don't have a lot of context. about what the enemy's doing, but also at the end when you're playing not to lose, it's actually in the middle. When I get back.

11:19 As I was about to come home, I would think about what I'd done in the middle of my deployment, and my hands would shake because I was just, Oh my God. So there's like these Overarching learnings about are you gonna be brave enough to put the team and your brothers before yourself? But also there's It's not even the same. There's these other contextual things that influence groups. And I think as a leader, you have to understand those team dynamics too, because the whole point of leadership is to be inversely correlated with the context.

11:46 When the team's playing not to lose, you have to counter that with extreme aggression in terms of the mindset to offset because you know where the team's headed. When they're overly sort of risk taking You need to try to mitigate risk and pull it back.

11:59 But the other thing was it was similar to entrepreneurship. We were given a novel problem set. And so I had a team We had a mission But we had never practiced for using signal intelligence and different techniques to basically be a SWAT team.

12:14 That was new. And so A lot of it was just the scientific method of having a certain way of doing things and then codifying learning. So when we would come back, we would say what worked really well that we should keep.

12:27 What didn't work so well. And over time that led to a lot of specialization. And so maybe the arc in terms of performance, if you can codify learning and feedback loops. The average success rate for these kill capture missions was like 44%, I think, give or take. And in the first three months, we were In the twentieth percentiles, which is to say that we sucked. But around month three we hit

12:49 average and then we caught the head of the Mujahidee Insur Council for Mosul. Which is this clearinghouse of nationalist and extremist Islamist groups. And we caught the spiritual leader of Northern Iraq for Al Qaeda. So we were designated The kill capture force of choice for Northern Iraq. By Colonel Townsend, who's went on to become a four star general, but by the end

13:11 Our success rate was over ninety percent. And I think by summetrics was like leading the theater. In terms of our efficiency. So there's a lot. That was my first real job. I had a lawnmowing business and like life guarding, but that was my first real job. What did you do to drive From average to ninety percent. As the leader.

13:28 I was relentless in preparation. I had an amazing team. Where There was a lot of prior selection that had gone into it. So in recon, you get to pick whoever you want. So

13:39 I had already. screen my team for certain skills to make sure that I had a good group around me. But the platoon leader's responsible for the maneuver and for getting the folks to the right place at the right time and orienting them to target. So

13:53 I spent basically all of my free time studying these terrorist cells, their pattern what was called pattern of life. Where they would be on a Tuesday for lunch. What their tendencies were. And it's just like anything else. Humans get lazy and they get complacent and If you're willing to put in the time, you could really get a feel for how this person

14:13 operated and where they were likely to make a mistake. It was that and then just I think the biggest difference between Mediocre leaders and great leaders is great leaders plan for contingencies. So before we even went on a mission, we would plan for all the things that might happen. So when it did happen

14:30 we knew what to do. I think relentless preparation and learning is just so important because it both inoculates you against risk proactively, but then if you do find yourself in a position where everyone's like you're in fight or flight, the adrenaline's going. It's really difficult to communicate and tell everyone exactly what you want to do. The more that you've rehearsed that and prepared for it. the better you're going to be able to execute when it counts. And the military really drilled that into me. And I've carried that particular lesson with me throughout my life. I'm curious'cause you've earned the answer to this next question more than most people that I've ever met. In addition to that idea of preparation

15:06 What are your other most deeply held beliefs about leadership and what makes for great leadership, both from earned lessons yourself, but also from the leaders that you worked with for around. You have to be credible. That's the most important thing you have to be credible, you have to care. So

15:22 When I went through ranger school, there was a moment You go through three phases. Benning phase, mountain phase, Florida phase. I had this just Miserable experience in mountain phase. It was wintertime. So it was it was freezing. I got a little bit of poison ivy right at the end of Benning phase. And I like beg the medic to give me some steroids because I'm just super allergic to it. Didn't give me steroids. Poison ivy spreads all over my body. They see that, then they finally give me the steroids. That weakens my immune system. I get bronchitis. And

15:49 You're carrying these seventy five and eighty pound rucks a mountain and mountain phase. And I could barely breathe. I would see like starbursts of color as we crested a ridge because I just couldn't get enough oxygen. So I was still so proud completing mountain phase just as a personal achievement, I think was where I had to dig deepest in terms of grid. And it got to the point. you jump into Florida phase and we're jumping into the final phase of Ranger School. the doors are opening. And I just remember I got to this point where I didn't care if my parachute opened or not because I was that miserable. I just had poison ivy everywhere. I felt terrible. I went at a hundred and ninety five pounds. I graduated at one hundred and sixty two. So just starting.

16:30 And I just remembered, I don't care if it opens or not. But I also realized I would die before I quit. And that's the purpose of that school. And what it means to have a ranger tab is it separates people who are just psychologically Really

16:45 Tough and resilient. And as a social signal to the men that you lead and to everyone who sees it. It is an indicator that you have grit. And so I think as far as what gives you the right to lead, you have to put yourself Through a crucible

17:00 Where you can prove to yourself and to your team that you're worthy to lead that tribe. And so I'm super grateful to Ranger School. For providing that. That to me. The other part After the sort of grit part is that

17:14 The leader has to be the most skilled at whatever it is they do. And When I showed up and talked to my man, I said, Listen. I might not be the fastest. I might not be the best shooter. I might not be the best at combatives. But I'll be damned if I'm not top five and everything. And so

17:30 You just have to be really good. At what you do across the board. And it's like sports. The team captain isn't necessarily the best player on the team, but they're one of the best players. And so I think that combination of Red.

17:43 And skill really matters. The hard part now about being a founder is If you're fortunate enough to scale, you take on more and more. Scope. And the skills you need to be effective, and so you need to be a relentless learner. But I think at the core

17:57 If you care about people If you have the grit yourself, where you'll put in whatever hours it takes, you'll never give up. And then you are curious and you're capable of learning the skill that you need. You gotta do all three and you gotta do it. In an excellent fashion if you want to keep up with what is required.

18:15 to lead a team and to be an effective leader in Iraq. Where the stakes were My man's life. There wasn't anything I wasn't willing to do. To prepare myself for that. And I think those habits that were so deeply set.

18:28 From when I was a young man in my early twenties, have carried through to today. Is there an episode of Leadership From someone In your orbit. During your time.

18:37 overseas that most exemplifies Leadership to you that you saw Some other leader perform? Yeah. My buddy Phil Schneider is my worst day in Iraq. We were in a neighborhood called Dora, which the LA Times referred to as Al Qaeda's Alamo.

18:53 in Baghdad and we were thirteen months into combat. We took more casualties in two weeks in that neighborhood, like a three by five kilometer box than we take it in the thirteen months. was literally hell. There were standing sewage because Al Qaeda didn't care about the locals. They'd put in so many bombs into the sewer system. That The sewage was just spilled out. It was a Sunni neighborhood. You had a Shia Iraqi army.

19:15 military unit that would snipe at people as they went out for groceries. And things then little kids would shut grenades at us. If there's hell on earth, it's probably Dora. And so the reason that Al Qaeda would put these roadside bombs into the sewer system is The kind of law of explosives is that

19:30 the force travels the path of least resistance. So if you have concrete, on two sides and underneath, but the road is dirt. It's a natural charge that directs upwards into the bottom of a vehicle. So there's two elements to this. One was when I saw that was happening, they would put five hundred pound berry bombs underneath that would literally saw a striker in half, like these twenty ton vehicles. From Front to back.

19:55 Just rip it completely in half to give you an idea of the force. And so when I saw this during the surge, I wasn't getting a lot of sleep. The first thing I did is I went to the operations center. I said, Give me the infrastructure plans for all the sewage system in Baghdad. And I went out to the truck with my radio telephone operator. And you have a graphic overlay of the streets, and we sit out there till three in the morning, even though our next mission was like at six thirty, just Until I had the final thing done. And once I had mapped it, I pushed it out to all the other trucks in our unit. And I said for us.

20:24 We are never gonna drive on these roads. Ever if we can avoid it. And if we do avoid it, you guys are both going to the rooftops. You're gonna cut every single wire down to the street. Phil was unfortunate enough he went across an intersection that had one of these five hundred pound bombs underneath it. And my platoon was the first one to respond to that scene and it was devastating, as you might imagine. He was just severely concussed.

20:47 But was just relentless in terms of Providing aid to his guys. getting'em into the tracks and gonna get emotional about it, so I'm sorry. But we raced a few of the guys who were critically wounded to the green zone to the combat sport hospital that was there. And Phil was just unbelievable. When we finally when his men were taken care of, he was so concussed, he was puking and he knew that he was about to just pass out and he just grabbed me by the lapels and he said, Blake, my guys, take care.

21:14 Of my guys. And that for me is just that's what it is, right there. His men love him for it that when the chips are down You care more about other people than yourself and his like will, even though he was physically Really banged up.

