Rodney Williams

In today's episode, I speak to Rodney Williams, who's the co-founder, chairman, and president of SoLo Funds, which is a B-Corp-certified community finance platform that's now used by more than 1 million users. Members can borrow and lend money between themselves rather than go to traditional lenders, loan sharks, or banks.

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EPISODE HIGHLIGHTS

• [01:16] Rodney's personal background
• [03:18] What other alternatives exist
• [04:50] How does SoLo work?
• [07:25] When and how do your customers use SoLo
• [08:56] Difference between Credit score vs SoLo score
• [11:50] Fighting the step crisis
• [14:27] SoLo's plan for the future
• [16:15] SoLo’s expansion to Nigeria
• [18:22] SoLo's approach to fundraising & growing revenue
• [19:53] Investors' feedback on the business
• [24:36] How did SoLo approach investors
• [27:53] How did Solo get to become
• [33:04] Undeniable product market fit
• [37:32] 10-year vision

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KEY LESSONS & QUOTES

• " You can't build wealth without growing it. " [12:12]
• "Subprime product, underserved communities, helping people that usually doesn't sound like a big business you’d want to invest in." [19:44]
• "Our goal to market strategy is done right and do good because if you can't buy users, you need users to really like what you do.” [21:46]
• “A challenge that has made this extremely difficult is that the same financial system

that has created the market that we live in today has created so much discrimination.” [20:30]

• “The majority of the group who use this predatory product, tend to be women. Women are taking advantage of these products significantly more.” [26:30]
• “All of the impact investors who have turned down Solo, I think they're a joke.” [24:57]
• “As we made the consumer experience better, our growth rate accelerated and that's when I knew it was an undeniable product market fit.” (35:01)

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Rodney of SoLo (Transcript)

[00:00:00] Maiko: In today's episode, I speak to Rodney Williams, who's the co-founder, chairman, and president of SoLo Funds, which is a B Corp-certified community finance platform that's now used by more than 1 million users. Members can borrow and lend money between themselves rather than go to traditional lenders, loan sharks, or banks.

[00:00:21] Maiko: And the company's based in Los Angeles has raised about $13 million in funding amongst others. From tennis legend Serena Williams from her fund, the platform really operates on an innovative model that doesn't rely on things like compound interest rates. Anybody that has been in debt for a while will be familiar with that hopefully, but that's really one of the key things that keeps people in debt.

[00:00:46] Maiko: So SoLo has found a model that works a little bit differently where those that are borrowing money are able to tip. Those who have lent them the funds, we'll talk about that. About 80% of SoLo's members are from underserved zip codes. That means they would usually struggle to access traditional loans or would rely on really high-interest loans, which often really keep them in-depth.

[00:01:09] Maiko: So I'm really excited to have you on the show. Rodney, thanks so much for taking the time today. 

[00:01:14] Rodney: Great. It's a pleasure to be here. 

[00:01:16] Maiko: Thank you. So let's start with your personal story. I always like to ask first, why do you do what you do? Is this something that you're working on? And just give us a bit of color of what you're working on.

[00:01:29] Rodney: First hello everyone. My story starts, especially myself and my co-founder, best friends for a very long time, but we had a shared experience of our friends and family, meaning access to short-term capital and it was sometimes a hundred dollars to fix the car or to pay a bill.

[00:01:46] Rodney: And when we double-clicked it, it was a much bigger problem than our friends and I think as I got older and experienced that with my friends and family, I started to really remember the experiences that I had growing up where my mom would have inconsistencies in cash flow, which as a child it would result into, the electricity is turned off, for example, and then a number of activities that would follow for my mom than to make ends meet. 

[00:02:12] Rodney: And most times it was a payday loan or something predatory. So, as we progressed in the idea, Travis my co-founders, had the distinct memory of his father, where his father worked at General Motors for a very long time, had savings, but it wasn't growing. And Travis was a financial advisor prior to SoLo, so his father was never redeemed worthy for him to call to offer investment options.

[00:02:39] Rodney: And what I'm really getting to is that there's a large group of people who have savings and they're not growing. So if you don't have access to capital when you need it, and then you do start to save. It's just sitting there, right? It's not trading a greater net. And these are the two problems with personal problems and personal experiences that made us say, you know what?

