From Wealthfront to Daffy: Adam Nash's Journey From CEO to Founder

Ethan: Hey, everybody, and welcome to the Startup Savant podcast. I'm your host Ethan, and this is a show about the stories, challenges, and triumphs of fast scaling startups, and the founders who run them. Our guest today is Adam Nash, founder, and CEO of Daffy. Adam, how are you doing today?

Adam Nash: Doing great. Glad to be here.

Ethan: Awesome. I am stoked you're here as well. We've got a lot of good stuff. There was a ton of research put into this episode, and I think we're going to really going to knock the socks off of this one. So, normally, we jump right into the business, but I want to talk a little bit about you first. Can you give us a little bit of a highlight reel of your career up to this point?

Adam Nash: Sure. Like a lot of folks in Silicon Valley, I actually began my career as an engineer. I came out with degrees in computer science, and human computer interaction, and I thought I was joining a small company called Next, but it turned out during my interview cycle, it was acquired by Apple, and so I ended up working on Rhapsody, which became MacOS 10, and iOS, and all the things that Apple shipped in the last 30 years. But I wasn't really suited for a big company at the time. I jumped to a startup called Previous Systems that went public in '99, which sounds very exciting except every company went public in 1999. Went to business school, spent some time in venture capital, learned a lot about the other side, about how investors think about putting money into startups, jumped to eBay, spent four years there in the real boom times, building out this great marketplace for small businesses, and individuals.

Then I met Reid Hoffman, one famous breakfast, and ended up at LinkedIn for about four, and a half years, where I ran core product through the IPO in 2011. Did another turn in venture capital, worked for a firm called Greylock Partners, one of the better firms out there on Sandhill Road, and then jumped to a new area that I was very excited about that didn't have a name, but now we call FinTech as the CEO of Wealthfront. And I was there for four years building that out, believing that we could use software to help bring financial advice to millions of people who didn't have it before. After Wealthfront did another turn real quick in venture capital, spent a couple years at Dropbox helping them grow, and scale the organization after going public. And then in 2020 I jumped ship to start what became Daffy. Oh, I should probably say I teach a class at Stanford on personal finance, and I am on the board of Acorns, which is a wonderful app, and service helping millions of people save.

Ethan: Yeah. As I was putting together the notes for this show, I kept having to put slashes like CEO slash founder slash investor, and I think I actually wore out the slash key on my computer just putting these notes together. And we're going to get into a bunch of that stuff, because there's so much there, but I want to get a little piece of timeline to set myself up for the next great question that came to my head. When did you go back to school to get your MBA?

Adam Nash: Ah, good question. It was actually pretty quick. So, I finished my master's in computer science in 1997, and I ended up joining the Harvard Business School class of 2001. So, I ended up going in the fall of '99. So really I was only at Apple for about a year and a half, and then my startup almost two years. There's a little bit of overlap there, but basically three and a half, four years out of school.

Ethan: Gotcha. Okay. So, you mentioned Reid Hoffman, both of LinkedIn, and Greylock. So, he's got a quote, and I'll just read the quote. "There are two things that need to be explained away in order for me to invest in your startup, an MBA, or a background in management consulting." So how did you sneak this MBA past Reid?

Adam Nash: I didn't sneak it. I think Reid is a pretty broad thinker. No, in all honesty, I think that people go to business school for a lot of different reasons, and I think it comes out very quickly when you talk to people, why did they go? Some people go just because they see it as a quick path to promotion, or a chance to get into an industry that they couldn't. For me, it was because I actually wanted to learn about business. I mean, I will tell you that the 1990s, while they seem wonderful looking in retrospect, there was a lot of nonsense going on there. There were a lot of companies being built that weren't really sustainable companies, products, and strategies that didn't make sense. And I had gotten somewhat disillusioned in the nineties that if this is what tech was about, I wasn't sure that I wanted to be building businesses like that.

And fortunately, it turned out that, actually, rationality resumed in building real businesses took over. But I went to business school to learn, and I had this wonderful opportunity. I mean, a lot of people read books by Clay Christensen, but I actually got to do projects with him. He was one of my advisors. It's such an unbelievable resource. So, for me, it was an investment. I took the money that I made in that first startup, and basically spent it on going to business school. And it was a wonderful experience for me. But I think everyone has a different experience, and I think Reid's right to be skeptical of some of the reasons that people go to business school.

Ethan: Right. He's a pretty smart dude, so when he talks I tend to try to understand why he's saying what he's saying, so it's good to hear that you had a good experience in your MBA program. So, I'm going to take what may seem like a hard left turn, and I know we're right here at the beginning, but I think if you follow me in, we're going to come out the other side with something that's interesting. So, you've put a lot of yourself out there on the internet. You've had a personal blog since like 2006. That blog has hundreds of posts, if not thousands. You've been on Twitter since 2007, where you have more than 47,000 tweets. So, there's clearly a lot of output of your ideas, of your thoughts into the world. And I'm curious, what's the driving force behind all this writing, and this sharing of thoughts, and ideas? What is that bringing to you?