21:28 Got him through it and I think man. America is super lucky to have leaders like Phil Sneider. He was decorated for heroism for what he did that day. I have a question which is a hard question to ask and maybe an impossible one to answer, but I'm asking it because I want the way I think of you is like you've gone a level up and the way that you started ID me was to serve this community in a deep and real way. And we'll Tell that story in a minute. But this is also abstract for us that haven't been in service, certainly not in Such incredible harm's way.

21:55 I'm just curious to help people understand the people that are doing this for us, the nature of taking life. Or seeing life taken amongst your friends. As the ultimate Steaks. And try to help people understand those stakes because I'm sure the answer is there's no way of understanding it unless you go through it yourself. But this is the ultimate sacrifice that so many

22:17 people put themselves in this kind of harm's way. Do you have a closing thought on just the nature of that life of living that experience that people can understand why this group is so critical to support. Yeah, I'll try to do Justice to it because I lost some wonderful friends who were just amazing people that gave their lives for this country. Richard Enke's

22:37 My interpreter Roy, who died with the platoon that followed us, Garrett Slaughter, Ryan Denison. Just wonderful people. And If you serve this country, it's because you believe that People have a right to live free. Life, liberty, and the pursuit of happiness. That's the core of what we enjoy, but it is protected at great cost. And you want to protect

22:58 The weak and the vulnerable who are being oppressed. truly oppressed in terms of values and what they are allowed to say or do And the way that manifests. We would have there was an Iraqi woman, she was Sunni and her husband was Shia, and as the sectarian violence was going. Some of the Al Qaeda militants who'd moved into this neighborhood called Amaria, they liked his car and they just pulled him out of his car.

23:21 A block away from his house, shot him in the head. And then just had his silver Mercedes. that they would then drive around and she had to like basically look at her husband's murderers every day and so she She took her three kids. And she walked down this super dangerous road to the Baghdad International Airport for maybe seven or eight kilometers with like a three and a five year old.

23:42 And she just showed up and she said I want justice. Now we let her down. The legal system let her down. Everything checked out. We caught the guys she talked about, found a lot of evidence. They were tied to Al Qaeda. The car was there. We lost the war in our prisons. Why you serve is for that woman. And that If you believe

23:59 human rights are universal and what America has is special, then it is worth Defending. And therefore, politicians have a sacred responsibility to make sure that our military is used judiciously. And to protect our way of life because The men that I just talked about who gave their life, they were just exceptional men who could have had amazing lives, could have had families and

24:21 accomplished great things in industry and they sacrificed everything for all of us. And you can't help but be moved by that. By you if you go to Army Navy and you watch the cadets and the midshipmen who are literally willing to give their life to protect our way of life. It's the most noble thing. that you'll see and in

24:41 I believe firmly that humans are meant to live free. And to be a part of a group whose very like nature is to be selfless. Is an incredible thing and it's an incredible thing to be around. I think a lot of Americans are jaded. If you spend some time around our military and folks who put the whole country in our way of life above themselves, you won't help. But be inspired and start to feel patriotic about why America is so special.

25:06 In the world. I'm so grateful for this first thirty minutes and you sharing all this. It's an incredible incredible story. I and we all listening, I'm sure, are so grateful for what you and your team and everyone else Like you did and does. I think it's the perfect bridge.

25:21 To set up why you started the business that you're now leading originally. Yeah, I want to harken back to that twelve versus fifteen months. And the sort of the benefits that were supposedly accessible to the people for those extra three months that they deployed, but how hard those are for our veterans to get. And that kind of original intention and nature of your idea for this business. So maybe you can bridge that story for us. And tell us.

25:44 What you did originally. when starting ID me, why you did it and who you originally served. The closing chapter in Iraq, which was the last thing that we did, was we were asked to target a vehicle bomb network that had set off, I think, at least seventeen vehicle bombs in Baghdad. It killed thousands of people. And the British SAS had been targeting them, had not been successful for various reasons. And asked us to help. And over the next two weeks, actually after I think it was like 10 days, we caught nine of the top ten and the entire level of hierarchy underneath it, it was gone. The last thing I did.

26:15 in Iraq was I stood in front of my thirty two guys. All of whom came home, thank God. to their families, which I'm grateful for every day. And I said two things. I was like pretty sure we all know a rock the story of a rocket, it probably isn't gonna turn out. The best.

26:29 But I was like, but for what we were asked to do. The math is pretty simple. This Network kill thousands of people. And if it continued, it would have killed thousands of people more. It doesn't exist anymore.

26:40 Intel folks come in and said we've never seen a network taken down this fast ever. And I was like, you'll never see the faces of the people that you say from the car bombs that didn't go off. But man, what an amazing thing to tell your grandkids about that you made a real difference here. And an impact. For those people.

26:56 And you go from that And I didn't believe America's and the strategy was making the world better. because we're just creating these power vacuums and everything else. And I didn't want to be a part of Taking life. We're risking life.

27:09 If I didn't feel like We had a strategy and a specific And That made sense. And so I didn't feel I could continue to serve in the military because there wasn't a strategy. But man, I missed the purpose that I felt. You don't have to question the meaning of your life when

27:25 You're trying to get to a terrorist in a phone before a car bomb goes off in a market full of innocent civilians. So Went from that scene And got into Harvard business school'cause my battalion commander refused to write me a letter of recommendation unless I applied to Harvard. I was like, sir, I was like, I haven't used a three syllable word in the last year. I don't think I'm ready to write an essay.

27:48 For Harvard. He's like, you're gonna play Harper, or I'm not gonna write a letter of recommendation. So all of a sudden I'm in Cambridge, Massachusetts. I'm twenty six years old. The biggest decision is like where to go on Friday to have a beer with my friends. I just couldn't shake it because I've seen I'd been exposed to so much, and I just knew that life is short. You don't have a lot of time. None of us know how much time we have. War had just infused Lightning into my bones. Every time you get one of these kill capture alerts, it's just a flood of adrenaline. So in some ways, it makes you an addict. And so I realized, oh my gosh, like I've basically been turned into an addict by this 15 months of like really high intensity. Tempo, I want to make an impact. And what combat taught me is that

28:30 You can't take anything with you. So material stuff, like who cares? What matters is making a positive impact on someone else's life and looking for that sense of purpose. I started to see stats around there was so much goodwill trying to to get the military suffer from identity theft at rates that were nearly twice as high as the general population. And I can walk you through the story, but that ultimately became the thing that I gravitated towards because I felt it was a worthy mission.

28:57 to solve with my life and that if something happened to me that if God forbid I were to die. I would do it. Trying to accomplish something that mattered. And not being

29:08 A cog and the wheel of a consulting firm or in banking that's just making capitalism work a little bit more efficiently. And so I think just the nature of risk was quite different. I thought risk was going into an organization where I didn't believe in the mission. I felt like I was wasting my life. I didn't really care about the financial side nearly as much because how could you after coming out Of combat. And so I'm super grateful for that. It was very schizophrenic to go from a time in your life where you're like seventy years old, maybe a normal time, your friends are dying, you're contemplating your own mortality. Most of us will get there later. I kind of had already been there and then felt like a time traveler coming back.

29:45 And it really just shifted my whole mindset. And it's why I started I D Me because I felt like it was a worthy mission to improve people's lives. I didn't know it would grow to become a multi billion dollar company like it is today. I just wanted to help The military community that I came from to start. But that's the bridge for how I got from the military to running this technology company.

30:06 Can you tell us the story of the earliest days and the very first things that you did and for whom and why you cared about those specific things at the start? That's grown into this big thing. First thing I just wanna be honest there I like I had no idea what I was doing. All I knew is I spent a summer at McKinsey. And the McKinsey people were wonderful. Built a business model, the first phone call of this telecom company, they say seventeen million dollars. And I went home that night.

30:30 And I was like, I don't care. It didn't move the needle. At all. So a few things happened. I saw that there was this need for a better solution for the military community. I started to dig into that. I Naively did this as an academic project, my second year at business school. I said, let's incorporate.

30:48 I'll solve this problem. It'll be easy and then I'll be on with my life. Literally looking back, you couldn't have known what it means to run and start a company and to make sure that it is built to last. And so a few things happened. One, this is more the luck part of it. My brother insisted on investing twenty thousand dollars. And I love my older brother. He's just like the hardest working guy. He works his tail off. And I actually begged him not to. I said, Please do not invest money, Russ. No. And he insisted on it. And I was like, Do you know what this is gonna do to my stress levels? I I've been a lifeguard and I've gotten shot at and I've mowed some lawns. Don't do this. He said something to me.

31:25 He said, You've never failed in anything you've done in your life. No. Yeah. I was like, that's so messed up, man. But he insisted on doing it. So he invested a twenty thousand dollar check into me. David Tish was one of our first checks in.