[00:02:59] Rodney: Financial services do not build products for people who don't have money or who have limited money. They build products for people with a lot of money, and we want it to be an example of what a new business model would look like. 

[00:03:11] Maiko: And if they build products for people with little money, they're usually predatory products or very often. So maybe you can talk about that.

[00:03:18] Maiko: What are the kinds of alternatives that exist out there? If there any that you know your customers would've used before, or what are they doing without you basically? And then has your solution different? 

[00:03:29] Rodney: Yeah, I mean there's a lot of misconceptions about the working class or what I call middle-class citizens or the gig economy.

[00:03:36] Rodney: The reality is that they are actually in the credit system. 80% of this market has a credit card. That's the majority of what they would use in this event. The problem is credit cards have, we actually commissioned a report most recently. Credit cards are actually even more expensive than payday loans.

[00:03:54] Rodney: And if you're a user of a credit card, you know this information. So you don't want to use a credit card because technically a payday loan is cheaper. If you're not using a credit card or a payday loan, technically the number one wage in which that someone addresses this is friends or family.

[00:04:10] Rodney: Friends or family can't show up for you. You then go to one of these sources. If these sources are there for you, then it gets really limited. There are some earned wage access companies that offer some prime products. There are some buy-now-pay leader companies that offer subprime markets, but in reality, as a stat, I like to say that 6% of this group will lead to resorting to crime. 

[00:04:33] Rodney: And that's what happens when you're a mother or a father and you can't put food on the table because you know the car is broken down. You're going to make it work out like you're going to fix the problem. There's no scenario in which you're not going to come home with food for your kids. So these are some of the things that we've learned. 

[00:04:50] Maiko: Let's dive a little bit deeper into how your platform works. Obviously, in the intro, I focused a lot on the kind of loan element, and already in what you shared, it's actually much more than that. Tell us about what's your kind of product philosophy. How does your product work and how do you help people to go towards financial wellbeing really?

[00:05:08] Rodney: Yeah. We have two goals with our product, and they're equally as important. It's access to capital when you need it and it's access to grow your capital when you have it. It's very simple. We think both of those things are extremely important if you want to raise a particular class you have to do both of these things because they're relatively similar, and that's how our platform works. 

[00:05:31] Rodney: So number one, as a borrower, you select all of your own terms that means, and how much you need, when you're going to pay it back, and how much you're going to pay.

[00:05:39] Rodney: What you pay is in the form of a tip and a donation. A tip goes to the lending member. A donation goes to the platform. There are no verification costs, there are no signup costs, there are no transaction costs, there's no costs. There's everything is voluntary. So it's very empowering to make a request on SoLo.

[00:05:56] Rodney: We also have a ladder system to protect our users. So our ladder system, when you first come onto the platform, you only can request up to a hundred dollars, and then it actually increases the increments. Again, we're teaching you to make up requests for only what you need and then ultimately pay it back in bulk.

[00:06:11] Rodney: Now, as a lending member, I scroll this marketplace, there are a couple of things that I see. Number one, I see a SoLo score. SoLo score is our proprietary score. It's based on cash flow. So when a user connects and signs up, we connect to their bank account. That's how we provide that score. As a lender, I may look at the reason, when there's like major emergencies going on, reasons are really important.

[00:06:34] Rodney: And then finally, obviously I look at the tip and then I decide to lend. As a leading member though, I lend to people who are not far removed from me. Our average lender as only lending maybe a thousand dollars 'cause that's probably what they have in their bank account. But they're able, from an end-of-the-year perspective, they're going to be able to yield over 20% annually.

[00:06:56] Rodney: For someone who only has a thousand dollars in their bank account, for them to have an additional $200 at the end of the year that almost can pay for Christmas. This is a 20% increase in their wealth. I don't know if people think about it, so for example, I'm pretty well off.

[00:07:11] Rodney: So if I have an investment that increases by 20%, that's not my net worth that didn't increase by 20%. But to someone who only has a thousand dollars, I'm just saying it's really substantial. But that's how the platform works. 

[00:07:25] Maiko: That's amazing. And how are your customers usually using it? What are the most common situations that they use it for and what's the journey for them to use it?