Adam Nash: Well, it's interesting. I think it started in a place, remember back in 2006, this is actually my third blog. I'd had a couple that kind of went for a couple years, and went away. But I think in the early web there was a lot of feeling of putting information out there, and getting feedback, and using that to improve your ideas, and your thinking as well as connect with other people. And maybe I've just been around the industry long enough that I still have that mentality. It's a mentality that's very common in the open source community. This is how developer forms work. If you're working on a project, you're working on a code, you run into a block, what better place than the internet to go out there and say, "Hey, I'm trying to do this. How do I fix it?" So I think a little bit of that dates back to the web 1.0 board's concept that I grew up with.

But in general, the blog, a lot of it is to capture my own thinking. It's somewhat of a diary of sorts. I find that by writing down my own thinking, it actually clarifies my thinking. I think there's some truth to the fact that when you have to write something down, you have to get it tighter, simpler, and more concise, and it actually forces you to look at it through someone else's eyes. And so sometimes I write just because I'm capturing my own thoughts. I had a rule at LinkedIn that if I ever answered the same question more than three times that I'd write a blog post about it just to capture it. And that's actually that something happened later in my career is that my writing became, I don't want to say a management technique, but it actually became a way for me to communicate ideas more broadly.

As LinkedIn grew, I found that if I wrote a post about how to think about growth, or product strategy, et cetera, that strangely it got read by more employees than if I got up at all hands. I actually gave a talk, et cetera, communication's kind of a funny thing. And I found that there was a lot of power in bringing together the folks outside the company with the people inside the company. And so through LinkedIn, Wealthfront, Greylock, et cetera, now Daffy, I find that writing is actually a very powerful way to get messages across. But I didn't come to it early in my career. I think I came to it one step at a time, just over the decades.

Ethan: I think that has so much value. I mean, just like what you said, when you get up at the all hands, that's kind of a one time thing. Even if you record it, it's hard to get people to go back and watch a 45 minute video of a presentation that they were at. But if you write the thing down, and it's just kind of a little contained little blurb about an answer to a question that they may have, it kind of has more permanence to it. And just like what you said, if you've solidified the thought as you were writing it, then they're going to get more value out of reading it like that. So, I really love that concept of writing down your thoughts to clarify them. 

Adam Nash: Oh, yeah, for sure. I say, even to this day, it's a little embarrassing now, but I find myself in meetings when I'm an angel investor, I've now invested in over 120 different companies, and I find myself with founders forwarding them old URLs from the blog that kind of capture my thinking. And it's useful for them because they can forward it to their team, and they can read through it. So some of those early lessons about how to build viral systems, or how to think about the math behind viral growth, or the kind of one, two, three of how to think about product strategy, or structuring prioritization, I could explain these as one-offs, and they'd be okay.

But I find that by writing them down, they not only become clearer, but they're reusable. And so even at Daffy today with my own employees, I find myself forwarding articles, and talking about these ideas just to get everyone on the same page, so I'm a big believer in writing, and this current culture at most startups of moving more information, because of remote work from meetings to actually writing, and shared documents, I think is a product of that basic insight there. There's a value in writing that you just don't get from an endless number of conversations.

Ethan: Absolutely. So, saying all that, the 47,000 tweets, the hundreds of blog posts, we've got a pretty good idea of your output of ideas into the world, but what does your intake of new ideas look like? Are you in books? Are you surfing the web? Are you in newspapers? What does that look like, and how much time are you spending on that?

Adam Nash: Yeah, this is one that I get teased for sometimes. So I'm a bit of a traditionalist. I still get newspapers at home, which I don't read every day, but I somewhat like to see what the editorial mix is that's selected, and how things are covered. I'm always fascinated with how different different information channels are. Like most people, I cultivated my Twitter over time, my feed. Really optimize around people that I feel like produce good content. And when I mean quality content, I have a diverse set of interests, so there's a set of accounts I follow because I'm interested in physics, and where we are there obviously compute the industry, economics, finance, but also kind of eclectic things.

I build Legos, and I'm a gardener, and collect coins, so there's all sorts of funny things in there. But in general, more, and more these last few years have really focused on the quality of the content, and writers. So I tend to follow people based on the quality of what they write, and their output. But I am a heavy reader. I always have a stack of books by my bedside. Unfortunately, I seem to get my... My purchasing rate right now is a little bit higher than my consumption rate, so I'm working through that.

Ethan: It's a curse.

Adam Nash: Yeah, my wife is somewhat patient for the perennial. Like it's time to move some of these books to the shelf, because the pile's getting kind of large. But I find that a mix of media is very useful for me. And by the way, I include kind of pop culture in that as well. I like to know what movies people are watching, or what shows people are talking about, et cetera. There's always human insight in all of that, in my opinion, so.

Ethan: Absolutely agree. All right, let's move to the real reason that we're all here, Daffy, your current company. Can you tell us what is Daffy?