31:39 He ended up becoming really impactful. So he's uh Box Group, one of the best angel investors in the country, and then was first managing director of Techstars New York. And what David Tisch did that I really am grateful for is I was talking more about business development and relationships. And he pointed me to this book, Steve Blank, Four Steps of the Epiphany. He said, You really need to read this book to understand how to build a company. And it's wonderful. It's basically like the scientific method for how you build a company stage by stage. And he introduced me To Some other folks and one of my classmates invested eighty thousand dollars in me. What was pretty crazy is even like a year into it, as I was raising

32:14 Our angel round where we put together I don't know, roughly a million dollars in a convertible note. I would continually have investors that listen to the pitch and they would say, I'm gonna invest and I'm gonna invest like fifty K or 75 K. And they would Thematically tell me two things. They're like, I don't think Because the initial name of Idem U is Troopswap. They said, I don't think that this business model is going to be successful, but then they would say, I believe in you. So I'm writing the check.

32:39 And then they'd be like, by the way, here's a picture of my daughter. This is her college phone. And it's like a baby. It's like what is that? Completely wild started this whole thing. And so tell us what was that pitch? What were you pitching then with TroopSwap that

32:54 BK. I've just been fascinated by how big companies start. And All the big companies actually start in a pretty focused way. So Facebook started

33:04 Just for the Ivy leagues first, and then students then grew up Dan Rose, who's on your show, talked a lot about that. That the only student, and at some point they like open it up to everybody, and I think their users increase by four or five X. Uber started with affluent riders and black car drivers, right? Very Pinterest started with Midwestern moms. Paradoxically, to get big, you have to focus small. And so I thought there was a void in the market around Craigslist in terms of trust. And because military families move so much that you could have

33:32 gated community of maybe military and then students. And that would actually be a way to disrupt the sort of peer to peer classified and like marketplace space. And so a few things happen. I was giving this pitch, USAA and military.com loved it, but then I called them back and they're like, Yeah, fast for us is like two to three years. To give it a pallet?

33:50 So that sucked. And I was like I'm not It got to a low point in twenty eleven where Kelly Purdue, who's David Tish introduced us, was our first board member. I was like, Kelly, I was like, I don't know if this is gonna work. And he said, Blake, and look, that takes a lot for somebody who's been through ranger school or whatever to be on the verge of I do not quit at anything in my life.

34:07 So he said Blake first, never say that to anybody ever again. Especially to investors. And he said, chin up. We're gonna get through this. Which I'm super grateful, your best friends in life. are super positive when the chips are down and there for you. And maybe when your head's getting too big, they're pulling you back down to earth to ground you. And Kelly's been that for me. So basically had this learning which was we couldn't get enough distribution to get the buyer and seller part going, but we were also spending three fourths of our time on identity. On actually making sure that somebody signing up was in fact a member of the military community. As we talk to different marketers from various firms like

34:44 Microsoft and Under Armour, they said, We're not really interested in your app or some gated garden for whatever, like you don't have enough users to have it be meaningful. But your ability to actually know if someone is a part of a particular community. Is really important and valuable, we would use that within our own channels. And so a few things happen. I saw that on Veterans Day, veterans to get like a free blooming onion at the outback were taking in their paperwork that has their social security number on it. And they would show this

35:17 And no wonder identity theft is twice as high. You're showing your social to strangers all over the place. And then I talked to this. Marketing manager at Microsoft. And they were delivering e learning vouchers to veterans in person and making them bring their paperwork in. And I said, doesn't The in person redemption defeat the entire point of e learning and she said, Yeah, we know it sucks.

35:37 But we don't have a way to know on our website if somebody is a part of the military community. So we're not able to keep it safe. And because we're not able to keep it safe, we can find distribution to brick and mortar channels. And I said, And if you had a way to keep it safe, she said we would bring it online. And then these different retailers said, by the way, it's not just military. Pretty much every segment. It's students, it's teachers, it's first responders, it's social influencers, it's beauticians. And that was the aha moment where I said, Wow. It's not an app, it's a utility. It's like what PayPal was for the early days the Internet with payments.

36:11 that we could be this identity utility. And if we're spending three fourths of our time on identity and login trying to build an app, if we could build this utility, then all these other developers that might want to create experiences based on trust. could just use us and then build on top of that. And that's actually the right thing to do. So There were some key moments in terms of how we did the pivot that I could talk about, but like that was the learning. I have one question going back to something you said earlier.

36:38 around the book that David gave you the four steps to the epiphany of the Steve Blank book. Is there anything from that book that you looking back on that time find to be the most valuable that other people out there should think about? Yeah, so the four steps just really quick. So maybe I can give you the the clip notes. The first one is Just pure scientific method, form a hypothesis that there's a problem.

36:59 worth solving and what that is. And then the way that you validate the hypothesis is that people are willing to pay you For the solution to solve it. And so Until you've done that, you don't earn the right to even figure out if you got a scalable company. So this constant iteration, this is what most founders struggle with. Am I even working on a problem that matters? You could convince yourself that your baby's not ugly and like every day, but the only way to really validate the problem is meaningful and your solution is the right one is to get people to pay you. And then Jeff Moore has written all this other literature around what part of the market to target. So the first two steps are I have a hypothesis about a problem and my solution for it.

37:35 And then step two is I validated it because somebody paid me to solve it for them. Now once you've passed step two, it's four steps, the epiphany. Step three is. How much revenue do I get from that customer? when they pay me and for how long, and then how much does it cost me to acquire them. And those are your unit economics. You can see companies that skip the stage from two to three. This is living social. Raised a billion here in the DC market, went to zero. Because if you violate the four steps of the Epiphany, if your unit economics are upside down, you're just gonna set money on fire.

38:06 Groupon pivots from daily deals to e commerce takes a haircut from twenty billion to five, but survives and is still around today. because you can't violate the steps. And then if your unit economics are good, step four is really culture and it's the Jim College good to great, great team, great retention, focus, alignment, all the things that help you capture hopefully a disproportional share of the market. And so what's really amazing is you can't skip stages. This is why you raise a ton of money from investors in Silicon Valley. Congratulations. You just ratcheted up expectations and if you don't fundamentally know you're sort of

38:43 ideal customer profile and whether you have product market fit or not, you can get really perverse incentives where folks try to move the revenue line up, even though the underlying unit economics are toxic. Yeah, the genetics of the business are bad and therefore screwed. I'm starting to wonder then about if we zoom all the way to today. If you can give us sort of an overview on the topic and the importance of identity. This is something that I met you through Mickey at Rivet, and Mickey and I are having this long, fascinating discussion about the role that identity has played and will play as a sort of like primitive for millions of workflows and products and actions that we take as humans. And it was something I really hadn't thought all that much about.

39:24 take it for granted that like you prove you're you in a variety of different ways and some are janky and terrible and some are whatever, but I never really thought about it too much. Could you give us the sort of overview as you see it on the role and importance of identity as a function in the modern economy? Identity is how you make life safer and easier and Here's why it matters. So In April, the government accountability office released a report on on fraud. In federal spending. This is just federal benefits at the federal level, does not include federal dollars, the state or tribal level. They estimated that the government loses two hundred and thirty three billion to five hundred and twenty one.

40:01 billion dollars. Per year. Two Oh. To put this in context.

40:07 Total aid to Ukraine is sixty five point nine billion dollars. The US defense budget is$824 billion. So if you take about half, it's about half the defense budget lost every year to fraud, just federal dollars at the federal level. It's two percent of GDP. An aircraft carrier cost thirtien dollars. So that's The magnitude of what we're losing right now when we have extraordinary debt of over thirty trillion dollars and interest payments.

40:34 And so It makes ransomware look almost insignificant by comparison. We played a pretty central role in stopping fraud. During the pandemic. So there's seven states on record that have credited us with stopping$270 billion worth of fraud. And let me zoom in on the impact that we had. We went into Arizona in October of twenty twenty. When we went in there, this is six months into the pandemic, Arizona had five hundred and seventy thousand four hundred new weekly unemployment claims in a state where there's only seven million people, including kids. And these state agencies would tell us we know it's fraud not because we have any advanced tooling, but because the bots are filing the claim end to end in less than sixty seconds.

41:13 Because all that you need is a name, date of birth, social, you could pinky swear that you're a Lyft driver and you could start collecting Six hundred dollars per week. The week after we were introduced, it went down to six thousand seven hundred claims per week. And so then Michael Weishard is the director over there. of Arizona D E S said hey Blake. He said, Listen.