[00:07:37] Rodney: Top five in no particular order. Medical bills. Medical bills are really high and I think medical loans are an entirely another industry that I'll talk about one day. But the mere fact that you can be sick and you can't get serviced in certain countries without paying for it first is an entire issue.

[00:07:58] Rodney: But number one, medical expenses. Number two, is utility. That's your electric bill or your phone bill, or rent. You'd be surprised that because of some emergency, you're just short a few hundred dollars in your rent. Pet care. Pet care is really hot. Just because you're a middle-class working class, that doesn't mean you have, you don't have a dog, right?

[00:08:20] Rodney: But at the same time, that's an expense that you're not planning for and that's a loved one. So that's high. And then car issues. Car issues are sporadic and erratic. It's every day from a flat tire to I need breaks to all of a sudden. And then when you think about our society today, in a lot of communities, the car is at the center of the person's income, right?

[00:08:42] Rodney: 'Cause they may be an Uber driver, they may be a delivery, they have to travel to work. It's so important that when the car stops working, the family stops working, they come to stop, and everything stops. So those are some of the top five reasons. 

[00:08:56] Maiko: Got it. And now you talked about the score that you calculate. Now I'd be very keen to understand what's the difference to a traditional credit score. How is it maybe something that is better than a traditional credit score and basically how you're thinking about computing that score? 

[00:09:11] Rodney: Default rate is 5.9%, so right now it's 6.9%. It's getting better each and every week.

[00:09:17] Rodney: It's the best it's ever been. That's about four to five times better than the traditional players in this market. I firmly believe that the traditional players aren't incentivized to encourage stronger payments and I think that's really important. So, the credit bureau, I don't really know what the credit bureau's purpose is, for many reasons because it maybe it work for certain things, but it does not work.

[00:09:45] Rodney: It definitely does not work for people who have limited cash. I give you an example, especially in the United States, right? I can have a credit card, 500 credit card for five years straight. I use it and I'm paying a time. I can have one late and my credit report could be substantially hurt by that.

[00:10:06] Rodney: That one lateness, could have been my child got sick, a car accident. I still have a great job. I'm still working, but right now I'm short. So now this person is penalized for the next foreseeable future. That's an example of, again, limited cash. The system that designed to hurt, and I think the credit bureau's a part of that.

[00:10:31] Rodney: But what I'm trying to get at is we do not use the credit bureau at all. We do not use credit party, our underwriting score is based on cash flow. We're looking at the past 24 months of your cash flow, looking at your credits, your debts, and your consistency to make it work. We used to call it the hustle score back in the day, so Impact Hustlers.

[00:10:47] Rodney: We used to call it the hustle score and know that it didn't translate all the way, but it's still inside. It's still called the hustle score because we wanted to understand your ability to hustle and get it done. 'Cause for us, that is an example of what really happened to people like regular people.

[00:11:03] Rodney: When something happens, you get another job. When something happens, you sell something. This is hustle, right? When something happens, you don't just give up and that's what the economy thinks. That's what our financial system thinks. So that's how they penalize people who have limited cash. 

[00:11:21] Maiko: Got it. So if you look at the numbers, I mean in the US especially, but you see it across all kinds of economies and countries.

[00:11:28] Maiko: Obviously you really have kind of a debt crisis in many ways. Like a lot of households being in debt and being in debt spirals. And you mentioned that obviously, the kind of fair lending that you offer is a good alternative to what's out there already, but then you also offer people to actually grow their wealth once they're able to get there.

[00:11:50] Maiko: So tell me about your philosophy around or your opinion on how can we fight the step crisis and how can we get more people to obviously fix any short-term needs that they may have, but also in the long run, put them on the right path, help them get on the right path towards rebuilding wealth.

[00:12:09] Rodney: Yeah. To me, it's obvious you can't build wealth without growing it. You can't build wealth without giving someone a dollar and tomorrow, It'd be a dollar 20, and in three years it's a dollar 60, and maybe in five years it's $3. You just can't, it's impossible to truly build wealth without creating some type of return or yield.

[00:12:34] Rodney: That's how people with money build wealth. People with money invest it very strategically to grow. And I think when you don't have money, it's very limited and in our system, the average bank is not giving you the products that they're giving their wealthy users. And the average bank is not giving everyday consumers better products.