Adam Nash: Daffy is pretty simple. It's a modern platform for giving, built around a financial account that's called a donor advised fund. But the real idea behind Daffy was to make it exceptionally easy to be more generous more often. We have all sorts of financial goals, goals for retirement, goals for our kids' education. And what we believe is that giving is also very important to people. And yet too many people don't put money aside for charity, which means that when they want to give, they're stuck with this very hard problem of how much they can afford to give, not only in addition to the hard problem of who do you give it to. And so yeah, Daffy is a simple app.

You download it from the app store, we ask you what your goal is for giving, we let you give to any of one, and a half million, or more legal charities across the US and you put money aside every week or every month. And the fantastic part is, is that money's invested tax free. So, as you're figuring out who to give to, you could be invested in a diversified portfolio of ETFs, and ESG portfolio, we even support crypto, but the entire purpose of the platform is to help people be more generous.

Ethan: So, I'm putting money into this DAF, and it sounds like it's kind of maybe taxed like a Roth, and then it sits there, and grows. And whenever I say, "Okay, it has grown to the point where I am comfortable giving to specific charity", then I just press a button and it goes to that charity. Does that sound about right?

Adam Nash: Yeah, you could use it a couple different ways. We actually see... Now that we're live, actually, it's fantastic you actually see what thousands of people do with this platform you've built. We have a large number of members who just use it as a better system for giving. They have a standard set of charities they support every year. It might be their church, or synagogue, it might be a local community center. It might be their alma mater, or their kids' school, but they have a few charities they support. They give a few hundred dollars every year to charity, and they just use Daffy to automate that, to put some money aside every month, and make sure that they have recurring donations to the organizations they care about. There is also a group, though, that uses it the way you describe, which is a little bit like a lot of us have good years, or bad years when it comes to income.

It turns out that our tax system says those good years are somewhat expensive. And so those are great years to make donations to charity, but sometimes it can be hard to figure out where to give all that money, and you don't want to do it all at once. And so yeah, so putting money into Daffy means you get the charitable deduction right away, and you can donate cash, you can donate stock, or you can donate crypto. That money's invested. And yes, then anytime you have the urge to give to an organization, or if you want to set up recurring donations, you can do that on the platform as well.

Ethan: It's a really cool concept. So, I think a lot of people might have looked at the kind of giving, or donation, I don't want to necessarily want to call it an industry, but the kind of concept of charitable giving and said, "It's easy. There's not really a problem here." So, how did you recognize that there was a problem worth solving, and worth creating a business on?

Adam Nash: Yeah. Well, I think it comes from a couple different places, like all ideas in startup, and founder stories, there's different threads that come together. I will tell you going back even to when I was at Wealthfront, or at Greylock, I had a list of great financial products that hadn't been reinvented yet, and the donor advised fund was on them. I mean, the donor advised fund is a wonderful type of account. It's a tax-free account, it can be invested, and it solves this real fundamental problem of separating, putting money aside for charity from figuring out exactly who you want to give it to, and when. And so it's really valuable, but most people don't know about it, because at this point, the incumbents mostly targeted at the ultra wealthy. They make their money based on a percentage of assets. So, they're really only interested in very large accounts at the high end where they can make thousands of dollars catering to those folks.

And so that was a great idea, but that by itself isn't a product. That's just an insight that there's real value to be added there. For me, the big deal was talking to people about giving. Obviously, my experience with Acorns, being on the board there, and seeing that team execute, the fact that they were able to build this simple app and service that's now helping millions of people with their financial lives gave me some hope that we might be at the point now where people are ready for real financial tools, on their phone, et cetera. But it wasn't until I talked to customers that I really got confidence in this particular idea. I'm a big believer in user research, and customer development, and so I went out talking to dozens of people across the country about how they think about giving. And it turns out there is a real problem there.

Most people don't agree. If you ask people what they should give to charity every year you ask 25 people, you get 25 answers. No one agrees on is it a percentage, is it a dollar amount? Is it a kind of thing you do when you have a good year, or is it time of thing you do every year? No one agrees. But the one thing that struck me was when I talked to people is whatever amount they thought that they should be giving to charity every year, when you asked them how much they actually gave to charity, they missed their mark, and they weren't happy about it. It was a really, I don't want to say guilty, but it was a really kind of deep moment where people realized it was something they thought was important to being a good person that they just didn't get around to. They're busy, work, family, social life. I mean, we had a pandemic. I mean, there's so much going on.

And so what struck me is that we see these problems in finance all the time. How many people would save for retirement if it didn't automatically come out of your paycheck? We know that if you set a goal, and automate it, that it's more likely that you hit it. I mean, this is actually, actually a lot of what great FinTech apps are built on, a lot of great services, and it's what the research suggests. And we found the same research for giving. We found that people who set a goal, and automate it seem to give 32% more than people who don't. And so for us-

Ethan: That's huge.