41:32 We processed about two hundred and sixty five thousand claimants that we're paying on a weekly basis. And He's like I feel it. It's my job to make sure that we're not paying these out to organized crime and overseas groups. So we're gonna run those six months worth of claimants back through y'all in December. I said, Okay. So when they did that, of the two hundred and sixty five thousand, how many

41:53 Do you think even tried to verify their identity? Oh God, I don't know, some crazy number. Ninety two thousand. Two thirds. Did you even try? We were able to successfully authenticate, I think about eighty-six, eighty-seven thousand of the ninety-two, which is our job. And then other service channels handle the rest. We were immediately hit with four denial of service attacks out of West Africa. We had there's something called the DNS query, which is yellow pages lookup. It maps out your infrastructure.

42:19 So we had two point two billion queries from IP addresses around the world. And then we saw hundreds of millions of Yandex IPs, which is Russia's internet service provider. I've never seen anything like it before in my life. What's really devastating is that Every name data birth social that these criminal groups for using that's a real person. If they need help. If the bad guy beat you to your own identity, you're done.

42:42 The government agencies weren't able to tell who was friend and who was foe. So California shut down for two weeks at the same time. We enabled them to reopen. And so on and on. Then the fraud, it moved to Florida with the bot attacks in January. It moved to New York in like March. And that's ultimately why twenty seven state unemployment agencies adopted us in fifteen to eighteen months. Now the crazy thing was I actually hadn't built it for fraud initially. It was more for customer experience to put people in control to help homeless veterans, international veterans get access to VA. Cause when I left the military, you had to go into the VA in person to prove your identity. But now that the pandemic's ended, this next evolution is deepfakes. Where in twenty twenty two, right before You know, AI has three phases, like the LLMs and text, then the media with face and voice, and you've got like Sam Altman and Scarlett Johansson going back and forth about stuff. The Nigerian print scams are like at a whole different level. So in 2022, we had about 180,000 logins across our wallet that we saw were targeted by scammers for account takeover.

43:41 The same ninety day window in twenty twenty three, it went up to one point three million. Holy cow. And so the net of all this To your original question, which is like, why is identity so critical? What I learned in Iraq, what General McChrystal taught us is that it takes a network to fight a network. If you have an inherently decentralized enemy that is learning and asymmetric and amorphous against a centralized foe. The decentralized insurgency is just gonna crush you. And so the only way to respond is to do what General McChrystal did is empower the edge.

44:08 Give local autonomy. redesign the organization to flood everyone with real time intelligence. So now your network of good guys Can respond in real time And that's tough to do as a general. It's why he's so remarkable. He's he said we need to get the captains and lieutenants and sergeants the tools and push the decision making to them because we're really fighting a network.

44:29 And this is a network. And so As a shared service, we are the network of good guys effectively that are able to see patterns that other folks can't. So, for example, We're over at the treasury and then we're over at These unemployment agencies, we were able to see 50,000 identities that have been used for unemployment went over to apply for business.

44:49 owner aid for owners of transportation companies. Get into like login or are you just contextually, you can't be unemployed and own a transportation business at the same time. But the thing is that signal as far as What's going on with the same identity at different levels of government? That hadn't existed before. And so you appreciate this is why we're losing hundreds of billions of dollars a year is that we're getting picked off like one by one.

45:13 Where the attackers are just going to the most vulnerable agency. And unless you have authentication as a shared service. To normalize and standardise trust. It's blockbuster versus Netflix, it's data centers versus G C P or AWS. You need to have standardization. And consistent security

45:31 and feedback loops if you were going to withstand the assault of organized crime. And we ended up helping NBC News break the story that APT forty one, which is China's economic warfare arm, was involved with directly attacking individual Americans. to steal their unemployment benefits. And I've shared some videos now on LinkedIn as well of some of these deepfakes where these Chinese threat groups are targeting individual citizens to try to steal their tax refunds and did fraud the treasuries. So the net of it is We're losing hundreds of billions of dollars a year.

46:02 Those dollars also represent hundreds of thousands to millions of victims. And the money is flowing In many cases overseas. It's a national security issue. And then the other side is people hate managing logins and passwords. And if we can both make it safer and easier for people to interact online. That's become my life's work.

46:22 Can you describe the building blocks of Signing up to begin with to say me as a human being is like some like verification and authentication process. Those are different. How do you do that? What are the ways that I prove that I'm me? And I wanna a also ask about

46:37 the non ID me versions of this. I remember you tell me like a branded relationship with the customer like Apple might have or Google might have or Clear might have. So I wanna talk about the ecosystem and not just ID me, but the ecosystem of people that represent a way to prove your identity and get access to something or stop something. So what are the building blocks? How do you literally know a person is a person Walk us through that. Seems this really important thing for the future. Time is one of the most important

47:02 aspects of identity and not just for technology, just For relationships in general. Think about the first time that you met your best friend or your wife or whatever. What you knew about them then and What you know about them now.

47:14 So time and the frequenci of how often you interact with someone and like the quality of those interactions really informs your perception of their identity as it relates to you, and you have a lot more touch points. For time, you you might know, I'll trust this person with anything. And you might know if I ask this person to do something, I'm gonna prepare myself to be let down. And so what I learned in Iraq. Was a lot about how telecom networks work, and the thing about bad guys versus normal people is it bad guys do things

47:44 that you can see in math related to time that make them stand out. So You're probably not doing sim swaps and changing your phone as it to different devices and porting your phone number that often. You probably change your phone every two to three years. You've likely had the same phone number for over 10 years now. And so that tenure when it comes to identity really matters. If we can look at records and see, oh, Patrick's phone number has been tied to Patrick. Since he was at Notre Dame. And then you prove possession of that phone number, and we can see that the phone number hasn't been ported because we can check with that's really good. That'd be if some bad guy was like setting us up.

48:20 And like from college. It then was like the bad guy like you know iris I started seeding this phone number in college and now I'm like fifty five and I'm gonna the long con Yeah. These guys aren't playing the long game and so What's really interesting is Most folks have a phone number with tenure. Now it's not for everybody.

48:41 You'll get to eighty five to ninety percent will have a long relationship. And then you'll be expats coming back to the country. Low income communities tend to switch their phone numbers more often because they're using prepaid devices instead of subscription and maybe avoiding collections calls. So it's not perfect, but just on that one signal alone, you can go, Well If you did have a phone number for twenty years and showed possession, we're pretty confident right away that's Patrick. So the basic premise is There's a big theme in security right now about moving away from passwords. And this is also why you want a shared service to do it. How long is it gonna take each company to figure out how to do Passkeys, which is just a fancy name for touch ID or face ID on your device, that why can't we use things that are really convenient on our phones and our computers to be able to securely prove

49:27 That we're the owner of the login credential, it's going to take time. Whereas if it's more of a SaaS approach where it's already just baked in as capability, if you use a shared service for login, that one capability as we deliver it through our RD is instantly available to thousands of different organizations, that's a much more efficient way where they just have to Say, yeah, please turn that on. Or we turn it on and cool. Thanks. So that's log and security. identity t can take many different forms'cause you've got your legal identity, which is where we've focused on Proving that you're you.

49:59 But then you also have different personas. One out of five doctors in the country uses us to prescribe narcotics and other controlled substances. And that It's not sufficient for you to be Patrick or me to be Blake. We have to go out to different databases that are sources of truth for medical professionals. And so this is where I start to geek out because What you want to do is you have to be like what's the source of truth for whether or not You're a medical provider. To be the federal

50:25 DEA number, health and human services is a national provider identifier, and then state medical licenses are issued at the state level. For military, it's obviously D O D, VA, and then maybe not intuitively, the National Archives is actually the repository of military records down in St. Louis. And this is what we call the trust graph, which is maybe this isn't just for like everybody, it's only for tax professionals or lawyers or for doctors or for HR staff at social security uploading W twos and W threes. So you have to figure out What's the source of truth for that claim?

50:59 If you said I went to Notre Dame How would I know that? we can actually go back to the registrar at Notre Dame with your permission, and we could find a record in the registrar's database that shows that you went there, your graduation date and your degree. So a lot of the connectivity you have to build is are connections into sources of truth as you say something. We can instantly go out and see if it's true. And so

51:23 Maybe the distillation of all this is that if you're like Everyone knows we're out at a bar. And if you s like walk up to a girl cold. You're fighting an uphill battle from the start. But if you for both of you,'cause she's like, Who are you? But if a mutual friend introduces you

51:38 And says, Oh my gosh, Patrick is amazing, and vice versa. Then all of a sudden you're in dude. An amazing conversation. That's effectively what we're doing. We're that trusted intermediary, kind of like visa between banks and merchants, but for a lot more ID cards to say, Hey, this person just said they're military. A merch's like, I don't know, but we're like, No, no, no, DOD, we're good. And now they can have a trusted interaction in a way where they're both better off while keeping bad guys who didn't serve or do Stolen Valor stuff out.