[00:13:02] Rodney: Why? Because that system is predicated for the higher the deposits you have, the more incentivized, and then I'm going to give you, so I'm going to give you more yield. I'm going to give you more return. I'm not going to feed you, you know what I mean? Versus they penalize you when you don't have enough. It should be the inverse because the group that needs to grow their wealth the most is the group that has it the least.

[00:13:28] Rodney: And that's what we're doing and that's what we're trying to do, and that's what we normally believe we should do. I look at who we're going against. It's technically the credit card industry and it's the subprime credit card industry, and it's the payday loan. Subprime lending in the US alone, that's nearly a $200 billion industry that's growing rapidly.

[00:13:50] Rodney: It has big players like BlackRock. All of that yield and wealth that's being generated from this underserved community is leaving the community. So even by giving them access to credit, you're indirectly hurting them because you're extracting their wealth. You're extracting every dollar that they have.

[00:14:16] Rodney: And I think, we're just an example of something that's different, we're not going to do that. The people who are going to benefit from this lending activity are very similar to the people who need it.

[00:14:27] Maiko: Love it. What's the plan for the future? We'll go a little bit more into it at the end, but what's the vision in the long run?

[00:14:35] Maiko: Where do you want to get to with this? Obviously, you've got plenty of users already on the platform, but I'm sure that there's some good master plan behind it for the next couple of years. 

[00:14:43] Rodney: Plenty. We want 10 million. We want a hundred million. This is a problem that we surfaced that's a global problem.

[00:14:54] Rodney: I think maybe some people say, hey, I want to start a company and I want to make an impact and it's like something they connect with very like local. For us, myself and my co-founder visited Nigeria for example, a few years before we ever launched SoLo. And we were learning about the informal economy.

[00:15:17] Rodney: We were learning about people having ambition. We're learning that financial systems constrict, like limits ambition, right? And we're seeing people who want to do and want to excel. We would visit Columbia and see the same well, we're like well-traveled folks. So prior to us starting this company, we had been in many places.

[00:15:40] Rodney: So I like to say that I'm a global citizen. I'm not just an American. I'm a human. I relate to so many different people. I relate to the working person. I relate to the person who dreams the creative, the person who's trying to thrive. And so for us, this is a global company. We believe that we're Uber for loans and just as there's an Uber in each and every city that you feel comfortable when you need a ride, this SoLo should be in every city and you should be comfortable when you need an extra hand, someone's going to reach out and give you one. And at the same time, you have a hand for someone to pull you up.

[00:16:15] Maiko: Love it. I can't wait for that. And I know you're getting ready to expand as well, right? I don't know how much you want to share about getting there. 

[00:16:23] Rodney: No, we are, we're going to launch finally in Nigeria, and it's been a long road. We are excited and Nigeria's going to be the first country. It's going to be our gateway country into the continent of Africa. I see us expanding across West Africa, Franco-Pole Africa, and East Africa, to like Egypt. I think it's, we're going to keep going. We're also hoping to enter Latin America over the next 12 months.

[00:16:48] Rodney: I'm not going to announce our gateway country yet. But Latin America's coming just as fast. And no, we're not funded well, but you gotta understand we've never been funded well. We've made more money in revenue than we've ever been funded. We have over a hundred employees and we don't have a bunch of margins.

[00:17:05] Rodney: But our pursuit isn't predicated on a big marketing plan or some celebrity dancing and telling you to use it and we don't have the marketing budget. When we enter the market everyone's how are you going to grow? And we're like we're going to do the same thing we've always done. We're going to let people help, that's it. 

[00:17:21] Rodney: And people are going to help people because we believe people can help people. And I don't believe people are illiterate and are not capable. I believe people are capable. I think people just are used to telling other people what to do, and that has been colonization, financial system, and bureaucracy that's been literally our history is people telling other people how they should live, how they should spend, where they should go. I think people amongst themselves can conversate and decide what they would like to do. 

[00:17:52] Maiko: Love that. I want to zoom in a little bit and switch gears towards some lessons learned and some of your lessons learned as a founder.