Adam Nash: ...it really crystallized that combination of do people want to do this? Yes, people actually do want to give. They care about the organizations and causes they support. Is there real economic value here? Yes. It turns out that if we got individuals to give 32% more on average, that could be a hundred billion more per year of giving in the US alone. That's something worth fighting for. And then of course, the question was could we build an app that was 10 times better than the current products out there? And looking around the space, technology's pretty dismal. I mean, I know that every FinTech founder says this about incumbents, and existing products, et cetera, but donor advised ones are still a place where people email around PDFs, where you have kind of concierge service, because it wasn't optimized for everyone, it's just for the wealthy. And so we thought that combination, Alejandro, and myself, was a ripe area to give it a shot, and build something different. But that's how we came together to get conviction that it was worth building a company here.

Ethan: Gotcha. Yeah, you said emailing around PDFs, and I was just waiting for you to throw out the fax machine, and I'm going to start a new hashtag right now. We're going to call it fight the facts where, and we've mentioned this many times in the show, anytime you see a fax machine, there's a business opportunity right there. Find a way to cut it out. All right, I want to talk about business model of Daffy, and I know you're big on business models, and kind of how it can drive products, and services, and companies. What is the business model of Daffy, and how does it compare to some of the competitors out there?

Adam Nash: This is a really important topic for me, and I've written about this in the past, and I tell founders they need to be very intentional about their business model. I think coming out of the web, a lot of people got the mistaken idea that because most consumer services build for engagement first, and then they figure out how to monetize later, that the business model is somehow just an obvious decision that you could make one way or the other. But the truth is, since I've been in a number of organizations that have scaled to thousands, or even tens of thousands of employees and billions of dollars, what you see is that over time, the business model, and the incentives that it creates really shape the culture, and the people, and the products that are offered by companies. And it's very hard to change.

We put a lot of thought into this into LinkedIn, which had a very different business model than most social networks, and I think has ended up in a very different place because of it. And so same thing with Wealthfront, same thing with a company like Acorns, and same thing with Daffy. So it is a very important issue. Now for Daffy, I mentioned before, we know the incumbents are focused on the wealthy. Why? We know that the incumbents don't do a good job of getting people to actually donate to charities. Why? And I think the answer is their business model. Their business model is to charge a percentage of assets. And so first of all, that means they really want bigger accounts. They really do make 10 times more money off a million dollar account than a $100,000 account. And so they end up spending their time on very wealthy people who can afford to put that much money aside for charity.

That's not even a 1% problem. That's like a 0.1% problem. And even worse, if you have a $100,000 account at Fidelity, and you decide to give $10,000 away to charity, Fidelity just lost 10% of their revenue. So, I think that all these organizations, by the way, are good, and well intentioned, and I have not met anyone from any rival donor advised fund that isn't well intentioned, and trying to help people give, but the incentives work against them. It works against prioritization when they have to figure out what they build in any given year, the features that lead to more giving don't feel as good from a metric standpoint, they don't feel as good from a funding standpoint. And so when we started Daffy, we knew that this is something we had to change. And so we looked at a wide variety of business models, and I think if you look at this space, you'll see a wide variety. But we went with something different that, to our knowledge, no other donor advised fund had done before, but actually is very common in the nonprofit world, which is we went with a simple membership fee.

My synagogue, community center, the San Francisco Zoo, they all work based on membership fees. And so we actually rolled that out. So, at Daffy, right, if you have less than a hundred dollars in your account, it's free. The basic membership is $3 a month. We have a family plan now at $5 a month. And then at the high end, if you want to contribute a lot of crypto, or stock, we charge $20 a month. But it's a very simple fee. And what it means is that we can focus not on accruing assets, but we can focus on what we think is the heart of giving, which is people. People give in a lot of different ways. They give what's meaningful to them.

And so we like building a platform where going forward, our focus is not on what are other ways we can get more dollars onto our platform to make more fee revenue, but instead, how can we get more people to give? I mean, it aligns with our mission to help people be more generous more often. And it aligns with our vision, which is a world where everyone puts money aside proactively for those less fortunate than themselves.

Ethan: So, who's the target market for this particular product? Because at those three, five, $20 price points, I mean, it's not a lot, obviously, it's set there. My guess is to get as many to up the volume, to get as many people in as possible. But I'm wondering if your target market is some of these folks who are going to be donating a lot, are they going to look at a product that's three, $5 a month and say, "Well, I don't use $3 a month products, I use $3,000 a month products." Have you ever run into that? Or I guess, back to the original question, who's the target market for this?

Adam Nash: You want us to build a more sparkly version that dazzles?

Ethan: I'm not the one who's putting up millions of dollars yet. So, we'll see how my mindset is.

Adam Nash: I mean, the truth is I think that that's actually fair, and it's a little counterintuitive for founders, right? Pricing also does matter. It does have a signal to it. And I don't think you're actually wrong, at the very high end that people might look at something that's inexpensive, and say there has to be a catch, or what does it do? As a founder, and as a product leader, I think that's part of your product design. It wraps with your brand, it wraps with the features, you prioritize what you build. Right now for Daffy, honestly, our strategy is fairly simple. We differentiate with features. Daffy, which it's a funny name, an engineer came up with the name, Donor Advised Fund For You, that's the app name. But we do things that other providers don't, even having a native application. We were the first fully functional donor advised fund with an app in the app store when we launched in 2021, if that sounds amazing, that's the level of technology in the industry.