52:06 And I just think that's so amazing because when I came back. From combat, there was so much goodwill. I couldn't go out in Nashville in my uniform without people buying me lunch is incredible. Often I wouldn't even know who did it. That's the waiter or waitress come over and just be like, Hey, listen, someone picked up your bill. And to be able to provide infrastructure that allows that connection to happen. without humans in the lube. So you don't have to always interact in person like it's the nineteen fifties. and keeping the stolen valor out is just really, really cool.

52:34 We obviously won't have time to go into all the intricate ways that you've built this network, and I think the shorthand you provided is right. But would it be a convenient way for me to think about it that if I, Patrick, have an I D me wallet that there's some amount of work that goes into establishing that wallet and that wallet is related to me. And then there's some set of steps that I can deploy that wall to check in and Lots of different places and effectively create this layer of convenience. for me that instead of going to the VA with my documents to get my

53:03 extended. 15 month deployment benefit, I can just do it digitally and much faster. I know it's more complicated than that, but at its most simple, that's a convenient way for us. Listening to think about it. When I think about what I want my kids to say to me when they grow up is daddy Did you really have to manage different passwords and logins and every website to? And the same way that somebody who grew up before VSR MasterCard to be like, wait, you had to pay cash everywhere? That sounds terrible. So

53:30 In Europe this has already happened. There's bank ID in Sweden and the Nordics and Nell, our co founder is Estonian. And in the Nordics and Estonia, they don't have a different login for different websites. They have bank ID. The average suite uses it five times per day. It's the same login for healthcare, for government, for banking, for commerce, and you control your own. Data. So the log and security effectively is your wallet. And what we're creating is a digital twin to a physical wallet. The root of trust within your phys is your driver's license. It's your government issued photo ID. That's why government has been so important for us because a lot of the credentials that we carry, they're public. These medical licenses, the state license, they're all published on public portals. There's no notion of a breach. They were meant to be public. The hard part is knowing that you're you. If somebody's going into prescribe narcotics, is that really a doctor or

54:16 Is that somebody who's going to prescribe narcotics by the leader and contribute to the opioid crisis and everything else? So the more that we can just replicate what your physical wallet does in digital form. It makes your life safer because we have the root of trust that you're you and it makes it easier. because you're in control of your identity. And when you want to get access to something, you don't need to reprove who you are. And our first mantra of user experience is never make the same person do the same thing twice. Obviously everyone that's interested in investing

54:47 has done some amount of time studying Visa and MasterCard as these gold standard business models. There really aren't higher businesses than these things because the network effect associated with them is just so incredibly powerful and therefore their margins are crazy high. I've heard you describe what you're doing as like Visa and three D. In some dimension. Can you just describe the business lessons that you've learned from Visa and why you think the way that you're building ID me will s be such a good enduring business beyond just the service that it renders for its customers? So I love how markets developed. I'm such a nerd for that economics and American history or my double majors at Vanderbilt. So Take Henry Ford. Henry Ford

55:26 Maybe the most famous entrepreneur ever invents the assembly line, invents the automobile. And it is the model T and he's like, I did it. I did it. Everyone needs the model T. And what's remarkable is at phase two of the market is Alfred Sloane, the CEO of GM General Motors, comes along and goes, No, Henry. They don't all want a black model T. They want

55:46 Pick up trucks and mini vans. And they want different colors and GM just kicks four's ass for the next two decades. Like four doesn't catch up until War War Two. I think over and over you can see the one point oh version of a market is monolithic and then it just explodes and personalizes. So the same thing is true, like Facebook and Friendster in MySpace pretty monolithic, and then just look at what we have now. TikTok and X and Instagram and Snapchat and threads and all this other stuff where the market has personalized. And so the V1.0 of Digital wallets are payment wallets where PayPal and eBay, like the hardest thing, the most ubiquitous thing.

56:22 on the internet early on to enable commerce was to pay for stuff. And actually payments are interesting because most of identity is exclusive. It's not about ubiquity. The reason that you have military ID is to separate you from everyone who's not military or a student ID is everyone who's not a student. Credit cards kind of everyone needs payments. So it's an interesting It's the logical place the market would start. But then it just stopped. And so there's been all this, let's just make it easier for young people to pay and everything else. And like this very myopic view. I came in from outside the industry and said no When I think about my wallet and my identity Payments is just one part of it, and in fact.

56:58 If I'm out Buying something at a store. And the cashier says, Hey, can I please see some ID? They want to see my government ID. And when you realize that, you're like, okay, the root of trust is actually of my driver's license or my passport. That's what authenticates and gives trust.

57:13 to every other ID card in my wallet that has my name on it. Because they can compare my face to me. They can see that the credential looks legitimate and doesn't look to be counterfeit. And once they trust that I'm Blake. Well, now if I show a health insurance car that has my name on it, and this is why hotels collect your legal ID and your payment every time you go in, because the stakes are quite high. So from a first principle's point of view, I'm like

57:36 If the root of trust is our interaction with the government, if everyone in banking and healthcare said, we don't want to be in the credential issuance business, that's what the government does. So you just bring over a government ID, whether it's an ID car, like a driver's license or a passport, and then we'll help you open up a bank account. I was like, Well, that's how the market should work. that whoever builds a consumer centric digital wallet that is able to be accepted by the federal government and when you deal with the government, you're at the apex of risk and standards and incentive. Then you can go back to the private sector. And make it really easy for people to open up. I'll share a little bit more.

58:13 One story that's super meaningful to me. When we first started working with VA You had to go in person. When I got out of the military, then we brought it online. And the more that I looked into it, I realized you had to have a presence in basically credit records in order for you. to pass these federal standards, which I found deeply unfair for folks

58:31 that effectively like we've linked access to affluence. And so I went back to NIST and said, hey, you gotta rewrite these standard to give an exception flow to people who are homeless, who live overseas, like homeless veterans are super important to me, always have been. I want to serve the most vulnerable. One of the first gentlemen that we got through He was eighty one years old. He lives in a Tokyo. His wife had Alzheimer's, and he hadn't been able to get access to his VA benefits in years because there's no VA facility near him and he can't travel. And at the end of this video chat session, which was this exception pathway that we had, he began to cry. It was just the most touching thing ever. And so now We've had over ten million Americans go through that process. the security and the inclusion gains that we drove in the public sector

59:14 as a shared service now Anywhere where the IDB button's at, if it shows up at a bank or a fintech or a patient portal. He would be locked out because most of those organizations use data brokers that are only focused on domestic folks and don't cover a lot of low income. Folks. He would now be able to seamlessly prove his identity, just to making his life safer and easier than what it was before. And

59:35 When I think about what we get to do as a team, one, we get to protect people, which is like my core drives why I was a soldier, but we also get to give them time back. So Visa and 3D means once your core identity enables more access to financial services and healthcare, that's the next phase. But that will be done. We've already issued sixty five million of these portable identities. On top of that, maybe your Netflix subscription and think about setting up an Apple TV or a Roku box, how long it takes you to authenticate to every single streaming subscriber. We could just turn that into API calls. Once we know that you're you, you could just tell us your subscriptions. If we could just fire off and say, Hey, Netflix, Hulu, ABC, NBC, Paramount, whatever, is this person a subscriber? Yep, cool. Bound, authorized, out, done. Checking in at Vegas just as a tactical example to close this out. Was always like a happy hour. It'd be like an hour long wait. And All your friends are there waiting for you. And it's just so demoralizing when you're behind this long line. And we went to them.

1:00:32 Several years ago, and we said, Hey Why don't we make this work more like airline boarding passes where you can just do it on your phone, the human agents, the bottleneck, clearly it doesn't scale as you're turning over these huge hotels at five o'clock. Every day. And today millions of guests use IDM to check into MGM and to win properties, and we save them an average of 15 minutes of their life. Which is incredible. Sometimes when you look at the time savings of the access gains we drive for federal agencies.

1:00:59 Or like what it means to do authentication before somebody might interact with a different system, we're saving on an annual basis hundreds of years of life. The people And Waiting. And I think with my single life, that's really motivating in terms of

1:01:16 giving people time back to spend it in a way that is much higher quality than standing in line at a DMV or at a hotel. And instead they could be with their family and friends. There was another source of inspiration which I found really interesting, which was Disney and how they think about authentication. What did you learn from Disney? So Usually

1:01:33 If you're just curious about the world, you can go find examples of folks who've already solved the problem that you're working on, but maybe in a more local way. So what Disney did is really ahead of their time. If you're going into the park, you would authenticate with a biometric with your fingerprint in the magic band. If you're authenticating to the web app, you'd start with the password because that's what most people were familiar with. And then If you were on a mobile device and using their native mobile app, you would use whatever is on your phone with like touch ID or face ID. And so I think in many ways, Disney already figured out what's the most convenient way for you to open up your digital wallet. Based on channel.