[00:17:59] Maiko: Again, you've got plenty of experience as a founder, as an entrepreneur, and I'm sure a bunch of lessons that you could share with us as well. So first of all, you just actually hinted at it. There are definitely startups that have raised much more funding. It's not like you, you've raised a decent amount, but you said you were very focused on revenue as well, generating revenue and growing organically as well.

[00:18:22] Maiko: So tell me a bit more about your approach, on that between fundraising and growing revenue. Do you approach it from the early days? 

[00:18:30] Rodney: I think we have three things against that. And it makes it very difficult to fundraise. I think the number one is obvious. I mean we're 

[00:18:39] Rodney: African-American founders. I like to say there's a very different distinction between being an African-American versus being an African versus being a non-African or American because they're treated very differently. For example, a lot of educated Africans tend to be very well educated, meaning they went to Harvard, they studied abroad, they went to Oxford, so they have a level of network and distinction very different than your average African American, which tends to be highly correlated to which we see on tv, music, entertainment, sports.

[00:19:16] Rodney: So it's very difficult as an African American to come into the financial system, which is probably the most segregated and hard industry to enter, and it has all types of ridiculous rules like people wearing seats and you have to look, it's not just even about your skin color, it's just it has an entire way in which you have to be a financial professional.

[00:19:40] Rodney: That's issue number one. Issue number two is that subprime products, underserved communities, and helping people that don't sound like a big business. 

[00:19:53] Maiko: When I read oh, this is donation-based and things like that, I'm sure so many investors are like, oh, this is a nice little charity thing. That's cute that you have this idea, but we're not really interested in that. I'm sure you got plenty of feedback like that, right? 

[00:20:07] Rodney: Oh man, you bet. That's just what it is, right? It's not on the top of the investment thesis. It's not the number one and a lot of them have scar tissue. So when they have done something like this in the past, it hasn't panned out. It hasn't worked well.

[00:20:19] Rodney: There have been some quote-unquote folks who have bigger and better resumes 'cause they went to those types of schools or they've done those types of things who have failed at trying to address this problem. And I think the third challenge that has made this extremely difficult is that the same financial system

[00:20:37] Rodney: that has created the market that we live in today and has created the largest wealth gap in the history of the United States has created so much discrimination. It's the regulatory system that won't support something like this. And that the third channel is that regulatory systems are built from precedents and legacy.

[00:21:03] Rodney: They're built from a discriminatory position, and then they've been modified to try to be more inclusive, and that is restrictive to innovation. So those three challenges, tend to scare some of the best investors away. And at an early time in our founder journey, we said, number one, what do we have?

[00:21:27] Rodney: We have an undeniable product market fit, undeniable. It's the best thing I've ever seen. Network effect organic AOL. Okay. We're going to have to create a unit economic or create a business model, which is not predicated on spending or marketing. So our goal to market strategy has to be done right and do good because listen if you can't buy users, you need users to really like what you do.

[00:21:57] Rodney: That's it. I'm a former brand marketer. There are only two ways to grow. You either buy them or the thing that you do has to do what you say it does. It's that simple. I know everyone else oh my god, we didn't grow. You weren't anything that they want it.

[00:22:14] Rodney: So we really focused on that. We focus on just doing the do and letting that be our go-to market. So you ask the question about sometimes you talk to investors and they're like you're so too good. Is this a social impact? I'm like, wait a minute. Social impact, being a business that cares about people has a good business strategy.

[00:22:37] Rodney: Patagonia, just tons of companies that, but Patagonia's one of my favorite, Patagonia entered an apparel industry that was crowded technically and shirt as a shirt, but when you wore it, it made you feel different 'cause you represented something a little bit different.

[00:22:55] Rodney: For the first time ever we believe we're a financial service company that when people turn it on, they feel different. When they lend, they feel different. When they borrow, it makes them feel different and our net promoter score is 90. It's the equivalent of a Patagonia or an Apple. Our organic halo is over 81%. It's increasing.

[00:23:16] Rodney: It used to be in a 60%. That means we can grow 5% to 12% per month on word of mouth. That's how we grow today. I was talking to an investor a famous financial service investor, and we went through the three things, why he may not do the deal very similar to. The things I communicate to you and he says, oh my God, I'm so impressed, but I gotta figure out how to get my team over some of the things.