We have full support for crypto. We get a lot of customers for that. We actually have members now who have millions of dollars on the platform, and a lot of them are drawn to the technology or they're drawn to the support for crypto. A few months ago, we just rolled out our family plan, and it may seem obvious, but no other incumbent donor advised fund has the ability to share your giving with your children, with your grandchildren, your nieces, and nephews, your siblings, to teach them the value of giving. And now of course, we have a number of social features. 

Most of us don't know what our friends, and colleagues give to what organizations, what causes. It's a wonderful way to discover causes, and find a way to do something good together. And yet no existing donor advised fund does that. So, our current product strategy is very much differentiated based on features, but I think you make a valid point at the high end, and it belies the fact that this is really a market expanding product. We think we've built a product better than anyone at this point for almost anything you want to do with giving.

But our focus isn't actually on the millionaires who are trying to put money aside for charity. We do a great job for them, and we have quite a few members now who have millions of dollars on the platform, but our focus is really on the 60 to 70 million Americans who give to charity every year. They give to their church, or their synagogue, they give to their kids school, they give to their alma mater, or they may give to a national organization they care about, and we want to give them the benefits of this account that frankly they've never heard about. And so that probably fits into the pricing strategy and the product strategy as well. This is not a product design to get more wealthy people in, and maximize revenue from them. This is a product designed to get as big a community as possible, aligned around one simple thing, people who are willing to put money aside proactively for charity.

Ethan: And that makes sense to me. It's like you're not solving the problem for the group of people whom it's already solved for. You're building a product for the people who want to do the thing but don't have great access to it. That makes sense to me.

Adam Nash: And it was actually funny, it turned out to be our first fire drill when we launched, as a company, because we launched the product September 30th, 2021, and almost immediately within a couple days, we were getting requests of how can I transfer my donor-advised fund, or part of my donor-advised fund from another provider? And because we were so focused on this new audience of this 60 to 70 million people who had never heard of a donor advised fund, we hadn't built the feature. We hadn't actually figured out how to do it. And so we had this quick scramble. We actually launched it just a couple weeks later, but it turned out to be one of those unexpected benefits. And at this point, what we've discovered is that most people aren't very happy with their existing donor advised fund. They use it. Financially, it works, but they're very excited about the app.

They're very excited about our capabilities. They're still quite a few people who are very excited about crypto, and people come to us for different reasons. But I like staying focused on what your purpose is, and what drives your business long term. Our vision for Daffy doesn't work if we don't get a very large community together. We're not trying to get thousands of people together. We're trying to get hundreds of thousands, even millions of people like Acorns has done with savings. And so we had to think, and focus on pricing on a product that made sense for millions of people, not just for a small number of folks who are ultra wealthy.

Ethan: That makes sense. So, in doing the research, and I'm no mathematician, or economist, or finances, I have my own, I've run a small business, but this is a little bit of a different beast. So, $3 a month, $5 a month, even some of the top tier plans being $20 a month, even if you get thousands, or tens of thousands of users, I mean, I'm not seeing where the profitability is, but that's because I don't see inside the company. And I hear the word community a bunch. And I'm curious, where does the profitability come from in this model with this price range?

Adam Nash: Well, I think that like a lot of subscription services, or membership services, the economics are actually pretty simple. How much does it cost you to acquire a customer? How does it cost to support a customer, and how long do they stay with you? The fantastic thing about giving is it tends to be a very long-term commitment. So, just to start with fundamentals, the type of people who give regularly who are going after give regularly, and it's something they do their whole lives. So, if I put on my quantitative hat, and I've run growth teams that LinkedIn, and Dropbox, et cetera, and then sharpen the pencil and look at the numbers, actually it turns out that this is a great service to run. It is inexpensive, let's be clear. But that's because it's very inexpensive to run. And I think with modern software, the scalability of it is phenomenal.

On the acquisition front, the wonderful thing about giving is that giving is fundamentally social. It's not like other financial tasks. If you, and I are saving for retirement, it's not something we do together. We could talk about it, but fundamentally, you put money aside. I put money aside, it's a very personal thing. Most financial services are what we'd call in the industry, single player games. You do it yourself. Giving is not like that. People volunteer at organizations, they serve on boards, they fundraise, they go to events, they don't just donate. And as a result, they connect with a lot of other people who give. And so a lot of our effort at Daffy is focused on encouraging people to talk about their giving. And in the process, people learn about Daffy. So, yeah, the core economics are actually quite good from an individual member standpoint, but as you are implying, it's not inexpensive to get the type of engineers together who build Google, Twitter, apple, et cetera.