1:02:09 If you extend that to the call center, you'd be like, what would be the the most convenient way, the safest and easiest way for you to authenticate? And so the natural things you use when you're calling someone is your voice and a device and a phone number. So the more that you can make that be the way that we recognize Patrick. Now, once that's done securely, then there's a host of other things related to it. It could be you've got tickets to the park. You might have a fast lane pass, you might have All these other things. And so When I saw what Disney had done, I said, All you really have to do is just

1:02:41 make this accessible to everyone, democratize it through a network. And if we can build the same capabilities to allow for These really fluid in person and online and call center experiences, then everyone will benefit. Even if you don't have the R and D budget of a Disney, even if you're like a little app developer. that's like just getting going, has dreams of competing with the Giants, but doesn't necessarily have the budget to make your login and identity experience on par. So I looked at Disney. I looked at

1:03:12 Amazon is another one of amazing data about feedback loops. And the problem is that the newer upstars don't have that data. But if people begin to take their own data with them and they're starting to populate profiles of their tastes and their preferences, And if an app developer is willing or is able to have somebody give them consent to access some part of their identity graph that you could actually create a level playing field. You mentioned the attacks that you suffered when you came between the international bot armies and their pot of gold. What have been the ways that more legitimate entities have tried to kill you?

1:03:49 Who do you threaten? That isn't like a illegal attacker, but is like a incumbent US company or something like that. And what's that been like? Had both sides. I mean, I had Russian callers calling me up during the pandemic and telling me where I I lived, where my kids went to school. We had private security on the house one Christmas, where I had former Marines that were

1:04:08 Around it. So I've gotten a lot of death threats as we've cut off. Fraud. And for me, whatever, I don't care. It's my family that I care about. The most. I think on the corporate side.

1:04:18 We're disrupting these data brokers and We went through an episode in 2022, just a couple of years ago, where these data brokers basically created a lot of misinformation and FUD. And I just had no idea how the media worked and how this whole dark arts work thing where lobbyists pull the wool over staff size and get them to write a letter and get principals to sign it. The media covers the letter. They don't even care what's true. They won't even come to you to be like, is this accurate? They just cover the letter.

1:04:45 And then it's the Mark Twain quote that like a lie gets twice around the world. Before the truth has time to lace up its boots. What happened to us on the way up. Phil Knight talks about that in his book, Shoe Dog, where once the incumbents don't have a product or a business model response, they start to come after you to tarnish the new technology is unsafe. Yeah, it's a fascinating experience. I'm sure you told me last time we talked about this that you're a rang and you can get ambushed once, but not twice. So what does that make you think about the future about like part of this building an enormous business necessarily bumps into lots of other entities that are self interested. So I'm curious about what you think about credit bureaus, the role that they play in all of this, or other groups of entities like this that you may end up displacing and improving upon for the end customer. How do you think about that as part of your job that

1:05:35 It's not just this idealistic like we're gonna build something really nice and everyone's gonna be happy. Not everything is positive. Some you're taking share from somebody else in some way. How do you think about that as part of your job as a leader? Love that question because that is a job of a leader. The job of a leader is to basically from first principles look at a team and be like, hey, You're fine, but the scope creep you're doing way too many things. You need to focus You do best. And so that's how I think about credit bureaus play a really important role in the economy in terms of figuring out your credit worthiness.

1:06:07 And whether or not what's the probability you're gonna pay a loan back based on your reputation. But should they be the gatekeepers of identity? Heck no. That doesn't make any sense. That's why you can literally look at who has a fine time with credit bureaus, higher income people who has a tough time. Why? Because They're underbanked, they're unbanked. And so why would you want to make those vendors the gatekeepers for identity? And so When I'm like how would you really

1:06:30 design it if you were to do it from just pretend that nothing exists. And you'd say. Identity naturally comes from health care and from government. Your identity life cycle begins in a hospital where you're born, you get a birth certificate, and then the birth certificate is sent off and the social security administration issues you a social security number. But so when you literally just back up to cradle to grave, what happens cradle, you would go, your financial life cycle doesn't really begin until you're, I don't know, seventeen to nineteen years old. So as an entrepreneur, I said, All right, credit bureaus are for credit underwriting, which is an overlay. The real identity should come from the government and from healthcare. And that's the right place to start. And that's going to take time because you're like building this new way of doing things while the existing world continues to putter along, just like Visa and MasterCard didn't get rid of cash payments overnight. They just gradually shifted the mix, but

1:07:18 I really suck to my guns on that. My running joke with the treasury was I've stopped measuring the sales cycle in terms of weeks and months, but instead by the number of children I bothered And all the board meetings, you can imagine, they were like, Blake, should you do banking or maybe you should go into this other thing and it's all give on a lot of things, but not on this. Your identity needs to come from the government. What role do clear Apple, Google other huge players like that play in this whole identity story to you.

1:07:49 Yeah, I think it just depends on for what. So if you want to turn your mobile phone into a wallet. Great. And so you'll see a lot of what Google and Apple are doing with transit cards and maybe your driver's license or your passport on your phone to get through a TSA checkpoint. Now you'll see that in some places.

1:08:07 That's all well and good. Because in person the attack surface is inherently limited. Attackers in China obviously can't show up en masse in the Dallas Airport. And deep fakes. There is no concept of deep fakes in person. You can clearly see if somebody's got a mask or something on or some sort of disguise. So if you just wanted to replicate exactly what a physical wallet does in its analog form, cool. And that's where a lot of the innovation's been going.

1:08:33 The problem is really risk. When you start to put things online Where now the attack surface is global. So this notion of a physical wallet was designed For inherently local use. It just moves where you move. But now when you go online, you can literally go anywhere. Like an attacker in China can come attack American systems. You need a lot more capability. And so the limitation

1:08:54 Of the hardware manufacturers approach, they have basically said, we're not going to be able to see anywhere the ID is used and there's no tracking, and they'll put it underneath privacy. And I would say for physical interactions that are localized and for use cases where the risk is morality, maybe adult websites or kids in social media. All good. Science I'd great. But when you look at financial risk, the way the market operates is quite different. Your bank can actually see everywhere that you transact. And for some reason as a society we've decided

1:09:24 That's okay. Well, why? Because credit card fraud is a real issue. And we've actually decided that if it looks like your Visa card has the potential to be everywhere that you want to be, but if it actually starts to fly around, Your bank can see that and go, Hey Time out.

1:09:38 Let me go talk to Patrick, make sure this is legitimate. And there's consumer protection. So if you go, Oh my God, no, it's compromised. That's not me. In a client side model, when you start to deal with financial risk where the phone manufacturer can't see it. Imagine this. Imagine there's

1:09:53 A sixty five year old woman, she's somebody's grandmother, she's about to retire. She's been scammed by one of these LLM enabled. AI scams that is Really sophisticated.

1:10:04 her four one K balance goes to zero. And now this attacker out of probably Lagos and Nigeria. Isn't taunting her that he's ruined her life. And she goes. I need help.

1:10:16 The reason banks can see that is banks can help. The reason that IDM can see that is IDB can help. We can provide recourse to the victim. We can also go back to the government agency and go, here's the audit trail of what we saw. This woman was not involved with any of this stuff, or to the four one K provider in this case and say, This is what happened. And now there's feedback loops. There's learning about what happened. For some reason People are losing their minds when it comes to digital identity that there are just different forms of risk and what's

1:10:43 Good. changes based on that risk. If you say it's decentralized, you can't see it, what you've actually said is there is no recourse for victims, there is no audit trail for the government, and if these really terrible things happen, you're on your own. Which I think is unacceptable. So we actually think it's both. It doesn't have to be this monolithic trade-off if you actually know what you're solving for.