[00:23:46] Rodney: And I said, you know what? It doesn't matter. I hope you will, it doesn't matter. I said, I'm going to be a VC one day and one day my strategy is simple. I'm going to invest in companies that work. That's it. I'm not going to get all in what it means. Work means it has good business practices. Works mean it grows efficiently, meaning you don't submit works means the unit economics benefit the people and the company, that's it. 

[00:24:15] Rodney: There's no like smoke mirrors, there's no fanciness. I don't want to dance. I just want to invest in people and companies that work and grow. And he laughed and he was like, oh, if it was that easy. And I think that's a great story to tell you about how innovation and how making an impact is not that easy. It's actually a hard business. 

[00:24:36] Maiko: Absolutely. Yeah. I think you've raised, actually, from a range of investors, how did you approach it? You didn't just get funding from pure and impact investors, right? You got it from a range of different funds that are looking for different things. How did you approach that whole process and how did it tweak your story or make sure that you are resonating with them?

[00:24:57] Rodney: All of the impact investors who have turned down SoLo. I think they're a joke. I truly believe they're a joke. Maybe they're not, but I think they're a joke for the foreseeable future. They're a joke 

[00:25:08] Maiko: Until they're proof otherwise. 

[00:25:10] Rodney: Until they're proven otherwise they're a joke. I've heard everything from an impact investor that we should charge more.

[00:25:15] Rodney: Like we're worried about this. I just think they're a joke. But to the investors who have invested, I think for us, they followed their gut. I can't describe it. I think they followed their gut. I think, Serena Ventures reads all the headlines and she looks at all the stuff. She actually is pretty active.

[00:25:34] Rodney: I think and I don't know this for sure, but what I'm saying is I think at the end of the day, she followed her gut and they followed their gut, and the fact that these are two founders doing the right thing. I can see that they're doing the right thing. Forget what everyone says. I can see that this is going to make an impact.

[00:25:51] Rodney: And I see that they're capable of doing it, and more importantly, they are doing it. And when investors are able to be that authentic and be that passionate about the thing they do, they tend to invest in us. We have very passionate investors, the investors that do invest in us. We don't have a lot of large VCs, as Acme VC led our Series A.

[00:26:12] Rodney: You have one of our favorite investors at Rich Lou Dennis, he runs a large family fund. He's the largest investor. You have Impact America. We definitely do have a lot of minority and women-based investors who have invested in us. It's interesting enough, here's a fun fact 'cause it's, I think it's a high correlation to why women invest in SoLo.

[00:26:30] Rodney: The majority of the group who use this predatory product, tend to be women. Women are taking advantage of these products significantly more. And it goes back into the historical context. If you think about 40 years ago, there was a lot of discrimination towards limits and financial products. So they couldn't go into a bank and get certain things, but they could go to the loan shark or they could go to the payday lender.

[00:26:57] Rodney: So that payday lending, that was a home for them. So, we just tend to have a lot of women but again, I just think they relate, they understand it, they're going to go for it, and I think we're going to make them very happy cause we definitely are the best-performing company in, on all of our investor's portfolio.

[00:27:16] Maiko: That's exciting to hear. Now, when somebody listens to this episode, and looks at you right now, obviously, you have a lot to celebrate and more than a million users, you raised funding from Serena Williams, and you were part of Techstars. All these like names that people are like, oh wow, how's that?

[00:27:35] Maiko: It seems like you just had so much success all the time. Now, you already talked about it a little bit maybe in the early days, and when you just came up with an idea, it wasn't quite as straightforward as just emailing those people and the funds were in the bank account the next day. 

[00:27:53] Maiko: So talk us through the early days of taking this from idea to reality step by step. How did you actually do it? Did you, how did you finance it? How do you make it happen? 

[00:28:06] Rodney: Ah, it's hard today, but it was hard then. I think my co-founder, quit his job first and I was still at my first startup and he lived on a couch for about six months. He was based in New York City.

[00:28:21] Rodney: He did a FinTech accelerator in Columbus, Ohio called Lumos. That's also right before that, got your first $50,000 check from an investor. In the beginning, that's how it worked. You're like, Crawling for a dollar. He got his first $50,000 check. He became Accelerator One. He did Accelerator Two, which is an Accelerator out of Cincinnati, Ohio.