And so we have a good team. It's a small team, but it's a very good team. And the real question is, can we grow the community large enough, so that the profitability of each individual member overcomes those fixed costs? But like I said, watching Acorns scale over the years, Acorns is now almost 10 years old as a company, but now has millions of paying subscribers, not thousands, not tens of thousands. And so it takes time. But we really believe that if we can get this community going, if we can really build a service that helps people feel more generous, that not only will they stay with us for a very long time, but they'll tell their friends, and colleagues about it. And so that's the path that I've taken with previous companies. It's the path I've seen be successful, and may be old-fashioned, but it starts with the basics of the business, and then you grow it over time.

Ethan: That's a good answer. I think the combination of longevity of the user combined with keeping a strong hold on your unit economics, I think that that answers the question, so I'm glad to hear it. Thank you. I want to go into a little bit more of your experience through your career. And as we mentioned, you've played tons of roles in the startup, and tech, and FinTech community, CEO of Wealthfront. You were at eBay. You've been board members of tons of different companies, lots of companies that we've all heard about. You've been a VC, you're an angel investor, everything. Everything there. But what's interesting to me is that Daffy is the first time that you've actually played the role of a founder. So, what is it that kind of kept you out of that founder's seat all this time?

Adam Nash: Oh, that's a great question. Well, I think, to some extent in my early career, I really wanted to learn from other people. I mean, some of the reasons I joined that first startup, or even the reason I joined companies like eBay or LinkedIn, is I thought there was a lot to learn. A lot to learn about how you think about strategy, how you think about product, how companies build out. And there is, actually, it is one of those funny insights, but it turns out when you work for a very successful venture backed company, the first thing you notice is that they do a lot of things wrong. I don't even mean cute, like, oh, it's counterintuitive, et cetera. I know really, they actually don't follow best practices in a lot of dimensions about how they build things, how they launch things, how they work together.

But what that teaches you is the difference between problems that you need to solve in the early days versus problems you can afford to solve as you grow, and as you scale. And it's hard to learn that lesson any other way, but I'm a little sheepish about it. I'm very proud of founding Daffy with Alejandro. But you're right, it is my first time, and that probably reflects the fact that this is the first time I felt that there was a product, or a service where instead of throwing in or joining an already existing great team to work on their efforts, I felt like this company, this product wouldn't happen if we didn't do it ourselves. I mean that that's one of the classic founder calls. But I honestly felt that here. I looked at FinTech, and like I said, I'm a very active investor. I have a pretty broad view of what's going on with startups in the venture community.

And I will tell you that there's not a lot of attention on this space. I think that the combination of features, business model, and kind of approach that we're taking with Daffy, I haven't seen done elsewhere. We're hoping it works. We're going to do everything we can to make it work. But I really felt like I would regret forever if someone didn't take a shot at building a company like this, building an organization like this. And after some time looking for it, I decided that the best way to make it happen was to do it ourselves. And there is a little bit, when I look at companies, I invest at the seed stage very early. You don't have a lot of metrics, you don't have a lot of facts to go on. And one of the things I do look at is product founder fit.

Is it authentically something that this founder wants to do, and can do? And for Alejandro, and myself, this one is a very strong form of product founder fit. We deeply care about this issue. We think that we have a unique idea on how to break through, and build something sustainable here, and we care. And we could be doing a lot of other things, but we see no better thing to focus on for the next 10 years than trying to build a sustainable growing community, and organization oriented around putting money aside for those who need it.

Ethan: So, even though this is your first time as a founder, you've definitely played the CEO role in a couple of different scenarios, and you've been top executive at several different companies. And I want to point out a couple of times in this conversation when you've mentioned launching, and especially the first time you mentioned launching, your face lit up, you could tell that there was a lot of really good feelings there. So, maybe the answer to the question either has already been answered in the subtext, but is there anything that feels different about your role as CEO now that it's for a company that you have founded that you've brought up from nothing into something?

Adam Nash: Well, I mean, you're correct. This is starting my career as an engineer. I don't think it's just engineering. I think that whether you come from a technical background, or more of a creative one, and increasingly you see people with both backgrounds in the space, anytime you try to build anything you come face to face with the complexity, the hundreds of things that can go wrong, the hundreds of things that are different than you expected, the complexity of working together. I believe that software is fundamentally a team sport when it's done well. So, I actually do have a huge emphasis on launching, and shipping because I think it's all too easy to build in private. It's all too easy to fiddle with things. I used to, when I was back in school, I had dozens of software projects that I got to 80% of the way, but didn't actually ship to having another person see, or play.

So, for me, doing actual shipping, it's part of the psychology, not just for startups, but I think for any company, and software that wants to be successful of having this momentum, always working on the next thing, always learning, always expanding. So, that is probably in the way I talk about things, et cetera. For me, as a founder, yes, the unique sort of pride... As a leader, I actually believe that executives make a mistake when they start thinking too much like just managers, and don't think clearly as leaders. And some of that founders take naturally, because they have nowhere to hide. I do believe that leadership roles are more than just being hired to do a job. You take on a whole set of responsibilities. You take on responsibilities for people, both people who work for the company as well as people who are using your product to solve real problems.