1:11:06 Then if the attack surface is global and the risk is financial, you have to have a centralized entity like a major bank or a credit card network. that can see things to provide feedback loops and protection. to both customers and users. You start to deal with things where the risk is different than I'll bet her off. But that's how I think about The approach which is

1:11:28 It's good. It's also limited in terms of what it'll allow you to do when it comes to online transactions. If you think about the let's say five year hence future to give it, not Infinite time, but decent chunk of years. What's your dream for the state of ID me and what it's doing for people on that? Time horizon. Yeah, in five years I wouldn't want there to be

1:11:49 logins that you would have to create at every single website you would go to. The same way that when you open up your laptop and you're just able to open up Word and you're able to open up Adobe and all these other systems, I think you should be able to open up Coinbase or Chase or Social Security or IRS's apps. And the then the flip side of that is As we are able to label and tag more content, we're able to help people navigate really difficult life events like disaster relief in LA right now. What's really interesting is every use case around Like this is what is needed to access it. Like you gotta be a doctor for prescription app or

1:12:23 You have to be in a disaster zone for FEMA aid and everything else. There's gonna be some access policies that we need to know about in order to make sure that you're you and that we've established trust the right level. But also, how do we help you find out about those programs when you don't know about them? And this is actually the other part of the story when I was first starting. There was about seven hundred and fifty million dollars of combat pay that had been approved by Congress to soldiers who were stop loss and voluntarily extended. Congress approved it like two more years, and at the end of it, about a quarter of a billion dollars went unclaimed because government just couldn't get the word out. All these service members had to do is fill out a form. And they would get five thousand dollars for it was crazy. And a quarter billion dollars of combat payment expires. So the same thing is likely happening right now in LA. There's all these programs and things that can help, but if you're displaced, you're trying to get your dog or your cat and just figure out a hotel room, you don't have time to research FEMA or nonprofits and figure out what's going on. And so we have this amazing ability that if we're doing it right, that whether it's disaster relief, taxes, retirement, Graduating from college

1:13:26 buying a house for the first time, we can help provide a curated view of here's all of the government and nonprofit and private sector offerings that are relevant to you. And when you want to get access to it, there's the IDB button. waiting so that you don't have to create a log and fill out forms and waste hours of your life, or maybe even have to go in person if they use a vendor that doesn't cover you because you live overseas. If in five years we can be everywhere that you want to be to borrow a line from Visa for online use cases and we're helping connect people to relevant financial programs and benefits that matter faster than

1:14:02 What an amazing impact and legacy to leave on the world. I would love to know how you decided what your business model would be and what you've learned about designing a business model alongside a valuable product because In your case, when you've got this network that's growing and it's the surface area of the network is so big, and there's lots of different stakeholders. You've told stories already today about how government's a beneficiary, how consumers are beneficiaries, how companies might be beneficiaries, how banks and other intermediaries might benefit from the use of this network. So there's lots of ways that I could imagine you making money. by doing your job and having your product be in market. And you've chosen a subset of those or one of those. How did you do that? What are your principles that others might borrow for okay, I've got a good idea that's valuable. It's valuable to lots of people. I'm not really sure who should pay an.

1:14:47 How did you get to that answer? And maybe just describe it a little bit for everyone. Yeah, I think maybe I'll start with philosophy and then I'll go into like how I did it Friday typically to separate the two. I think philosophically, I just don't believe in charging customers for anything unless I've created value that demonstrably makes them better off. So I never wanted my incentives at odds with my customer and I view that if someone buys our software, I want that person to get promoted. And if somebody uses our software, I want their life to be better for I to me having been a part of it.

1:15:16 That's where I'm coming from. Which just goes back to service and purpose, which are core drives for me and for a lot of folks who are Built that way. Now I saw two things. When I saw that basically Visa and PayPal were the V one point oh of this market, I looked at how their business model was designed. Visa doesn't sell data, Visa sells trust and convenience. You decide if your money moved to a merchant when you want to pay. And what Visa did is they basically has a business model that adjusts to risk and value. The amount, the financial dollar of the transaction is the value, and then risk is well is card present or is it not present? Is it online? And then

1:15:51 Grocery, jewelry, very complicated business model. that they've unpacked. On a more ground truth note, we were using a credit bureau, I won't say who back in this was like twenty fifteen time frame and just for records validation. So just if we try to find a name, date of birth, social address in records, could we find it? And these credit bureaus will charge you transactionally. So every time that you query their API, you have to pay money. How does that manifest in practice? I saw There were two veterans, one was in his sixties, the other one was in his seventies. One had just recently moved, the other one had credit, even as an older person just never had credit. These two folks tried

1:16:28 Fifty to seventy times each To prove their identity. It looks really cheap. It's like twenty five cents an API call or depending on what you're calling. It could be 10 cents an API call. But then you have to play it through in terms of I can only imagine how frustrated those two veterans were with us at that moment, but then they're not done. They still haven't gotten access. So they either give up,

1:16:46 Which is the worst thing, or they have to go to the call center. probably a credit bureau waiting for them too that also doesn't have coverage and then they have to go in person. by the time they get in person, just think about how you would feel. So that's awful. And what I realize is that for worse data coverage, they actually made more money. If they had the data coverage, it would have passed on the first attempt. But when they didn't cover somebody and that person tried

1:17:08 To just repeatedly attempt multiple times. You might end up paying tens of times, so fifty times twenty five cents. And I was like, you know what, that's just such a perverse business model where you actually make more profit and revenue for having a deficient product. I resolved, I said, I'm never gonna have a business model that is misaligned with the incentives of this B2C ecosystem that we serve, that I'm only gonna charge. A government customer when we successfully authenticate somebody and get them access. And that actually makes sense for the user so that if we're not able to get somebody through who's not fraudulent.

1:17:44 we suffer as a business and rightly so. Now all of our incentives are aligned in harmony with who we serve. I think it's value and alignment with stakeholders. And once you commit to it, those are some of the things from a values basis as a founder that I really enforce as sacred that we'll never violate. It's core to our DNA and who we are. You said something to me about the business, which I found so interesting, which is that you don't want diversity of values at IDM. I want to ask a couple of questions about just the principles and the culture in that step four of the Steve Blank book and how you've thought about philosophically deploying those things. Maybe start with that one as an example. And then riff on the other principles that you've established, like the one for business model there in building the business and the power of those principles. And if you don't screen for it, you're in for a tough ride. So I think E Pluribus Unum.

1:18:30 out of many one. This is the whole premise of America that what our country's struggling with right now The Everyone is welcome as long as you are committed to the fundamental American values of freedom. That you can criticize any religion, you can burn any book.

1:18:45 And you will not be met with violence. People might have problems with that just like I'll have a problem if you burn the American flag. But the fact that you can do that and not be harmed shows that you live in a free country. So when you let people in who fundamentally reject the premise of your country. Your culture begins to suffer. Our country is suffering for that right now because we haven't been intentional about it. The same thing is true with the company. So right now

1:19:05 whole country is struggling with this battle really between enlightenment values and postmodernism. And if you let that conflict into your company, it's like a wagon that has two hands pulling On the wheel. Is it merit or is it something else? What are we really focused on driving? For me, what I loved about the military, what I loved about growing up, what I loved about fairness and what my dad told me. three rules that his grandfather had given to him. And one of them was never think that you're better than the men that you lead. And that we come from different backgrounds, we come from different places, from different experiences, but we're all army green. And your job is to treat everyone fairly according to the same standard. And that's what I loved about service that if you listen to my guys talk to each other, part of you would be like, Oh my God. But the other part would be like, these guys would all take a bullet for each other. They're brothers. And so true intimacy is being able to be open, not malicious.

1:19:57 To love each other, joke and have a good time and not have folks throwing Yellow cards'cause you said something Just ridiculous. So if you want to move fast. You don't want ideological tension. I'm really deliberate about that. We published some value statements about our commitment to

1:20:13 Really classic liberalism, everyone is equal before the law. It's not good or okay. to be racist in any direction. And just like you would want your kids elementary school teacher to treat everybody, not giving preference, but teaching kids about character and you're responsible for what you do. And that's all that matters. crazy to me that that's even a question, but it's therefore even more important that you screen that out.

1:20:35 at the beginning, once you move past ideology, you're looking for I basically design or cultural values around All the patterns that I'd seen across my time in the military about what makes for effective teams. So you can imagine selection as a triangle where one point of the triangle skills One point uh the triangles capability just raw sort of intellectual potential

1:20:57 The other one is your behaviors and habits. And you can hear this echo too Caristotle. We are what we do, excellence, therefore, is not an act, but a habit. FBI profilers. The best predictor of future behavior is past behavior. We defined our cultural values First rule is don't be a jerk. And what we mean by that specifically is if you are not emotionally self regulated, if you can't control your fight or flight response, you're not welcome here. Because ultimately that's when we

1:21:23 do things that are really mean and cruel is when we go into fight or flight. And actually there's a lot of research too that shows that really good CEOs when Rangers for that matter are able to move out of fight or flight very quickly. This briefing after ranger school from a Delta Force recruiter who showed us the cortisol profile of a ranger graduate versus general public. And he's like, here's the the profile of somebody who's exposed like a life and death traumatic event. And it's three or four days before it goes back to normal. Here's the profile of Ranger School graduates. And it was like a thirty to forty five minute rebound effect that after near life a death, you and I could be talking like this and it's fine. So anyway. So there's that. There's always compete, which is great. We don't hire pessimists here. We love critical thinkers, but we want optimists who can believe in a contrarian. Point of view, if they have first principles conviction, I think you want to be really intentional about that to make sure that as you scale, you don't end up sideways. And you need only look at Paul Graham.