[00:28:42] Rodney: That's also when he got his first employee. Then he did Accelerator Three in Kansas City, which was the Techstars Accelerator. Where I'm telling you is that I think even so far, I think the company has probably been in somewhere between seven to eight accelerated before anyone knew anything. And sometimes it gets really hard and frustrating and challenging sometimes where we are today, especially when regulators or people come to us and say, we're this diligence.

[00:29:09] Rodney: Who was the legal? And I said we actually traveled the country and we talked to so many lawyers. We talked to so many people. We did so much work. I think we spent about $300,000 on lawyers before we ever wrote a line of code. Because this system was so difficult to enter, the market was so difficult to enter and it was very challenging and I remember many times we didn't know, people said you shouldn't do this.

[00:29:40] Rodney: I don't think this was going to work. I think it's going to be too hard. We shouldn't do it. And we'd go to sleep and we would wake up and say, we're going to do it 'cause it's the right thing. And that's it. Eventually, we made our way to Los Angeles. We started gaining some traction with certain investors like Serena, and Mac Venture Capital, and we said, I think this might be a better home for us. It seems like something about this area, people are liking us a little bit more. 

[00:30:08] Maiko: So is that a statement? Because you moved away from New York City, isn't it? Like, you would think that FinTech would be best placed in New York City compared to LA but maybe that's a statement as well to be like maybe you shouldn't align yourself that much with the traditional industry.

[00:30:23] Rodney: Yeah, the New York financial system doesn't know the social impact. Social impact is a bad word. Like just please stop. It was like no conversation at all. They were like, I don't get it. So you're going to do a donation. I don't get it. A tip, why? What do you mean you're going to make the borrowers choose that?

[00:30:39] Rodney: This doesn't make any sense. We would get ripped up every day in New York City anyway, so we left New York City, we went to California with the guys and the long hairs and the surfers and that thought a little bit more openness to helping people, some of the like human things that you should do in life, right?

[00:30:57] Rodney: So that's where we made our home and that's where our home is today. We started to gain traction and it became this, and along the way, it's still challenging. I'll give you an example. We're paused in the state that we're headquartered California. The state that we thought would love us, the state that we thought would support us, but one of the biggest lobbyists in that state.

[00:31:18] Rodney: One of the biggest political supporters in that state is the payday industry. And we're going to do our best. We do have plans to relaunch in that state, but that's an example of some of the things that we're challenging and that we're going to face. And that's okay. But for the foreseeable future, we're going to be founded at a direct and honest, and transparent, right? And that's it. 

[00:31:40] Rodney: But yeah, it's been a very challenging journey. I joined All-time sometime in 2020, during the Covid era. I would tell you 2020 was a tough time for SoLo. We actually turned off the company at the beginning of 2020 and rebuilt it. We also didn't have money to pay anybody, so those people working.

[00:32:02] Rodney: We had an investor paying for payroll as payroll was due. Literally, as payroll was due, someone would give us some money. We've gone through all of the scar tissue and then even at that moment, we had so many of our employees leave, they're like, this isn't going to work. But again, we've always known something that everybody else didn't know.

[00:32:25] Rodney: And it goes back to, it's one of the first things I said, undeniable product market. That is what happened to the textbooks and all of the things that they teach you in startup school, undeniable product market fit. Don't know what else to tell you, that's it. And we always knew that we can grow. And what we're going to show you guys in Nigeria is that we can grow in other locales the same way.

[00:32:54] Rodney: It does not matter. The financial system created the healthiest garden for us to grow because they don't believe in helping people.

[00:33:04] Maiko: Oh. When was the first moment you realized you had an undeniable product market fit, and how did it show to you? How did you reveal yourself? 

[00:33:13] Rodney: So the first thing that we saw was, this is day zero.

[00:33:17] Rodney: We launched, put the app on the app store, and roughly like minute seven, someone made a request. Again, this is zero reviews, this is a fresh app. I'm like, someone made a request and 15 to 30 minutes later, someone funded it. And first I was like, who are these people? Do they know us? And the next day it was three people and the next day it was four people and the next day.