You take responsibility for the investors who've put their money at risk into your company. You take responsibility even as an industry for what unique value you think you could provide into the market. And so I have a pretty heavy, or I should say, a pretty high bar for what I think leadership is in general, and I've tried to carry that through in the roles that I've had. I think the one extra thing with a founder, though, you feel is that pride, and also responsibility from knowing that the company wouldn't have happened without you. Almost any other role that the company existed before you were there. You might believe, by the way, ego's abound, and my ego is not the smallest ego that's ever been built. You might believe that you uniquely made this company successful, or that it would've failed without you, but that's different than knowing that the company wouldn't have existed in the first place without you.

And so I do think, and I've always had an immense respect for founders, it's one of the reasons I got into angel investing with really to support founders, and learn from them, because I think everyone who takes that leap, whether it was a bad idea, or a good idea, or something in between, I think there's something really impressive about taking that leap, and trying to build something new. And it's wonderful at Daffy to feel that same feeling. Alejandro, and I late at night, or when we're talking there, there's a bond that forms really around this idea that you decided to build something together, and it wouldn't have existed otherwise. And so for better, for worse, I do think that that's been amazingly rewarding for me. But it's also, it's a lot, it's a lot of pressure. It's a lot of responsibility, because it really does feel like it's on your shoulders to make this thing as successful as possible, and make sure that you give every effort possible to explore the space.

Ethan: Well, and the one thing that is definitely sure is that no one will ever care about it as much as you do, as the founder. So, yeah, you've got that level of responsibility of like if I have an off day, it's going to affect the others. And just the ability to drive the team, drive the effort, drive the momentum of the company with your internals, it's huge.

Adam Nash: I think that's a big deal, although, I would probably map that to leadership in general, right? I see that engineering manager for the first time having a few people on their team they're responsible for that director who might have teams of teams all the way to that executive at scale. That's a little bit what I talked about, that high bar for leadership. I do think you have responsibilities, how you carry yourself, your emotions, what you get upset about, what you don't, what you focus on, what you don't. Actions do speak louder than words, and so I think that's always important. And I think for a lot of founders, what is the interesting thing about founders, of course, is that you've probably noticed, and most people do, that the overlap set between founders, and people who are leaders at scale is pretty small. It's not zero. Some founders go the distance, but usually it's their first time managing at scale. And so I do think that a lot of founders have to learn these leadership, and management lessons. I would actually reverse it. I have seen great progress.

One of the great things that Reid Hoffman of course did at LinkedIn, which I'm sure you're aware of, is he actually did something that most founders don't do well in technology, which is transitioned to scale leadership. He found someone who was better for LinkedIn at its next 10X for its next big growth period. And that involved bringing Jeff Wiener on board who led the company for 10 years. So I think that there's a lot to it. I would map a lot of it to leadership, but I think that a lot of founders have had enough on their heads to try, and figure out how to even build a product, build a business, build an organization, that they're often surprised that, that's not enough by itself. That these basic leadership aspects, there's a lot of people who spend their lives focused on how to be better leaders, and how to teach people to be better leaders. And I do think it's immensely important for founders to invest the time in thinking about leadership in general. I think the irony with most founders, and most entrepreneurs in general is one of the reasons you build companies is that there's some part of you that doesn't like any of the other companies, or isn't as excited about joining someone else's organization, or someone else's mission or someone else's product. And so actually, I think it's almost a paradox. The type of person who starts a company, builds a company very often is there because they didn't want to spend too much time seeing how other people lead, or to be on those teams. But I do think there's a reason why a lot of successful founders, like you saw yesterday, Mike Krieger, and Kevin Systrom launched their new product, and service.

But you'll see that a lot of those founders, they had a few years experience at a high quality organization, right? Kevin was an APM at Google in the heyday of that program, and that affected probably how he behaved as the company scaled, even when it was acquired by Facebook, how that organization grew inside that company, and how to make it successful when it's part of a larger organization.

Ethan: All right. I want to shift gears a little bit, and give you the opportunity to put your advisor hat on, which is yet another one of those roles that you commonly play. So, when you are having a conversation that starts out as an angel pitch, but then it turns into you saying, all right, let's fix this thing, and then we'll talk later. Is there something that kind of stands out to you as a common roadblock, or the specific thing that most businesses are missing in order to become a solid company?

Adam Nash: Yeah. Well, I mean, I think there's a lot of different sectors, and a lot of different types of products, and services out there. And so my bias is very much towards the types of businesses, the type of software markets that I'm familiar with, which tend to be things like consumer in FinTech, and marketplaces. But in FinTech in particular, I look for three things as an angel investor, and they do reflect problems that I see with a lot of founders. The first thing I already talked about, which is product founder fit, do you authentically care about this problem, or do you think it's just a place to make money? That latter one tends to not be a great motivator for building businesses that go the distance, like a venture class business, a new platform company. It might be a great way to make money. I never fault anyone for trying to do that, but it's not the type of business that I would invest in.