1:22:12 The whole Google Gemini thing was going on where you want an image of George Washington and God forbid show an actual historically accurate picture. Of George Washington, that's a great example of if you emphasize things other than truth and merit. And excellence, you end up with pretty bizarre outcomes. I've been pretty ruthless about enforcing culture because I know what it is to be in an intimate Close team.

1:22:37 Where everyone's treated fairly as an individual. Don't care about anything else other than performance. And I want that for everyone who works here. It's a wonderful environment. It's what I loved about the military and what I'm really passionate about enforcing here at ID Me as well. What were the two other things that your grandfather told your dad? Yeah, so his other rule was

1:22:55 If you have a choice of unit to go to the one with the worst reputation, so that when you leave you can see the difference that good leadership makes. And then he had one that was quite specific to his experience, but He said, never let your name be associated with S four, which is supply and logistics. He had fought his way up through Anzio into the Alps and it was wintertime and everyone in the Alps on the front lines, they all had frostbite or frostnip of some form, and he got pulled on a detail to go all the way back. to headquarters.

1:23:24 for something that they needed to do. And so he's in the back of this truck. And as they got further and further back, he started to see jackets and gloves and fur line parkas until they're back at headquarters. Everyone's got the latest, greatest cold weather gear, and there's Peter's and stuff. And meanwhile, he and his brothers who are in the Alps on the front lines have none of that. So I think there's a more general lesson there to be extrapolated, which is leaders eat last, always serve those who you're responsible for, who are at the tip of the spear before you take care of yourself. And that's more again back to caring and selflessness, but

1:23:56 Those were the three rules that he gave to my dad after his experiences sixty six months in combat. I love it. On the topic of performance, you turned me on to something I hadn't heard of before, which is this stratum. concept behind levels of leadership. Can you explain what that is and how you found it useful? Our brains hear the same words, but it interprets it into different meanings.

1:24:16 So maybe the easiest example would be like if you asked Thomas Jefferson or your average high school student about what's the purpose of education, you would get two very different answers. Jefferson's gonna be talking to you about how an enlightened citizenry is indispensable for the proper functioning of a republic. The high school is probably talking to you about whether they should go to vocational school or whether they should get a bachelor's degree or join the military. It's very tactical. And so At root, what you're screening for is you're screening for linear versus conceptual thinkers. And what's amazing is that so for our overall selection, we have the triangle, which is skills, capability is sort of your habits and expressed values in terms of behavior. Maybe your childhood. We can fix a lot of things. I can't fix your childhood. So we want to screen for that. Then for executives, you have it's really like the cognitive equivalent of speed. And so people talk a lot about systems level thinkers. Well, what do they mean?

1:25:10 So the first thing you want to do is you want to separate linear from conceptual thinkers. And so this theory of stratum, we have these two trained uh psychologists that administer interview tests. You could ask a Rorschach Block question like What do you think about a bachelor's degree? Should we legalize cannabis? Do you think that it's okay to

1:25:27 paint your house pink or that you have to buckle up when you drive. And what's amazing is that thematically you will get similar answers from the same person at a certain level of thinking. So for example, if you ask somebody about buckling up when you drive or painting your house pink. They might say like yeah, it's annoying, but It keeps you safe and I think it makes sense and people should buckle up more often. You're in a conversation about buckling up when you drive and we should probably be more responsible about that. The systems level thinker will have a totally different answer. They'll be like, That's bullshit because it's the same question. So they reject the frame first. They go, What we're really talking about are what are the limits of individual freedoms when it comes to some

1:26:04 broader impact on the surrounding community or public. And so maybe let's just talk about that. You could talk about cigarettes in public too, right? So let's talk about that. And now you're into a completely different conversation. So what's true thematically is true systems level thinkers, they think over different time horizons. So think about Elon Musk. He's thinking over millennia. He wants to make humans multiplanetary. And all of his actions day to day are guided by this overriding

1:26:30 Mission. To get folks to Mars as a broader bridge to being a multiplanetary resilient species. Who thinks over And when you think about You know, CEOs of oil and gas companies and everything else, and they're riding these broad macroeconomic trends responsible for geopolitical dynamics across different cultures. They have to be good at so many different things. And so what's remarkable is

1:26:53 Stratum four is the shift from linear thinking to conceptual thinking. But the thing about Stratum Four is they'll be able to start to feel concepts, but they wouldn't be able to go to a whiteboard and explain to you how they influence each other. So for us, like Stratum Four is where we want our VPs to be. Who are on the road, but It takes maybe five to ten years to move from one stratum to the next. Stratum five is when you can not only see concepts, but if you went up to the whiteboard, you could organize them and you could make it really simple.

1:27:21 That's where you go, hey guys, it's really this. This influences all this other stuff. And so what you'll typically find with like Stratum Fourthinkers is just a lot of detail. But what you'll continually have to go back to is hey, listen, I love the math. I love the work. What's the headline synthesis? If you find yourself talking for like you're like looking at this Excel spreadsheet and they haven't taken the time to just Give you the headline number, you're probably talking to a stratum three or a stratum four worker, and it's just how their brain works. Stratum five is where it's simple and then stratum six and seven is where you start to deal with like how concepts influence other concepts you're thinking over very long time horizons. So to be on our executive team, You have to be at least stratum five because you have to take a very complicated thing.

1:28:01 And make it clear. And I just noticed that as we were scaling. I would have different conversations with different executives. The higher stratum ones would come to me and they'd be like, Blake. I got ninety nine problems, like everything's burning, but these are the three that matter. Here's how I see if we execute on this, it hits that. Is that a line? I'm like, Yeah. that's line, or if it's not, we just revise it a little bit, we go.

1:28:20 The other ones, I'd be like, what are you working on? It's And then you go, What's important? Well that's important. And I grade three, I'll be like, actually these things are grouped under that, and this is under that. And what I was actually doing, we had a chief people officer with background and talent, had spent some time at Bridgewater. He would actually be able to predict what would happen after I had conversations with executives. I'm like, I couldn't make it more simple. He's like, That's not what he heard, though. 'Cause his brain works a different way. He just heard you giving him more work and he doesn't know how to approach it in a more creative way in a way that scales. It was to the point where it was consistent enough. I was like, What am I missing? And so

1:28:52 Now that we screened for that, it's remarkably predictive. I think the closing thing is It teaches you to be much more empathetic because I believe that most people show up to work trying to do a good job, working their best. Once you understand stratum and how their brain works and whether if they can see the field or not, a physical analogy would be like if you had a sports coach that asked kids to sprint and there was like Tommy's running as hard as he can, but he's slow. And the coach is like, Tommy, if you only cared and if you tried harder, you'd be fast. The kid'd be like, What the hell? That's just mean. So once you understand it's not a Effort thing.

1:29:26 It's not a trying thing, it's a capability thing. Their brain doesn't work. Like yours works, it's cruel. To try to do it because it's immutable. You can't train for it. It's literally it's like your whole life, you're grooved into this pattern and it changes very slowly. So I think Honestly, that assessment as well as

1:29:45 getting the skills assessment culture kind of takes care of itself over time. If you bring in a jerk and nobody in the company is a jerk, those people get put on an island pretty quick. It's like an immune system response, but it's so hard. And the most common mistake that I've made is to promote and overtitle people, not realizing that doing a great job just means hanging on to title and hypergrowth. 'Cause the business is growing faster than most people. And that has its own thing. Where folks who would be fine in one position when they're overtitled, they become insecure and realize that they're not. effective and so what they'll naturally do as a defense mechanism is start to set like other people up. To take blame? It's really hard.

1:30:18 It's really hard to beat me. I have so enjoyed You teaching me And now us about

1:30:24 not only your story, but the system that you yourself are building and working on the potential implications of it. I think your story, my obsession with this notion of life's work and it's stories like yours that I'm always trying to find more of to be able to show people as examples. Obviously, no one's gonna live your exact story, but the authentic nature of it, the unique nature of it, the way you've embraced challenge and risk and all these things, I just find Deeply inspirational. So thank you for doing this with me today. I ask everyone the same traditional closing question. What is the kindest thing that anyone's ever done for you? I don't even know where to start, honestly.

1:30:57 I'm full of gratitude to so many people. Sergeant Berkman Save My Life in Iraq. tackled me as like tracers were going by my head, said they almost took you out, sir. I'm so grateful for that. Kelly Purdue. took me under his wing when I had no idea what I was doing. I wouldn't be an entrepreneur if it wasn't for Kelly. I'll stick with two for right now, but man, I'm so grateful for all the people who've helped me along this journey and I'm grateful to you for telling people stories in a way that we can all learn from. You're just a master interviewer and I really appreciate the collection.

1:31:26 Of lessons that you put together for everyone else to enjoy because you're doing your life's work as well, Patrick. Thanks for saying so, Blake. This has been such a total pleasure. Thanks for your time. Thanks, buddy. If you enjoyed this episode, check out Join Colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning. You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.

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