[00:33:46] Rodney: And I was like, it's crazy because it didn't really work that well to be honest. Like it wasn't smart And just so that was the first time. So I knew we had product market fit when I knew it was undeniable that we had a lot of challenges 'cause it was an MVP and it was growing. We had a lot of challenges in 2018 and 2019, but it was growing and we were just like, oh man.

[00:34:08] Rodney: But we really didn't say it was undeniable because the consumer experience was still pretty not there. They're like, we didn't have money for customer support really. And some lenders were doing well, but the majority of lenders were not. And for example, things like our transactions, successful transactions, we were like in a 70% range, meaning 70% of the time you got your money.

[00:34:30] Rodney: That's, I'm just being honest. It was tough. So we rebuilt everything and we changed it like we changed the unit economics a bit and we relaunched it and it had more successful transactions. It had basic stuff, more and successful transactions. We had email support and like out, grew up free double and I said, wait a minute.

[00:34:51] Rodney: We didn't do that much. We just redid some emails and I was like, wait a minute. Every time we like addressed the consumer experience. 'cause the product demand was already there. It was like as we made the consumer experience better, our growth rate accelerated. I knew it was undeniable then and that's when I knew it was undeniable.

[00:35:11] Rodney: And then we tested the undeniable. Last year 'cause we didn't raise the funding. We said we're going to have to make a pathway to profitability as of April of this year, we are profitable. So to make the company profitable. Number one, we had to cut expenses. We had to cut staff. We had to completely wipe out marketing.

[00:35:32] Rodney: We had to wipe out a lot of things. And as it relates to the unit economics of the business, the way we move money, we had to do different things that were more margin. So therefore our lenders end up paying for certain things. And we were very concerned that everyone was concerned. Everyone's oh my God, our lender's going to still have enough value to lend to people.

[00:35:54] Rodney: Our borrower's still going to get funding and we have our calculator. So we knew that we could make this change and still grow. Our investors didn't, they didn't believe us. They thought they, they're like, I've never seen a company do. We did it and then we doubled. I'm like, we go in these meetings, they're like, you guys doubled and you guys didn't spend any marketing?

[00:36:16] Rodney: I'm like, you get the same financial that we get. So I don't know what else you want to tell me. I'm telling you, that's what's happening. And we didn't have a party for getting profitable. We should have, I had a party by myself because that's the type of company this is all of the press. This state could be mad at us.

[00:36:33] Rodney: This state could be paused. When we pause in a state enough, it doesn't even do anything 'cause I've learned something that I used to tell people all day. We're barely serving a borough in New York City with 1 million users. That's why it doesn't matter. And then here's the other question.

[00:36:51] Rodney: People said, where are your users? Are I like hyper concentrating on a certain area? No. There are more people like this everywhere than people like you. You go get coffee, the barista, the valet person, all the people cleaning. There's more staff at the hotel than people staying at the hotel. The majority of Americans need this.

[00:37:15] Rodney: They're everywhere. These are the things that you have to teach a wealthy investor or someone who's so far removed from the plight of people. 'cause they're so far gone and these are the things, but these are the things, that's why I know it's undeniable. 

[00:37:32] Maiko: I love it. I have a last brief question before we wrap up, and that's how does the world look like in 10 years if SoLo succeeds and continues to succeed.

[00:37:44] Rodney: Listen, the best thing that can happen to the financial service industry is you guys should probably come and take us out, but I don't think you're that bright. So if you don't come by us and acquire us, and you let us thrive because we're social impact, we're whatever, we're the little thing over there.

[00:38:04] Rodney: In 10 years, we won't be the little thing over there. I believe that we'll be one of the largest financial service companies in the world, and I believe that we will redefine financial services for regular people. We will be the vanguard of the people and we will be a public company and we will change the financial system ourselves.

[00:38:25] Maiko: I love this man. I haven't been as inspired by a podcast for a while, so this says a lot. Rodney, thank you so much for making your time and sharing your story. Wish you all the best and let's catch up in 10 years or maybe a little bit earlier than that. 

[00:38:39] Rodney: I'm sure. Maybe at some point 10 years from now I'll figure out how to wear a suit.

[00:38:45] Maiko: I think I'll never figure that out, to be honest. So there we go. Awesome. Thank you so much.

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