And I think that founders spend too much time a little bit on that problem, and not on a product, and a problem that's authentic to them. The second thing, of course, is where are you really adding value? I see this problem a lot in FinTech, which is what value economically are you truly adding? I can look at Daffy and say, the research shows that if people follow this system, they will give more, and believe strongly that if more people gave more, it would be better overall for society, and it would be better overall for them. But I find myself often having to push founders, not just on, once again, how can they make money, but where does this product really add value? And that leads to the third most important thing that I see founders struggle with. Who is this product for?

Especially in FinTech, or in finance, if you have a product that helps people access a new type of investment or a new way to invest, who needs that product? Is it a 20-something starting out? Is it someone a little further along starting a family? Is it someone, an empty nester who's going to retire in 10 years? But it's very hard to get everything from the product, and the brand, and the go to market right, if you don't know who you're targeting. And so those are probably the three things that I focus on with founders as an investor, certainly as an advisor, and then personally as a founder at Daffy, the things that I spend a lot of time on.

Ethan: Thank you for that advice. I have 100 more questions, but I know that we got to get you moving on through your day, so we're going to start to wrap here. Can you tell us what's Daffy got brewing for 2023?

Adam Nash: Well, the biggest thing that we've invested in most recently has been this transition. I'm a big believer in this idea that giving wants to be social, that it's not a single player game, that it's something we do with other people. And so towards the end of last year, we started rolling out our platform for supporting multiple users on the same fund. So, Daffy for families, very innovative, at least in the charity space. This ability to add up to 24 people together on a fund where there's a couple people who organize the fund, and make decisions about where the money goes. But everyone can recommend donations, everyone can see what's going on, it's a fantastic way to teach giving to your loved ones, and do it with others. We've also rolled out features now to let people follow each other, and really put together an identity around what are the causes, and charities you support, and support your friends, and colleagues when they give, and vice versa, receive that support when you give.

And so in 2023, you're going to see us invest a lot in these features. We are looking across all of FinTech at everything in the last decade that's helped people save, help people spend, help people invest, and asking the question, can we use those features to help people give, right? You get confetti, and Robinhood when you buy stock or crypto, that's fantastic. What's even better to me is getting confetti when you actually give, when you meaningfully make a difference for a cause that you care about. And so that's a lot of our effort is actually focusing on how we can bring people together in different ways to give, and be more generous, be the generous people that they want to be.

Ethan: Yeah, this idea of community is massive, and I think we have Web3 to thank for some of that, and I'm stoked to see more of this from all sorts of different companies here in the near future. So, we're going to go to the question that we ask everybody, and maybe you've already answered this, but we're going to give you an opportunity to put a nice bow on it. What is your number one piece of advice for early stage entrepreneurs?

Adam Nash: My number one piece of advice for early stage entrepreneurs is just to remember it's a marathon, not a sprint. There are hundreds of things to do, thousands, and there'll be a new set of problems to deal with every stage of the way. Look at company, I mean, my first company I worked at Apple, every year, they're dealing with new problems, and new issues, and products they wish they could build that are too hard to build or they can't figure out how to get it through. So, the journey never ends. And so the journey needs to be the reward. But that being said, what I tell them is to enjoy every piece of it. The prioritization is brutal. Every day, every week, I recommend that you think of what are the three things I need to get done today? And I know that's false.

I know there's a thousand things you need to get done every day, but the clarity of every day making progress, and really being intentional about what you focus on, and prioritize is not just important for the company. It's not just important for the product. It's actually important for your own personal emotional wellbeing. It's important to be able to know you're not going to get feedback every day, and you're certainly not going to get positive feedback every day, but if you set out to do a few things every day, and you get them done, you'll feel good about the journey you're on, and it'll set you up in a pattern that will let you fight that fight for years, or even decades, which is what it takes to build a great new company at scale.

Ethan: Well, Adam, this has been so much fun. Again, I could just go for forever. So, maybe somehow we'll collude to get you back on the show sometime, and we can continue this conversation. But for now, where can people... Let me start that over. But for now, where can people connect with you online, and how can our listeners support Daffy?

Adam Nash: Well, the best place to find me online is pretty simple. I'm still true to heart, that original head of product from LinkedIn, so you can find me on LinkedIn, you can find me on Twitter. It turns out the way that I name things is very straightforward, so it's always Adam Nash, so you can find me. But more importantly with Daffy, download the app from the app store. You can go to Daffy.org, but I'll give you a special bonus if you want to use my own personal invite. If you go to Daffy.org/AdamNash/invite, you'll actually get $25 that you can use to give to any charity that you want to. It's a great way to start giving, and get a feel for the product, and the service we're trying to build.

Ethan: Awesome. Thank you so much for that. We're going to put that link, the links to Daffy, the links to the LinkedIn. We're going to put it all in the show notes, and everything else you heard today. Tons of fun, Adam. Thank you. We will talk to you sometime soon.

Adam Nash: Thank you. It's been great to be here.